Why you Should Fire your Broker or Financial Advisor

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Why you should fire your broker or financial advisor

by David C. Arena

The recent bear market should have opened the eyes of investors, making them realize that you can't possibly think someone else, such as a financial advisor or broker can care more about your financial situation than you do. Now that investors have lost in some cases over 80% of their retirement accounts, all that these so called "advisors" can do is put their hands up in the air and say I was wrong. That is simply not good enough for clients who have trusted that professional for 10, 15 or 20 years. I know people that literally had to put retirement plans on hold and go back to work because they can't financially support themselves after these losses.
Brokerage firms teach their brokers to advise clients that thinking long term by making them sit in mutual funds for years and years is the way to come out ahead. This is done in an attempt to easily control that client for a long time while continuing to collect commissions no matter if your money is growing or not. What if after years, your funds didn't grow enough to meet your goals? When we have a market fallout like we did a few years ago, advisors simply say, "that's ok, we planned for these ups and downs, now we have to stay invested and wait for it to go up". They are preying on a person's fear. "If I leave this advisor, will I be wrong"? This keeps most investors with an advisor for much longer than they need to be. There is no excuse for having major losses like this, it is simply the advisor's fault. You either were not diversified, the investment choices were poor or they didn't take profits and manage losses properly.
Believe it or not, the main problem is that brokers and advisors don't know enough about the investments they are recommending. The major brokerage firms influence their brokers by pushing whatever product they want clients to buy. They will even sponsor nice lunch meetings with the sales staff, so the brokers rally behind this product and then immediately sell as much as possible to their clients. These recommendations are regardless if the investment is appropriate for the client or not. The brokerage firm will even offer contest incentives to those that push the most product. Does this type of selling seem like it has the investor's best interest in mind? Then once you buy it, they make sure you feel comfortable just sitting there not making any major decisions and hoping the advisor knows what he is doing. It's about time people knew that there is nothing glamorous about a financial advisor or stock broker, they are simply over glorified salesmen. Most couldn't predict the correct direction of a stock if his or her life depended on it. And independent financial advisors do the same thing. They may not have a large firm telling them what product to push, but they have several mutual fund choices to pick from, each offering incentives or certain commissions for using their fund.
And why all the mutual funds? Because they are easy to sell and the broker doesn't have to worry about getting calls every day from annoying clients wondering if the 50 shares of some stock they just bought is going up or down. Mutual funds are for the long term they tell you, so you are supposed to sit and wait. The most ironic thing about mutual funds is that they claim to be long term investments, but the fund managers are actively trading in and out of positions daily without the client even realizing. But these brokers tell you that active trading is dangerous. Why? Because they do not have the know how to manage such an account, having to give you advice sometimes intra daily. They also have no interest in actively managing such an account. It takes up way too much of their time to baby sit a bunch of clients, but more so, they do not have the expertise to correctly advise you of what to trade or how to manage risk. What an advisor wants is to put everyone in the same few long term investments and review everyone's portfolio once a year. Then, they can sit back and manage more clients and more assets, collecting a small percentage on those assets for their trouble. Minimal work for maximum gain.
And what if you are ready to retire after waiting for 20 years through a good market and the bubble bursts like it did a few years ago and suddenly you have only a fraction of your retirement account left? What then? You work some more? Is this a position you want to be in after all is said and done, because you put faith into some other person looking after your finances? How much attention do you think you will receive from a so called "full service" broker? The really savy ones will call you after they haven't spoken to you in a few months and tell you about a great new mutual fund that he heard of over "lunch" and advise that you buy some. So, after he just railroaded you for a 5% percent fee on the last mutual fund, he will take your money out of the fund he just sold you and pop you into another one, so he can earn another 5% on the same money. Not only is this immoral, it's also illegal. And it's done everyday.
Anyone with an interest in being a successful investor needs to learn how to do their own research and make their own trades. In today's market, you must be an educated, active trader who has more knowledge than most retail brokers or financial advisors. If you can do that, you will be a wealthy investor. If not, you will simply be an average investor or perhaps even worse if you allow the market to control you instead of controlling the market.

