Pressure Tactics and Poor Advice
I had one guy INSIST that I buy a costly Variable Life insurance policy. “Don’t read the prospectus! TRUST ME!” Sorry. “We’re not leaving until you sign!” Okay well you may want to order a pizza, because it’s gonna be a looooooooooong wait!
Another time I met with reps from a major financial firm who asked how my investments had been doing. “For the past ten years my compound returns have been 27%.” (That is, my portfolio was up 10x over ten years.)
This upset then tremendously, like I had just told them I kidnapped babies to use as firewood. “Well, THAT’s totally unsuitable!”Well, what do YOU recommend? “We have a program that will deliver 7% a year. But no promises!” (Perhaps double over ten years.) Okay! We’re done here!
Related Horror Stories
Dodged a Bullet: I Fired My Adviser Who Wanted Me to Mortgage My Home for a Risky Annuity
My former adviser recommended that I, on the eve of retirement, take out a mortgage on my fully paid-for home to buy a variable annuity from her. I would have gone from having zero layers of humans between me and a valuable asset (100% equity in my home) to three layers of humans between me and my asset.
First layer was her (collecting the fat commission on that annuity). Second layer was the insurance company selling that notoriously questionable product, and lastly the fund managers of the mutual funds into which the insurance company would invest my annuity dollars. Everybody would be taking their cut, and I would be last in line for value. How did I fix the problem? You'll notice I began by describing that person as my former adviser.
Churned and burned
Some time in the past, a “financial advisor” convinced me that I could make a lot of money trading commodities. Wrong! I figured out he was just “churning” me (putting me into and out of too many positions, just to earn the commission), and I closed the account, buy not until he lost 80% of my money in less than a year!
Mortgage financial advisors pushing risky loans
In the fall of the year 2005 and when the real estate market was going crazy and all kinds of real estate investors were giving speeches and masquerading as advisors, I attended a local seminar about real estate investing.
I already had my rural land property/investment business model developed and most of my current advisors in place. A mortgage broker was speaking about loans for real estate.
These so called mortgage financial advisors were recommending people take interest only loans to fund their real estate purchases because the rates were low and it cash flows easily. There are many problems with this dumb advice.
Here are some:
- Debt at some point has to be paid back. Anybody who has done any investing and used debt with real estate, stocks, or a business knows this. Delaying indefinitely paying off a debt is foolish.
- Even if an interest only loan for any type of investment cash flows today, it might not tomorrow, next month, or next year. The investment might quit paying. For example:
- The tenant lost his/her job. The property flip did not work as the foundation crack was not discovered during the euphoria when the property was bought. Funds (from more debt) were needed to fix the crack when an engineer who looked at the property to buy it discovered it.
Share Your Story
Have you had a negative experience with a human financial advisor or other human “financial expert”? Share your story to help others avoid similar issues. Together, we can shed light on the importance of reliable, unbiased financial advice - its been a big motivator for us to build PortfolioPilot.
Global Predictions provides investment advice only through its internet-based application, PortfolioPilot, and only to individuals who are advisory clients of Global Predictions pursuant to written advisory Client Agreements ("Advisory Services"). The publicly available portions of the Platform (i.e., the sections of the Platform that are available to individuals who are not party to a Client Agreement - including globalpredictions.com and portions of portfoliopilot.com) are provided for educational purposes only and are not intended to provide legal, tax, or financial planning advice. To the extent that any of the content published on publicly available portions of the Platform may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Nothing on the publicly available portions of the Platform should be construed as a solicitation or offer, or recommendation, to buy or sell any security. All charts, figures, and graphs on the publicly available websites are for illustrative purposes only. Before investing, you should consider whether any investment, investment strategy, security, other asset, or related transaction is appropriate for you based on your personal investment objectives, financial circumstances, and risk tolerance. You are also encouraged to consult your legal, tax, or investment professional regarding your specific situation. Registration does not imply a certain level of skill or training. Investing involves risk. The value of your investment will fluctuate, and you may gain or lose money.
The contents of the Platform may contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates, and projections about the financial industry, the economy, or Global Predictions itself. Forward-looking statements are not guarantees of the underlying expected actions or future performance and future results may differ significantly from those anticipated by the forward-looking statements. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements.
Note: our use of the term AI refers to all artificial intelligence models used including large language models, proprietary economic models that incorporate regression or dynamic factors, and machine learning methods like supervised learning.
2. As of July 14, 2024
3. $20B Assets on Platform as of July 14, 2024. Aggregated across all plans (including the free plan). Assets on Platform represent the total value of connected and manually inputted accounts (including assets like real estate and private equity) and does not in any way represent Asset Under Management as Global Predictions does not manage any client funds.
8. Case studies presented are hypothetical scenarios and intended for illustrative purposes only. They do not represent an actual client, investment or experience, but rather are meant to provide an example of the intended investment process and methodology. An individual’s experience may vary based on his or her circumstances. There can be no assurance that the Firm will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of the Firm’s investment advisory services. The information contained herein should not be construed as personal investment advice.