Beware of product pushers when assessing advisors

The company I worked for decided to close the doors but offered a generous retirement package which I took in May 2008. The last year or so I worked I went very conservative in my modest investment portfolio...mostly money market funds and cash within my company's savings plan. My intention was to move my portfolio into GIC's and begin using it in 2009 either through an RRIF or a lump sum withdrawal to suppliment my monthly pension. A longtime family friend who was a Scotiabank financial advisor suggested I move my portfolio to his institution rather than keep it with the credit union I had dealt with for years. I agreed and in August 2008 did just that. I indicated my desire to invest in GIC's with the previously stated goal of supplimenting my pension. I was told this was the wrong approach and I needed to have my money in one of Scotiabank's mutual funds. I was even told if I wanted to have a Florida vacation every winter this is what I should be invested in. I reluctantly signed the papers. I did not feel good about this arrangement and two weeks later I told my advisor I was not comfortable with what he was doing with my money. He told me I worried too much and that this investment was going be great for me. When I received a financial statement for the period that ended two weeks later I had already lost 10% of my life savings. This fund continuously bled money for several months until I was so sick about it I insisted he pull my money out of the fund. Of course in hindsight this was the wrong thing to do but at the time with nothing but doom and gloom in the forecast I felt I had to protect what was left of my portfolio. This is a hard lesson I didn't want to learn. I feel like I was cheated out of my money and my retirement plans have had to drastically change. Needless to say the longtime friendship is gone as well.

Dear Shafted,

How advisors did you interview and how much did you pay for your advice?...prior to the heavy price you did pay.

I too worked for an investment advisor, not only one, but six! My "boss" told me to get a mortgage/loan line of credit. He had me pay out my original mortgage which only had 10 years left. I was 48 at the time and he was so excited about this venture that we all went along with it. So, now we're paying interest only on the lines of credit. Spring forward 10 years later; the mutual funds are not doing that well. I wanted early retirement (which he promised I would have) along with all lines paid out and a million in the bank! What a fool I was. I left work totally stressed out and depressed. We now had nothing! We still owed the bank for the mortgage line (if we stayed with our original mortgage we would have owned our home.) I'm now on disability as all the stress caused other ailments. We still owe the same amount on our home as we did when I first started working for him. We have no investments whatsoever, we're living on one income and will have to sell our home, which we've desperately tried to hold on to. I wish I never heard of investment advisors and went along the route of my parents, who lived modestly, with money in the bank and a home. Who never had to worry whether stock/mutual funds were going up or down or worry about losing their home. What a way to spend your retirement years, not knowing if you'll have a roof over your head after working so hard for so many long years and throwing it all away on the advice of .........

I also agree with Ted. I worked in the industry for over 17 years, all told. All of the advisors pushed products which gave them lavish trips every year, or "if you sell this property, you'll receive a bonus and/or higher commission." The grand incentives were always there for the advisor; I saw some clients being "bullied" into purchasing property/stock/funds of which they had no idea of what they were. When you use bully tactics, you either sign up because you've been pushed into signing or you flee! I recall an advisor swearing and yelling at a prominent doctor; calling the doctor "stupid!" I was the happiest person that day when the doctor walked out of the meeting, never to return. So, if you are an investor, be aware; don't get pushed into something you don't want to do, get references, if possible. Most of these investment advisors are looking out for their best interests, not yours....I could write a book!

To answer 'an advisor' I talked to two other financial advisors prior to my Scotiabank experience. Mutual funds seemed to be all they were interested in talking about. When I moved to Scotiabank I was dealing with a friend who I thought had my best interest at heart. That was my mistake. When he pushed me towards a mutual fund as well I went along with it. If dealing with a stranger I would have stuck to my plan.

Banks are in business to make money for thier share holders, not clients. If interested in more free information on how you can prevent financial devestation and improve your retirement outlook then e-mail me at unrevealed_deity@hotmail.com. I can help you to help yourself become financially independent. After all, who cares more about your money than you right? Retire with dignity. I educate middle income families on how not to be taken advantage of by product pushers. We do what's right 100% of the time to save people money in any economy.

The clients worst enemy is the MFDA or the Mutual Fund Distributors Assoc. I have now left the "licenced" side of business and am only engaged in businesses WHERE I AM NOT A SERVANT AS IN A MASTER SLAVE RELATIONSHIP such as mutual funds, insurance, real estate and stock brokerages. The MFDA restricts clients from investing wherever the client wants to invest by threatening the independent agencies and their representatives. The MFDA asks for "their" form of know your client info and they are invading on a client's privacy. I have advised many clients to with draw their mmoney and deal with a bank. One of the banks that I deal with recently had a teller ask me if I lived at the same place and was my telephone number the same. I asked this teller if this was this banks KYC Know Your Client update and she said it was.