David C. Arena is a Wall Street veteran of over 10 years and has developed his professional trading strategies into a simple to follow step by step options trading course valuable to the novice or pro investor. This course is even used by New York Stock Exchange Floor Traders. Learn How to Turn $200 into $4,630 in 30 Days, How to get Paid for Doing Stock Research Online and Secrets Brokerage Firms Don't Want You to Know. To instantly download the course click: http//hypertracker.com/go/1optionscourse/ezinearticles1/ Free investment newsletter also included.

About the Author

David C. Arena is a Wall Street veteran of over 10 years and has developed his professional trading strategies into a simple to follow step by step options trading course. Learn How to Turn $200 into $4,630 in 30 Days, How to get Paid for Doing Stock Research Online and Secrets Brokerage Firms Don't Want You to Know. To instantly download the course, click: http://www.hypertracker.com/go/1optionscourse/ezinearticles1/
Free investment newsletter also included.


inskin 27.06.2010. 20:31

How do I fire my financial advisor? After doing some research, I now know that my financial advisor is charging sales fees that are too high, and I want to do my own investing. How do I terminate our professional relationship?


Admin 27.06.2010. 20:31

CRUMMY ADVICE. POOR performance. Theft. They all sound like good reasons to boot a financial adviser. But before you do, consider the following:

Don't fire your adviser ? or let on that you're considering it ? until you get a copy of your most recent account statement. That way, you'll know exactly what is in your account. Regulators say too many investors who bring complaints against advisers don't know what they own. Also, make sure to grab the investment-policy statement, which essentially summarizes what you were thinking back when you stocked up on Lucent shares.
Conduct an "exit" interview. This is best done, again, before you give your adviser the shove. Sit down and discuss his line of reasoning in managing your money. "If you have questions or there are errors, now is the time to air them," says Susan Wyderko, director of investor education at the Securities and Exchange Commission. If your broker can't answer your questions or refuses to fix errors, your next stop is the firm's compliance officer. Explain the problem, and ask for a written response. There's a chance that you could resolve the issue right away; if not, at least you have documentation that can be useful for later legal action. If you don't get such a response, contact your state securities regulator or the SEC and ask for help.

Getting even. All right, you've fired the planner, but your relationship isn't over yet. If you feel you've been so wronged by your adviser ? he negligently put you into an inappropriate investment or ignored your account ? that you deserve restitution, you'll most likely resolve your dispute via arbitration. This process, handled outside of a court, is usually faster and cheaper than a lawsuit.


DeadManPoet 31.03.2011. 01:19

How hard is it to become a stock broker? Is it difficult to make a living as one?


Admin 31.03.2011. 01:19

There is no such thing as a stockbroker anymore.

They are all Financial Advisors now.

It is easy to become a stockbroker. All you need is a pulse and possibly a college degree.

The hard part is staying a Financial Advisor. They are under tremendous pressure to meet VERY high sales quotas. Those who meet the quotas get paid very well.

Those who don't get fired.

The industry has a 95% failure rate of stockbrokers/financial advisors for this very reason.


EL-Beth09!! 22.02.2012. 22:18

How did financial advisors and Wall Street help ENRON in their deception? Array


Admin 22.02.2012. 22:18

I love the Enron story. A great book on this is "Smartest Guys in the Room".

By financial advisers, you are talking about internal and external. Arthur Anderson (accounting auditor) basically did whatever the company wanted, even though their internal controls people said it was a bad idea. This deceived Wall Street, because, at the time, they were he #1 accounting firm in the country (basically... many people would disagree, but they were very good).

Internally, Andy Fastow created some crazy financial structures that should never have been approved by the board. He would be an internal financial adviser. Either he lied to the Board (which he certainly did), or the Board didn't understand what they were approving (which, even if they were duped, they should have).

By Wall Street, I assume you mean to include lenders, investment brokers, and analysts. Lenders and investment brokers were willing to do things that they knew were wrong -- and were wrong -- and they knew it was wrong -- but they were shielded by this idea that ENRON WAS SMARTER THAN ANYONE ELSE. For a time they were. They were motivated by greed, and made to feel like simpletons if they didn't agree with Enron.

Some lenders were told... "Contribute equity today, and we guarantee you a X% return, and you'll get your money back in 6 months." An equity investment is basically buying stock, to put it simplistically. Enron used complicated special purpose entities (SPEs) to do this, so they were not really buying stock in Enron -- that'd be too obvious. The point is that Enron guys didn't tell anyone else about these "sweetheart" deals -- they would say it, and shake hands, and at times say, "We can't put it in writing because it would screw up the accounting."

