[quote=FreeLunch]

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]

Thanks for the compliment.

[quote=skippy][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.

[/quote]

I was gonna comment on this, but skippy summed up my thoughts quite nicely.

When do the clients need the money?  And please tell us the American Legacy VA you're going to use is not the B share.  If it is, your argument holds no water.

With Lincoln's i4Life feature (American Legacy or ChoicePlus), Skippy's guy could access his annuity money before he is 59 1/2 WITHOUT 72q.  It's a pretty cool feature for the right person. AND, a good chunk of the money would be return of principal, which would lower his taxes for quite a while (until his basis is used up).

You could also use their 4Later feature to give the guy some gaurantee's on his income in the future.

[quote=now_indy]

With Lincoln's i4Life feature (American Legacy or ChoicePlus), Skippy's guy could access his annuity money before he is 59 1/2 WITHOUT 72q.  It's a pretty cool feature for the right person. AND, a good chunk of the money would be return of principal, which would lower his taxes for quite a while (until his basis is used up).

You could also use their 4Later feature to give the guy some gaurantee's on his income in the future.

[/quote]

Not being TOTALLY familiar with Lincoln's VA lineup, I looked up some basic facts on this.

http://www.annuitycontent.lnc.com/llsup/PDFLibrary/CP_I4L_FA CT.pdf

i4life appears to be a GMIB or Guaranteed minimum income benefit.  This doesn't require a 72q because it is ANNUITIZING the contract.

There's nothing wrong with annuitizing, but for MY client, I don't think he'd like the idea of losing control of all the money that he has (will have) put in.

But, there is something to be said for using up his basis first via annuitization to lower his overall tax burden once he retires at 54.

Thanks for that idea.  It bears further investigation when I get to the office tomorrow!  (It just might mean that I give the business to MetLife instead of Hartford.)

[quote=deekay]

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 

[quote=AllREIT]


Just because clients want something, and would buy it if presented to
them doesn’t mean you should sell it to them. Annuities are expensive
and illiquid. Bad attributes for any investment.




[/quote]

Hedge funds?  Oil and gas partnerships?  Timber funds?  Managed Futures pools?

[quote=skippy]

...

i4life appears to be a GMIB or Guaranteed minimum income benefit.  This doesn't require a 72q because it is ANNUITIZING the contract.

There's nothing wrong with annuitizing, but for MY client, I don't think he'd like the idea of losing control of all the money that he has (will have) put in.

...

[/quote]

Skippy, I know this will sound crazy, but yes, it is annuitizing the contract, but NO, he doesn't lose control of the money.  Lincoln has figured out a way to have the income stream treated like an annuitized payout, but leave the customer access to their money up to age 90. (They have patented this, that's why other companies don't offer this).

I would recommend calling your Lincoln Internal to learn the pros and cons of this.

16 different limited partnership interests...only one profitable.  Initial total investment...just over $100K.  Value a few years later when I did her tax return...just over $30K.  The lady had a negative AGI as the bulk of her life savings were in these dogs.

...sold by an Edward Jones broker in the 1980's.  He's still in business and considered highly successful.

I have an 84 year old client. She inherited 1.2 million back in 04.  I started dealing with her in 05 and she transferred here with me in Feb…In a review, she brought in handwritten statements from her insurance SALESMAN, on her multiple EIA contracts.  The insurance guy sold her varying amounts in each contrat, from two different (no name) companies.  One group of 14 different contracts, sold on the same day, amounts to 700k in face value…ALL with 25% surrender first 5 years…and then goes down slightly. The other annuity company only had 15% surrender the first few years.  She has to contact him yearly to get her FREEEEED up money.  What a piece…I think he was mentored by Spiffy.  All I can do is shake my head and sympathize with her…

[quote=Indyone]

16 different limited partnership interests...only one profitable.  Initial total investment...just over $100K.  Value a few years later when I did her tax return...just over $30K.  The lady had a negative AGI as the bulk of her life savings were in these dogs.

