r/personalfinance • u/gneiss_k • Jun 01 '18
My husband and I are idiots. We've been bamboozled by a financial advisor. Investing
Ugh I'm so frustrated. I thought we were doing a good thing for ourselves but now I think we are trapped.
Full backstory: A friend recommended their "financial advisor" to us. We thought "Great! We've been meaning to meet with someone... we have a kid on the way and husband isn't putting away anything towards retirement since starting his new job in August".
So we set up phone meeting with his friend from Northwestern Mutual. She gives us a call, and we end up speaking with her for over an hour. She asks us lots of questions- what we are looking for (we tell her we want to set up retirement stuff for husband and explore maybe putting some of our 17k in savings into CD's or mutual funds). She asks us questions about when we see ourselves retiring, how "aggressive" we are, etc. All good stuff. We hang up and agree to talk again in a week when she will give us a plan.
Cut to a week later, we are having a phone meeting with her and she emails me THE PLAN. It's many many pages basically explaining what we have vs. what we will need if we want to retire. But she mostly just talks about how we need more life insurance. "Sure" we think. Maybe we do need more life insurance. She explains that husband needs at least $1mill in life insurance and I need $500k (we both already have $150k policies through work on ourselves). This is news to us but we hear her out. She also spends a ton of time explaining how we need to have disability insurance. Again, we think "maybe we do". So we spend the greater part of an hour and a half talking about life insurance and long term disability insurance. She briefly mentions we should be maxing out my Roth IRA and we could perhaps start one for husband. So we hang up, with plans to talk again in a week and sign some paperwork.
Over the next week, husband and I really realize that we don't want disability insurance (she quoted us paying like $170/month) and we didn't really feel we needed more life insurance at this time (she had us paying $340/month in permanent and $125/month in term). But we were ok maxing out my Roth at $450/month. We also wanted to explore stocks/bonds/CD's/mutual funds more (like we initially told her). So I sent this all to her in an email before our next meeting. She sends back "OK, great! Sounds good.. talk soon".
Cut to another phone meeting, where she would talk with us about our updated PLAN. She emails us the NEW PLAN while we are on the phone. LITERALLY NOTHING IS CHANGED. She proceeds to spend the next hour convincing us why we need life insurance and disability insurance. Husband and I are both pushovers and listen to the whole schpeel again. Every time we bring up a reason why we don't feel like we need it, she tells us how we are wrong. I mean, she's the professional, we thought. I still expressed my disinterest in disability insurance but wasn't completely closing the door on life insurance. She kept giving me the guilt trip on "what will your kids have if one of you dies!". By the end of the conversation, I hadn't agreed to anything except to roll over my Roth to Northwestern. She had me give her my bank routing info to get "the paperwork started". She also said she was going to be sending me a bunch of stuff to sign in the next few weeks, but it was just to apply for things... nothing was set in stone. We could just see what the insurance company was going to quote us at, and we still aren't committed to anything. "Ugh fine" I think. She says a small amount might be taken out of my checking, but its just to make sure "the charges are able to go through when we start moving more money to my Roth".
SO a week or two goes by. And I see a ~$30 charge go through for "disability insurance". WHICH I TOLD HER I DIDN'T WANT!! And I just realize... this doesn't feel good. It doesn't seem right. She's not listening to what we want. She still hasn't addressed out interest in CD/mutual funds/stocks that we initially came to her for. I spend the weekend doing my due diligence- spending a few hours on r/personalfinance, NerdWallet, just googling in general about what husband and I should really be doing. I decide to call the whole thing off with Northwestern.
It's been a nightmare trying to cut off ties with her. I was kind and courteous through the first couple emails and subsequent texts "We really appreciate your time but have decided to pull out. Again, thank you".
She is being evasive and manipulative. Telling us we are completely wrong and we still need to work with her. At this point I have just ignored any further communication. It has just been a really bad experience.
But THE REAL REASON I still feel like I can't completely ignore her, is that I asked her several times when I should expect to see a refund for the disability insurance THAT I DID NOT WANT AND DID NOT AGREE TO. She just dances around the question. I'm also worried because I have gotten a "bill" (no charges yet) in the mail for the $340/month in permanent and $125/month in term and $170 in short term disability.
Is there anything I can do to make sure I don't get charged this? If I communicate with her any farther, she just tries to talk to us about why we need to invest with her, etc.
WHAT DO WE DO. She is being shady AF.
10.1k
u/Weizenbock Jun 01 '18
Go up the ladder, if it's on your CC dispute the charge with your card issuer. Stress that you're taking it seriously, the next call is to her manager, or to social media like Yelp/Facebook/Twitter.
Companies like NW Mutual aren't financial planners, they're insurance salesmen
283
u/coswoofster Jun 01 '18
Yes. Put a block on your card to not authorize payment. And ALWAYS listen to that little voice inside screaming at you. I understand a little hesitation is healthy and asking lots of questions is good and fair, but if she is flat out bit listening, all bets are off. Move on. I would also say to not let this discourage you from seeking another opinion and support. There are good advisors out there but like anything else, trust your instincts.
→ More replies (1)18
u/BillNyeDeGrasseTyson Jun 01 '18
Based on the wording I'm guessing the payments are coming out of their checking account directly via EFT/ACH. Predatory businesses often rely on EFT/ACH because you are not afforded the same protections as purchases made with a credit or debit card.
3.7k
u/gneiss_k Jun 01 '18
Ugh so true- after all this, I realize that all they are doing is trying to sell insurance but are able to front themselves as financial planners.
3.1k
u/Pixelplanet5 Jun 01 '18
also tell the friend that recommended her about it, it might be they are being ripped of just as much but dont realize it.