A practice called churning makes reps. lots of money and the clients none. Goes on all the time.

I do well where I invest with no MFDA involvement anywhere along the investment. I know when I see long double page KYC info sheets mthat it is not a good investment and rep. can't speak the truth
if he could remember what it ever was.

My clients took me at my word. I never let them down.

Advisors are like any other profession. Lawyers who bill 48 hours in a day, contractors with tail light warranties, dentists who offer a 10% discount if you don't have a benefit plan and then stick on an emergency fee for an appointment two weeks later. When I was a bank manager I wanted your assets, your loans and then to get the heck out of that branch on a promotion; I had no incentive, other than personal principles, to truly look out for the client. I laugh when I see people that have "lost all their money" in Nortel, or Bre-ex or charitable donation scams...they were greedy and stupid to put all their wealth in one stock or act so misguidedly by investing in art donation, medical equipment donation schemes. The bottom line is that there are quality people in every profession and it is up to you to find them, pay them appropriately, partner with them and be responsible. Ted is no different, he needs to feed his family; just make sure the products "he is not pushing" are right for you. Wise up people.

Thank you Ralph Rack for your comment. The MFDA is a "cancer" on the Canadian financial regulatory landscape. As a long time advisor, (over 25 years), I can report that the mutual fund industry has declined to despicable depths. Under the guise of a professional body, the MFDA exists only to further the interests of Distributors intent on extracting ever bigger percentages of dollars from transactions of everday Canadians attempting to establish savings for various purposes

Unfortunately, mutual fund companies and government officials have abandoned a stance of consumer protection and emphasis on professionalism. If there was a shred of concern for people, the MFDA should be recognized as being predatory and of having NO interest in the public good.

The only effective system for the Canadian consumer can be one that allows Consumers to seek redress directly from an Investment Advisor and Mutual Fund company. In this way, companies like CI and Aim Trimark would be involved in determing whether or not an Advisor could represent them.
Mutual fund dealers DO NOT CARE ABOUT CLIENTS!! They only care about how much they can extract from Clients and Advisors.
CONSUMERS beware !!

The common theme seems to be educate yourself and buyer beware when seeking investment advice. After my hard lesson I must agree. That said, banks put advertisements everyday in the media, on the side of buses and even in personal mailings telling people 'they are richer than they think' or 'come in see us to plan your retirement wisely.' The banks are in a position of trust or at least they used to be. People go to banks for advice not to get ripped off. For banks to basically condone and even profit from the dealings of unscrupulous/incompetent advisors is criminal or at the least negligent. In my case I even considered a legal recourse but found that unless losses were in the $250K plus range lawyers weren't interested which in itself speaks volumes. If you lose enough there is a legal option. How many 'little people' have had their savings or retirement decimated through iffy or inappropriate investments?

I know a lot of advisors that are just product pushers. Many came into the business years ago when all you needed was a mutual funds license, no Financial Planning abilities or accreditation. Many bank advisors have quotas and bonses, not exactly unbiased. I have a CFP and have been very slowly building my business. I provide advice in investments, taxes, insurance, mortgages and estate planning. I always strive to find the right mix of investments to match my clients comfort level. I don't know how an advisor could live with what they did to someone like "Shafted". He clearly said he wanted Guaranteed investments. I would have talked about GIC laddering, annuities and Guaranteed Income Products. I would explain the pros and cons of each and discuss the effect of inflation on his purchasing power going forward. You need to talk to potential advisors, find out about their credentials, ask for references from clients in a similar financial situation as you.

As someone soon to enter the business of financial advising, I find it very interesting that some of the Financial Advisors including Ted are claiming that they should look elsewhere and infact gravitate towards them instead.

Surely people remember the old saying "actions speak louder than words".

If you invest with someone you do not feel comfortable with, that is your own fault to a certain degree. At the end of the day, when you invest it is your responsibility to ask the questions if you are not sure about something. And if you still are not comfortable with a certain product, whats to stop you getting a second opinion?

Whatever you do, dont feel pressured into buying into something immediately by thinking you will lose out if you dont do it now. Because thats where people make the mistake and dive into thinks without properly thinking it through.

Yes Financial Advisors have commission based compensation but if they are as good as your neighbour, friend, relative says they are and they come highly recommended, they should hopefully be a worthwhile investment in themselves. Dont sell yourself short unless you think its not worth the time to bother about whether they are right for you or not.

Just as a last word on this subject I would like to ask a question. Why is it after the bank and advisor have advertised and promoted their products are clients required to sign forms absolving the bank and advisor of any and all responsibility as far as the product is concerned?

They are certainly a pleasure to watch as I do enjoy them.

I am sure there is many others who also feel the same about your videos.
money and profit

i really am interrested in this but i am sceptical...and who am i to trust them or you...i am confused and wish i new what to believe.
money and profit