Talk of The Villages Florida - Rentals, Entertainment & More
Talk of The Villages Florida - Rentals, Entertainment & More
#16
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If you want to know more about annuities AND Financial Advisors, read the book I have mentioned in another thread regarding Financial Advisors and what they try to get you to buy. It is a short (73 pages?) but excellent read, free in Kindle, and describes them from a retired Financial Advisor who got tired of how firms operated with their clients.
I confronted one of my past advisors on some of the questions he remarked in the book. Needless to say he got defensive and tried to say he was told how good they are in their training. He is no longer my advisor. "Beware of Your Financial Advisor" by: L. T. Drake Please let me know how you feel after you read the book on annuities AND other investments with companies please. It opened my eyes for such a short read. |
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#17
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Oldcoach Ed "You cannot direct the wind, but you can adjust the sails" "Be yourself - everyone else is taken" |
#18
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I agree with you. The book describes all of that. I was amazed on how many reps had the package for a client already in place before they talked. They basically went through the motions. And the profits for the firm? wow? The book was written by a guy like you who actually CARED about his clients and couldn't tolerate what financial companies were telling them to sell so he quit the industry. If nothing else, it's a good quick study for people that want an understanding on how annuities and other investments work,and prepare them for what to ask.
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#19
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![]() Quote:
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Oldcoach Ed "You cannot direct the wind, but you can adjust the sails" "Be yourself - everyone else is taken" |
#20
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KayakerNC Mt Clemens, MI Newport, NC Suffering from TV envy |
#21
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I got the book about 10 months ago and it was free. They may have changed their pricing. Even at $9.99 it is a good investment. Great information.
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#22
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Thanks for the info.
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KayakerNC Mt Clemens, MI Newport, NC Suffering from TV envy |
#23
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FINRA - Investor Alert pdf - Equity-Indexed Annuities—A Complex Choice.pdf
FINRA - Investor Alert pdf - Variable Annuities-beyond the hard sell.pdf I thought this would be a good place to post this information. Use lots of caution around some of these products. Good luck - I am new to TOTV and it seems like there are dozens of "free lunch" seminars every week in The Villages. It seems like sales reps are making a lot of money???? ![]() ![]() ![]() |
#24
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Cool article on variable annuities ... Celsius and Fahrenheit analogy is so well taken. PURPOSE is a key word in any investment decision. Sometimes, it is critical to conserve and sometimes it is exciting to gamble. I've never felt comfortable on imparting "gambling" advice - never sure whether a client fully understands his or her or their position nor my explanation. Like to sleep at night so I've stayed on the insurance side of the fence rather than the investment side. For those seeking security with potential for measured gain, I'd recommend studying up on the coin known as Indexed Fixed (it exists in both the Universal Life and Annuity markets sourced from major A rated insurance companies with billions in assets. In a nutshell, you get a piece of the action in a rise of the S&P 500 (for example) during each year but you do not share in any downside. All your annual gains are vested, if you will. The coolest attribute of the Indexed UL policies is that you can take out your earnings in the form of loans (translation not taxable). Translation, they have both living benefits and death benefits. Naturally, there are waiting periods and penalties if they are not met plus the danger that, if not well-structured, can become a MEC - Modified Endowment Contract yielding costly fed penalties. What's the old saying? There is no free lunch. There is also no substitute for being well-informed. All of these articles and books are great resources to all of us. Just my .02.
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#25
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Don,
I don't see the article or link. I guess the important thing to remember is that the more complex the investment product, typically the worse it is for the investor. Watch your fees and invest in something you understand. Before you buy and annuity, make sure you ask some tough questions (see FINRA investor alert in previous thread- Good public information). Typically, the longer the surrender period, the higher the upfront commission to the Sales Agent. Annuity fee disclosure checklist Before you buy any annuity, ask your advisor to fill in the blanks. What you pay each year Annual fee (as % of account value) for: Your Number(fill in blank) Typical fee The insurance (a.k.a. mortality and expenses) _____% 1.35% typical The investments within the annuity _____% 0.95% typical Riders and options _____% 0.65% typical Total annual fee: _____% 2.95% typical What you pay to get out Max. surrender charge (as % of withdrawal) ____% 7% typical Number of years before surrender charge expires ____ % 8yrs typical Source:Morningstar, National Association of Variable Annuities, Money research Note: Max. surrender charge may not apply to all withdrawals. According to Larry Swedroe at CBS MoneyWatch The typical EIA provides far less than 100% of the index’s return…First…most EIAs have participation rates….between 70 and 90 percent, [second is] through the use of an annual cap–the maximum rate at which the annuity can be credited. For example, the S&P 500 rose almost 29 percent in 2003 [but] an EIA might have limited the gain to…perhaps 12 percent, less…expenses. [Third, dividends don't count toward payout, only the price change of the index. Fourth is] the use of a margin fee…For example, in the case of an annuity with a [margin fee] of 3 percent, if the S&P 500 gained 9 percent, the return credited to the annuity would be 6 percent. Fifth…[they use] simple interest instead of compound interest. |
#26
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If you go to a free lunch seminar, the presenters can only sell you two things - annuities and life insurance. They pay for your free lunch (or dinner) by selling the annuities that make them the highest commission and pay you the least amount of interest and the fewest guarantees. The only true guarantee you will get is that your money will be locked up and unavailable to you (without a steep penalty) for a very long time. True financial advisors that can offer any product are usually prohibited from selling the junk annuities that these insurance scumbags push. It's all about oversight and accountability - FINRA registered representatives have very strict oversight so that they operate in the best interest of the public, while insurance agents can get a license to sell this high commissioned garbage in about two weeks and operate with no oversight at all. It's almost like a license to lie, cheat and steal. It's crazy to the point of being criminal, yet it's true and running rampant in places like The Villages where there is a high concentration of retirees. Take a look at the article Index Annuities Are A Safety Trap on CNN Money.
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