No one wants an electric drill.
They want holes. The drill is how they get them.
Financial products are like that. No one wants to own life insurance or an RRSP. They want what life insurance or an RRSP can do.
Many financial plans fail because some people like their tools too much. Tax shelters, limited partnerships, trusts, pension plans, corporate mutual funds, segregated funds, Alberta trusts, some kinds of life insurance, and hundreds more. Design matters and is exciting in some way. You might be the only one who has one of these tools. Pretty cool.
It is not that these are bad tools. It is just that they don’t work the same way for everyone and some of them don’t work at all for you.
You can tell if you should have one. Focus entirely on what the tool does, not what the tool is. If you cannot see the “How I get whatever it is that I want” part, (like the drill gets holes) then probably the tool is not for you. Strategy first. Tactics next.
If you are a financial adviser, you should not show a client any tactic or tool that is not in the context of solving a problem or exploiting an opportunity that the client knows about and values.
Doing tactics first means the tool has value without the context of its purpose. It would be like Armani selling quarter-inch, designer drills for $800 each.
They don’t, do they?
You can never be sure any more.