How long have you been in this business navet?

Not counting tomorrow too long.  I'm not just arguing with you about your investment choices. For the most part they are spot on. The issue about VA's begs the question about safety. A 5% lifetime payout is the most you can hope for in any investment portfolio without running the risk of outliving your assets. In an VA you can invest in mutual funds without ever running the risk of having a down year. Ask any of your 55+ age clients if they wish their money had grown by 5% minus expenses in 2008? I mentioned your age because it has been my experience that the younger the FA, the more likely they don't use VA's. And while I'll admit they are not for everybody, a VA is a tool in your belt that has a place.

I agree with Navet. Not piling on you GHGR but I think the downside protection and the relative piece of mind is well worth the cost to some clients.

You can get the same downside protection by purchasing Puts on the S&P. Maybe even cut your costs more by selling the same Put but at a lower strike price. The advantage of annuities are ,arguably I might add, the tax deferral, creditor protection and state guarantees of insurance products.

The biggest problem with a VA is you can't get at your money. The biggest benefit with a VA is you can't get at your money.

Well said Navet.

[quote=iceco1d]

You cannot get the same protection of a VA by buying puts on the S&P.  Have S&P puts helped you at all with any of your European equity OR fixed income holdings lately?  Nope...

...Just thought you'd like to know, before you look dumb(erererer). 

[/quote]

Excuse me for dumbing it down. I simply used the S&P puts for an example of protecting the entire portfolio which is typically benchmarked to the S&P. You can diversify your puts to better match your portfolio or you can only buy puts on the portion of your portfolio that has the potential for excessive volatility and unacceptable downside risk.

thanks for the clarity that I guess I needed. you must think it is so much easier to explain to a client the mechanics of an annuity with riders and the various expenses then a long put position, plus if you work them right and sell a lower strike price put you have the option to buy back in at a better level and cut your costs on the entire package. With your knowledge of annuities and the hopes of not wearing blinders, I am sure I don't need to go further.

ND, I think it's much easier to explain to a boomer who lost big in '08 that he could invest in the market, get 5% or the market increase, never a down year, and a 5% stream of income that he can't outlive. For a portion of your portfolio it's a no brainer. I'm not pooping on your put strategy, I'm just saying that the VA offers more protection and is actually pretty easy to explain.

Ice - all those spaces can be hedged by shorting or to buy puts on those positions by using the respective ETFs. For those unable to place options trades they should work a little harder to track the markets. For example, playing the euro trade and buy currency ETFs to hedge the PIIGS crap.  Make sure your clients are not just traditionally diversified but tactically diversified. If money is coming out of the real estate market then it is going into another market. Look at the TLT over the last 3 months versus EFA. Real money does not ever come out it just moves around. You can either lead it join it or follow it.

Navet - I am talking about people over 5 years from retirement. I personally think annuities are great for creating a stream of income aka a personal pension but not so much for the accumulation stage. Just my opinion and not set in stone by any means.

The entire purpose of an annuity is to transfer the risk to the insurance company. The insurance company does not buy risk unless they can make money on it from the big picture point of view. There is no one single tool to use and no matter what I say there will be a situation when <fill in the blank> is not appropriate for the client. If they are scared shitless about the market then yes an annuity with an accumulation rider may be appropriate. But otherwise I prefer to manage the risk myself.

If someone simply got out of the market as it drifted below the 200dma they would have been great over the last ten years but for the most part advisors buy and hold/gather so Navet would be right about ‘08 clients.

deleted duplicate post.

(thanks admin, your sorry ass page takes so long to load it makes some of us click save over and over ughhh why do I keep coming back here?)

Can I plug advisorheads here?

I guess not. How about a d v i s o r h e a d s. c o m?

Here's my cold calling station. Fan, coffee heating plate, hour glass, script, list of names with a ruler, phone, picture of a gorilla. Gotta be a gorilla on the phone. Fortunately I have a back room where I'm set up. No distractions. My BOA can't hear me. No chair, no computer.

Props to TakingNames for PM'ing me about a year ago telling me how to set up. (He got a lot of ideas from Bill Good ;) ) Also have the index card system utilized for call backs.

[quote=FA86]

Can I plug advisorheads here?

[/quote]

Apparently not huh, but if your name is Yonglian01, you can endlessly spam this website? Huh?? Why haven't the mods at least, pulled the guys account?

I have been looking for a good flat iron

Because they have not caught on to it yet after countless threads asking for mods to delete yong dong king kong.

GHGR, Since this campaign began what are your numbers total calls, contacts, accounts, etc? Curious to hear, in the beginning you sounded frusterated now I would guess you are knocking the cover off the ball!!!

 Please update and share any lessons of success and failure.

PS I am in week two and currently feeling frustration. Only calling businesses.

Roger - I have no clue. I stopped keeping my calling records after a few thousand calls. By then I knew my contact ratio, prospect ratio, and client ratio. I've probably called a little under 10,000 phone numbers. Only been residential.

Not knocking it out of the park just building up AUM and hoping for the best.

My best advice would be to stick with tax free bonds and use the script I mentioned in your thread. And don't leave the office until you've dialed 200 numbers. You'll get the sale on the last 10 dials for the day. Always seems to happen that way.

God I love bonds. No talk of commission, sales charges, which chinese equity is the best at the moment.

A low interest rate environment has actually helped my business. Bank paying you 60 bps? Maybe 1%? And you only keep 75% of what you make? On $100k investment at 1%, you're paid $83/month from the bank. Only keep $62. Has your bank ever called you up and said, "These rates stink. Let's look at something else." That's where you come in. Tax free bond. $416/month. Keep every dime.

Love me some bonds.

You like bonds now because they are easy.  You'll hate bonds three years from now when your clients get statement shock. No matter how much you've thought you've prepared them for rising rates, it's not enough. 

If you have balls you'd be selling equities.