I asked her to send me the comparisons she made in our meeting since we went through them so quickly but she hasn't responded yet. When and if she responds, I'll be sure to post them so hopefully you all can critique her choices and let me know if they were truly "apples to apples" as she said.
Be interesting to see if she will respond. It can be kind of tough to do a true comparison, benchmarks are not always a cut & dried comparison, and if the time period isn't in both up and down markets it might not be too meaningful. But it probably would be interesting. I will be surprised if there wasn't some obvious cherry-picking of the benchmarks.
And it isn't simply a case of whether her fund picks were better/worse than a benchmark - did she move you in/out of them? I'd say based on your risk tolerance, did the
portfolio (not the individual funds over select time periods) do better than a benchmark low cost index B&H overall?
This is how a fee-based advisor works: Nice (at initial meeting) > Really Nice (when you are in office for initial evaluation) > Gushing (when you sign up) > Annoyed at your questions. The investor falls back in line, and the process starts over at Nice.
You hit it right on the nose!! Is it really that common and apparent?!?!
Yes and yes. If a salesperson is selling a product that actually has little/no/negative value to the customer, what else do they have to go on? They have to be nice, and dazzle you. If you get smart, they have no real defense, so they attack and move on to greener pastures. Makes sense to me that that is the only way it can be.
I think about this from time to time - I dealt with sales people in my line of work. I was responsible for selecting millions of dollars of high tech equipment, and in many cases I had a high amount of discretion in choosing that equipment. We had several suppliers and reps for similar equipment. Sure, they were 'salesmen' and 'saleswomen', and they were always going to paint their equipment in the best light. But they knew that a long term relationship and some trust was in their best interest, as next year would likely bring more $M orders, and they wouldn't get the orders if they let me down. And it wasn't too easy to just move to the next customer - there weren't too many others dropping those kinds of bucks as regularly as we were at the time.
You still take what they say with a grain of salt, knowing they aren't going to highlight any weaknesses in their product (though if the product really was unsuitable for my application, they wouldn't recc it to me, because they are thinking long term).
And they always tried to be your 'friend'. But it all works, because it was a win-win. I get a good product to use to make money for MegaCorp, they make a sale. But most likely, and from the posts we've seen here, with an FA like those from Ameriprise, there is no win-win. So they are friendly as long as
they are winning, and then they move on.
-ERD50