Watch out for the Toxic Combination of Sales and Financial Advice
Financial advisors have a responsibility in making sure that they are communicating the right message. After all, they are presenting concepts that potential clients are trying to make decisions that affect their financial future. I happened to look over an advisor's set of recommendations yesterday. It is disturbing and not surprising. Either the financial advisor didn't understand what they were recommending, they are only interested in the sell, or they were intentionally trying to mislead the prospect. It is not a tough call to say that they were not acting in the best interest of the client (either intentionally or unintentionally) considering what the prospective client thought was going to happen.
You are looking for red flags.
Advisors get away with this type of misleading marketing because the industry lets them. There are not enough regulators to police activity nor compliance people in broker dealer/insurance companies that are charged with monitoring them. So, you look for red flags. It is actually quite simple. Here is what you are looking for:
No risk what so ever - only potential strong gains - everything has a risk
Investment results are so good that they are unrealistic - most of the time they are unrealistic - especially with annuities/life insurance promising income
It is easy - all you have to do is A plus B and you get C along with great returns
Investment results that forecast great returns that will happen way into the future - be especially careful of this
Mainly be careful with past returns and the implication that they are going to repeat themselves. For example, take insurance products as a good example. They guarantee no losses, and if presented irresponsibly, insinuate great returns. The hypothetical illustrations are extremely misleading the way they are presented - be careful.
Finally, they are very quick to replace something that you are doing with another advisor requiring huge penalties to be paid.The mixture of sales and advice has been a toxic combination for decades. Just make sure you are dealing with a trusted communicator and not a salesperson. Sales becomes dangerous when the sale is in the best interest of the sales person versus the prospect.