By Michael Ryan, MBA Hendersonville, TN

Although I have never thought of myself as a particularly gifted salesperson, I have always enjoyed watching one at work. Good salespeople are artists, and volumes have been written about how to be one. If you Google “how to sell,” you will get about 460 million responses. Selling is an old and honorable profession. If you have it, someone sold it, so I would never denigrate salespeople. But I do want to make some observations about how “selling” can have an impact on our financial lives.

The best salespeople are totally committed to their products. They see no gray areas; they see only that your life, as well as theirs, will be better once you buy their product. They allow no doubt to enter their minds and hopefully not yours. And salespeople are always selling. A good salesperson realizes that eventually someone always buys.

I was reminded of the effects of “selling” recently when I spoke with a friend. He had just endured the heartbreak of divorce and had been trying to get his financial life back in order. He asked me to look at his finances and offer suggestions. As I was reviewing his holdings, I noticed he owned an annuity. He was able to tell me what company had issued the annuity but not much else about it. He was not sure how much it was worth, how long the surrender period lasted, or what the surrender penalty would be. He was unaware that the IRS usually imposes a penalty on money withdrawn from annuities before the owner reaches age 59½. And more importantly, he did not know what he was trying to accomplish when he had acquired the annuity. In other words, he was “sold” the annuity.

This scenario happens all too often with financial products. Unless consumers educate themselves before talking with a good salesperson, they may find themselves being sold a product they do not need that will not accomplish what they want to accomplish. If a product is sold, the salesperson’s interests and biases may play a bigger role than the consumer’s actual needs.

If you cannot explain a financial product fairly succinctly to someone else, you may not need it. Most financial products that we as consumers really need are straightforward and logical; they make sense. We can understand what we are getting and what we are trying to accomplish when we buy them. If you have to be sold a product, a product that you cannot easily understand or explain, you very likely do not need it as much as the salesperson needs to sell it.

Contact an ACA member for the help you may need to determine if you are “buying” or being “sold” a financial product.