[Eg_cruz]

Originally Posted by rsmurano

There is no place on earth that a financial advisor or an annuity is needed.
Let me see, your business model is to make the most money off your investments. What is the financial advisors business model, too make the most money off of you. How does that benefit you?
Now an advisor who charges by the hours is ok to use so you can review his/her proposal and then you make the trades. I would also not use an advisor associated with any brokerage house because they will try to get you to buy house funds. I have personal experience of this on more then 1 occasion.

Annuities are just terrible. High fees, low returns. Again, the person holding the annuity isn’t the person making the money.

FYI Fixed and Fixed-Index Aunnity do not have annual fees unless you add a rider (which I don’t recommend riders). Annuities work great for those who is do not want to be in the market not all people have the risk tolerance for the market.
If you’re talking about fees, maybe you’re talking about variable annuities and which in that case I agree with you variable annuities are high in fees, they do cost too much and if you’re gonna be in the market just be in the market don’t do it an annuity , I agree.
When you want funds out of the market (20% to 30% of net worth)fixed annuities are a good alternative to money markets or CDs.
I can give you examples
I believe in simple straightforward short term annuities

Question funds you can’t afford to lose or you want completely risk free from market loss….what do you do?

[Eg_cruz]

Originally Posted by retiredguy123

Thank you. You said that anyone can ask for a policy. I guess, technically, it is true that you can ask for anything. But, over the years, I have been asked for an opinion from friends about buying an annuity that their advisor had recommended. I told them that I would happy to do that, but I need to read the contract first. But, on at least 3 occasions, when I called the advisor, they were very rude and refused to send me the annuity contract to review. They had slick brochures and PowerPoint presentations, but, I asked for the entire annuity contract. One guy even cussed me out and hung up on me. Another advisor explained that their company policy was to collect money from the client, based on an application, and then to send the contract to them. He said that the contract allows the client to cancel the contract within 30 days of receiving it, and they will refund the money. Another advisor said that I could come to his office and he will answer any questions about the annuity, but, under no circumstances, could he allow me to review the contract. That is the truth about my experience with annuity salespeople.

I have also reviewed portfolios for friends, and asked them if they knew that they had purchased an annuity. Often, their answer is that they had no idea that they owned an annuity. Note that I am occasionally asked for advice about investing because I have completed the Certified Financial Planner education program, but I have never been a paid planner or tax preparer. When I did the CFP training, I received the advisor trade magazines, and I was surprised at how many full-page ads it contained touting the 9 and 10 percent commissions available for selling annuities for insurance companies.

FYI companies are not paying the average agent 9% and 10% in fact in all my years I have never had any A rated company offer such high levels
I am doubting how much you know

[CoachKandSportsguy]

Each hooman is unique, so your circumstance will depend upon who you get and hir/her particulars. .

[Stu from NYC]

I find it interesting to go to so called investment dinners.

Almost always their main focus is selling annuities and will downplay the historical performance of both individual stocks, indexes like S & P or outright lie and say the average cost of a no load fund is about 4% annually.

Do learn a little something most of the time and have a very nice dinner in one of the better restaurants in the bubble.

Amazing that I will be the one to ask the presenter is educational background and work history and have to literally cross examine him/her to get this info.

[manaboutown]

Originally Posted by Stu from NYC

I find it interesting to go to so called investment dinners.

Almost always their main focus is selling annuities and will downplay the historical performance of both individual stocks, indexes like S & P or outright lie and say the average cost of a no load fund is about 4% annually.

Do learn a little something most of the time and have a very nice dinner in one of the better restaurants in the bubble.

Amazing that I will be the one to ask the presenter is educational background and work history and have to literally cross examine him/her to get this info.

I bet the presenters are quite evasive. Some may be selling annuities but never use the word.

Do you ever get invited back?

At subsequent dinners you may find yourself as popular with the hosts as successful card counters at casinos!

[petsetc]

I'm late to the party but here are my unwavering thoughts.

My obligatory post to anyone seeking investment advice.

Take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches, remember, the info is free.

