According to the Gallup polling organization, stockbrokers rank among the lowest professionals in terms of trust, and from what I’ve seen – for good reason. Too often financial advisors give the impression of working in the client’s best interest, and then actually doing what’s in the advisor’s best interest.
Which brings me to America’s self-proclaimed wealth coach, Peter Jose D’Arruda, or as radio listeners in the Triangle may know him “Coach Pete.” Coach Pete is a prolific advertiser on radio and television, and host of his own radio & TV show, Financial Safari.
I’ve peeled back the onion on Coach Pete and what I found made me cry. In football, misdirection is used to confuse the defense. The quarterback fakes a handoff and throws the ball deep downfield. It appears Coach Pete is a fan of misdirection when it comes to working with consumers and how he gets paid.
Coach Pete loves to promote the benefits of working with a fiduciary advisor. According to Coach Pete’s own words on his radio show, “fiduciaries cannot take commissions out of your money.” However, Coach Pete and his firm (Capital Financial) sell annuities and life insurance, and as the firm’s ADV (page 11) very clearly states:
“If you decide to purchase an insurance product from Capital or one of our insurance producers as part of the implementation of your financial plan, we will receive a commission for selling it to you.”
And it continues:
“Because Capital is a registered investment advisor, we are obliged always to act in the best interest of you, our client. When you buy an insurance product from us however, our obligations as licensed insurance producers is to ensure that the product is suitable for your needs. These two standards are different.”
Confusing? You bet! It seems Coach Pete faked a handoff and threw a touchdown pass, and the big winner on the play is Coach Pete’s compensation!
Don’t fall victim to the fiduciary camouflage. If you want a financial advisor who ONLY works in your interest, we recommend you find a fee-only Certified Financial Planner (CFP®) that is a member of NAPFA. This organization prohibits its member advisors from taking conflicted commission compensation.
In the coming weeks we'll explore some other areas about Coach Pete that consumers might want to consider.