College funding is the third largest financial outlay next to retirement and eldercare and yet only 3% of financial advisers and insurance professionals focus on the economics of a higher education. The Higher Education Research Institute at UCLA found that 75% of students were accepted at their first choice of college. But only 43% of that group attended that college. 62% of students said they couldn’t afford it. 25% said they were offered no financial aid at their college of choice. 60% said that money was the most significant factor in their decision. Is it wise to borrow from your 401(k) for your child’s future from your own retirement future? You’re paying interest to borrow your own money. You may not be able to transfer it to another place of employment until the loan is paid off.  And significant borrowing against your 401(k) may compel you to work longer than you anticipated. Borrowing from the equity position of your home also charges interest that must be paid monthly. If the value of the home decreases the loan could be called. The Baby Boomers have used both these options to their own hurt. But the real pain is the over $245   Read more…

Stranger danger! There are a host of hooligans that prey on the innocent, the indignant and impaired in the geriatric community. Many dress in suits. Some are great conversationalists for the lonely. A few are just plain thieves. Some estimates put senior losses at 36 billion a year. Fiduciary felons dress for success. The have a command of financial terms and sound like an MBA. Their demeanor is very professional and conveys a genuine concern for their prospects and clients. But there is larceny in their hearts.  And if you can fake sincerity, you can fake anything. You need to go through a discovery process that will help you weed out the…well, weeds! Better review Broker Check and/or the Department of Insurance for their history for starters. Ask for three non-relative references. Carefully examine their LinkedIn bio and learn to read between the lines. Many subconsciously tip their intentions cloaked in the language of honesty. Too much sincerity may turn out to be a form of reverse psychology Telephone scams are extremely creative using endearing conversations that target lonely seniors. Having a senior moment is now defined by letting your guard down. Never ever give any personal information to anyone   Read more…

Government regulations in the security and insurance industry, appear to be reactions to security representatives and insurance agents acting badly. They are created to be punitive and simply not just an exhortation. Many financial professionals that cross the line are ignorant of boundaries, which could, in and of itself, disqualify them as a professional. Some knowingly ride the fence and believe there is a neutral zone governing the gray areas of the law. But there are a few whose nature has a criminal disposition and their felony convictions taint the field force at large. Intent is a heart motive that may be identified by their methods and more often their targeted audience of the elderly and the innocent through a facade of trust. The methods and approaches may be evidentiary. What is evidentiary is the blatant exaggerated benefits these carnival barkers promote.  One of the most glaring examples is the marketing mantra “Zero is Your Heroâ€� often used with indexed annuities and indexed life insurance. The evangelists of this motto proclaim that you can never lose money. This is the great misnomer. If they meant to say that the crediting account can never levy less than zero, that is correct.   Read more…

So while introducing best practices will add more paperwork, it may add some degree of protection. The engagement letter is a lost art of business. In the past an engagement letter outlined the talking points of previous meetings, the engagement of the financial professional and the expectations of both parties. It  spelled out those expectations with scheduled performance reviews and accountability that included remedies for nonperformance. The engagement letter became the road map or blue print of the relationship going forward. Sometimes the biggest illusion between financial professionals and their clients is that communication has occurred between them. A review of stored communication often reveals a tributary of conversations in which both parties feel they weren’t heard. What was said was not what was meant.  One of the biggest areas of non-compliance is communication without documentation. There are so many communication modes in our culture: texting, email, voicemail, real mail, video and audio recordings. Ideally every one of these communication modes should be stored in secure environments in the cloud or hard copy. If arbitration becomes necessary, the documentation may very well develop into evidence that can support the claims of either party. When disputes between financial professionals and their   Read more…