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The 4 Most Expensive Products Your Financial Advisor Sells

03.24.2015

"There's no such thing as a free lunch." goes the popular saying widely attributed to economist Harley L. Lutz around 1942. In the financial services industry, nothing could be more true. Unfortunately today, many advisors are selling high fee products under the guise that they are a "good deal,"  that the investor is getting something they don't deserve for the cost. You get what you pay for, make no mistake about it! Here are the four most oversold and costly investment products that fee-hungry advisors are selling today:
1) Structured Notes
"What are these things?" is a question we get quite often when we speak to an investor who has purchased a structured note based on a recommendation from their advisor. It's a very good question because the answer is elusive to say the least. Technically, a structured note is an IOU from a large bank (usually), many of which are in the cross-hairs of governments around the world. Upon further investigation, structured notes can be very costly too, as investors may pay a 3% commission or more at the time of purchase! When a financial advisor makes such a large fee upfront, the only party guaranteed to win is them and not you. Always get a second opinion from a non-commissioned advisor before buying a structured note.
2) Annuities
This may be the most oversold and misrepresented financial instrument on the planet. The reason: an insurance agent of broker stands to make upwards of 6% commission on the sale of an annuity to you! As you can imagine, when the compensation is so large, many financial advisors go out of their way to sell various forms of an annuity to their clients. In the right situation, an annuity can be a perfect fit. In our opinion, however, somewhere in the range of only 5-10% of investors should consider an annuity. Again, these investments are rarely fully explained and the fees are largely hidden from plain view. Back-end sales charges also sting buyers of annuities who close the contract before it's completed. This lock-in period can range anywhere from 3 to more than 8 years! Any investment that takes more than one page to explain is probably too expensive and complicated to be a good deal (annuity contracts can be dozens of pages), so tread very carefully before committing to buy any form of annuity.
3) Universal, Variable or Whole Life Insurance
Life insurance mitigates the risk of your untimely death and provides financial security to your loved ones who have lost you as a bread winner for the family. Always use insurance for this reason and you will be in good shape. Buy insurance as a investment as well, and get ready to be socked with fees upwards of 4-6% annually to maintain the contract! "Buy term and invest the rest" is an old adage and it rings true today. Term insurance is usually very affordable yet that's what makes it so unappealing to sell -- the insurance agent would starve if he or she only recommended term! Far too many investors are sold universal, variable, or whole life policies when they really don't need them. Look before you leap into one of these products and have a financial advisor with a Certified Financial Planner™ credential review any insurance proposal before you buy.
4) In-house College 529 Savings Plans
Saving for a child's college education can be a daunting challenge for many families. The 529 college savings account is an awesome vehicle that warrants serious consideration when trying to tackle this huge financial burden. But buyer beware here, because high fees can eat away at your returns and leave your child short-handed once the college years are upon them. Some plan fees can exceed 2% when you consider the commissions and annual expense ratios of the underlying funds. Additionally, a broker who is tied to their company's investment platform typically only has one or two options to chose from, yet all 50 states plus the District of Columbia offer 529 plans. Because so many are offered directly to consumers, do your own homework here and skip the expensive middleman.
At Infinium Investment Advisors, our Denver financial advisors' goal is to provide you with unbiased advice and an objective opinion. If you would like us to run a complimentary review of your financial advisory relationship, please click the link below to schedule an introductory call:
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 At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:



Denver | A Great American City

03.23.2015

Denver, CO
Ranked as one of America's fastest growing cities, Denver, Colorado is the gateway to the Rockies. A unique combination of thriving metropolis and the wild outdoors, the city is literally one mile high above sea level. Talk to anyone on the street and more than likely they are not a "pioneer," or someone who's family arrived in the state prior to 1861. They are most likely an import from another part of the country, or even outside of the Unitesd States.  The pioneers and the new entrants have a few things in common, though, including a love for the Mile High City and all that it has to offer. Here are some of the top reasons that make Denver one of America'a greatest cities:
- 300 Days of Sunshine, more than Miami Beach or San Diego, CA
- 32 Moutain Peaks Higher than 13,000 ft.
- Boasts the largest city park system in the country with more than 200 parks with in the city limts and an additional 14,000 acres of mountain space nearby
- Sits within a 2-hour drive to world-class ski resorts such as Vail, Breckenridge, Keystone, Beaver Creek- Hosts the Great American Bear Festival, the largest of its kind with more than 1,300 breweries and 50,000 attendees
- Hosts the National Western Stock show, the largest of its kind with more than 600,000 vistors annually
As financial sdvisors in Denver, we feel very fortunate to call the Mile High City our home base from which to serve our clients. If you are ever visting our great city from out of town, be sure to look us up and stop by! 


