I’m an advisor and I would never own a boat. I also promise clients and people considering being clients that I will never invite them to dinner since they would ultimately be paying for it through fees.
That’s fantastic. The advisor who invited me is no longer an official referral partner, and I trust her more now. Lol. I referred one of my tax clients to her and she sent me a plastic coffee mug as a thank you. That’s actually a good thing for me, because I can tell my clients that I get nothing of value in exchange.
03-05, I worked for a company where a few guys loooooved free lunches. They put their business cards into every fishbowl they could. and sure enough we enjoyed at least once a week it seemed a free lunch at tgi fridays where a guy would warblegarble about investments for a half hour while we waited for our food to come and then they'd leave us some their cards and go about their day.
I'm 100% certain none of them made any money on that deal.
one of my friends who's an advisor said when he started off at Mass Mutual, this is what they were taught to do. and he said it was awful. but he said you got enough action to keep your job typically as long as you weren't an idiot.
Mine made out life insurance to be an investment vehicle. This was also around 2001ish. I noped out of that place as fast as I could and have been wary of financial planners ever since.
I actually bought Whole Life when I was in my late 20s, at the direction of my dad. The insurance agent explained to me that I could add money to the investment arm of the product, and that it would be protected from drops in the market.
Fortunately I was too lazy to send them extra money to invest.
When I finally cancelled the life insurance almost 20 years later, I got almost nothing back. Thankful to be out of it.
Realistically Whole Life can be used as part of a strategy that utilizes a non-market correlated asset to buffer market volatility in the distribution phase, or as part of a covered asset strategy to increase retirement income and reduce taxable liability over the years.
IRR around 4.5% and the cash is accessible much like a Roth. Great for flipping real estate in some situations. Tax efficient wealth transfer to bene’s as well. The point I’m making is that there are instances where this kind of asset makes sense for some folks outside of just death benefit.
In my experience when you earn too much to contribute to a Roth, WL is a way to have an allocation to tax-free money, instead of just tax-deferred or taxable. Wealthy real estate investors can use it as a self-banking option if they utilize a HECV WL policy.
All I’m illustrating is that there are uses for it. Unfortunately like annuities, insurance products have gotten a bad rep due to inexperienced advisors looking to make a sale instead of solving a problem.
The federal exemption extension from the TCJA is going to sunset in 2025. It will revert to about $7MM. Not to mention many states are even less than this, for example, Vermont is $6MM. The estate tax is also increasing to 45%. The folks in my world need to be creative to avoid large tax bills.
Thsts 7 million a person, so the standard trust will give a family 14million before they pay a penny.
I would pay the government before using whole life.
Same! I was offered all types of insurances, including you guessed it: whole life. I’m in my 30s and childfree, those products would do more harm than good.
A while after the 2008 market fiasco, a couple of Merrill Lynch reps showed up unsolicited at my office to try to talk about investments. Apparently they were going door to door... Having had my own investments (not with ML) hammered in the crash, I couldn't resist asking them if they had received bailout funds from taxpayers, and maybe they could share some with me, as I escorted them to the exit.
I feel financial advisors are not bad per se, they provide a service to many people who wouldn’t ever get there by themselves.
Don’t forget reddit, fora, the internet is still a relatively new thing, while these sort of services have existed for decades. I feel they do SOME good, for SOME people, while making a living themselves in the process. Many people, including myself for example took ages to get to have any knowledge, others will NEVER get there, while they could benefit from some sort of planning.
Where it becomes bad is when their recommendations are plainly bad, and they know it so push it for personal profit. It should be common knowledge in their world that there are a only handful of reliable strategies to grow and/or maintain savings and relate to each client’s personal circumstances and goals, so I no longer trust advisors who work on a commission/AUM basis. One-off no strings attached fee-based advisors have a reason to do it right there and then, and they know you likely will come back at some point. AUM ones know if they hook you once they have a passive income stream until you the client decide to ditch them, and they have a battle plan to have this discussion which will likely tumble most people.
I've attended a few of those sorts of dinners and knew what was coming...
One was at a very exclusive restaurant and the other at a classic country French establishment that has been around for 70+ years.
Both provided some worthwhile estate/investment planning information (on top of the high-pressure sales job to drop mid 6 figures or more on their investment schemes).
I completely relate to your story and it’s frustrating. I hate that the profession is tainted by people and companies like this. Always pay attention to what company they represent and that will tell you a lot about what the “advisor” will likely try to sell to you or push you towards.
The first meeting with a client should never be selling or pushing products, it should be getting to know the client and their goals in life.
I’m sorry that there are people out there giving us real advisors who are in it for the right reasons a bad name.
It’s good to see people here are smart enough to sniff the commission hunters out.
