By: Jack Waymire | September 8, 2009 | Deceptive Sales Practices, Who Can I Trust?
The most dangerous financial advisors out there are the ones who have developed positive relationships with investors by meeting their expectations then turn bad. What does that mean exactly?
You have used the services of an advisor for years and you have been happy with the results. There is a good chance you have a personal relationship with the advisor and you trust his or her financial recommendations. This is what makes them so dangerous – you trust your advisor so you let your guard down.
The advisor has a sudden need to make more money. The need could come from a major market decline, a divorce, a foreclosure, a bankruptcy, or any other event that threatens the advisor’s lifestyle.
The advisor is at an ethical crossroads. Does he continue doing what is right for his clients and suffer the consequences or does he take advantage of their trust to make more money? The ethical advisors make the right choice and the advisors who are ethically-challenged make the wrong choice.
The advisors who decide to take advantage of their clients don’t have to start Ponzi schemes. That takes a lot of time and work. They want money now! So they use deceptive sales tactics to make more money. For example, they recommend you replace all of your annuities with new ones even if the replacements are inferior to your current holdings. This creates a whole new round of commissions for the advisor and new sales penalty periods for you.
Do not let your personal relationship make you passive. It is your money.
2 Responses to “When Good Financial Advisors Turn Bad”
Clark Kent
December 24th, 2010 at 8:06 am
I have had a horrible experience with a financial advisor…lack of professionalism, condescending statements and tones, lack of follow through, elitism, truly disingenuous individual. Are there websites or a list where I can post my story and out this individual? He did nothing illegal just more unethical and self serving. Thank you for any suggestions you may have.
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Jewel
September 14th, 2010 at 9:59 am
You really hit the nail on the head. I just experienced a lousy recommendation but I bit, sad to say, and I fear it will shatter my future.