Equity Indexed fixed annuities?

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JonesIR's picture
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What do you think about these equity indexed annuities? Are these equity indexed annuities too good to be true?

ezmoney's picture
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what's it matter you can't sell them if you're a jones ir

JonesIR's picture
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Just asking an easy question, EZ. Please don't respond if you are going to answer in that fashion in the future.

Dirk Diggler's picture
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Too good to be true? No. A really good thing for people? Hell yes.
If you have a client who is happy with an average annual return of 6 to 8%, tax deferred, with all of their principal guaranteed, it's great. If you want an alternative to bonds or CD's, it's great.
A lot of money is going into these products because most people are happy with those types of returns. It's so easy to close on these deals because you KNOW the worst case scenario up front.
I like them because I get paid a 10% commission with a 100% payout. That's right bank brokers...If I sell a $100.000 Index Annuity, $10,000 gets directly deposited into my personal checking account.

JonesIR's picture
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thanks for the post, Dirk. Can a client really expect that rate on those annuities? The one I was lookin at the other day had a cap of like 7%. Participation rates of like 75% too...are they all like that?

bankrep1's picture
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Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.
Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 
I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.
 

bankrep1's picture
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No JonesIR you cannot achieve those returns here is why.  Say you get a 5yr. annuity and 1 of the years is negative.  Every other year the market is up 12% and as you said caps are around 7%.  That is an average of 5.6%. 
Also I have never seen an index annuity whose cap rate is guaranteed, typically the insurance company gives you 7% the first year, 6% the second, 5.5% the third the 5% might be the minimum cap. in this scenario your returns are likely to be between 4-5% with very little liquidity.

7yrvet's picture
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DD-
Tell us exactly how you describe the surrender charge. And what about the M&E? Oh did your clients receive 6-8% last year with the S&P earning 3%. I had an 84 year old in my office last week with 200K (out of 450K total) in two different EIA's from Jefferson Pilot, a good/strong insurance company. If we took the money out now he would be penalized 20K after having the damn thing for 7.5 years. He received 65% (I believe its called participation rate) of the index. 1 yr CD's paid much better.
The most disturbing sentence in your statement was the last. "I like them because I get paid 10% commission with a 100% payout." DD...I am no sage wise man, but I have been in this biz since 94. I was reared in the insurance world and got the hell out. These products are not in your client"s best interest. Just yours. And the company.
With an attitude like yours, the rest of us pay dearly. For the record EIA's are coming under tremendous scrutiny by the regulators. If you expect to be in this business for the duration, I would stay away from this investment. Or at the very least, increase your liability coverage.

Dirk Diggler's picture
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bankrep1 wrote:
Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.
MasterDex 10 sucks. You have to annuitize to get your earned interest. In ten years, it's gonna bite a lot of brokers in the ass when clients find out the truth.
You have to go ten years to get between 6-8%. I'm not going to call you an idiot for comparing a 5 year average with a 10 year average.
Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 
I'm not going to call you a retard for thinking that they payout at LPL is 100%. Commissions on outside business, like insurance products, are paid at 100%. I'm surprised your ER hasn't told you about this.
I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.
I'm not going to call you an absolute imbecile for thinking that 22% of $150,000 is higher than 90% of $150,000.
 

Dirk Diggler's picture
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bankrep1 wrote:
No JonesIR you cannot achieve those returns here is why.  Say you get a 5yr. annuity and 1 of the years is negative.  Every other year the market is up 12% and as you said caps are around 7%.  That is an average of 5.6%. 
I don't use an annuity with caps and I don't use 5 year products. Using your analysis, there's TON'S of people who would be happy with 5.6% over 5 years with a guarantee on their principal.
Also I have never seen an index annuity whose cap rate is guaranteed,
Wrong. I'd explain, but based on your current level of misunderstanding and the fact that you can't sell them anyway, it would be futile.
typically the insurance company gives you 7% the first year, 6% the second, 5.5% the third the 5% might be the minimum cap. in this scenario your returns are likely to be between 4-5% with very little liquidity.