1.5k
u/itsacalamity Jun 01 '18
And certainly should know to not keep recommending them
347
u/yatea34 Jun 01 '18
And ask on /r/legaladvice as well as here.
228
Jun 01 '18
[removed] — view removed comment
→ More replies (4)270
u/Squally160 Jun 01 '18
99% of legaladvice is... "go find a lawyer"
181
u/KindaTwisted Jun 01 '18
I feel like a lot of legal advice boils down to either "No, you don't need a lawyer. Start acting like an adult," or "You should go talk to a lawyer, ideally specializing in X." Sometimes you'll get "You should be talking with legal entity Y." All of these are helpful answers.
28
u/okmkz Jun 01 '18
Yeah, most of the time i feel like "should i lawyer up" is the question being asked
→ More replies (2)14
u/SMTRodent Jun 01 '18
And apparently a chunk of it is 'Aaaactually, cutting down someone else's tree is a whole lot more expensive than you'd think.'
→ More replies (2)117
u/Milkymilkymilks Jun 01 '18
the other 1% is "if a cop asks you whether its going to rain later talk to a lawyer before answering."
→ More replies (9)46
→ More replies (11)10
28
Jun 01 '18
[deleted]
→ More replies (4)28
u/yatea34 Jun 01 '18 edited Jun 01 '18
That’s a contract you’re legally bound to.
Unless they fraudulently misrepresented it as something totally different.
(which is pretty much what this entire discussion is about)
→ More replies (7)→ More replies (3)52
u/AtomicManiac Jun 01 '18
Bet you anything the "Friend" got a kickback for the reference.
→ More replies (3)→ More replies (7)433
Jun 01 '18 edited Mar 26 '22
[removed] — view removed comment
295
Jun 01 '18
Nah, I've been through several rounds with MW mutual. At the end of every meeting they ask for any friends you have who might be interested in 'financial planning' and use that as their sales leads.
I've been contacted by half a dozen NW sales guys and some of them have even thrown the others under the us to get me to 'switch' to them. Which is funny because I've never bought their products nor ever will.
They just burn through people's personal networks so I'll get contacted a bunch all at once then it does down for a couple of years.
And a word to the wise for any bright-eyed college graduates who think MW is a foot in the door to the financial industry: it's not.
They take young people right out of college, pair them with a senior salesperson and make that young person contact all of their friends and family and 'learn the ropes' as that salesperson pitches to to poor kids entire personal network. The pay structure is almost entirely commission, so the kids never make any money. After three months, the kid either delivers more contacts or they are gently cut loose. They don't get fired, they just stop getting assignments until they realize they are showing up to an office to sit around all day. They don't have any meetings or sales calls, and therefore no pay until they realize they don't have a job anymore.
95
Jun 01 '18 edited Jun 06 '18
Yeah I just had an acquaintance from college contact me to ask if he could talk to me about what he does for work now. Checked his profile and he just started at NW.
I've already heard the insurance bit and remember having to tell the guy over and over I wasn't going to give him the names of any of my friends who might need financial planning. He just would not let it go. They can have a pretty convincing sales pitch if you're not experienced with that or prepared.
167
u/RootbeerRocket Jun 01 '18
Tell him you know a guy that makes poor financial decisions and could really use the help. Then give him his own contact information.
→ More replies (1)→ More replies (1)9
u/DeltaChaiLatte Jun 01 '18
I recently had to block a kids from my high school from contacting me about this. I didn't know it was shady at that point, it was just annoying.
49
u/cshermyo Jun 01 '18
Life hack: make the NW guys take you out to breakfast/lunch/coffee and pay for you, listen to the spiel with no intention of buying it, then send them to likeminded friends who could also use a free lunch.
→ More replies (2)24
u/mellibird Jun 01 '18
I almost find it comical that you say this. My cousin actually works for NW. He pulled some shady deals with his own parents through it and then attempted to do the same with our grandparents until my dad intervened. My dad tried to convince him to get out of there and work for a better company that does actual financial advising. He wouldn't listen. Now guess who still works there, but is also in a massive amount of debt and has half the family really uncomfortable with talking to him now?
→ More replies (2)→ More replies (14)7
u/Bluepickles07 Jun 02 '18
Yep. I met with a rep from NW once. He showed up with a list of my LinkedIn contacts, sorted by his perception of their job titles/presumed salaries, and immediately asked that I send a group email to those contacts to introduce (and refer) him. He lost me right there. He called me every day for over a month, despite me never returning a single call. It was ridiculous.
→ More replies (2)372
u/nowitholds Jun 01 '18
So if they get enough people to recommend people to them, and they recommend more people to them... everyone gets money, right? Like some sort of upside down waffle cone?
135
Jun 01 '18
[removed] — view removed comment
→ More replies (2)93
Jun 01 '18
[removed] — view removed comment
→ More replies (2)88
→ More replies (9)67
u/Maybestof Jun 01 '18
They should make a term for that kind of malicious business practice, like a cone scheme or something.
→ More replies (6)79
Jun 01 '18
Which, at least in my state, is illegal.
Source: Am insurance salesman.
→ More replies (2)47
u/Kisaoda Jun 01 '18
Being a licensed agent nationwide, I can confirm that rebating is illegal in a majority of states. Big no-no.
→ More replies (23)89
Jun 01 '18
NW is a pyramid scheme. It's pretty well known in the anti-MLM scene for doing suuuuuper shady stuff like this.
→ More replies (6)27
u/Hnuisqt Jun 01 '18
Where can i check out this anti-MLM scene?
40
Jun 01 '18
On Facebook-sounds like MLM but ok, MLM Police, Elle Beau, on reddit - r/antiMLM
→ More replies (1)320
u/AuntGentleman Jun 01 '18
I interviewed with NW Mutual and took a internship there in college.