At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources


Top 3 Traits of an Honest Financial Advisor

03.23.2015

Many years ago, ago, having a financial advisor was a luxury reserved only for the privileged few. How times have changed! Now, even investors just getting started have a whole host of different types of financial advisors to chose from including the traditional broker, registered investment advisor, and even a computer algorithm, or Robo-advisor!
At the end of the day, we believe most investors prefer a human being to help them navigate through all of the market uncertainty and complexity that exists today. The biggest challenge to this desire is the industry itself; the old sales models of yesterday have burned far too many investors and they now have the knowledge and awareness to believe that they deserve more. Better advice, better service, and overall better deal for their fees.
So when looking for a human financial advisor that will provide you the right value, look for these three traits:
1) They are governed by the fiduciary rule
For many investors, the world of financial planning and investing is like one big, black box. It's hard to know what questions to ask, how to judge what you are hearing, and if your advisor's advice is really in your best interest. The easiest way to solve this problem is by hiring a financial professional who is obligated by law to always put you first. The real question is, "why would you want anything less for your hard-earned investment asserts than to have a true and trusted partner?"
2) They never "sell you" 
An honest financial advisor is a true consultant to their clients. They never pressure you into doing something that isn't in your best interest,  but rather, they always seek to uncover your roadblocks and goals, and find the best solutions to solve the problems. A financial salesman(woman) by contrast, pushes clients into home grown investment products, leaves out important details on issues like fees, and treats their clients like a revenue source instead of a person.
3) They are not locked into one platform
Unfortunately for investors today, most large financial institutions want a greater share of your wallet. They attempt to encircle you with as many of their own products and services as possible. This makes it difficult and painful for you to leave. In theory, using one company for a broad range of your financial needs makes sense, however, in practice this quickly falls apart. No one company can be the best at financial planning, investing, insurance, trust services, lending, etc. yet time and time again we see them pushing their in-house offerings to clients with increasing frequency. The large banks are most guilty of this one. Your financial advisor, if acting in your best interests, always brings to you the best-of-breed solution from a wide variety of companies and money managers.
Finding an honest financial advisor should be a lot easier than it is, but utlimately if you know what to look for finding a trusted professional is possible. By looking for these three traits in a financial advisor, you are giving yourself a fighting chance to find true value for the fees you pay. 
For a complimentary review of your financial advisory relationship from our Denver financial advisors, please click the link below to schedule an introductory call:
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At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:


Financial Advisor: A Top 25 Career Choice

03.21.2015

According to the 2015 survey conducted by US News and World Report, Financial Advisor ranks as the 25th best career choice in America. Among Best Business Careers, Financial Advisor ranks as #5.
One of the main reasons for the strong move up 16 spots from #41 last year, is the growing demand for retirement advice especially for the wave of Baby Boomers leaving the workforce. Between 2012 and 2022, careers in the financial advice industry are expected to grow some 27%. This is compared to just a 10% average growth rate in other professions. 

 

At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:

3 Mistakes A Trusted Financial Advisor Never Makes

03.19.2015

Thankfully, the days of the traditional stock broker are long gone, but the echo of their questionable sales tactics can still be heard if you listen closely enough. A trusted advisor, by contrast, will always lead you down the right path. They put your interests first, and never make these three mistakes:
- Failure to give the full picture: Still used heavily today especially by those so-called financial advisors who are not fiduciaries for their clients. See our white paper entitled "Choosing Between Insurance Agents, Brokers, and Registered Investment Advisors" for a comprehensive look at the differences among advisors. One of the biggest problems we see in the world of personal financial services are professionals who fail to give clients a reason not to make a particular investment. They never provide a reason why something won't work out, but rather, continually focus on the best case scenario and why what they are hawking is a good deal. Buyer beware: when you only hear one side of the story, it's time to start asking a lot of questions.
- Failure to disclose the total cost of owning an investment: This is another big one we see violated over and over again. And it's easy to see why certain financial advisors knowingly fail to provide the all-in fees for the particular investment they are recommending. The short answer is, nobody would buy it if they knew the true cost! We see the insurance agents most guilty of this sales tactic, unfortunately. They present slick illustrations showing net figures often times with assumptions that are wildly optimistic. The prudent consumer of financial services presses the advisor for a clear explanation of total fees for any investment they are about to purchase.
- Failure to make a comprehensive financial plan: Of the three Failures, this one is violated the least, yet the results are hardly sufficient. In our experience, many prospective clients that we speak with have completed a financial plan with their current or former financial advisor, but the plan was merely a Trojan Horse to figure out which of the advisor's in-house products and services could be sold to the client. Mind you, these proprietary vehicles are often times far too expensive to warrant serious consideration. Examples here are the company's own mutual funds, loan products, and instruments like structured notes. The moral of the story on financial planning: It should be agnostic and applicable no matter with whom the plan is implemented.
Keep your radar up and tuned into these three financial advisor failures to avoid getting a bad deal on your hard-earned investment assets. For a complimentary review of your current advisor's financial plan, portfolio, and overall costs, please click the link below to schedule a 30 mintue phone/web appointment with our Denver financial advisors:

Schedule a Consultation


At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:


Does the Rise of Robo-Advisors Signal the Death of Human Financial Advisors?

