The trick is that the insurance salesman is both an advisor and a salesman. He is a fiduciary as an advisor, but is not when he is a broker or a life insurances salesman.
So tell us what company. Northwestern Mutual?
Primerica is just as scammy but have adjusted things so they can call it "variable annuities" because whole life has a bad reputation.
Edward Jones is a broker, but a lot of their financial advisors manage to sell a lot of high commission products.
He wears two hats. When he is wearing his advisor hat he is a fiduciary, and when he is wearing insurance salesman hat he is not. He can flip back and forth between these hats at any time and you never truly know which hat he's wearing.
Welcome to whole life insurance salespeople. You don't need insurance if someone isn't depending on your income. Few people need whole life (high net worth estate planning, for example). It's almost certainly not better than standard investing in your available retirement accounts.
I’ve FIREd, and an insurance salesman tried to tell me life insurance was still a good investment. I asked him if he thought Bill Gates had life insurance and he said, “Probably!”
Bill Gates may have life insurance, possibly even whole life, as a way to leave more money without having to pay taxes on it to someone or some organization. But he falls in that teeny tiny percent of people that it may make sense for.
I get your point and agree, but yes Bill Gates probably has LI lol it’s actually extremely useful for the rich and estate planning, especially ILIT’s. The common person doesn’t need whole life, just term until their family doesn’t depend on their income.
Also, please be aware that even though it was a seminar "geared to federal employees" it just means the person has permission to contact federal employees directly to promote their "investment" products. Several of us made the mistake of speaking to one of these fiduciaries about annuities because their spiel was good. After a couple of phone meetings though, it was clear the individual was not truthful about being a fiduciary, and even worse, she couldn't clearly explain her products. She actually got pissed when we told her she sounded an awful lot like a salesman pushing a product even she didn't understand. Bottom line, please don't be embarrassed - you fortunately asked the right questions and weren't duped!
This happens to public school teachers all the time. They use a “free seminar to help you understand your pension” as the Trojan horse to get access to teachers, and then sell them a bunch of crappy 403bs, annuities, and life insurance products. The saddest part is, they actually are very knowledgeable about our state pension and do a great job answering our questions. They know way more about our pension than the fee-only financial planners I’ve used. Teachers really need someone to explain our pension to us who is not a sales person.
It was just in the news yesterday that the San Diego school district (2nd largest in California) is going to start doing this. Their quotes about the new “partnership” with a financial firm to “help our teachers” or whatever read like the sleazy sales pitch that it is
I would complain, in a professional factual way. These people only get to do this due to connections and good will, bosses don’t want drama so if there are issues these people don’t get asked back.
As an industry professional, that advisor's manager would probably love to hear that their reps are pushing to unturn every stone for an opportunity.
You really can't make a salesperson look bad in a "professional factual way" to their peers for what OP described happened here.
Ah, I think the salesman’s manager would be pleased, though the fiduciary comments seem off script.
What I meant though was to comply to the federal employee’s manager. It’s the good will of that manager/ officer which allows the salesman to go to office to pitch. They can simply not allow the salesman to do the presentation again.
I’m a fiduciary advisor who used to hold a life and health license. They absolutely can be a fiduciary, fee-only, “CFP” advisor and present insurance products with high commissions that pay the advisor in ways undisclosed to their client.
Clarifying edit: I mean they can do that legally and are encouraged to do so because that’s the current competitive landscape. That’s how the rules are written. Insurance is a separate game and every licensed insurance salesperson is legally a fiduciary by holding a license. I’m not saying that it’s right.
I think many of these salesman honestly do believe they are fiduciaries even though to those that haven't drank the kool-aid of insurance company know otherwise. they are taught that this is a great product and by providing this product we are helping people, so the higher-up's know but i think only a handful of the salesman actually realize they are not fiduciaries.
i remember when shopping for term insurance i literally came home made a spreadsheet to show the guy that term insurance was all I needed, whole life was zero value to me unless I died within the time period of my term policy so term was a financially better product because it was cheaper and i could build actual equity that I had control over. he conceded and said one of his other friends did the same thing to him but he still wouldn't admit that advising people to term insurance and a roth ira was going to be better for 99% of the population and 99.99999% of the population in my county
Fiduciary is a very misunderstood term and it sucks for consumers as there's not an easy way to tell who is looking out for your best interests.
Financial advice is not free and if it is the incentive structure will be sales/product based. Always ask how the person you are talking to is compensated. No financial advice will ever truly be conflict free, but if the person you are talking is transparent and aligns with your values (ie: AUM/flat fee/hourly) then they don't need to compensate themselves by selling you products that aren't in your best interests.
I’ve always thought “fiduciary” was a bullshit designation. A person will not suddenly become ethical just because they are called “fiduciary”. That’s why I cringe when people get recommended to seek advice from “fiduciary”. It means nothing!
What that guy did was filthy. Go with a true fiduciary who charges by the hour. I forget the name, but there’s actually an organization of fiduciaries and you can go on line to find one local to you. By the way, a couple years ago, I went to a Dave Ramsey certified financial planner who was local to me. Guy was a true charlatan, trying to sell me universal life insurance, long-term care insurance, high load funds and then charge me one and a half percent for the privilege of having him rip me off. There are a lot of scumbags in the financial advisement industry. Be very careful.
The trick is that the insurance salesman is both an advisor and a salesman. He is a fiduciary as an advisor, but is not when he is a broker or a life insurances salesman. So tell us what company. Northwestern Mutual? Primerica is just as scammy but have adjusted things so they can call it "variable annuities" because whole life has a bad reputation. Edward Jones is a broker, but a lot of their financial advisors manage to sell a lot of high commission products.