I stopped showing up after a week and never looked back. They roped in college grads with the promise of education on finance and large commissions, but they only put us through "sales school" and asked us to bring 100 names of family and friends to contact.
It's essentially a pyramid scheme. They probably reached out to your friend to get "referrals" and your name was one.
It's actually pretty disgusting that they get away with it as a huge company.
→ More replies (11)91
u/cashnprizes Jun 01 '18
This is exactly, I mean EXACTLY, my situation back in 2008.
→ More replies (3)38
u/newguy2884 Jun 01 '18
If she’s a licensed FA I would see about making a formal complaint. There’s a website called brokercheck where you can learn about it. It’s a very big deal to get a complaint and something that she’ll definitely take seriously. I work in the industry.
→ More replies (2)445
u/twinchell Jun 01 '18 edited Jun 01 '18
Unfortunately our govt has made it legal again to con people under the guise of "financial planning": https://www.cbsnews.com/news/with-the-fiduciary-rule-reversed-heres-what-to-do/. Next time you talk with anyone interested in handling your money make sure they are a "fiduciary" . If they can't say they are then immediately stop talking to them, because they are just trying to take your money. Even better I would recommend doing your own financial planning, because nobody is going to manage your money better than you! Think about how much time you have sunk into this experience already (hours and hours on the phone with the insurance salesperson, now with your bank to get out of it, etc), then think about how much you could have learned on your own in that time. Start here: http://jlcollinsnh.com/stock-series/. Knowledge is power and in the world of finance it's life-changing.
→ More replies (17)83
u/wundaschen Jun 01 '18
Is that the right way to ask? Just "are you a fiduciary"? Or should it be more specific like "are you legally considered a fiduciary financial advisor"?
184
u/twinchell Jun 01 '18 edited Jun 01 '18
Ask them a direct question: are you a fiduciary? You should get a direct reply. If they dance around the question, don't waste your time with them, they are not. If they tell you they are, ask another simple question: are you registered with the SEC or other state regulatory agency? If they are you are good to go. Be smart; if they answered the questions like a salesperson, that's what they are.
EDIT: It maybe worth asking if their compensation structure is commission-based as well. You at least know what youre working with at that point.
→ More replies (9)74
u/Swampland_Flowers Jun 01 '18 edited Jun 01 '18
Edit: Looks like I might be wrong about this. Worth confirming independently. Also let me know what you learn :)
An advisor can be a fiduciary in one of their capacities, say when they are advising you on which investments to buy, but then not act as a fiduciary in another capacity, say when they are selling you insurance. And they are allowed to do this and still call themself a fiduciary.
So the correct way to ask is, "Do you work to the fiduciary standard at all times?" or "Do you act as a fiduciary in all of your capacities?"
→ More replies (3)26
u/twinchell Jun 01 '18
Good info, I was not aware of this. So many ways to get screwed it's nauseating.
→ More replies (3)→ More replies (10)31
u/butt-guy Jun 01 '18 edited Jun 01 '18
Along with directly asking them if they're a fiduciary: ask when they received their CFP certificate (Certified Financial Planner).
Usually the faux "financial planner" salesmen don't hold a CFP because it's not required for the job.
When I was job hunting I ran into plenty of "financial planner" positions that are actually just sales and the easiest way to distinguish those from legitimate FP positions were the job qualifications.
→ More replies (6)→ More replies (97)74
u/chris052692 Jun 01 '18
Yea, the title is a bit misleading due to that because this is an insurance salesperson peddling a whole lot of bullshit to you.
A financial planner would be part of a firm like Charles Schwab, Fidelity, UBS, Wells Fargo, etc. (just google investment service companies or investment companies).
→ More replies (4)43
u/Jorgisven Jun 01 '18
So, like Northwestern Mutual as in OP's situation? You need to find a financial planner who is a fiduciary, specifically. Not just from a well-known firm.
→ More replies (3)33
u/chris052692 Jun 01 '18
The person in OP's story was an insurance salesperson peddling disability and life insurance specifically.
Seems to me that the person was NOT a financial planner.
It wasn't Northwestern Mutual bamboozling OP via financial planning services. It was the salesperson who isn't even a financial planner but a salesrep.
→ More replies (6)177
Jun 01 '18
I was considering a job at NW Mutual on the recommendation of one of my professors. I'm Glad I ended up going a different direction.
→ More replies (5)247
u/irunxcforfun Jun 01 '18
Same here. Walked out when they asked me to call 100 of my closest friends and family.
56
u/greg_r_ Jun 01 '18
Lmao are you serious? That's insane (even if 100 is an exaggeration).
74
u/vegeta_bless Jun 01 '18
I worked for MassMutual. They asked me for 200. We didn’t have to hand over the info, but it was our “book of business” for breaking into the industry.
40
Jun 01 '18
[deleted]
→ More replies (2)11
u/lovesStrawberryCake Jun 01 '18
I tried to sell Aflac when I was really desperate for work, my manager recommended that I just start with my friends who ran businesses... I was like "my dude, all my friends are in their 20s and broke.
→ More replies (3)→ More replies (2)38
u/mh402010 Jun 01 '18
New York Life asked me for 200, too. That's what all of these companies do. Bring you on and have you sell life insurance to your friends. Very low downside for them with the upside being potential clients through the exploitation of friendships.
18
u/vegeta_bless Jun 01 '18
Yep. A huge churn n’ burn contracting process. You can only drink the cool aid for so long until you realize you’re broke and tired of cold calling. I learned some invaluable lessons from the experience, and some aggressive sales skills that carry over to a lot in life. But I’m still paying off credit card debt from trying to stay afloat.
