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Old 03-30-2013, 12:40 PM   #21
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I'm not clear on what business you engage in with your client/customer but how about a conflict of interest argument?
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Old 03-30-2013, 01:01 PM   #22
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Follow clifp's advice, and OP will be in a pickle with his business client.........
I don't see why. Proof of past performance is a reasonable request. If the FA does not wish to comply, the OP can simply say that he also does not wish to do business with him.

I don't know why any of us not being an FA would have anything to do with this. I've also never had my own driveway seal-coating business - but when one of those guys comes up to me unsolicited, I send him packing. I can't imagine that I'd have to walk a mile in his shoes before I can say "No"?

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Old 03-30-2013, 04:03 PM   #23
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Im probably the nice one of the bunch - If the advisor is one of the long-term EJ guys, Id probably politely take a short meeting and outline your situation. He or she may be sharp enough to get a small slice of your portfolio.

I'm a do it yourself guy, but I am always thankful to an advisor eight years ago that put me on to an excellent mutual fund manager that was putty small at the time.
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Old 03-30-2013, 04:37 PM   #24
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Follow clifp's advice, and OP will be in a pickle with his business client.........
Why is this? Now to be sure my advice is mostly factious designed to get rid of an aggressive EJ broker. But I think the principal is sound. People that are promising to perform a service, almost always provide references. I went to see a carpenter about doing kitchen cabinets recently, he happily showed me the cabinets in his kitchen and all of his other wood work. If I was interested in pursuing in further he would have provided me with the phone number of other satisfied clients. For some reason this isn't common in the financial "service" industry.

A bit of background in 1999 when I retired I was 39, had 3+ million in lottery winnings (i.e. stock options). I was a reasonably knowledgeable about investing, with both credentials (MBA) and 17 years of investing experience. But FIRECalc, internet forums other than the Motley Fool, researchers like Wade Pfau etc and other source of info were all well in the future.

So like many new folks on the forum, I had anxiety about being able to manage my money by myself. I met with several potential adviser finally narrowing the list down to Fisher investments. After a few meeting and many hours I was leaning to signing up with them. I asked the two Fisher investment guys for proof that their strategy produced good returns.

"I'd like to see the annual returns all the money under your management, as well as a the monthly statement for a couple representative accounts that are similar in size and objectives to my portfolio with the names and account numbers removed."

"Ah well we can't do that for privacy reasons" they responded. "Ok well how about providing me with your personal portfolio statements", I asked.
They smiled and shook their heads. At which point, being pretty annoyed I said. "Look you guys want me to give you $30,000 a year to manage my money, and you aren't willing to make some extra effort to show my why I should hire you, do I really look that stupid."? Schwab periodically rolls out new investment advisers, and I happily attend the seminars they invite me to. I have meet with a few advisers, and pretty much always ask for the same thing, (generally with more tact), and it always ends the conversation. Which isn't a bad thing after all.

Still I felt vindicated when Warren Buffet required everything I asked for plus tax returns before hiring two investment adviser to run Berkshire's portfolio.

Now there are definitely easier ways of telling the EJ guy to get lost. The one advantage of my approach is the OP could look his business friend in the eye and tell him. "Thanks for the referral, but unfortunately he wasn't willing to do business with me." Which may lead to conversation about how good the EJ guy really is and lead his business client to figure out that we was paying a lot for very little. Which might lead to very happy customer when he ditches EJ.
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Old 03-30-2013, 05:09 PM   #25
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I don't see why. Proof of past performance is a reasonable request. If the FA does not wish to comply, the OP can simply say that he also does not wish to do business with him.
What if FINRA and the SEC don't allow FAs to do that? Maybe that's why clifp has never gotten anyone to provide that info.
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Old 03-30-2013, 05:34 PM   #26
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What if FINRA and the SEC don't allow FAs to do that? Maybe that's why clifp has never gotten anyone to provide that info.
What specifically does FINRA prohibit regarding the disclosure of a adviser personal financial info.
I have searched the FINRA manual in vain several times, along with reviewing my textbook from an abandoned CFP course, for a rule that says I as an adviser can't give you my tax returns and/or personal brokerage statements.
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Old 03-30-2013, 05:43 PM   #27
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"I'd like to see the annual returns all the money under your management, as well as a the monthly statement for a couple representative accounts that are similar in size and objectives to my portfolio with the names and account numbers removed."
It sounds good in theory, but I don't think seeing this would prove much. They could easily have had a string of unusually good or bad years, or achieved fantastic results by taking fantastic risks with their client's money.
By the time you could really analyze the data (gather enough of it, adjust it for risk, etc), two things would have happened:
1) The EJ management would have come up with new improved investment criteria making the whole historical compilation irrelevant going forward.
2) You would have learned enough about investing to realize you could save yourself $30K per year by doing this yourself.
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Old 03-30-2013, 08:31 PM   #28
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I think this is a job for caller ID.
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Old 03-31-2013, 06:32 PM   #29
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It took us six-eight months to find a good finacial advisor that we were both comfortable with.

Our experience is that the really good advisors, the pros, do not need to resort to cold calling multiple times for clients.

And absolutely avoid the ones that spend time telling you how good they are.

Their solid reputations result in more than enough business and personal referrals than they can handle.

Turn him down politely and firmly. Don't provide any objections since it will only prolong the discussion while the advisor tries to overcome your objections. Firmly and politely say no thanks and do not leave the door open to more discussions/calls.

