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Rekenthaler Report

All Financial Advice Is Conflicted

The business model exerts its effects.

Annuities: Friend or Foe?
That headline is not strictly correct. It should read, "Why Most Financial Advice, in Most Cases, Has Conflicts That You May Not Recognize." But on this day, permit me a bit of exaggeration. Compared with the tale of Santa Claus, my title is a model of truthfulness.

The thought was prompted by Retirement Income Journal's profile of a Canadian financial advisor named Jim Otar, who often recommends fixed annuities to his retired clients. A former engineer turned Certified Financial Planner, Otar has become a fixture on the advisor speaking circuit, outlining the results of his "aftcasting" technique: He says it builds portfolios that, like bridges, can withstand moments of peak stress. He claims that his method avoids the flaws that arise from standard Monte Carlo analyses.