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Started By
Message
Do I have a bad financial advisor?
Posted on 1/25/24 at 2:25 pm
Posted on 1/25/24 at 2:25 pm
To give some context, I am 38 years old and own a couple of healthcare businesses, do fairly well but certainly not F U money.
About 4 years ago, I had to close a solo401k as I took a partner into one of my businesses. My advisor at that time, with my agreement, moved 142k into a variable annuity. To look at additional retirement savings, we eventually decided on a universal whole life policy. Before I go any further I think I was very naive and should have done much more research, but it's a lesson learned. My thoughts, after doing some research after the fact, were that this guy put me in the vehicles that were best for him and that front loaded his commissions. The returns were OK, nothing stellar.
I have since killed the whole life policy and started a company 401k instead, paying a decent sized fee in the process. I very recently killed the variable annuity as well for a much smaller fee, and moved into a Fidelity IRA hoping to self manage that amount through a couple index funds to follow the S&P. I am 38 years old. It seems that these are more appropriate for someone my age and level of income/savings. Advisor was VERY upset when he found out about the transfer, and in hindsight I probably should have called him before doing it as a courtesy.
Am I wrong in my thinking? Were these appropriate retirement vehicles for someone in their mid 30's?
About 4 years ago, I had to close a solo401k as I took a partner into one of my businesses. My advisor at that time, with my agreement, moved 142k into a variable annuity. To look at additional retirement savings, we eventually decided on a universal whole life policy. Before I go any further I think I was very naive and should have done much more research, but it's a lesson learned. My thoughts, after doing some research after the fact, were that this guy put me in the vehicles that were best for him and that front loaded his commissions. The returns were OK, nothing stellar.
I have since killed the whole life policy and started a company 401k instead, paying a decent sized fee in the process. I very recently killed the variable annuity as well for a much smaller fee, and moved into a Fidelity IRA hoping to self manage that amount through a couple index funds to follow the S&P. I am 38 years old. It seems that these are more appropriate for someone my age and level of income/savings. Advisor was VERY upset when he found out about the transfer, and in hindsight I probably should have called him before doing it as a courtesy.
Am I wrong in my thinking? Were these appropriate retirement vehicles for someone in their mid 30's?
19
Posted on 1/25/24 at 2:39 pm to Saint5446
Did he move the proceeds from the solo 401(k) into a self directed IRA or liquidate and you pay taxes? Important information to determine.
A general rule though, there is really no reason to fund a qualified retirement program with annuities. Doing so is more often to the benefit of the broker. This is just my opinion though.
A general rule though, there is really no reason to fund a qualified retirement program with annuities. Doing so is more often to the benefit of the broker. This is just my opinion though.
Posted on 1/25/24 at 2:44 pm to CHGAR
He moved the solo 401k to a variable annuity through Jackson National, that had very limited investment options. It was not a taxable event.
Posted on 1/25/24 at 2:58 pm to Saint5446
I would insta fire any financial advisor that tries to sell me an annuity at 34
Posted on 1/25/24 at 3:08 pm to Saint5446
quote:
I am 38 years old
---
moved 142k into a variable annuity
---
additional retirement savings ... a universal whole life policy
quote:Sounds like it.
Do I have a bad financial advisor?
Posted on 1/25/24 at 3:12 pm to NC_Tigah
OK, next question, what do I do with this 163k I just moved into a fidelity IRA? 
Posted on 1/25/24 at 3:18 pm to Saint5446
quote:
I am 38
quote:
My advisor at that time, with my agreement, moved 142k into a variable annuity.
quote:
decided on a universal whole life policy.
quote:
Advisor was VERY upset when he found out about the transfer
frick that clown
quote:
Am I wrong in my thinking?
you were completely played a fool
quote:
Were these appropriate retirement vehicles for someone in their mid 30's?
f no man.