03.17.2015

Robo-Advisors: First, a History

Ever since the advent of the modern computer, savy techno-philes have long sought to improve their investment performance by automating functions and removing the human element from the process. It's not hard to see the attraction of decision-making void of the emotions that so often ruin the final result. Nearly ten years ago, the latest iteration of computer-driven investing burst onto the scene in what many are calling the Age of Robo-Advisor. By definition, a robo-advisor uses algorithms to perform previously manual investment-related activities such as asset allocation, rebalancing, and tax-loss harvesting to name a few.

Tradtiional Financial Advisors' Self-Made Mess

Personally, I attribute the rise of the robo-advisors to the financial services industry's habitual failure to deliver valuable solutions to the public. Here at Infinium, we are constantly analyzing portfolios where the risk-reward trade-off on the investments is abhorring, the fees are ridiculously high, and the overall strategy makes the Three Stoogies look highly organized. 
Many in the industry see the robo-advisors as a threat; well, financial advisors, if you are out there and listening, "It's our fault and no one else's!!!" For far too long, the industry gorged itself on the unsuspecting public who had little knowledge and little choice but to trust the person on the other side of the table offering the advice. Now, an empowered Main Street investor has the tools and accessibility to the markets unlike ever before and a new batch of disruptors, backed by big Venture Capital dollars, are more than ready to completely undercut the existing and entrenched players. Competition breeds efficiency, and our industry is in dire need of a force-of-change to drive better value for the end customer.
Our professional duty is now more clear than ever; the cheese is moving and only those financial advisors who continually improve their offerings and provide better value will survive.

Peaceful Co-Existence

Rewind the clocks to the dawn of the Internet in the late 1990s when a lot of pundits believed online trading would decimate the stock brokers of the day. For many, it was the end of their careers but for those who embraced the change and morphed their offering to comprehensive advice, the opportunities proved enormous.
 
Much to the chagrin of the robo-advisor advocates of today, human advisors are alive and well and will continue to exist. Like so many other technology-based solutions that have come before it, there's a high degree of likelihood that robo-advisors and the functions they serve will not go head-to-head with human advisors forever. Rather, they will merely become a part of the tradtional advisor's toolkit.

At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:


Your Career as a Financial Advisor | Denver

03.17.2015

The Need for Financial Advisors in Denver is STRONG!

The metro Denver region is a terrific geography in which to build a financial advisor practice. Take a look at the demographic trends that support the strong need for financial professionals here on the Front Range of Colorado: According to Forbes.com, Denver has shot up to No. 6 on the list of fastest growing cities in America. Along with this substantial projected influx of people comes the need for professional services providers like doctors, lawyers, accountants, and you guessed it, financial advisors.

Financial Advisor 2.0: A New Breed for a New Era

Given this ever-growing need for financial advice, the advisor of today must look very different from the advisor of old. Today's investor has never had more options available, but with that comes the potential for information-overload. Advisor 2.0 is not only an expert in the markets, financial planning, and risk management, they are a filter that can sift through endless streams of data to help an investor figure what is important, and what is not.
It's an exciting time to be a financial advisor; let's find out if you have what it takes!
Infinium Investment Advisors is currently seeking bright, hard-working individuals to enter our Financial Advisor Apprenticeship (FAA) program. To schedule an appointment to speak with our leadership team, please click the link below: Schedule a Call

At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:


True Financial Advisors Focus on Financial Planning

03.10.2015

Fail to Plan at Your Own Risk!

One of the biggest mistakes that professionals make who provide investment advice is to fail to complete a comprehensive financial plan for their clients. Think about it; would you start construction on a new home without first consulting an architect to design it for you? Heading down to Home Depot to pick up some lumber, nails then jumping right in would be absurd to say the least. Yet, that's exactly the approach that far too many financial advisors take when beginning a new relationship with a client. Failure to complete a plan before one penny is invested is equivalent to committing financial malpractice!

