I am sickened, disheartened and ashamed. My emotions stem from the lack of character shown by fellow financial advisors. These are the advisors that sell product and make transactions specifically to make the sale, to get the commission, to keep their numbers up. The client’s best interest has nothing to do with the decision. In fact, in many cases, the client suffers a financial loss when, on the advice of the financial planner, they are taken out of a profitable product and are put into a less profitable or risky product.
You may ask why someone would move their money or make that purchase if they were not going to profit? In essence, they have been sold by a slick salesman posing as a reputable financial advisor. That advisor more than likely wove a tale around the proposed product, presenting colorful brochures and claims of the company’s reputation. The excitement in his voice, as he recites his pitch, builds until he has captured his audience in awe and, putting their trust in his advice, they willingly sign on the dotted line.
Is this legal? Most likely. Is this ethical? Not in my opinion. A financial planner should have the prospect or client’s financial situation in mind when they recommend a transaction. This should not be done with focus on the profit of the financial planner or wealth manager. As a Certified Financial Planner®, I am bound by a high standard of conduct. Even more important are the high standards of moral character to which I hold myself.
My clients come first – always. Transactions are recommended based on the specific needs, risk tolerance and timeline of the individual. Nothing is one size fits all. Even a purchase that looks great on paper may have drawbacks for some because of duration, risk or liquidity.
Bottomline – get a second opinion. No, don’t call your brother-in-law or the guy your neighbor says is a whiz at trading. Get the opinion of a trusted financial advisor.
How do you know who to trust? That can be tough. After all, you thought you could trust the guy that gave you the pitch. Find people who have been successful investing and ask them who they trust. Get several recommendations and then vet them out. If you aren’t asked in-depth questions about your financial and personal situation they may not be the right the advisor.
What Can Be Done About a Bad Financial Transaction
Think you made a bad investment? The good news is, depending on where you live, you may be able to reverse the transaction. For instance, in the state of Florida, there is a “free look” or “cooling off” clause that allows you time to change your mind. This is where you will need a trusted financial advisor or wealth manager to assist you.
I can’t stress enough how important the financial advisor/client relationship is for building wealth. Please take the time to find the right financial professional, resist the urge to buy with emotion and when in doubt seek out a second opinion. I am always just a phone call away for those that need questions answered or portfolios reviewed. My view on financial planning is that it is more than a career – it is an opportunity to help people prosper.
This information is not intended to give specific recommendations, investment, legal or tax advice. Advisory services offered through Nepsis Advisor Services, Inc.; an SEC Registered Investment Advisor.