The “Surrender Charge Conversation is Optional” Advisor
I once had a person come to me who was very disgruntled with their current financial advisor. They had lost more money than they’d wanted to and really didn’t understand what they had. When I had a chance to take a look at their mutual fund portfolio, I noticed that all they had were B-Share mutual funds.
For those of you who don’t know, B-Shares, for the most part, are now non-existent. Although I can’t be certain why, my hunch is that they aren’t around anymore because too many advisors abused them. If they could still sell them, the advisor could make a handsome commission, and the client would never know.
Now, it’s not the commission on the B-Share that makes them so bad; it’s the fact that most of them had a six- to seven-year surrender period. That means if you buy the fund, you’re going to have to hold it for at least six or seven years before you can liquidate it without a penalty.
The client in my office had no idea what a B-Share was, and most importantly, had no idea that she had a surrender charge attached to it. So here she is—stuck in investments that had lost more money for her than she had wanted, and she can’t do anything about it. If she did sell it, she’d have to pay a surrender charge on top of her losses. Talk about a slap in the face.
Lesson learned: Read all the fine print and make sure you understand if your investment product has any type of surrender charge attached to it.
Related Horror Stories
Deceived for Commission
When I was new and wanted to buy mutual funds, they sold me ULIP in the name of Mutual Funds, which they were not dealing even, but for getting some commision, they found me a good prey.
Trading My 401k for a Questionable Insurance Policy
It was once suggested to me by a “financial advisor” to cash out my 401k and reinvest it into a whole life insurance policy.
Giving Control of $100K and Earning Less Than Their Fees
I once gave a major fund control of 100G for one year. I got a 2% return. They made more money in fees than I did in ROI. Meanwhile, the rest of my money invested in index funds earned 10%+ after fees.
Share Your Story
Have you had a negative experience with a human financial advisor or other human “financial expert”? Share your story to help others avoid similar issues. Together, we can shed light on the importance of reliable, unbiased financial advice - its been a big motivator for us to build PortfolioPilot.
Global Predictions provides investment advice only through its internet-based application, PortfolioPilot, and only to individuals who are advisory clients of Global Predictions pursuant to written advisory Client Agreements ("Advisory Services"). The publicly available portions of the Platform (i.e., the sections of the Platform that are available to individuals who are not party to a Client Agreement - including globalpredictions.com and portions of portfoliopilot.com) are provided for educational purposes only and are not intended to provide legal, tax, or financial planning advice. To the extent that any of the content published on publicly available portions of the Platform may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Nothing on the publicly available portions of the Platform should be construed as a solicitation or offer, or recommendation, to buy or sell any security. All charts, figures, and graphs on the publicly available websites are for illustrative purposes only. Before investing, you should consider whether any investment, investment strategy, security, other asset, or related transaction is appropriate for you based on your personal investment objectives, financial circumstances, and risk tolerance. You are also encouraged to consult your legal, tax, or investment professional regarding your specific situation. Registration does not imply a certain level of skill or training. Investing involves risk. The value of your investment will fluctuate, and you may gain or lose money.
The contents of the Platform may contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates, and projections about the financial industry, the economy, or Global Predictions itself. Forward-looking statements are not guarantees of the underlying expected actions or future performance and future results may differ significantly from those anticipated by the forward-looking statements. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements.
Note: our use of the term AI refers to all artificial intelligence models used including large language models, proprietary economic models that incorporate regression or dynamic factors, and machine learning methods like supervised learning.
2. As of February 20. 2025
3. $30B Assets on Platform as of February 20. 2025. Aggregated across all plans (including the free plan). Assets on Platform represent the total value of connected and manually inputted accounts (including assets like real estate and private equity) and does not in any way represent Asset Under Management as Global Predictions does not manage any client funds.
8. Case studies presented are hypothetical scenarios and intended for illustrative purposes only. They do not represent an actual client, investment or experience, but rather are meant to provide an example of the intended investment process and methodology. An individual’s experience may vary based on his or her circumstances. There can be no assurance that the Firm will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of the Firm’s investment advisory services. The information contained herein should not be construed as personal investment advice.