Should I Fire my Financial Advisor

[Webzter]

Quote:

Originally Posted by cute fuzzy bunny See...I thought that but didnt say it. I must be getting nicer in my old age.

I'm sure we all have some even better descriptions if it turns out that he was sold a variable annuity inside of an IRA.

[cute fuzzy bunny]

Back to those "two words!" items. Maybe even some single word descriptions.

[crispus]

Sorry to say but the variable annuity is in an IRA.

I talked to my FA advisor today. I asked him why when I called you last month to go ask why our returns lagged the market by over one percent; he told me that you have less downside risk with their strategy. Today I reminded him of what he said and I was told that in a big downturn we loose the protection of the covered call. Also I was told I should not look at my account on days like these. I like my FA and I think he is trying to make me money, but he has to make a living and it cuts into my profit. I did not have the heart to tell him that I was looking to dump him. I will have to work on that.

[cute fuzzy bunny]

Quote:

Originally Posted by crispus I was told I should not look at my account on days like these.

You owe me a new computer. I just spewed orange juice all over this one.

Just dont look at it on days like these...I'll bet the other FA guys reading this are scrambling to write that down... "Yes! The reason why you shouldnt worry about bad days, the ones I told you that you were paying me extra to avoid...is to just not look at them!"



Shoot, my back lawn needs mowing something fierce. I'm not gonna look at it.

[73ss454]

Quote:

Originally Posted by crispus Sorry to say but the variable annuity is in an IRA. I talked to my FA advisor today. I asked him why when I called you last month to go ask why our returns lagged the market by over one percent; he told me that you have less downside risk with their strategy. Today I reminded him of what he said and I was told that in a big downturn we loose the protection of the covered call. Also I was told I should not look at my account on days like these. I like my FA and I think he is trying to make me money, but he has to make a living and it cuts into my profit. I did not have the heart to tell him that I was looking to dump him. I will have to work on that.

Nothing wrong with supporting your FA, someone has to do it. When I dumped mine I was actually mad when I figured out what I was paying. I had no problem moving on even after 20 years.

[Webzter]

Quote:

Originally Posted by crispus Sorry to say but the variable annuity is in an IRA.

I have good news and bad news. The good news is that I would have no problems terminating services if I were you.

The bad news is, I would do it because I would clearly feel that my FA is not on my side.

Here's the deal. An IRA is tax-advantaged. You contribute pre-tax and don't pay taxes until you take money out. If you live life right, and assuming our politicians don't come up with a way to really make us hurt, you'll be in a much lower tax bracket when you're not working and will be able to not pay as much in taxes then.

An annuity is also-tax advantaged.

Assume you only have $x dollars to invest every year. You should max out your 401k / IRA first. If you have extra dollars to invest after that then you should do so. However, in that case, you should put your most tax inefficient stuff in the IRA and then tax-efficient stuff in your regular account.

In essense, you've filled up your IRA with a tax-efficient holding. Absolutely the wrong thing to do (in my not so humble opinion).

Now, here's the thing, if you started life like most of us, you didn't know that. In fact, there's a good chance that you didn't know that when the FA sold you that variable annuity. No problem...

BUT, your FA did know that. Not only did your FA know that, there's also a good chance that he and his brokerage split an 8-12% commission plus any bonuses that might have been going on at that point. And, those commissions aren't really well known to the public (just like we don't really know how much that salesperson gets when he sells us that car).

I think this clearly shows that the FA isn't on your side. I may be cynical, but that's how I see it anyway.

I know you don't want to do anything rash and on a whim, so please please go back and read up on the stuff that's been outlined in the thread. Taking no action for a week probably won't put you in a significantly worse spot.

On the other hand, if you want out now, you could think about liquidating everything to a money market account (either at your current brokerage or t. rowe price, vanguard, etc) and then decide where to go from there.

[cute fuzzy bunny]

Good post. We went a little overboard and you shouldnt feel stupid or bad about this. You paid a pro to do something for you that you didnt feel comfortable enough or knowledgeable enough to do for yourself.

[megacorp-firee]

Quote:

Originally Posted by cute fuzzy bunny You owe me a new computer. I just spewed orange juice all over this one.

You're fault for eating and drinking while reading the posts on this thread... you shoulda known some of the FA quotes would be 'doozies'.

