An article from Investment News titled, “Portfolio Managers Should Eat Their Own Cooking” indicated that approximately 25% of equity (stock) fund managers invest in their own funds. Only 25%? Why so few?
This fact is also true for the vast majority of ‘professional’ financial advisors, fee-based advisors or financial planners. They DO NOT own or invest in the products they recommend to investors. Here is what makes Tim ‘mad-as-hell’: These so-called financial service industry ‘professionals’ masquerade as sales reps pushing financial products that financially benefit themselves, their company and the industry first and foremost…NOT you the investor…and it’s all legal due to what is known as the industry’s ‘suitability standard’.
Here are a couple recommendations to ensure your advisor has your best interest as their #1 priority:
1. Have them show you proof that the financial products they are trying to sell you, they personally own in their portfolio.
2. Have them write on their company’s letterhead, that they have a legal fiduciary duty to serve your best interest, first and foremost…’legal’ being the key word.
I can say with a high degree of certainty, your financial ‘professional’ will start to feverishly dance, figuratively speaking, when you ask for these. If they can’t say unequivocally yes and be willing to share proof to both, without hesitation, it’s time to move your money someplace else…unless you’re ok with knowingly forfeiting the majority of your future wealth.
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