By Rob Russell
In a culture where we often value convenience over quality, banks and credit unions have become a one stop shop for many of our financial needs. You can’t even walk into your bank without being propositioned (what’s called ‘hits’ by banking insiders) to meet with their in-house financial advisor, but before you step off the tile floor and onto the carpet you may want to think twice.
Banking customers are being pushed more than ever to use the banks in-house ‘financial advisor’ in order to get a bigger share of your wallet. Tellers and bank employees are trained to cross-sell and fill their daily quota of ‘hits’ by encouraging you to not only do your checking with them, but also mortgages, personal loans, and of course investing your life savings. However, the quality and diversity of investment products offered at your local bank or credit union is somewhat limited, their recommendations generally incur higher fees, and despite perception are not guaranteed or backed by FDIC as evident by the mouse-print disclosure on one national banks website
Banks are the perfect place for checking and savings accounts, CDs, and securing a home mortgage at a great rate, but they were never designed to provide high-quality investment advice at a reasonable cost. Know before you roll over your retirement savings to your local bank/credit union that you may be at a disadvantage compared to other sources of independent specialized wealth advice. Banks, large and small, offer a big convenience to have your loans, checking, and investments under one roof, but far too often this convenience can come at a steep price through above average fees, various conflicts of interests, and overall quality of advice.
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