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Investing: Keep Up Your Guard

Do you like being taken advantage of? IThe key point is that you shouldn't
sure don't. In fact, I hate it! Worse,trust a product just because it has a
it seems like it is happening more andfamiliar name associated with it. Do you
more. Now, more than ever, it ishomework and compare it to its
buyer-beware. Read on for some specificcompetitors.
examples and to learn how you canWe can be taken advantage of in other
protect yourself.ways. I recently responded to an offer
Trust is involved when we buy afor a 'free credit report'. It was
company's products of services.provided by one of the largest credit
Companies spend millions of dollars areporting companies in the world. Surely
year in advertising trying to gain ourit could be trusted.
trust. Employees, especiallyNope. Buried in the fine print is that
salespeople, are trained in what to sayfact that anyone who receives the 'free'
to build our trust in them and theircredit report is automatically signed up
company.for their credit monitoring service.
When I take the bait and find out thatUntil you call and cancel, your credit
the product or service doesn't meet mycard is billed each month. Since I used
expectations, I feel my trust has beenmy debit card, I didn't notice the
violated. I've been taken advantage ofcharge right away. The lesson? Be
just so the company could make anothercareful when signing up for 'free'
dollar. It used to be rare. Now it'soffers, read all the fine print, and
common.don't use your debit card for online
Take AARP for example. Founded as thepurchases.
American Association for RetiredLastly, I recently bought an electronic
Persons, it quickly became the largestbook online as part of some research I
defender of senior's rights. It is stillwas doing on Equity-Indexed Annuities.
one of the most powerful lobbying groupsThe sales pitch explained that
in Washington. Its members trust it to'shocking' truths about annuities would
act in their best interest.be revealed. It's easy to find people
That's why so many of them werepromoting annuities and I was looking
surprised when AARP suddenly changedfor an opposing view. This seemed to be
course and supported the Medicare Drugit.
Bill. AARP even spent $7 millionWhen I went to purchase it I learned
advertising their support! Members werethat the information I was looking for
stunned--only 18% of them supported it.wasn't included in the 'shocking truths'
What could have caused this trustedand that I had to upgrade to learn those
voice of seniors to stop acting on theirsecrets. The entire package cost $97,
behalf? I'm not going to judge motives,double what was initially advertised.
but isn't it interesting that AARPWorse, the material ended up being a
stands to make millions of dollarssales pitch FOR annuities! I read the
selling its new prescription drugterms and conditions. They sell your
insurance called MedicareRX? Hmmm.information to list brokers and
AARP receives more money from licensinginsurance agents. One of the 'bonus'
the AARP name to products and servicesservices was the ability to talk with a
then it does from membership dues.live person about your situation. In
They're becoming more of a marketingreality, you would be connected to an
firm then a lobbying firm. Are theirinsurance salesperson and received
products truly in their member's bestbiased advice.
interest? Not always.It shouldn't be this way. We shouldn't
AARP mutual funds are a perfect example.have to constantly keep our guard up to
Managed by Scudder, not a single one hasprotect ourselves. But we do. Be careful
performed in the top 20% of itswho you trust--especially a financial
category. Those who invested because ofsalesperson. The people and companies
the AARP name have forgone thousands andthat provide the products and services
thousands of dollars of growth due toyou use should repeatedly earn your
low returns--while AARP has pocketedtrust. If not, they don't deserve your
tens of millions of dollars.business.



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