Insurance and investment salespeople’s business cards read “Financial Advisor”. It’s the financial industry’s most deceptive sleight-of-hand.
You can thank Wall Street lobbyists and the regulators they’re in bed with for that one.
While they get busy under the sheets, the CFP Board – the governing body of Certified Financial Planners – has decided to take matters into their own hands.
They now require CFP’s to disclose all conflicts of interest to clients and prospective clients.
The big brokerage and insurance companies are having a fit. Many of them (like Edward Jones & LPL) are refusing to comply and won’t let their “financial advisors” use their CFP marks.
Others are begrudgingly complying. Among the complacent is Northwestern Mutual – the king of selling unneeded life insurance to unsuspecting young people.
Their disclosure template for compliance has leaked and it’s eye-opening:
“I primarily recommend, sell and service Northwestern Mutual insurance products, and I am required to meet annual minimum insurance production requirements.”
“The transaction-based commission structure incentivizes me to sell insurance products that pay the highest rates of commissions and that have relatively higher initial and ongoing premium payments associated with them.”
“As an insurance agent, I am compensated by Northwestern Mutual for sales of its insurance products through commissions, which… can range up to 55% of the first year’s premiums.”
If you don’t want to play the “is it right for me or am I being sold?” game, then work with an independent financial advisor who cannot legally earn a commission from selling you an investment or insurance.
That includes all financial advisors you’ll find here – NAPFA.com.
And if you’re a Bay Area family working in the tech industry, then start with us.