...sold by an Edward Jones broker in the 1980's.  He's still in business and considered highly successful.

[/quote]

Did the Jones broker change the tax code that blew up the LP's?

[quote=bspears]I have an 84 year old client. She inherited 1.2 million back in 04.  I started dealing with her in 05 and she transferred here with me in Feb...In a review, she brought in handwritten statements from her insurance SALESMAN, on her multiple EIA contracts.  The insurance guy sold her varying amounts in each contrat, from two different (no name) companies.  One group of 14 different contracts, sold on the same day, amounts to 700k in face value...ALL with 25% surrender first 5 years...and then goes down slightly. The other annuity company only had 15% surrender the first few years.  She has to contact him yearly to get her FREEEEED up money.  What a piece...I think he was mentored by Spiffy.  All I can do is shake my head and sympathize with her....[/quote]

I'm going to call bullsh*t on that.

Would you like me to fax you the handwritten breakdown? Have you ever heard of Amerus or National Western?

[quote=Bobby Hull][quote=Indyone]

16 different limited partnership interests...only one profitable.  Initial total investment...just over $100K.  Value a few years later when I did her tax return...just over $30K.  The lady had a negative AGI as the bulk of her life savings were in these dogs.

...sold by an Edward Jones broker in the 1980's.  He's still in business and considered highly successful.

[/quote]

Did the Jones broker change the tax code that blew up the LP's?

[quote=joedabrkr] [quote=Bobby Hull][quote=Indyone]

16 different limited partnership interests...only one profitable.  Initial total investment...just over $100K.  Value a few years later when I did her tax return...just over $30K.  The lady had a negative AGI as the bulk of her life savings were in these dogs.

...sold by an Edward Jones broker in the 1980's.  He's still in business and considered highly successful.

[/quote]

Did the Jones broker change the tax code that blew up the LP's?

[/quote]

No...he just put all of the client's life savings in an illiquid investment.  Sound familiar?
[/quote]

Funny thing you should mention that....I've been taking gains out of these "Illiquid" annuities and rolling them into the oil deal. I love illiquidity.

[quote=bspears]Would you like me to fax you the handwritten breakdown? Have you ever heard of Amerus or National Western?[/quote]

Yes, I've heard of Amerus.  They've been acquired by Aviva recently.

http://www.amerus.com/

Have you heard of Google to do a search on these companies?

[/quote]

My VA clients have averaged 25%/year over the last 4.5 years. Please suggest a way to "Crush" these returns.

[/quote]

What funds inside of a VA have averaged 25%/year for the last 4.5 years?  You are smoking crack.  Do you also have some property in Florida that you like to show us?

[quote=pretzelhead]

[/quote]

My VA clients have averaged 25%/year over the last 4.5 years. Please suggest a way to "Crush" these returns.

[/quote]

What funds inside of a VA have averaged 25%/year for the last 4.5 years?  You are smoking crack.  Do you also have some property in Florida that you like to show us?

[/quote]

Why would I want to give helpful information to a punk like you?

[quote=joedabrkr]

[quote=AllREIT]


Just because clients want something, and would buy it if presented to
them doesn’t mean you should sell it to them. Annuities are expensive
and illiquid. Bad attributes for any investment.


[/quote]

Hedge funds?  Oil and gas partnerships?  Timber funds?  Managed Futures pools?
[/quote]



Hedge funds: Mostly smoke and mirrors. The good ones aren’t acessed via retail brokers



Oil/Gas: Publicly traded upstream MLP’s do exactly the same thing



Timber: A number of Timber REITs trade publicly (RYN,PCL,PCH etc)



Managed Futures: Smoke and mirrors with teeth.

[quote=bspears]Would you like me to fax you the handwritten breakdown? Have you ever heard of Amerus or National Western?[/quote]

I totally rely upon handwritten notes.

Hedge funds: Mostly smoke and mirrors. The good ones aren't acessed via retail brokers

If only we were RIA's- then the sea would part and we too could be on your level...