Conflict of Interests

Financial advisershave a financial stake in the course of action that he/she recommends to you and, therefore, havean inherent conflict of interest.  Consequently, financial advisers should not be considered objective and unbiased. This is true even if the financial adviser truly believes that he/she has only the best interests of the client at heart.

Unfortunately, the vast majority of financial advisers in the United States are sellers of financial products. Some or all of their income may be dependent upon their ability to steer their clients to a limited number of the thousands of financial products available today. Many of their clients are not aware of their financial advisers’ dependence on selling products, or do not recognize its difference.

Many of the problems that beset investors – including the mismanagement of their investment portfolio, failure to protect retirement assets and poor allocation of savings and investments – relate directly to the conflicts of interest that pervade the investment marketplace.

Here is a typical example of what investors are faced with when obtaining advice from financial adviser:  A new retiree needed advice about how to handle his retirement savings worth $1,00,000. He  consulted with a financial adviser for help. The first financial adviser advised him to purchase a variable annuity that would provide the retiree with monthly income, the potential for 7% per year in appreciation and a death benefit.  The retiree thought that sounded like a good idea.  Still, the retiree consulted a second financial adviser who told the retiree that it would be a mistake to purchase the annuity because of the high fees.  Instead, the second financial adviser recommended that the retiree give him the money to manage.

The retiree, concerned, contacted the first financial adviser and informed him about what the second financial adviser had said. The first financial adviser reassured him that the second financial adviser was trying to manipulate him because second financial adviser’s motives had to do with money. The second financial adviser charged a feebased upon a percentage of the size of the retiree’s investment portfolio. More assets under management means more fee income to the second adviser.

As you can see, the retiree is left confused because two investment professionals gave opposing advice.  Clearly, each of the financial advisers were motivated by the money they would make if they could convince the investor to follow their advice.

Wittenberg Law provides an investment valuation service that is entirely conflict free, meaning that Wittenberg Law does not receive payment in connection with your purchase and sale of any security.  Rather, protecting you from these inherent conflicts of interest that bias your financial adviser is what motivates Wittenberg Law.

If you suspectthat your financial adviserhas put his or her interests ahead of yours in advising you in connection with the purchase and sale of securities, or engaged in another sales practice abuse, please contact Wittenberg Law to discuss your legal rights and options.