If you think you can do a better job than the annuity, then you have a moral and ethical obligation to take the penalty and move on. The FACT that you haven't done that tells me that you don't have much to offer and that you know it. Some of the best work I've done is convincing people to pay a little now to fix a mistake rather than pay the higher price of ignoring the mistake. I'm not shocked that you don't have the guts to do that.

It's not the performance that is the problem.  HE DOESN'T WANT THE ANNUITY, HE WOULD RATHER INVEST IN INDIVIDUAL STOCKS.  Since the performance is not bad within the annuity, 9% YTD, why pay the penalty?  He and our team agreed that we will take what is out of surrender which is about 50k and move on with that.  When the rest of it is out of surrender, in 2010 and 2012, we'll take care of it then.  Yes we do have the guts to pay now to fix a mistake when that situation occurs, but we don't feel every situation warrants that.

Oh and by the way, I do appreciate your deep concern with this issue.  I am truly impressed by your ability to have nothing else to do but sit on the computer ALL day EVERY day to answer and solve everyone's issues as they are posted.  Everyone should be thanking you for the time you take out of your busy, successful schedule.  I am sure you are a god among true financial professionals and can only hope that you decide to walk across the freeway and proceed to get nailed by a truck.

[quote=wallstreeter]

If you think you can do a better job than the annuity, then you have a moral and ethical obligation to take the penalty and move on. The FACT that you haven't done that tells me that you don't have much to offer and that you know it. Some of the best work I've done is convincing people to pay a little now to fix a mistake rather than pay the higher price of ignoring the mistake. I'm not shocked that you don't have the guts to do that.

It's not the performance that is the problem.  HE DOESN'T WANT THE ANNUITY, HE WOULD RATHER INVEST IN INDIVIDUAL STOCKS.  Since the performance is not bad within the annuity, 9% YTD, why pay the penalty?  He and our team agreed that we will take what is out of surrender which is about 50k and move on with that.  When the rest of it is out of surrender, in 2010 and 2012, we'll take care of it then.  Yes we do have the guts to pay now to fix a mistake when that situation occurs, but we don't feel every situation warrants that.

Oh and by the way, I do appreciate your deep concern with this issue.  I am truly impressed by your ability to have nothing else to do but sit on the computer ALL day EVERY day to answer and solve everyone's issues as they are posted.  Everyone should be thanking you for the time you take out of your busy, successful schedule.  I am sure you are a god among true financial professionals and can only hope that you decide to walk across the freeway and proceed to get nailed by a truck.

[/quote]

Does your team know that their sales assistant is making an ass of herself on the internet?

[quote=wallstreeter]

This could be interesting!

Yesterday we had a client in his mid-30's come in to talk about moving his $150,000 IRA to us.  We look at his statement and it is obvious to us that it is in an annuity.  He has had several 401(k) rollovers before starting his own business and they all went into the annuity.  He said when he met with the guy who did this, all he wanted was an IRA.  He was never told anything about an annuity.  Most of it is still in surrender as it was a 6 year product.

Even worse is that his wife's $10,000 IRA was also put into an annuity.

What are the worst things you have seen done by another broker?

[/quote]

How old is the annuity?

Talked to a lady whose insurance agent convinced her to buy a BAD
15 year equity indexed annuity.

She was in year 2 and needed to access a good chunck of her account.
She cried for about 3 months.

If he doesn't want the annuity, why did he buy it in the first place?  If the results aren't the issue, what doesn't he like about the annuity? 

It's my experience that clients don't care about the vehicle they're riding in as long as they can get to their destination.  Before you blow him out of the annuity, I would have a frank discussion with your client about this issue.

What is the reasoning behind purchasing individual stocks versus funds/SMAs/VAs etc?  Mind you, I can understand the pros and cons of doing either strategy, but I'm curious as to why he feels he will be better served with individual securities.  I find the ones who specifically request individual issues are the same people who individidual stocks won't be appropriate for.

[quote=wallstreeter]

It's not the performance that is the problem.  HE DOESN'T WANT THE ANNUITY, HE WOULD RATHER INVEST IN INDIVIDUAL STOCKS.