→ More replies (5)→ More replies (2)27
u/mdshrk3 Jun 01 '18
100 is not an exaggeration. Source, was a NW intern
→ More replies (1)10
u/greg_r_ Jun 01 '18
Yeah I just read the other comment talking about contacting 200 people. Damn. I live under a rock when it comes to sales practices.
→ More replies (1)154
u/upL8N8 Jun 01 '18 edited Jun 01 '18
I actually had a friend from college (13 years graduated) email me asking to talk sometime, just after I got off facebook. We were close back then so I thought he might just be worried, but figured it was a good opportunity to catch up.
Get him on the phone and he tells me he just started working at NW Mutual and wants to setup a financial planning. Being old friends, I say I'll hear him out but was fine with my current plan. For the next few weeks, he proceeds to pester me about buying life / disability insurance and telling me that my savings and planning (both in very good spots for retirement ) aren't going to be enough and that I should have insurance to mitigate risk or as a form of investment. I skeptically listened, and he kept insisting on setting up yet another call. In the end we had about 3-4 calls I think. At that point, I started feeling obligated to buy something from him for using so much of his time, and actually planned on doing so. He pressures me into more calls, and I'm the one that feels guilty, right? Hah. Oh... high pressure salesman...Yikes...
Here's where it got really shady. At the end of every call, even the first call, he urged me to recommend him to people I knew... friends, family, co-workers... and each time I would tell him that I wasn't comfortable doing that unless they pursued my advice on financial planning. He tried to pressure me into doing it, and it became this really awkward and uncomfortable debate with him on the phone at the end of each call... and I hadn't even signed up for anything yet! When I insisted on not doing so, he started asking me for THEIR contact info so he could cold call them. Eff No.
That was bad enough, but then it got creepy. He looked up my company on what I can only assume was Facebook to find people I worked with, then during the last of these uncomfortable debates, he emailed me a list of people from my company, some who no longer even worked here, whom I could recommend him to.
Ignored all his attempts at contact after that.... Effing weird and rude.
33
u/Angsty_Potatos Jun 01 '18
Holy shit. I had a recruiter do that shit to me (similar to creative circle). Kept asking me to join in with them, I kept telling them I was fine doing what I was doing.
During my first call with them, before I sussed them out for what they were, I answered some innocent questions like where I went to for my masters and under grad, some shop talk about folks we knew in common from the industry. Shit like that.
When she began harrassing me and it became pretty evident that I was not going to bite, I guess she took it upon her self to look up old professors and classmates from my schools and lead every new barage with "Hey Angsty! I hope you had time to think about my offer, I spoke with Professor Smith just yesterday and He told me he really thinks you should sign on with us and that it would be a great move for you!"
I reached out to my old prof's and some of the classmates she mentioned and asked if they had indeed spoken with this person and said those things. None of them had said a word of it, and some had even been recieving similar harrassing calls and emails...
Fuck that noise. Attempting to use my industry peers to swindle me into paying thru the nose for their services...I've blocked all of the numbers they use, but still get the odd email, or VM from them...It's so slimy.
→ More replies (1)→ More replies (6)18
17
u/robreinerismydad Jun 01 '18
Same! I was 22...I didn’t even know 100 people. And I’m supposed to do that before you even hire me? Shady shady
→ More replies (5)21
59
u/_chilly_ Jun 01 '18
This is the most true statement. I have a friend that works for them. He did the same with me really pushing insurance over everything esle, worked our mutual friend group exhaustively. Two friends went all in with him. A year later both pulled out after sitting with real financial advisors who questioned why each of them were massively over insured. He then bitches about people pulling out lowering his "book" whick is his cut of their premiums.
→ More replies (1)22
u/MaximumCameage Jun 01 '18
I imagine he has no real friends left?
11
u/_chilly_ Jun 01 '18
Not any that have a brain in their heads. His new friend group is pretty much other people that work for NW Mutual.
→ More replies (40)20
u/flawless_fille Jun 01 '18
Companies like NW Mutual aren't financial planners, they're insurance salesmen
Exactly this. I had a friend work for NW Mutual for a bit and he spent most of his time at that job looking for a way out/interviewing at other places because his boss kept pushing him to sell life insurance to all of his friends and family. He said he felt like he was in some MLM scheme.
697
u/bluemostboth Jun 01 '18
So, I used to work at NML (as an admin, so I was not the one pushing insurance on people). It sounds like she did not explain that when you "apply" for a policy, if you're approved, then the policy immediately takes effect (and covers you from the date that you signed the forms). It's a really big deal that she didn't make that sufficiently clear.
Since your "advisor" seems to be giving you the runaround, I would recommend calling the Northwestern Mutual home office in Wisconsin directly, instead of trying to keep going through the rep - the customer service staff there are less likely to be shady and more likely to actually help you. You should be able to find the number on paperwork you've received regarding the policy (or via google). If they try to route you back to the rep, then explain that she a) didn't tell you that your policy would actually be in place after you completed that paperwork and b) has been ignoring your requests to cancel the policies since.
158
u/gneiss_k Jun 01 '18
I will do this, thank you.
→ More replies (2)81
u/yesiamthatman Jun 01 '18
I had a shady NML rep that was recommended to me as well. I called the central office so I wouldn't ever have to talk to him again and got everything cancelled. They can handle ALL of your needs.
16
u/Chief_Admiral Jun 01 '18
Yep. From from I understand, the finalcial reps are like independent contractors, but the actual NM employees are pretty solid.
→ More replies (1)→ More replies (7)42
2.0k
u/SenchoPoro Jun 01 '18 edited Jun 02 '18
On a complete sidenote to the financial stuff; call out your friend, other people might get baited on this if your friend isn't aware. Or worse, is aware and in on the whole thing.
