You guys are wasting your time trying to school this guy. He pops up with this crap every so often like a case of herpes. If he were smart enough to understand these things he would have been smart enough to not misspell his website name... botique instead of the correct BOUTIQUE.
Equity Indexed Annuities: Are they the real deal or junk products?
- Thread starter NHB_MMA
- Start date
-
- Tags
- annuity indexed annuities
I listen to facts -- None of which anyone has proven. Nathan sent me a sample contract for a Hartford IA. It guarantees 87.5% of your money back but not 100%. The guy using Prudential to prove a fact about a VA forgets that he once told me all IAs are different. But hey, trying to prove a point without posting any evidence does not settle an discussion.
Sman -- where is your FACTUAL evidence? If you post a clients account of yours, blacken out the name and personal information, that would be factual. Otherwise it is just conjecture.
Casinos in Las Vegas do not make money because the luck of the draw MOST of the time. The cards are stacked in favor of the house. Same with IA companies. If you do not understand that, I cannot help you. Caps & spread are part of the product for a reason, it is a fail-safe for the company and is FAR more expensive than the charges involved in a VA.
I am ALWAYS looking for information and to learn -- Your problem is that you, like Obama, want me to take your word for it without showing proof. Your words are not FACTUAL proof to me.
- - - - - - - - - - - - - - - - - -
Iceco1d -- you are classless!! Not quoting you this time so that you cannot delete my comment as you did last time. I hope that you explain to your clients how the markets works over the long run and the concept of inflation. If after doing that, you can show them a sample contract of the product and they buy -- it is what it is.
A lot of what you said in your response is incorrect. Show where it says PRU can raise the fees on the rider or just stop with your non-sense. Do you really think that the fees in a VA cost more than the spreads and caps in an IA?
I'm not going to bother with you anymore. You obviously have a problem with reading comprehension.
And there are some which guarantee returns on 100% of the investment.
There is plenty of evidence on the sources that have been provided to you. You've chosen not to accept them because they are somehow tainted due to the fact they have some type of association to the IA industry.
Yet, for some reason, you will take Pru's negative comments on IA's as fact. I find that very hypocritical of you. Why do you think Pru has negative comments about IA's?
Yes, caps and spreads are part of the IA, but to claim they are more expensive than the fees in a VA is ridiculous.
http://www.annuities.prudential.com.../pruannuities_investor/ppr_pros.pdf?siteID=25
That's a link to a prospectus of just one of Pru's VA's (Premier Retirement Series). On page 24 you will see the M&E charges for the different VA products. Those are pretty straight forward. Take a look at page 25 where it list some of the different riders. Notice it says "Maximum Charge" and "Current Charge". If the current charge is less than the maximum charge, that means the fee can be raised from it's current charge to the maximum charge.
Now let's talk about total charges. We'll use the X-Series. M&E is 1.85%. If we add the highest daily income with lifetime income accelerator, that's another 2.00% max charge. Now we're up to 3.85% before we've even discussed the management expenses of the sub-accounts. Page 27 tells us the lowest and highest expenses of the sub-accounts. They range from 0.62% to 1.66%. We'll just split the difference and add 1.14% to the already 3.85% we have from the M&E and rider charge. Now we're at 4.99%.
So hopefully the above information answers two questions for you. First, a VA company CAN increase their charges on their riders within the annuity up to the contractual amount. Second, the expenses with this VA exceed the spreads on most IA contracts. With this particular VA, the client has to realize a 5% return on their sub-accounts just to break even. If you are using VA's for anything more than risk management then you are likely doing a disservice to your client.
As I've stated before, I use VA's as part of the overall portfolio for some of my clients. Those who want a guaranteed income for life while still having some market exposure. I have also used IA's on occasion for the client who just wasn't willing to see their balance go negative from time to time but wanted to the opportunity for a higher return than what they are seeing on their savings and CD's.
- 337
Funny aren't you!! How about instead of attacking me, defend your belief in this product.
Keep on placing people in products that you do not even understand and arguing facts that YOU cannot prove without conjecture. Mathematically almost impossible to make money. You must be a recruiter who does not care about the truth!!
Which companies since you did not name them? Funny, you sell these products but do not have sample contracts to send to me??
Instead of throwing stones, offer evidence and not just statements of conjecture!!
Keep on placing people in products that you do not even understand and arguing facts that YOU cannot prove without conjecture. Mathematically almost impossible to make money. You must be a recruiter who does not care about the truth!!
- - - - - - - - - - - - - - - - - -
Which companies since you did not name them? Funny, you sell these products but do not have sample contracts to send to me??
Instead of throwing stones, offer evidence and not just statements of conjecture!!
Last edited:
- 14,808
http://www.slcg.com/pdf/workingpapers/EIA White Paper.pdf
A great read. This is not at all bashing EIA's but simply pointing out how rather complicated they are and the fees. Doesn't make them bad products at all. It does, however, raise a flag when agents claim how "easy" they are to understand.
A great read. This is not at all bashing EIA's but simply pointing out how rather complicated they are and the fees. Doesn't make them bad products at all. It does, however, raise a flag when agents claim how "easy" they are to understand.
- 10,589
This was the "research" paper the SEC used in trying to pass 151a.
It is not based in fact. The SEC (who had already proposed 151a) hired these guys to do a "study" AFTER they had decided IAs were a Security.
If you cant see the political bias in the first paragraph then you are blind.
You should know that any credible research paper should not begin its research with a conclusion.....
John,
If you spent half the time reading a contract (or even a contract summary) that you do searching out and reading material criticizing IAs, they would no longer be a mystery to you...
If you actually do want to learn, why not take up offers to be educated on the subject?
Have you actually read an IA contract?
- 14,808
Yes, I've had agents send me a few in the past. I'll maintain they're great products but like anything, when they're a proper fit.
I'll also maintain that there are too many "annuity salesman" out there who only have a hammer and everything looks like a nail.
You may not talk to these agents all the time. I do. They are "hired" to sell annuities, smacked on the ass with "go get 'em tiger"...and they are very dangerous to the industry.
I can relate. I was chugging the HSA Kool Aid for almost two years before I had to back off the realize that they weren't a proper fit for a lot of my clients.
I'll also maintain that there are too many "annuity salesman" out there who only have a hammer and everything looks like a nail.
You may not talk to these agents all the time. I do. They are "hired" to sell annuities, smacked on the ass with "go get 'em tiger"...and they are very dangerous to the industry.
I can relate. I was chugging the HSA Kool Aid for almost two years before I had to back off the realize that they weren't a proper fit for a lot of my clients.
Last edited:
Who are you that I or anyone else here needs to defend anything to you? I couldn't care less what you sell or what you believe. What have you done in this undustry that sets you apart as someone who we should all listen to?
It's only out of courtesy that these other guys waste a minute of their valuable time attempting to help you or respond to your silly questions.
Fix the spelling of your website, genius.
Last edited:
