[quote=Blitzburgh][quote=rankstocks]

Blitzburgh,

    Don't feel bad about thinking the GMIB was a guaranteed rate of return on principal.  I have talked to dozens of people that were sold these riders on their annuities, and 90% of them didn't realize that this was only a "hypothetical" compounding of your principal for annuitization purposes.  Second, 100% of people that were sold this feature didn't realize the annuitization tables they use on the GMIB are far worse than if you were to annuitize on an actual cash lump sum basis.  Unfortunately, you were sold snake oil, in my opinion.     Here's a couple questions I would ask your "trusted" advisor:     1.  What was your compensation for selling me this annuity? (6-7%)     2.  What is my TOTAL cost of owning this annuity? (1.4% M&E, approximately 0.6% rider cost, 1% internal fund expense, for a total of 3%+ annual cost)     3.  Why would I buy this annuity considering it has so few investment choices?     4.  Why did you put me in a product that has a 7 year surrender period when I could have had liquidity in almost every other type of investment?     5.  Why did you put my money in an investment primarily designed for tax deferral when my IRA is already tax deferred?     You can look at two other current threads that tackle this exact topic if you are looking for more questions to ask your advisor.  See if you had any commonality with any of the information given on those two threads.  I hope this helps.[/quote]   This was exactly the kind of reply I was seeking...thank you much sir.  I am not an expert in this field which is why I posted my request for information.  With respect to dealing with just one FA, sorry...I think most financial matters are like a medical "practice".  No one's perfect or has the crystal ball which makes the need for second opinions very important.   Thank you for yours Rankstocks![/quote]   I hope you realize you just received a completely biased point of view from a person that won't even consider a variable annuity for his clients.   It's essentially as fair as the network news stations and the New York Times.   Nobody on here knows your personal circumstances.  Your FA does.  If you want a second opinion, would you go to WebMD?  Why would you go to an online forum?  You don't even know who you are talking to.  Tell me you are smarter than that.  Go see someone in your city if you want a second opinion.  A little bit of knowledge can do a lot of harm.  You may well be on your way to harming yourself.

Blitzburgh, you have just been played.  Rankstocks just hit on every emotional hint you put in your original post and regurgitated (sp?) them back to you in the form of questions designed to sway you to his point of view (which may or may not be right for your situation).  Bottom line, do not take financial advice from an anonymous poster on a message board.  Go and talk to the advisor you trust.  I’m not a big fan of annuities, but what rankstocks posted did you a disservice so let me show you how easy this is.

  1.  6% with 1/4% each year after the first.  This is far less than the 1-1.5% each year forever that a fee based broker like Rankstocks charges.  Over time as your account grows, so does the annual fee paid and that will make a huge difference in your account over time.  BTW, the M&E charges reduce in your annuity in the 8th year, your fees actually go down.   2.  Are you concerned about what it costs, or what you keep?  You told me you were concerned about losing your money as you lost a tremendous amount during the last bear market.  This annuity gaurantees you an income that you CANNOT outlive, think about that.  Rankstocks is feeding you questions designed to play on your emotions which is easy to do with the market what it is.  But he cannot tell you that his method will give you income for the rest of your life gauranteed, plus your income is rising at 6% per year until you start taking withdrawls.  Do you want lower costs (which is debatable) or to sleep at night knowing you will not be a Walmart greeter at 80?   3.  How many investment choices do you feel you need?  This annuity has 68 and this is more than enough selection to allow me to give you the proper allocation needed to achieve your long term goals.   4.  First these are retirement funds so you do not have liquidity without IRS penalty until you are 59 1/2.  When we looked at this annuity last year, you stated the need for income and security.  This annuity provides it.  Rankstocks is implying that investing with him he would be getting you out of the market.  This would be a mistake.  We did not know it at the time, but the market was high in early 2007.  It is now low.  Buying high we cannot control, but selling low we can.  This is exactly the opposite of what we want to do.  If you feel you would like to be more conservative, the annuity does offer 68 choices and we can adjust your investment.   5.  IRA money or not, you asked for income you could not outlive and security.  Bringing up tax deferal is adding a concern that you don't have nor should you, but he wants your business and is working very hard to get it.   Full disclosure, I have no bloody idea if your FA did the right thing for you, I just wanted to show you how easy it is to make both sides to the argument.  Again, go talk to your FA.

