EIAs give a participation of the market 

No they don't.  They get credited based upon market performance.  This is very different.

At the risk of drawing the ire of those who refuse to be open minded about any annuity: how exactly do you plan to intend to provide income for an entire generation of Americans who resist authority, do whatever they want, are lousy savers, and will in many cases die broke?

[quote=rollinrock]At the risk of drawing the ire of those who refuse to be open minded about any annuity: how exactly do you plan to intend to provide income for an entire generation of Americans who resist authority, do whatever they want, are lousy savers, and will in many cases die broke?[/quote]

And you think an annuity can stop that?

Not to worry at any rate.  Nancy Pelosi is in the House, and Hillary will soon be in charge.  They'll straighten everything out, and everything will be free to the poor.

[quote=rollinrock]At the risk of drawing the ire of those who refuse to be open minded about any annuity: how exactly do you plan to intend to provide income for an entire generation of Americans who resist authority, do whatever they want, are lousy savers, and will in many cases die broke?[/quote]

At the risk of drawing your ire, how will an annuity solve a problem like that if the person doesn’t have enough money to retire?

More like, stop fighting each other and focus on what is important.

If Hilary is going to jack taxes and annuities can't help, so be it.

I like to try to keep an open mind about things, and debate in a collaborative spirit.

It is almost like a conspiracy, planners get a few ideas that work and defend them to the death so we never pull together and confront the real enemy.

Joe, my overall impression is that some kind of risk transfer could at least help. Part of that might be recognizing the problem earlier on, and embracing the strategy of risk transfer ( leaving some of your money to an insurance company - or using someone else's money).

The problem is see is that special interests at all levels are clouding the solutions. I'll bet you know what I am talking about, since you are an experienced player in the biz.

Let's agree to not get hung up on the details before we frame the issue. We act like a bunch of fish that are examining and fighting about each food particle that floats past us in the stream. Why not control the ecology of the stream?

[quote=rollinrock]

More like, stop fighting each other and focus on what is important.

If Hilary is going to jack taxes and annuities can't help, so be it.

I like to try to keep an open mind about things, and debate in a collaborative spirit.

It is almost like a conspiracy, planners get a few ideas that work and defend them to the death so we never pull together and confront the real enemy.

[/quote]

So tell us...who is the real enemy?

[quote=joedabrkr]
At the risk of drawing your ire, how will an
annuity solve a problem like that if the person doesn’t have enough
money to retire?
[/quote]



The insurance company has magical abilities to generate endless retirement income. See, it says so right here in my annuity presentation.

Oh, now we have Allreit the cynic  ?

What happened the logical researcher debater guy?

[quote=anonymous]new to this, but i’m interested in this
conversation about EIA’s.  I’ve come across some clients who are
talking to some insurance salesmen about EIA’s and i’ve been
trying to educate them about the product but they keep going back
to the guarantee.  Anybody have any other angles to use against
them?

These people are probably your customers and not your clients.  Why else would they be talking to someone else.  It sounds like they want guarantees and you haven't been able to offer guarantees.
[/quote]

Well Philo, I think you know.

The real enemy is anyone who does not add value to the client/advisor/shareholder relationship.

Our personal relationships with client is not a commodity.

I would say a service provider like LPL is an example of an efficient service provider who does not have an agenda to strip money beyond the core business model.

So that leaves all the other suits in inefficient corporate offices to make faciliitate we professionals, who all basically do the same thing, to fight each other over unimportant things.

Conspiracy theory you say? I call it market inefficiency, and exploitation of our own ignorance or bad habits. Cold calling is a great example. You have otherwise intelligent and succcessful people like Bond Guy putting their ego or nostalgia behind " prospect calls ". This is just an example of making money for the useless suits - and tainting our own waters with chum. We ought to make it stop, so we can make more money, and tune up our message to a confused public.

Don't wake up and just smoke the bong every day. Take some responsibility.

[quote=anonymous]

EIAs give a participation of the market 

No they don't.  They get credited based upon market performance.  This is very different.

[/quote]

Well, OK have it your way. I dropped a word.  They give a particpation credit based on index performances which are calculated in various ways. 

Point to point.  Jan 15 to Jan 15.  If the DOW is the target index and the gain was 8% between those two points that is what they use for calculating.  

Averaging monthly point to point:  Take the % gain or loss each month and average it on a 12 month basis.  I believe (not sure) that the negatives are counted as a zero month when doing the calculations.

