Text joke message from a friend (friends since middle school):
R u ready to invest in my hedge fund? Outperforming the S&P 500 by 650% last quarter. ( Not net of manage fees of course but hey I don't see you (the client) doing any of the work. Standard 2% plus 25% of the profits apply, does give the ability to say,"...my hedge fund manager says..." at cocktail parties. Get in now before the fund closes to new investors...the fine print: past performance doesn't guarantee future performance, all investments have risk of loss, the only guarantee is the hedge fund manager will make money but like was previously stated, "...we don't see you doing any of the work.." /joke
The friend had been a financial advisor for about 10 years.
In a long phone conversation we had recently, he described "investment advisors" who at least thought like this and sometimes pretty much said it too.
One guy sold B shares (no load but high ongoing fees) and when the withdrawal penalty 4 to 7 years was over, slammed the client into "managed money" with 1.5% or more of his fees, on top of the managed money fees.
My friend, as workmanlike and honest as you can get a financial advisor, got clients into "great" bonds Worldcomm, Enron and Tyco -- "the trifecta"
Oh yeah, he was MY financial advisor for a while. As soon as I left money with him in 2001, everything took a 30% dive.
When he left one company some years later, I transferred tIRA to Vanguard as cash -- March 2008.
Got back in in September 2008 as my IPS said to go in at -20% and all in at -30%. How could anything go wrong :-)