[quote=Primo]Blitzburgh, you have just been played.  Rankstocks just hit on every emotional hint you put in your original post and regurgitated (sp?) them back to you in the form of questions designed to sway you to his point of view (which may or may not be right for your situation).  Bottom line, do not take financial advice from an anonymous poster on a message board.  Go and talk to the advisor you trust.  I’m not a big fan of annuities, but what rankstocks posted did you a disservice so let me show you how easy this is.

  1.  6% with 1/4% each year after the first.  This is far less than the 1-1.5% each year forever that a fee based broker like Rankstocks charges.  Over time as your account grows, so does the annual fee paid and that will make a huge difference in your account over time.  BTW, the M&E charges reduce in your annuity in the 8th year, your fees actually go down.   2.  Are you concerned about what it costs, or what you keep?  You told me you were concerned about losing your money as you lost a tremendous amount during the last bear market.  This annuity gaurantees you an income that you CANNOT outlive, think about that.  Rankstocks is feeding you questions designed to play on your emotions which is easy to do with the market what it is.  But he cannot tell you that his method will give you income for the rest of your life gauranteed, plus your income is rising at 6% per year until you start taking withdrawls.  Do you want lower costs (which is debatable) or to sleep at night knowing you will not be a Walmart greeter at 80?   3.  How many investment choices do you feel you need?  This annuity has 68 and this is more than enough selection to allow me to give you the proper allocation needed to achieve your long term goals.   4.  First these are retirement funds so you do not have liquidity without IRS penalty until you are 59 1/2.  When we looked at this annuity last year, you stated the need for income and security.  This annuity provides it.  Rankstocks is implying that investing with him he would be getting you out of the market.  This would be a mistake.  We did not know it at the time, but the market was high in early 2007.  It is now low.  Buying high we cannot control, but selling low we can.  This is exactly the opposite of what we want to do.  If you feel you would like to be more conservative, the annuity does offer 68 choices and we can adjust your investment.   5.  IRA money or not, you asked for income you could not outlive and security.  Bringing up tax deferal is adding a concern that you don't have nor should you, but he wants your business and is working very hard to get it.   Full disclosure, I have no bloody idea if your FA did the right thing for you, I just wanted to show you how easy it is to make both sides to the argument.  Again, go talk to your FA.[/quote]

That was primo.

What's funny is that I've done over 2 million in VA's business the last 12 months, keep in mind that's about 10% of my new business.  I just don't find them appropriate very often.

Blitz,  I have found that as I have pointed out weaknesses in VA's (if you look at my previous posts, you will see 20 reasons why I generally don't do much VA business) those that make a significant living on the product in question have difficulty digesting the truth.  Most of the participants on this thread wouldn't even know the difference between a GMWB and a GMIB, even though the difference is HUGE.  And there lies the problem.  Because of all the moving parts, most advisors, including those that have been around a while don't truly understand what their selling.  If they did, they wouldn't be pushing VA's that often.   Case and Point:  you have what is known as a GMIB (guaranteed minimum income benefit) that will return you a hypotherical 6% annually on your original principal as long as you don't touch it.  The problem is that to capture that hypotherical return, you will be forced to annuitize the contract.  What your advisor didn't tell you is that only around 3% of annuity contracts get annuitized, and the one you have uses a significantly worse annuitization schedule than if you came to that same insurance company with a lump sum of cash.  This little known fact (and most annuity saleman don't even know this) is DISHONEST.   As I have mentioned before, annuities have their place...although rarely.   You will see a lot of venom directed my way for stating truths about the subject, but put me up against anyone selling an annuity (and this has happened a lot over the years) and I will always come out on top.

