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By Dan Serra

(MCT)-When it comes to deciding which investment to purchase, our emotions tend to be a factor in determining what we add to our portfolio. That’s unfortunate because our decision should be based on what investment we need the most according to our situation. Slick financial salespeople often use tactics to make us believe what they offer is the best solution.

They do this by the way they make their presentation and the terminology they use. One of the most popular is the use of negative language. They can scare us into a decision by telling us all the bad things that will happen if we don’t buy what they are selling. “If you don’t invest in this, you won’t reach your retirement goal,” for example.

The methods and psychological influences the salespeople use has only recently begun to be studied by academics. A recent report by the Center for Retirement Research at Boston College addressed this issue by posing different language as part of investment presentations to see how it influenced buying decisions, specifically an annuity.

While annuities have been called unfairly priced or an investment with no inheritance potential, they do serve a purpose of insuring longevity in many cases, the report said. The limited demand for annuities could be because many financial professionals often give them a negative connotation; for example, emphasizing the expenses, limits and risks involved compared with other investments.

Researchers posed both negative and positive phrases about annuities to test subjects and found negative presentations were more influential than positive presentations. As results in other emotional responses, researchers found we pay more attention to negatively framed information. For example, more people would be afraid to fly if they are told there is a chance the plane will crash versus more who would be happy to know the odds of a plane crash are very unlikely.

Because of this reaction, the report said, insurance agents have used scare tactics to sell annuities.

Consumers can avoid “being sold” by being aware of these tactics and keeping their specific needs in mind. Sales presentations must be evaluated for factual statements and fair and balanced information. If you’re not shown the pros and cons, move on.

Consumers can also ask for unbiased advice through a certified financial planner who works at an hourly rate and is not associated with any insurance company. CFPs take pride in being unbiased and evaluating financial products for consumers.

Whatever you do, don’t take the word of just one salesperson. And don’t be scared into making the wrong decision, or scared from making the right decision.

© 2008, McClatchy-Tribune Information Services