Anyone Up for a Variable Annuity Question?

[scagnt83]

Came here to try to learn.. Know very little about variable annuities..

If you filter out all the bs this thread actually has a lot of good info about VAs and their features.

 

[iceco1d]

I'm quickly developing the opinion that I'm having this conversation with someone who is a tad shallow on depth of knowledge.

You can develop that opinion all you'd like, but that would make you wrong. Again.

You're constant confusion on the db rider and the stand alone GMWB rider is simply that, confusion. It's not really a mission critical point to this conversation, so I'll leave it alone.

I'm not confusing them. You can get GLWB (Freedom Flex) rider alone. I simply threw in the DB/LB combined rider as a separate discussion item in case it would be helpful to anyone spectating this discussion (and I threw my opinion in about where it might be suitable).

You're depiction that it's just a matter of GMWB numbers, charges, and "equity flexibility" (whatever that means - That means they don't limit the amount of equity exposure you have, and don't force you into their models) leaves your evaluation model with a lot of exogenous variables. There's more to it than that, and this is why it's difficult to simply declare one the best, and it's why I won't do it.

Investment cost is the best predictor of performance. A low cost contract has a significant edge against a pricier contract. This holds true for mutual funds too. The riders are then easily compared (ratchets, withdrawal percentages, etc.). That isn't to say you can't find situations where an overall inferior contract works better (due to age banding and/or a client wanting to be ultra aggressive, etc.).

If you don't know what charging off the high water mark means, than you really have no business declaring any one product best in the industry.

I never said I didn't know what it means! Stop putting words in my mouth!

I haven't sold JNL's VA in a while, I think this is when you'd say "Reading Comprehension," though I'm not sure you know exactly what that means, that or it's some ironic inside joke you have with yourself.

Speaking of reading comprehension, I really don't think you've done so well comprehending what I've detailed for either JNL or Pru, that or you're intentionally trying to confuse issues in hopes that you can trip up the conversation.

Please elaborate. I think you're confused about what I'm saying.

So let me ask you this. If you have a client who is a few months away from a contract lock in on the roll up, and the stock market starts to decline, are you one of those who tells your clients "don't worry about it, it'll come back?" I've moved to the fix bucket for a short while and mitigated losses quite well. Or better yet, following on the sage advice that hogs get slaughtered, if I'm having a really good year, I can move to fix bucket until the lock in and then risk it from there. Most people don't appreciate the "it'll come back" crap they hear from most "advisers."

I put my clients risky money in a VA contract. I don't need to pay Pru, JNL, or Ohio National 1 point a year (or more) to give me a LB rider on the fixed bucket, or a government bond subaccount.

If I am going to have half the clients money out of the market, I'll put it in a fixed or indexed annuity, or short duration fund/etf, and skip out on the costs of the VA for that money. If the funds are in the VA, it's because in their overall picture, that is their risky money, and no I wouldn't move it based on my "gut feeling."

For money intended to be tactical, I will put that in an ETF model I run on a discretionary basis that follows a methodology similar to that of Meban Fabre's work, using moving averages (and P/E ratios, to some degree) to be tactical with each asset class.

The S&P 500 doesn't mean the stock market? Heresy! I'm well aware of this, in fact I like to throw out little soft balls from time to time to test one's true proficiency with a subject. I opened the door wide and put a "come on in" sign over it, and yet you failed to truly seize the opportunity.

I don't know why I waste my time talking to children looking to play games on the internet.

So, now I'll lead you along and explicitly ask for what I was hoping you'd be slick enough to provide with my allusion. Show me the methodology behind the numbers. Where are we finding 10-14% on "the stock market?" And then go one further and answer how we are finding 10-14% on the stock market.

What breakdown of Large, Mid, Small, Micro/Nanco caps are you talking? 50/50 split among growth and value? Proportion to domestic vs. international (and in international, do you want more segregation of assets based on geography (BRIC vs. EAFE, etc.) or just a general breakdown?).

You give me the asset allocation you want for each asset class, and I'll give you the blended expected return of that allocation. I gave a range of returns (10 - 14%) to account for different people wanting different levels of exposure to various equity asset classes.

Twenty. Friggin. Characters.
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Came here to try to learn.. Know very little about variable annuities.. However I do know how to spot an A$$ in the crowd and icecold you are it.

I think you've made the mistake of thinking I give a rats arse about your opinion of me.

 

[tntiquer]

Twenty. Friggin. Characters.
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I think you've made the mistake of thinking I give a rats arse about your opinion of me.

No mistake.. didn't expect you to.. if you did, you wouldn't be one.

 

[Norwayguy]

Could we all put away our swinging dicks and just get back to discussing information so others can learn instead of having a pissing match?

 

[tntiquer]

Could we all put away our swinging dicks and just get back to discussing information so others can learn instead of having a pissing match?

What I was hoping to do when I came here.