Are you a Muppet?

By now, you have probably heard about Greg Smith, a former executive director at Goldman Sachs (GS) who, in March, resigned by writing a scathing New York Times editorial.  The raw and disturbing truths of his message are important to understand.   He’s the Jerry McGuire of the financial world – exposing the corruption of those who do what is best for their firm, NOT their clients.  In his editorial, Smith reveals that directors refer to their own Clients as “Muppets”.   With this latest editorial, you have to wonder…. Who is on your side?  Are you a Muppet to Wall Street?

Here is a list to help you decide: 

• Are you working with a Fiduciary?  An Advisor who has a “Legal Loyalty” to put your interests first?  Brokers and Insurance reps do not have to obey this standard and are fighting it.  Most of them are sales reps that work on commissions.  Why would you give your hard earned money to someone who is not on your side?
• Will your Advisor put in writing that they will act as a Fee Only Fiduciary on your behalf?  It must be in writing.
• Are you working with someone who doesn’t fully disclose all conflicts of interest?  Do you fully understand how they are paid?  Do they receive any extra commissions or “kick-backs”?
• Do you fully understand your total expenses?  Sales load? Operating expense? 12b-1 fees ( $10.6 Billion were paid in 2010!)?, trading costs?, turnover? Taxes?  Advisor fees?
• If you have over $500k in assets, your advisor fees should be 1% or under.
• Are your investments and strategy too complex?  Complexity = Confusion = High Costs = Bad outcomes for you, the Investor.
• Have you been sold “high commission” products like equity indexed annuities, reverse convertibles, equity linked CDs, insurance as an investment, non-traded REITs? 
• Are you focused on an optimal asset allocation for your individual risk tolerance?
• Are you saving enough for your retirement?

Do you need a free 2nd Opinion about your current strategy?  If so, contact us.