[quote=VA Salesman]

[quote=Primo]

I have no idea how much or little you disclose Tom.  Being that we live in different parts of the country, we most likely will never see the same prospect.  IF (and that is a big if) you pitch annuities like you post here, you are the poster child for the scorn given to annuities.  I base my opinions of annuities on what I see in my market.  EIA’s are pitched as no downside equity products instead of fixed annuities with a different crediting method.  I would be willing to bet EIA sales will drop tremendously when they are regulated as equity products (if it happens).  I’m not a big fan of regulation, but I would welcome this particular piece.

I only take about 80% of prospects, I don’t take prospects that I can’t help.  So that is not a lie.  If a prospect has reasonable expectations, the assets to accomplish their goals, and choose the gaurantee, then I sell them a VA.   Neither statement was a lie.  What lies do you tell?

[quote=Primo]I only take about 80% of prospects, I don’t take prospects that I can’t help.  So that is not a lie.  If a prospect has reasonable expectations, the assets to accomplish their goals, and choose the gaurantee, then I sell them a VA.   Neither statement was a lie.  What lies do you tell?[/quote]

I don’t lie. The truth closes more deals than a lie. I don’t take people that don’t want/need annuities. Especially people who are too ignorant to know that “inexpensive” doesn’t usually mean “worth owning.”

I’ve got a question, how much of your own money goes into annuities?

[quote=Primo]I’ve got a question, how much of your own money goes into annuities?[/quote]

What does it matter? How much chemotherapy do oncologists give to themselves?

I knew you would duck the question.  More proof.  Thanks.

[quote=Primo]I knew you would duck the question.  More proof.  Thanks.[/quote]

You’re welcome. You may want to print it out and show it to your clients when you see that their annuity transfer paperwork has hit and your assets are flying out the door.

Primo, I've got to defend Bobby on this one.  

He's an annuity salesman.  He doesn't claim that everyone should own an annuity.   He doesn't claim that all of someone's money should be in an annuity.  He only sells annuities.   His claim is that he sells annuities when they are appropriate and if they aren't appropriate he doesn't work with the client.  That sounds to me like the way that an annuity salesman who wants to specialize should work.

Whether he owns one or not is irrelevant.  We don't know if they are appropriate for his situation.  I sell a fair amount of annuities, yet I wouldn't buy one based upon my current financial situation.

[quote=joedabrkr]

[quote=VA Salesman]

[quote=Bodysurf]Well, it’s the very core of my belief system that only equities can deliver the long-term performance, price appreciation, diversification, and dividend growth that today’s investor needs to ensure that inflation doesn’t demolish his retirement portfolio.  So I begin with a long-term horizon and outlook.  For such people, EIA’s, CD’s, munis–are a guaranteed money loser after inflation and taxes.  (And yes, I’m aware that annuities defer taxes.)
I demonstrate to the client, however, that it’s always wise to keep a percentage of their post-retirement income guaranteed.  One way to do this is show how their Social Security, their pensions, and some money invested in VA’s will guarantee–to the best extent possible, anyhow–a given level of income.  Every dime above that needs to be invested in instruments that historically outperform.  The real “risk” you need to concern yourself with, is outliving your money.

Most prospects disagree.  Most like the temporary security and comfort that fixed-income investments provide.  It’s only later, when they run out of money courtesy of a 25-year retirement and soaring costs, that they wish they’d done something–anything–differently.  Not my problem.  It’s always baffled me how anyone hears the term “fixed income” and doesn’t run in the opposite direction.  There are no expenses I know of that are fixed, but we pretend we’re doing people a favor by helping them down a slope from which many will never recover.  Our job is not to tell people what they want to hear, or to modify our investment advice based on their “feelings”–it’s to deliver cold, hard doses of the truth.  And the truth is that there are NO investors who bought into a diversified portfolio of stocks years ago, and would’ve been better off in bonds, or CD’s, or these abominations called EIA’s.

[/quote]


How do you explain to people why they should continue to pay you to lose money for them?

Are the reps at your b/d  even allowed to sell EIA’s? Tell the truth.
[/quote]

How about if YOU tell the truth?

You are not an ‘annuity specialist’ in the sense that you sell clients an annuity for that portion of their portfolio that must be guaranteed.

No…you exploit their fear to sell them as much as product as you can, instead of helping them learn how owning investments that can grow over time-given reasonable costs of investment-are the only things that will allow them to maintain a reasonable standard of living.

By my perception, that’s no different than the snake oil salesmen who traveled from town to town in the old west making outragoeous health claims and separating people from money.  You just wear a nicer watch and hide your expenses a little better.
[/quote]

You’re an angry, angry man. Who are you to say what portion MUST be guaranteed? What if the client wants ALL of his largest asset insured? Do you insure your whole house or just the garage that you converted to an S&M dungeon?

Bodysurf says:  I only deal with people who are serious about making money, and who
know that the best way to do so is to divorce your feelings about
temporary market swings.  Over time, the risk of a diversified
portfolio of stocks goes to zero; for everything that’s “fixed”–let
alone those instruments that lock up principal for 10 years or
more–it’s slow-motion suicide.  How anyone can lock in their money at
3% in a world of $3.50 gasoline and skyrocketing medical and nursing
home costs and feel good about it is beyond me, so I don’t bother.



