Annuity Recomendation

[scagnt83]

Scant,

No offense, but you don't know what you're talking about. No one said anything about "Preferred Stocks" at any point. I made a glancing comment about using dividend paying COMMON STOCKS because someone implied options were complicated.
....

I thought preferred stock was mentioned, my bad, its a long thread... lol.
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I can continue this conversation further if you want, but what I am stating here are facts, no opinion. I have a feeling I'm getting so much push back because you're offended by what I'm saying, and I'm not sure why.

I'm plainly admitting this isn't realistic to do for most clients, and that I don't. And that I have no problem with FIAs, and have solicited them myself. So what's the disconnect here?

No disconnect and no offense taken.

I do not dislike the market. And a major source of income for me are qualified plans.

The reason I make all of these points is to show the disconnect that the majority of brokers have with Annuities, especially IAs. Its about the guarantees.

The way the IC makes money behind the scenes can be replicated, but the value of the annuity contract cannot. You are not getting Tbills and calls for your money, you get a Guaranteed Contract with lots of features the Tbills/calls do not.
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I understand that many people who do not hold themselves to a fiduciary standard would rather put a client in a crappy bonus fia that pays a high commission, and I wish they would just say that rather than trying to poke holes in strategies that work if you have the financial know-how.

You do realize that you make around the same and often more in fees over a 10 year period than you do from the average 10 year IA

I think you mentioned that you charge 150bps to 200bps for accounts under $1mill? That would be 15% over the 10 years, as opposed to 6%-10%.

Yes, the IA is mostly in a lump sum, and that does make it more tempting for some. Personally, I like trails. And wouldnt be opposed to more backend pay and less frontend pay on IAs.

But in reality, most people who are invested in equities pay way more than 6%-10% in fees over a 10 year period; this is because most are in managed funds.
(I realize RIAs can be the exception, but thats realistic for maybe 5%-10% of prospects.)


And the IAs commissions are a soft cost as opposed to a hard (out of pocket) cost.
With the IA, you know the contract terms, and it includes commission. Yearly returns per the contract are net any "fees" or commissions.

With the brokerage account, fees are a hard cost, which is a direct loss against yearly gains.

I am well aware that IA commissions affect the terms of the contract; but the contract is spelled out up front. Its not a "surprise" deduction from their accumulated amount.

To suggest that an IA is a bad product or unfit because of the commissions paid, generally speaking, is bullsh*t.
And to suggest that IA commissions effect a clients account in the same manner is misleading and again, bullsh*t.

In general, more people are negatively affected by brokerage fees than IA commissions.

 

[iceco1d]

Here is my ONLY problem with FIA commissions: They are high for a FIXED annuity (which is what a FIA is, just a fancy fixed annuity).

If commissions were more like 1% up front with a 1% trail, or even a 50 - 75 bps trail, the client could get a lot more out of the contract.

Personally, I'd rather sell a wrap account at 1.25% than a fixed annuity for 2% up front and a 1% trail, if my income was the question.

 

[0b1kanobee]

Here is my ONLY problem with FIA commissions: They are high for a FIXED annuity (which is what a FIA is, just a fancy fixed annuity).

If commissions were more like 1% up front with a 1% trail, or even a 50 - 75 bps trail, the client could get a lot more out of the contract.

Give it some time. From what I hear that is where we are heading.

 

[scagnt83]

Here is my ONLY problem with FIA commissions: They are high for a FIXED annuity (which is what a FIA is, just a fancy fixed annuity).

If commissions were more like 1% up front with a 1% trail, or even a 50 - 75 bps trail, the client could get a lot more out of the contract.

Personally, I'd rather sell a wrap account at 1.25% than a fixed annuity for 2% up front and a 1% trail, if my income was the question.

Yeah, but think back to the Calls the company buys.
If the market works out they are well in the black, if it doesnt they just have to pay 1%ish.

With the FA they are locked into an above average interest rate. With the IA they are locked into a below average rate. More of a margin.

But yeah, IA commissions can be uncomfortably high with certain companies or products.

 

[FSPNYL2012]

I have plenty of great annuity products that can be offered to any individual at any age, if you still have some interest in getting the best fit for yourself please respond and I would be happy to help educate you on the best products and possiblities for your individual circumstances.

 

[Norwayguy]

I have plenty of great annuity products that can be offered to any individual at any age, if you still have some interest in getting the best fit for yourself please respond and I would be happy to help educate you on the best products and possiblities for your individual circumstances.

Your kidding right! Sarcasm used.

 

[JrGuru]

At age 45, look for product that offer renewal of the income rider , F&G 20 years, aviva 25, NWL, 30.
Hope that helps.