While I was doing some research on this life insurance product (since the brochure had nothing useful), I ran across a forum thread about the company. There were a lot of former advisors who were saying the company went through salespeople like crazy. After an advisor went through all of their friends and family, they starved out on pure comission. Very few of the advisiors lasted more than a couple of months.

I also felt bad for my friend, but I didn’t want to step on his dream. He’s been in a tough sales job before, so maybe he will make it.

Frankly, I felt a bit bad for the guy who tried to sell me insurance. Didn’t seem like a lot of fun for him.

I totally agree with the spirit of your last paragraph. We are each individually responsible for ourselves, and our future – including learning about investments and personally being accountable for our own finances. Nobody will truly care more about your finances than you.
Squirrelers recently posted..Home Equity Vanishes- Dead Fish Appear

Not only didn’t I get a free meal, I spent my whole lunch hour at the presentation and didn’t get to eat at all.

Next time, I think I’ll skip the whole thing and eat lunch with the money I would have spent for parking. Six bucks buys a pretty nice sandwich.

I agree with you that you need to dig deep for nasty fees and do your own research. That’s a good point that the best funds eventually close to new investors because they are so successful!
Jennifer Barry recently posted..Lasso Your Budget

There is definitely a conflict of interest. People are trusting an advisor who has an incentive to recommend high-commission products. I think most financial advisors want to do what is right for their clients, but they have to sell fee-laden products to make a living. As for frequent trading (aka churning), it’s unacceptable.

Many mutual funds have a 12b-1 fee for marketing purposes. This can be used for advertising and/or incentives (aka kickbacks). I consider a 12b-1 fee a red flag and I avoid funds that have them. Funds that perform well have money pouring in and often close to new investors. They don’t need to advertise or pay incentives, like the poorly performing funds. On average, the best performing funds are the ones with the lowest fees.

Mutual funds can be dangerous as well. I saw a Bloomberg TV video which showed that mutual funds “pay to play,” meaning that they give kickbacks to companies who enroll employees in their retirement plans. These funds are often below-average performers that investors would never choose for themselves. They found that many 401(k) plans have punitive, hidden fees that can eat up half the balance over 30 years.

I see a lot of comments and stories about how the S&P 500 Index had horrible returns over the past decade. This is factually true and accurate. However, the beginning of the decade was the market high of the dot-com bubble and the end of the decade was near the low of the sub-prime crisis. So, I don’t think this specific period is representatve of the S&P 500′s historical performance.

I would be very interested in the published performance of whole life policies, after the fees and comissions. If you have this kind of information, please provide it my readers. The brochure I recevied didn’t provide any information regarding the performance or fees.