Jan. 12, 2001 Edward Jones’ A-share annuity sales were about $400 million in the past year and are growing at an annual rate of more than 20%, the firm says.Jones has long pushed upfront load funds over B and C shares, believing the lower ongoing costs of A shares are better for long-term investors.
Annual expenses with A-share annuities range from 72 to 95 basis points, according to Merry Mosbacher, Jones principal of insurance marketing. The B-share product averages 1.4%, she says.
Jones’ A-share annuities are unique to the firm because they were developed in conjunction with several insurance vendors, including Hartford Life, Allstate, Lincoln National and SunAmerica. Upfront loads on the products begin at 5.5% and breakpoint downward.Some reps grumble that Jones almost forbids them from selling traditional B-share annuities. They point to the firm’s one-year-old policy that reduces reps’ payout on traditional annuities to 35%, instead of the normal 40%.
But Mosbacher says the firm does not have a policy against selling spread-load annuities. She confirms that Jones "significantly reduced" payout for B-share annuities, but says it was done to remove the appearance of a conflict of interest. -- Tom Nelson
For more on Jones’ A-shares, see "Edward Jones Selling A-Share Annuities," November 2000 RR, Page 33.
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