Warning make sure your financial advisor hasn't screwed you. (Full Version)

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NeedToUseYou -> Warning make sure your financial advisor hasn't screwed you. (10/19/2008 3:33:49 PM)

Well, just in the last few days, two people I know have been screwed by their advisers. First one, went to theirs in February and insisted they convert everything to cash, or something highly safe. However, he kept dragging and pressuring to stay in the market, stating that if everyone pulled their money like they wanted to, it'd cause a downturn. Well, after arguing with the guy (I wouldn't have argued I'd have ordered him or called the authorities, if he refused), they eventually relented. Well, this retired couple has lost 200K now. While that isn't illegal it definitely was not healthy advise or good advice, nor advice in the interest of his client.

Second case, was blatantly illegal. A 68 year old (my business partners mother in law) was no doubt ripped off. She had an annuity, and her adviser had canceled her existing one, and flipped it for another.  He had also invested her money in a manner that she had not consented to. Now, this case, is 100% fraud, as we looked up the relevant laws in Wisconsin, and he did not follow the necessary disclosure, or even get all the required documentation signed by her. She is out because of the flipping, and unauthorized investments about 250K.

Both of those were at supposedly legit companies. Well, known nationally, and the other regionally.

Point is if you have an adviser, and you have not checked where the heck your money is at, it may not be where you agreed it should be. Might want to check that out, especially those with annuities, as those are very lucrative to flip.

Anyway, thought that was odd that two people in my little extended circle got burned for nearly 500K total. The first it was their fault for not being more forceful, the second was blatant theft.

Just saying if someone is handling your money you really might want to do a thorough audit of where and how it is being used, so many it seems trust others to much.




faerytattoodgirl -> RE: Warning make sure your financial advisor hasn't screwed you. (10/19/2008 3:45:11 PM)

i advise myself on my money....but then i dont have any... [8|]




pahunkboy -> RE: Warning make sure your financial advisor hasn't screwed you. (10/19/2008 5:12:56 PM)

interesting.   Surely simplicity is a good thing.




DedicatedDom40 -> RE: Warning make sure your financial advisor hasn't screwed you. (10/19/2008 5:31:49 PM)

The real purpose of consumer investment portals (AG Edwards and the like) is to take money from people cant make much use of it in a global market sense and give it to people who can do alot more good with it.  Not all times will things work as the consumer believes it should. The whole premise of their operations is "give it to me without knowing what will be given back". I think way to many people act like its a bank account on steroids.

I don't understand why people are so unguarded and willing to hand it over to an environment of unknowns when it comes to their life savings.  They certainly aren't that unguarded when it comes to other assets like their house. To be so would be the equivalent to betting your house in a poker game every week. Perhaps its the thrill one gets from gambling.




blacksword404 -> RE: Warning make sure your financial advisor's hasn't screwed you. (10/19/2008 5:38:22 PM)

Lol. I invest my own money. Some advisers have allegiances to people or companies other than you.




OneMoreWaste -> RE: Warning make sure your financial advisor hasn't screwed you. (10/19/2008 11:39:37 PM)

quote:

ORIGINAL: faerytattoodgirl

i advise myself on my money....but then i dont have any... [8|]


So then I guess the OP wants to know if you've masturbated lately. [:-]




TNstepsout -> RE: Warning make sure your financial advisor's hasn't screwed you. (10/20/2008 5:56:05 AM)

quote:

ORIGINAL: blacksword404

Lol. I invest my own money. Some advisers have allegiances to people or companies other than you.


I agree. No one cares as much about your own money and future as you do. Learn to do it yourself, or at least learn enough to know if your "adviser" is doing it right. 




NorthernGent -> RE: Warning make sure your financial advisor hasn't screwed you. (10/20/2008 6:03:01 AM)

quote:

ORIGINAL: NeedToUseYou

Well, just in the last few days, two people I know have been screwed by their advisers.



'Could be different over there, Need, but here they are, first and foremost, businessmen. Now, I appreciate that the long term solution is to treat your customers with a modicum of honesty in order to retain custom, but when needs must.......




pahunkboy -> RE: Warning make sure your financial advisor hasn't screwed you. (10/20/2008 6:29:02 AM)

my best friend Jim, is so enthralled in his petty issues in his mundane life- that he has no idea is 110k  401.k, likely is a big drop.

It reminds me of trying to pick up a quarter while driving thru a toll booth- and herniating the balls.   forget the quarter-

but he is like that. he will so focus on a penny- that it has cost him $.

never take your eye off of the ball.  distraction fries more dreams then any other tactic. 




corysub -> RE: Warning make sure your financial advisor hasn't screwed you. (10/20/2008 5:51:02 PM)

quote:

ORIGINAL: NeedToUseYou

Well, just in the last few days, two people I know have been screwed by their advisers. First one, went to theirs in February and insisted they convert everything to cash, or something highly safe. However, he kept dragging and pressuring to stay in the market, stating that if everyone pulled their money like they wanted to, it'd cause a downturn. Well, after arguing with the guy (I wouldn't have argued I'd have ordered him or called the authorities, if he refused), they eventually relented. Well, this retired couple has lost 200K now. While that isn't illegal it definitely was not healthy advise or good advice, nor advice in the interest of his client.

Second case, was blatantly illegal. A 68 year old (my business partners mother in law) was no doubt ripped off. She had an annuity, and her adviser had canceled her existing one, and flipped it for another.  He had also invested her money in a manner that she had not consented to. Now, this case, is 100% fraud, as we looked up the relevant laws in Wisconsin, and he did not follow the necessary disclosure, or even get all the required documentation signed by her. She is out because of the flipping, and unauthorized investments about 250K.