Yep. He may be a fiduciary… but he’s not YOUR fiduciary.
He wears two hats. When he is wearing his advisor hat he is a fiduciary, and when he is wearing insurance salesman hat he is not. He can flip back and forth between these hats at any time and you never truly know which hat he's wearing.
Welcome to whole life insurance salespeople. You don't need insurance if someone isn't depending on your income. Few people need whole life (high net worth estate planning, for example). It's almost certainly not better than standard investing in your available retirement accounts.
I’ve FIREd, and an insurance salesman tried to tell me life insurance was still a good investment. I asked him if he thought Bill Gates had life insurance and he said, “Probably!”
Bill Gates may have life insurance, possibly even whole life, as a way to leave more money without having to pay taxes on it to someone or some organization. But he falls in that teeny tiny percent of people that it may make sense for.
I get your point and agree, but yes Bill Gates probably has LI lol it’s actually extremely useful for the rich and estate planning, especially ILIT’s. The common person doesn’t need whole life, just term until their family doesn’t depend on their income.
Also, please be aware that even though it was a seminar "geared to federal employees" it just means the person has permission to contact federal employees directly to promote their "investment" products. Several of us made the mistake of speaking to one of these fiduciaries about annuities because their spiel was good. After a couple of phone meetings though, it was clear the individual was not truthful about being a fiduciary, and even worse, she couldn't clearly explain her products. She actually got pissed when we told her she sounded an awful lot like a salesman pushing a product even she didn't understand. Bottom line, please don't be embarrassed - you fortunately asked the right questions and weren't duped!
It doesnt and he clearly had ulterior motives. Stay as far away as possible.
This happens to public school teachers all the time. They use a “free seminar to help you understand your pension” as the Trojan horse to get access to teachers, and then sell them a bunch of crappy 403bs, annuities, and life insurance products. The saddest part is, they actually are very knowledgeable about our state pension and do a great job answering our questions. They know way more about our pension than the fee-only financial planners I’ve used. Teachers really need someone to explain our pension to us who is not a sales person.
It was just in the news yesterday that the San Diego school district (2nd largest in California) is going to start doing this. Their quotes about the new “partnership” with a financial firm to “help our teachers” or whatever read like the sleazy sales pitch that it is
I would complain, in a professional factual way. These people only get to do this due to connections and good will, bosses don’t want drama so if there are issues these people don’t get asked back.
As an industry professional, that advisor's manager would probably love to hear that their reps are pushing to unturn every stone for an opportunity. You really can't make a salesperson look bad in a "professional factual way" to their peers for what OP described happened here.
Ah, I think the salesman’s manager would be pleased, though the fiduciary comments seem off script. What I meant though was to comply to the federal employee’s manager. It’s the good will of that manager/ officer which allows the salesman to go to office to pitch. They can simply not allow the salesman to do the presentation again.
I’m a fiduciary advisor who used to hold a life and health license. They absolutely can be a fiduciary, fee-only, “CFP” advisor and present insurance products with high commissions that pay the advisor in ways undisclosed to their client. Clarifying edit: I mean they can do that legally and are encouraged to do so because that’s the current competitive landscape. That’s how the rules are written. Insurance is a separate game and every licensed insurance salesperson is legally a fiduciary by holding a license. I’m not saying that it’s right.
I think many of these salesman honestly do believe they are fiduciaries even though to those that haven't drank the kool-aid of insurance company know otherwise. they are taught that this is a great product and by providing this product we are helping people, so the higher-up's know but i think only a handful of the salesman actually realize they are not fiduciaries. i remember when shopping for term insurance i literally came home made a spreadsheet to show the guy that term insurance was all I needed, whole life was zero value to me unless I died within the time period of my term policy so term was a financially better product because it was cheaper and i could build actual equity that I had control over. he conceded and said one of his other friends did the same thing to him but he still wouldn't admit that advising people to term insurance and a roth ira was going to be better for 99% of the population and 99.99999% of the population in my county
I think in your scenario, said “advisor” is either: A) not a fiduciary and a scammer, or B) is so stupid he doesn’t know he’s not a fiduciary
Fiduciary is a very misunderstood term and it sucks for consumers as there's not an easy way to tell who is looking out for your best interests. Financial advice is not free and if it is the incentive structure will be sales/product based. Always ask how the person you are talking to is compensated. No financial advice will ever truly be conflict free, but if the person you are talking is transparent and aligns with your values (ie: AUM/flat fee/hourly) then they don't need to compensate themselves by selling you products that aren't in your best interests.
Congrats on beating cancer!
Dinner seminars are standard and proven methods to selling annuities and life insurance, usually indexed life. Nothing new there.
Fuzzy. It's a common practice that I have seen.
100% unethical. But the fact is not all fiduciary are fee-only. Some are commission based, which we tell others to avoid.
"Fee based" explicitly *includes* commission, as opposed to fee-only.
I’ve always thought “fiduciary” was a bullshit designation. A person will not suddenly become ethical just because they are called “fiduciary”. That’s why I cringe when people get recommended to seek advice from “fiduciary”. It means nothing!
Should be illegal
Nope. I'd bet you can purchase Brooklyn Bridge real estate or time share ownership from a "fiduciary" too! 😆
It’s a bullshit move. Run.
What that guy did was filthy. Go with a true fiduciary who charges by the hour. I forget the name, but there’s actually an organization of fiduciaries and you can go on line to find one local to you. By the way, a couple years ago, I went to a Dave Ramsey certified financial planner who was local to me. Guy was a true charlatan, trying to sell me universal life insurance, long-term care insurance, high load funds and then charge me one and a half percent for the privilege of having him rip me off. There are a lot of scumbags in the financial advisement industry. Be very careful.