Quarterly or (monthly) Ratchet:  Take the gain at the end of each 3  or(1)month period and lock that gain into the contract.

There are more.  There are better investments out there.

[quote=Dust Bunny][quote=anonymous]

EIAs give a participation of the market 

No they don't.  They get credited based upon market performance.  This is very different.

[/quote]

Well, OK have it your way. I dropped a word.  They give a particpation credit based on index performances which are calculated in various ways.

That base crediting rate is always at a deep spread to the AGG which is how the insurance company makes its money.



Unless the market drasticly outperforms the total return on an EIA should be roughly equal to the base crediting rate, since all the EIA is doing is converting a stable cash flow into a risky cashflow.



If you offered a monte carlo annuity in which the returns were randomly generated you would get the same result as an EIA. The equity indexation is a distraction.



For example you could have a Red Sox annuity, in which the crediting was applied to bets in vegas on the Red Sox. If the Sox did well you gain positive participation, if they do poorly, you don’t lose money.



This Red Sox annuity is risk free and so much better than a risky investment in stocks or bonds.

[quote=AllREIT]



For example you could have a Red Sox annuity, in which the crediting was applied to bets in vegas on the Red Sox. If the Sox did well you gain positive participation, if they do poorly, you don’t lose money.



This Red Sox annuity is risk free and so much better than a risky investment in stocks or bonds.



[/quote]



It didn’t work out quite like that for Pete Rose.

Guess what? EIAs are not bad. They are sold by some of the most trusted and well respected banks and insurance companies.  You also get guaranteed market-like returns with NO downside risk.  They are the safest investments grandma can buy!  Not to mention, I get a beautiful commission check every time I sell one.  So while you fools are selling muni-bonds and mutual funds, Ill be flying by in my new Ferrari to your grandpa’s house!

[quote=playball]Guess what? EIAs are not bad. They are sold by some of the most trusted and well respected banks and insurance companies.  You also get guaranteed market-like returns with NO downside risk.  They are the safest investments grandma can buy!  Not to mention, I get a beautiful commission check every time I sell one.  So while you fools are selling muni-bonds and mutual funds, Ill be flying by in my new Ferrari to your grandpa’s house!
[/quote]

I feel like I need to go take a shower after reading this post…

So name just ONE “well respected bank” and ONE “well respected insurance company” that sells EIA’s.

Not all EIA’s are bad, but there are a LOT of bad people selling EIA’s.

[quote=joedabrkr]

I feel like I need to go take a shower after reading this post…

So name just ONE “well respected bank” and ONE “well respected insurance company” that sells EIA’s.

Not all EIA’s are bad, but there are a LOT of bad people selling EIA’s.
[/quote]



Well lots of 'em sell 'em. EIA’s are cheap and fulfill a human desire to get something for nothing.



More seriously, look at who you are replying too.

EIA’s are not sold by the top insurance companies.  Look at top flite mutual insurance companies.  None of them sell EIA’s.  EIA’s are not investments.  They are long term savings vehicles.  They are appropriate only when a fixed annuity is appropriate. 

[quote=joedabrkr] [quote=playball]Guess what? EIAs are not bad. They are sold by some of the most trusted and well respected banks and insurance companies.  You also get guaranteed market-like returns with NO downside risk.  They are the safest investments grandma can buy!  Not to mention, I get a beautiful commission check every time I sell one.  So while you fools are selling muni-bonds and mutual funds, Ill be flying by in my new Ferrari to your grandpa's house!
[/quote]

I feel like I need to go take a shower after reading this post....

So name just ONE "well respected bank" and ONE "well respected insurance company" that sells EIA's.

Not all EIA's are bad, but there are a LOT of bad people selling EIA's.
[/quote]

There are a lot of bad people selling fee-based accounts.

[quote=playball]Guess what? EIAs are not bad. They are sold by some of the most trusted and well respected banks and insurance companies.  You also get guaranteed market-like returns with NO downside risk.  They are the safest investments grandma can buy!  Not to mention, I get a beautiful commission check every time I sell one.  So while you fools are selling muni-bonds and mutual funds, Ill be flying by in my new Ferrari to your grandpa's house!
[/quote]

The funny thing is that most pompous brokers don't understand that lots and lots of people are perfectly satisfied only making 6 or 7 percent with no chance of losing money.