Both of those were at supposedly legit companies. Well, known nationally, and the other regionally.

Point is if you have an adviser, and you have not checked where the heck your money is at, it may not be where you agreed it should be. Might want to check that out, especially those with annuities, as those are very lucrative to flip.

Anyway, thought that was odd that two people in my little extended circle got burned for nearly 500K total. The first it was their fault for not being more forceful, the second was blatant theft.

Just saying if someone is handling your money you really might want to do a thorough audit of where and how it is being used, so many it seems trust others to much.


The second case you cited is a no brainer for a good lawyer.  Your friend should be able to recapture any lost money in a heartbeat.  A call to the compliance director of each of the companies involved might get a pretty quick settlement, particularly these days with Wall Street brokers not held in high esteem..to say the least.

The first case might be a bit more difficult but doable...depending on the age of the people, the risks that they signed off on in the "New Account Application" they signed off on with this broker.  A stock broker must adhere to the risks that his client states they are willing to assume and has a fiduciary responsibility to make recommendations only in keeping with their objects and risks boundaries.  With the amount of money involved, I would think getting a lawyer to work on "retainer" would be kinda easy.  You would be surprised at some of the surprising decisions in favor of plaintiff by the SEC and other jurisdictions.




subfever -> RE: Warning make sure your financial advisor hasn't screwed you. (10/20/2008 6:54:57 PM)

quote:

Second case, was blatantly illegal. A 68 year old (my business partners mother in law) was no doubt ripped off. She had an annuity, and her adviser had canceled her existing one, and flipped it for another. 


Canceling an existing annuity and exchanging it for another isn't necessarily an illegal, immoral, or even a negative thing for that matter... especially if it had been properly done as a tax-free exchange under the IRC 1035, and full disclosure had been provided to the owner.

quote:

 He had also invested her money in a manner that she had not consented to.


Is the new annuity a variable annuity, fixed indexed annuity, or a fixed annuity? From the sound of it, the new annuity is a variable annuity and at least some of the funds had been invested in equities.

quote:

Now, this case, is 100% fraud, as we looked up the relevant laws in Wisconsin, and he did not follow the necessary disclosure, or even get all the required documentation signed by her.


Insurance companies that issue variable annuities today won't even accept new business applications without signed disclosure forms. Is there any possibility that the 68 year old woman signed these forms and had forgotten about them?

How long has she had the new annuity, and when did she first notice a problem?

quote:

 She is out because of the flipping, and unauthorized investments about 250K.


I'm fairly sure the issuing company of the new annuity will launch a full investigation to determine if there indeed was any wrongdoing on the part of the representative who effected the exchange. If there was any wrongdoing, the company would rather correct the problem than have the Director of the Department of Insurance get involved. If it's a variable annuity, the NASD may get involved too.

Does the representative of the issuing company have E&O (Errors & Omissions) Insurance? Most E&O policies have a $250K minimum coverage for liability.




NeedToUseYou -> RE: Warning make sure your financial advisor hasn't screwed you. (10/21/2008 1:35:41 AM)

quote:

ORIGINAL: subfever

quote:

Second case, was blatantly illegal. A 68 year old (my business partners mother in law) was no doubt ripped off. She had an annuity, and her adviser had canceled her existing one, and flipped it for another. 


Canceling an existing annuity and exchanging it for another isn't necessarily an illegal, immoral, or even a negative thing for that matter... especially if it had been properly done as a tax-free exchange under the IRC 1035, and full disclosure had been provided to the owner.

quote:

 He had also invested her money in a manner that she had not consented to.


Is the new annuity a variable annuity, fixed indexed annuity, or a fixed annuity? From the sound of it, the new annuity is a variable annuity and at least some of the funds had been invested in equities.

quote:

Now, this case, is 100% fraud, as we looked up the relevant laws in Wisconsin, and he did not follow the necessary disclosure, or even get all the required documentation signed by her.


Insurance companies that issue variable annuities today won't even accept new business applications without signed disclosure forms. Is there any possibility that the 68 year old woman signed these forms and had forgotten about them?

How long has she had the new annuity, and when did she first notice a problem?

quote:

 She is out because of the flipping, and unauthorized investments about 250K.


I'm fairly sure the issuing company of the new annuity will launch a full investigation to determine if there indeed was any wrongdoing on the part of the representative who effected the exchange. If there was any wrongdoing, the company would rather correct the problem than have the Director of the Department of Insurance get involved. If it's a variable annuity, the NASD may get involved too.

Does the representative of the issuing company have E&O (Errors & Omissions) Insurance? Most E&O policies have a $250K minimum coverage for liability.



They headed up to wisconsin on sunday, according to her he switched it without her consent. Maybe he forged the paper work or misrepresented what it was she was signing, I've no reason to not believe her. Others are handling it now, I am just a friend of her son-in-law. So, I won't be getting deeper involved. I'm actually licensed to sell most forms of insurance in Illinois, and I know that multiple papers must be signed when switching them over. However, I don't know what wisconsin law is compared to Illinois law, we did look it up, and she says she didn't authorize any changeover. The Department of Insurance I'm sure will be involved (Her step son is an insurance agent, so we know that is the best threat).

Anyway, It would not suprise me one bit if he forged it, when I worked actively in insurance I know of more than a few occasions where agents did such things.  Most of the time the insurance company just eats the loss, rather than get in trouble with the department of insurance.




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