Probably the most surefire sign that you should flee an existing or potential financial adviser is if he or she tries to sell you on variable annuities. Never, ever, ever sign up for one of these. For starters, it mixes and matches insurance with investments, which is unnecessary. Next, the fees are outrageous. Often 10% of the principal invested. So they make great sense for the person selling them, but are awful to the buyer. Finally, they are wildly complex. Just try reading through the contract. Simply put, few people will have any idea what they are agreeing to.
There is probably one case in a thousand where the variable annuity makes sense, but don’t gamble that you are that case. Just stay away.
–Tim Shields, UBS