Stephen Patrick Harnden‘s name may come up in your search for a financial consultant in the Peoria area of Arizona if you are looking for someone with his particular skill set. Stephen Patrick Harnden is a significant figure in the area and works as a wealth advisor for Ameriprise Financial Services. He is also known as Stephen Patrick Harnden.
However, as an investor, it is your responsibility to be aware of both the positive and negative aspects of working with any given service provider. The following is a list of some of the information that is contained in the disclosures made by Stephen Patrick Harnden that he does not want you to know.
Who is Stephen Harnden Ameriprise?
Ameriprise Financial Services, LLC is Stephen Patrick Harnden’s employer, and he holds the position of a financial advisor. Certifications that Stephen Patrick Harnden holds include CFP and CPA.
At first glance, Stephen Patrick Harnden appears to be a run-of-the-mill financial counselor; nevertheless, there are a number of questions that have been raised regarding him. The following are the most notable among them.
Problems in Working With Stephen Patrick Harnden Ameriprise
Disputes with Clients
There have been several disagreements between Stephen Harnden Ameriprise and his clients. In spite of the fact that all three of them were rejected, it is important to point out that each of them involved a unique problem.
If you search for your financial advisor on FINRA BrokerCheck, you will be able to find out if they have ever been involved in any disagreements with their customers in the past. If you were to search Stephen Harnden, you would discover numerous disagreements listed in his profile.
In the second dispute, the client alleged that the fixed and variable annuities bought in 2001 and 2003 were unsuitable. This dispute was in 2007 and the requested damages were $10,525.53.
Earning from Commissions
One of the most prominent issues in Stephen Patrick Harnden’s disclosures is what he earns from commissions. This means he gets compensation from the “sale” of certain investments.
Commissions can introduce bias in the financial advisor’s service. He might ignore your interests and financial goals to make an extra buck. In many cases, you wouldn’t even realize you’re getting subpar advice because your advisor would make it seem as if you’re getting the best returns possible when that’s not the case.
Most investors expect their advisor to keep their financial goals and requirements as the top priority. However, when you work with a commission-earning advisor, the chances of them keeping you as their biggest priority are slim.
Charging 12b-1 Fees
12b-1 fee is a marketing fee that generally goes into the pockets of the advisor. It only increases the costs of the investment and doesn’t offer any benefits for the added cost. Stephen recommends securities that charge this fee, which is another red flag.
SEC had done a study to compare the returns of investments that charge 12b-1 fees and those that don’t to see if there’s any difference. They found none.
Investments charging 12b-1 fees were worse because they cost more than the ones that don’t charge this fee.
If you’re a client of Stephen Harnden Ameriprise, review your investments and see if you’re paying this fee.
Selling Insurance
Stephen is an insurance broker as well. This means he earns commissions from selling insurance products to his clients.
There is nothing wrong in selling insurance but you don’t expect your financial advisor to “sell” your insurance. Most clients are unaware of this and think their advisor cares about their security when he suggests getting expensive insurance products.
Coupled with the 12b-1 fees, insurance products can increase your costs substantially. Be on the lookout for unnecessary insurance recommendations while working with such advisors.
Proprietary Products
Stephen is a part of Ameriprise Financial Services, which has many proprietary products and affiliates. When an advisor has many proprietary and affiliated investments, it introduces bias in their services.
This selection limits the number of investments they recommend to their clients because there is little to zero incentive for them to recommend anything else.
Proprietary products offer above-average commissions to wealth advisors. Hence, they might suggest them to you even though they are unsuitable for you.
Charging Performance-based Fees
When your wealth advisor charges performance-based fees, he earns money only when he outperforms a specific benchmark (like an index). It can force the advisor to follow high-risk strategies and ignore the client’s financial requirements.
Charging performance-based fees is highly looked down upon in the finance industry for multiple reasons. However, the biggest reason is the fact that advisors have the incentive to put their clients at unnecessary risk.
If the high-risk strategies work out, both you and your advisor make money. However, if they fail, you lose your investments.
Moreover, high-risk strategies aren’t suitable for every investor. If you don’t get the desired returns, the advisor can always say, “You knew all the risks”. Hence, it’s best to avoid advisors that follow this fee structure.
In the case of Stephen Harden Amerirprise, you should avoid him too.
Side-by-side Management
Stephen’s ability to provide side-by-side management is yet another important facet of the services he provides. This indicates that he manages a mixture of both major and small accounts at the same time.
This should immediately raise a massive red flag for individual investors and smaller investors. Because of the fact that side-by-side management typically requires the company to provide standard guidance to its smaller clients in order to conserve resources.
Buying and Selling Suggested Investments
Stephen has the ability to trade the stocks that he advises his clients to invest in, which presents a number of potential conflicts of interest. If you are one of his clients, it is in your best interest to examine your investments and determine whether or not he has traded them on your behalf.
This is due to the fact that many financial advisors who trade recommended assets have a tendency to exploit their clients’ funds in order to manipulate the returns for the purpose of increasing their earnings. The fact that many customers are unaware of such manipulation is a much greater problem.
Conclusion
The fact that Stephen Harnden is a wealth advisor for Ameriprise is already a significant accomplishment in and of itself. However, you should not let his numerous accolades and achievements detract your attention from the numerous conflicts he has had with his clientele. You should not let them divert your attention from the many questionable provisions that are included in his disclosures.
It is challenging to place trust in a consultant who discloses such a large number of competing interests in his work.
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