What if only people with CFPs could call themselves planners/advisors, and everyone else had to use the title “Investment Salesman”. I’m guessing there would be a lot of people out of work since anyone with average intelligence would rather not talk to a salesman about their finances.

If you pass the CFP test and have passed all of the other exams and you won’t to be successful, you will WANT to tell your client where they can look you up online to verify. You will WANT to act on their behalf to make them life-long clients.

This is a no-brainer. I am amazed that so many fools out there ruin it for the good guys.

That’s a great point, especially about the fixed annuities; very true. The problem with annuities (esp. variable) is most investment companies, broker/dealers do a pathetic job of putting them together and presenting them.

Thanks again for the post.

Todd

Where it can get a bit more shady is when they are pitching variable annuities. By nature, they are investments in mutual funds and generally don’t have any sort of guarantee, but now there are many riders you can put on these products that can guarantee principal, rates of return, lifetime benefits, etc.

Of course, people should steer clear of these investments to begin with, but these variable annuities with the various guarantee riders are what a lot of advisors/brokers use to push someone into something more risky. They tout the fact that they can participate in the market and realize those gains, or if it doesn’t perform as well, they can add a 6% interest rider or something for another 50 basis points each year.

I would be more than cautious, I would report them to the principal at their investment firm. No matter what the investment is, no broker can make a “guarantee statement” of any kind for any investment. This is forbidden by the NASD/SEC.

2 other key things to look for when working on investment options with a broker:
1) If they tell you the past performance of a fund or investment indicates what it will do in the future – be cautious. Past performance never guarantees future results.
2) If they are unwilling to give you additional material upon request. They have to discolse all information about investments.

Great post! I’m going to reference it at my blog, thanks for putting this out there!

I did learn in the March issue of Kiplinger’s, though, that you shouldn’t necessarily send every minor concern to your broker in writing. Written communication is apparently usually considered to be formal complaints, which will go on brokers’ permanent records. While some suspicious activity certainly require documentation like this, it’s possible that poor portfolio performance may just be due to bad market conditions.

Granted, it sounds like this was a stockbroker that wrote in, but it might be worthwhile to talk to the broker and his or her supervisor in person first before submitting a request on paper. No reason to jeopardize a broker’s career if he or she hasn’t truly done something wrong.