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Article: Financial Advisers Flunk Undercover Sting
04-02-2012, 08:59 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Houston
Posts: 1,448
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Article: Financial Advisers Flunk Undercover Sting
More empirical evidence from a Harvard/MIT study that financial advisors are only looking out for one person's interests...it's amazing that this industry continues to operate this way.
So, when the actors came into these offices, what happened? Basically, the advisers advised the dummy clients to do a whole lot of things that were in the advisers' interests, while making some adjustments based on just how much they thought the clients could be persuaded to do.
Financial Advisers Flunk Undercover Sting - SmartMoney.com
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04-02-2012, 09:14 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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I would love to have a discussion if this thread gets some momentum. All I see is a lot of bias involved. Interesting that 70% of the "fake clients" would go back and see those advisors..........hmm..............
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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04-02-2012, 09:54 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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These people are salespeople and trying to make a living. I don't believe for one minute that they have anyone's interest at heart except their own.
About 6 years ago a member of my family received 2.5M in an ins. settlement from a death. After her husband died in the car crash she went to see a friend of her husbands who was in the brokerage business. He promptly sold her 3 annuities eating up the total amount and a LI whole life policy for 19K a year. She was 61 with no dependents at the time.
Now it's 6 years later and the annuities are about to expire. She said the other day that she trusts this guy and is going to give him the money again so he can do what he want's with it.
Hey it's her money let her have a good time with it. I told her once and that's that, she don't listen.
__________________
Work is something you do to get enough $ so you don't have to....Me.
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04-02-2012, 10:10 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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Does this study actually surprise anyone ?
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04-02-2012, 10:57 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by 73ss454
Hey it's her money let her have a good time with it. I told her once and that's that, she don't listen.
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A wise choice I believe. My Dad sometimes said- unless you live in the same house, eat at the same table, or sleep in the same bed, it's not your business.
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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04-02-2012, 10:58 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Moscow
Posts: 1,569
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In other news, dogs bark and cats meow. Wait! This just in. The sun will rise tomorrow!
__________________
You can't enlighten the unconscious.
But you can hit'em upside the head a few times to make sure they are really out...
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04-02-2012, 11:08 AM
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#7
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,583
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Having seen how some people manage their money, these financial advisors might not be a bad option.
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04-02-2012, 11:28 AM
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#8
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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04-02-2012, 12:28 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by MasterBlaster
Does this study actually surprise anyone ?
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The surprising thing is that the sponsors of the study were surprised that the advisors advocated making changes.
They put out 4 portfolios, right?
1)"Chasing Returns" portfolio. No much said about this. Quite honestly, I send folks like this to TD Ameritrade or Etrade and let them go crazy. Folks like this don't listen to advice anyways, so are not a client most advisors want......
2)Portfolios heavily weighted in company stock. Not much said about this either. Of course, logic would say the advisor would try to diversify the client's investments. I am sure the lessons of Enron and others would show that having 75-100% in company stock only is a bad idea. The sponsors said they were surprised that the advisors changed around the portfolios.really??
3)Diversified low-fee index portfolios. I think the article said the advisors "blatantly" moved fund into higher cost MF and such......hello there, bias anyone? That is what I consider a DIY investor, why even talk to an FA if you don't want them to give ideas?
4)All cash - wow, the article suggest the advisor might be most helpful here, since the investor has no plan.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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04-03-2012, 01:05 PM
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#10
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Recycles dryer sheets
Join Date: Jan 2010
Posts: 243
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When we were very young (mid to late 20s) we had saved a lot of money and decided to talk to a neighbor who worked for Dean Witter. He talked to us about investing in oil and gas and gave us a prospectus to take home and read. It did not take me long to figure out that we did not qualify for the investment in terms of our income or net worth.
I started to think about it and it dawned on me that if these guys were so smart, they would not need to work for Dean Witter as salesmen...uhm, I mean financial planners.
We never bothered seeking advice from a commission based FP ever again.
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04-03-2012, 01:36 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by misty57
When we were very young (mid to late 20s) we had saved a lot of money and decided to talk to a neighbor who worked for Dean Witter. He talked to us about investing in oil and gas and gave us a prospectus to take home and read. It did not take me long to figure out that we did not qualify for the investment in terms of our income or net worth.
I started to think about it and it dawned on me that if these guys were so smart, they would not need to work for Dean Witter as salesmen...uhm, I mean financial planners.
We never bothered seeking advice from a commission based FP ever again.
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Yeah, how can you trust planners whose office is in a Sears store?
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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04-03-2012, 02:49 PM
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#12
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Quote:
Originally Posted by FinanceDude
Yeah, how can you trust planners whose office is in a Sears store?
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Only if the investments come with the old Craftsman Tools warranty. "My value-weighted fund broke. Gimme a new one with my original balance."
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04-04-2012, 06:35 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by M Paquette
Only if the investments come with the old Craftsman Tools warranty. "My value-weighted fund broke. Gimme a new one with my original balance."
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How BIG would have been the "Craftsman Portfolio"..........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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04-04-2012, 12:20 PM
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#14
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Recycles dryer sheets
Join Date: Jan 2010
Posts: 243
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Is that where Dean Witter is now? Really? I haven't had any money with them in decades.
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04-04-2012, 12:43 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Mar 2007
Posts: 1,854
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I guess it surprises me in one way. I would think it would follow more of an "80-20" rule...with 20% bad apples....but it seems more widespread.
It's a shame things are this way...hate to see people get taken advantage of.
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"Live every day as if it were your last, and one day you'll be right" - unknown
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04-04-2012, 03:03 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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04-04-2012, 03:04 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by misty57
Is that where Dean Witter is now? Really? I haven't had any money with them in decades.
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Sears sold them off a long time ago.
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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