They Trusted Him. Now He Doesn’t Return Calls.

Affectionate old couple with the wife holding on lovingly to the husband's face. Focus on the husband's eyes. Concept: Elderly love. Photo by: Ian MacKinzie. Wiki Commons license. Used with permission.

Two of my coaching clients have been having a rough time getting access to their money. Sadly, their story is one that I’ve seen far too often – particularly with regard to Boomers, retirees and anyone who wants to turn over the management of their money to someone else to handle. (Rich people don’t do that. They hold the people who are in charge of their investments accountable, and have regular meetings where the manager has to explain the strategy and the results.)
 
When D&T started asking questions and wanting greater control over their own financial future, their “financial advisor” went radio silent and quit returning calls. They are in the middle of this process. Hopefully, by dotting the I’s and crossing the t’s on their requests, and because we are still riding high on Wall Street, they will get all of their money out of the high-risk investments that they were sold into as safe. Imagine, however, what would be happening during harder financial times, such as the Great Recession… So, many people were caught in these kinds of quagmires, and few escaped without losses. (Lehman bankrupt. GM bankrupt. Chrysler bankrupt. AIG bailed out, but restructured. 20% of the Dow Jones Industrial Average was bailed out or went bankrupt. Washington Mutual bailed out. Countrywide bailed out. Merrill Lynch bailed out. Bear Stearns. All of these bonds and stocks lost a boatload of dough. And that isn’t the end of the list.) As the economy weakens, it’s a very good idea to know exactly what you own and why now, and to be the boss of your money.
 
Specifically, private placement REITs that pay you a high dividend (anything above 4%) are not safe. All of the REITs that I checked into the financials had been losing money for years, with a sea of losses. Annuities are not FDIC-insured. They are backed solely by the insurance company who sells them to you. We would have seen a sea of annuity and life insurance losses if we’d allowed AIG to go bankrupt in 2008. They also have fees and fine print that can dramatically reduce the return that you believe you are receiving. And in some cases with some products, you are at risk of capital loss. (if the company becomes insolvent, you stand to lose most of what you put in.)
 
Here is D&T’s story, in their own words.
 

 
I met a new financial advisor/money manager, David, at a conference. I wanted to trust someone since my knowledge was lacking in this arena. I had been following Natalie for years and truly liked what she had to say. Finally, I went to my first educational retreat with Natalie. It was all new for me and a bit out of my comfort zone, but I had a deep desire to be in charge of my own money. After all, nobody will care for it like I would.

By this time we had hired David. In that first financial educational retreat, I learned that so many things we were invested in were much higher risk than we’d been told. David had put us into a variety of things that were good for him, in that they paid him a high commission! 
 
I asked David if he was a fiduciary. He said he was, that everything he did was for us. The thing that truly angers me is what he convinced us to do. I am not a high-risk person, My husband is more so this way, so David manipulated him into investing in private placement REITs. I now know that these are very high risk. Many of these companies have been cash negative for years, borrowing from one investor to pay off another, and paying brokers a high commission to do that.  

We put in the paperwork last year to cash out of these. Nothing!!! Then we redid the paperwork in August, so we could get the next payout for December. They say that you can only get out of these things twice a year. If you miss the window you have to wait again.

We did everything by the book. Once again trusting this would be taken care of.  Waiting…waiting…nothing.

David, the salesman who put us into these investments, is not even returning our calls!!!!  We both have called every week for several weeks now and nothing!!!

There is a lot of money in these accounts. It truly matters to us. 

Now, we’re in the process of writing letters to all parties involved in this world, which includes the broker, the brokerage, another financial firm and the REIT itself. If this does not work, even if it does, we will file complaints with FINRA, the SEC and the FTC on all of those involved. 
 
Again, the one that hurts the most is David. If I can impart any wisdom to you, it is to remember that “financial advisors” are sales people. They know how to listen and manipulate to serve their best interests, all the while making you believe that they truly are your friend.

I am so angry at this system!!!! I could be angry at myself. However, compassion is what is needed. We did not know that we did not know. They play the game like they care, and they really don’t. It is still hard for me to accept David’s lack of integrity and respect in not responding.

My husband has emailed David’s brokerage to report him. Nothing. No response.

I am grateful we are now educating ourselves. We have realized through all of this that we truly need to educate ourselves. 

Studying with Natalie Pace is giving us this opportunity. I wish everyone could take these workshops. It would be great if this was taught in schools.
 
 
 
 
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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.