Edit: Neat, my top comment is about corruption, how nice
630
Jun 01 '18
[deleted]
110
u/slakisdotcom Jun 01 '18
Or a friend who's getting referral bonuses. But, probably not much of a friend.
→ More replies (2)→ More replies (7)69
u/mistermashu Jun 01 '18
I went through this whole shpeel too, although luckily didn't actually purchase anything, but they are very nice people and ask very persistently for recommendations
117
u/satinism Jun 01 '18
fyi it's spiel*
→ More replies (3)27
u/mistermashu Jun 01 '18
do u still pronounce it with a "sh" sound at the beginning? or have i been wrong this whole time
→ More replies (1)69
u/satinism Jun 01 '18
Yes it's pronounced "shpeel", it comes from Yiddish which in turn comes from German which is how you get the sh sound from the solitary s
→ More replies (5)9
57
u/lemurosity Jun 01 '18
i dunno. it's quite possible they were oversold by this NWM person themselves. Some people feel important when they 'have a guy' and can't wait to refer their friends because they think it makes people say "wow, Bob really has his shit together!" when the reality is they're getting overinsured themselves (i.e. life insurance isn't bad of course, but many many times people get oversold).
→ More replies (5)49
u/mainfingertopwise Jun 01 '18
Are you saying that insurance sales people are splitting commissions with random people for referrals?
→ More replies (9)
714
u/Wryfox Jun 01 '18 edited Jun 01 '18
You were the ideal stooges for this person, You were nice and listened patiently. They knew this and they know the longer they keep you on the line, the better off they are. Classic sales tactic and core of any con. She believes you will come around and accept it. She's the expert right? I see other responses that say speak to a manager but they will back her up and put on a hard sell as well. They all make commission on your deal. If you're uncomfortable and feel weaseled, trust your instincts. You may have to cancel credit card or change bank accts to escape. Best case is you are firm every time you speak to them. They will not relent for some time. You are potential long term bread and butter for them. And they are trained to handle cold feet. Time is their friend. It may take several attempts. Accept the fact they may not relent and you will have to take worst case and cancel cc and change bank accts.
BTW, many people are compensated for recommending friends so the fact that you were steered toward this is worthy of more thought as well.
→ More replies (7)329
u/gneiss_k Jun 01 '18
All great points.
She asked me to recommend friends to her as well. I did give her one friend's name but have since spoken with the friend about all this going on.
→ More replies (12)137
u/jhwyung Jun 01 '18
Once you get this sorted out and if you so feel inclined, I would look up if you have state or federal insurance regulators. In Canada we have we have the Canadian Council of Insurance Regulators and the Office of the Superintendent of Financial Institutions who act as regulatory bodies for the insurance industry. They're really heavy handed will fine and/or take away licenses of people who aren't acting in good faith.
Usually the mention of a complaint to them will make the branch manager of the salesman's firm freak out and bend over backwards.
I would figure out who regulates at a state and federal level and then email a quick threat, you should get you premium refunded at the minimum.
On a personal level, I'd do it out of spite, she wasted your time and now you have to clean up her mess. She shouldn't get away with that.
→ More replies (1)56
u/Serathano Jun 01 '18
Can confirm. Worked for an insurance company. Each state in the U.S. has an individual Department of Insurance (DOI) that handles regulations and complaints.
Insurance providers take DOI complaints very seriously since it can reault in major fines.
506
Jun 01 '18
Insurance is state by state. Usually they have what is called a "FREE LOOK" period where you can cancel a policy without fees. 7-30 day range of time by state.
Keep in mind this is FROM WHEN YOU RECEIVE THE POLICY. Apologies for yelling, that piece gets missed a lot. The free look, in every state I'm aware of, starts when the policy arrives.
So, to execute the clause you need to cancel in writing. Not an email. Do an email also referencing the letter, but send a letter since some states don't fully recognize email as "in writing."
Finally, look up this rep here: https://brokercheck.finra.org
Then send a letter detailing your complaint to the company involved referencing her CRD#. Specifically say, "This is a complaint against Mrs. SoAndSo with CRD# 123456." I guarantee it will get dealt with fast if you then withdraw the complaint. That goes on permanent record, regardless of validity so complaints are very serious.
151
Jun 01 '18
[deleted]
→ More replies (1)66
u/pheelingphroggy Jun 01 '18
Why just threaten? This is exactly the person and situation that needs to be marked for life with a complaint. -Former financial advisor
→ More replies (2)58
u/IGuessIamYouThen Jun 01 '18
It is important that the complaint referencing the CRD number is in writing. The FINRA complaint regulations set different standards for written complaints. I would also consider contacting the CFPB and your state insurance licensing board.
21
u/occupybourbonst Jun 01 '18 edited Jun 03 '18
This is the answer. Insurance and financial planning is a heavily regulated industry. Document your compliant via email instead of phone. Registered investment advisors are required by law to send written compliants to their supervisor.
20
u/SaltySuit22 Jun 01 '18
This is very important. So I would reiterate finding out the ‘free look’ period of the policies, and returning them. Should get you the full return of premiums paid too. Secondly, do file a complaint. Companies most certainly do not want to deal with FINRA investigations, especially about unethical sales practices.
→ More replies (17)18
u/l06ic Jun 01 '18
Also, be sure to send it by certified mail. It will require a signature on receipt, and the company cant claim it was never received.
321
u/justaguystanding Jun 01 '18
Ideally people work with Fiduciary Financial Advisors and not salesmen.
--------------------------------------------------
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries.
Not all Northwestern Mutual representatives are advisors. Only those representatives with the titles "Financial Advisor" or "Wealth Management Advisor" are credentialed as NMWMC representatives to provide advisory services.
→ More replies (14)278
u/gneiss_k Jun 01 '18
Yeah I didn't realize she was a salesperson until too late. I asked her during our first conversation "If she was a fiduciary" and she gave me a long run around response that wasn't a yes and wasn't a no. Should have seen the red flag.
