Dodged a Bullet: I Fired My Adviser Who Wanted Me to Mortgage My Home for a Risky Annuity

A recent series of encounters with a "financial planner" would be funny if it wasn't so predictable. I have a reasonably healthy amount of money in the care of the investment department of a regional bank. The new "financial planner" at the bank apparently noticed this money, and started to send me emails pitching me on---wait for it--single-premium life insurance. His idea was that I could use the money to "build a family legacy that will last for generations" Barf.

It would be funny if it wasn't so predictable. I had to meet with him about changing some investments within my SEP/IRA. In the meantime, he was helping me set up a Donor Advised Fund. This is a fairly labor-intensive process, with no immediate benefit to him or his bank, and he was taking care of every step of it for me. If the process of setting up the Donor Advised Fund had involved him wiping my backside, he would have done it with smile, while asking me whether I preferred Charmin or AngelSoft.

Two days ago, we met at my office. After we did the necessary stuff for my SEP/IRA, he turned to the life insurance pitch. I cut him off and said, "If this is about life insurance, I'm not doing it." At that point, he left my office. Yesterday morning, bright and early, I got a email from him giving the contact information of various people who I needed to talk with to finish setting up the Donor Advised Trust, along with his sincere best wishes that I could successfully complete the task on my own.

As long as he saw me as a live prospect for high-commission financial products with high internal costs, he was willing to wait on me hand and foot. Once the prospect of selling me life insurance was over, I was "dead to him." Again, it would be funny if it weren't so predictable. Something to keep in mind concerning the priorities of "financial planners." (Hint: It 's not you.)

At one time, just after returning back from UK, I had a significant balance in my HDFC savings account. HDFC people started calling me stating that they will send a special advisor to help me get good returns - better than savings account; all free. So I invited them to meet me at my home (COVID times).

At the first instance two gentlemen came and started preaching about HDFC Life Sanchay Plus scheme. I was not interested but I did not wish to sound rude. So I told them that I will think about it and meanwhile they can send me prospectus, etc. The next week the two came back.

They first called and said that their senior, a lady, would also like to meet me to explain the plan, options, benefits, etc. They came with rather good looking lady. This is a typical ploy. There is a group of people about 3–4 who come and target you. One of them is a pretty girl/lady who will go on to explain how life is uncertain, how one must be ready for the future, how their scheme works the best, etc. This is a psychological ploy.

First you are surrounded and hounded. Then the pretty lady, without saying so, tell you how you are making a colossal mistake. They play on your fears. You don’t wish to look stupid in front of a pretty lady. So you cave in. Once again, I was not convinced. I said I didn’t need insurance plans or pension plans. I may be open to look at investment plans and retirement income plan. Again, they went (or tried to go) for the jagular. They said that this plan they were suggesting “guarantees me” income for any term that I chose - 10 years, 30 years, life. The amount is free of tax. At my death, my nominee/heir will get the full invested amount, etc. I told them - let me think.

Both of my parents saved their money with one of the giants in this field (as tempting as it is, I will not name them). When you visit their offices, there is lots of polished wood, hushed tones, and big conference rooms as they very seriously do their job of turning the assets entrusted to them into more money.

I was executor for both of my parents' estates (they were divorced), so I got an up-close-and-personal look at what the investing company was doing, but only after the fact. My father thought of himself as a savvy investor, so he managed his money himself. He was, in reality, the epitome of the “Poor Dad” and couldn’t find a good investment with a flashlight, a compass, and someone pointing him right at it.

My mother was the polar opposite; she totally trusted this investment company. Over more than 50 years, they both managed their retirement assets this way. While my mother “won” this race because she had more money when she passed, the fact is that if you look at how much money she handed over to them and how little they actually did with it, it’s just sad.

When it was time to unwind her accounts, she was diversified to the point of “diworsification." There was no rhyme or reason for what she was invested in. It was as if the plan was to see if there was a possibility to buy a little bit of everything. She was in every high-load mutual institutional fund you could possibly find, and a smattering of international institutional funds as well. What a mess.

They wanted to hand this over to the heirs as-is and not sell any of it. I insisted they cash all of this mess out and only transfer the money to the heirs. They did this for everything except her IRA, which they transferred as-is. I received $13,000 (give or take) worth of 20 different mutual funds. That’s just nuts.

So, don’t be swayed by the big conference rooms and the fancy offices with their name on the top of the building. These folks are totally in it for themselves, and if they make you some money, it was by accident.