The True Financial Advisor

Unfortunately, the old broker mentality is still alive and well today. Just look at how they are compensated and you'll begin to understand why the financial salesman(woman) is in business and doing well; it's called "Net New Money." Yes, the dreaded criterion that most advisors are measured against and upon which they stand to receive hefty bonuses. You can imagine, if your sole purpose is to bring in new money into your firm, then the focus is not on providing valuable advice, but rather, on finding the next dollar of investor assets. Just look back at the Global Financial Crisis if you want proof that chasing commissions at any cost can have devastating consequences.

Find a true financial advisor that focuses on financial planning, who doesn't get paid on commissions, and is beholden to the fiduciary code of conduct and you'll be doing yourself a favor that will pay dividends for a lifetime.

Infinium Investment Advisors offers a complimentary 30 minute consultation to learn more about your needs and share how we work with clients. To book an appointment, please click the link below:

Schedule a Consultation  


At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:


What is it Like to Work with a Financial Advisor?

03.10.2015

Over the past twenty years, investors have moved from complete dependence on a stock broker to a position of autonomy in researching, purchasing, and managing their own portfolios. With the rise of online resources, individuals are no longer tied to the chains of high commission trades and limited investment choices. Now, more than ever, investors can compete on an even playing field with the most sophisticated money managers. This democratization of the personal financial services industry is good for investors, but many do not know how to handle the freedom.

How to Know if You Should be Working With a Financial Advisor

Investors choose to “go it alone” for a variety of different reasons. As you consider the best way to manage your assets you should ask yourself some questions to help determine if working with an advisor is the right course for you:
  • Do you enjoy learning, reading, and studying the various financial markets?
  • Have you been trained in the basics of portfolio construction, and if so, do you implement sound and disciplined strategies in your personal portfolio?
  • Do you have the time to spend on studying and managing your investments
  • Do you enjoy doing so and have you been successful making a priority of reviewing and monitoring your portfolio? 
  • Have you rebalanced your portfolio regularly over the years?

  • Have your risk-adjusted returns compared favorably to the market overall? Are you satisfied with your own success as a manager?

If you answered “no” to two or more of these questions, it may be in your best interest to seek out a financial advisor with whom you can build a professional relationship based on trust and mutual respect.
Infinium Investment Advisors offers a complimentary 30 minute consultation to learn more about your needs and share how we work with clients. To book an appointment with a financial advisor in Denver, please click the link below:

Schedule a Consultation  


At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources:


Portfolio Analysis: Your Financial Advisor's Investment Choices

03.01.2015

Has Your Financial Advisor Filled Your Portfolio with a bunch of @#$!%?

As investors relying on our advisor's advice, we never want to think that he or she has not served us well, every time. But the reality is, the financial services landscape is littered with questionable intentions and reasoning, especially when it comes to building portfolios. The unfortunate reality is many types of financial advisors are incentivized to put their own interests above yours. The question is, how do you better understand what you own in your portfolio in order to feel confident that your portfolio is serving you well?

Portfolio Analysis 101: Good and Bad Portfolio Construction

The foundation of sound portfolio construction starts with a your financial plan. A financial plan you say? Yes, indeed, a thoughtful and well-conceived financial plan should drive the design of your portfolio. In practice, however, we often find that financial advisors fail to build financial plan that is thorough enough to help with portfolio construction. Far too many financial plans are created solely to help the advisor understand where there is opportunity to sell the firm's proprietary products and services. On the contrary, an objective analysis is the cornerstone of a good plan and when done properly, the results yield a very clear picture of how you should position every last penny of your assets.

Questions to Ask of Your Financial Advisor

When you look at your monthly statements or log in online to view your portfolio and can't recognize your holdings, it's time to start asking questions of your financial advisor. Don't sound the alarm bells just yet, though, because part of the reason you have hired a professional in the first place is to bring to the table appropriate investments for which you may not have prior knowledge.

Asking your advisor for a full explanation of why and how your portfolio looks the way it does not asking too much; it's simply adding to your understanding of what you actually own. For a complete list of questions to ask your financial advisor during a portfolio review, click here to download our white paper entitled: "Has My Advisor Filled my Portfolio with a Bunch of %*@#?"

Get a 2nd Opinion

In sum, portfolio construction is hardly ever a black and white subject; there are many ways to build a sound portfolio. Working together with your advisor to understand and craft the best portfolio for your needs is the ultimate goal. If the review and discussion with your current advisor does not measure up, then consider getting an objective, 3rd party review of your holdings. Having a second set of professional eyes look at how you are currently positioned can go a long way in helping you understand whether you have a quality portfolio or not.

If you are interested in our complimentary portfolio analysis, please click here to schedule an initial phone consultation:

Schedule a Consultation  


At Infinium, we believe in providing you original research and thoughts on the world of personal financial services. Nothing of what you see on our site is canned or produced by a 3rd party. Take some time to explore the following resources: