| Question? Site Map Join Forums Leaving/WFR Contacts Benefits Healthplans Stock Retirement/Pension Career About HP/HPE | |
|
||
Understanding Financial Advisors Member advice. (Updated Apr 17, 2025) Join our forums Email: info@hpalumni.org Join the HPAA Finance Forum. (Due to the personalized -- and usually geographic -- nature of working with a financial advisor, we don't get into specific advisor recommendations.) Summary When getting financial advice, you need to understand the role and motivations of each person and company you deal with. Unless you have directly hired them, a financial advisor receives compensation or other incentives from their employer -- which may bias their recommendations. Financial companies, such as Fidelity or Vanguard, have their own business objectives, which may not align with yours. Credit unions, while legally member-owned non-profits, are still businesses -- with their own objectives. At any credit union, the financial advisors are generally commissioned salespeople employed by legally-separate financial companies -- which pay the credit union for access to members and space in CU branch offices. (For DCU, Digital Investment Services and LDL. For First Tech CU, Addison Avenue Investment Services or ATS Wealth Circle and Raymond James.) Whoever you deal with, you can easily check out the person and company on the FINRA website. "Managing Your Money Manager -- Demand these things from your financial adviser" ["Fiduciaries are persons or organizations who act on behalf of others
and are required to put clients’ interests ahead of their own." From retired AARP financial columnist Jane Bryant Quinn: "How do you know if your
financial adviser has your best interests at heart? They all say they
do. Then some of them turn around and sell you products with high (often
hidden) costs that line their pockets at your expense... You can pay directly for independent financial advice.
"A certified financial planner (CFP) is the gold standard
for financial planners, backed by a rigorous certification
from the CFP Board of Standards.... Most importantly, CFPs
are required to put your interests first—it's not just a
promise, it's their legal obligation as a fiduciary."
Investopedia article:
https://www.investopedia.com/terms/c/cfp.asp Whoever you deal with, you can easily check out the person and company.
The Financial Industry Regulatory Authority (FINRA) is an
independent, nongovernmental organization that writes and
enforces the rules governing registered brokers and
broker-dealer firms in the United States. Check out a financial advisor or broker on the FINRA Broker Check site: https://brokercheck.finra.org Financial companies, such as Fidelity or Vanguard, have their own business objectives, which may not align with yours. Several years ago, HP made a pension lump-sum buyout offer to certain EDS retirees: "...speak with a Fidelity Representative at no cost to you... help you understand how this decision may affect your personal financial situation and help with your overall retirement planning and investment strategy." However, it became clear to EDS alumni that Fidelity was acting as HP's financial advisor, not the retirees' advisor -- key information required to evaluate the offer was buried in the legal Summary Plan Description, which was not included in the mailing. If you have an existing retirement, 401(k), or personal brokerage account at Fidelity, go to http://netbenefits.com and use your existing username and password. Otherwise, call Fidelity 1-800-457-4015 (If no password, keep hitting #.) (Outside US 1-508-787-9902 collect.) Fidelity (Don't go to a local Fidelity office, which is focused on sales.) Credit unions, while legally member-owned non-profits, are still businesses -- with their own objectives. At any credit union, the financial advisors are generally commissioned salespeople employed by legally-separate financial companies -- which pay the credit union for access to members and space in CU branch offices. A CU financial advisor's business card and desk nameplate indicate their legal employer. For example, Digital Credit
Union financial advisors are employed by an outside company -- Digital
Investment Services -- which is connected with LDL Financial. Similarly, First Tech CU financial advisors are employed by outside companies -- such as Addison Avenue Investment Services and ATS Wealth Circle -- connected with Raymond James Financial Services. Typical fine print at the bottom of the page: "...securities are not insured by credit union insurance, the NCUA or any other government agency, are not deposits or obligations of the credit union, are not guaranteed by the credit union, and are subject to risks, including the possible loss of principal. .. First Technology Federal Credit Union, Addison Avenue Investment Services are not registered broker/dealers and are independent of Raymond James Financial Services and ATS Wealth Circle..." The Digital Investment Services site has a link to a very thorough explanation: "Our Professionals are
primarily independent contractors, although a portion are employees or
employees of an affiliated company... Professionals who provide
you brokerage services receive a portion of the commissions or
markups/markdowns from your trades. Receiving a portion of the advisory
or brokerage fees you pay to us creates an incentive for them to
encourage you to increase your investment account size or trade more
frequently. We also compensate Professionals based on production,
including payments based on the amount of client assets they service and
the products they sell. In addition, our Professionals receive different
levels of compensation for selling different types of investments or
services. ...these additional forms of compensation create an incentive
for them to recommend specific financial products." "Preparing for early retirement, I called First Tech CU. Once the 'Financial Advisor' determined that I wasn't interested in an annuity, he was off the phone in 15 seconds." --HPAlumni Finance Forum member |
||
Helping each other with life after HP and HPE. Website Map Join Forums Independent, member-supported volunteer association. Not officially endorsed or supported. © 2025 Hewlett-Packard Alumni Association, Inc. By using this site you accept these terms. |