7yrvet's picture
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DD-
What about your liquidity?

Dirk Diggler's picture
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7yrvet wrote:
DD-
Tell us exactly how you describe the surrender charge.
Accurately.
And what about the M&E?
There is no M&E. You should know that, smart guy.
Oh did your clients receive 6-8% last year with the S&P earning 3%.
I just got on the bandwagon in June. Interest is credited every year at the end of the contract year, not the calendar year. I'll let you know in June. My VA's earned between 15% and 25%, though.
I had an 84 year old in my office last week with 200K (out of 450K total) in two different EIA's from Jefferson Pilot, a good/strong insurance company. If we took the money out now he would be penalized 20K after having the damn thing for 7.5 years. He received 65% (I believe its called participation rate) of the index. 1 yr CD's paid much better.
Why are you adivising him to get out? Do you want to make some money off of him?
The most disturbing sentence in your statement was the last. "I like them because I get paid 10% commission with a 100% payout." DD...I am no sage wise man, but I have been in this biz since 94. I was reared in the insurance world and got the hell out. These products are not in your client"s best interest. Just yours. And the company.
You know nothing about me or my clients. I am in business to make money. You're right. You are not a wise man. If you were, and you were reared in the insurance world, you would not have asked me a stupid question about M&E charges in an EIA.
With an attitude like yours, the rest of us pay dearly.
Given a choice, I would rather me make money than you. I'm sorry you can't compete with me.
For the record EIA's are coming under tremendous scrutiny by the regulators.
I'm ok with that. My business can withstand any level of scrutiny possible. I use my own disclosure forms, which are much more thorough and comprehensive than any compliance officer has come up with. I think the biggest reason that I close a lot of business is that I'm not afraid to show all of the pimples. People don't want the best of all worlds, they just want to know what they're getting into.
If you expect to be in this business for the duration, I would stay away from this investment. Or at the very least, increase your liability coverage.
Noone has ever lost money in an EIA who stayed the course. Period.

JonesIR's picture
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It is obvious that those that are naysayers at least on this forum are not really knowledgable about how the EIAs work. Sounds like there a lot of junky ones out there though. Dirk, which ones are you familiar with?

Dirk Diggler's picture
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JonesIR wrote:It is obvious that those that are naysayers at least on this forum are not really knowledgable about how the EIAs work. Sounds like there a lot of junky ones out there though. Dirk, which ones are you familiar with?
Send me a pm and I'll tell you.

Dirk Diggler's picture
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7yrvet wrote:
DD-
What about your liquidity?

My liquidity? I'm very liquid. I make more than I spend. How's yours?

babbling looney's picture
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I use my own disclosure forms, which are much more thorough and comprehensive than any compliance officer has come up with.
Holy Crap!!!!!  You make this stuff up as you go along don't you?  At least I hope so.
My VA's earned between 15% and 25%, though
So what? I have mutual funds in my own portfolio that have an annual returns of  25% to 38%.  This is not a valid comparison to an EIA.
Noone has ever lost money in an EIA who stayed the course. Period.
This is true.  It is also true that they gave up the possiblity to earn more outside of the indexed annuity and without the downside capital gains being taxed as ordinary income.  
Disclaimer: I have sold EIAs.....not many.... they can be appropriate in certain circumstances and they are very difficult to explain to the average client.

Dirk Diggler's picture
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babbling looney wrote:
I use my own disclosure forms, which are much more thorough and comprehensive than any compliance officer has come up with.
Holy Crap!!!!!  You make this stuff up as you go along don't you?  At least I hope so. Only when I'm trying to close a deal with a woman, if you know what I mean.
My VA's earned between 15% and 25%, though
So what? I have mutual funds in my own portfolio that have an annual returns of  25% to 38%.  This is not a valid comparison to an EIA.
I think the word "though" makes it clear that I'm not comparing VA's to EIA's. If you weren't a woman, you could follow a line of logic.
Noone has ever lost money in an EIA who stayed the course. Period.
This is true.  It is also true that they gave up the possiblity to earn more outside of the indexed annuity and without the downside capital gains being taxed as ordinary income.  
When your husband bought your car, he gave up the opportunity to make money with your money. When your husband bought the house, he gave up the opportunity to make money in the bond market. I'm sure you have a point, but it is well hidden by your hair.
Any man knows that the money made is interest and not capital gains. Interest income is taxed as interest income. Nothing new there.
Disclaimer: I have sold EIAs.....not many.... they can be appropriate in certain circumstances and they are very difficult to explain to the average client.
You would probably be able to explain them, if you understood them better.