These lenders and investment bankers should NEVER have been okay with this. If it has been a less prestigious, less valuable company, they would have either said HELL NO or reported them to the SEC, or both. They did not. Not only did they not, they did the deals. That's one way they helped.

How financial analysts helped is interesting too. Not everyone believed in the Enron story. The ones who thought something was fishy tended to get fired because their analyses didn't match with current conditions. They were ultimately right, but were wrong in the short-term.

You should investigate the "Chinese wall" aspect of how investment banking and financial analysts were previously separated. President Clinton eliminated this Great Depression-era idea. You ended up having the people who were selling the loans, bonds, etc. being in the same room as the analysts, who were saying YES YES YES we guarantee you a STRONG BUY on your stock. That should never have happened. Analysts, who are supposed to be neutral and just report on the nature of the business and it's current situation, because sales people. That's like an accountant saying he or she will give favorable tax treatment on a transaction because you are buying other services from my accounting firm. That is fraud! Of course, Enron's outside accountants did basically the same thing.

So did their attorneys at Vinson & Elkins.

Hope that helps. Like I said, read that book. There is also a Smartest Guys in the Room movie if you want to see that. I moved to Houston right at the time the Enron debacle was playing out.

But the real reason why I like the story of Enron is it's just so freaking interesting. They had such potential. They revolutionized the natural gas market. They were so brilliant. But it didn't last. They lied. They screwed people out of billions. Over a decade they went from market revolutionaries to the people who killed the market.


Wardlow 06.07.2007. 21:18

My financial advisor wants me to get a $100,000 home equity loan and he will invest it. Good idea? I would use part of the interest earned to pay the loan. I have $500,000 equity. My mortgage balance is $350,000.


Admin 06.07.2007. 21:18

never borrow to invest money, its stupid because it will take years longer to pay off your house and you are putting steady and safe money (home equity) into risky investments, if you have a half million in equity you are halfway to retirement, don't blow that over some silly risk to try to make a few extra bucks.

Fire your broker and get someone who actually understands money.


federalistcapers 23.05.2007. 11:05

Do you intend to cash in on the "climate change" cause? What is your angle? How much do you hope to bilk? Array


Admin 23.05.2007. 11:05

I tend to think in terms of "who" gains?

ecocommies are pushing this, the IPCC report was compiled and written by UN bureauRats by cherry picking the science.

seems to me the "cash" in may be two-fold. Power is one place. as the sheep buy into the myth, more power is wielded by politicians and more tax dollars go into this cesspool.

I found an article on the "Green Credit" crap that I found interesting.

And Make sure you check out junkscience.com, as it does have a compendium of information about who is poised or poising to benefit.

I was watching the news last night and one of the Hollyweird poster boys was called on the carpet for his jet travel hypocrisy.. He claimed the green credit crap.

Catholism had it's indulgences, and the ecomarxists have "Green Guilt Credits"..

I do hope the real science in this matter is addressed before the world goes truly down the toilet. As a scientist, geologists, It makes me worry about what this country and world will look like politically in a few years if this movement is not stopped.

Political correctness is running amok, and the green religion is pressing for power that would draw fire by many people if it were Pope Benedict, Jerry Falwell, or Pat Robertson. It needs to be stopped.


Industry caught in carbon ?smokescreen?
By Fiona Harvey and Stephen Fidler in London

Published: April 25 2007 22:07 | Last updated: April 25 2007 22:07

Companies and individuals rushing to go green have been spending millions on ?carbon credit? projects that yield few if any environmental benefits.

A Financial Times investigation has uncovered widespread failings in the new markets for greenhouse gases, suggesting some organisations are paying for emissions reductions that do not take place.

Others are meanwhile making big profits from carbon trading for very small expenditure and in some cases for clean-ups that they would have made anyway.

The growing political salience of environmental politics has sparked a ?green gold rush?, which has seen a dramatic expansion in the number of businesses offering both companies and individuals the chance to go ?carbon neutral?, offsetting their own energy use by buying carbon credits that cancel out their contribution to global warming.