The bottom line is that annuities have the highest probability of screwing people over when they do change their mind.

You might as well PUSH B-Share Asset allocation funds in your IRAs

Just kidding - but these crappy insurance salesman selling these equity index annuities need to be thrown in jail for a few days.

[quote=FreeLunch]

The bottom line is that annuities have the highest probability of screwing people over when they do change their mind.

You might as well PUSH B-Share Asset allocation funds in your IRAs

Just kidding - but these crappy insurance salesman selling these equity index annuities need to be thrown in jail for a few days.

[/quote]

So, when you put them in some SMA, charge them 1% year over year, then they decide to change their mind, how do you propose they recoup those lost costs?

Are you aware that B shares exist because in some instances, they're the most appropriate share class for the client?  I know of these cases - do you?

How familiar are you with how EIAs work?  Do you know of any instances where the would be appropriate?  I do, and I'll be happy to share those cases with you.

Look, FL, I'm not asking you these questions to be antagonistic.  I'm asking them because it seems you have a habit of making blanket statments on alot of myths of investing.  I say myths because, in fact, you have not been able to back up your opinions with solid facts.  I'll be the first to admit - I used to think that the only thing an investor needed is a good wrap account and call it a day.  Now I know that dismissing other kinds of investments (ie annuities) is doing your client a disservice.  If you can be open minded, your clients will have a much better advisor.  If not, well, they might not be your client for very long.

First of all - who said I used SMAs all of the time?

Most of my clients are 50/50 A & C Share, and then the rest are equity traders ( I just love stocks, and always will ).  I hardly have ANY wrap accounts - I'm probably too Old school with the transactional approach

I am simply talking about people using Annuities for everybody, all the time, before they even get the people talking they know what they're going to pitch people.  I don't like that.

For the right people, annuities are great. 

Two things:  When in the world is B-Share the most appropriate?  Tell me one, I'll believe it.  I'm an open minded guy

We could debate this issue forever, but you KNOW as well as I do that Equity Index annuities are the MOST ridiculous investment offered out there today.  I am close minded when it comes to this issue.

Actually, don't think I'm being hypocritical....but I'm doing a 1035 this week for $450k worth of annuities.

They are right in this instance!  I'm taking them OUT of 1/2 Fixed and 1/2 EIAs.  They are getting Screwed royally.

I'm using Lincoln National American Legacy. 

Please, Please tell me how EIAs are good - ESPECIALLY in an IRA.  I am not a believer, but I take it back about being close-minded.  If you can convince me I'll change my mind, BUT I'm truly wanting to hear you on this one.

Thanks 

[quote=FreeLunch]

The bottom line is that annuities have the highest probability of screwing people over when they do change their mind.

You might as well PUSH B-Share Asset allocation funds in your IRAs

Just kidding - but these crappy insurance salesman selling these equity index annuities need to be thrown in jail for a few days.

[/quote]

Are EIA's illegal? Who are YOU to say that someone else is crappy? You've been in business for 1.5 years and you can't even break $100,000 in TT. If anybody is crappy....

THe reason your production sucks so bad is that you have failed to figure out what clients want to buy. I sell annuities because that's what people want to buy. If they wanted to buy that sh*t that your pitching, I'd be pitching it, too. You've let yourself blame your failure on the other salesmen who are better at it than you! Don't say that noone warned you that Wachovia will not put up with pikers like AGE will. Listen to all these other idiots tell you that you're doing fine at your own peril.

You can lash out at me all you want, but it won't change your truth.

[quote=FreeLunch]

First of all - who said I used SMAs all of the time?

You didn't.  There are alot of advisors who think SMAs are the end-all be-all of investment planning.  Just like your contention that there are advisors who think VAs are the best in all situations.

Most of my clients are 50/50 A & C Share, and then the rest are equity traders ( I just love stocks, and always will ).  I hardly have ANY wrap accounts - I'm probably too Old school with the transactional approach

That's fine, alot of my business is A and C shares as well.  I'm definitely not a trader and I don't take clients who are.  Different strokes for different folks.....

