I have a long list of seniors who have come to me asking for advise about “something” they bought from a self proclaimed “financial advisor” who legally cannot use this title since they are only insurance licensed and not CFP’s nor licensed as RIA’s or IAR’s.

Senior after senior has recounted with significant detail what they were told and sold by the IA salesperson. Almost every statement or talking point the salesperson used was lies. Unfortunately once they realized the lies it’s too late. I have sent dozens of spies to confirm the lies and I will tell you that the Dateline show was way too easy on these deceitful IA salespeople.

Of course, there may be a very small number of good IA’s, however every one brought to me by unhappy investors of all ages has been the highest commission, longest surrender charge available.

How can anyone claiming to have the financial interests of their clients sell them any investment with a 20% CDSC, reducing gradually over up to 20 years – especially to a 75 or 85 year old who will not live long enough to get their money back.

In three states there is a company which has been sued many times, who is advertising “7%, to as high as 8.3% FDIC Insured Bank CD’s” to attract seniors. In most cases when the senior arrives to buy the CD, the advertiser (insurance agent) refused to discuss it, and instead rolls into how he can get them a “guaranteed 10-15% per year, not average, but ever single year.” The FTC has opened an investigation on these advertisers (Bait and Switch advertising is against the law), and the State of Florida has filed indictments against some of them.

I have been vigorously working with many multi-state agencies in an attempt to cease unethical sales practices, specifically “Bait & Switch” advertising. They are all very interested in insurance agents taking advantage of seniors, yet the only department with the jurisdiction that could do something immediately doesn’t seem interested, or claims they don’t have the manpower.

34 OUT OF 57 YEARS

Your S&P 500 comparison looks like a wipe out to
me…..But curiously the Annuity was a better
investment in 34 out of 67 years…Note
the returns between 1956 and 1978..Also between
1997 and 2007…….

My math may be wrong..but check it for your self…We do not know the future…Some
people do not like to gamble with it too much.!!

Annuities, insurance agents, brokers, fee based planners all have a place in our financial systems infrastructure.
However every situation and everyone is different and a cooky cutter approach or “one size fits all.” would be a disastrous over simplification.

There is no place for misleading conduct,or beliefs based on expediency.

All viewpoints need to be heard so we can understand the boundaries needed in our business relationships and so we understand the responsibility we all have to our clients and each other.

Ethical behavior cannot be legislated.
NASD, SEC, who cares? except purveyors of vested self interest.
Ethics is personal, its doing the right thing when you are there, all the time. The examples of unethical behavior depicted in the tapes is all too prevalent because the agent’s ethics was clouded by self interest above all else.
I find the result illuminating and sobering.

I use EIA’s as a solution and I find all the specific annuities enumerated can be a fit depending on the circumstances and particular client’s needs.
We look at the goals of the client. We present choices and solutions openly and completly. If we aren’t truthful then we are responsible and we will know it. Our conscience will tell us.
If some one is injured by our actions we have to be held accountable.

YES

This is a battle OVER WHO CONTROLS the money. Pure and simple! No other motive. A battle over who can earn Fees managing this money.

1. Fee Based Advisors hate Annuities because they lose their 1%+ annual fee on their client’s assets. The can’t charge a Fee when the Insurance Company Manages the money.

2. Financial Planners same reason as the Fee Based Advisors.

3. this is very interesting case! Radio Financial Gurus… They are the worst breed. They only make money and keep their radio show if they are able to generate ratings. To generate ratings they need a villain. Annuities are an easy target because none of the people in the media who talk or write about annuities make a distinction about which annuity they are discussing. Their are 5 General types: Immediate Income Annuities (SPIA), Deferred Guarantee Rate Annuities (CD-Type), Deferred Declared Rate Annuities (Rates Guaranteed for 1 or 3 or 5 years and declared other years), Index Annuities (EIA’s or FIA’s: Interest is earned each year based on a Stock Market Index i.e. S&P 500 & many others. Never Lose Account Value in a Down Market).

The pevious 4 are all Fixed Annuities. Last but NOT least Variable Annuities… This is the one that gets all the bad press because Annual fees range between 2% to 3% (With the Guarantees added GMIB etc. some are highe than 3%.).

Radio Gurus Lump all Annuities together and just say Annuities. But when you listen to their TRASH comments, they are really describing Variable Annuities. NOW this villian serves a purpose… it helps the people who pay his salary. The Advertisers of his show. 90% of them are direct Mutual Fund Companies, Online Trading firms, etc. etc.

Immediate Income Annuities have a place in everyone’s portfolio to provide retirement income for life.

Deferred Guarantee Rate Annuities (CD-Type) have a place in pre-retiree and in retirement portfolio’s

Index Annuities (EIA’s or FIA’s: Interest is earned each year based on a Stock Market Index i.e. S&P 500 & many others. Never Lose Account Value in a Down Market). Have a place in everyone’s portfolio’s. mStarting at ages 47 all the way through retirement.

Lets Get Real people. Look into Index Annuities, Immediate Income Annuities, CD-type Annuities for yourself. Don’t listen to all their TRASH TALK!

I will agree with them on Variable Annuities. Not worth Starting out each and every year at a negative 2% to 3% Return. Especially if in the 1st 1 or 2 years the MARKETS go down 20% to 40%. OUCH!!!!!! The Guarantees provide an expensive false sence of security.

How about giving us some actual data on one of these EIAs. No one who sells these things will give us even a short list of the ones to consider. We all agree that there are some lousy products. Which ones are the good ones?

And no I don’t sell securities, advice, or insurance, or make any money in the “biz”.

“I would be willing to bet the ones slamming annuities peddle stocks and bonds for a living.”

No, I don’t think so since lots of brokers now hold insurance licenses and can now sell the same stuff that insurance agents sell.

Don’t you find it strange that most people outside of sales don’t think highly of annuities, particularly EIAs? Why do you suppose this is? Are they ALL stupid?

Read the articles I linked to at the end of my post. Surely you can’t argue with them.