Category: Articles

Lately it’s been more challenging out there, especially for older folks alone. Sometimes they get talked into buying products they can’t afford.

Just recently one of our clients was so pressured by an intimidating salesman, she signed up for a water purification system she couldn’t afford. He even told her he would get fired if she didn’t buy it. It did turn out ok for her though, in the end. They can’t touch her retirement account or her home, so she is lucky.

Another client had a salesman in her home to learn about stairway chair-lifts and he was so overbearing he insisted on her giving him her brokerage statement! He told her how she was invested incorrectly and picked up the phone and called me! When she realized he had called me she got on the phone and told me what was going on. I told her not to sign anything and call me later. Fortunately, she is fine, didn’t buy it, and he is now fired.

These two instances were very close calls. One would have had to pay $8,000 and the other $13,000. I am not saying the products were bad or not worth the price, but these clients weren’t in a position to pay for them.

But both women felt intimidated, stressed, even frightened by these aggressive men. I know our clients can make good, solid decisions. But, if you are alone and think you may feel at all vulnerable if someone is trying to hard-sell you something, have a plan ahead of time. Tell a close friend or family member about the appointment. Better yet, have a trusted person with you.

Sit by your phone ready to call if you feel intimidated, and tell your contact ahead of time a prearranged word or phrase to come over, such as “Can I afford this?”

If you do feel like you got pressured into buying something you shouldn’t have, under Florida law you have 3 days to cancel the purchase. For those of you in other states, check your state’s laws.

Call your financial advisor or planner before the appointment to discuss what a reasonable, affordable purchase for you would be, especially if you’re not sure. Then, if the product is over that amount, be firm with your decision that you will not buy it.

If you have already made a mistake and want to find out if anything can be done now, we can see if any of our resources can help, but if not, don’t berate yourself, just know you’ve learned from the experience.

If you have a friend or relative who may be vulnerable in this way, sit down with him or her and come up with a plan if a desired in-home purchase appointment is coming up. Not all companies have unethical salespeople. I know there are many great people out there. Just please be careful.

Sometimes we don’t realize how much an aggressive salesman or woman can coerce us into making an emotional, disastrous decision. Preparing for an appointment with a salesperson includes checking ourselves for our own steadfastness in protecting ourselves, even if that means reaching out for help.

Here is a check list of questions to ask yourself:

1) Does he/she prognosticate and predict?
We’ve been taught to expect our experts to tell us what is coming, yet in reality no one knows. We must be prepared for all possible and unseen events to the extent we can be.

2) When the market makes a big move up or down, does your advisor suggest changes to your portfolio?
If so:
A) Why was it incorrectly positioned in the first place?
B) Were there commission charges on the changes?
Your portfolio should be allocated to weather any storm for your time horizon and your comfort level. After that it is just routine maintenance to keep the allocation aligned with your original plan. The only time this might change is when you have big changes such as marriage or retirement.

3) Do you receive education on how the markets really work from your advisor?
Is there an opportunity for clients to learn methods of investing including philosophies so you can discern what yours is?

4) Does your advisor talk ‘above’ you? When you listen to your advisor is he/she understandable?
If you don’t understand, does he/she re-frame the answer in a way that you do? It is important you know what you are doing and why with your investments.

5) Do you have a high feeling of trust? Do you feel good after talking with him or her?
This will be your experience when your advisor is also a good ‘coach’. Your emotions will invariably work against your success if they go unchecked. You may be tempted to buy and sell at inopportune times. The stock markets will always have drops of 20% or more, and our decisions during those times can easily damage our long term plans. It is important that you can voice your fears and concerns to your advisor so that not only are you heard, but hopefully you will learn the truth about the markets and not the latest media buzz.

6) Have you been encouraged by your advisor to have reasonable expectations?
Such as:
A) The markets will cycle through bull and bear markets. During the last 31
years we had 24 positive returns. Even during the positive years the average intra-year decline was 14%
B) The stock markets will invariably decline over 20% at some time.
Are you prepared to stick with your plan no matter what is going on in the world and the markets? This is a sign of a seasoned, well-educated investor.

7) Lastly does your advisor understand, when it comes right down to it, your success has more to do with your internal commitment, internal guidance and financial maturity than any other variable?
If you have no resolve to leave your money invested through the tough times, can’t resist spending more than you earn, or you haven’t devised a good way to save, no advisor can be of much help.