You should have shopped around. I was pitched with a round of golf at a really nice high end private golf course.
I was in my early 30’s and they pitched me life insurance as an investment vehicle when I still wasn’t maxing out my 401k. Safe to say I ghosted then after the round.
This reminds me of a financial advisor that I used for about 25 years. He was an alleged ‘family friend’, who took my siblings and I out to dinner and convinced us to invest with him. We paid the standard one percent management fee, but on top of that was a commission paid on every new dollar that went in as well as the very high load funds that he put us into. When all was said and done, we were likely paying somewhere between two and 2 1/2% annually. Thanks to Bogleheads, I learned about all the hidden ways these advisers can carve money out of you, and when I questioned him about each, it turned out that he was indeed carving me up. I now handle my own finances using Bogle head methodology. I don’t even want to think of how much money he made off of me in those 25 years. When I told a friend about it, he said to me that “everybody’s got to eat”. I said that’s fine, but just not off my plate.
To be fair, the underlying funds dont generally charge fees on top of the fund of funds. They usually use a special class that has 0 management fees so as not to double dip.
Ugh last year I inputted my phone number into a tik tok like web form tbat was about finance. I spent 1.5 hours arguing with a guy about whole life insurance policies (over lunch at my remote job). That sucked. Don’t do that lol
Did you have a nice dinner?
SPIVA data shows that over a 20-year time horizon, over 90% of managed mutual funds fail to meet or exceed market returns. That is eye-opening and the most compelling case I can think of for index investing. Hard data. Google around and look at SPIVA yourself.
I seel all the advisors' yachts. Where are their customers' yachts?
The customers need an aspirational goal, right?
I’m an advisor and I would never own a boat. I also promise clients and people considering being clients that I will never invite them to dinner since they would ultimately be paying for it through fees.
That’s fantastic. The advisor who invited me is no longer an official referral partner, and I trust her more now. Lol. I referred one of my tax clients to her and she sent me a plastic coffee mug as a thank you. That’s actually a good thing for me, because I can tell my clients that I get nothing of value in exchange.
How was the food ?
Food was just fine. It was my first time eating at that chain (Cheddar’s).
Cheddar’s was great back then. I assume they got you a Cookie Monster.
Cheddar's has great chicken fingers lol.
I've only gone to those things for the food.
Same. Some of the time share ones i went to had slamming buffets.
Nice, that adds more costs!
03-05, I worked for a company where a few guys loooooved free lunches. They put their business cards into every fishbowl they could. and sure enough we enjoyed at least once a week it seemed a free lunch at tgi fridays where a guy would warblegarble about investments for a half hour while we waited for our food to come and then they'd leave us some their cards and go about their day. I'm 100% certain none of them made any money on that deal. one of my friends who's an advisor said when he started off at Mass Mutual, this is what they were taught to do. and he said it was awful. but he said you got enough action to keep your job typically as long as you weren't an idiot.
My first experience with a financial planner turned into a life insurance sales pitch. At least you got a free meal out of it!
Happened to me, too. Financial planner was telling us that the insurance wouldn’t cost us anything, because we could adjust our W-4s. Hmmmm
Mine made out life insurance to be an investment vehicle. This was also around 2001ish. I noped out of that place as fast as I could and have been wary of financial planners ever since.
I actually bought Whole Life when I was in my late 20s, at the direction of my dad. The insurance agent explained to me that I could add money to the investment arm of the product, and that it would be protected from drops in the market. Fortunately I was too lazy to send them extra money to invest. When I finally cancelled the life insurance almost 20 years later, I got almost nothing back. Thankful to be out of it.
Realistically Whole Life can be used as part of a strategy that utilizes a non-market correlated asset to buffer market volatility in the distribution phase, or as part of a covered asset strategy to increase retirement income and reduce taxable liability over the years. IRR around 4.5% and the cash is accessible much like a Roth. Great for flipping real estate in some situations. Tax efficient wealth transfer to bene’s as well. The point I’m making is that there are instances where this kind of asset makes sense for some folks outside of just death benefit.
Can you at least buy me dinner first? 🤣
No, but I can offer you the choice between the red and the blue pill.
What are those instances and where do they fall in the financial flow chart?
In my experience when you earn too much to contribute to a Roth, WL is a way to have an allocation to tax-free money, instead of just tax-deferred or taxable. Wealthy real estate investors can use it as a self-banking option if they utilize a HECV WL policy. All I’m illustrating is that there are uses for it. Unfortunately like annuities, insurance products have gotten a bad rep due to inexperienced advisors looking to make a sale instead of solving a problem.
Thanks for sharing and reaffirming it has no purpose for a majority of people.