[2B]

Quote:

Originally Posted by crispus Sorry to say but the variable annuity is in an IRA. I like my FA and I think he is trying to make me money, but he has to make a living and it cuts into my profit. I did not have the heart to tell him that I was looking to dump him. I will have to work on that.

There is absolutely no reason on earth that would have anyone put any form of annuity inside an IRA other than the salesperson's commission. Variable annuities are also so far down the line of "suitable" investments for you that I am totally convinced this guy just has his hands in your pockets.

Find out how soon you can cash it out. What the penalties are and what the fees are. The question will be how long a time period will it take to justify cashing it out. Also, look into the possibility of transferring the annuity to Vanguard or Fidelity. You may or may not be able to inside the IRA.

This guy's primary objective is making himself money. He's not your friend. Get your money away from him ASAP.

[crispus]

You know FA's daughter is being Bat Mitzvah's in October and they wanted an upscale booklet to hand out at the party. I am a print salesman, so FA called me for a meeting to discus project at his home. I gave him the price and he said that looked great and he would get me the info in August. He called me a week later, very apologetically, to tell me he was not going to do the booklet. I guess his wife found a cheaper way to do it.

I could not help but notice his home a 1960's rancher in an established high end neighborhood. Inside was a brand new kitchen, several wall mounted flat screen TVs. We walked outside to a nicely landscaped patio with hot tub and in ground pool. It was a hot day and I felt like jumping in to the inviting crystal clear pool.

I am not a jealous person. We have learned to live well below my income and we do not have the extra money for many luxuries. I rely on my faith quite often to give me strength. But I can see that FA is doing quite well.

[2B]

crispus,

It's time to "fish or cut bait." You are supporting his lifestyle by paying fees you don't need to pay for advice you don't need.

Depending on the size of the variable annuity, you may have bought one of those flat screen TVs for him.

[cute fuzzy bunny]

That does it.

I'm going back to work as a financial advisor.

[Webzter]

Quote:

Originally Posted by cute fuzzy bunny That does it. I'm going back to work as a financial advisor.

I've gotten three emails from Amerprise so far telling me that they want me to get a job for them as an FA.

Scary.

[73ss454]

Quote:

Originally Posted by crispus You know FA's daughter is being Bat Mitzvah's in October and they wanted an upscale booklet to hand out at the party. I am a print salesman, so FA called me for a meeting to discus project at his home. I gave him the price and he said that looked great and he would get me the info in August. He called me a week later, very apologetically, to tell me he was not going to do the booklet. I guess his wife found a cheaper way to do it. I could not help but notice his home a 1960's rancher in an established high end neighborhood. Inside was a brand new kitchen, several wall mounted flat screen TVs. We walked outside to a nicely landscaped patio with hot tub and in ground pool. It was a hot day and I felt like jumping in to the inviting crystal clear pool. I am not a jealous person. We have learned to live well below my income and we do not have the extra money for many luxuries. I rely on my faith quite often to give me strength. But I can see that FA is doing quite well.

After seeing your FA's house would it surprise you to know that he's also living below his means. Run Forrest run!

[FinanceDude]

Quote:

Originally Posted by cute fuzzy bunny That does it. I'm going back to work as a financial advisor.

Now THAT I would like to see................

[cute fuzzy bunny]

Dont sweat it, I live a little too far away to steal your customers.

On the other hand, theres this "internet" thing I've heard so much about...

[FinanceDude]

Quote:

Originally Posted by cute fuzzy bunny Dont sweat it, I live a little too far away to steal your customers.

Stealing is a felony............

[cute fuzzy bunny]

Alright then, how about I split the commissions with you from all the rubes good customers that I sell 5% front load, 1.75% ER mutual funds in a variable annuity inside an IRA to?



2B's head just exploded for a second time.

[FinanceDude]

Quote:

Originally Posted by cute fuzzy bunny Alright then, how about I split the commissions with you from all the rubes good customers that I sell 5% front load, 1.75% ER mutual funds in a variable annuity inside an IRA to? 2B's head just exploded for a second time.

I don't sell those, so I guess I better find you an insurance agent that needs a partner............

BTW, VA's don't have front loads, but I digress...........

[FinanceDude]

Quote:

Originally Posted by Webzter 403B

Most 403Bs are invested in annutities through Nationwide, ING, TIAA-Cref and Principal. That's the reality..........