Beware the Shady Financial Advisor

In late 2016, I achieved a writing milestone I was particularly proud of: I secured my own column in my state’s biggest newspaper, the Indianapolis Star. Every few weeks, they’d let me crank out a column about ways to save money or some other aspect of frugality, all in the name of helping community members achieve their financial dreams. Since I’ve always wanted to write for a print publication, I was stroked.

A few months had passed and everything was fine – that is, as long I didn’t read all the angry troll complaints in the online comments. Eventually though, I started getting some weird emails from local people who thought they could “help me” with my column. Ahem.

One guy who reached out stands out as the most peculiar, and scary, really. He was a financial advisor, he said, and he wanted help me “ramp up my message and touch more lives.”

His words, not mine.

As a writer who has a collective reach in the millions through the various publications I write for, I thought that was laugh-out-loud funny. So, I was like yeah, no. I don’t want to work with you. And that was before I really knew what he wanted.

But, it gets worse. After our initial email exchange, he followed up on LinkedIn to share more details about his genius plan. Since I was intrigued by now, I asked him to spell things out. Here’s what he said:

“My company has a very unique message about getting out of debt, backed up by a specific plan for doing so. You know more than most, that debt is epidemic, and that far too many people feel hopeless and helpless when it comes to seeing light at the end of the tunnel.

“You have an audience – and I suspect the demographic of your audience coincides with families who have the greatest struggle with debt. What I’m envisioning is that – if you vetted and validated what we do and what outcome it produces for people – that you might want to be a sort of spokesperson for the solution. That may be a complete non-starter, but if it is not, it would give you something to talk about by way of solving family debt issues that is effective, timely, and doesn’t necessarily require sacrifice (lifestyle modification) to accomplish.

“Bottom line – it could position you to do more than talk about it through your writing – but actually advocate a solution (please don’t mis-read that your writing isn’t effective on its own). We would of course show you how your advocacy could benefit you financially, which might give you another, complimentary income source. If I’m way off base – just say so. If you’d like to know more – let’s get together. Your call – I just don’t want to leave things on a sour note due to my poor word-choice and failure to research you before reaching out.”

Whoa. To be clear, he wanted me to help advance his agenda in exchange for monetary compensation. Worse, he wanted me to suggest an alternative that “didn’t require sacrifice.” I wondered what on Earth he was talking about. Sorry, but on this planet, you typically need to make a few sacrifices to get out of debt. Right?

Sadly, what I discovered on his business website did not surprise me at all. While he was a “financial advisor,” he focused most of his business on whole life insurance and variable annuities. His company’s actual mission, which is on the homepage of their website, is to change and improve “how Indexed Universal Life Insurance and Indexed Annuities are sold.”

Blecchht.

Beware of the Shady Financial Advisor

With few exceptions, most people need whole life insurance and annuities like they need a hole in the head. Especially if you’re in debt, you’ll get a lot more bang for your buck by cutting your expenses and using your extra funds to pay off high-interest debts, including credit cards and personal loans.

While I’m surprised this “financial advisor” thought I might collaborate with him, the fact remains that this type of thing happens all the time. And since nearly anyone who works in financial services can call themselves a “financial advisor,” it’s only natural that you’ll run into a sketchy one at some point.

Heck, my own husband could have been a shady financial advisor if he hadn’t changed course. Faced with a career crisis about five years ago, he turned his focus from funeral directing to investment and life insurance sales. After enduring the training, however, he found out the firm he joined wanted him to focus his efforts on selling whole life insurance because the commissions were huge – like, thousands-of-dollars-per-sale huge.

They also said he could call himself a “financial associate,” which seemed gross for someone hawking whole life insurance to family and friends. After all, he hadn’t really received any financial training, other than passing his boards and exams.

Within a few weeks of starting the job, he quit and burst home in tears. He just couldn’t do it. It wasn’t honest and it wasn’t right, he said. So, back to the funeral industry he went (albeit this time with a different employer).

But, for every person like my husband, there are a few who forge forward with whatever dishonest career path they’ve chosen. And sometimes, they even convince themselves they’re doing the right thing. The financial advisor who contacted me is the perfect example. Somewhere along the way, he learned to believe people in debt really need whole life insurance and indexed annuities to turn their lives around.

The Bottom Line

While there are thousands of reputable financial advisors out there, never forget that some “advisors” are wolves in sheep’s clothing. While they may seem honest, some financial professionals may be nothing more than life insurance salesman in disguise. Some may be hell-bent on selling you specific financial products – whether you need them or not – instead of helping you achieve your financial goals. Unfortunately, it’s mostly up to you to figure out who’s who and whether they’ll hurt or help.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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Have you ever encountered a shady financial advisor? If so, how did you find out? Please share in the comments below.