I am simply talking about people using Annuities for everybody, all the time, before they even get the people talking they know what they're going to pitch people.  I don't like that.

I'm going to guess you're referring to Bobby Hull.  He's stated several times that if a VA isn't the best thing for them, he doesn't sell it.  If he does, it is appropriate.  He just has a way of getting to the point in his prospecting method where his specialty is VAs.  There's nothing wrong with that IMO.

For the right people, annuities are great. 

Two things:  When in the world is B-Share the most appropriate?  Tell me one, I'll believe it.  I'm an open minded guy

For investors who are going to hold a fund for 7-10 years and have less than $50k to invest, B shares leave the most money in a clients account vs. A or C shares.  You can run a hypo that shows this.

We could debate this issue forever, but you KNOW as well as I do that Equity Index annuities are the MOST ridiculous investment offered out there today.  I am close minded when it comes to this issue.

Here's the thing - EIAs are not an investment.  They are a savings vehicle.  The only difference between EIAs and fixed annuities are how the earnings are credited and growth is calculated.  The advisors who say EIAs give you "all the upside of the market and none of the downside" are misrepresenting them.  However, for the client who wants low risk for a portion of their liquid assets with the potential for a better ROR than a traditional fixed annuity, EIAs have their place.  However, the most overlooked reason to purchase an annuity is to give a client an income they cannot outlive.  The annuitiization factor can be a huge benefit to those going into retirement where you as an advisor can see an overspending problem.  Think of it as a 'personal pension'.  Clients like pensions.  Why?  Becasue they can't run out of money.

That is by far the most ridiculous thing I have ever heard.

You SELL annuities b/c of 2 reasons.

A.  that is all you have knowledge of

B.  You do not have personal skills that will provide you with lifelong clients.  YOU HAVE to make all your money as soon as possible.

I feel sorry for your clients mentality that they just BOUGHT something from you.  You are not a financial advisor and you are certainly not a consultant.  That is why you have only ONE option.

There are a few key differences b/w me and you.  I am a money manager for my clients, whereas you are an annuity salesman.  And that is all you are.  If you can sleep at night, good.  But you are definitely not an admired individual to your clients and their family

DEEKAY - The above post is in response to Bobby Hull

(I guess he chooses to humiliate himself in public.....maybe he doesn't know what he's doing)

Thanks for the good points Deekay, that actually does clear things up a bit.

Like you said, different strokes for different folks - I'm sure you are a great advisor.

[quote=FreeLunch]

That is by far the most ridiculous thing I have ever heard.

You SELL annuities b/c of 2 reasons.

A.  that is all you have knowledge of

B.  You do not have personal skills that will provide you with lifelong clients.  YOU HAVE to make all your money as soon as possible.

I feel sorry for your clients mentality that they just BOUGHT something from you.  You are not a financial advisor and you are certainly not a consultant.  That is why you have only ONE option.

There are a few key differences b/w me and you.  I am a money manager for my clients, whereas you are an annuity salesman.  And that is all you are.  If you can sleep at night, good.  But you are definitely not an admired individual to your clients and their family

[/quote]

You are correct. I am not a money manager. I have a strategy that I didn't make up and it works better than anything I can come up with. That's why I keep throwing money at it. When Wachovia pushes you out, you need to reflect upon everything I've told you. Don't think it's not coming. I think, at some level, you know what's around the corner for you.

[quote=FreeLunch]

Actually, don't think I'm being hypocritical....but I'm doing a 1035 this week for $450k worth of annuities.

They are right in this instance!  I'm taking them OUT of 1/2 Fixed and 1/2 EIAs.  They are getting Screwed royally.

Please explain how they are getting screwed royally.  They bought the fixed and EIAs for some reason.  Tell me how they weren't appropriate in this situation.

I'm using Lincoln National American Legacy. 

OK - we're going from fixed to variable (assuming to get a better rate of return - please tell me if I'm off base). 