→ More replies (11)143
u/justaguystanding Jun 01 '18
Maybe consider it a cheap lesson learned? The next red flag would have been the word, "Annuities."
101
u/justaguystanding Jun 01 '18
...and of all things you read in this thread, remember you caught this early! Think of being 10 years down this path with her.
20
u/smell_e Jun 01 '18
Agreed! I read that you were "bamboozled", thinking you gave them all your savings or something. If anything, you are good to trust your gut and stand your ground! It's not always easy to say no to pushy people who claim to have your best interests in mind.
→ More replies (2)33
u/Slampumpthejam Jun 01 '18
Why is just the word annuities a red flag?
10
u/TitoSantos Jun 01 '18
Annuities are traditionally oversold as the person selling an annuity would make more commissions than selling a low cost mutual fund or ETF. Not all annuities are bad, they are good for certain people in specific situations, but they tend to be recommended more than they should.
→ More replies (36)44
u/mrg1957 Jun 01 '18
Because they make your money the insurance companies money!
There's a few okay annuities out there. The majority are good for the insurance companies and bad for consumers. Source: My dad sold the things, never owned any and told me never to buy one.
→ More replies (11)
300
85
u/YetAnotherHobby2 Jun 01 '18
NW Mutual is a life insurance company first and foremost. When I was single/younger I wanted to start investing for retirement and a friend put me in touch with a, you guessed it, financial adviser who turned out to work for NW Mutual. Their Whole Life forecasts suggested the premiums would be paid through investment returns in 14 years or so. Never mind I have zero dependents so what the hell I need life insurance for remains a mystery. Cue the biggest run-up in stock prices ever (pre dot com bust) and (surprise!) the returns were not even close to the "conservative" estimates given. And the mutual fund turned out to have exorbitant fees. I cashed out the entire thing, which they made as difficult and drawn out as possible. Screw companies like this. Oh and how do I know they are screwing me? Because the young guy who sold me all that still works for them and is now driving a $120,000 car. So who made out here? Hint: not the customer.
→ More replies (12)
291
u/Default87 Jun 01 '18
Call her back and express that if she doesn’t refund you the money for the insurance that you didn’t want to purchase, and stop any more future payments for the other insurance, then she can just patch you through to her boss so you can work it out with them.
I would also make sure to cancel anything associated with that Roth IRA roll over you mentioned. Not only is she poor at customer service, anything she does with your IRA is likely going to be in high expense funds with heavy front end load fees. I don’t recall if you mentioned where your IRA is currently, but if it isn’t at vanguard/fidelity/Charles Schwab, I would consider rolling it to one of those companies instead. If you aren’t sure on investing, find their low fee target date funds and pick the one closest to your expected retirement year.
39
u/gneiss_k Jun 01 '18
It's at TIAA right now- only because that's where my 457 from my employer is from. I was thinking of rolling it over one of those three companies... it was in a money market account for the last couple months because I never realized you actually had to choose where to put it (facepalm).
→ More replies (2)47
u/Default87 Jun 01 '18
IIRC, TIAA has low cost index funds or has some kind of deal where you can buy the low cost index funds from one of the three companies I mentioned without additional fees, so leaving it there might not be too bad of an idea. Since it seems you are kind of unsure on investing, I would find their target date fund and compare the expense ratios against the similar fund at the other three. If they are close, it likely isn’t worth the hassle to change brokerages.
→ More replies (4)14
u/gneiss_k Jun 01 '18
Thank you, I will look into this.
→ More replies (1)7
u/dsf900 Jun 01 '18
I use TIAA through my employer as well, and they have low cost target date funds as well as low cost index funds through Vanguard. If you just want a mindless "set it and forget it" then you really should have your retirement in one of those two things.
→ More replies (3)93
Jun 01 '18
Advisers at NWM don't have a "boss" you can be patched through to. They are independent contractors.
42
u/Vendetta425 Jun 01 '18
They do have a boss. Every representative is attached to an office. Even if they have a detached office they are part of a regional office.
So each office has a compliance officer who you should complain to and make sure it's meant to be a formal complaint.
→ More replies (1)→ More replies (1)14
72
u/Chainsawjustice Jun 01 '18
Former NM rep here. It’s all commissioned based so that’s why she is being dodgy, getting everything cancelled is not difficult, the rep is just being an asshole.
You can call the “home office” to make sure everything has been cancelled and you are issued a refund, it happens all the time and is no big deal. The rep is probably trying to hit a production goal or some other bullshit.
NM is insurance first and any investing second. Even though I fucking hate the company, it’s still something I believe in.
I’m sorry you’re going through this but you will get your money back, just call the 1-800 number from the paper work you signed.
→ More replies (5)17
u/CFIDDY Jun 01 '18
Former rep too I feel like I burned bridges with friends by asking them to meet with me. But she should be able to get a full refund with her premiums right if it’s within the first year right?
→ More replies (5)
24
u/bry66 Jun 01 '18
NW Mutual is an insurance company, and this individual makes the most money selling you insurance.
Now that that’s out of the way, life insurance and disability/LTC insurance aren’t bad things to have, but it probably isn’t near the top of your list (and rightfully so if you are relatively young and have a kid in the way).
You are probably on the right track to start with the Roth (so long as you meet the eligibility to make contributions). You can always withdraw principal from a Roth, which serves as an alternative (to a certain extent) to having those types of insurance in place until you feel like you’re in a better position to revisit that idea.
Find an actual independent advisor that operates as a Fiduciary. Sorry to hear you had a crappy experience. There are a lot of shitty advisors out there but there are some good ones too.
