Eccleston Quoted In SmartMoney Magazine Article
June 16, 2009
SNSFE securities partner James Eccleston is quoted in "Ten Things Financial Planners Won't Tell You" appearing today in SmartMoney magazine.
The article takes a critical look at the financial planning industry, highlighting 10 issues consumers should be aware of when seeking the services of a financial planner:
1. “I got this gig on a whim.”
2. “I’m a jack-of-all-trades and master of none.”
3. “I have ghostwriters draw up your plan.”
4. “I’m a high-pressure shill in disguise.”
5. “Am I ‘fee-only’ or ‘fee-based’? Um, let’s not split hairs.”
6. “Once I’ve done the plan, I’m outta here . . .”
7. “. . . especially if you’re not so well-to-do.”
8. “Confused? That’s the point.”
9. “In fact, I don’t even understand your plan.”
10. “Good luck busting me for malpractice.”
In #2, “I’m a jack-of-all-trades and master of none,” Jim recalls a client of his who met with disaster when a financial planner failed to advise him about the tax ramifications of exercising stock options. Instead, the planner convinced the client to buy a second home, using the stock as collateral for the mortgage, "and the coffin was sealed, because this was a 100-percent position in Cisco." When Cisco stock tanked during the tech-bubble fallout, the client’s portfolio plunged, from $1.7 million to about $5,400. He was forced to liquidate all his shares and take a $100,000 second mortgage on his primary home to meet margin calls—then got whacked with a $400,000 tax bill.
Additionally, a good financial planner should work alongside outside professionals— accountants, lawyers, insurance brokers— to offer you the best service. Jim notes that consumers should beware of the planner who tries to do everything himself. Like tax planning, estate planning poses great risks, since flaws might not show up until the client retires or dies. Jim advises to doublecheck anything your financial planner says about taxes or estate planning with a lawyer or CPA.
In section #10, “Good luck busting me for malpractice,” Jim says that consumers with grievances are unlikely to get any money back, but the adviser may face disciplinary action. Consumers can protect themselves in advance by checking out a prospective financial planner’s record.
PDF of article.
Jim heads the securities group at SNSFE and can be reached at 312-621-4400 or JEccleston@snsfe-law.com.
SNSFE securities partner James Eccleston is quoted in "Ten Things Financial Planners Won't Tell You" appearing today in SmartMoney magazine.
The article takes a critical look at the financial planning industry, highlighting 10 issues consumers should be aware of when seeking the services of a financial planner:
1. “I got this gig on a whim.”
2. “I’m a jack-of-all-trades and master of none.”
3. “I have ghostwriters draw up your plan.”
4. “I’m a high-pressure shill in disguise.”
5. “Am I ‘fee-only’ or ‘fee-based’? Um, let’s not split hairs.”
6. “Once I’ve done the plan, I’m outta here . . .”
7. “. . . especially if you’re not so well-to-do.”
8. “Confused? That’s the point.”
9. “In fact, I don’t even understand your plan.”
10. “Good luck busting me for malpractice.”
In #2, “I’m a jack-of-all-trades and master of none,” Jim recalls a client of his who met with disaster when a financial planner failed to advise him about the tax ramifications of exercising stock options. Instead, the planner convinced the client to buy a second home, using the stock as collateral for the mortgage, "and the coffin was sealed, because this was a 100-percent position in Cisco." When Cisco stock tanked during the tech-bubble fallout, the client’s portfolio plunged, from $1.7 million to about $5,400. He was forced to liquidate all his shares and take a $100,000 second mortgage on his primary home to meet margin calls—then got whacked with a $400,000 tax bill.
Additionally, a good financial planner should work alongside outside professionals— accountants, lawyers, insurance brokers— to offer you the best service. Jim notes that consumers should beware of the planner who tries to do everything himself. Like tax planning, estate planning poses great risks, since flaws might not show up until the client retires or dies. Jim advises to doublecheck anything your financial planner says about taxes or estate planning with a lawyer or CPA.
In section #10, “Good luck busting me for malpractice,” Jim says that consumers with grievances are unlikely to get any money back, but the adviser may face disciplinary action. Consumers can protect themselves in advance by checking out a prospective financial planner’s record.
PDF of article.
Jim heads the securities group at SNSFE and can be reached at 312-621-4400 or JEccleston@snsfe-law.com.