Please, Please tell me how EIAs are good - ESPECIALLY in an IRA.  I am not a believer, but I take it back about being close-minded.  If you can convince me I'll change my mind, BUT I'm truly wanting to hear you on this one.

Actually, I'm of the opinion that annuities (fixed and variable) are better served in IRAs.  All distributions regardless of the invesment vehicle are taxed at ordinary income rates.  Of course, there could be situations where taxable money can be put an in annuity (protection from creditors, maxed out all other retirement savings vehicles, etc).

Like I've stated before, EIAs can be a good fit for the conservative investor who wants a guaranteed rate of return with the possibility of a greater potential rate of return than a traditional FI/CD/bond, etc.  Bobby makes a good point - some people want that kind of concept.  Giving clients what they want and what they may need is how we best serve them.  Dismissing a strategy because some mutual fund wholesaler said it was wrong can be hazardous to your clients, yourself, and your firm.  Keep that in mind.

Thanks 

Tell me how they are getting screwed royally?

They want to get their money out 8 years later and they have a TEN percent CDSC.  I met a guy who got into an 18 year EIA -

8 years later he had only averaged 5% annual return and if he were to cash out $250,000 he would've been hit with a $25,000 penalty.

THATS HOW

[quote=FreeLunch]

Tell me how they are getting screwed royally?

They want to get their money out 8 years later and they have a TEN percent CDSC.  I met a guy who got into an 18 year EIA -

8 years later he had only averaged 5% annual return and if he were to cash out $250,000 he would've been hit with a $25,000 penalty.

THATS HOW

[/quote]

Most people are just getting back to even after 8 years. What did he say when you explained that to him? LOL!!! What a rookie mistake!!!! I can't f**king believe that you overlooked that!!!!! A LITTLE knowledge can be very dangerous and expensive.

[quote=FreeLunch]

That is by far the most ridiculous thing I have ever heard.

I know Bobby can defend himself, but I feel the need to step in here.

You SELL annuities b/c of 2 reasons.

A.  that is all you have knowledge of

From what I see and what I know of Bobby, he's got alot of knowledge of alot of investing concepts.  He just chooses to use VAs when it's appropriate. 

B.  You do not have personal skills that will provide you with lifelong clients.  YOU HAVE to make all your money as soon as possible.

Even though he comes off as harsh, I've got no doubt he's got some great personal skills.  He wouldn't be a good salesperson if he didn't.  And what's wrong with getting paid upfront for the work that you do?  Isn't that what A shares are all about?

I feel sorry for your clients mentality that they just BOUGHT something from you.  You are not a financial advisor and you are certainly not a consultant.  That is why you have only ONE option.

He's never represented himself as an FA or consultant.  He holds himself out as a salesman.  You assumed that everybody in our business has to be an advisor/consultant/CFP.  That's simply not the case.  I know alot of reps who do a great job for their clients that don't get hung up on titles.

There are a few key differences b/w me and you.  I am a money manager for my clients, whereas you are an annuity salesman.  And that is all you are.  If you can sleep at night, good.  But you are definitely not an admired individual to your clients and their family

Tell us how you differentiate yourself in the crowd of "money managers".  There's literally thousands, almost all of them with greater research capabilities, more effecient processes, more experience and better investment results.  Plus, they've managed money in a bear market.  Did you handle client money in 2001-2002?  How about 1994?  1987?

[quote=FreeLunch]

Tell me how they are getting screwed royally?

They want to get their money out 8 years later and they have a TEN percent CDSC.  I met a guy who got into an 18 year EIA -

8 years later he had only averaged 5% annual return and if he were to cash out $250,000 he would've been hit with a $25,000 penalty.

THATS HOW

[/quote]

If you sold an annuity based on LIQUIDITY, I would agree with you.

Annuities are an INCOME vehicle.  To build an income base, and to generate an income stream.

Annuities are to INSURE that you have an income stream later.  They are NOT for large withdrawals later.

This is/should be disclosed up front when presenting an annuity.  I do.

If you take money out before age 59 1/2, there can be a 10% withdrawal penalty.  There may be a surrender charge depending on the year of surrender above the 10% free withdrawal amount.