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Old 08-21-2018, 06:40 AM   #21
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4.75% Front End Load?

That suggestion alone taints anything else he might have said.
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Old 08-21-2018, 06:45 AM   #22
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It is certainly a side gig for me. At the time I got into this there was a need for professional guardians in my area. Typically my referrals come either from attorneys or occasionally Department of Children and Families.

When I’m assigned a client who needs help my first priority is to put that client in a safe environment so they come to no harm healthwise. My second priority is to secure their funds to stop any exploitation. Following that, the pieces start to be picked up.

Some good work has been done. In one case a frail woman in her 80s was kept in the closet of her home with a 5 gallon bucket for a toilet. Her grandson and his girlfriend supported their heroin addiction through her state retirement pension and Social Security. They also refinanced her home, having her sign documents which she had no clue what they were. Home subsequently went into foreclosure. DCF became aware from concerned neighbors and I was subsequently appointed the guardian. I got her out of that mess, stopped the exploitation although in some ways the well had already run dry, and got her into an assisted living facility that treats her well.

in another case a man with advanced dementia was transported to the hospital after neighbors found him on the ground outside of his home. Through an heir search I found two daughters and put them back in touch with their father. For the past 45 years they had thought that her father had died due to stories that their mother had told them. The reunion was a tearjerker.

I had one case where a stripper and her boyfriend took advantage of a gentleman who suffered a head injury. His subsequent diminished capacity allowed her to manipulate him so that she drained him of every dime. By the time his family got the court to intervene, she was hiding a Mercedes E-class he bought her on Indian property so it would be difficult to repossess despite the court order giving me authority to take possession. I secured a bench warrant for her arrest, she was finally found, she was held in contempt for over a week brought before the judge every morning. She finally relented and gave up the location of the car.

I’ve been threatened. I’ve had dogs turned loose on me. I’ve had guns pointed at me. All over me cutting off the purse strings of those exploiting the incapacitated.

The financial advisor who was brought in to handle the accounts of many of these people was recommended to me by an attorney who refered to me the greatest amount of clients. Not knowing any better, I thought it was a good recommendation. The 55+ page Envision plans he works up on the clients often cause my eyes to glaze over. I do have contacts with a couple other financial advisors who were taking care of client’s money before I was involved. In those cases, due to the personal relationships they had with the clients and their obvious genuine concern, I kept them in place for those respective clients. I plan to reach out to them and ask for their opinion on the work product of this peer/competitor of theirs .
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Old 08-21-2018, 07:34 AM   #23
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Sounds like a stand up guy. Can I have his contact info? I've got way too much money and have been itching to throw some of it away.
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Old 08-21-2018, 07:49 AM   #24
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OP the majority of FA's are no better than the people who you're protecting people from. Yeah, I w*rked around the industry and there are a whole bunch of lowlifes who want to make other people's money theirs.

ETA: While at Megacorp I had to help two large financial institutions out, they each had an assigned Megacorp associate. Both of these guys were absolutely clueless. I swear each carried a map to find their cubes!

No suprising both were among the first RIFed. Both are now FAs pulling in 6 figures annually. They don't have the brains to come in outa the rain and some people are trusting their future to these idiots.
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Old 08-21-2018, 07:53 AM   #25
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@firemediceric, by virtue of what you do you are a fiduciary. Fiduciary duty cannot be delegated, so you are on the hook with the courts for everything that happens.

Personal referrals for a financial advisor, while they sound like a good idea, are flawed. The majority of people rate their FAs according to whether they are nice guys, whether they talk like experts, etc. but they are clueless about whether the FA is doing a good investment job for them. So while you did the natural thing, it may well have not produced the investment professionals that you, as a fiduciary, need to be dealing with.

There are no guarantees, but one way out of this is to talk to your lawyer and judge friends and attempt to identify investment professionals who are experienced in guardianship matters and who are respected by the court. Next, interview at least two or three with an ear for fiduciary and investment matters, not for whether the person would be a good friend. Like doctors for a serious illness, you want the most effective doctor whether his bedside manner is good or not.

Finally, insist on getting a letter signed by the FA and by his/her compliance officer confirming that he/she will perform in a fiduciary role in all matters related to your accounts and your clients' accounts. This "in all matters" language is important because under SEC and DOL rules, there are some chameleon-like tricks where an FA can be a fiduciary in some matters and not in others. With a high integrity FA you should not have to worry about this, but it's belts and suspenders to get the assurance. In your role as fiduciary, too, it's a good CYA.
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Old 08-21-2018, 08:03 AM   #26
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There are some sad stories there ... breaks yer heart to hear about the greed and total lack of conscience by some people.