babbling looney's picture
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the money made is interest and not capital gains. Interest income is taxed as interest income. Nothing new there
Right you are in the EIA, interest only, taxed as ordinary income deferred until withdrawn.
When your husband bought your car, he gave up the opportunity to make money with your money. When your husband bought the house, he gave up the opportunity to make money in the bond market. I'm sure you have a point, but it is well hidden by your hair.
You are so cute when you try to be sexist.   The point is that by putting money into an EIA the clients get the feeling that they are participating in the market but are actually foregoing the real opportunity to earn more.  They are doing so with the knowledge that they will not lose any money either.  Nothing wrong with that at all.  We all make trade offs in life. 
The problem arises when the clients don't understand the crediting methods and that sometimes those "bonus" annuities (EIA and VA) require annuitization.   That is how EIAs get a bad rep.  BTW: for 7yr vet.  Not all EIAs are tied to the S&P.  There are DJIA and other indexes used as well as a fixed income bucket for the super conservative scairdy cat customer.
I don't buy cars that lose money.  I consider my vehicles as investments and my cars/trucks appreciate in value so that I make a profit when I sell them, with the exception of my daily driver which I lease. 

bankrep1's picture
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Dirk Diggler wrote:bankrep1 wrote:
No JonesIR you cannot achieve those returns here is why.  Say you get a 5yr. annuity and 1 of the years is negative.  Every other year the market is up 12% and as you said caps are around 7%.  That is an average of 5.6%. 
I don't use an annuity with caps and I don't use 5 year products. Using your analysis, there's TON'S of people who would be happy with 5.6% over 5 years with a guarantee on their principal.
I like how you split my words 5.6% would be great but it is not possible because the insurance company lowers the caps.
Also I have never seen an index annuity whose cap rate is guaranteed,
Wrong. I'd explain, but based on your current level of misunderstanding and the fact that you can't sell them anyway, it would be futile.
Why can't I sell them?  I can sell anything you can Dirk.  I am very familiar with EIA's.  Name one product (the one you use) that has a guaranteed cap and participation rate for the entire surrender period..  (I know this question will be repsonded to with....YOu would understand give your a CFP/banker etc.) rookie
typically the insurance company gives you 7% the first year, 6% the second, 5.5% the third the 5% might be the minimum cap. in this scenario your returns are likely to be between 4-5% with very little liquidity.
No insurance company would ever do this....

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Dirk Diggler wrote:bankrep1 wrote:
Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.
MasterDex 10 sucks. You have to annuitize to get your earned interest. In ten years, it's gonna bite a lot of brokers in the ass when clients find out the truth.
You have to go ten years to get between 6-8%. I'm not going to call you an idiot for comparing a 5 year average with a 10 year average.
This was the highest return I saw in any EIA I did due diligence on.  The only reason it was 6.38% is because in 1994 or 1995 the S&P rose 2% or more each month for all 12 months.  This hasn't happened any other time in last 20 years so it's unlikely to happen again.  It's an anomoly.
Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 
I'm not going to call you a retard for thinking that they payout at LPL is 100%. Commissions on outside business, like insurance products, are paid at 100%. I'm surprised your ER hasn't told you about this. 
I know how it works 80/90/100 deoending on what you sell.  They have an ad on every other page of every magazine I get. 
I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.
I'm not going to call you an absolute imbecile for thinking that 22% of $150,000 is higher than 90% of $150,000.
Tell me how many independents are doing 150,000 a month there 2nd year in production?
 

