http://www.bnet.com/5799-19699-0.html?type=18 Blog Recent Discussion Activity http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_92239 Just wish to say that I'm very thrill to discover this blog and that Allan and Rick are both active participants. I bought and read the "All about asset allocation" and just got the "2nd grader beats wall street" and am in Chapter 3. This article just echoes what was said in Chapter 3.<br><br>I sincerely look forward for any future posts.<br><br>Jack Tue, 24 Nov 2009 02:40:10 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_92239 2009-11-24T02:40:10Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92237 tnut4,<br><br>Not talking about teaser rates like Everbank. You lost the bet about the Alaskian CFP. Tue, 24 Nov 2009 02:32:45 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92237 2009-11-24T02:32:45Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92199 Quote: "banks paying the highest rates don't pay advisors."<br><br>1) If moving a client from .001% at the bank to 1% where they have information and can move a client back and forth to earn .25% is that in the client's interest or not? You know there are many clients who will not open accounts or utilize them on their own. <br><br>2) www.everbank.com Find me a higher rate. And, btw, they pay advisors. <br><br>Next article can you pick a bigger group of people to stereotype? Makes a great article when you can criticize a whole group of people for what .05% of their population did. <br><br>What state did this guy practice in? I'll bet he was an Alaskian CFP(r). You know you have to watch our for those guys. Tue, 24 Nov 2009 01:16:33 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92199 2009-11-24T01:16:33Z http://moneywatch.bnet.com/investing/blog/irrational-investor/insurance-investing-and-the-10000000-challenge-the-outcome/654/#17454_92232 Hi Dougmor,<br><br><I><B>I like the EIUL but the cost of insurance is of concern. An illustration for cost of insurance should be provided by carriers too.</B></I><br><br>That's another really cool feature of the Universal contract design; You're fully disclosed of the actual costs of insurance, in advance illustration and every year in your statements. It is not "folded into the mix" as with the obsolete whole life chassis.<br><br><I><B>I'd rather have tax free growth than the recommendations of fund pickers that can't beat the SP500 index and charge 3.5% per year without any risk on their part.</B></I><br><br>The average COI (fully transparently disclosed) tends to be well under 1.5% of a properly structured, max-funded (non-MEC) EIUL strategy... often well under 1.0% for survivorship structures (last-to-die.)<br><br>ONE thing I have really begun to take to heart is one of Allan's questions (at least I think it was Allan... too lazy to re-read this thread from the top again.) <br><br>That question was;<br><B>If this can really be done... guaranteed no losses, resetting the basis to re-grow every year from the bottom, tax-free growth and tax-free access, match the absolute index upside annually, etc... then why aren't the brightest in the securities world doing it also?"</B><br><br>The only answer I can come up with is;<br>They *COULD*... however;<br>A) It's capital intensive (requires deep pools of reserves, and securities people just don't have the DNA for reserves,)<br><br>B) The internal mechanics are COMPLICATED... the few who are really bright enough to know how are far more likely to accept institutional salaries & bonuses at life insurers than to hustle for individual accounts,<br><br>C) Offering results with accountability to guarantees... is simply against the typical securities salesperson's religion. <br><br>It's not that they don't wish they could... they sincerely can't fathom it being possible.<br><br>D) LASTLY; even those who are "shown the light" and bright enough to understand, are so publically invested in a previous position of its impossibility... that they cannot afford to acknowledge the discovered facts.<br><br>Cheers,<br>Aztec Tue, 24 Nov 2009 01:12:09 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/insurance-investing-and-the-10000000-challenge-the-outcome/654/#17454_92232 2009-11-24T01:12:09Z http://moneywatch.bnet.com/investing/blog/irrational-investor/how-to-protect-your-investments-from-yourself/776/#19037_92221 Hi Allan,<br><br>Thanks for this article and many others. Great job!<br><br>I do have one small suggestion, regarding Zweig's "Thou shalt put no <br>money at risk that thou canst not afford to lose."<br><br>You interpreted this as "Put simply, if you've met your financial goal <br>and have a low need to take risk, don't take it."<br><br>IMO Zweig's comment is better interpreted simply as "Put simply, if <br>you have low ABILITY to take risk, don't take it." One with low ability <br>to take risk may not have the ability to earn back money they might <br>lose. Thou canst not afford to lose refers to not having the ABILITY to <br>take risk. Having met your financial goal means you have a low NEED <br>to take risk, however such a person may in fact have the ABILITY to <br>take risk. Subtle but important difference I think.<br><br>Best wishes,<br><br>Steve Mon, 23 Nov 2009 23:23:44 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/how-to-protect-your-investments-from-yourself/776/#19037_92221 2009-11-23T23:23:44Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92201 @Carl, yes doing the right thing is what's important!<br><br>@Allan, I agree that all models have inherent conflicts of interest, re: monetary incentives, but the hourly model is the only one I know of that doesn't have an inherent conflict in terms of giving financial advice.<br><br>Susan Tiner<br><a href="http://www.financialorganizing.info/" target="_blank">http://www.financialorganizing.info/</a> Mon, 23 Nov 2009 21:59:20 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92201 2009-11-23T21:59:20Z http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_92170 Think of the logic of your statement. If people could pick the market bottom then doing so would stop it from being the market bottom. Mon, 23 Nov 2009 20:41:09 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_92170 2009-11-23T20:41:09Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92149 The comments above are very thoughtful. There are conflicts in all fee models, including my hourly model. I have never met a planner, however, that didn't feel he was doing the right thing. <br><br>The self-righteous planner I was speaking to that gave me the idea for the column felt he was doing the right thing, which is why my challenging him on the cash question was such a conversation stopper. Mon, 23 Nov 2009 20:30:04 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92149 2009-11-23T20:30:04Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92099 @Susan: I completely agree. There are conflicts with <br>charging a fee for managing assets, but how many times <br>have you heard people complain about there attorney that <br>takes longer than they think it should because they bill by <br>the hour?