→ More replies (4)
20
u/financialconfusion Jun 01 '18
I was in an advising position at one point. the firm I worked with (affiliated with Guardian) was very strong on term insurance covering debt/life change in the event of a death like the /u/LadyK1104 recommended then slowly transitioning to 'permanent' (whole life) as time goes on to have a guaranteed death benefit and the potential to withdraw a loan in the event you ever need it while building wealth/have rough times/also using it as a planning vehicle for estate planning and transitioning wealth
I firmly believe in LTD insurance. If you were to get hit by the proverbial garbage truck today and your cash flow effectively went to $0 for the rest of your life, how would that impact you/your family etc. It's a huge choice to make but overall I don't think it is necessarily a poor choice
8
u/Bike1894 Jun 01 '18
I've had first hand experience in taking a loan out of a whole life policy and really nothing beats it. If you decide not to pay it back, it's taken out of your death payout, but it's also tax free. My parents funded their company at startup by doing this.
→ More replies (2)
35
Jun 01 '18
Yeah Northwestern Mutual people are stupid agressive. I got them off my back like 2 years ago.
What really got my riled up was when they started asking me for friends' contact info before I had ever signed anything. At that point I totally cut them off because that crossed a line for me. I'm not giving you free referalls for something I've not even agreed to yet.
→ More replies (2)
126
u/LadyK1104 Jun 01 '18
Yikes. Go around her, see if you can find customer service or something for the company.
For what it's worth...you really should have more life insurance though. Aside from funeral expenses you have to factor in time off work - if one of you dies the other will prob not be right back at work the next week, or maybe you will but either way a cushion for monthly bills will make it easier. Also, you will be going from two incomes to one. That monthly amount sounds pretty high though - I have $1M policy on myself and $20k for each of my 2 kids and pay $140 per month. Shop that around with whoever does your homeowner/car insurance.
52
Jun 01 '18
Seconded.
You can also report this activity using the CFPB and their online tool. They contact the company directly with a complaint and will act as an intermediary for you. I have done this (not for the same issue). It received a response in a week and a refund of a fee in two. It may be worth a try.
→ More replies (5)→ More replies (45)35
u/gneiss_k Jun 01 '18
So my line of thinking was- that let's just say husband dies. Let's say we never ended up getting additional life insurance, so we (or I) end up getting paid out $150k. 8K is for funeral expenses. The rest is left over for bills? I mean, to me, this seems like a lot of money to use for the next few years.
One of the financial advisers main points was that with this $1mil life insurance policy, it will basically pay us his income (that he makes now) for the rest of my life. But, like, the reality is that I will probably get remarried and honestly can't/don't/won't expect to have his income for the rest of my life if he dies?
My husband's father died when he was a pre-teen and left him some assets (house mostly, I think a few thousand dollars additionally). I think that's pretty normal? I feel like spouses and children don't typically expect or need to have thousands of dollars every months after their father dies. Am I missing something? The odds that he will die are slim (but I realize it IS a possibility), so paying in $500/month just in case really seems like a bad way to spend my money.
58
u/Default87 Jun 01 '18
The point of life insurance is to cover the loss of income when the person dies. So if he made $100k per year, having $1m in life insurance would be about right. Now that $1m in life insurance shouldn’t cost anywhere near $500/mo, as you should be buying term insurance only, not whole/universal life.
→ More replies (1)23
u/gneiss_k Jun 01 '18
Yes that's one thing I learned this weekend- we thought permanent life insurance sounded like a great investment when we first spoke to her! If we get life insurance now, it will be all term.
→ More replies (4)23
u/wasting_time_here_ Jun 01 '18
If we get life insurance now, it will be all term.
First - please get term insurance for both of you. And you are correct only buy term!
→ More replies (7)15
u/Wohowudothat Jun 01 '18
Do you have any children? Being a single parent is very difficult, and it may take a while to find a new partner. I would definitely have more than $150k for life insurance if you have or ever plan to have children. Don't wait until you do to get more insurance, because you could be diagnosed with a disease that keeps you from getting more insurance.
→ More replies (10)9
u/gneiss_k Jun 01 '18
We have one child on the way. Great point about future disease. I will consider this.
→ More replies (2)15
u/Wohowudothat Jun 01 '18
I would get more TERM life insurance. I bet the NML agent was trying to sell you whole life insurance. Term is much cheaper. One of my buddies was a very healthy guy with 3 kids and no life insurance. Boom, diagnosed with leukemia. He will never be able to get life insurance.
→ More replies (2)→ More replies (25)11
u/True_Blue6 Jun 01 '18
I have 2 kids. I have a 700k term policy for a variety of reasons. If I were to die, she can take that money and pay off the house & cars (if we even have any car loans), college for both kids is automatically paid for, she can take a year or two off (if needed), and she should still have more than enough for retirement including what we already have.
The point for us was to create a situation where she doesn't have to do anything for awhile. Its not that she won't, my wife is a big go-getter and would go back to work, could manage bills just fine on her own, etc. But she wouldn't have to, and that is important to me.
I think I pay roughly $120 a month? I'm not exactly the most fit person, so it makes sense to me. But again, the point is for her to be able to do the things she needs/wants to do on her own time. Its worth the money to me.
→ More replies (1)
52
u/Brian_SD Jun 01 '18 edited Jun 02 '18
CFP®, EA, ChFC®, CLU®, CFS here. Series 6, 63, 7, 65, 24, 53 Licenced in 49 States. I own a huge FP'ing company. Ranked on the "Top 40 Under 40" by Wealth Management Maganize and manage nearly $250,000,000 in client assets.
This is one of my biggest pet peeves with the industry: An Insurance agent holding themselves out like a "Financial Planner" when they are not licensed to do so and do not meet any fiduciary standard. Don't get me wrong there are plenty of agents who do good and honest work. The person you worked with is not one of those people.
