The next time you are approached by a broker, financial adviser, annuity salesman or insurance agent, consider using the following to judge their pitch.

• The Glossy-Brochure-O-Meter.  Is there a glossy brochure that describes all the wonderful, too-good-to-be-true benefits of the product, but fails to mention what you are giving up, like fees and features that work against you?  Do the materials and accompanying DVD have heart-warming photos of retirees on the golf course or hugging the grandchildren?  That’s when you have to focus extra hard on the details.  Too often, higher gloss = lower returns for you.
• The War & Peace Test.  I have been reviewing a variable annuity owned by a client.  The prospectus (which has all the product details) runs 814 pages.  No, that is not a typo.  Yes, no one will ever read it or understand it.  Yes, the annuity company doesn’t want you to understand the product’s negatives.  No, none of the negatives made it into the accompanying glossy brochure.
• The Proprietary Product Reality Check.  Anytime a financial product is called “proprietary”, you can be sure it’s not.  Financial products are worlds away from technology.  When a financial services company “invents” a new product that’s attractive to consumers, it takes about a week for the competition to copy it.  Start shopping around.
• The One Sentence Challenge.  If you can’t succinctly explain a product in one sentence (okay, maybe two), it’s too complicated.  That means, almost always, they are hiding large fees or “bells and whistles” that make the product less attractive to you.

If you have other ideas about tools that would help, please let me know.  I’ll post them on my blog.  In the meantime, I have to get back to that 814-page prospectus …