<br><br>I also agree that finding what I call a REAL planner is <br>difficult. I know REAL planners that charge by the hour, and <br>REAL planners that charge AUM. What they have in common <br>is they just DO THE RIGHT THING. Mon, 23 Nov 2009 17:38:19 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92099 2009-11-23T17:38:19Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92120 This question is not a fair question to compare the fiduciary responsibilities of financial planners in general. Not all financial planners (CFP professionals) provide investment advisory services; some are hourly based.<br><br>For those planners that do provide investment advisory services to clients, assets that would be spent or required to be liquid in less than one-year should not be considered investable assets to begin with. If the assets were invested for a period of time and then would be needed within a year, the advisor would have access to brokerage CDs to provide the client the current market-rate CD returns that would be FDIC insured. Money that was needed soon would be transferred to the client's account and not be held by the advisor.<br><br>Planners/advisors that charge a fee based on assets are not charging just to manage the money. It is a total fee for the services of the planner and advisor. This is different than an asset-based fee that would be paid to an investment advisor strictly for the management of a certain amount of money in one account. In fact, this question raises the opposite concerns. Would planners/advisors NOT go into cash if the asset-based fee did not apply to cash/money-market assets? Having an asset-based advisory fee for advisors/planners ensures that the advisor does not have any incentive to recommend one investment or allocation over another. This is in the client's best interest without a doubt.<br><br>This blogger's question and comparison is not fair and does not fairly represent the true fiduciary responsibilities of a Certified Financial Planner professional. But this kind of question makes for a nice blogpost, don't you think? Mon, 23 Nov 2009 17:17:59 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92120 2009-11-23T17:17:59Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92110 Re: Carl's point that "charging a fee on assets and doing the right thing are not mutually exclusive," that's true, but I agree with Allan that it can create a conflict of interest. I am aware of examples of AUM planners advising against a mortgage payoff and charging fees on short-term fixed income, and wondered about the implicit bias in that advice. How does a client know if the advice is coming from a REAL planner? Mon, 23 Nov 2009 17:16:16 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92110 2009-11-23T17:16:16Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92094 Allan-<br><br>I have long felt like charging for cash or short-term fixed <br>income was inconsistent with putting a client's interest <br>first...so I don't, and I know a number of REAL financial <br>planners that do the same thing. <br><br>I also can't count how many times I have told clients to take <br>money from accounts I can charging a fee on to pay down <br>debt, and again I know a number of REAL planners that do <br>the same thing.<br><br>It's not that hard to figure out: you just do the right thing! <br><br>Charging a fee on assets and doing the right thing are not <br>mutually exclusive.<br><br>Carl Richards<br>behaviorgap.com Mon, 23 Nov 2009 17:03:00 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92094 2009-11-23T17:03:00Z http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92104 "Its easy for anyone to believe they have the highest ethics <br>and always put their clients interests first. Its much harder <br>to practice that belief, especially when it hits one squarely in <br>the wallet." Perfectly put, Allan. There are biases for nearly <br>everything in the financial services world, and underlying <br>them is the manner in which one is paid. <br><br>One additional tip: If an advisor/broker/planner claims to put <br>your interests first, have them put their fiduciary status in <br>writing...and REVIEW that contract. Mon, 23 Nov 2009 16:48:16 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/do-certified-financial-planners-really-put-clients-first/798/#19015_92104 2009-11-23T16:48:16Z http://moneywatch.bnet.com/investing/blog/irrational-investor/insurance-investing-and-the-10000000-challenge-the-outcome/654/#17454_91928 Aztec,<br><br>Thanks for your insight. After reading 65.5 mil of the 151mil tax filers don't pay taxes, coupled with huge Bush and massive OB spending, which way are taxes headed? I like the EIUL but the cost of insurance is of concern. An illustration for cost of insurance should be provided by carriers too. Still I'd rather have tax free growth than the recommendations of fund pickers that can't beat the SP500 index and charge 3.5% per year without any risk on their part. Sun, 22 Nov 2009 15:37:59 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/insurance-investing-and-the-10000000-challenge-the-outcome/654/#17454_91928 2009-11-22T15:37:59Z http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91901 Allan <br><br>Actually an insto has recently shown some interest as it can identify turning points very well.<br><br>It also picked the bottom this year.<br><br>G.S. Sat, 21 Nov 2009 15:16:58 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91901 2009-11-21T15:16:58Z http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91851 Yeah, there's a company called LTCM that might be interested. Sat, 21 Nov 2009 06:10:21 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91851 2009-11-21T06:10:21Z http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91380 Grand_Supercycle:<br><br>If your claims are true, you should sell your model to a large institutions for a few billion dollars. Wed, 18 Nov 2009 21:29:29 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91380 2009-11-18T21:29:29Z http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91356 More people should study trends !<br><br>I use technical analysis to identify trends which can also tell us where the economy is headed.<br><br>My long term USD indicator has been giving BULLISH warnings for some time and I am expecting a USD rally.<br><br>My indicators can identify trend changes before they occur.<br><br>They warned me of an impending market crash back in early *2007*<br><br>The VIX index continues to give bullish warnings as well.<br><br>Is the bear market rally ending ?<br><br>I post my analysis at this forum:<br><a href="http://www.zerohedge.com/forum/market-outlook-0" target="_blank">http://www.zerohedge.com/forum/market-outlook-0</a> Wed, 18 Nov 2009 19:37:10 GMT http://moneywatch.bnet.com/investing/blog/irrational-investor/is-now-the-right-time-to-get-back-into-the-stock-market/762/#18761_91356 2009-11-18T19:37:10Z