Fools & their money conclusion
10. Get a second opinion (but be prepared to pay for it – just like you would if you visited more than 1 doctor). If the planning recommendations are good they should stand up to scrutiny so there is no reason that you should not discuss a planning recommendation with someone else – but be prepared to pay if you are going to do this. Consider it in the same manner as you would if you were getting a second opinion from another doctor/dentist/lawyer etc.
11. Advice is not free – be prepared to pay for it – especially good advice. Professional advisors are highly qualified individuals so be prepared to pay for their consultation just like you would for any other professional. If you want “free” advice then expect that it will be tainted by the need/desire to sell you something at a later stage (and most probably motivated by ulterior motives).
12. Don’t be rushed – this is a favourite sales technique so be aware of it. There are times when there is a genuine need to “rush” but generally these do not include the area of product purchase. Examples where there might be a degree of urgency include changing beneficiaries on investments, updating a will and meeting the tax deadline for Retirement Annuities. Rather than be rushed into making a decision, take your time to consider the implications it will have on you and your family. Talk it over with your spouse, sleep on it and then make a rational decision in the morning. Never sign a document you have not read or don’t understand.
13. Life insurance is not an investment. This is an area where we have long been misled. In the overwhelming majority of cases it is better to separate your investment and insurance. You will never benefit from a life insurance policy – it pays when you die! So why would you want it to have a (cash) value? Most of the insurance companies now recognize this and have begun to separate investment and risk in their products. Watch out for the “new” products that offer bonuses in the future…the stats show that the average lifespan of an insurance policy is less than 7 years – so why would you want to pay towards something you probably won’t have with the same company in the future?
In conclusion, ask questions, think carefully, act rationally and insist on conducting your financial affairs in a professional manner.