Never Say Never To An Investment

Many people think I know of a “great investment” or that I have a favorite that I use over and over again. I have been in the financial services industry now for over 30 years. (Yes, I am old.) I do have certain favorites that I prefer -for myself. My risk tolerance, my tax bracket and my goals are different from yours. That said I keep an open mind when I am working with clients. I I want to find the best investment for them, and I will use anything that I think is appropriate.

Because my clientele is not in the 1%, I am very conscious of fees in each investment. This is one of the reasons why I rarely recommend a variable annuity. I find it hard to get past the high internal fees that are in annuities.

In a casual conversation with a young woman, we chatted about Vanguard funds, and having a good estate plan, and then she popped the question- What do you think of Variable Annuities? I went off in a litany of reasons why I think they are a bad idea. She listened intently and then told me that she was married to a much older man and that he had an annuity and it was giving them both growth possibilities and income, and they liked the tax deferral feature.

I regretted saying what I had said. Knowing now of her personal situation, I could see that the annuity was not only suitable for her family but a correct choice for them.  I know now to hold my tongue when asked about investments since I don’t know the questioner’s situation. Like a doctor prescribing pills without a thorough history and examination of the patient, my comment about variable annuities did more harm by making her question whether they had an appropriate investment. She listened to me and starting questioning her choice and wondering if they could have done better.

Awkwardly,  I had to reverse course and tell her how even though I disliked variable annuities, from what she told me, she had made a proper and wise choice. I went into a break down of all the good features of a variable annuity that was suitable for her husband and for her. She felt a lot better.

Just because you dislike a particular investment now, does not mean that it will forever be inappropriate for you. As you age and your personal situation shifts, more investments you thought you would never invest in become more attractive to you.

Keep an open mind and never say never to an investment.

About the author

Fern Alix LaRocca CFP® EA

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