Dirk Diggler's picture
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bankrep1 wrote:Dirk Diggler wrote:bankrep1 wrote:
Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.
MasterDex 10 sucks. You have to annuitize to get your earned interest. In ten years, it's gonna bite a lot of brokers in the ass when clients find out the truth.
You have to go ten years to get between 6-8%. I'm not going to call you an idiot for comparing a 5 year average with a 10 year average.
This was the highest return I saw in any EIA I did due diligence on.  The only reason it was 6.38% is because in 1994 or 1995 the S&P rose 2% or more each month for all 12 months.  This hasn't happened any other time in last 20 years so it's unlikely to happen again.  It's an anomoly.
Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 
I'm not going to call you a retard for thinking that they payout at LPL is 100%. Commissions on outside business, like insurance products, are paid at 100%. I'm surprised your ER hasn't told you about this. 
I know how it works 80/90/100 deoending on what you sell.  They have an ad on every other page of every magazine I get. 
I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.
I'm not going to call you an absolute imbecile for thinking that 22% of $150,000 is higher than 90% of $150,000.
Tell me how many independents are doing 150,000 a month there 2nd year in production?
 

I'm not aware of any that are doing $1.8mm/year, after two years. I don't believe your friend is, either.

bankrep1's picture
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He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 
 

Dirk Diggler's picture
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babbling looney wrote:
the money made is interest and not capital gains. Interest income is taxed as interest income. Nothing new there
Right you are in the EIA, interest only, taxed as ordinary income deferred until withdrawn.
When your husband bought your car, he gave up the opportunity to make money with your money. When your husband bought the house, he gave up the opportunity to make money in the bond market. I'm sure you have a point, but it is well hidden by your hair.
You are so cute when you try to be sexist.   The point is that by putting money into an EIA the clients get the feeling that they are participating in the market but are actually foregoing the real opportunity to earn more.  They are doing so with the knowledge that they will not lose any money either.  Nothing wrong with that at all.  We all make trade offs in life.
Just because YOUR clients feel that way, doesn't mean MY clients feel that way. How are you sending them this message? I suggest you stop doing that.  
The problem arises when the clients don't understand the crediting methods and that sometimes those "bonus" annuities (EIA and VA) require annuitization.   That is how EIAs get a bad rep.  BTW: for 7yr vet.  Not all EIAs are tied to the S&P.  There are DJIA and other indexes used as well as a fixed income bucket for the super conservative scairdy cat customer.
I don't understand how airplanes work and I don't need to know to realize the benefit of travelling in them. Lift and thrust or something like that, I hear.
I don't buy cars that lose money.  I consider my vehicles as investments and my cars/trucks appreciate in value so that I make a profit when I sell them, with the exception of my daily driver which I lease. 
How nice for you. 

Dirk Diggler's picture
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bankrep1 wrote:
He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 
 

Any team of 15 people should be doing WAY more than that.  Your friends are averaging $120,000/year gross. With a 22% payout, they make an average pre-tax income of $26,400. Since the range you gave me has a low end of $840,000/year gross, these people are in serious trouble. I'm being generous by using the high end in my analysis.
Seriously...do you think things through before you try to stump me? You are presenting yourself as a very stupid bank worker.

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Dirk Diggler wrote:bankrep1 wrote:
He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 
 

Any team of 15 people should be doing WAY more than that.  Your friends are averaging $120,000/year gross. With a 22% payout, they make an average pre-tax income of $26,400. Since the range you gave me has a low end of $840,000/year gross, these people are in serious trouble. I'm being generous by using the high end in my analysis.
Seriously...do you think things through before you try to stump me? You are presenting yourself as a very stupid bank worker.

You don't get it.  He has 15 bankers/reps that work on his team.  He is kinda in charge but also sees higher end clients.  The bankers are paid a salary plus a very small commission, the reps are paid a salary plus commission.  He is paid 22% of the team production.  I have the opportunity to go there, but I am happy building my biz in my institution  I'm a lone wolf, I like it that way. 

