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Almost got burned by financial advisor!

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  • Almost got burned by financial advisor!

    After years of DIY investing, we thought we might be missing something we just started working with

    a financial advisor.  We paid an annual fee of $2000 and received our financial plan.

    The advisor billed herself as an independent advisor but was associated with Ameriprise for logistics.

    We thought the flat fee we paid would mean we would get unbiased financial advice.

     

    Clearly, we did not understand the nuances of financial advisor fees and compensation.  After

    spending days reading on the Internet about variable annuities and variable universal life insurance

    we are now seeing the "emperor has no clothes"! The $2000 was merely the tip of the iceberg.  Every

    recommendation in the financial plan included Ameriprise products - moving assets from Vanguard

    low-cost funds to Ameriprise managed funds for ongoing ~1% fees and even worse were the complicated

    Ameriprise annuities and life insurance products which will generate commissions for the advisor and

    generate minimal returns for us while tying up our money for the rest of our lives.

     

    Thank you to this site and to all who contribute! We are not newbies and yet we still were almost convinced

    these complex products would be reasonable solutions to our needs.    The advisor said "she felt *very*

    good" about what she was proposing. Wow! And yes, we know now that $2000 is not close to what a fixed-fee

    advisor would cost, but at this point we plan to do it ourselves (term insurance + index investing).

  • #2
    Good for you for seeing through her BS. Is there a money back guarantee on her services? It seems outrageously unjustifiable to pay for someone to pitch you a potentially disastrous plan when you had a solid plan in place when you met her.

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    • #3
      I have lost more than $2000 to unscrupulous/conflicted financial pros--consider yourself lucky.

      No need to pay more than $96 for a financial plan these days.

      http://www.doughroller.net/financial-planning/the-96-dollar-financial-plan-from-mark-zoril/

      Comment


      • #4
        I'm looking forward to when doughroller compares the 93 dollar plan to the more conventional plan another recent guest is doing for him.

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        • #5
          Most advisors associated with a certain group tend to only promote the products associated with the group. Ameriprise and HD vest are two I know. Maybe they have to pay fees to join and have something like franchise fees to be paid annually. But then we end up paying those fees via their recommended investments, that favor them than us.

          And what irritates me is that it comes on surreptitiously. I have lost $1500 when an investment went through one of these before it reached the 529 plan. I could have invested directly and saved that. I now don't get any investment advice and every penny invested is DIY. I have individual stocks held for a long time and now invest in Vanguard admiral index funds.

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          • #6
            Glad you figured it out before you got in too deep. Another reason, if you are paying for financial planning, to limit your choices to true "fee-only" financial planners.
            Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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            • #7
              Thanks for the help.  I did request a cancellation of financial services and was refunded the $2000 fee.  I also got a call from Ameriprise "operational leader" and explained my concerns.

              Here is the Ameriprise cancellation form if anyone else is in the same situation:

              https://www.ameriprise.com/content/files/AMP_402004.PDF

              Onward!

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              • #8


                I did request a cancellation of financial services and was refunded the $2000 fee.
                Click to expand...


                That's great! How many people just forfeit the fee, I wonder?

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                • #9
                  Sorry to hear you didn't get the good financial advice you were looking for. Many kudos to you for being an "informed physician investor" and not just blindly accepting the recommendations of your so-called "financial advisor."

                  -WSP

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