Today’s Mission:

We explore a Wall Street Journal article connecting the dots between steak dinners and annuity sales. J’Neanne explains and offers a different strategy.

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(Click the featured times below to jump forward in the episode)

Strategy Points:

1:37 – Steak Dinners & Annuities.

  • A recent Wall Street Journal article (note: this article is behind a paywall) explores the connection between steak dinners and annuities. It argues that ever since the fiduciary rule in Washington was struck down that financial product sales have shot up. For some context, that law was supposed to put in place a regulation that would force advisors to operate in their client’s best interest. While some advisors had been doing that all along, big brokerage houses and insurance companies were operating under the suitability standard. This means they were able to offer you a selection of “suitable” products that might not be in your best interest and collect a large commission. Once the fiduciary ruling fell through, Wall Street saw an uptick in annuity sales from swanky dinner seminars. Basically, brokers and insurance salesman would invite you to a fancy dinner at a steak place and try to sell you on their products.

5:26  – Mrs. Provost’s Story.   

  • Mrs. Provost is a retired school bus driver. She’s 65 years old, and she attended dinner seminars with multiple salespeople. One salesman convinced her to switch from an annuity she had just purchased to another annuity. In the process, she paid all sorts of penalties and surrender charges. This tactic is why so many advisors hate annuities. Mrs. Provost clearly didn’t need another annuity, but the salespeople were more concerned about getting their commission than they were her financial health.

8:00 – Ponzi Schemes And Fraud.

  • While annuities present their own problems, fraudulent salesmen are even worse. Three men in Maryland were recently arrested on charges of fraud after they ran a $364 million ponzi scheme. We talk about the fiduciary rule, but even had it passed, these folks would have found their way around the law. You have to be careful when looking for a financial advisor. Work with an advisor who focuses more on holistic planning than steak dinners and product sales.

Other Objectives:  

  • 10:00 – How The Ponzi Scheme Worked.
  • 14:10 – Watch Out For Bullying.

The Grand Plan:

[spp-tweet tweet=”Work with an advisor who will work in your best interest. If your advisor is more concerned with product pushing than comprehensive planning, you need to run in the other direction. – Your Financial Mission“]

The Spy Kit:

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More Intel:

Wall Street Journal Article

The host: J’Neanne TheusContact – Call: (443) 718-6310


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