Dirk Diggler's picture
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bankrep1 wrote:Dirk Diggler wrote:bankrep1 wrote:
He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 
 

Any team of 15 people should be doing WAY more than that.  Your friends are averaging $120,000/year gross. With a 22% payout, they make an average pre-tax income of $26,400. Since the range you gave me has a low end of $840,000/year gross, these people are in serious trouble. I'm being generous by using the high end in my analysis.
Seriously...do you think things through before you try to stump me? You are presenting yourself as a very stupid bank worker.

You don't get it.  He has 15 bankers/reps that work on his team.  He is kinda in charge but also sees higher end clients.  The bankers are paid a salary plus a very small commission, the reps are paid a salary plus commission.  He is paid 22% of the team production.  I have the opportunity to go there, but I am happy building my biz in my institution  I'm a lone wolf, I like it that way. 

I'm not gonna say that you are full of crap, because I'm too nice.

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Read Bank investment consultant magazine.  There are tons of examples of people like this.
 

Dirk Diggler's picture
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bankrep1 wrote:
Read Bank investment consultant magazine.  There are tons of examples of people like this.
 

I'll get right on it.

doberman's picture
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You may want to refer to my earlier post on EIA's:
http://forums.registeredrep.com/forum_posts.asp?TID=1659&amp ;KW=eia

Dirk Diggler's picture
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doberman wrote:
You may want to refer to my earlier post on EIA's:
http://forums.registeredrep.com/forum_posts.asp?TID=1659&amp ; ;KW=eia

What's your point? EIA's don't do as well as the S&P? Neither do CD's or bonds. So what? Did you know that CD's do better than money market rates? Did you know that small caps do better than large caps? Did you know that apples do better than oranges? I could go on and on comparing things to irrelevant things, but there's no point in it. Now, if you're assuming that EVERYBODY'S objective is to perform EXACTLY in line with the S&P, with no prinicpal protection, then you've got a very valid point.
Even though you qualify, I refuse to call you an idiot.

7yrvet's picture
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DD-
Your ignorance to the possibility of problems with EIA shows your time in the business. The statement you have only been selling EIA's since June tells the rest of us your tenure.
Even if there are no M&E charges (I still need to look into that one) are you slamming 75+ in this product with horrendous surrender charges. If you are making 10% what time frame does the client have to keep it in without penalty.
Does your disclosure say to the client, "IF YOU NEED THE MONEY FOR ANY REASON, EXPECT TO RECEIVE LESS, MUCH LESS BEFORE THE SURRENDER CHARGE IS ELIMINATED. I wonder if that is one reason why I see more and more clients suggesting to me that they need to take a reverse mortgage or tap other assets because the annuity that their financial salesperson (who by the way is long gone from the business or won't return a phone call) sold them can't help them support themselves for care in the home,etc.
DD. Have you noticed the difference in font size in this response? Because I am willing to bet the farm your disclosure is half the font size. Most folks don't read them and older folks can't see the small print. Hell I am in my late 40's and I can't see it sometimes.
One last thought. If you are a real financial planner, you would understand the meaning of lost opportunity cost. What is the cost for not receiving the full index rate over their lifetime. I know it doesn't matter because chances are you will be one of those brokers who moves from firm to firm or b/d to b/d finding ways to maximize your return. After all you don't need clients, just prospects who buy once.

Dirk Diggler's picture
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7yrvet wrote:
DD-
Your ignorance to the possibility of problems with EIA shows your time in the business. The statement you have only been selling EIA's since June tells the rest of us your tenure.
Even if there are no M&E charges (I still need to look into that one) are you slamming 75+ in this product with horrendous surrender charges. If you are making 10% what time frame does the client have to keep it in without penalty.
Does your disclosure say to the client, "IF YOU NEED THE MONEY FOR ANY REASON, EXPECT TO RECEIVE LESS, MUCH LESS BEFORE THE SURRENDER CHARGE IS ELIMINATED. I wonder if that is one reason why I see more and more clients suggesting to me that they need to take a reverse mortgage or tap other assets because the annuity that their financial salesperson (who by the way is long gone from the business or won't return a phone call) sold them can't help them support themselves for care in the home,etc.
DD. Have you noticed the difference in font size in this response? Because I am willing to bet the farm your disclosure is half the font size. Most folks don't read them and older folks can't see the small print. Hell I am in my late 40's and I can't see it sometimes.
One last thought. If you are a real financial planner, you would understand the meaning of lost opportunity cost. What is the cost for not receiving the full index rate over their lifetime. I know it doesn't matter because chances are you will be one of those brokers who moves from firm to firm or b/d to b/d finding ways to maximize your return. After all you don't need clients, just prospects who buy once.

