I've been browsing these boards for a while and finally wanted to join in.

Count me in as a Yull-Hull disciple.

Please tell me what all of you guys who don't sell VA's are going to do if we have another downturn or the economy slows and we hit another recession.  I, being a guy that sells VA's, will simply say "This is why we payed the extra .50 percent.  So this year, and any year that the market does not  do better than 6%, we will credit you with 6% to take w/ds from.  Whats more, the withdraw base will also be computed off the highest level the account reached.  And no, you do not have to annuitize to take those w/ds."

Annuities are more expensive, but the come with guarantees that provide options.

And as for getting sued.......Yeah i could have sold him the same porfolio of mutual funds, that would have been managed by a  CFA, and had a guaranty for donwside protection, but I like using principia to construct optimum portfolios that the series seven totally prepared me to do.

[quote=jcskimmer]

I understand what you are saying Rob ... and I happen to be a believer in using annuities SOMETIMES.  But the only time I have ever used them, they are used as a compliment to other products like mutual funds or actively managing the money.  An annuity is NEVER (if you found a case let me know) the ONLY thing that someone should be invested in.  If you are selling annuities as a compliment to other business that someone else in your office does, I get that - but you should never approach a prospect trying to sell them an annuity first becuase it is almost 99% of the time against your fudiciary duty. 

Spiff, I'm with you ...

[/quote]

Why?

but you should never approach a prospect trying to sell them an annuity first becuase it is almost 99% of the time against your fudiciary duty.

jcskimmer, you sound like your new to the business.  Since when do investment salespeople have a fiduciary duty?

Rob Yull,

    You have to be pulling everyone's leg in this forum.  Let me see if I have this right.  Can you guess the product I am selling below?

    Has an average total expense of over 3% annually.  Has a limited number of investment choices.  If this product does well it will create a ticking tax time bomb, meaning its tax deferral no longer makes sense with the lower tax consequences of Long Term capital gains and dividend taxes.  The living benefit rider is a giant smoke and mirror show.  You have a 7 year or longer surrender penalty with this product.  I get paid 7% to sell this to you.  If the market drops and you have a high death benefit, you will have to die before your heirs get your money.  If you have a high death benefit in an IRA and you must take RMD's, you must use the death benefit amount to determine the RMD and not the cash value (broker in my town has burned several clients with this one). 

    If you can sleep at night, good for you.  I couldn't.  Karma has a tendancy to catch up with those run their practice dishonestly. 

[quote=rankstocks]

Rob Yull,

    You have to be pulling everyone's leg in this forum.  Let me see if I have this right.  Can you guess the product I am selling below?

    Has an average total expense of over 3% annually.  Has a limited number of investment choices.  If this product does well it will create a ticking tax time bomb, meaning its tax deferral no longer makes sense with the lower tax consequences of Long Term capital gains and dividend taxes.  The living benefit rider is a giant smoke and mirror show.  You have a 7 year or longer surrender penalty with this product.  I get paid 7% to sell this to you.  If the market drops and you have a high death benefit, you will have to die before your heirs get your money.  If you have a high death benefit in an IRA and you must take RMD's, you must use the death benefit amount to determine the RMD and not the cash value (broker in my town has burned several clients with this one). 

    If you can sleep at night, good for you.  I couldn't.  Karma has a tendancy to catch up with those run their practice dishonestly. 

[/quote]

You've just proven that you have no clue as to what you are talking about. You are an idiot, but I'm not going to call you one.

Rankstocks,  you are painting with an awfully broad brush.  

Has an average total expense of over 3% annually. 

This would make it a bad VA.  Many are much less expensive. 

Has a limited number of investment choices. 

True, but is limited investment choices necessarily a bad thing?  We can say the same thing about the client's 401(k) or just about anything that's not in a brokerage account.

If this product does well it will create a ticking tax time bomb, meaning its tax deferral no longer makes sense with the lower tax consequences of Long Term capital gains and dividend taxes. 

I tend to agree which is why in most cases, the VA's that I do are with qualified money.

The living benefit rider is a giant smoke and mirror show. 

