Some Advisors Might Have Agendas

Adam Jorgensen - Monday, April 03, 2017

It seems like no matter where you turn someone is trying to sell you something, and this can be true of financial advisors. With so many financial products and services on the market, and people touting titles such as wealth advisor and financial consultant, the definition of an advisor has become more and more blurred.

To put it simply, the term “financial advisor” covers many different types of advisers that offer many different services.  For example, the same financial adviser, assuming he/she has the proper licenses, may sell you insurance products, sell you securities for your portfolio, sell you advice about how to invest your portfolio, prepare your taxes, sell your home for you and do your estate planning.  In each of these capacities, a financial adviser is compensated differently.  But not all of these capacities requires a financial adviser to act as your fiduciary.  If a financial adviser is not acting as your fiduciary, that adviser is not legally mandated to put your interest first.

 A financial adviser working in multiple capacities may be conflicted.  Conflicted advisers can waste your time and your money.  When it comes to your investments, you deserve an advisor who is looking out for you.  Before taking anyone’s advice here are a few things to consider:

  • Be cautious of anyone claiming to be an advisor, but has an agenda to sell you something.
  • Every program has positives and negatives. If an advisor/sales person hates a program, it is often because they don’t understand it or may want to influence you differently.
  • If someone loves a particular financial program and “all their clients are on it” it is likely the advisor pushes that product because it makes the advisor the most money.
  • Financial professionals might be paid to sell proprietary products for the company named on their business card, and they are held to a suitability standard rather than a fiduciary standard.A suitability standard does not hold an advisor accountable to put the best interest of a client first, but rather to prove the transaction was reasonable.
  • Always ask an advisor the capacity in which they are acting.
  • Always ask the adviser how they are being compensated.

We understand that brokers, accounting professionals, insurance agents, bankers, etc. play a significant role in our financial lives, but we hope you keep the points above in mind as you assemble the best team possible to manage your unique financial interests.

When Will Your Insurance Premiums Increase?

Adam Jorgensen - Monday, March 06, 2017

Do you know if and when your insurance premiums are set to increase? Life insurance, disability income insurance, and long term care insurance are all an important part of a wealth protection strategy, but it’s important to understand how your future premium situation may affect your plan.

Term life insurance policies are usually issued with a level premium that is guaranteed for the length of the term, but when the term expires they jump significantly in price.

Permanent life insurance policies are intended to be a level premium for the life of the insured. Unfortunately, many policies are started with too low of a premium. Based on the structure of the policy, it’s common that additional premiums will be required in later years. By reviewing your policy with an advisor, you may be able to prevent a premium surprise down the road.

Additionally, disability income insurance and long term care insurance policies may be lacking provisions to lock the required premium for a guaranteed number of years. As the more and more people are using their long term care benefit, insurance companies have been forced to raise rates.

When purchasing an insurance policy ask your advisor about the financial strength of the company and the track record regarding premium increases.  If you already own a policy then review it to make sure everything is on track. Remember that it’s an advisor’s job to apply their expertise to make sure your coverage fits within your financial boundaries now and into the future. To learn more reach out to Veracity Financial Services and obtain reassurance. 

It's Never too Early to Start a Plan with These Steps

Adam Jorgensen - Monday, February 20, 2017
        • Begin with the end in mind!
        • Understand your paycheck.
        • Create a budget. Separate your needs from wants and live within your means.
        • Start saving monthly for the unexpected.
        • Master the concept of compounding.
        • Sign up for your employer’s 401(k) or 403(b) plan to earn the match.
        • Get insured!  Protect your family with life insurance and 60% of your income in disability insurance.
        • Aim for a credit score of 760 or higher, and pay your bills on time.
        • Develop saving goals from short term (house, wedding) and long term (retirement, children’s education).
        • Stick to the plan and keep your eyes on the goal!

The Importance of Reviewing Life Insurance Beneficiaries

Adam Jorgensen - Monday, February 06, 2017
Obtaining a life insurance policy is a great first step toward financial responsibility. Besides purchasing coverage, it is important to review your life insurance beneficiaries. It may be equally important to make updates at each major life event: Marriage, divorce, birth of a child, retirement, a death in the family, the creation of a will or trust, etc.

In addition to naming a primary beneficiary you have the right to list backup or contingent beneficiaries so you can still control who receives the benefits if you and your primary beneficiary are in a common accident. Especially after having a policy for many years, we tend to get comfortable and forget to make updates.

There have been incidents that have gone to court where a re-married person failed to name their new spouse as their beneficiary. Therefore, at their death the life insurance proceeds went to the ex-spouse whom was still designated.

If you don’t list a primary or contingent beneficiary, it’s is likely the benefit will go to your estate, which may lead to issues concerning the probate process. Probate can be a hassle and be costly, which may reduce the benefit you intended your heirs to receive.

A final point to consider is how to name minor children as contingent beneficiaries. If not designated correctly the children may have to wait to age of majority to receive the proceeds, at which point they would receive it as one lump sum. You may prefer a custodian handle the money in a way that would benefit the kids as they grow.

For a complimentary, no hassle review, reach out to the professionals at Veracity Financial Services.

Veracity Advisers is a division of Capital Markets IQ, LLC, a SEC registered investment advisor. 

© 2019 Veracity Advisers

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Veracity Advisers, to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered personalized investment advice for compensation.