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Fire Your Advisor
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Reasons to Fire your Financial Advisor:
Here are more reasons you MUST make your own investing decisions.
Your trading and investing success is your responsibility. Do NOT forget that. Without this knowledge you will lose. Financial advisors are commissioned salespeople, nothing more, and will sell you anything at any time.
Here are 4 simple TRUTHS about financial advisors.
Investing Truth #1:
They do not work for you - they are sales people, nothing more, and will sell you investments regardless what the market is doing, may do, or is about to do. They have absolutely no plan to protect your investment capital.
For instance:
In November 2007 I was invited to speak at a major investment firm’s training center. There were 34 recruits in attendance that particular week from all over the United States. Prior to arriving, each recruit had been given 6 weeks to build a list of potential clients with a mandatory minimum of 25 per day, or 100 per week. Thus, every recruit had a minimum of 600 individuals to contact with hopes of selling an investment, and collectively, there were at least 20,400 potential sales. All recruits made sales calls while the instructors listened to the conversations and provided pointers on ways to improve the selling techniques. The recruits were provided three possible investments to sell depending on the potential client’s interest.
1. A mutual fund
2. Shares of Pepsi stock
3. A bond in the firm’s inventory
VERY IMPORTANT:
Did you take note of the date? Yes, November 2007, the market was near an all-time-high and topping out. Virtually every sale the recruits made resulted in an eventual loss to the investor. I hope you were not one of the victims hit with a 30, 50, or 60 percent loss.
You are probably thinking what I just described is an occasional thing. If so, you are absolutely wrong. Investment firms turn out a new class of recruits every single week. And that was just ONE firm.
Investing Truth # 2:
What were Financial Advisors selling in 2009?
In 2009, the Bear Market was in full swing, stock prices and mutual funds were down 40 to 50 percent, Investors had taken huge losses and were scared. So what do financial advisors sell when investors are looking for safety? Bonds! Now, in case you don't know - That was the absolute worst time to buy Bonds!
You see, Bond prices and interest rates are on an inverted scale. Meaning, while interest rates were low(in 2009), bond prices were high. As interest rates inevitably increase - those bond prices will decline handing those investors another loss.
In more than 25 years in the business, I have never seen a worse time to rely on a commission-hungry salesman for your investing advice and decisions.
Investing Truth # 3:
Investment firms actively recruit unemployed individuals from internet job posting sites like Monster and Hot Jobs to sell investments. They also advertise job openings on those same sites. These individuals are hired, furnished a 3-week online course to pass the necessary exam, and trained to sell.
They have absolutely NO capital market experience. Of the 34 recruits mentioned earlier, not a single one had ever personally bought or sold a security. I asked! Classes of sales personnel are farmed out each week with a box full of brochures, a defined area to solicit, a sales quota to meet, and a tablet computer to record any personal information you are willing to reveal. That information is uploaded to the firm's database for future contact and sales.
They do not have an office.
The standard lie taught in training is to tell potential clients that they are "opening an office in the area." If pressed, the continuation of that lie is "the home office is negotiating the lease arrangements." Truthfully, there is no office. Furthermore, there never will be an office unless and until predefined sales quotas have been met or exceeded for normally a 2-year period.
Investing Truth #4:
It's ALL about sales -
Investment Firms have more sales incentives than a calender has days. Every advisor is given a sales quota that must be met and then a plethora of bonuses, trips, and international vacations paid in full for meeting or exceeding those quotas.
Mutual funds and annuities are the highly pushed investments because they pay the highest commissions. Higher commissions means reaching the sales quota faster. Not only do the advisors receive a large commission for the sale, they can also receive 'trailing commissions' for years to come. All paid by you from the fees charged by the firm.
Conclusion:
You MUST ask yourself - Would a commissioned advisor really pass up on a sale to tell you to wait for a better time to invest? No!
They will take your money regardless the risk involved, regardless what the market is doing or about to do, and tell you that "Time in the Market is better than Timing the Market."
What absolute insanity...
Remember this: Timing is everything!
Charting and Technical Analysis provides you the knowledge and tools necessary to avoid being decimated by losses. Don't invest without it!
Decade Lost
Bad Investments
Fire Your Advisor
Safe Investing
Investing Theories
Investing in Mutual Funds
Preparing for the Bear
Reading the Tea Leaves
Running from the Bear
Investing Tips - The Truth
Becoming a Successful Investor
Protect your Portfolio
Investing Advice
Bad Investments
Fire Your Advisor
Safe Investing
Investing Theories
Investing in Mutual Funds
Preparing for the Bear
Reading the Tea Leaves
Running from the Bear
Investing Tips - The Truth
Becoming a Successful Investor
Protect your Portfolio
Investing Advice
1. Certified financial planners and NAPFA-registered financial advisers take a pledge to put their clients' interests ahead of their own, but I really like earning a commission.
2. Do some digging before you hand me the keys to your future. Use BrokerCheck at finra.org to see if I've been in trouble.
3. I work on commission, I typically make money whenever you buy a new product, and I've got monthly quotas to meet. That's why I always seem to call with something to purchase at the end of the month.
4. I may have other incentives to get you to buy. If I sell to enough people, I could win a trip to the Caribbean, a new laptop, or a big bonus. (The guys behind the product may also have bought my dinner at Morton's last week and sponsored our corporate golf tournament.)
5. Before buying a mutual fund with a load, see if there is a better option. For every fund that has one of these sales charges, there's usually a similar one that doesn't.
6. Be careful with annuities. They pay me big commissions, but they're not a good fit for many clients.
7. Stay away from investments that have a fee to get back out. If you get married, get divorced, change jobs, or move, it can come back to bite you.
8. There have been ten recessions since 1953. I have no clue where the market is going, and neither does anyone else. So if someone promises a certain amount of growth, walk away.
9. You're spending way too much. But I'm not going to be the one to tell you to give up your cleaning lady or your fancy car-or me.
10. Some of us can give discounts, but you may not get one if you don't ask.
11.Haven't heard from me in a while? Not a good sign. I don't like to be the bearer of bad news.
12. Everyone wants no fees, no risk, double-digit returns. I want a pot of gold at the end of the rainbow.
Here are 12 things your financial advisor won't tell you.
Source - Interviews by Michelle Crouch from Reader's Digest May 2010
Source - Interviews by Michelle Crouch from Reader's Digest May 2010
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of the very best investing and trading knowledge - ever...
Stop being a 'LOSER'
Invest and Trade safely with Trading the Trends. Get out of the market at the highs - avoid the corrections - avoid bear markets - Profit on the upswings - keep your money safe when the market tanks! Buy-and-Hold is a Loser's Strategy!
*Make money in ANY market.
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