Call your customer, thank him/her for the contact but politely tell him/her that you do not really need the services of his advisor at this time. Do it before the spurned advisor has the opportunity to follow up with your customer. It will be fine.
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Old 03-31-2013, 08:43 PM   #30
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I can generate safe after-tax return of 6-8% with my cash should I need to or if I want to.
How?
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Old 03-31-2013, 08:49 PM   #31
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How?
Based on the quote below, I'd guess real estate...
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... I spent the last two years gobbling up 15 newly built foreclosures and shortsells. The net rental income after all expense is $108k, but I subtract $24k as reserve for occasional vacancy and remodeling.
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Old 03-31-2013, 09:16 PM   #32
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Based on the quote below, I'd guess real estate...
Oh, thanks.

I guess if OP is making those nice returns due to his expertise and hard work with rentals, he should just tell the Edward Jones rep that and be done. That shouldn't offend the rep or the friend who recommeded him.
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Old 04-01-2013, 02:12 PM   #33
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For curiosity sake, I ran clifp's scenario by our Compliance department. They told me that although no specific FINRA rule disallows the request that clifp is talking about, they would never allow it. ALL release of information an advisor wishes to do must be pre-approved by their Compliance Department. He said they would never approve such a request and the reason is that it would give the investor free rein to sue for ANY reason and that since "no-fault" settlements do not exist in arbitration cases, the advisor would have no defense and no recourse, and would lose the case, regardless of appropriate disclosure, etc. He was of course referring to the performance scenarios and not the tax return part. However, he said he can't think of any reason any advisor would share their tax return details with a potential investor. Most of these folks were securites litigators and/or worked for FINRA or SEC so I am going with what they say.

So I guess the bottom line is that even if the advisor WANTED to comply with a request like clifp's, it would not happen in most if not all cases...............at least I asked.........
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Old 04-01-2013, 04:32 PM   #34
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You are under no obligation to justify yourself to the EJ guy. Politely tell him 'no' without a reason. Then say goodbye and hang up.
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Old 04-01-2013, 04:57 PM   #35
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I am fascinated by all these games proposed by the anti-planner types on this forum, as well as the time they spend crafting such games. Do you have anything better to do?

An EJ guy pestered me at home a couple of times, When he came back a third time, before he could start a conversation, I politely told him I was not going change anything I was currently doing. He backed away from the door and extended his hand holding a business card, which I took, and then he said something to the effect that he was sorry to have bothered me and I was free to call him if I ever wanted to. That's all -- no game playing.
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Old 04-01-2013, 04:59 PM   #36
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I am fascinated by all these games proposed by the anti-planner types on this forum, as well as the time they spend crafting such games.
I'm guessing they do it all for your entertainment!
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Old 04-01-2013, 05:07 PM   #37
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New Edward Jones reps are REQUIRED to have 1000 contacts, whether in person or on the phone, DOCUMENTED, or they are fired. When Big Brother is providing you a stipend salary and offcie support money for your new Ed Jones office, he has a lot of apron strings........
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Old 04-01-2013, 05:09 PM   #38
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Have to admit I am using EJ. When I first started saving a decent amount of money I hadn't even heard of Vanguard/Fidelity etc. They have about $360k of my money right now. The guy who I was dealing with (kind of friend of a friend who was a EJ guy) just this last summer got tired of EJ and quit and started with another company. He said he got tired of EJ pressuring him to try to get people to make moves just to generate money. A bunch of people moved their money to the new place...I stuck with the new guy, if for no other reason than I had already given EJ the pre-load and just wanted them to get on with it. The new guy has tried twice now to get me into variable annuities which I have shot down each time. Seems to be something EJ is pushing right now with what has been said already. I have $400k+ in my TSP he is desperate to get hold of.....and likely isn't. Sometime in the near future I think we are going to have to butt heads on his trying to sell me things I don't want.
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Old 04-01-2013, 05:17 PM   #39
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For curiosity sake, I ran clifp's scenario by our Compliance department. They told me that although no specific FINRA rule disallows the request that clifp is talking about, they would never allow it. ALL release of information an advisor wishes to do must be pre-approved by their Compliance Department. He said they would never approve such a request and the reason is that it would give the investor free rein to sue for ANY reason and that since "no-fault" settlements do not exist in arbitration cases, the advisor would have no defense and no recourse, and would lose the case, regardless of appropriate disclosure, etc. He was of course referring to the performance scenarios and not the tax return part. However, he said he can't think of any reason any advisor would share their tax return details with a potential investor. Most of these folks were securites litigators and/or worked for FINRA or SEC so I am going with what they say.

So I guess the bottom line is that even if the advisor WANTED to comply with a request like clifp's, it would not happen in most if not all cases...............at least I asked.........
Fascinating.

So how would a prospective client gain quantifiable track record of a financial advisor.

NB. Am not interested in hiring one, but the curiosity is killing me.
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Old 04-01-2013, 06:30 PM   #40
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Fascinating.

So how would a prospective client gain quantifiable track record of a financial advisor.

NB. Am not interested in hiring one, but the curiosity is killing me.
Quite easily. What clifp seems to be referring to are portfolios of individual stock picks. There is no manager other than the FA himself. However, if an FA recommends a VA or an ETF or a mutual fund, or a UIT, or a combination, there are track records for all of those managers........
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