An Advisor Reveals His True Colors

Guarding Your Wealth" is a nationally syndicated weekly personal finance column written by Jeffrey D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group, a private wealth management firm that employs sophisticated proprietary strategies designed to protect and grow its clients' investments. Please visit our website, www.guardingyourwealth.com to read past articles in our archive.

(PRWEB) June 20, 2005 -- The vast majority of the financial services industry does not have your best interests at heart. It is more concerned about the money it makes, not the returns investors receive. Read on to hear what an agent himself has to say-it may shock you.

When you work in the brokerage, financial planning and insurance industries, it is all about sales. The training, the incentives and the pay structure are all designed to motivate the advisor to SELL. Their success in the industry is not based on how well their clients do, but on how much commission is generated.

Im not against people making money. The workman is worthy of his wages. The problem is that its the individual investor who turns to the industry for help that ends up paying the price. Investors need to be skeptical and cynical when dealing with an advisor-especially one that is paid on commission. Reading actual quotes from an advisors email I received will give you an insiders look into the industry.

The financial industry attracts those that are good at selling and want to make a lot of money. This advisor who emailed me calls himself very aggressive" and a grey haired 34-year old hustler." Im a natural sales whiz and have found this biz very easy to succeed in. Ive never made less than $200,000 in commissions [per year since entering the biz 4 years ago." Believe it or not, he was saying these things trying to impress me!

Here are his comments about Equity-Indexed Annuities (EIAs)-an investment that I have been warning investors about for over a year. I have only been selling EIAs because I am not full of [investment options." In other words, it is one of the only 'investments he can offer.

I am more than happy to get $50,000 [invested by a client all day long at 10% commission." The agent makes $5,000 a pop. Whats the client make? Who cares! He goes on, I realize there is a better way for ...my clients."

Have I thought EIAs may not be as great as other alternatives? YES. [his emphasis Obviously, if I get 12% commission it comes from somewhere and its not the carrier." The clients of this 'advisor dont realize his true motivation. They expect him to be knowledgeable and have access to a broad range of products, but he isnt and he doesnt.

How does this affect you? This could be the advisor that you are talking to! This could be the advisor that was such a great speaker at that free seminar you attended. This could be someone you thought was a financial genius when in reality all that he/she has done is learned a good sales pitch!

Most advisors arent as open about their motivations as this one was. Some advisors sincerely believe that equity-indexed annuities are a great investment. Only God knows how much their opinion stems from the outlandish commissions theyll receive.

Not all advisors are like this. There are some that are willing to take a stand and do what is in the clients best interest even when it means the advisor will make less money. They realize they cant accomplish this working within a commission-based compensation structure.

Theyve left the big brokerage firms and work for themselves. This gives them freedom and control over the recommendations they make because their job security isnt based on meeting sales production requirements. These advisors are paid a fee for their services instead of a commission.

By the way, it takes a fee-based advisor 7-10 years to make what the commission-based advisor makes off an investor in 10 minutes. The only way the fee-based advisor can do that is by keeping YOU satisfied. If you arent then you wont continue to use his/her services. If commission-based brokers compensation was tied to their performance most of them would go hungry!

In the next article I will share an email I received from another advisor. Youll be surprised at what he did to satisfy his conscience! Ill also provide a list of questions that you should ask any advisor you are working with that will decrease your chances of being an easy 'mark for a financial salesperson.

Have a financial question? Ill personally answer it. Go to www.guardingyourwealth.com and click on 'Ask Jeff.

In addition to being a nationally syndicated columnist and Certified Financial Planning Practitioner, Mr. Voudrie provides personal, private money management services to clients nationwide.

Looking for an energetic expert who is passionate about financial and wealth management? Mr. Voudrie is an excellent speaker who will excite and inspire your audience. Mr. Voudrie is available for a limited number of speaking engagements, television appearances and radio talk shows. For booking information, email jeff@guardingyourwealth.com.

Related Articles can be found at www.guardingyourwealth.com under the Guarding Your Wealth Article Archive:

Equity Indexed Annuities: There Are Better Growth Alternatives
Equity Indexed Annuities: There Are Better Alternatives (Stability)
Better Alternatives Than Equity Indexed Annuities
Equity Indexed Annuities: Agents Prey On Unsuspecting
Consumer Alert: Equity Index Annuities

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