Come Into Some Money? Expect Constant Phone Calls
23 August 2006Apparently, there’s a new trend of various kinds of financial advisors, stock brokers, and other salesmen monitoring a variety of different kinds of press releases and news sources to try to find people who’ve suddenly earned a whole bunch of money. Stacey Bradford at SmartMoney points to a guy who sold his company for $20 million, which was reported in a wire service along with some contact information. The result?
While the experience was both dizzying and exhilarating there was one aspect of it he wishes he avoided: The monthlong onslaught of sales pitches from hungry stock brokers and insurance salesmen. As soon as the press release announcing the sale hit the newswires he was blanketed with phone calls, emails and hand-delivered letters trying to sell everything from short-term municipal bonds to personal banking services. “The phone calls started at 6:00 a.m. and didn’t stop until 10:00 p.m.,” Siegel says. “The investment bankers [who closed the deal] said I would need a good accountant but no one warned me about the aggressive cold calls,” he says.
And it’s not just the very rich – even pretty small amounts of money will attract salesman like flies to honey:
Think you’re not part of the elite and won’t be pursued? Even a relatively modest windfall will catch an insurance broker’s or real-estate agent’s eye. Earlier this year, Shirley Wicker, a 71-year-old widow living in Penrose, Colo., won $10,000 playing Bingo at the Mirage Casino. For three months she received unwanted solicitations for everything from time shares to life insurance, she says.
Stacey gives some good advice, which is to get caller ID and stop answering for phone numbers you’ve never seen. I’d add that you should never even consider buying financial services from some random person who called you up on the phone. It’s not just about the annoyance factor – you can’t trust people who cold-call you and who you have no relationship with. You need to go through a more in-depth research process to find a financial advisor, and finding an advisor through a friend instead of a phone call is a good way to establish trust. Another statistic in the article that was shocking:
Seventy percent of people who come into a large sum of money squander it in a few years, according to the National Endowment for Financial Education.
Which basically means that 70 percent of people have no clue what to do with money. Another testament to the idea that one of the biggest things you can do to improve your financial status, and by extension your life, is to educate yourself about the basics of financial planning.
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