Wow! You're an angry man. Doesn't it scare you that you can have such an emotional reaction to a bunch of words on your computer monitor?

7yrvet's picture
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The only thing that angers me is when naive new brokers think they have real knowledge. You, and many others like you, make it incredibly difficult for the rest of us.
I have said this before, we all are in this together. When one does something that makes the headlines it affects us all. We are in the business of trust. Perhaps you ought to rethink your strategy. It just might save your career.
Independents have so much freedom, I am not one, but I wonder how your compliance department at your b/d would feel about having your own disclosure form. Did you happen to get it approved before you started sell EIA's?
Good luck, bad habits are extremely difficult to break when you see $$$. There is a sucker born all the time. Funny thing is that you might feel that it is your paying customers who ultimately will pay the price. I would suggest you look in the mirror very closely. I am not angry, just concerned for our industry. Hope that clarifies.

Dirk Diggler's picture
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7yrvet wrote:
The only thing that angers me is when naive new brokers think they have real knowledge. You, and many others like you, make it incredibly difficult for the rest of us.
You've got me confused with someone who wants to make things easier for you. Too bad you can't compete with me.
By the way...I've been in the business since 1999, which makes me a 7yrvet.
I have said this before, we all are in this together. When one does something that makes the headlines it affects us all. We are in the business of trust. Perhaps you ought to rethink your strategy. It just might save your career.
First, we are not in this together. I'm in business for me, my family, and my clients. You don't fit into the equation. I try to take clients away from othere brokers. Do you think  I should be sitting around singing KumBayah with you? Second, my strategy is making me a lot of dough. Why would I rethink it? Finally, if people didn't trust me, I would be out of business.
 
Independents have so much freedom, I am not one, but I wonder how your compliance department at your b/d would feel about having your own disclosure form. Did you happen to get it approved before you started sell EIA's?
My disclosure form is an addition to the firm's disclosure form. Compliance loves it. Thanks for asking.
Good luck, bad habits are extremely difficult to break when you see $$$. There is a sucker born all the time. Funny thing is that you might feel that it is your paying customers who ultimately will pay the price. I would suggest you look in the mirror very closely. I am not angry, just concerned for our industry. Hope that clarifies.
I know what you mean. I've been reading the obituaries and crossing the names out of the phone book for 20 years. As much as I want to stop, I can't seem to quit for more than 2 or 3 days.

JonesIR's picture
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Joined: 2005-12-31

That was an interesting article that doberman posted on page three. There doesn't seem to be anything wrong with them...but I bet there are many people that sell them purely for the high pay out.   Thank you all for the dialogue...Dirk thanks for offering your thoughts too.

7yrvet's picture
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DD-
There are no words for you but greed. You are the type of advisor that all of us (excluding you) should continue to try and weed out. No wonder you are selling high commission products.
Your own words are so prophetic;
First, we are not in this together. I'm in business for me, my family, and my clients.
 

Dirk Diggler's picture
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Joined: 2005-12-30

7yrvet wrote:
DD-
There are no words for you but greed. You are the type of advisor that all of us (excluding you) should continue to try and weed out. No wonder you are selling high commission products.
Your own words are so prophetic;
First, we are not in this together. I'm in business for me, my family, and my clients.
 