[quote=rankstocks]

What's funny is that I've done over 2 million in VA's business the last 12 months, keep in mind that's about 10% of my new business.  I just don't find them appropriate very often.

Blitz,  I have found that as I have pointed out weaknesses in VA's (if you look at my previous posts, you will see 20 reasons why I generally don't do much VA business) those that make a significant living on the product in question have difficulty digesting the truth.  Most of the participants on this thread wouldn't even know the difference between a GMWB and a GMIB, even though the difference is HUGE.  And there lies the problem.  Because of all the moving parts, most advisors, including those that have been around a while don't truly understand what their selling.  If they did, they wouldn't be pushing VA's that often.   Case and Point:  you have what is known as a GMIB (guaranteed minimum income benefit) that will return you a hypotherical 6% annually on your original principal as long as you don't touch it.  The problem is that to capture that hypotherical return, you will be forced to annuitize the contract.  What your advisor didn't tell you is that only around 3% of annuity contracts get annuitized, and the one you have uses a significantly worse annuitization schedule than if you came to that same insurance company with a lump sum of cash.  This little known fact (and most annuity saleman don't even know this) is DISHONEST.   As I have mentioned before, annuities have their place...although rarely.   You will see a lot of venom directed my way for stating truths about the subject, but put me up against anyone selling an annuity (and this has happened a lot over the years) and I will always come out on top.[/quote]   With the advent of GMWB, GMIB isn't used as often.  None of us can do anything about the incompetancy of individuals who don't know what they are talking about.   I sold an annuity last month for $380k to someone whose mother ran out of money.  I don't think you would have come out on top of that situation.  You shouldn't use blanket statements as truths, especially when you can't prove it.    

[quote=rankstocks]

What’s funny is that I’ve done over 2 million in VA’s business the last 12 months, keep in mind that’s about 10% of my new business.  I just don’t find them appropriate very often.

Blitz,  I have found that as I have pointed out weaknesses in VA's (if you look at my previous posts, you will see 20 reasons why I generally don't do much VA business) those that make a significant living on the product in question have difficulty digesting the truth.  Most of the participants on this thread wouldn't even know the difference between a GMWB and a GMIB, even though the difference is HUGE.  And there lies the problem.  Because of all the moving parts, most advisors, including those that have been around a while don't truly understand what their selling.  If they did, they wouldn't be pushing VA's that often.   Case and Point:  you have what is known as a GMIB (guaranteed minimum income benefit) that will return you a hypotherical 6% annually on your original principal as long as you don't touch it.  The problem is that to capture that hypotherical return, you will be forced to annuitize the contract.  What your advisor didn't tell you is that only around 3% of annuity contracts get annuitized, and the one you have uses a significantly worse annuitization schedule than if you came to that same insurance company with a lump sum of cash.  This little known fact (and most annuity saleman don't even know this) is DISHONEST.   As I have mentioned before, annuities have their place...although rarely.   You will see a lot of venom directed my way for stating truths about the subject, but put me up against anyone selling an annuity (and this has happened a lot over the years) and I will always come out on top.[/quote]

$20,000,000? Let me be the first to congratulate you for opening 1500 new accounts over the last 12 months.

rankstocks:

As I have mentioned before, annuities have their place…although rarely.   You will see a lot of venom directed my way for stating truths about the subject, but put me up against anyone selling an annuity (and this has happened a lot over the years) and I will always come out on top.