100% disagree on this.  I think that the mistaken assumption is that someone wasted money on the living benefit rider if it doesn't need to get used.  In my practice, these riders allow conservative clients to invest more aggressively.  This more aggressive investing has allowed them to get higher returns.  If they did not have the rider, they would have to invest much more conservatively and would be unable to match the returns that they have received.

You have a 7 year or longer surrender penalty with this product. 

True, depending on the particulars of the VA.  I'm not so sure that surrender penalties are a bad thing for the client.   There's a huge difference between investment returns and investor returns.  One reason for this difference is that investors (and their reps) have a tendency to chase returns.  Surrender penalties can serve to stop this from happening.

I get paid 7% to sell this to you. 

What VA will put 7% in your pocket?  Regardless, how much ends up in the rep's pocket is not material.  How much the client receives is what counts.  So, yes, expenses count. How much the rep makes from these expenses doesn't.  Ultimately, the rep will make more money by putting someone in a fee-based account than in a VA. 

If the market drops and you have a high death benefit, you will have to die before your heirs get your money. 

I don't understand your point.  By definition, heirs only get money at death regardless of the investment and investment performance.   This is why they are called "heirs".  You can still give the money away when you alive just like any other investment.

If you have a high death benefit in an IRA and you must take RMD's, you must use the death benefit amount to determine the RMD and not the cash value (broker in my town has burned several clients with this one). 

Untrue.  The RMD's are based upon the contract value from the last day of the previous year.  Both the Cash Surrender Value and the Death benefit are meaningless when it comes to RMD's.  

Annuities are simply a tool.  They are not good nor bad.  They are appropriate or inappropriate based upon the situation.  Like all other products, some are better than others.  

[quote=anonymous]

I get paid 7% to sell this to you. 

What VA will put 7% in your pocket?  Regardless, how much ends up in the rep's pocket is not material.  How much the client receives is what counts.  So, yes, expenses count. How much the rep makes from these expenses doesn't.  Ultimately, the rep will make more money by putting someone in a fee-based account than in a VA. 

Why are the commissions in German?

[quote=Spaceman Spiff]Why are the commissions in German?[/quote]

Funny man!

That is merely an example I know of off the top of my head.

[quote=anonymous]

but you should never approach a prospect trying to sell them an annuity first becuase it is almost 99% of the time against your fudiciary duty.

jcskimmer, you sound like your new to the business.  Since when do investment salespeople have a fiduciary duty?

[/quote]

You say that as if it's ok to not...  If you have your NASD S66, you have a fudiciary duty - it doesn't just apply to investments (if you don't hold that license, I apologize - but I feel more comfortable telling prospects that I do, and it makes them more comfortable as well). 

I NEVER said annuities were bad, I use them (I prefer ING's Landmark w/ MGIB), I just said they were only appropriate after you understand they are best for the client.  It certainly sounds like Yull is more interested in money than his client's best interests - a strategy that will not work in the long run.  I am new in the business, my approach?  Honest, straight forward advice and products that my client understands and support for the long run - and I can sleep at night :)

jcskimmer, every time that you open your mouth, you sound more and more like a rookie.   Just because you have your NASD S66 does not mean that you are acting in a fiduciary duty.  It means that you have the ability to act in a fiduciary capacity if your firm allows you do so and the particular client agrees to it. 

If you have your 66, yet you are selling product for a commission and you don't have an advisory agreement with your client, you are not acting as a fiduciary.

I find nothing wrong in many cases with not acting as a fiduciary.

[quote=jcskimmer]

  If you have your NASD S66, you have a fudiciary duty - it doesn’t just apply to investments (if you don’t hold that license, I apologize - but I feel more comfortable telling prospects that I do, and it makes them more comfortable as well). 

jcskimmer, rankstocks 

You guys are worrying about your image too much. My image is I sell a solution. I don't mom and pop my products or go after simples' sep's or worry about whatever your  analist is spouting off on cnbc. You can do whatever you want.

