Usually this column is used to communicate different products and services in the financial services marketplace with my hope that the information here helps the readership understand financial services products a bit better. Today I’m shifting course to discuss the industry in general.
Over the last three days I attended the Financial Planning Association Conference held this year in Anaheim. This conference is the largest annual gathering of financial planners (international and domestic) anywhere on the planet. We met, listened to keynote speakers, networked with colleagues, checked out the exhibit booths and attended workshops. This year, I realized one very enlightening fact. My industry is, in fact, a herd. We live and die running with the pack.
I’ve listened to quotes like, “we all missed the downturn”, “buy and hold is dead, again”, “and asset allocation doesn’t work.” The most outlandish comments I heard came from a renowned advisor, he said “products don’t matter, charge more fees!”
So what did I learn?
In listening to the speakers the theme was, during the bull market we sold stocks, now that we lost 30% of your money trust us we know what we are doing. To that end the industry is now pushing guarantees. Life payout products and products that lock in gains or offer straight line growth with a guaranteed payout for life (if you pay for the benefit) because we can’t predict the future.
There. I said it. The entire herd that promoted tech stocks, real estate, etc., who railed against guaranteed, now play Monday morning quarterback and want to convince you that they know what they are doing this time, really!
The worst part is that they have lost Billions for clients and now they want you to believe that you should pay more for the same advice they gave you over the last 18 months. Let me make this one crystal clear: if one advisor charges more fees, the rest of the herd will follow.
What does this all mean? First, not all advisors can’t think for themselves, many can and do a great job for their clients. Second, given the recent recession and market downturn I see a greater gap between the wealthy and the rest of us and if fees are going to be the driving force in the financial services industry those of you not making $500,000, or own over $1,000,000 in assets, will be left to fend for yourselves.
Our firm has always worked with clients to help them determine what they need and how to achieve their goals, not by selling them the trendy products. While everyone is looking for the $1,000,000 clients we understand the need to assist everyone under the $1,000,000 threshold because they need planning but they can’t afford $2,500 to $10,000 in annual fees for the advice.
If you are paying more to your advisor than you made in returns, you need to contact our office. Don’t join the herd, stand out from the crowd.
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Mr. Brandone is the President of Horizon Financial Services, a retirement, financial planning and wealth management firm in Del Mar CA. For questions he can be reached at 858-259-0131, ext 313 or via e-mail at mbrnadone@torreypinessecurities.com
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In The Money 