Equity Index Annuity the best ?
- Thread starter smithgroup82
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The first thing we must begin to understand is this
In investing You must time the market.
EIA allow you to do that in a fashion
By locking in gains during good times and the totally avoiding the bad times and losing nothing.
Its the best of both worlds
In investing You must time the market.
EIA allow you to do that in a fashion
By locking in gains during good times and the totally avoiding the bad times and losing nothing.
Its the best of both worlds
- 2,908
Re: Equity Index Annuity the best??????????
I would not get a series 6 just to sell EIA's although I could get one easily having had a 7 before. A lot of the independent guys here think that it is just a matter of picking up a series 6. It is more than that, much more. The broker dealer assumes oversight responsibility for all of you products, even products they dont offer such as health insurance, final expense, med supp etc. They have to review and approve everything you do in those areas as well and it will cramp your style bigtime. If you dont have a stomach for CMS, then dont even think of getting a securities license, or you will get far more oversight and regulation than you ever dreamed of.
It can make sense if you are truly doing a fair amount of securities business but dont think of it as just getting appointed with another company for another product as in the insurance/annuity world. It is not like that at all.
I would not get a series 6 just to sell EIA's although I could get one easily having had a 7 before. A lot of the independent guys here think that it is just a matter of picking up a series 6. It is more than that, much more. The broker dealer assumes oversight responsibility for all of you products, even products they dont offer such as health insurance, final expense, med supp etc. They have to review and approve everything you do in those areas as well and it will cramp your style bigtime. If you dont have a stomach for CMS, then dont even think of getting a securities license, or you will get far more oversight and regulation than you ever dreamed of.
It can make sense if you are truly doing a fair amount of securities business but dont think of it as just getting appointed with another company for another product as in the insurance/annuity world. It is not like that at all.
- 924
Winter is right.
I went to the trouble to get a Series 65 mainly so I would not fall into the "giving financial advice" trap that was always in the tall grass there somewhere. I also wanted to do some investing work from an RIA institutional investor platform.
I can't see going back and doing much of the same work to get more licenses, especially if I have to go through a B/D. I didn't do it to sell variables, so I can't see doing it just to sell FIAs.
I have a feeling that most of the companies are going to have some good fixed products for us. We will then be able to pan FIAs just like we currently pan variables: "You don't want a variable annuity, you still have market risk."
"You don't want an indexed annuity, you have complicated formulas for cap and spreads that are all skewed in the company's favor."
I went to the trouble to get a Series 65 mainly so I would not fall into the "giving financial advice" trap that was always in the tall grass there somewhere. I also wanted to do some investing work from an RIA institutional investor platform.
I can't see going back and doing much of the same work to get more licenses, especially if I have to go through a B/D. I didn't do it to sell variables, so I can't see doing it just to sell FIAs.
I have a feeling that most of the companies are going to have some good fixed products for us. We will then be able to pan FIAs just like we currently pan variables: "You don't want a variable annuity, you still have market risk."
"You don't want an indexed annuity, you have complicated formulas for cap and spreads that are all skewed in the company's favor."
I sell FIA's, but for the Bonus component, not the Indexes. 90pct of my FIA clients start in the fixed interest account and stay there year after year. I meet with them every year and explain the Index strategies, and they stay in the fixed side, even with the boring rates. If Indexed products go to the BD's, I don't know that I care as long as the companies keep a Bonus product with a fixed account.
BTW, I have my 6, 63 & 65, and don't use them. I have about 18 months to place them with a BD or I lose them. I hope it doesn't matter, but if it does I am sure the insurance company will find one to put me with if they want my business.
...I agree with your perspective Charpress. For my particular niche, the index is not a big deal and would be easy to sell against. Give me a 10% bonus to work with and a decent interest rate, and I will be happy.
BTW, I have my 6, 63 & 65, and don't use them. I have about 18 months to place them with a BD or I lose them. I hope it doesn't matter, but if it does I am sure the insurance company will find one to put me with if they want my business.
...I agree with your perspective Charpress. For my particular niche, the index is not a big deal and would be easy to sell against. Give me a 10% bonus to work with and a decent interest rate, and I will be happy.
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Using this strategy, are people better off in the FIA or would a fixed annuity with the same surrender period work better? Can you give an example? Thanks.
It is the Bonus. When you compound it, it can beat a straight fixed annuity in many cases, especially for the first several years of a contract period. It also helps recover some of the principal they may have lost in the market, ect. The bonus is also payable to a beneficiary even if the annuitant does not live the full length of the contract. My clients generally want to stay clear of the markets, so losing the Index option would not be as big a deal to me as to someone dealing with Boomers.
Not sure if I answered your question or interpreted it correctly?
Are there good Fixed only products out there with a 10pct or better bonus? I don't know for sure, but not to my knowledge. There will be in the future, if 151a passes, which btw has just had the comment period reopened and extended. It looks like the securities industry is questioning its ability to regulate and monitor what is already on their plate.
Not sure if I answered your question or interpreted it correctly?
Are there good Fixed only products out there with a 10pct or better bonus? I don't know for sure, but not to my knowledge. There will be in the future, if 151a passes, which btw has just had the comment period reopened and extended. It looks like the securities industry is questioning its ability to regulate and monitor what is already on their plate.
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I'm asking, more specifically, what size of bonus are you using and what is the guaranteed minimum interest? Say the bonus is 10% and the min. is 3%, on a 10 year product. The avg. would be 4%. This is much worse than a 10 year fixed annuity.
- 924
Here's the thing about bonuses:
With most products (nearly all, as a matter of fact), if you leave before the contract period the bonus is lost. So, a bonus is fine if you stay for the long haul.
There are also products that take this even a step further: you have to take an income stream for some period, usually 10 years, or you lose the bonus.
I know a lot of you don't like Allianz, but at least with their latest product the 10% bonus vests at 1% per year. Since it is a 10 year product and the penalty is around 6% in the sixth year, I'm looking at this as having a 6 year walkaway if someone really hated it. The vested bonus and the penalty would be about the same in year 6.
So, in the past I haven't made a big deal about the bonuses because I always looked at bonuses as being icing on the cake.
That whole world is different because of the economy and because there are some decent products now with genuine bonuses.
With most products (nearly all, as a matter of fact), if you leave before the contract period the bonus is lost. So, a bonus is fine if you stay for the long haul.
There are also products that take this even a step further: you have to take an income stream for some period, usually 10 years, or you lose the bonus.
I know a lot of you don't like Allianz, but at least with their latest product the 10% bonus vests at 1% per year. Since it is a 10 year product and the penalty is around 6% in the sixth year, I'm looking at this as having a 6 year walkaway if someone really hated it. The vested bonus and the penalty would be about the same in year 6.
So, in the past I haven't made a big deal about the bonuses because I always looked at bonuses as being icing on the cake.
That whole world is different because of the economy and because there are some decent products now with genuine bonuses.
