Glenn Pahnke – RBC Wealth Management Financial Advisor
Working with the right financial advisor can help you reach your financial goals most efficiently. But working with the wrong one might lead you to disaster. In the case of Glenn Pahnke RBC, he might seem like the right one when he isn’t.
As an investor, it’s your right to know what flaws are present in your advisor. So, before you consider working with Glenn Pahnke RBC Capital Markets-affiliated advisor, read the issues present in his disclosures below in this review.
About Glenn Pahnke RBC
Glenn Pahnke is a financial advisor affiliated with RBC Capital Markets. Glenn Pahnke’s office is located at 6710 N Scottsdale Rd Suite 150, Scottsdale, AZ 85253, US and it opens from 9 am to 5 pm.
The contact number of the Glenn Pahnke Clinic is 480-609-4901.
He is the managing director of RBC Wealth Management, a Scottsdale-based firm. Glenn has been operating in the industry for 30 years and claims to help his clients achieve their life goals.
But there are a ton of things he doesn’t like to highlight. Here are some of them:
Issues with Glenn Pahnke RBC You Should Know
History of Disputes with Clients
The first and biggest problem with this financial advisor is his past disputes. On FINRA Brokercheck, you can find if a financial advisor had any disputes with his past clients.
In the case of Glenn, his profile shows three disputes.
The first one is dated 11-26-2008. Here, the client alleged that they didn’t understand the variable annuity’s provision and that the value of their investment could decline.
The settlement amount was $140,103.78. In response to this, Glenn said that he explained everything in detail and the client had received written disclosures. Note that it’s a common tactic among financial advisors to blame everything on their clients. It seems Glenn has done the same.
His second dispute was denied. It was in 2010 and the client alleged that he misled them regarding the performance of their accounts.
The most recent dispute was just a year ago. It’s dated 11-1-2020. Here, the clients expressed grievances that the advisor’s account management resulted in losses and requested $85,000 in damages.
Glenn settled the matter for $15,482.79.
Having so many disputes with his clients shows a lot about Glenn’s service and professionalism. Maybe the reason behind having so many conflicts with the clients is the selfish provisions present in his disclosures. I have discussed them below:
What is a Red Flag?
A red flag serves as a signal or sign that there may be an underlying issue or danger associated with a company’s stock, financial statements, or news reports. These indicators can come in many forms and are often identified by analysts or investors as any notable undesirable trait.
Broker-Dealer
Glenn Pahnke is a broker-dealer. This means he can earn commissions from the sale of certain investment products. Usually, you’d want to work with an advisor that offers unbiased advice on how you should invest.
But when you work with a broker-dealer, your chances of getting effective advice get slim. That’s because the advisor has an incentive for ignoring your financial well-being. They would suggest investments that offer them higher commissions instead of those that help you gain higher returns.
This is a huge problem because it means you’d get subpar results and miss out on a lot of potential growth.
12b-1 Fees
As an RBC Capital Markets advisor, Glenn can recommend investments that charge 12b-1 fees. This is a marketing fee that goes into the pocket of the broker.
What makes the 12b-1 fee a conflicting matter is that it doesn’t offer any benefits to the investor. You wouldn’t get any advantages for paying that extra fee. SEC conducted a study to compare the returns of mutual funds that charge a 12b-1 fee and those that don’t.
They found no difference in the returns of the two. The only difference was in the costs as mutual funds with the 12b-1 fee cost more than the others.
So, when you’re investing with Glenn Pahnke, you are paying higher than you need to, increasing your investment costs.
Insurance Broker
Another problem with this advisor is that he’s an insurance broker. This means he sells insurance products and earns commissions from them.
Be cautious about getting insurance recommended by such advisors. In such cases, the advisor would recommend you unnecessary insurance products which will rack up your costs and diminish returns.
Gullible investors think their advisor is looking out for their security while the advisor is only increasing his commissions.
This is a common issue and it can hamper your financial returns in the long run.
Proprietary Products
Glenn is affiliated with RBC Capital Markets, a prominent financial advisory firm with various proprietary investments and products. He earns commissions from the sale of these investments and these commissions are probably a lot higher than other investments.
Selling proprietary investments can lead to several conflicts of interest.
The biggest issue, however, is misrepresentation and unsuitable advice. Proprietary products limit the range of products an advisor can suggest to his clients.
It also incentivizes the advisor to recommend unsuitable investments because they offer high commissions. Take, for example, UBS’s YES Strategy lawsuits. UBS has been paying hundreds of thousands of dollars to its investors because its investors recommended the product without checking its suitability.
Clients alleged that those advisors were suggesting the YES Strategy program because it offered them higher commissions. With Glenn and his firm, you face similar risks.
Performance-based Fee
Glenn Pahnke offers products that charge performance-based fees. When your advisor charges this fee, they earn when they beat a specific index or benchmark.
At first, it seems like an attractive fee structure. But it has many flaws. So many flaws that performance-based fee structure is heavily looked down upon in the finance industry.
Professionals avoid charging this fee because it promotes high-risk strategies.
When your advisor earns “only” when they beat a specific benchmark, they would take risks with your investments. In some cases, the undertaken risk is unnecessary.
Also, risky investment strategies aren’t suitable for every investor. But the performance-based fee structure makes it imperative for the advisor to follow such strategies.
Such strategies are particularly dangerous in volatile and uncertain markets (like the current pandemic-ridden one). Furthermore, while following this fee structure, you can’t hold your advisor liable for any losses you incur.
Experts recommend avoiding performance-based fees.
Side-by-side Management
Another problem with this advisor is he performs side-by-side management. This means he handles large hedge funds at the same time as the small retail accounts.
Firms that perform side-by-side management tend to give most of their time and resources to their larger clients. Because of this, small retail clients don’t get sufficient time and attention from their advisors.
If you’re not among the highly affluent individuals, it might not be worth it to go with Glenn Pahnke.
Trading Recommended Securities
Finally, Glenn trades the securities he recommends to his clients. While it may seem like “eating your cooking”, it leads to a ton of issues and conflicts.
Trading recommended securities can lead the advisor to manipulate the returns he gains by using his clients’ funds. They may perform “front-running” where an advisor trades a specific security and then recommends it to his clients to get better returns for himself.
Should You Trust Glenn Pahnke RBC?
Having so many conflicts of interest in his disclosures and a history of client disputes make it extremely difficult to trust Glenn Pahnke.
He might claim to put his clients’ goals in focus but his disclosures suggest that the only thing he cares about is his wallet. So, think twice before giving your business to him.
