New annuity payouts at banks

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BACFA's picture
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Joined: 2006-03-26

Has anyone heard about how banks are requiring variable annuity companies to change their compensation?  I think it's similar to what Raymond James did 2 years ago.

ezmoney's picture
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Joined: 2004-11-30

yeap, and your fu@ked.

EDJ4now's picture
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Joined: 2006-02-08

That would be my signal to move on.  I think that my bank is small enough that this type of change would not be in the works for us, at least currently.  But if it is, that would probably be my signal to exit.  I put up with a certain amount of BS from them, but if they get into my wallet, I'm going to take that personally.
2 points to rebut the responses that will probably follow my post.  1 - Yes, I know they are already in my wallet, I just am not willing to give up any more than I already do.  2 - There is BS to put up with everywhere, even independent.  You don't have a boss, I don't have to pay the light bill or worry that my landlord isn't renewing my lease.  I'm not saying the 2 systems are equal by any stretch, just that there are hassles no matter what track you are in.

whitewlfz's picture
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Joined: 2006-12-23

Yea they capped us at my bank about 2 years ago.. everything pays no more than 4.5 percent.. no worries though .. everything I mark pays me 3 plus a 1 point trail.. so ha! .. but yeah my bank has done that awhile back..

troll's picture
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Joined: 2004-11-29

whitewlfz wrote:Yea they capped us at my bank about 2 years ago.. everything pays no more than 4.5 percent.. no worries though .. everything I mark pays me 3 plus a 1 point trail.. so ha! .. but yeah my bank has done that awhile back..So you're not embarassed to know that you're doing the same work for half the pay?

whitewlfz's picture
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Joined: 2006-12-23

joedabrkr wrote: whitewlfz wrote:Yea they capped us at my bank about 2 years ago.. everything pays no more than 4.5 percent.. no worries though .. everything I mark pays me 3 plus a 1 point trail.. so ha! .. but yeah my bank has done that awhile back..So you're not embarassed to know that you're doing the same work for half the pay?
Look I am not going into the whole we are cooler than you because we are independant arguement ..ok .. infastructure costs money ..period.. I know they did that for that reason and mind you another layer of management ..*lol* ..anyway I am comfortable at the moment ..and if in time I do go Indy ..then I went Indy ..it doesn't though make your model better just different..  

Indyone's picture
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Joined: 2005-05-30

whitewlfz wrote:Yea they capped us at my bank about 2 years ago.. everything pays no more than 4.5 percent.. no worries though .. everything I mark pays me 3 plus a 1 point trail.. so ha! .. but yeah my bank has done that awhile back..
Are you talking L-share...trail in year two?

whitewlfz's picture
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Joined: 2006-12-23

Indyone wrote:
whitewlfz wrote:Yea they capped us at my bank about 2 years ago.. everything pays no more than 4.5 percent.. no worries though .. everything I mark pays me 3 plus a 1 point trail.. so ha! .. but yeah my bank has done that awhile back..
Are you talking L-share...trail in year two?

YUP!! Sure am .. I am up to about $350k in trails now.. well they will flow up to that level over the next year ...

BACFA's picture
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Joined: 2006-03-26

The 4.5% cap has been common on almost all large bank platforms for several years.  The L-share annuity was created by annuity companies to get around that cap.  The new cap I'm referring to is in the range of a 2% upfront pay with .5% trail.  Or they'll let you take the upfront pay at 1% with a 1% trail.  I've spoken to several annuity wholesalers and they have confirmed that Bank of America has asked the VA firms to come up with new products to fit this comp plan.  Expenses will also have to be reduced (thus the lower payout).

Brokermike99's picture
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Joined: 2007-06-12

Nice to know someone is watching out for the consumer

BACFA's picture
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Joined: 2006-03-26

If "watching out for the consumer" means "lower expenses AND lower comp," then shouldn't all of us just be peddling Vanguard for free?

Brokermike99's picture
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Joined: 2007-06-12

Watching out means disclosed fee structures. Any deferred comm. product is inherently difficult for consumers to understand, and more difficult for them to grasp what they're paying you.

BACFA's picture
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Joined: 2006-03-26

I disagree with your statement but even if it were true, you are making a jump with your conclusion.  A deferred annuity (I assume that's what you meant) IS difficult for consumers to understand but that doesn't mean we're not watching out for consumers.  Anyway, please stay on topic.

ezmoney's picture
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Joined: 2004-11-30

A deferred annuity "watches out" for the right consumer better than mutual funds or managed money

vbrainy's picture
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Joined: 2006-07-26

How much do you think you should get paid for annuities?  If you get paid more for writing annuities than mutual funds will you write more annuities?
What fits the client is best, and we get paid just fine.

AllREIT's picture
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Joined: 2006-12-16

BACFA wrote:
If "watching out for the consumer" means "lower expenses AND lower comp," then shouldn't all of us just be peddling Vanguard for free?

No, you should be peddling vanguard, and getting paid for the advice and service you provide.

maybeeeeeeee's picture
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Joined: 2005-02-24

remote-your language is offensive.  this is supposed to be a board for professionals.  I think you are better than this type of post.

NOFX's picture
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Joined: 2006-09-22

The payout  caps will be 3.50%, 2.75% and 2.00% - not sure where the $ amont breaks will be.  C share and 7 year VAs only.  no 3 or 4 year surrender products.  M+E  will be slightly reduced.
I do very little VA business but I hate having a leash.

BACFA's picture
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Joined: 2006-03-26

Thanks, NOFX. I was wondering when someone was going to publish useful information.  I heard that it won't be implemented until Jan. 2008.  Seems unlikely considering how slow state insurance agencies are at approving new products.

ezmoney's picture
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Joined: 2004-11-30

my firends at wachovia say it's a great place to work.

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