It’s enough to drive a financial representative crazy: A constant stream of people, well meaning, who don’t understand the help that is available, have tremendous fear, and are conditioned to expecting a scam. In the Capital Region, the fear is almost universal. The clearer you explain things, the more distrust builds. People expect fraud.
And the beat goes on with Khan Academy’s World Series ads
That’s why I cringe when I see the commercials for Khan Academy, a worthwhile project to teach all sorts of must-know subjects, including money literacy, advertising it’s relationship with Bank of America. The big banks, the credit unions, the big investment companies have all failed middle class America. Bank of America is a big member of the “Debt Industry,” that has lured millions of Americans into hopeless amounts of debt, crippling their hopes, their futures.
I emphathize greatly with families at a loss about which way to go. Trust a name bank that spends millions of dollars on expensive advertising that they, the potential clients, will utlimately pay? And take their awful .87 per cent rate of return? When taking my securities license exams, I learned that there are many quality, established firms that have been in business for nearly a century. They don’t advertise and work quietly, serving mostly the wealthy in anonymity. Problem is they won’t talk to a family with getting a check for $750 or expecting a family to already have assets of $250,000.
As my nephew would say, that’s messed up.
If you think about it, the people who really need financial advisors are the ones who can’t afford them. If you’re impoverished or firmly in the middle class and can’t seem to make it to the next level, you’re the one who could really use financial advice. If you’re wealthy, you know what you’re doing.
Yet many financial advisors simply aren’t interested in working with the middle class. “There has been a paradigm shift in the financial services industry just over the past four years with the increase in banking regulations and associated costs, which has led many major banks and broker-dealers to focus more on their bottom line and shareholder value, more so then their clientele,” says Jon Ulin, a managing principal at Ulin & Co. Wealth Management, a branch of LPL Financial in Boca Raton, FL, as quoted in US New & World Report.
Debra Speyer, a Philadelphia attorney who specializes in investment fraud, concurs. She says many firms have stopped paying commissions to brokers for accounts that are considered small – and accounts ranging from $100,000 to $500,000 in assets can be considered small.
Stick up for yourself!
A financial advisor is going to pick up pretty quickly that you aren’t vacationing in Fiji every spring, so you might as well make that clear upfront. Not that you should sell yourself short, but there’s no harm in explaining your financial situation even if it’s shaky or you’re a beginner.
But your not having a million or more in the bank doesn’t mean you should let yourself be treated badly. “If you get the sense that you are just going to be another number and not get the advisor’s personal attention, move on and find someone who really cares about you,” Lewit says.
In fact, if your potential financial advisor is still interested in talking to you once you’ve revealed your middle-class status, that’s a good sign.
And at the same time, it’s helpful to remember that everyone pays something when they hire a financial advisor – and not everyone is out to get you.
Dave Balog teaches financial essentials for Capital Region families. 952-1257. email@example.com