Hartford Leaders EDGE is the A share product.   

Here are some assumptions I'd make, since spiked isn't giving them up.  First, the contract is less than or not much over $100K.  If it were substantially more than that it would be an A share annuity.  Compliance wouldn't let it fly if it were a B share over $100K.  Second, the 10% free w/d can't be much more than $10-15K.  $500 gross isn't enough to make a month for anyone in any segment, so let's throw that arguement out the window. 

I don't know that I understand the "I asked if she considered re-allocating the mutual funds through an exchange within the same family" question.  How did we get from talking about an annuity free w/d to mutual fund exchanges?  You can't take a Hartford annuity and do an exchange into Hartford funds.   

Bobby, the answer to your question is no.  He wasn't.  He was so blinded by his distaste for Jones that he glossed right over talking about the why of the recommendation and went right to broker bashing.  The client was willing to go along with him because she was upset about the recommendation to begin with. 

Maybe you should have asked why she has the annuity to begin with.  That's the question I ALWAYS start with when I see an annuity inside an IRA.  Most of the time the clients don't know why it's there.  They just know that the broker sold it to them.  At 50 years old, unless she's concerned about the DB, the annuity is only marginally appropriate.  Just an added expense in my opinion.  I'll agree with rankstocks that if I saw that at another company I'd change the agent and do the w/d too. 

There are too many variables for you to be calling the reco unethical. 

Maybe you should have asked why she has the annuity to begin with.  That's the question I ALWAYS start with when I see an annuity inside an IRA.

If this is your first question, I would question your annuity knowledge.

At 50 years old, unless she's concerned about the DB, the annuity is only marginally appropriate. 

Not necessarily.  Assuming that she had/has 10 years to being able to withdraw from the annuity at age 59 1/2, in an IRA annuity the GRIB can be a big benefit by guaranteeing a base retirement income in a down market.

Of course, we have all gone over this in excruciating detail.   Some of you younger guys are not going to be convinced until you actually experience a real down market and have to deal with clients who see their retirement funds going up in smoke.  I guarantee you that with the GRIB, you will have a client who, while not happy about the contract value going down, will be less likely to want to cut your throat when they know that they will still have positive cash flow and guaranteed minimum gain from the annuity.

[quote=spikedkoolaid]

I couldn't resist--

I just transfered an account from EDJ and the client told me that the FA wanted her to take a 10% penalty free withdrawl out of an annuity and put it into mutual funds at 5.75% commission. 

I asked her if the FA suggested moving the money inside of the annuity to achieve the same objective.  She said, "no!"  I asked if she considered re-allocating the mutual funds through an exchange within the same family.  She said, "NO!"

All I could think about was the EDJ FA needed to make some money this month.  ABSURD!

[/quote]

It was probably in surrender too...

[quote=Dust Bunny]Of course, we have all gone over this in excruciating detail.   Some of you younger guys are not going to be convinced until you actually experience a real down market and have to deal with clients who see their retirement funds going up in smoke.[/quote]

Amen and well said.

[quote=anonymous]

Maybe you should have asked why she has the annuity to begin with.  That's the question I ALWAYS start with when I see an annuity inside an IRA.

If this is your first question, I would question your annuity knowledge.

[/quote]

I understand annuities just fine, thank you very much.  It's not always MY knowledge of annuities that is important, rather it's the clients.  Most of them don't know or remember the M&E and Admin expenses involved, surrender periods, etc.  So, when it's time to look at investments, the question about the annuity comes up. 

Case in point, I'm looking at an account right now for a guy who has 2/3 of his $325K "stock" portfolio in annuities.  When I asked him that question he said that's what his buddy at the school sold him.  All of it is IRA money BTW.  No income guarantees, DB is contract value, and he's not planning on taking the money except for RMDs.  Why does this guy need the extra 1.4% drag on his portfolio?  MAYBE for the DB if, like Babs alluded to, the market drops.  If he were insurable I'd pull some $$ out every year and buy a nice insurance policy for him to further protect his family.   

So, my guy, like spiked's lady needs to understand the pros and cons of annuities.  IMHO if you're going to pay the extra fees of an annuity inside your IRA you better be getting something for the money.    

Spaceman,

The clients understand what they bought when they are in our offices and immediately begin to forget once they walk out of the office.  This is true for annuities and all other financial products.

If the DB is the contract value, he does not need the annuity for the DB because there isn't one.   If he invested $250,000 and it drops in value to $150,000 and he dies, his beneficiaries will get $150,000.

If this particular client is paying an extra 1.4% over what he would be paying if he was investing with you, he is in one crappy annuity.

There are plenty of unsuitable annuity sales.  This is a problem with annuity salespeople and not with annuities.  The taxation of non-qualified annuities is irrelevant to whether they are appropriate inside of IRAs.

P.S. I admire how you handle your responses concerning Edward  Jones.

[quote=Spaceman Spiff]

I understand annuities just fine, thank you very much.  [/quote]

Actually, your comments about A share vs. B share annuities was a HUGE tip that you don't understand. You sure are cute when you bark like a chihuahua with no teeth, though.

republican-Chihuahua.jpg800×510  

Whoa, Bobby Soprano.

He just missed Suze Orman.  Odds are, that was the intended target…

Nostalgia can unravel a guy. :).

[quote=Bobby Hull]

[quote=Spaceman Spiff]

I understand annuities just fine, thank you very much.  [/quote]

Actually, your comments about A share vs. B share annuities was a HUGE tip that you don't understand. You sure are cute when you bark like a chihuahua with no teeth, though.

republican-Chihuahua.jpg800×510  

[/quote]

OK, I'll bite Bobby.  Educate me.  What don't I understand?

AMEN! AMEN! AMEN! That is for sure gospel if ever I read it!

[quote=Indyone]

[quote=Dust Bunny]Of course, we have all gone over this in excruciating detail.   Some of you younger guys are not going to be convinced until you actually experience a real down market and have to deal with clients who see their retirement funds going up in smoke.[/quote]

Amen and well said.

[quote=anonymous]

Maybe you should have asked why she has the annuity to begin with.  That's the question I ALWAYS start with when I see an annuity inside an IRA.

If this is your first question, I would question your annuity knowledge.

[/quote]

I inherited a stack of accounts that have annuities inside IRA's.  The only answer why I heard was that the broker needed the six points.  It also didn't help that 6 months after annuitizing his book that the broker took a check from Mother Merrill. 

IndyEDJ

[quote=Indyone]He just missed Suze Orman.  Odds are, that was the intended target...[/quote]

Yeah, Kiyosaki and the Donald, too

[quote=IndyEDJ][quote=anonymous]

Maybe you should have asked why she has the annuity to begin with.  That's the question I ALWAYS start with when I see an annuity inside an IRA.

If this is your first question, I would question your annuity knowledge.

[/quote]

I inherited a stack of accounts that have annuities inside IRA's.  The only answer why I heard was that the broker needed the six points.  It also didn't help that 6 months after annuitizing his book that the broker took a check from Mother Merrill. 

IndyEDJ

[/quote]

You're stupid for taking a bunch of accounts that you can't get paid on and that you're liable for, from this point on. You have all the risk and none of the reward. I'll bet that broker is laughing his ass of at you. WTF were you thinking?

So, you don’t like annuities inside IRAs, or you just don’t like to inherit them?