Because they're not really financial plans. The plans are marketing tools to get the unsuspecting client into prop products. The unsuspecting client gets a false sense that the plan is designed to help them when in reality it's used as a marketing tool designed to help Ameriprise. It also serves the purpose of figuring out how much money a client has so they know how much they can contribute to a VUL and other prop products each month. Believe me, the plan is designed to generate far more in the long run then the 2 Grand you're charging.

The regulation our compliance put us through was no joke. we could not mention a particular "product" until they had their plan in hand and our planner "hat" was off.

This is pretty typical, but I wonder about this.   If you are talking about taking off your planner hat, you are obviously both an IAR and a RR and I'm assuming that your RIA is related to your B/D.   How does not mentioning a particular product benefit the client?  I think that you can't do it because, primarily, not mentioning the product increases the chance that you will get the business.  

If in the plan, you said, "Buy XYZ mutual fund and buy disability insurance from ABC company", the client wouldn't need you for implementation.  They would know exactly what to do and it would be easy to implement with anybody.  

On the other hand, if you said, "Buy a mutual fund and disability insurance", it would be much harder to implement the plan with someone else.  

I'm not being critical of you.   I'm just arguing, or, more accurately, thinking out loud, that the reasoning for the lack of specifics has more to do with dollars and cents to the B/D, then about compliance.   Shouldn't a good financial plan have specifics?

Secondarily, it's much tougher to get sued over recommendations if they are generic rather than specific.  

My real problem is that the reasoning for not mentioning product isn't because this is best for the client.

VUL,

For the record, I agree with you.  But why do you say what you do?  You say it's overpriced, and that it's only about finding financial "holes" to fill with prop products.  Can you explain that?  

And who is "we"?

What really ticks me off is the whole '2 hats' BS. The client is never told that when doing the financial plan the 'advisor' is supposed to do what is in the client's best interest but then the 'best interest' goes out the door when it comes to selling the products.

This is just one more piece of the scam.

Here's another:
""I am a Registered Investment Advisor (RIA) with the Securities and Exchange Commission. Are you impressed? Don’t be. Just about anyone can become an investment advisor. Simply send in a form to the state or federal government with a modest filing fee, and you can join the club. You don’t need an MBA or a college diploma to apply. Heck, you could have flunked out of the third grade, gone bankrupt seven times, lost everything you ever owned to a Ponzi scheme, and still make a great living managing other people’s money.

In this surreal world of investment advice anyone can claim to be an expert and get paid for it. This is why most stockbrokers, financial planners, and insurance agents are in the business, and why accountants, attorneys, and bankers want in as well. The problem is, most investment advisors are borderline incompetent. Thousands of them lack the basic investment skills and knowledge of a first-year business student." - Rick Ferri

So, let's think about fiduciary and the client's best interest. Most RIAs have no idea what is in the client's best interest!!

Bottom line:
"In essence, the talk about ethics, fiduciary responsibility, integrity, etc. is primarily a marketing gimmick designed to lull the unsuspecting client into the perception of trust." (EF Moody, PhD, MSFP, LLB, MBA, BSCE, CFP)

"I can't speak as to how Ameriprise does things, but in my firm is VERY CLEAR as to when someone is working as an IAR or an RR."

I don't believe you. You may have some fine print buried somewhere, but I bet your clients have no idea what it really means and I seriously doubt you charge a reasonable hourly or flat fee and put your clients into low-cost index funds, which is what doing the best thing for the client really means. And, I seriously doubt you'd show your client's Rick Ferri's quote.

And as far as integrity, you are all masters at rationalization.  I see it on this site every day.

Your industry is a scam.

"In essence, the talk about ethics, fiduciary responsibility, integrity, etc. is primarily a marketing gimmick designed to lull the unsuspecting client into the perception of trust." (EF Moody, PhD, MSFP, LLB, MBA, BSCE, CFP)

"Isn't it usually dishonest people who have the inability to think that others can't be honest?"

It depends. In this situation it's my personal experience with you and my wide research about your industry that tells me you are dishonest.