All the advice here is solid, find a "fee for service" advisor. Sounds like this 55 page prospectus is designed to lull one to sleep ... and all for CD's?
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Old 08-21-2018, 08:40 AM   #27
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... The 55+ page Envision plans he works up on the clients often cause my eyes to glaze over ...
So he's with Wells Fargo Advisors or one of their wealth management groups? I have been through the Envision process, and I found a lot of value in it because it got us to think through a lot of things and talk them over and gave us another confirmation that we had enough to retire with the lifestyle we wanted. I am not sure how helpful it would be when managing the trust of someone who can't participate though.

If these are fairly small trusts and the primary goal is "don't lose money" then on the one hand, the ultra-conservative portfolios he's using might be what a fiduciary should do; but on the other hand, is he charging each of them a 1% AUM fee as well? How many hours per year do you think he spends on each client to earn this money? The annual advisory fees are in the 1099 document package in the section labeled Federal Non-Reportable Information.

If you can find someone who will work on a fee for service basis and manage the accounts at a low cost brokerage, that will probably work out better for your clients.
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Old 08-21-2018, 08:55 AM   #28
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I'd dump him faster than last night's dinner after 4 laxatives...
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Old 08-21-2018, 09:08 AM   #29
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OP, we made those exact mistakes in the early years of investing. I bought a whole life policy guarantee 4% return in the early 1980's. The front end load seemed worth at as I received a print out a mile long on how much money I'd be making over my lifetime.



The $ manager was assigned to us when DH worked for Anheuser Busch in the same time period. He had wonderful investments lined up for us. I have gray hair thinking about our youthful ignorance back then. We trusted everyone that had "Financial Advisor" on their business card. They wore nice suits, had nice smiles and were so nice! I have to thank Bob Brinker for teaching us about shark attacks. We'd listen to him on the radio traveling back and forth from family holidays. We lost a good deal from those shark attacks but made it up following BB advice and turning to VG. Been there ever since and are happily FIRE with confidence.
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Old 08-21-2018, 09:24 AM   #30
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@firemediceric, by virtue of what you do you are a fiduciary. Fiduciary duty cannot be delegated, so you are on the hook with the courts for everything that happens..
Without discounting any of your statements included elsewhere in that post as they are all good, the quote above is not quite accurate.

All of these investment plans are presented to a judge. The judge makes the final decision. That is a CYA move to insulate me from liability.

Case in point: I took over as successor guardian on a case after a family member had been exploiting and mismanaging the ward. The ways the family member acting as guardian was enriching the rest of the family from the ward’s money would make your head spin. In doing an audit my attorney presented to the court issues with accountings and annual plans from prior years. The court did not allow us to seek restitution on those prior years as the judge had already signed off and approved them. Judges of course are insulated from being held accountable when they sign off on something they should not have
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Old 08-21-2018, 09:38 AM   #31
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Originally Posted by firemediceric View Post
It is certainly a side gig for me. At the time I got into this there was a need for professional guardians in my area. Typically my referrals come either from attorneys or occasionally Department of Children and Families.

When I’m assigned a client who needs help my first priority is to put that client in a safe environment so they come to no harm healthwise. My second priority is to secure their funds to stop any exploitation. Following that, the pieces start to be picked up.

Some good work has been done. In one case a frail woman in her 80s was kept in the closet of her home with a 5 gallon bucket for a toilet. Her grandson and his girlfriend supported their heroin addiction through her state retirement pension and Social Security. They also refinanced her home, having her sign documents which she had no clue what they were. Home subsequently went into foreclosure. DCF became aware from concerned neighbors and I was subsequently appointed the guardian. I got her out of that mess, stopped the exploitation although in some ways the well had already run dry, and got her into an assisted living facility that treats her well.

in another case a man with advanced dementia was transported to the hospital after neighbors found him on the ground outside of his home. Through an heir search I found two daughters and put them back in touch with their father. For the past 45 years they had thought that her father had died due to stories that their mother had told them. The reunion was a tearjerker.

I had one case where a stripper and her boyfriend took advantage of a gentleman who suffered a head injury. His subsequent diminished capacity allowed her to manipulate him so that she drained him of every dime. By the time his family got the court to intervene, she was hiding a Mercedes E-class he bought her on Indian property so it would be difficult to repossess despite the court order giving me authority to take possession. I secured a bench warrant for her arrest, she was finally found, she was held in contempt for over a week brought before the judge every morning. She finally relented and gave up the location of the car.

I’ve been threatened. I’ve had dogs turned loose on me. I’ve had guns pointed at me. All over me cutting off the purse strings of those exploiting the incapacitated.

The financial advisor who was brought in to handle the accounts of many of these people was recommended to me by an attorney who refered to me the greatest amount of clients. Not knowing any better, I thought it was a good recommendation. The 55+ page Envision plans he works up on the clients often cause my eyes to glaze over. I do have contacts with a couple other financial advisors who were taking care of client’s money before I was involved. In those cases, due to the personal relationships they had with the clients and their obvious genuine concern, I kept them in place for those respective clients. I plan to reach out to them and ask for their opinion on the work product of this peer/competitor of theirs .
Wow! Sounds like you are really trying to do the right thing. Obviously financial money managers have an opportunity to confuse and abuse. With elderly incapacitated clients, being mostly CDs would seem prudent. The huge 55+ page plans seem suspicious - why can’t they be simple enough to understand? Feeling out his professional peers is not a bad idea but what about your own peers - have they found trustworthy financial advisors? I’m glad to see you’ve maintained the relationships other clients have established with their own financial advisors.

