Too Good to be True

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Protecting Your Nest Egg: A Warning About Conflicted Financial Advice

In today’s financial world, the lines between professions have blurred. Your banker may also be an investment advisor, and your insurance broker may offer banking services. This “one-stop shop” approach is marketed as a convenience, but it can create significant conflicts of interest and expose seniors to advice that benefits the institution more than the client. It is more important than ever to be a skeptical and informed consumer.

The Annuity Trap: A Common Pitfall for Seniors

One of the most aggressively sold products to seniors is the annuity. Pitched as a safe investment with guaranteed income, an annuity is a complex insurance contract that often comes with a major downside: a loss of control over your money. When you purchase an annuity, you are typically locking up your funds for a long surrender period. If you need that money back for an unexpected crisis, such as paying for long-term care, you will face steep penalties that can erase any gains and even eat into your principal.

These products often carry high commissions for the salesperson, creating a powerful incentive to sell them, even when they are not in the client’s best interest. A common and particularly harmful example involves so-called “VA Pension annuities,” which are often sold to veterans with the false promise of helping them qualify for benefits. In reality, these products can hurt a veteran’s eligibility and tie up funds they desperately need. This is a critical consideration when planning for VA benefits.

Your Defensive Playbook: How to Protect Yourself

Seniors hold a majority of the wealth in our country, making them a prime target for both outright scammers and professionals pushing unsuitable products. You can protect yourself by following a few simple rules:

  • Remember the Golden Rule: If it sounds too good to be true, it almost certainly is.
  • Never Be Rushed: High-pressure tactics are a major red flag. A legitimate advisor will give you all the time you need to make a decision.
  • Get a Second Opinion: Before writing a large check or signing a complex contract, discuss it with a trusted family member or another professional who has no financial stake in the transaction.
  • Use the Power of “No”: You are never obligated to buy a financial product. It is perfectly acceptable to say no and walk away.

The Role of Your Elder Law Attorney

An experienced elder law attorney acts as your fiduciary, meaning they are legally and ethically bound to act solely in your best interest. We do not sell financial products. Our role is to provide unbiased advice and ensure that any financial decisions you make are consistent with your overall goals for asset protection and long-term care. This includes making sure you have the liquidity needed for a potential crisis and a plan to pay for long-term care.

A comprehensive approach to your financial and legal affairs is the best defense against conflicted advice. Call our office at (919) 256-7000 to schedule a consultation.