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You are incorrect in my commentary and you have not demonstrated anything to suggest he didn’t act in her best interest and your opinion that you don’t like him is entirely irrelevant.
There are numerous reasons to leverage life insurance and just because a 70 year old widow hasn’t told you why it occurred doesn’t mean it’s not a valid strategy. It’s possible she doesn’t want to share details with you. You’ve made it clear you don’t have any ownership, there’s no reason to accommodate you either your relative or the advisor
You have no idea what advice he gave her on withdrawal amounts. You also have no idea if he warned her at all. You are in an entirely clueless position. The greatest risk to any financial plan, even with an advisor is clients overspending despite advice otherwise. I’ve seen it thousands of times, you are dealing with a single time of which you have limited to zero actual interaction with the person you are making judgement on
I brought it up because people are often clueless. An Advisor isn’t slimy because a client over spends. An advisor can’t magically make enough money to meet spending. You are extremely limited on what you actually know about the history and information. That’s also probably ignoring a lack of your personal experience and knowledge on the topic which simply compounds the issue you are having
You are right that I don’t know why he sold her the policy. So I will concede that maybe I do t know the reason why. She can’t tell me either though and that concerns me. I am the executrix of her estate and I’m going to be her live-in care giver in a few months. She already gave me power of attorney. So in a way I do have ownership in that I will be managing her affairs soon. And because she’s put me in charge of that responsibility.
She told me he didn’t tell her the fund was running out. Her memory isn’t impaired yet, just her judgment, so I believe her. And when I say judgment, she’s become too trusting and naive. He only sent her a letter last month and then she told me.
And I have interacted with this advisor. When I was first divorced (at 40) the marital finances were a mess. I went to him because mom said he was willing to help me. His help was he tried to convince me to open a million dollar whole life insurance policy on top of my existing term policy (no reason given) and suggested I convert all my retirement savings from mutual funds into high fee, low return annuities. That all rubbed me the wrong way and I’ve never liked him since. So again, I will concede, I have a lot of biased against this man.
But again, like I said, you were the one who brought up that you would question why the fund was running out of money. I was just answering you that it was poorly managed and it’s actively managed by this guy. I don’t think he did anything fraudulent, I just don’t think he’s very good. I think he’s more of an insurance salesman.
1) You mentioned your daughter is vegetarian, implying you are not. Consider going vegetarian.
2) Approach your daughter about going Vegan rather than merely vegetarian; this will cut out, for example, milk, cheese, eggs and the like.
While you indicate this is a short-term problem - a year or so - you might discover it is not a short-term problem but rather a long-term problem. For example, while your daughter is in college, she may need more financial support from you than you have budgeted, or she may wish to pursue graduate school after college asking you for incremental financial support, or she may need incremental financial support from you when she exists college and takes a job in a HCOL area -- possibly for a decade or more until she is well established.
EDIT
A drivers license, and access to a car and the incremental insurance payments, are a right-of-passage. But they are an expensive right-of-passage. Your daughter now has her license, and I presume knows how to drive, but you might consider telling her you cannot afford the incremental insurance and hence she is not allowed to drive your car.
You haven't mentioned child support from your daughter's father; is it possible he would fund car insurance now that the daughter is old enough to drive?
Last edited by RationalExpectations; 06-16-2021 at 09:50 AM..
There is a concept of a financial fiduciary. You should find out if he is a fiduciary. If he is, then it is possible he has broken the fiduciary trust - at the very least by violating a "safe withdrawal rate."
Do you know if he charges her on a "percentage of assets managed" basis, and if so how much he charges her?
Thanks! I didn’t find him in the database. I looked at his website years ago, but I can’t find it now either. It appears to be gone. When I look under his business name, I find other sites, business directories, with his business name listed as a financial services company but no detail. I searched by his name and I found a linked in profile of someone of the same name, and the same location, and it says that person is the owner of an insurance company. That is, assuming the linked in profile is the same person who is my mom’s financial advisor. If it is the same person, it looks like he may have gone out of the financial advising end of business and just as insurance sales now.
Like I said in an earlier post, I’m moving in with my mom in a few months and will pretty much be her caretaker. I don’t live in the same state that she does now, so it’ll be a lot easier once I move to her area and move in. Then I can go through paperwork and figure all the stuff out.
1) You mentioned your daughter is vegetarian, implying you are not. Consider going vegetarian.
2) Approach your daughter about going Vegan rather than merely vegetarian; this will cut out, for example, milk, cheese, eggs and the like.
While you indicate this is a short-term problem - a year or so - you might discover it is not a short-term problem but rather a long-term problem. For example, while your daughter is in college, she may need more financial support from you than you have budgeted, or she may wish to pursue graduate school after college asking you for incremental financial support, or she may need incremental financial support from you when she exists college and takes a job in a HCOL area -- possibly for a decade or more until she is well established.
EDIT
A drivers license, and access to a car and the incremental insurance payments, are a right-of-passage. But they are an expensive right-of-passage. Your daughter now has her license, and I presume knows how to drive, but you might consider telling her you cannot afford the incremental insurance and hence she is not allowed to drive your car.
You haven't mentioned child support from your daughter's father; is it possible he would fund car insurance now that the daughter is old enough to drive?
She probably wouldn’t mind going vegan. She doesn’t really care for eggs and she’s lactose intolerant. I tend to buy her things like oat milk, and cheeses which don’t have a lot of lactose in them. I wouldn’t mind going vegetarian, I really don’t care if I eat meat or not. Just don’t take my potatoes away for me! Ha ha
My daughter really wants to get a part-time job now that she has a car and a license. And yes, she has a car. I gave her my 17 year old car and got myself a newer car. I haven’t talked to her yet about it, but my idea is that she should pay her own car insurance with money she makes for a part-time job. It actually isn’t a lot. Adding her to the insurance only added $300 more a year. But that is $25 a month and every little bit adds up.