"The real difference is whether a client is paying for advice or for a product."

And, how much the client is paying for that 'advice' compared to what that advice is worth.

"My fees are high."

Exactly.

"Yet, the fees are certainly reasonable, or else clients wouldn't be paying them."

Wrong. You have learned how to manipulate your clients and your clients have no idea about this:

"Table 1. shows the effect of investment management fees on your IRA balance. This exhibit assumes you invest $2,000 on January 1st of each year and earn a 10% rate of return before deducting management fees. The table shows your IRA balance after deducting your advisor's fee. Most folks find the results hair raising.

Table 1.
The Effect of Management Fees on your IRA Balance.
Assumes $2,000 yr. contribution,
10% annual return before management fee.
IRA Balance after 5 Years 10 Years 20 Years 30 Years 40 Years
Mgmt. Fee @ 0.02% $13,423 $35,022 $125,696 $360,454 $968,249
Mgmt. Fee @ 0.25% $13,334 $34,556 $122,204 $344,402 $907,762
Mgmt. Fee @ 0.50% $13,238 $34,077 $118,528 $327,816 $846,479
Mgmt. Fee @ 1.00% $13,047 $33,121 $111,529 $297,150 $736,584
Mgmt. Fee @ 2.00% $12,672 $31,291 $98,846 $244,692 $559,562
Mgmt. Fee @ 3.00% $12,307 $29,567 $87,730 $202,146 $427,219

That's not an error. If your advisor is collecting a 3.00% fee, your IRA balance will be some $541,000 lower after 40 years than if you used low-fee investments. Your account will be literally chopped in half, with the larger slice going to your advisor. (See, "How much should I be paying in fees?" ) What you pay in fees and commissions can have a large effect on your retirement."

Whine all you want. Your high fees are badly hurting your clients.

`The average investment manager adds nothing,' Buffett said. `He subtracts something from your investment performance. It's almost unique among professions that I can think of.'

"If I'm doing financial planning, I'm not putting my client into any funds.  That's not financial planning.  That is financial plan implementation.  It's not the same thing."

Do you have a sales license?

"There's people with too little knowledge in all industries, but that doesn't mean that there aren't those with lots of knowledge who are helping their clients."

I happen to think it is a huge responsbility when you handle money for client's financial future. But the way your industry is set up insures that brokers will hurt their clients.

Conflicts of interest, 12b-1 fees, soft dollars, revenue sharing, ongoing % of ALL assets charged no matter the performance, money taken directly from investment accounts with no full accounting, hidden fees, expensive actively managed funds, high fund turnover, churning, inappropriate products sold all over the place (like VULs), the BS marketing of 'fiduciary', RIAs, lack of education, the fund scandals, putting stockholders ahead of client interests, surrender fees to get out of horrible products, 'fake it till you make it', 'professionals' underperforming DIY-ers and charging a huge amount to do so, the mess of fees charged in 401ks and the consequences, the hard selling of products, hedge funds, terrible asset allocations, market timing, chasing past returns, manipulating clients, scripts, firms hiring kids with no experience to get to their natural market, 'advisors' that are really salesmen that sell what they are told to sell and never think of comparing products, survivorship bias, soft dollars, and on and on and on.

NO other business operates like this!!!!

Yes, I agree that there are good advisors out there that charge a reasonable fee....but there are VERY FEW of them and how will an ignorant client find one? Especially with all the slick advertising out there? 99% won't.

I see it over and over - people set up in garbage portfolios and paying huge fees and singing the praises of their wonderful financial advisor that is their trusted friend. They think they pay very little in fees....or no fees at all. They have no idea how their investments are performing as compared to the proper benchmark. I have to tell them. They are shocked to see how much they really pay in fees and how poorly their investments are really performing.

Do I think you are one of the 'good guys'? No way. You'd be out here helping me if you were.

The topic was "why are the plan fees so low" and our resident village idiot Macca/Aisa/noload/whogivesacrapbecauseIhavesomanyscreennames
has diverted the topic to something else and has begun attacking someone she doesn't know