Yeah of course every client is different. I would say that the bulk of our agents (unless it's Allianz' BUDBI) use a 50/50 mix of annual pt to pt and monthly pt to pt.
Yeah I mean up to 12% is what they say. Concerning yes, but they have a solid renewal rate history and it would devastate them if that spread starts jumping up. The last comminication I got from Allianz is that 83% of the business coming in the door has this strategy attached to it. If they screw this up that is going to put them from the number one carrier to way down the list. Worse comes to worst, annual reset.... Even if you had to throw the clients into a strat with a lower cap they're still getting a 50% bonus on that gain (assuming 360 or 222 which are most common). So that is what I tell my agents. They're screwing themselves if the spread gets bad or even if that happens, the alternative could be a lot worse. That's really the communication we have been getting from our rep at Allianz as well.
my BGA is pushing this but I cannot get comf with a potential 12% spread. Just seems that, over time, they will have to manage it so that it's about the same average interest as GALlC (caps now about 5.25%). But with GALIC I won't be trying to explain large spread changes. Of course, maybe this will not be a problem, but if not, then it's even more likely the the returns will be similar between them.
I of course don't know which cap you're speaking about when you mention the 5.25% but those stinkers are having another rate decrease again. You very well could be taking that into account already but just throwing that out there. I hear you for sure. I suppose the way it would be pitched would be something a long the lines of "Now we're going to start with this uncapped strategy that has (a current) 2.5% spread. I want you to realize this can change each year but remember we can change which indexing strategy we use. We are going to start with this to take advantage of the low spread. We have strategy x to fall back on if they make unfavorable changes."
Sounds good; does Allianz give you enough fair warning on that if you needed to use fall back strategy?
what chart are u referencing ? Simple mountain chart ?