The burgeoning regulated market for carbon credits is expected to more than double in size to about $68.2bn by 2010, with the unregulated voluntary sector rising to $4bn in the same period.

The FT investigation found:

? Widespread instances of people and organisations buying worthless credits that do not yield any reductions in carbon emissions.

? Industrial companies profiting from doing very little ? or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially.

? Brokers providing services of questionable or no value.

? A shortage of verification, making it difficult for buyers to assess the true value of carbon credits.

? Companies and individuals being charged over the odds for the private purchase of European Union carbon permits that have plummeted in value because they do not result in emissions cuts.

Francis Sullivan, environment adviser at HSBC, the UK?s biggest bank that went carbon-neutral in 2005, said he found ?serious credibility concerns? in the offsetting market after evaluating it for several months.

?The police, the fraud squad and trading standards need to be looking into this. Otherwise people will lose faith in it,? he said.

These concerns led the bank to ignore the market and fund its own carbon reduction projects directly.

Some companies are benefiting by asking ?green? consumers to pay them for cleaning up their own pollution. For instance, DuPont, the chemicals company, invites consumers to pay $4 to eliminate a tonne of carbon dioxide from its plant in Kentucky that produces a potent greenhouse gas called HFC-23. But the equipment required to reduce such gases is relatively cheap. DuPont refused to comment and declined to specify its earnings from the project, saying it was at too early a stage to discuss.

The FT has also found examples of companies setting up as carbon offsetters without appearing to have a clear idea of how the markets operate. In response to FT inquiries about its sourcing of carbon credits, one company, carbonvoucher.com, said it had not taken payments for offsets.

Blue Source, a US offsetting company, invites consumers to offset carbon emissions by investing in enhanced oil recovery, which pumps carbon dioxide into depleted oil wells to bring up the remaining oil. However, Blue Source said that because of the high price of oil, this process was often profitable in itself, meaning operators were making extra revenues from selling ?carbon credits? for burying the carbon.

There is nothing illegal in these practices. However, some companies that are offsetting their emissions have avoided such projects because customers may find them controversial.

BP said it would not buy credits resulting from improvements in industrial efficiency or from most renewable energy projects in developed countries.

Additional reporting by Rebecca Bream

Media Shows Irrational Hysteria on Global Warming

"The Public Has Been Vastly Misinformed," NCPA's Deming Tells Senate Committee

12/6/2006 5:57:00 PM

To: National Desk

Contact: Sean Tuffnell of the National Center for Policy Analysis, 972-308-6481 or sean.tuffnell@ncpa.org

WASHINGTON, Dec. 6 /U.S. Newswire/ -- David Deming, an associate professor at the University of Oklahoma and an adjunct scholar with the National Center for Policy Analysis (NCPA), testified this morning at a special hearing of the Senate Environment and Public Works Committee. The hearing examined climate change and the media. Bellow are excerpts from his prepared remarks.

"In 1995, I published a short paper in the academic journal Science. In that study, I reviewed how borehole temperature data recorded a warming of about one degree Celsius in North America over the last 100 to 150 years. The week the article appeared, I was contacted by a reporter for National Public Radio. He offered to interview me, but only if I would state that the warming was due to human activity. When I refused to do so, he hung up on me.

"I had another interesting experience around the time my paper in Science was published. I received an astonishing email from a major researcher in the area of climate change. He said, "We have to get rid of the Medieval Warm Period." "The Medieval Warm Period (MWP) was a time of unusually warm weather that began around 1000 AD and persisted until a cold period known as the "Little Ice Age" took hold in the 14th century. ... The existence of the MWP had been recognized in the scientific literature for decades. But now it was a major embarrassment to those maintaining that the 20th century warming was truly anomalous. It had to be "gotten rid of."

"In 1999, Michael Mann and his colleagues published a reconstruction of past temperature in which the MWP simply vanished. This unique estimate became known as the "hockey stick," because of the shape of the temperature graph. "Normally in science, when you have a novel result that appears to overturn previous work, you have to demonstrate why the earlier work was wrong. But the work of Mann and his colleagues was initially accepted uncritically, even though it contradicted the results of more than 100 previous studies. Other researchers have since reaffirmed that the Medieval Warm Period was both warm and global in its extent.