Some of this must fall into the lesser of X evils camp.
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Old 08-21-2018, 09:57 AM   #32
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Originally Posted by SpartacusSchmartacus View Post
... Sounds like this 55 page prospectus is designed to lull one to sleep ... and all for CD's?
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Originally Posted by audreyh1 View Post
... The huge 55+ page plans seem suspicious - why can’t they be simple enough to understand? ....
A 55 page plan was a red flag for me, seems to be all about dazzling and obfuscating - 'see how complex this is, you need my professional help!'

I'm with the suggestion from OldShooter to find someone who puts it in writing they will act as a fiduciary in "all matters". Depending on referrals is risky, most people really don't know how to judge an FA.

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Old 08-21-2018, 10:26 AM   #33
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firemediceric, Kudos for your work and all your effort to help your clients get in the best possible situation for them. As a single person with no kids and limited extended family, I sometimes wonder what might happen in a worst case scenario, and I just hope if I'm ever in need of these services, I encounter someone with your ethics and intentions.

Everyone has different skills, and financial stuff can be intimidating. What's bad is that so much of the financial community finds it in their interests to make things seem intimidating - like you need lots of experience to understand complicated investments - when often the simple approach is best. Often the so called advisors are directing people into funds or insurance products that pay the advisors large fees.

Even though you claim to not have much financial background, you've done a good job of investing in low cost, diversified funds. That puts you ahead of a lot of investors.

This site can be a source of a lot of helpful information. A "fee only" (preferably one paid by the hour versus someone who charges a percentage of assets under management) can help you do a retirement checkup if you want. Or feel free to ask more questions here.
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Old 08-21-2018, 10:29 AM   #34
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55 pages should be 2 pages. Tops.
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Old 08-21-2018, 12:01 PM   #35
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Originally Posted by firemediceric View Post
Without discounting any of your statements included elsewhere in that post as they are all good, the quote above is not quite accurate.

All of these investment plans are presented to a judge. The judge makes the final decision. That is a CYA move to insulate me from liability.

Case in point: I took over as successor guardian on a case after a family member had been exploiting and mismanaging the ward. The ways the family member acting as guardian was enriching the rest of the family from the ward’s money would make your head spin. In doing an audit my attorney presented to the court issues with accountings and annual plans from prior years. The court did not allow us to seek restitution on those prior years as the judge had already signed off and approved them. Judges of course are insulated from being held accountable when they sign off on something they should not have
Well, it's a fine point and not critical to the discussion, but are you sure you are not a fiduciary? I'm asking just for my own education, but it sure seems to me that any guardian or conservator is automatically a fiduciary.
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Old 08-21-2018, 12:12 PM   #36
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Wow. This thread shows that a lawyer, a guardian, and a court cannot save one from unscrupulous actors in the financial arena nor from relatives who will take advantage of you.
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Old 08-21-2018, 12:36 PM   #37
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I am not a fiduciary.

I can tell you that the system is set up to quickly drain the assets of the incapacitated right into the pockets of these court officers who are involved.

Just to have a person deemed incapacitated so that their rights are delegated to another, that starts at about $6000.

Attorney fees at $450 an hour. Guardian fees of $100 an hour. Examining committee members. Court-appointed attorney for the AIP. Then the whole money making business of the ALF/SNF
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Old 08-21-2018, 01:24 PM   #38
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I would question whether a guardian or the judge is meeting their fiduciary duty if the guardian is recommending and the judge is approving investing in funds that charge a load given the vast number of ways to get advice at a much lower cost and to invest in funds that would have a much lower management fee.
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Old 08-21-2018, 01:37 PM   #39
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My guess is that this is typical of these arrangements. Courts are not knowledgeable about nor interested in becoming involved with financial affairs of their wards. They delegate to the guardians. When a guardian first takes on the job, he or she likely follows past practice. Safety over performance is favored as protecting the capital of the wards.

Because expenses have to be paid every year, it's hard to tolerate market downturns. Even if the wards end up with insufficient funds in later years, money was not "lost."

Financial management that is in the long term interest of the client/ward is difficult under these parameters. Going with the accepted, known advisers minimizes risk to the guardian.

This apparently is a system that needs substantial improvement, probably in every jurisdiction. Since the wards don't complain about their financial situations, nothing is done.
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Old 08-21-2018, 01:47 PM   #40
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X2 that you should get a Fiduciary FA, that works on an hourly fee basis. Fiduciary will make recommendations based on information provided, that is in best interest of the client. Judgment is not biased based on receiving the commissions and other fees from the investments.
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