I get the notion that many people on here are jealous of others making money. I don't worry about money, because I am making more and more of it. You are assuming all of us want to be life coaches. Thats more than I care to ever understand. We live this baby once, and I am going doing it with a passion. This supports my lifestyle of nice cars, women, and bone fishing. There are some cool guys on here that are open minded and objective. You close your mind off like many of those I have crossed at jones. I came into a good situation, but just like in college baseball the way we practiced is the way we played the game. Take for instance spiff,  He wants to leave jones soo bad he comes here to live out his fantasy of being an independent.

Once you learn to let money go, you get better at focusing on your goal. Go watch National Geographic when you see that cheetah look at all those impalas, the jones of the world try to net the whole bunch. I am the cheetah. I focus on one letting the rest go. Why, because you can't be all to everyone. Therefore I am a specialist just like the cheetah, he doesn't get the kill every time, but he knows it must stay focused on one to get the big kill.

Are you rich?

Not Rich enough.

[quote=Rob Yull]

 Take for instance spiff,  He wants to leave jones soo bad he comes here to live out his fantasy of being an independent.

[/quote]

Huh, there's the something new I learned today.  Actually Rob, I don't want to leave Jones.  If I did, I would.  I've had some offers to do just that.  If I wanted to go to a forum to live out a fantasy, it certainly wouldn't be this one.

Look, when you put your ideas on this forum with a bunch of guys who are "looking to take down the whole herd" expect that you aren't going to get much respect.  Personally I don't really care what you do.  But you might want to explain to the rest of us that you are the guy in the office that does annuities.  Period.  Your original post made you look like a sleazy annuity salesman.  Period.  That's why you caught so much grief.  At least that was my assumption of you.  As long as you can sleep at night you keep doing your thing.    

Huh??  You don’t want to leave EDJ?  I’m feeling let down, hurt, slapped in the face and violated.  So the lease you signed is for…what…a drycleaner??

anonymous,

 you quoted:

If you have a high death benefit in an IRA and you must take RMD's, you must use the death benefit amount to determine the RMD and not the cash value (broker in my town has burned several clients with this one). 

Untrue.  The RMD's are based upon the contract value from the last day of the previous year.  Both the Cash Surrender Value and the Death benefit are meaningless when it comes to RMD's.  

------------------------------------------------------------ ------

You are dead wrong, and I hope you haven't screwed your clients.  Either you are a rookie, or don't understand the change in rules last year.  You also used to be able to convert an annuity with a low cash value and a high death benefit to a roth and use the cash vaue as the basis to pay taxes on, but that has changed to the death benefit amount as well.  Why I must continually educate rookies, or even feel the need to, I don't know.

Also, any fool knows the living income riders and GMIB's are an absolute joke.  Smoke and mirror your clients to death, we all know the truth.

rankstocks, can you please back up your post.  I'd appreciate it.   My knowledge and my sources all tell me that I'm correct, but I've been wrong in the past and will be wrong in the future. 

I believe that RMD's are based upon the contract value (not the surrender value and not the death benefit) as of the last day of the previous year. 

Can someone please back me up or let me know that I'm wrong. 

Why are you calling living income riders an absolute joke?   The guarantee that these provide have allowed my clients to invest more aggressively and not panic when the market goes down.  This combination has allowed my annuity clients to outperform my mutual fund clients.  It does not matter that the insurance company won't have to pay a dime to my clients and it cost my clients some money.  The end result remains that the living benefits will mean more money in the pockets of my clients. 

[quote=anonymous]

rankstocks, can you please back up your post.  I'd appreciate it.   My knowledge and my sources all tell me that I'm correct, but I've been wrong in the past and will be wrong in the future. 

I believe that RMD's are based upon the contract value (not the surrender value and not the death benefit) as of the last day of the previous year. 

Can someone please back me up or let me know that I'm wrong. 

Why are you calling living income riders an absolute joke?   The guarantee that these provide have allowed my clients to invest more aggressively and not panic when the market goes down.  This combination has allowed my annuity clients to outperform my mutual fund clients.  It does not matter that the insurance company won't have to pay a dime to my clients and it cost my clients some money.  The end result remains that the living benefits will mean more money in the pockets of my clients. 

[/quote]

He's right. If you don't use an optional death benefit rider, you're fine. I haven't used one in years.