First, you are vulnerable to financial advisors when you retire and get the biggest check of your life. Suddenly you're faced with the most important financial decision of your life. The security of your golden years will be determined by your choice of advisor and investment.



Advisors know how emotionally difficult this time in your life can be. They also know it's a chance to get their hands on $250,000, $500,000, $1 million or more. Commission-based advisors, depending on the investments they recommend, can 'earn' between $25,000 and $50,000 by simply convincing you to invest $500,000. Now you know why they are so serious about their hunting!

Advisors are taught the two ways to motivate investors to take action are fear and greed. For those nearing or in retirement, fear is used. They try to convince you that unless you buy their hot new product, you could lose tens or hundreds of thousands of dollars and you won't have enough income to make it through your golden years.

Retirees feel surrounded by countless advisors, each wanting to bag your hard-earned savings. Many retirees think the advisors they talk to have the retiree's best interest at heart. They don't realize the tremendous, hidden conflicts of interest in the advisors' recommendations. In all of the confusion, it's easy for an investor to be overwhelmed and make a choice they will live to regret. I don't want this to happen to you!

The number one mistake retirees make is buying a high-commission annuity product. You don't see the commission, what you do face are years and years of surrender penalties that can result in you getting back less than you invested. The advisor makes money regardless of whether you do and you are left holding the bag. And forget about service after the sale--the advisor will have moved on to bag the next trophy.

Secondly, you're most vulnerable when those long surrender charges or back-end loads expire. That's when your money is once again up for grabs. Here come the hunters again. They won't help you mange your money but they are meticulous about keeping track of when it is up for grabs.

Advisors will bait you by explaining how their investment is better than your existing one--but it is all just an attempt to get the sale. If your existing penalty-free investment isn't meeting your needs, why step back into the frying pan by allowing yourself to be talked into moving money to a different high-commission annuity product? Don't take their bait.

Third, you are vulnerable any time your money can be easily transferred to a new investment. The commission advisors make by taking clients from other advisors is second only to the money they make bagging a retirement distribution. They are trained to make your existing investments look bad so they can motivate you to make a change.

This is why advisors sell products like annuities where they, in effect, get paid 7-10 years worth of commission up-front. They have the option of only receiving 1% per year (then the client doesn't have any surrender penalties), but what happens if another advisor steals you away? Instead, they take the 6%-10% up-front commission option. That way, they aren't financially at risk if you choose another advisor.

Any time an advisor is recommending an investment with a surrender penalty, they are looking after their interests, not yours. Commission-based advisors get paid to bag new money or reinvest old money. Their working hours are spent uncovering the three times you are financially most vulnerable.

Don't be taken in by slick seminars and fear tactics. If you're in or near retirement, have money coming due, surrender penalties ending, or you have investments that can be moved without fees, be aware. The hunters are lurking. Don't become their prey.