Beware of Faux Financial Planning

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Whenever I surf television cable news channels, I can't help but notice the plethora of ads for financial planning. Some of them sound compelling, even to me. I often find myself thinking, "Dang, that’s exactly what we do."

Then I noticed the incongruency. The ads are being run by companies that sell financial products or are owned by huge insurance companies.

One promises their advisors are financial experts who will see the big picture of your finances and dreams to help you get what you want out of life. They will create a personalized financial plan that shows all the possibilities and strategies tailored to your goals, and they will protect you now and in the future from the unexpected.

This sounds great, but a closer examination shows this company specializes in selling life insurance and mutual funds, making most of its revenue from the sale of these products. There is a high probability their "advisors" and "financial experts" will recommend a "financial plan" that includes a variety of life insurance, mutual funds, private REITS, and variable annuity products, all of which typically pay lucrative commissions. These "advisors" have a significant conflict of interest, since the bulk of their personal income comes from commissions.