If you do want to know too much about annuities, listen to Stan The Annuity Man® | Brutally Honest Facts About Annuities podcasts.

Podcast - Have Fun With Annuities(R) | The Annuity Man

Last recommendation is FIRECalc: A different kind of retirement calculator , a Monte Carlo simulation of your future.

FWIW

[Stu from NYC]

Originally Posted by manaboutown

I bet the presenters are quite evasive. Some may be selling annuities but never use the word.

Do you ever get invited back?

At subsequent dinners you may find yourself as popular with the hosts as successful card counters at casinos!

Very often we do get invited back but unless it is a restaurant we have not been too, will toss invitation.

They do use the word annuity but they do show how they are selling a new improved and wonderful product that will beat the return on no load funds with no risk at all.

[Caymus]

Originally Posted by Stu from NYC

I find it interesting to go to so called investment dinners.

Almost always their main focus is selling annuities and will downplay the historical performance of both individual stocks, indexes like S & P or outright lie and say the average cost of a no load fund is about 4% annually.

Do learn a little something most of the time and have a very nice dinner in one of the better restaurants in the bubble.

Amazing that I will be the one to ask the presenter is educational background and work history and have to literally cross examine him/her to get this info.

That is a good mental exercise to keep your mind sharp.

[Stu from NYC]

Originally Posted by Caymus

That is a good mental exercise to keep your mind sharp.

Two advantages to us

1. Very often I learn a little something.
2. Get a very nice free dinner.

[Pairadocs]

Originally Posted by manaboutown

This is an extraordinary 2012 study that confirms my belief that some if not many financial advisors are primarily commission driven and act in their own self interests to generate fees, ahead of the best interests of their clients. The paper is quite detailed and lengthy, containing disturbing findings IMO.

"Do financial advisers undo or reinforce the behavioral biases and misconceptions of their clients? We use an audit methodology where trained auditors meet with financial advisers and present different types of portfolios. These portfolios reflect either biases that are in line with the financial interests of the advisers (e.g., returns-chasing portfolio) or run counter to their interests (e.g., a portfolio with company stock or very low-fee index funds). We document that advisers fail to de-bias their clients and often reinforce biases that are in their interests. Advisers encourage returns-chasing behavior and push for actively managed funds that have higher fees, even if the client starts with a well-diversified, low-fee portfolio."

The actual paper is in a PDF.

The Market for Financial Advice: An Audit Study | NBER

Ho ho ho, are ducks waterproof ? From the first time I made some small, very small, investments, I also started an extensive collection of books related to the financial markets, history of the stock market, etc. etc. NEVER EVER did I buy into the idea that ANYONE, no "advisor" or "fiduciary" cared AS MUCH ABOUT MY MONEY AS I DO !

[Pairadocs]

Originally Posted by retiredguy123

It is for the advisor to make a commission. That is who benefits from it.

It works very like like those "convenience fees" we all know so well when we buy concert, sporting events, or other entertainment tickets. WHOSE "CONVENIENCE" I always ask ??? Certainly not for MINE !

[Pairadocs]

Originally Posted by La lamy

Yup!!! Learned that the VERY HARD way. Lost 1/3 of my savings by adviser putting me in ".com" stocks that went bust in 2000 and lost out on an even more stupid "insurance policy" from their bank that was a total money pit. Live and learn. I'm now educated about investing, and do it all myself.

It's really sad more people don't educate themselves as you have. Amazing how the old "annuity" thing still works, some do seem satisfied, but I often wonder if they REALLY understand what they could have had if only they'd taken a small interest in their own MONEY ! ?

[Stu from NYC]

Originally Posted by Pairadocs

It's really sad more people don't educate themselves as you have. Amazing how the old "annuity" thing still works, some do seem satisfied, but I often wonder if they REALLY understand what they could have had if only they'd taken a small interest in their own MONEY ! ?

Your right. Sad that so many people have no idea how to invest and refuse to take the time to learn. A six figure IRA or 401 is not so insignificant.

[MorTech]

2 and 20, baby!