Real Fiduciary Advisor Charlie Ryan discusses the bad experience of Maryland investor, Margaret, with a broker. Margaret tells her story.
Meet Margaret from Maryland. She had been relying on the advice of brokers for many years but contacted a fiduciary (CFP®) for a second opinion when the broker recommended that she buy another annuity to add to the two she’d already been sold.
The fiduciary found that the broker did not highlight the seven-year surrender charge schedule of the proposed annuity to the then 80 year-old Margaret, who needed liquidity to finance her standard of living. She was also unaware that she was currently paying $4000 annually in annuity expenses. These annuities had no living benefits.
On a pay by the hour basis, the fiduciary helped Margaret transfer all holdings to low cost index funds, saving her $3500 in annual expenses.
You can read Margaret’s comments below.
My experience occurred in the early 1990’s, shortly after the death of my husband. The agent I used was recommended to me by a long-time friend. She had used him as her agent for several years and was pleased with her earnings.
I knew little about investing, but the firm was well known with a good reputation. I think I did very little to investigate the agent, trusting my friend’s judgement and my own judgement of how the agent presented himself. The proposal presented to me for an IRA account and an Annuity seemed sound and profitable. Unfortunately, I did not know to pay attention to fees.
Sometime after I purchased the IRA and Annuity the agent sold me an insurance policy with a “disappearing premium.” I made an initial payment of several hundred dollars. In time I found the monthly premium more than I could afford and I dropped the policy, and the money I invested was lost.
I later learned that the policy was not one sold or recommended by the firm, but one the agent was promoting on his own. The firm notified me of his departure and recommended another agent.
The new agent helped me make some adjustments to my account. After a few years, I stopped hearing from the agent, although his name still appeared on my statements as agent. Finally I heard from another agent of the same firm offering a new investment for me.
Asked why he was calling instead of my agent, he informed me that my agent had died three years before. I had received no notice of this occurrence. The agent offered another annuity plan which needed to be decided upon very quickly because of my approaching eightieth birthday. It was at that point that I secured a Certified Financial Planner.
I sincerely hope you will be successful in your efforts. There are so many people like me who suddenly have money to secure with no idea how to do with it, other than a bank account or a “knowledgeable” friend. I appreciate your dedication to this cause.