I found a new friend who “gets women” especially when it comes to managing finances during a life changing experience. Russ Thornton of Wealth Care for Women shared the following information.
You’ve likely heard the adage “there’s no such thing as a free lunch.”
But what about a free dinner?
Many financial advisors, brokers and insurance types market their services to women like you by offering to wine and dine you. But they usually skip the wine and serve tea instead. And dinner is typically chicken of some sort or another.
While you’re enjoying your free meal, they “educate” you about the benefits of hiring them to help you manage your money. And the education they provide typically revolves around a specific financial product or tactic.
Sounds innocent enough, right?
But while you’re washing down your chicken and rice with some sweet tea, there is some psychology at play here . . .
Using a bit of social psychology called reciprocity, these advisors are hoping to trigger something in your subconscious to make you feel like you owe them something. They are feeding you after all.
And while I haven’t heard of any advisors asking you to whip out your checkbook while dessert is being served, you can almost certainly count on them to ask (or expect) you to schedule a meeting with them. That’s when you’ll get the full sales pitch.
There’s some more psychology at work here, but I think you’re probably getting the idea.
So what, you might be asking yourself right about now. A free meal is just that . . . free food.
If you’re able to fend off the advances of these financial salespeople, eat your chicken and leave, you’ll be labeled a “plate licker.”
But being considered a plate licker is nothing compared to the alternative.
What if instead of just eating a free meal, you’re helping this advisor win a luxury Italian sports car? With your hard earned savings and investments. The same savings and investments that need to last the rest of your days.
Read this Wall Street Journal article by Jason Zweig. It’s a pretty short article, but is well worth the few minutes of time to read it. Once you’ve read it, pass it along to someone else you know.
Here’s another example of what you need to be aware of and protect yourself against.
Of course not every financial dinner seminar is an attempt to put your money into a high-commission, high-expense insurance product. And there are professional advisors out there who are laser focused on your best interests (yours truly, for example), but as I mentioned in last weeks’ email, you’ve got to be a healthy skeptic.
Even if there’s a plated chicken dinner in front of you.
I’m regularly being asked by women (and their friends) to give them a second opinion on their investments. I’m amazed at how often there are expensive insurance products (usually annuities) involved.
I was recently asked by a woman to review her 81-year-old Mom’s investment portfolio. She had over 90% in stocks – that’s more aggressive than my approximately 60% allocation to the stock market. And I’m not 81. Oh, and she had 2 variable annuities in her portfolio that both cost over 2.5% per year in total expenses.
Sadly, the portfolio above isn’t the exception. It seems to be the rule.
Have questions about investments, annuities, or other personal financial planning concepts? That’s what my Wednesday Q&A meetings are for.
And if you have any questions or need anything before our next Q&A meeting, it’s easy to get in touch with Russ at http://wealthcareforwomen.com/.