VIDEO: Your Financial Sweet Spot: If You Don’t Have a Fully Licensed Financial Advisor You May Be Missing Opportunities
By Scott L. Olson // May 25, 2017
Atlantic Financial Advisors, LLC
SPACE COAST DAILY TV: Scott Olson, President of Atlantic Financial Advisors in Melbourne, Florida, talks about what to consider when selecting a financial advisor and the keys to investing wisely.
BREVARD COUNTY, FLORIDA – Many ‘Financial Advisors’ are not qualified in all important areas of investing and financial & estate planning, but it is easy to sort out the real deal from advisors with ‘Limited licenses.’
A local doctor, who suggested this article, went to a FREE-Dinner hosted by a local advisor who stressed that “No-one should own stocks, bonds mutual funds, variable annuities and REITs.” We looked up his licenses and no surprise, he is only licensed as an insurance agent and fee-based advisor. He is not a registered stock broker.
Because of his limited licenses and registrations this advisor can’t offer popular investments that he says “No-one should own.” His clients are being short-changed.
Our doctor has been a “Do-it-Yourselfer‘ however, after losing half his life savings in the Crash of 2007 to 2009 and seeing how long it took to make back his losses he decided to seek expert help.
After going to many ‘Free-Dinners’ he noticed that most of them fit into one of two buckets;
A) Salespeople who were only licensed for one thing – fixed Indexed Annuities (EIAs), or
B) Fee-Based advisors who charge a fee to manage your money (which usually ended up only trying to sell fixed Indexed Annuities).
Advisor Licenses Make The Difference
If a financial advisor is not licensed with all three licenses they cannot be non-biased?
Insurance Agents (Florida license 2-15) are licensed ONLY for insurance products such as fixed annuities and fixed life insurance.
They cannot be objective and legally are not allowed to discuss your investments—not that this stops them, but they are not qualified to do so. They cannot offer securities (real investments) without a Series 7 registration, or fee-based investments without a Series 65 or 66 registration.
Many local annuity hucksters push clients into putting their entire life savings into the only investment they can sell – fixed annuities. This is against all common sense.
Many insurance agents claim to be financial advisors, yet they only sell one investment – Fixed Indexed Annuities!
The problem is that these annuities are designed to pay only 2.75-4% maximum annual return despite the most popular lie I have heard in almost 40 years “When the Markets go up you make money, but when they crash you don’t lose.”
Fee-Only, or Fee-Based Advisors, like one who’s name says they offer only mutual funds, can only sell one thing – mutual funds. They are limited to only offering mutual funds for a fee, on top of all the fund charges.
Many investments are available exclusively to Millionaires – investors with a minimum net-worth of $ 1 million or more, not including home, or income of $200,000 or more, yet a radio show hosted by a national mutual fund only, fee-only investment company actually said “There are no investments reserved just for millionaires.” Was he lying or ignorant?
If an advisor is not licensed with all three licences/registrations they cannot be unbiased.
Fee-Only advisors cannot offer thousands of great investments such as REIT’s, Real-Estate Partnerships, Variable Annuities, Oil & Gas Royalty Programs, Oil & Gas Partnerships, Equipment Leasing, and many Senior Secured Debt funds. We believe that fee-only advisors are not an efficient way to invest since you are always paying a fee (usually about 1%) and they cannot give you a choice of paying a fee or commissions without a Series 7 license.
Commission-Only Advisor (Stock Broker)
If an advisor only carries a Series 7 securities license they can only offer commissioned investments. They cannot offer annuities without a Florida 2-15 license, nor fee-based investments without a series 65 or 66 license.
Your Financial Sweet Spot
If you don’t have a Fully Licensed Financial Advisor you may be missing a World of Opportunities
It makes sense to have an advisor with all three licenses. If an advisor is licensed in all three areas they can be un-biased in making recommendations.
Conflicts of Interest
If someone claims to be a financial advisor but they are limited to what investments they can offer, they are biased, and not likely to be honest about investments they cannot sell.
I have been in the investment industry for almost 40 years, and most of that time I have worked extensively with Accredited Investors who invest in NON-Correlated assets, which are investments which do not move in lock-step with the stock market.
Many times Alternative investments may gain value, even when the stock market is crashing. Yale, Harvard and the largest Endowments in the U.S. have, on average, 52% of their Billions and Billions of investments in Alternative Investments. Like all investments, Alternatives have risks, and are less liquid or non-liquid. Liquidity has a cost – typically lower income.
Risk Tolerance
An area most advisors and almost no investors address is risk. Most do nothing more than riding the wave ‘Up’ when the markets go up, but plunge with the markets with no risk mitigation plan. Make sure your portfolio matches your Risk Tolerance.
Today we have great tools to help define your individual asset risk, but better, they can define the risk of your entire portfolio risk. We use Morningstar, Envestnet and Global Award winning Riskalyze risk analysis programs.
If you haven’t seen your portfolio risk with Envestnet you owe it to yourself to do so – BEFORE THE NEXT CRASH.
IRA’s Income and Estate-Planning
Your IRA is most likely completely left out of your Estate Plan. The IRS Specifically allows you to reduce the taxable value of certain assets which allow you to convert your IRA to a TAX-FREE Roth at a discount of as much as 40% to 90% depending on the asset. Discounted Roth-Conversions allow you greater tax-free income and more to your family when you die.
Working with Alternative investments which do not correlate to stock markets or interest rates, investors may smooth out the wild swings in the stock markets, and potentially increase income over bonds, ETFs and annuities.
ACTIVELY Professionally Managed investment portfolios, custom built for each client. Why ride the stock market swings down 50% and have to make 100% just to get back to even, only to ride it down 57% and have to make it all back again?
The S&P 500 has only returned about 5% annualized over 15 years (Morningstar). Can you do better? Call 321-751-5599 now for a free Risk Analysis and to see how non-correlated investments may pay you higher income, and help you sleep better.
ABOUT SCOTT L. OLSON
With 39 years’ experience in all areas of financial, estate and charitable planning, wealth preservation and wealth transfer gives Scott a unique perspective many other advisors cannot. While his firm offers everything other financial advisors offer, they add a unique background in ACTIVE Portfolio Management, Endowment Style Investments, and Discounted Roth-Conversions.
For more information, or FREE portfolio review and FREE Second Opinion.
Scott has been a popular speaker to groups of Attorneys, CPAs, Financial and Estate Planning professionals. He provides Continuing Education to Attorneys and CPAs and has presented at the Florida Bar Tax-Section annual conference, and their CLE teleconference.
Not an offer to buy or sell any investment or insurance product. Securities & Investment Advice offered through Financial West Group – member FINRA/SIPC. Atlantic Financial Advisors, LLC, Registered Investment Advisor not FWG affiliated.
Scott L. Olson, President, Atlantic Financial Advisors, LLC, Registered Investment Advisor
E-mail: Scott@AtlanticFinancialAdvisors.com
3682 N. Wickham Road, Suite C, Melbourne, FL
321-751-5599 • 800-779-4744
Securities offered by Financial West Group. Member FINRA/SIPC Securities. NOT FDIC INSURED, NOT BANK GUARANTEED, and MAY LOSE VALUE. Atlantic Financial Advisors, LLC not affiliated with FWG