First a disclosure. I have only sold a few EIAs in my career and that
was early on when they first came out and were simpler than they are
today.  Annuities in general including fixed and VAs are about 20% of
my book.  EIA sales have been abusive and are coming under the scrutiny
of FINRA.  If I wanted to place an EIA, my B/D has a list of approved
firms and there are numerous suitability forms that must be completed
and the trade is reviewed by compliance.



That being said BS (nice abbreviation no?) seems to be under the
delusion that there is NO risk in a diversified stock portfolio. He
also suffers under the hubris of thinking that he is smarter than the
market.  In addition many of our clients aren’t that concerned with
growing the portion of their funds that are invested in
annuities and are more concerned with capital preservation and
guarantees.  When your time horizon (death looming on the horizon) is
about 10years you aren’t that concerned about inflation.   They aren’t
willing to take anymore market swings, divorced from emotion or not.



Talking about when every tool is a hammer all solutions look like
nails, BS must not be dealing with the elderly very often.  For a young
client I agree that a portfolio of diversified stocks, a long term risk
taking investment strategy and using covered calls in a down market is
most likely appropriate. 



Not all EIA or fixed annuities are 10 years or longer.  I just placed a
portion of some portfolios in a 5.25% 5 year surrender fixed product
for some of my older income oriented clients who just couldn’t take the
downturn in this current bear market.  They know this money is not
going to grow.  They don’t care.  They want to take the income and not
worry about it while the rest of their money is in play.



Our job is not to tell people what they want to hear, or to modify our
investment advice based on their “feelings”–it’s to deliver cold, hard
doses of the truth.



Sometimes you have to compromise from your high horse know it all
attitude and work with your clients to keep them from bolting and
completely destroying their financial plans.

As to the fees in VAs being buried in the prospectus. Not true.  The fees are clearly detailed for each option in the sales material and often in the application and suitability forms.  

Any product…ANY product can be inappropriately sold or under disclosed with the risks minimized.  Just ask any long term bond holder who was ‘sold’ a bond.  Do you think they were disclosed that the call date is theoretical.  Did they get completely informed of the ramifications on their bond market value when rates go up?   How about those stocks that were sold based on hot air back in the dot com boom?  Did their advisors discuss P/E ratios, market cap, cash to debt ratio of the company?  Or did they just say buy this stock it’s growing and as part of a diversified portfolio of stocks over time there is no risk.  Enron…  Worldcom anyone??

[quote=anonymous]

Primo, I've got to defend Bobby on this one.  

He's an annuity salesman.  He doesn't claim that everyone should own an annuity.   He doesn't claim that all of someone's money should be in an annuity.  He only sells annuities.   His claim is that he sells annuities when they are appropriate and if they aren't appropriate he doesn't work with the client.  That sounds to me like the way that an annuity salesman who wants to specialize should work.

Whether he owns one or not is irrelevant.  We don't know if they are appropriate for his situation.  I sell a fair amount of annuities, yet I wouldn't buy one based upon my current financial situation.

[quote=Primo][quote=anonymous]

Primo, I've got to defend Bobby on this one.  

He's an annuity salesman.  He doesn't claim that everyone should own an annuity.   He doesn't claim that all of someone's money should be in an annuity.  He only sells annuities.   His claim is that he sells annuities when they are appropriate and if they aren't appropriate he doesn't work with the client.  That sounds to me like the way that an annuity salesman who wants to specialize should work.

Whether he owns one or not is irrelevant.  We don't know if they are appropriate for his situation.  I sell a fair amount of annuities, yet I wouldn't buy one based upon my current financial situation.

If a person is retiring and wants to roll their 401(k) into and EIA and take immediate income from it, are there products out there that will allow them to do so?

If you only work with one type of investment because of your belief is that investment is superior enough to work exclusively with it, then certainly your own money should be in it.

If a person is retiring and wants to roll their 401(k) into and EIA and take immediate income from it, are there products out there that will allow them to do so?

The EIAs I’ve looked at (I can’t and won’t sell them either) all seem to be designed for 10+ years. Then, if you’re able to abide by the myriad rules, you’ll be eligible to receive all of the wonderful promises at the end of the contract period.

[quote=Borker Boy]The EIAs I’ve looked at (I can’t and won’t sell them either) all seem to be designed for 10+ years. Then, if you’re able to abide by the myriad rules, you’ll be eligible to receive all of the wonderful promises at the end of the contract period.

[quote=VA Salesman] [quote=Primo][quote=anonymous]

Primo, I've got to defend Bobby on this one.  

He's an annuity salesman.  He doesn't claim that everyone should own an annuity.   He doesn't claim that all of someone's money should be in an annuity.  He only sells annuities.   His claim is that he sells annuities when they are appropriate and if they aren't appropriate he doesn't work with the client.  That sounds to me like the way that an annuity salesman who wants to specialize should work.

Whether he owns one or not is irrelevant.  We don't know if they are appropriate for his situation.  I sell a fair amount of annuities, yet I wouldn't buy one based upon my current financial situation.