- THE RISK ROUTINE:
This is where an advisor assess your "attitude to risk". They will ask you to pick a number from one to ten.
This is a pantomime they go through to satisfy regulators. But it tells you nothing about the risks you are embarking on.
- THE WOBBLY WARNING:
This involves telling people that past performance is no indicator of future performance - and then telling them it is.
They will explain that you can't go on past performance and then add "But equity investments have always done well over a period of five years.
If that's not using past performance as an indicator of future performance, what is?
- TABLE FABLES:
Some advisors will tell you their fund has been the best in the market for an X amount of time.
Don't be fooled by this, they all have their ups and downs. Ask to see details of their worst period as well.
- THE CONTRIBUTION CON:
If you sign up to invest in a savings fund or pension, check the application form carefully.
If you intend to make only one single payment, be sure the form doesn't mention "future payments" or describe any part of your intended single contribution as an "annual one".
- THE FORM-FILLING FIDDLE:
This is where the salesman fills in the application form himself and asks you to sign it. Make sure it agrees with what you want to do.
Many people are disappointed to find out that their policy is for 25 years when they thought it was only going to be for ten or 15, which would have earned less commission for the salesman.
- THE HEALTH HOAX:
If it's life assurance or sickness cover you are applying for, don't let the salesman make light of any health problems you might have.
Cover anything up and they won't pay out, although the salesman will have earned nicely out of you.
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