Phil Cannella – Phillip Cannella Media: Phil Cannella, investigative reporter and founder of Retirement Media, Inc, helps his readers understand the difference between the two types of financial accounts available to retired people so that they can better protect their nest egg. The options are broker-driven and client-driven financial accounts.
Broker-Driven Financial Vehicle
Broker-driven financial vehicles are the products that financial advisors endorse, recommend, direct and protect to no end. Phil Cannella points out that financial advisors and brokerage firms only prefer these products because they collect ongoing fees and commissions from them, but they are not the right vehicle for retirees. This is because they are securities-based, which means your assets remain susceptible to market downturns.
Client-Driven Financial Vehicles
Phil Cannella suggests retirees use client-driven financial vehicles, which are money instruments that favor the owner instead of the advisor. These accounts can help retirees stay ahead of inflation without market risk and without worrying about losing principal.
There are no ongoing market fees associated with these vehicles and commissions are not paid from the account to the advisor. Another reason Phil Cannella prefers client-driven accounts for retirees is because you don’t have to pay taxes on accumulation until you withdraw. That means if you leave the gains in your retirement account, you won’t have to pay taxes on money that you’ve made but are not using.
No matter how different they may be, all financial instruments have one thing in common: they were each designed for a specific purpose. Phil Cannella reminds you not to make the mistake of choosing ones that aren’t right for you and your situation.