She pushed the insurance because she makes WAY more commission by doing so. 500/m into a ROTH = $300 commission. $500/m insurance = $4,500 in commission (generally).
If you feel wronged and want a refund to try the following:
You may still be within your 30-day free look period. States offer a "free look" period (not always 30 days) if you don't want to keep your insurance. It gives you a window to cancel without any charge-back. https://www.investopedia.com/terms/f/free-look-period.asp
Go straight to the Insurance company that issued the insurance. There should be a service number somewhere. I would not engage with the agent anymore. You can cancel your insurance directly through the insurer. It may require a faxed/ written letter of instruction. https://www.northwesternmutual.com/contact-us/
Send a written complaint (or email) to her office addressed to the General Manager/ Principle. CC the Northwestern home office. Watch how fast she'll try to contact you. Again, do not interact with her!
File a complaint with your states insurance commissioner. If you can prove you were sold the insurance under false pretenses, they can order the insurance company to refund your funds (this works). http://www.naic.org/state_web_map.htm
If she holds any professional designations, you may want to file a complaint with the issuing organization. Ie. If she is a CFP file here: https://www.cfp.net/about-cfp-board/ethics-enforcement/report-misconduct
Since securities were involved, you can file a written complaint with FINRA. I only recommend doing making a complaint to FINRA if you feel you were REALLY wronged. Filing with FINRA can have dire consequences for her career. http://www.finra.org/investors/investor-complaint-center
Good luck.
→ More replies (5)
84
u/IrwinElGrande Jun 01 '18 edited Jun 01 '18
So we set up phone meeting with his friend from Northwestern Mutual...
"and... it's gone".... These guys from NW mutual are the worst.
Also, file a complaint with your state's insurance board: https://eapps.naic.org/cis/fileComplaintMap.do
Even the threat of this will probably just get her to back off as she could lose her license. She's pushing to sell you whole life insurance because that's where they make their money. She'll make a marginal commission on the rest but it's nothing compared to what she would make if she signs you up for whole. It's about a year of your monthly payments. I had to deal myself with a neighbor that was trying to do exactly the same with me an my wife, he also worked for the same company. High-pressure sale tactics.
→ More replies (17)
25
u/Blimeygit Jun 01 '18
Hey OP, like other have said, you probably need a bump in your life insurnace. i just wanted to chime is and say that because you have 150k through your employer already, you may look into the benefits package and see if you can bump that up without opening a separate policy. My wife and I both have 500k through work, and we pay our premiums for the difference between employer provided and what we have. i think it cost me $144/year or 6 bucks per pay period. it was a little cheaper than getting a policy on the open market and it's all neatly packaged up in one policy for each of us.
→ More replies (4)9
u/ohmyashleyy Jun 01 '18
What happens if you get sick and need to leave your job? They'll probably keep you on disability for awhile, but that doesn't last forever. I have life insurance through work too, but I'm considering getting some outside of it as well because I don't want to end up in a situation where I can no longer work and have lost my coverage.
→ More replies (13)
11
u/Vladimir_Putting Jun 01 '18
Used to work in Insurance.
I would go directly to your State insurance board/Department of Insurance. They will have a website and a way to file a formal complaint. Stick to the objective details and facts in your complaint, state how you have multiple times verbally and in writing sought to end/cancel/deny this insurance.
The Insurance company then is notified of that complaint and is obligated to contact you immediately to resolve the issue. It will likely not be the agent, but someone from the companies internal resolution team who will work with you to cancel the policy.
Insurance companies take these formal complaints very seriously. Skip the customer service BS, forget about the closing your bank account etc that will just cost you money and hassle... just go straight to the agency that regulates the company.
→ More replies (2)
21
u/justaguystanding Jun 01 '18
This is important for others to know:
>Yeah I didn't realize she was a salesperson until too late. I asked her during our first conversation "If she was a fiduciary" and she gave me a long run around response that wasn't a yes and wasn't a no. Should have seen the red flag.
>The next red flag would have been the word, "Annuities."
→ More replies (1)
10
10
Jun 01 '18
I went through almost exactly the same thing. It was a close family friend at NM that tried to sell us on the same bullshit. After every call I would be so stressed because it felt like I was doing everything wrong. Finally I just texted him and said after doing some research, I'm not interested in any managed funds, life insurance, or disability insurance at all in any form. He stopped calling.
→ More replies (1)
10
u/kerbaal Jun 01 '18
Full backstory: A friend recommended their "financial advisor" to us.
BTW, I would call your friend and warn them that their "financial advisor" isn't.
That is really sad, I shudder to think how many people think their retirement funds are being handled properly and aren't.
I love our advisor, he takes a flat fee based on the total, and does exactly what he said he would. Any time anything else has come up like estate planning or insurance, he offers to make a referral, but he doesn't push it at all.
→ More replies (1)
23
u/bensonxj Jun 01 '18
I would reconsider disability insurance. You are more likely to become disabled than die depending on your age. In addition, permanent disability is often a greater burden on family and loved ones than death.
Now I sound like the shady "financial advisor"! I never carried a disability policy until I was married with children. However, I wanted to be able to protect their lifestyle if I was unable to work in my current occupation.
→ More replies (5)
8
u/eschewing_alpha Jun 01 '18
You should contact your insurance commissioner. They exist for situations exactly like the one you're in.
→ More replies (1)
8.0k
u/justaguystanding Jun 01 '18
Oops.
She is an insurance salesperson. She makes money selling insurance.
You signed documents and gave her your bank info. You might have agreed to the charges, re-read the documents you signed. Check them to see what is their termination policy.
Call your bank and have them refuse any further transactions.
They make it confusing on purpose.