The “I Can Use Anything, I Just Happen to Use My Own Company’s Mutual Fund” Advisor
I had just met with some folks who had recently moved in-state from the East Coast. They were referred to me because they were unhappy with the advisor that they’d been with. The advisor had worked for one of those big insurance companies that also have their own proprietary mutual funds.
The advisor had always made the claim to them that he could use any type of investment that he wanted. What I found funny about that statement was when you actually looked at their account holdings, over 80% of all their investments were with that company’s mutual funds; their own proprietary product.
What was even more a bunch of crap, was the actual funds themselves were horrible.
Their track records were bad, their fees were high, and their performance resembled that of a 16-year-old trying to make it in the NFL; it just wasn’t cutting it. Lesson learned: If you’re using an advisor who works for a big company, be on the lookout if they always recommend their own company’s funds.
Related Horror Stories
Dodging Disaster: The Terrible Mortgage Advice That Almost Led Me Into the 2008 Crash
Some idiot financial advisor came to my workplace circa 2006 advising everyone to take zero-downpayment, interest-only mortgages, which were widely available at the time and were what fueled the housing bubble.
Then use the proceeds to buy life insurance as an investment.
I recall asking him, what happens when the interest-only period expires and you're required to start paying principal? "Oh, don't worry, you can always refinance into another interest-only loan. "Obviously I did not follow his advice, and we all know how the real estate market ended up after the 2008 crash. (I ended up buying my house in 2012.)
Nokia will rule the cell phone market
My 1 experience with a financial advisor 18 years ago. I did my high school senior project on investing. So my “mentor” was this financial advisor. I had 5k from my grandmothers to invest in (my great grandmother has mutual funds for all the grandkids so I cashed mine out and my grandma also threw in $1,000 for me)
Anyway.
His can’t miss these are about to be the next big thing picks were Nokia and Pioneer energy services. So Nokia only ever went downhill, I bought I think around $16 and sold at $5 some years later. Pioneer it actually had tripled at one point to $18 then a year later it was $2 then they went bankrupt so bye bye to that money.
I was really into computers back then, I had built my own and talked to him about how everyone in gaming was using Nvidia GeForce graphics cards. He has no interest in it. I can still hear his whiny voice saying how computer industry moves so fast and there will always be some new better faster thing on the market so that would be bad to invest in. And how Nokia was going to rule the cell phone market for years and years.
My REIT Nightmare
What's the dumbest piece of advice a financial adviser has given you? Put your money in this “safe” REIT…. lost half of it AND the fund was “frozen” when the banks did their nasty back in 2008; had to wait for 5 years to get even that back.
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 February 20. 2025
3. $30B Assets on Platform as of February 20. 2025. 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.