Investment Recovery Counsel

Are you worried about investment fraud? Check out our newest article. https://www.investmentrecoverycounsel.com/what-you-can-do-/

New Year’s Resolution - Remember the Eagles As the calendar rolled over to 2018, like many people, I resolved to lose some weight. Like many others, I have found this resolution to be very difficult and slow going. However, there is one area where I can trim the fat quickly and very easily. I am referring to the fat in my retirement account. While this may sound strange, it is a good thing to do. Let me explain. Last year, I attended a presentation given by Ken Frost a...t WFA Wealth Managers. WFA is a respected San Diego investment advisory firm founded by Pete Wheeler and Ken Frost. I view Ken as the numbers guy at WFA. Ken’s presentation included the requisite charts and graphs about the current lengthy bull market; or as my favorite band, the Eagles, would call it, The Long Run. My take away from Ken’s presentation: I should be concerned with my equity position growing too large in proportion to my overall portfolio. For example, my retirement account was set up to consist of roughly 60% equities, 35% bonds and 5% cash. After The Long Run, the value of my account was 75% in equities, 20% bonds and 5% cash. This was good news, right? Not necessarily. The Long Run will eventually end. When the market turns downward, it is important to protect against significant losses. If the equities market suffers most of the losses, my account will take a big hit. Ken suggested the best way to limit losses is to re-balance your account periodically to match your desired percentages of equities, bonds and cash. If you are closer to retirement, perhaps readjust your account to add more bonds, fixed income and cash. My advice: Don’t be a desperado, don’t take it to the limit and find your retirement already gone. Follow Ken’s advice so you can have a peaceful easy feeling. Mark Brewer represents investors in disputes with their financial advisors. For more information, check out www.investmentrecoverycounsel.com

I have recently received a number of calls regarding "L" share variable annuities. A few of the callers now believe the L in L share stands for loser. It is important to understand what you buy --- or more likely --- what is sold to you. Variable annuities are insurance products with the rate of return tied to underlying securities, such as mutual funds. The mutual funds associated with variable annuities generally come in the form of A shares (fees paid up front) or B sha...res (no fees upfront, however subject to a surrender charge for early withdrawal.) L share variable annuities are complex investments combining insurance and securities that allow for a short term hold. However, L share variable annuities pay higher fees to brokers in exchange for shorter surrender periods. The lure of higher fees has caused many brokers to sell L shares, when A or B shares would be more appropriate. FINRA announced today that it has fined eight firms, including First Allied Securities of San Diego, a total of $6.2 million for failing to supervise the sale of variable annuities. Check out the full story at http://www.businesswire.com//FINRA-Fines-Firms-Total-6.2-M

Many investors know that "churning an account" (the recommendation to buy and sell stocks for the primary purpose of generating fees) is illegal. Unfortunately, churning happens all the time. The article below is an excellent explanation of "reverse churning." With the looming Department of Labor Fiduciary Duty rule, reverse churning will likely be on the rise. Be aware.

If your broker is continuously moving firms, don't be afraid to ask why. You have a right to know!