The Advocacy
Network is focused on inoculating and insulating investors, consumers and
businesses against scams, fraud and predatory sales tactics. As an investor,
consumer or business entity the most evident threat is predatory sales tactics.
After all even scammers and fraudsters need to sell their propositions.
Eliminating the scams and fraud is the easiest part of our work; the difficult
aspect is continually identifying and eliminating the predatory sales tactics
used by entire industries.
Financial services
are a vital part of any individual’s personal financial health and one would
expect to find safety in an industry created to protect your financial
well-being. Unfortunately the industry is awash with gimmicks and predatory
sales tactics. Yet you must be able to integrate such financial tools such as
Life Insurance, Annuities, and Health Insurance along investment vehicles into
your financial plans.
The risk
protection of insurance products is the foundation upon which a strong
financial lifestyle is created. The insurance agent has a crucial role in you
and your family’s financial well-being.
Having spent
over 20 years in the Financial Services industry as an agent, manager and sales
trainer I can attest to the myriad of manipulative sales practices that are
taught and perpetrated against an unsuspecting public. Many of these tactics
have been around since the 1920’s and certainly there are several that have
been staples since the 1980’s. Let’s review just a few of the most common
marketing gimmicks used to entice you into a bad decision about money.
·
The ticking time bomb of taxation on
life insurance and annuities. This has been a very common tactic
since the early 1980’s and the Reagan tax changes. Since that time Congress has
continually sought ways in which to gain tax revenue from retirement based
usages in these products. Life Insurance continues to have a tax-free privilege
through the proper usage of loans against cash values. This has long been one
of the most effective means of creating tax-free income, yet the reality in
planning is that this should never be the major purpose in developing a life
insurance plan. Of course if this is the only reason people purchase Life
Insurance then Congress would certainly put an end to this process. As to
annuities there is no better vehicle to provide an income one can never
outlive. For the concern of living too long annuities create a guaranteed
stream of income and of course are a vital tool in proper retirement planning.
The difficulty is that the industry has made these products so complicated that
many times the agents who sell them have no idea of what is going on little
alone educate an unaware public. In reality the annuity is a very simple
concept and can be easily explained to you the consumer. SO why has it become
so extraordinarily complicated? It seems that the creation of mass confusion
works to the benefit of the insurance carriers. This confusion can hide the
fact that not everyone needs an annuity. That’s right annuities are not right for
everyone. There are circumstances where the financial benefits and restrictions
of an annuity do not fir. This is called “suitability” and the insurance
industry has made it more complicated the never in this arena.
·
Seminars, freebies and other manipulations. The most common marketing tool over
the past 15 yrs. or so has been the use of seminars. Now there is nothing
innately wrong with an educational seminar, in fact it is a good thing. But the
industry has manipulated an educational event into a predatory sales hunt and
certainly a product pitch. Life Insurance planning and Annuity planning is a
personal issue and needs to be individually programmed. It is never a one-size
fits all remedy. So. While information in a seminar setting is useful, it is only
useful in general terms and once it moves into one size fits all
generalizations it becomes manipulative. Your safest move is to avoid seminars
as you can get all the general information you need through totally independent
sources.
·
Social Security optimization. Another oldie but goody. This used to
be known as pension maximization in the 80’s-2000’s. Now with the economic
crises surrounding the government programs it has focused itself on Social
Security. The reason for this is less people have pensions now and therefore
the biggest market place exists in Social Security. With 10,000 Baby Boomers
turning 65 every day the market is abundantly plentiful with those who are
Social Security eligible. Once again there is solid and useful information to
be had about your Social Security; unfortunately it doesn’t need to be used as
a manipulative sales tool for you to purchase more financial products. Being
fully honest at this point in time how many of you actually believe the Social
Security system will last long enough to actually make good on its payouts to
the entire universe of baby-boomers? It would seem that delaying your social
security check for a larger payout from a system that may well be bankrupt in
less than a decade is not a very prudent financial decision.
·
Retirement planning. Long the holy grail of the Financial
Services industry, this concept has left a long a brutal trail of predatory
sales tactics and manipulations. Once again we have a very individualized
personal scenario that is treated with a one-size fits all mentality. Such
issues as life-style, Life-experience, Life-expectancy and legacy desires are
all vital parts to a congruous retirement plan. This also has to have
flexibility in its design as life is never a totally linear event. Making smart
decisions about money today and tomorrow require a consistent mental and
emotional approach to these factors. You have to ask yourself some very crucial
questions and acknowledge what has happened in the past along with what is
probable in the future. The normalcy effect will not serve you well in today’s
ever-changing society. One simple concern is any existing ERISA qualified
retirement savings you now have (IRA’s, 401k’s, Keogh’s SEP’s etc...) as all
these plans could well be targets of the government’s debt concerns in the near
future. Would you be comfortable if the government determined that these funds
should be in a GRA (government retirement plan) which would simply annuitize
your balances and make payments much like Social Security? It is not only a
possibility it has been discussed on Capitol Hill and will continue to get more
traction as the runaway debt continues to grow exponentially. Over $17 trillion
dollars is presently in these types of accounts. You have serious decisions to
make.
The stark
reality is that in marketing and sales everything old is new again, yet in
today’s economic arena nothing old will ever be new again. There are many other
areas of concern when it comes to predatory sales tactics and the marketing
tools used to attract investors, consumers and businesses. The Advocacy Network
is an organization that keeps our members educated and aware of all these
manipulative behaviors. Our only concern is your best interest.
Karl Schilling
321-250-1445 O
321-947-3220 C
Skype: karl.schilling5
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