An industry insider pulls back the curtain on
A widow just shy of her 90th birthday recently asked
how money advisers really work—and why good planners
sometimes do very bad things with your money
By Allan Roth
me to review her investment portfolio. This happens a lot.
Much of my practice involves giving second opinions to
other financial planners’ clients.
This widow had a reason to worry. She had been sold two
expensive annuities—just about the last thing a 90-year-
old needs—and the rest of her portfolio consisted mostly
of risky stock funds and junk bond funds. The planner was
making a fortune as the widow’s nest egg dwindled.
A natural reaction would be to file this story next to that
of Bernie Madoff or other brazen crooks. But that would be
too easy. Like every financial planner I know, the widow’s
adviser really seemed to believe that she was doing her cli-
ent a great service. In fact, she considered her a dear friend.