This morning's Dallas Morning News has an excellent story by Scott Burns on the perils of working with a financial adviser. It's even in bold type.
http://www.dallasnews.com/sharedcon...s/2005/stories/072805dnbusburns.17b9a9b8.html
The following note from J.T., a Dallas CPA, is a good indication that the financial services industry has a long, long way to go before it earns our trust and respect:
My 79-year-old mother was referred to an investment adviser (CPA/CFP) who made some amazing investment suggestions.
She told him that she is not a millionaire and primarily invests in CDs with a few no-load mutual funds at Vanguard or Fidelity.
She has no debt, hates risk but wants good return, and doesn't like to pay taxes.
When I spoke with the Dallas-based adviser about his top two choices for my mother, here is what he suggested:
Section 42 Fund: Invests in low-income housing credits, requires a 10- to 12- year time horizon, has a 25 percent load and an IRR (internal rate of return) of 7 percent.
Senior Subordinated Debt Unit Investment Trust Fund: requires a 5-year time horizon, has a 10 percent load and is currently earning 5.4 percent to 5.9 percent.
I told him thanks but no thanks and told my mother to never speak with this gentleman again!
I thought I'd pass along a most amazing tale since this adviser is working with some of my mother's friends.
</snip>
Question for any of the highly ethical, highly professional CFP's who follow this board. How long does it typically take for a CFP who recommends a product with a 25% load to a 79-year-old woman to be drummed out of your organiztion?
intercst
http://www.dallasnews.com/sharedcon...s/2005/stories/072805dnbusburns.17b9a9b8.html
The following note from J.T., a Dallas CPA, is a good indication that the financial services industry has a long, long way to go before it earns our trust and respect:
My 79-year-old mother was referred to an investment adviser (CPA/CFP) who made some amazing investment suggestions.
She told him that she is not a millionaire and primarily invests in CDs with a few no-load mutual funds at Vanguard or Fidelity.
She has no debt, hates risk but wants good return, and doesn't like to pay taxes.
When I spoke with the Dallas-based adviser about his top two choices for my mother, here is what he suggested:
Section 42 Fund: Invests in low-income housing credits, requires a 10- to 12- year time horizon, has a 25 percent load and an IRR (internal rate of return) of 7 percent.
Senior Subordinated Debt Unit Investment Trust Fund: requires a 5-year time horizon, has a 10 percent load and is currently earning 5.4 percent to 5.9 percent.
I told him thanks but no thanks and told my mother to never speak with this gentleman again!
I thought I'd pass along a most amazing tale since this adviser is working with some of my mother's friends.
</snip>
Question for any of the highly ethical, highly professional CFP's who follow this board. How long does it typically take for a CFP who recommends a product with a 25% load to a 79-year-old woman to be drummed out of your organiztion?
intercst
