Posts belonging to Category Unsuitable Recommendations



Aging of Population Raises the Bar for Advisers

 

The problems of elder financial abuse and loss of cognitive faculties due to aging are on a steep upward trend. The inability to manage money and make sound financial decisions is one of the earliest indications of Alzheimer’s disease.  Financial advisers should look out for clients who stop paying bills, seem addled about their assets, […]

Alternative Investments are no Panacea

 

Why do investors continue to be enamored with hedge funds and other alternative investments? The press recently reported that institutional investors are expected to increase allocations to hedge funs by 300% this year, and hedge fund assets are expected to increase by 11% to $2.5 trillion, according to the 11th annual survey of institutional investors […]

Bond Market – ‘Irrational Exuberance?’

 

Recent warnings regarding dangers in the bond market were recently issued by bond maestro Bill Gross. These warnings are reminiscent of Alan Greenspan’s implicit warning in a 1996 speech when he asked: “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?”  Specifically, Mr. […]

Financial Advisers Face Growing Risks from Aging Population

 

As the population ages and investors’ financial acumen decline, financial advisers will be forced to assume additional duties and responsibilities in order to avoid liability exposure. For example, Alzheimer’s disease will raise legal and ethical challenges for investment advisers over the next 40 years as the incidence of that dread disease is expected to nearly […]

Low Yields Push Investors into Very Risky Alternatives

 

The financial world continues to beat the drum warning investors about the risk of bonds.  When interest rates rise (or when the market believes a significant rise in interest rates is imminent) bond prices will fall, and investors in bond funds and individual bonds will suffer declines in value and/or losses.  Retirees and others, who […]

Deutsche Bank Loses $934,000 in Arbitration

 

On February 8, 2013, a Financial Industry Regulatory Authority (FINRA) arbitration panel ordered Deutsche Bank and its former registered representative, Karl Hahn, to pay $934,000 to a couple who had sought to recover $2,193,931 for losses associated with the improper sale of premium-financed life insurance.  The award included $100,000 in attorney’s fees.  Hahn worked in […]

Alternative Investments – Often Tainted by Sales Practice Abuses

 

Investors in search of fixed income have poured money into a variety of alternative investments, including nontraded real estate investment trusts (REITs).  Alternative investments encompass most investments other than traditional stocks and bonds and mutual funds that hold stocks and/or bonds.  There are three basic clusters of problems that investors who are considering these products […]

Bond Warning Issued by FINRA

 

The Financial Industry Regulatory Authority (FINRA) has finally joined the crowd in warning investors about the risks of bonds and bond funds in the current environment. If FINRA is worried about bonds, the end may be near. FINRA may be late in warning investors about bond and bond fund risks say financial advisers, but investors […]

Alternative Investments Begin to Haunt LPL Financial

 

LPL Financial, the country’s largest independent broker-dealer, is encountering serious problems involving its sales of alternative investments. LPL is also (not coincidentally) one of the country’s largest sellers of alternative investment products. In 2011, LPL sold $758,435,677 of variable annuities (which are considered by most industry observers as being alternative investments) and $110,643,148 of other […]

Victims of Elder Investment Fraud – A Growing Problem

 

Investment scams targeting senior citizens continue to proliferate in Georgia and across the country. In fact, the Atlanta Journal Constitution recently published an article dealing with financial fraud perpetrated against seniors.  The article (“Financial fraud scams target Georgia seniors”) focused on an 81 year-old lady who was the victim of a ponzi scheme.  A ponzi […]