"There is an overwhelming bias today in the media regarding the issue of global warming. In the past two years, this bias has bloomed into an irrational hysteria. Every natural disaster that occurs is now linked with global warming, no matter how tenuous or impossible the connection. As a result, the public has become vastly misinformed."


The NCPA is an internationally known nonprofit, nonpartisan research institute with offices in Dallas and Washington, D. C. that advocates private solutions to public policy problems. NCPA depends on the contributions of individuals, corporations and foundations that share our mission. The NCPA accepts no government grants.



Remington Irons 16.09.2010. 04:33

Prudential or Principal Financial? I have an opportunity to be a Financial Advisor with both of these companies...

Im looking to get some info on both comanies, good and bad.

Which company is more focused on investing rather than insurance?

Which company offers a draw and how much for how long?

And which company is more repuatable in the industry?



Remington Irons

Admin 16.09.2010. 04:33

Neither company offers a draw or a salary and this is stated at your first of several interviews. Neither company is set up to sell individual stocks, but can manage a rare stock buy or sell. Their primary goal is to make you sell insurance products but no one uses "Insurance Salesman" anymore, they use "Financial Adviser" because they've created so many variations of annuities that you really are selling more of an investment product than you are an insurance product. They train you to help plan a clients financial needs when they retire, whether with annuities, life insurance products, low risk mutual funds, etc... If you want to do a stock buy or sell for your client, you have to go through compliance, then make contact with a subsidiary of the company that does only that, make the trade, and go through something called a "DVP" transaction where the stocks are moved from the brokerage into your clients account and the money is taken out, but the commission charge on that trade will be such that either your client will fire you or will never make a trade through you again. Furthermore, you need several licenses, of which all but 1 are insurance licenses, even if it is called a "CFA" (certified financial planner). The Series 6 is for mutual fund products. Most wont ask you to take the Series 7 because that's for stockbroker's but involves all securities. If you insist on taking the 7, they'll let you, but they'll try to talk you out of it because the 6 is much easier and shorter and the 7 opens the door for you to A) try and sell stocks or B) get hired by another company.

No draws, no salaries, nothing. They make sure you are aware that at least 6 to 18 months may be required for you to have your expenses covered. That's why they love those either straight out of college, because they still live with mommy and daddy or those who already have client books, which all of them will hunt like vultures. They're all the same: Prudential, Hancock, Northwestern, Mutual of Omaha, Mass Mutual, etc.... If you want to have more options and freedom to really choose what's right for your client(s), then Merryll Lynch is the place to go right now after they were bought out, most of their key employees left, so they're trying to fill in the ranks and that's what Merryll Lynch is all about, their rank and file stock brokers with their Series 7 that can sell anything, including stocks, bonds, annuities, and most insurance products, but remember, insurance is state regulated so you always need a license for that state you want to sell insurance in. You also have to "blue sky" register in any state you plan on selling stocks in, but if you pass the 7, passing each states series 63 is a piece of cake.


Shree P 03.02.2010. 23:37

Help! What insurance agency is best to go to when insuring a house in canada b.c.? Need to know they tried to stick me with axa pacific and the reviews are crap.

Shree P

Admin 03.02.2010. 23:37

Are you looking for property iunsurance to protect against fire or damage or are you looking for something to make sure the mortgage gets paid if something happens to you?

Either way, I would recommend working with a broker. A broker can shop around for you. I recommend Customplan Financial Advisors. They are independent brokers whose compensation holds them accountable to making sure that you're needs are taken care of first. That where I place all my insurance business though... www.customplanfinancial.com


Haley G 19.01.2010. 20:46

What should I be for Career day? I go to a Christian school..... so try to keep that in mind=)

Haley G

Admin 19.01.2010. 20:46

Aerospace engineer
Air traffic controller
Animal trainer
Athletic trainer

Bank teller
Beauty therapist
((Balloon salesperson))

Cab driver
Car designer
Chess player
Chief information officer
Chief executive officer
Chief technology officer
Chief financial officer
Chief of police
Chimney sweep
Civil servant
Civil engineer
Coast guard
Company secretary
Computer programmer
Conductor (music)
Construction engineer
Construction worker
Contractor, general
Corrections officer
Costume designer
Customer service representative
Customs officer