Son, just how are you going to weed me out? You can't even compete with me. You're jealous because your firm haircuts the crap out of high commission products, so you can't enjoy them like I do.

doberman's picture
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Joined: 2005-02-22

Personally, I believe Dirk is a phony. Either he's not in the business, at all, or he's simply studying for the 7. Because he has nothing to offer me, in the way of intelligent discussion or debate (besides lacing his replies with the word "retarded"), I will no longer give him any response.
However, if he really is a broker, his tenure in this business will be shortlived and will, no doubt, end very, very badly for him. Of course, that's after it will have ended very, very badly for his clients.

bankrep1's picture
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I'd have to agree, wait for it......
I think Dirk is a rookie, 6 months in and is someones phone bitck.  He has trouble getting along with others so he comes on here pretending to be a big shot arrogant prick when in all reality he is a lil' girl.  Suckin' up to daddy or Uncle Ray in hopes one day they will pass along the book so Dirk can provide for his boyfriend, I mean wife.  His screen name is probably who he fantasizes to be or be with...

Dirk Diggler's picture
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doberman wrote:
Personally, I believe Dirk is a phony. Either he's not in the business, at all, or he's simply studying for the 7. Because he has nothing to offer me, in the way of intelligent discussion or debate (besides lacing his replies with the word "retarded"), I will no longer give him any response.
However, if he really is a broker, his tenure in this business will be shortlived and will, no doubt, end very, very badly for him. Of course, that's after it will have ended very, very badly for his clients.

Thanks for the attention. I would probably say the same thing if I had brought a knife to a gunfight, like you did.

Dirk Diggler's picture
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bankrep1 wrote:
I'd have to agree, wait for it......
I think Dirk is a rookie, 6 months in and is someones phone bitck.  He has trouble getting along with others so he comes on here pretending to be a big shot arrogant prick when in all reality he is a lil' girl.  Suckin' up to daddy or Uncle Ray in hopes one day they will pass along the book so Dirk can provide for his boyfriend, I mean wife.  His screen name is probably who he fantasizes to be or be with...

If I were told what to sell and were on a 30% payout at a bank, I'd say the same thing. Of course, I could get upset about what you're saying about me or I can smile at the 1099's that have been arriving in my mailbox. Actually, I'm frowning because now I have to pay taxes.
P.S. A 1099 is something you get when you work for yourself. You wouldn't understand.

troll's picture
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bankrep1 wrote:
I'd have to agree, wait for it......
I think Dirk is a rookie, 6 months in and is someones phone bitck.  He has trouble getting along with others so he comes on here pretending to be a big shot arrogant prick when in all reality he is a lil' girl.  Suckin' up to daddy or Uncle Ray in hopes one day they will pass along the book so Dirk can provide for his boyfriend, I mean wife.  His screen name is probably who he fantasizes to be or be with...

DD may come across as arrogant, and you don't have to like him, but I can vouch for the fact that he has been in the business for way longer than you think, and from what I can tell(without seeing his bank deposits or 1099's) he's making some major bank.
You may find his views to be controversial, but he really believes in what he is doing and his passion comes through.....so that is what you see.
Belive me or not.  "nuf said.
 
Joe

iconsult100's picture
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Joined: 2005-09-07

I think if you sell an Index Linked Annuity, your license should be revoked.  The 2% per month cap is never clearly explained to clients and it a good market, you cripple them.  If you owned these over the past 3 years, you're returns where mediocre compared to the S&P 500 because the big runs game in spurts.
If you want principal protection and 6-7% upside, look at a real annuity like AXA or ING.  The Index linked annuities are all about YTB. (yield to broker). 

youcanhatemenow's picture
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Dirk I've got to hammer you on this one, Indexed Annuities are a joke.
   1.  no one mentioned dividends, what happens to the 2% a year yield on the s&P?  That's right, the insurance company.
   2.  the litmus test is if you would buy one at age 60 yourself, if the answer is no, then don't sell them.
   3.  Annuities now are ticking tax time bombs.  With the lowered long-term capital gains and dividend rates, how can you justify selling this garbage, especially if the plan is handing the money down?
   4.  Participation rates capped, average annual returns comparable to burying your money, huge surrender penalties, these are jokes.
   5.  Here's a better option, better for the client.  Buy a ten year government agency note or insured muni with 60% of the money (that way it guarantees the full return of principal in 10 years) and put the other 40% of the principal in SPY ETF with dividend reinvestment.

