Lottery Ticket

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Lottery Ticket

“What is a Financial Advisor? That is a term that means almost nothing. It is somebody who might be a financial planner, or it could be a broker who is really a salesperson. The vast majority of so-called advisors—around 85 percent—are not fiduciaries.”

    --Helaine Olen and Martin Smith on the PBS documentary, “The Retirement Gamble”


Just when we think we are at the point where nothing can surprise us, we see a headline like this one from

“Bogus ‘Advisors’ Blow Lotto Winner’s $168 Million”

Even we, who thought we had seen every possible shenanigan from the investment world, had to do a double-take on this one. How in the world can anyone “blow” a sum of that size? If someone were to give us an amount like that and tell us that it was our job to find horrible investments that would make it vanish and go to money heaven, we would be hard pressed indeed.

The author of the article attributes this debacle to the ongoing confusion from the public about who, exactly, is a financial advisor. In this case, the “financial advisors” were two attorneys and insurance agents who had opened a branch office of a wealth management company named EFG Capital, and the winner of the lottery was a California employee of Whole Foods. Apparently, the advisors tied up the winnings in illiquid property, causing the winner to end up in debt which he was unable to service. Also, the plaintiff alleges that the defendants pushed a $600 million dollar life insurance policy, despite the plaintiff having no children or siblings. One could only imagine what the commission would be on a policy like that.

All too often, we have read about lottery winners who were simply out of their depth when suddenly faced with a sum of money that was beyond their imagination. Indeed, winning the lottery ended up being a curse rather than the blessing that it should have been. This appears to be one more such case.

If you would like to have the guidance of a wealth advisor who is a true fiduciary, please call us at 888-643-3133.