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Scott Burns on Financial Advisers
Old 03-02-2008, 08:34 AM   #1
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Scott Burns on Financial Advisers

(With apologies in advance to any forum members who happen to be FA's... )

What “Financial Adviser” Means 95 Percent of the Time

"Want to guess how many people are called financial advisers? Cerulli Associates, a Boston firm that studies the financial services industry, recently put the number at nearly 250,000."

"Cerulli Associates says you can find people called financial advisers in six major places. Each place represents a channel of distribution. Here are the basic numbers:
  • National full-service brokerage. There are 69,000 advisers at national full-service brokerage firms such as Merrill Lynch, Smith Barney and UBS.
  • Regional full-service brokerage. There are another 14,000 at the smaller regional brokerage firms such as RBC Dain Rauscher or Morgan Keegan.
  • Independent broker/dealers. There are 98,000 at independent broker/dealers such as Raymond James Financial and Mutual Service Corp.
  • Bank brokerage. There are nearly 16,000 at bank brokerage operations such as Wells Fargo and Bank of America.
  • Insurance broker/dealers. Insurance broker/dealers add another 34,800 at firms like AXA advisors, NYLIFE Securities and Mass Mutual Investor Services.
Add them all up, and you’ve got 232,000 salespeople who work for their firm, not you. Another 23,000 are registered investment advisors. But nearly 10,000 of those are also broker/dealers included in the 98,000 count above.

That leaves about 13,000 registered investment advisers. In other words, of all the people who may call themselves financial advisers, about 5 percent are registered investment advisers alone.

This is an important fact. A registered investment adviser is the only person in this group who has a sworn fiduciary duty to put your interest first. The others provide what is deemed "suitable" investments. Micro print contract documents may even tell you that your interest and the interest of their firm may not always be the same."
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... and then we have this guy
Old 03-02-2008, 09:19 AM   #2
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... and then we have this guy

My dad suggested I listen to Jordan Goodman who according to his website is:
Quote:
“America’s Money Answers Man” and a nationally-recognized expert on personal finance.
I thought I had heard of all the financial gurus, but apparently I'm lacking because I've never before heard of this "nationally-recognized expert on personal finance".
Looking further over his site, under "Recent Posts" is an article "Financial Birthdays" which has gems such as:
Quote:
Age 50:
First year you can contribute the extra catchup $500 into an IRA and/or a 401k. That means you can contribute $3,500 instead of $3,000 if you are merely 49. These catchup amounts will rise in
coming years, eventually to $1,000 a year.
and
Quote:
Age 65:
First age when you can retire and get full Social Security benefits.
His website is devoted mainly to selling his books and software. Given the quality of his "information", I won't be typing my credit card information into his checkout forms any time soon.
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Old 03-02-2008, 09:14 PM   #3
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My dad suggested I listen to Jordan Goodman...
His "wisdom" is offered a couple of mornings a week on WLW radio in Cincinnati. His big things are "medical re-pricing" where you can pay for somebody to negotiate lower rates with your doctor, and investment in Canadian oil and gas trusts as a means for generating income.
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Old 03-02-2008, 10:10 PM   #4
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WLW......the BIG ONE. Home of Bill Cunningham. Do they still do Earl Pitts?
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Old 03-04-2008, 06:33 PM   #5
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WLW......the BIG ONE. Home of Bill Cunningham. Do they still do Earl Pitts?
No. Gary Burbank retired at Christmas time. The new afternoon guys are Tracy Jones (a former Reds player) and Eddie Fingers (a former DJ at rock station WEBN).
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Old 03-04-2008, 06:53 PM   #6
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Unfortunately, the age 50 advice is not quite as good as you can get. At age 49 you can already begin your so-called catch-up contributions since you only have to be age 50 on the last day of the year. So folks with late birthdays often waste the first eligible year because they did not plan in advance to have enough money freed up to make that contribution. An example of this is someone who turned 50 in late October. Can they increase their 401(k) contribution by $2500 in Nov and Dec to get that extra $5K into their 401(k) plan?

So you 49-year olds, you gotta be looking into this early.
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Old 03-04-2008, 08:40 PM   #7
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Well, Burns is right that most are salespeople. But RIA doesn't really mean anything either. It all boils down to how they are compensated and if you are willing to pay it.
There were quite a few Edward Jones and Smith Barney salespeople in my CFP review course--not that they were necessarily charlatans, but if I had to bet, well, let's just say I wouldn't want my mom's money there.
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Old 03-04-2008, 10:52 PM   #8
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When I made my earlier post on this thread, I assumed that everyone on the forum would instantly see how flawed Jordan Goodman's advice is. And I still think that is the case for most.

For for those few who aren't up to speed on the "facts" Goodman mentioned and didn't catch my sarcasm about his advice let me be specific.

In addition to LOL's point about catch-up contributions being allowed for the entire year in which you reach age 50, his catchup amounts are wrong. IRA catchup is $1000/year, and 401(k) is $5000, while he has them both at $500/year. Were IRA and 401(k) catchup amounts ever the same?

And anyone turning 65 this year was born in 1943. For someone born in 1943, normal retirement age when you can draw "full" benefits is 66. The last year his statement for a 65th birthday was true was 2002.

So much for the recency of the "information" in Goodman's "recent" posts.

And he missed one that many planning early retirement should consider: If you leave employment after Jan 1 of the year you turn 55, if the plan rules allow then the IRS allows you to withdraw without penalty from the 401(k) plan sponsored by that employer.
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Old 03-05-2008, 07:57 AM   #9
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I did, but I am no longer surprised at what is published as current and credible on financial websites! But that was a good indicator of his web savvy and his complete lack of current information. The 2002 info for catch-ups was $500 for IRAs and $1000 for 401ks. Another moron spouting bad info to the General Public? Why, THAT is news!
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Old 03-05-2008, 09:34 AM   #10
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Originally Posted by Sarah in SC View Post
Well, Burns is right that most are salespeople. But RIA doesn't really mean anything either. It all boils down to how they are compensated and if you are willing to pay it.
There were quite a few Edward Jones and Smith Barney salespeople in my CFP review course--not that they were necessarily charlatans, but if I had to bet, well, let's just say I wouldn't want my mom's money there.
Ameriprise pretty much makes it MANDATORY to get a CFP....that being said, most Amerprise CFPs I have met are insurance guys not doing any REAL planning like you would expect a CFP to do............
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Old 03-05-2008, 09:37 AM   #11
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Ameriprise pretty much makes it MANDATORY to get a CFP....that being said, most Amerprise CFPs I have met are insurance guys not doing any REAL planning like you would expect a CFP to do............
Well, seeing as one of the things a CFP could do is help with insurance planning, they could do some of it. But I don't want the insurance guys doing my tax planning, or my investing strategy, or my retirement planning, or my estate planning, or any of those other things a CFP should be doing for their clients.
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Old 03-05-2008, 10:59 AM   #12
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No. Gary Burbank retired at Christmas time. The new afternoon guys are Tracy Jones (a former Reds player) and Eddie Fingers (a former DJ at rock station WEBN).
I played in a charity basketball game with Gary Burbank (and news guys Len King) years ago when I was a dj at a lowly country station (WMPI), and they were at WAKY in Louisville. Gary was hilarious...

Damn, I thought that brain cell was dead...
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Old 03-05-2008, 10:56 PM   #13
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Damn, I thought that brain cell was dead...
........just needed to be fed.
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