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Risks of using a “free” (non-fee-only) financial planner for investing a substantial sum?
I have a substantial (at least to me) amount of money from the sale of a second home. The money is momentarily in a savings account at a big branch bank in the US. The amount is such that I have access to a "free" financial planner. I would not be against investing in the products offer by the bank, but think I could do better someplace else.
Should I go straight to a fee only financial advisor or is there something I, as a naive investor, can gain from an advisor attached to a big bank?
The risk is that the "free" service may be supporting itself by steering customers to products which part a sales commission, or that are products of the company/bank that employees then, rather than those which are actually best for the customer.
If you go in with a skeptical outlook, watching for this sort of conflict of interest, it's possible they might be useful. But that's not exactly a glowing recommendation...
If they try to tell you that insurance is an investment, or if they recommend anything other than low-fee index funds without an extremely good reason, run.
There is no free lunch. "Free" can cost you a small fortune over time.
If you wish to sit through a free pitch you may as well go to a time share seminar. Just keep your hands in your pocket and don't sign anything.
In the end, you will be best served spending the time it will take to learn to manage your own money. Short term, spend a few hundred dollars and find a fee only planner who will give you general advice.
My disdain for the "bank guy" goes back to an overheard conversation. An older woman, in her 70s was asking about investing in T-bills vs the bank CD. T-bills were a bit higher yield at the time. The banker stated that the CD was FDIC insured,but T-bills were not. This was decades ago, but I remember it as if it were yesterday.
