Standard Fixed Annuities With Trails?
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May 22, 2009 4:40 pm
Are there any other annuity companies besides The Principal that have standard fixed annuity products( not Equity Linked) that pay up to a 1% Trail? If not, given the market environment, why have not more companies developed these products?
I would think this would be attractive to many advisors. Also would not penalize advisors and take away from fee based biz when a fixed annuity was appropriate. It would render fixed annuities product neutral. I would give up the large upfront if I know I could keep my 1% advisory fee whether it was best for clients to be wrapped in funds or no upfron commission trail VA, or no up front commission Fixed Annuity. Any input would be appreciated.I thought I remembered in another post somewhere that there are certain annuities that can be held in advisory accounts. Maybe it was just VA’s.
[quote=iceco1d]
Some RIA custodians (OK, most) hold VAs (no load), and the IARs charge a fee for managing the money just like anything else.
[/quote] Be careful. I was at a Transamerica DD trip a while back, and a guy told me that the RIA version of their VA had a calculation problem with the RIA's fee. The fee coming out of the VA somehow somehow affected the living benefit calculation (like the advisor's fees pulled down the annual accumulation or something like that, so instead of 5%, the client only received 5% - the advisors fee). I would check with the VA company.Another Heads Up:
MassMutual just lowered their payout on their Odyssey and OdysseyPlus fixed annuities. It used to be 5% upfront (under age 75), as of May 17, it's only 3%. Sucks.[quote=now_indy][quote=iceco1d]
Some RIA custodians (OK, most) hold VAs (no load), and the IARs charge a fee for managing the money just like anything else.
[/quote] Be careful. I was at a Transamerica DD trip a while back, and a guy told me that the RIA version of their VA had a calculation problem with the RIA's fee. The fee coming out of the VA somehow somehow affected the living benefit calculation (like the advisor's fees pulled down the annual accumulation or something like that, so instead of 5%, the client only received 5% - the advisors fee). I would check with the VA company.[/quote] We take the fee out of their taxable brokerage account so that it doesn't affect the living benefit. We don't touch the money in the VA