Time to Update Your Beneficiaries and Other Nonsense

Should your beneficiaries on your retirement accounts be current?  Of course!  But do you know that advisory firms contact you ostensibly to make sure your beneficiaries are current – but have a totally different agenda for the meeting?

It is likely they are trying to find out if you have other money you can invest with them.  This is known as “uncovering assets.”  Or they may have a new, investment or advice program they can add to your current investment to “improve” the performance of your investments – obviously for a fee.

But when they call to set-up an appointment, it sounds better to say “We want to update your account to make sure that the people most important to you receive the funds in the event something unexpected happens”  than “We would like to visit with you to see if you have any assets that we can uncover to invest with us so we can make a commission – and by the way, if we need to update your beneficiaries we can do that too!”

Maybe it is just me, but I have never heard of any broker/dealer or investment firms that use, as a goal for their financial advisors, the number of clients that have accurate beneficiaries for all of their accounts.  I am pretty sure that is not near the top of the list for metrics used to gauge performance – it is not even on the list.

Of course, it is smart and prudent to always make sure that your beneficiaries are current.  And if your advisor can assist you in that process, then they should be congratulated for helping you stay on top of something that can easily fall through the cracks.  But it is quite dishonest to imply that you will be getting help for one thing when your advisor has an entirely different agenda.

By the way, I get quite a bit of junk e-mail and regular mail on products and services for advisory firms, even though about only 5% of it applies to my practice.  In the midst of developing this post, I received an e-mail from a very large distributor of Life Insurance products that specifically recommended this strategy to advisors! Honest.