Deputy (law enforcement)
Disc jockey
Dog walker
Dealer (casino dealer, also croupier)

Electrical Engineer

Fashion designer
Film director
Film producer
Financial adviser
Fire marshal
Fire Safety Officer
First Mate
Flight attendant
Flight instructor
Food critic
Fortune teller
Funeral director

Game designer
Game warden
Government agent
Graphic designer

Hotel manager

Image consultant
Industrial engineer
Information Technologist
Interior designer
Investigator [disambiguation needed]
Investment banker
Investment broker


Karate master

Loan Officer
Landlord (also Landlady)
Laundress (also Lavendar)
Law enforcement agent
Leather worker
Level designer (also Mapper)
Lighthouse keeper
Lighting technician
Loan officer

Mailman or Mail carrier
Make-up artist
Management consultant
Marine biologist
Market gardener
Martial artist
Master of business administration
Massage therapist (also masseuse/masseur)
Mechanical Engineer
Medical biller
Medical Laboratory Scientist
Medical Transcriptionist
Milkman (also Milkmaid)
Mortgage broker
Music educator

Night auditor

Occupational therapist
Optician (also Optometrist)
Ordinary Seaman
Organizer [disambiguation needed]

Park ranger
Parole Officer
Patent attorney
Patent examiner
Pedologist (soil)
Personal Trainer
Physical Therapist
Physician Assistant
Piano tuner
Pilot (shipping)
Pilot (aviation)
Police inspector
Porter [disambiguation needed]
Press officer
Prison officer
Private detective
Probation Officer
Product designer
Professional dominant
Project Manager
Public Relations Officer
Public speaker
Porn star

Queen consort
Queen regnant


linuleb7 29.09.2009. 09:57

Are the victims of financial scams really victims of their own greed ? Vincent Lacroix, Bernard Madoff, Earl Jones made the headlines in 2009 with much publicized multi-hundred-millions financial scams involving thousands of victims.
I ask myself several questions. Choose your topic.
Would you trust anybody with your hard-earned retirement money ?
Would you invest your widowed mother's money in a volatile unsecured scheme that promises a higher return than banks to give her a more comfortable living ?
Didn't financial advisers always advised to invest or gamble only on money that you can afford to lose ?
Some victims whine about having to sell their house. It may be true in very few extreme cases. But some others even claim they have to rely on food banks. If this is true, what brought them there if not greed ?
Is it believable someone would risk everything they own for a few dollars more ?
Would you trust a stranger such as myself if I promised to make you rich ? If you do, send me bank coordinates and your PIN. You won't regret it. I promise.


Admin 29.09.2009. 09:57

I trust someone with my retirement money every day. I choose high profile mutual finds and government backed securities. The return is modest but the risk is relatively low.

I would not invest in an unsecured scheme. Did these people know what they were investing in? Madoff was a good liar and he falsified a lot of documentation.

Financial advisers suggest different plans based on the client's goals. An ethical broker will encourage diversity so if one investment tanks hopefully you won't lose it all. Unfortunately, Madoff was the broker giving the bad advice and outright lying to people.

Were people greedy? Yes. It's hard to feel sorry for rich people who are now less rich.

Yes, people will risk everything for a few extra bucks. I know a guy who got fired from an $80K job for stealing less than $100 worth of computer parts. Some people are stupid.


Atlas 06.11.2008. 15:33

My broker told me the rules have changed? I have a broker who calls me about every 2-3 months to suggest moving my investments around according to what he thinks makes sense (and of course he gets a commish each time). Last time he called I said hold up, I want to put my money where I think it makes sense (stalwarts, not too risky etc) and hold it long term, that is my strategy. He is saying that strategy is now outdated. Is he right? All along I have been told to invest long term and adjust once in a long while, tired of paying the guy to move my money every couple of months. Is he right? Have the rules changed?


Admin 06.11.2008. 15:33

Rules never changes, the perception that "This time is different" has been the biggest fall-out for stocks in many stock market crashes.

2000 - Everybody believed that the internet this the internet that would justified the ridiculous valuations.

2008 - Everybody believed that emerging markets this emerging markets that, and you now can see the results. -75% and counting on almost every emerging markets.

So if I were you the only rule I would change is fire your broker and hire an financial adviser that get paid according to your performance not how many trades you make.


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