When making investments, it is important to avoid unsuitable investments that can trap consumers. According to the Attorney General, aggressive and high-pressure sales tactics are often used to market unsuitable retirement products like annuities to seniors. Consumers should watch out for things like “bonuses”, high surrender fees, churning, and unrealistic returns. It is wise to deal only with reputable brokers and not overinvest. By being an informed investor, one can avoid unsuitable investments and protect their interests.
Be wary of aggressive and high-pressure sales tactics
The Attorney General warns that questionable sales people may use tactics like unsolicited calls, repeatedly contacting you, limited time offers, and trying to meet without family members present. They may also use “free seminars” that are actually aimed at selling products. Do not trust people who give themselves false credentials or claim affiliation with reputable institutions.
Watch out for bonuses and high fees
While bonuses may seem enticing, they are often marketing gimmicks and the costs may outweigh the benefits. Similarly, high surrender fees essentially penalize consumers for early withdrawals. One should carefully evaluate the full costs before investing.
Do not let brokers churn investments
The SEC warns about brokers who encourage switching annuities, a practice known as “churning”. The full costs may not be disclosed to generate more commissions. Carefully check that profits exceed transition costs.
Conduct reasonable investments aligned to your means
Some advisors encourage unrealistic investments that investors cannot actually afford long-term. It is unwise to invest more than one can handle just because a salesperson makes bold promises. Conduct investments cautiously and reasonably.
By understanding common sales tactics, evaluating products carefully, dealing with reputable brokers, and not overinvesting, investors can avoid unsuitable retirement products. Information is the key to protecting one’s interests.