04.05.24
The Conflicts Your Financial Advisors Don’t Want You To Know About
by: Anne Tergesen
Annuities have critics, partly because many varieties have high fees, but some economists like annuities in part because they offer longevity into retirement. Advisors don't generally share in economists' enthusiasm, said Michael Finke, professor at the American College of Financial Services, perhaps because buying an annuity generally means moving money out of an investment account. “They are so seldom used by advisors that one would have to question whether conflicts of interest are preventing advisors from presenting a solution that will likely make clients better off,” he said. David Blanchett, head of retirement research at PGIM DC Solutions, an affiliate of Prudential Financial, co-wrote a study that found that people who used fee-based advisors took their Social Security benefits at 65, on average. Though people can claim Social Security earlier, holding off until later guarantees them a higher monthly check. But advisors stand to earn more fees when their clients claim Social Security soon after retiring, because clients don’t take as much from their portfolios.
Read the full article on The Wall Street Journal