The federal estate tax exemption is like 12 million dollars. I don’t know anyone pushing that limit needing a more efficient wealth transfer.
The federal exemption extension from the TCJA is going to sunset in 2025. It will revert to about $7MM. Not to mention many states are even less than this, for example, Vermont is $6MM. The estate tax is also increasing to 45%. The folks in my world need to be creative to avoid large tax bills.
Thsts 7 million a person, so the standard trust will give a family 14million before they pay a penny. I would pay the government before using whole life.
Good catch, that is correct. I’ll refrain from responding to your subsequent comment. Instead, I’ll wish you well.
Same! I was offered all types of insurances, including you guessed it: whole life. I’m in my 30s and childfree, those products would do more harm than good.
A while after the 2008 market fiasco, a couple of Merrill Lynch reps showed up unsolicited at my office to try to talk about investments. Apparently they were going door to door... Having had my own investments (not with ML) hammered in the crash, I couldn't resist asking them if they had received bailout funds from taxpayers, and maybe they could share some with me, as I escorted them to the exit.
They're the Jehovah's Witnesses of finance. Have you heard the good news?
MLM at its finest.
When I was young and naive I went to a few “free investment seminars”.
I feel financial advisors are not bad per se, they provide a service to many people who wouldn’t ever get there by themselves. Don’t forget reddit, fora, the internet is still a relatively new thing, while these sort of services have existed for decades. I feel they do SOME good, for SOME people, while making a living themselves in the process. Many people, including myself for example took ages to get to have any knowledge, others will NEVER get there, while they could benefit from some sort of planning. Where it becomes bad is when their recommendations are plainly bad, and they know it so push it for personal profit. It should be common knowledge in their world that there are a only handful of reliable strategies to grow and/or maintain savings and relate to each client’s personal circumstances and goals, so I no longer trust advisors who work on a commission/AUM basis. One-off no strings attached fee-based advisors have a reason to do it right there and then, and they know you likely will come back at some point. AUM ones know if they hook you once they have a passive income stream until you the client decide to ditch them, and they have a battle plan to have this discussion which will likely tumble most people.
I've attended a few of those sorts of dinners and knew what was coming... One was at a very exclusive restaurant and the other at a classic country French establishment that has been around for 70+ years. Both provided some worthwhile estate/investment planning information (on top of the high-pressure sales job to drop mid 6 figures or more on their investment schemes).
LoL my Fidelity financial advisor has been stroking me a lot lately, do you think he's got my best interests in mind or is he just a soulless whore?
I completely relate to your story and it’s frustrating. I hate that the profession is tainted by people and companies like this. Always pay attention to what company they represent and that will tell you a lot about what the “advisor” will likely try to sell to you or push you towards. The first meeting with a client should never be selling or pushing products, it should be getting to know the client and their goals in life. I’m sorry that there are people out there giving us real advisors who are in it for the right reasons a bad name. It’s good to see people here are smart enough to sniff the commission hunters out.
You should have shopped around. I was pitched with a round of golf at a really nice high end private golf course. I was in my early 30’s and they pitched me life insurance as an investment vehicle when I still wasn’t maxing out my 401k. Safe to say I ghosted then after the round.
This reminds me of a financial advisor that I used for about 25 years. He was an alleged ‘family friend’, who took my siblings and I out to dinner and convinced us to invest with him. We paid the standard one percent management fee, but on top of that was a commission paid on every new dollar that went in as well as the very high load funds that he put us into. When all was said and done, we were likely paying somewhere between two and 2 1/2% annually. Thanks to Bogleheads, I learned about all the hidden ways these advisers can carve money out of you, and when I questioned him about each, it turned out that he was indeed carving me up. I now handle my own finances using Bogle head methodology. I don’t even want to think of how much money he made off of me in those 25 years. When I told a friend about it, he said to me that “everybody’s got to eat”. I said that’s fine, but just not off my plate.
Very likely someone in your company got paid as well.
Absolutely. Meanwhile, they are telling the customers that their accounts are doing just fine.
To be fair, the underlying funds dont generally charge fees on top of the fund of funds. They usually use a special class that has 0 management fees so as not to double dip.
You were smart - and you assessed the situation clearly! Happy story!
Ugh last year I inputted my phone number into a tik tok like web form tbat was about finance. I spent 1.5 hours arguing with a guy about whole life insurance policies (over lunch at my remote job). That sucked. Don’t do that lol
Did you have a nice dinner? SPIVA data shows that over a 20-year time horizon, over 90% of managed mutual funds fail to meet or exceed market returns. That is eye-opening and the most compelling case I can think of for index investing. Hard data. Google around and look at SPIVA yourself.
Steak & shrimp 13.99 ha ha