Posted on 1/25/24 at 3:21 pm to TheOcean
quote:
I would insta fire any financial advisor that tries to sell me an annuity at 34
should not have that garbage at 54 or 44 or 34 for cripes sake. maybe 64 but i cannot stand annuities.
This post was edited on 1/25/24 at 3:23 pm
Posted on 1/25/24 at 3:24 pm to Fat Bastard
90% of them are jackasses like that.
Posted on 1/25/24 at 3:31 pm to tigersint
Don't walk...run. If any FA is pushing insurance then you know they are looking out for themselves and not you. Big fees and commissions.
If you want an FA, find one that is a true fiduciary (and can't accept commissions). Hopefully they are not involved in the 401(k) for the company.
If you want an FA, find one that is a true fiduciary (and can't accept commissions). Hopefully they are not involved in the 401(k) for the company.
Posted on 1/25/24 at 4:04 pm to Saint5446
quote:
Do I have a bad financial advisor?
quote:
My advisor at that time, with my agreement, moved 142k into a variable annuity. To look at additional retirement savings, we eventually decided on a universal whole life policy.
Almost certainly you have an insurance salesman and not a true financial advisor.
Posted on 1/25/24 at 4:09 pm to Saint5446
You don’t have a financial advisor. You have an insurance salesperson. Big difference
ETA - posted this without even reading the replies.
ETA - posted this without even reading the replies.
This post was edited on 1/25/24 at 4:11 pm
Posted on 1/25/24 at 4:12 pm to Dead Mike
Responses to this make me feel a lot better. Thanks everyone. Next step is to figure out how to allocate this in my new fidelity ira. Good lesson learned in all of this and good motivation to learn to manage this on my own.
Posted on 1/25/24 at 5:09 pm to Saint5446
quote:Everyone has different risk tolerance. Fidelity has a number of index funds. I'd put all of it in either the S&P 500 Index fund or their Total Stock Market Index fund.
Next step is to figure out how to allocate this in my new fidelity ira
Posted on 1/25/24 at 5:24 pm to PlanoPrivateer
That was kind of my tentative plan. Maybe I guess in the big scheme it doesn’t matter too much if I average into indexes over time or just dump it all in now into a few fidelity index funds.
Posted on 1/25/24 at 5:29 pm to Saint5446
quote:
The returns were OK, nothing stellar.
$142k in S&P Jan 2020, you'd have ended 2023 with approx $216k if you reinvested your dividends.
The fees are the least of it, he caused you miss an incredible bull run even in basic index funds.
Posted on 1/25/24 at 5:36 pm to Saint5446
I'd also do S&P 500 or total market index fund. No need to over complicate it buying several funds.
Mathematically, lump sum beats spreading out investments. But if you're likely to second guess yourself averaging can serve a psychological purpose or you might just get lucky and average into a lower basis. The market goes up more than it goes down over time.
Of course, if your FA was worth a shite they'd have taught you some of this over the years. Congrats on realizing and calling his BS.
Mathematically, lump sum beats spreading out investments. But if you're likely to second guess yourself averaging can serve a psychological purpose or you might just get lucky and average into a lower basis. The market goes up more than it goes down over time.
Of course, if your FA was worth a shite they'd have taught you some of this over the years. Congrats on realizing and calling his BS.
Posted on 1/25/24 at 5:44 pm to slackster
quote:
You don’t have a financial advisor. You have an insurance salesperson. Big difference
Posted on 1/25/24 at 6:02 pm to Saint5446
quote:
Responses to this make me feel a lot better. Thanks everyone. Next step is to figure out how to allocate this in my new fidelity ira. Good lesson learned in all of this and good motivation to learn to manage this on my own.
At the risk of downvotes to oblivion, you should interview a few actual financial advisors and see how you feel. Can always go on your own if you don’t get the warm and fuzzies now that you’re more educated.
Posted on 1/25/24 at 6:03 pm to Fat Bastard
quote:
Fat Bastard
I can guarantee this didn’t happen at Edward Jones.
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