Monday, May 3, 2010

How Do You Determine When Your Financial Advisor Is Being Even Sort-of Dishonest?

How Do You Determine When Your Financial Advisor Is Being Even Sort-of Dishonest?

Is it when he/she fails to tell you all that you need to know – also known as the whole story – before you make a decision, or when they actually make false verbal statements?

We are living in the 21st century, so there are perhaps a million and one intellectual arguments to be made about what actually constitutes guilt and dishonesty. But I am pretty sure that at the end of the day, when we wind down, an overwhelming number of us would arrive at the same answer.

Over the past several days, you very likely have heard some of the discussions about the allegations against Goldman Sachs, and the attendant back-and-forth. One side claims, “You knew things would blow up and you sold those products to investors anyway.” The other side argues, “We followed the law and correct procedures.” Without taking sides – because, frankly, I don’t care much for either side – I must say that it is sad but true that there is widespread dishonesty in the financial industry.

Not long ago, I wrote a very simple, easy-to-read little book, called 5 Mistakes Your Financial Advisor is Making  in which I make my case regarding each of these mistakes. At the end of each segment, I pose specific questions for investors to propose to their advisors, suggesting that they request specific answers. Oh, boy! I knew those simple questions would invite the opportunity for discussion, but I honestly didn’t envision the can of worms the questions would open in many people’s relationships with their financial advisors. Of course, the majority of these so-called advisors defend themselves by arguing that since they did not actually verbalize “anything” they were not dishonest.

Is your financial advisor ethically bound to tell you about an investment product they know would be better for you, even if they cannot offer it to you? How would your advisor react if you were to mention a strategy and/or product you believe might work well for you, but they were unfamiliar with it or unable to offer it to you? Should your advisor simply sell you the products they have available?

I am fairly certain that at some point during our childhoods, we were all strongly admonished to tell the truth – regardless of the situation. What’s happened to that advice over the years? Actually, last Friday, April 30, was National Honesty Day, a day when we were all encouraged to be honest – no matter what. Here’s an idea: Why not make it 365 days per year?

One thing I know for sure is that here at Laser Financial Group, we pride ourselves in basing ALL of our clients’ strategies and recommendations on FACTS. Silence is not an option – and just because something is legal doesn’t mean it passes our test for honesty. We are dealing with the financial lives of families; should that include any room for creative dishonesty – non verbal or otherwise? Absolutely NOT!

Another thing I know is that while the moment of dishonesty is fleeting, it always has a way of catching up to you. I’m sure you’ve had your own experiences and don’t need any examples here.

And the last thing I know – for now – making the conscious decision to be honest allows an individual a strong level of confidence, because you never have a need to second guess or cover anything up.

For an honest, straight-forward evaluation of your current financial situation, please call Laser Financial Group at 301.949.4449 or visit us on the web.

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