  Truths?  Hardly.  Your analysis is full of bias and half-truths, while ignoring the obvious benefits of ownership.  Case in point is the ancient argument against putting VAs in IRAs because IRAs are already tax-deferred.  Please tell me how much VA owners pay for the VA tax deferral feature.  The point is, it's irrelevant.  Tax-deferral never enters the conversation in IRA rollover proposals and clients are not charged for the tax-deferral benefit.  Far and away, the number one reason clients use VAs inside of IRAs in my practice is because they want a guaranteed payment stream for life.  If the markets perform as expected, this monthly guaranteed income can go up, but short of guarantor failure, that monthly payment cannot go down.  This essentially creates a private pension and I often use the VA in conjuntion with a seperate IRA account that can be drawn upon as needed.   Lest you think I'm just another annuity slinger, Annuities make up 16% of my book right now, although I expect them to level out a bit higher than that as my book matures.  The venom you perceive is mostly due to the lack of a fair and balanced analysis of VA's and the snide remarks you make at your peers who choose to use them more often than you deem appropriate.  The questions you gave the original poster were designed to attack and put the advisor on the defensive.  If he has reasonable skills and experience, he should be able to handle your questions without too much difficulty.  At the same time, I doubt you'd appreciate some anonymous advisor who knows very little about your client, giving your clients garbage ammunition that ends up wasting your time and impairing the trust relationship you've worked hard to forge.  Karma will lead some of your clients to this forum where we can teach them about selling call dates on long bonds and other favorite Jones advisor strategies.   ...and while I'm appreciate your confidence in your abilities, a good competitor in your market will adapt to your pitch and find ways to beat it.  I've got a Jones guy in my market that in my estimation, is even higher in the food chain than you and I've beaten him on proposals several times recently.  I don't always win, but over the years as I've become familiar with his pitch and developed effective counterarguments, I've won my share while proposing VAs as all or part of the solution.  It sounds like you have weak competitors in your market.  For the sake of your clients and prospects, I hope that changes to the point that you have to sharpen your skills and your pitch.

AXA GMIB is good for clients who need to take income now, but if you have a 55 year old who will wait to 65 to take income, i think Prudential is hard to beat.

  They now have a Highest daily value lifetime seven.  The product has two guarantees.  First, you are guaranteed to have doudled the initital principal amount to take tiered income form.  Second gaurantee is that if you have any less than you started with 10 years out, they will make you whole again.  So, if you put 200k in, you know that you will have 20k worth of annual income at 65 or they will return your principal if it is less than your initial investment at 65.  The 7% rollup is of the highest day that your contract every reaches.   Also, this thing has some great investment choices in it.  Traditional, tactical, quantitative, and academic asset allocations with funds and ind equities.  Great UITs from first trust.  Founding funds.  T Rowe Price.  And now they have came out with an academic model that will be run by wharton business school.  They will be able to earn currencies, commodities, and take short positions.  VA people should look into this.    

[quote=the word]AXA GMIB is good for clients who need to take income now, but if you have a 55 year old who will wait to 65 to take income, i think Prudential is hard to beat.

  They now have a Highest daily value lifetime seven.  The product has two guarantees.  First, you are guaranteed to have doudled the initital principal amount to take tiered income form.  Second gaurantee is that if you have any less than you started with 10 years out, they will make you whole again.  So, if you put 200k in, you know that you will have 20k worth of annual income at 65 or they will return your principal if it is less than your initial investment at 65.  The 7% rollup is of the highest day that your contract every reaches.   Also, this thing has some great investment choices in it.  Traditional, tactical, quantitative, and academic asset allocations with funds and ind equities.  Great UITs from first trust.  Founding funds.  T Rowe Price.  And now they have came out with an academic model that will be run by wharton business school.  They will be able to earn currencies, commodities, and take short positions.  VA people should look into this.    [/quote]

Is Prudential the legacy American Skandia product? How much is the all upfront commission?

Yes, Prudential bought American SKandia.  I use the 8 year product b/c the M&E is lower 1.25 compared to 1.65 on the four year product.  And after year 8 the M&E goes to .65.  It pays 7% up front.  The 4 year pays 5.5%.

  1.25 M&E seems about standard for the industry.