Dirk Diggler's picture
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youcanhatemenow wrote:
Dirk I've got to hammer you on this one, Indexed Annuities are a joke.
   1.  no one mentioned dividends, what happens to the 2% a year yield on the s&P?  That's right, the insurance company.
Wrong. Options are used to generate the growth. Options don't get dividends, therefore the bank doesn't get them. Nice try.
Also, people who don't want their money to be in the market like EIA's. Their money is NOT exposed to market risk. If you're not gonna take the risk, you shouldn't be entitled to dividends.
   2.  the litmus test is if you would buy one at age 60 yourself, if the answer is no, then don't sell them.
I don't know what my situation will be at 60. I am faiirly risk averse and I can see myself owning EIA's at sixty. I own one now and I'm happy with it.
   3.  Annuities now are ticking tax time bombs.  With the lowered long-term capital gains and dividend rates, how can you justify selling this garbage, especially if the plan is handing the money down?
Annuities earn interest, not cap gains. Interest is taxed at the ordinary rate, not CG rates. Why is that so shocking to you?
   4.  Participation rates capped, average annual returns comparable to burying your money, huge surrender penalties, these are jokes.
You can't have the best of all worlds, can you?
   5.  Here's a better option, better for the client.  Buy a ten year government agency note or insured muni with 60% of the money (that way it guarantees the full return of principal in 10 years) and put the other 40% of the principal in SPY ETF with dividend reinvestment.
How is paying taxes every year, so that the tax payments have no chance of compounding on a tax deferred basis, better than making more money in an EIA?

You've really demonstrated that you don't know too much about EIA's. Here's a good idea for you...go learn about them, see how they can be a good fit for a lot of people, quit assuming that you have to make people a LOT of money to  make people happy, and quit fighting the fact that a LOT of money is going into these products.

7yrvet's picture
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Joined: 2005-02-08

DD-
Try used cars. Really, you can put yourself first without an ethical moment to consider. Don't forget the patent leather shoes. Always attracts a higher commission.
Whenever a product becomes THE MOST IMPORTANT THING in your bag of tricks, you are doomed. Mr. Diggles will go down and out of the business as soon as his U4 or reputation reflects. My guess and already others on this forum would say sooner than later.

Dirk Diggler's picture
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Joined: 2005-12-30

7yrvet wrote:
DD-
Try used cars. Really, you can put yourself first without an ethical moment to consider. Don't forget the patent leather shoes. Always attracts a higher commission.
Whenever a product becomes THE MOST IMPORTANT THING in your bag of tricks, you are doomed. Mr. Diggles will go down and out of the business as soon as his U4 or reputation reflects. My guess and already others on this forum would say sooner than later.

I happen to love what I do. I'll be the first to admit that it's not for everyone. Why would I want the headaches associated with unhappy clients? I make too much money for that crap. That's why I only take clients who are right for me and my business and refer the rest to a few friends in the office. Of course, they split commissions with me and refer annuity clients to me.
 

BankFC's picture
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Joined: 2005-05-27

Joe,

What makes you so sure about Dirk?  He seems like a complete fraud.

Dirk Diggler's picture
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BankFC wrote:Joe,What makes you so sure about Dirk?  He seems like a complete fraud.
 
Why would you say that? I don't think YOU'RE a fraud. I believe that you ARE a bank broker with a low payout and a limited menu of things that you can sell.

BankFC's picture
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Joined: 2005-05-27

Poor little Dirk,

I can sell anything you CAN...and more than you DO.  I don't limit
myself to EIA's.  I am an advisor, not just a hack salesman like
you.

Dirk Diggler's picture
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Joined: 2005-12-30

BankFC wrote:Poor little Dirk,I can sell anything you CAN...and more than you DO.  I don't limit myself to EIA's.  I am an advisor, not just a hack salesman like you.
Don't tell my bank about it. They think that those direct deposits are real.

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