There is a concept of a financial fiduciary. You should find out if he is a fiduciary. If he is, then it is possible he has broken the fiduciary trust - at the very least by violating a "safe withdrawal rate."
Do you know if he charges her on a "percentage of assets managed" basis, and if so how much he charges her?
A fiduciary could be in violation of something but a client can ignore a fiduciary’s advice and continue to take out money. You are fueling a situation in which the OP isn’t a client or beneficiary and the fiduciary has no duty to the OP at least based on what has been said
You are right that I don’t know why he sold her the policy. So I will concede that maybe I do t know the reason why. She can’t tell me either though and that concerns me. I am the executrix of her estate and I’m going to be her live-in care giver in a few months. She already gave me power of attorney. So in a way I do have ownership in that I will be managing her affairs soon. And because she’s put me in charge of that responsibility.
You have no ownership directly or implied by being an executor/executrix or having POA
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She told me he didn’t tell her the fund was running out. Her memory isn’t impaired yet, just her judgment, so I believe her. And when I say judgment, she’s become too trusting and naive. He only sent her a letter last month and then she told me.
Was this you? Because I find your inconsistency convenient to align with your thoughts
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but she’s elderly and has Parkinson’s (which effects your thinking capacity too)
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And I have interacted with this advisor. When I was first divorced (at 40) the marital finances were a mess. I went to him because mom said he was willing to help me. His help was he tried to convince me to open a million dollar whole life insurance policy on top of my existing term policy (no reason given) and suggested I convert all my retirement savings from mutual funds into high fee, low return annuities. That all rubbed me the wrong way and I’ve never liked him since. So again, I will concede, I have a lot of biased against this man.
All of which may be true and valid but you have done a ton of speculation without having much of any information
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But again, like I said, you were the one who brought up that you would question why the fund was running out of money. I was just answering you that it was poorly managed and it’s actively managed by this guy. I don’t think he did anything fraudulent, I just don’t think he’s very good. I think he’s more of an insurance salesman.
I thought based on your initial comments it was your trust/assets but it turns out that wasn’t the case
I said he doesn’t act in her best interest and I don’t like him, not that he did anything illegal (which I assume is what you mean by wrong). It’s not illegal to sell a 70-year-old widow a life insurance policy, for example. But a 70-year-old widow really doesn’t need a life insurance policy when she has no debt or dependents and already has a small policy to cover funeral expenses. She didn’t go to him wanting a policy, he convinced her of it in a visit. She has no idea why she needs it, but he told her she did. And I find it no coincidence that he made a commission off it.
Thanks for the questions. They are good ones. I suppose if you count savings as an expense, yes, I am spending everything that comes in. I set things up that way. I first set aside a minimum amount of savings, then set a budget, whatever was left was added to mandatory savings (if that makes sense). The easiest answer to less income is to just save less since that's where all my excess income goes, but I want to see if I could cut expenses first. That's all.
I thought about a new job, but now is not a good time with my daughter as a high school senior and me needing flexibility regarding events, college tours, etc. My main problem with my job is that they pay isn't keeping pace with the cost of living here. I will be moving to a LCOL area in a year, that will go a long way to helping. Housing is the main thing killing me. I've seen my fixed rate mortgage payment go up from $1700 per month to $2050 per month in ten years (it's all due to increasing taxes with increased property value). And my HOA fees doubled in the same time. After I sell my house, if I want to, I can easily buy a similar sized house for cash where I am moving to if I want to. That will go a long way to cutting expenses.
I do have an emergency savings of sorts (I have a year of expenses saved up).
Well, I wasn't trying to limit it to groceries, but it's a big expense and the only thing I could think of to cut. Looking at quicken, over the past year my grocery bill has steadily gone up. I was hoping someone would have other ideas aside from groceries that I didn't think of.
I will admit, I've gotten lazy with shopping. Pretty much the stores in a 45 minute drive of me are Whole Foods, Giant (a lot of Giants), Safeway, Aldi, Trader Joes, Wegman's, and Costco. Two years ago, I went on a field trip and did price comparisons. The end result was I buy a few things at Aldi (mostly spices and baking goods) and most at Giant and I haven't changed from that routine. I found Safeway and Whole Foods to definitely higher priced. Wegman's was about the same as Giant but always over crowded. Costco was cheaper on some things, but not the main things I buy (plus the membership fee). Trader Joes hardly had anything I needed and seemed to be mainly prepared foods whereas I mainly do that "around the outside of the store" shopping except for things like dried beans, grains, pasta, etc.
But, having said all that, things change. Maybe it's time for another field trip. Thanks for the reminder and the tip on the spreadsheet. I need to see why my grocery bill has gone up.
And yeah, the car thing is a slight of hand. To be honest, it's kind of an emotional thing. It "bugs" me to have the debt. The reality is, the interest rate on the car loan is so low that it only costs me $274 over four years to carry the loan. I think the big advantage will be related to FAFSA. Draining down my savings before I do that paperwork will mean more student aid, but I think FAFSA just takes into account something like 5% of the parent's savings. So maybe it's not really worth it.
I’ve only read to this post so far, but with the names of the stores given, I can guess that you are near the region where I used to live. There is/was a store named Global Markets (if I remember correctly) that is chocked full of ethnic foods and fantastic veggies on the cheap. We used to get our vegetables for a fraction of what was offered at the other stores and they were fresh & good quality.
I suggest, as you said, that you scout around for other places to shop again.
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