









28 Reasons Why Successful People Fail At Investing: Reason #9 They purchase proprietary products - “sticky assets”
All financial institutions (banks, wealth managers, brokerage firms, portfolio managers, and private investment counsel) desire is to keep a client long-term. This means making it a daunting task for the client to leave by tying them to multiple products and services so that it is difficult and costly to leave. The inside term for these products is called “sticky assets” and it binds clients to the institutions selling them.
One element of this approach is for every financial institution to create and aggressively promote its own proprietary products. Advisors receive additional incentives and points towards exotic trips and awards. Additionally, and most importantly, these institutions aggressively promote these products because they provide a massively higher profit margin versus non-proprietary products.
Proprietary products created by any institution cannot be transferred to another institution in-kind or otherwise, meaning you are forced to sell the asset if you leave, potentially triggering a costly taxable event. (Sticky assets)
Time and time again, when I am rescuing a new client from their current advisor the games begin. Once it becomes known that a client relationship is in jeopardy, specifically when clients are considering moving their accounts to another firm or a competing advisor the scare tactics begin. It makes perfect sense as these institutions and advisors are compensated on a percentage of the assets that they manage.
These institutions and advisors are trained to provide a common line to their potentially vacating client…"Oh, I wouldn’t sell or transfer your investments because if you do, you will trigger a significant tax bill, you don’t want that do you?” This is a deterrent and ploy so the client thinks twice about moving their accounts, and ultimately making smarter investment choices. The reality is switching to a more efficient low-cost investment option will likely save you multiples of the tax bill.
Proprietary products provided by any institution can include non-transferrable GICs, private pooled funds, wrap programs, and others. These are NOT fringe products. They are mainstream products that many, many Canadians own. Yet, it is unlikely that you were told about the downsides of these products when you bought them. Be wary of proprietary products, regardless of how attractive they may seem.
The goal of all financial institutions is to gather as many assets as possible by whatever means possible. These products are easy to administer and free up the advisor’s time so they can now focus on one thing, gathering more and more assets. After all, the industry purports that the best financial advisors are the ones with the most assets under administration. It is a medal of honor in the industry. This model directly benefits the institution and the advisor, NOT the client.
https://www.ideal-life-experience.ca/smoke-and-mirrors
You might be asking yourself, “Where do I find the right Financial Consultant near me who charges a flat fee and will treat me fairly?” “Where can I find an Advisor who can create an Integrated Aligned Overarching Strategy?” “Where can I find an advisor who will only invest my money in proven passive investments? We suggest that you interview several. You’ll quickly learn that there are very few who are fiduciaries, believe in passive investing and have a process to create an Integrated Aligned Overarching Strategy. When you do find the right advisor, you’ll be able to relax in the knowledge that you are in the right hands and that your financial future is secure. Feel free to reach out to me with your questions. I’m committed to investor education.
If you are ready to get really serious about living your Ideal Life and getting your financial house in perfect order, please call me at 403-543-7226 or email me at dean@ideal-life-experience.ca to get started. I look forward to working with you to reach all of your goals.
Dean Kendall is a Financial Organizer in Calgary, handling all of the financial affairs for a select group of clients who value unbiased quality advice for one simple flat fee.
His book - Stop Paying Hidden Investment Fees! Click here for more information https://www.ideallifeexperience.com/Stop-Paying-Hidden-Investment-Fees
Newest book - Becoming The Champion of Your Dreams: How to Set and Achieve Your Most Important Goals Click here for more information. https://www.ideallifeexperience.com/Becoming-the-Champion-of-Your-Dreams
In addition, Dean is a 3X Canadian National # 1 Amateur, a 5X Canadian National #1 Professional BMX rider, downhill mountain biker and an avid snowboarder. He is an expert at winning. Let him show you how to win the money game. You can reach Dean at dean@ideal-life-experience.ca or Phone 403-543 -7226
Copyright 2008 – 2022 by Dean Kendall. All rights reserved. 403-543-7226 dean@ideal-life-experience.ca