SEC: Investor Alert on Indexed Annuities (clueless)

Aug 13, 2019

  1. DHK
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    DHK, Aug 13, 2019
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  2. Golfnut2112
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    What part is inaccurate?
     
  3. DHK
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    Sheryl Moore says that this "investor alert" describes more of a structured annuity rather than an indexed annuity. I don't know much about structured annuities, but for indexed annuities, you can't lose money purely due to market losses.
     
    DHK, Aug 13, 2019
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  4. Tahoe Ray
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    You have to be securities licensed to sell-structured/hybrid indexed/insert fancy marketing name here-annuities too, for that exact reason.

    This is why I'm guessing that the SEC is commenting on them. There is a difference between a fixed indexed annuity and what a lot if the industry is calling an indexed annuity which can include both types.
     
    Last edited: Aug 13, 2019
  5. Allen Trent
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    Isnt the definition of floor inaccurate? It gives the impression floor of 10% could cause a loss of 10% to the cash value if the market dropped 12%. If most have a floor of zero, wouldn't there be no chance at a market loss. Now, if some of the products are including index choices that include Multiplier index segments that carry a % fee of 5 or 10%, then the client could take an actual crediting loss in down or flat years.

    Maybe this was triggered by the AG49 discussion going on about IUL illustrations & the author confused the issue or failed to clearly state it.
     
  6. Tahoe Ray
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    It's talking about hybrid index products which are considered variable and uses that exact terminology (floors, buffers, etc.).

    A lot of company wholesalers are calling them indexed (which they are) but they certainly aren't FIAs (FIXED).
     
  7. Allen Trent
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    thank you. then, the SEC alert is poorly written to not call that distinction out or define that FIA are different
     
  8. IsaacA
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    Ooof this is something.
    Fixed Index Annuities are not these structured products.
    Those structured products are considered VIAs or Hybrids.
     
    IsaacA, Aug 14, 2019
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  9. DHK
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    Just got off the phone with a journalist for InvestmentNews about this bulletin because I had posted on Sheryl Moore's LinkedIn post. Gave my opinion that either the bulletin is mis-titled OR it lacks the clarity required to give consumers a clear distinction between indexed annuities and these other structured annuities. And if agents are getting this wrong, and if registered reps are getting this wrong, and if the regulators are getting this wrong... what hope does the consumer have in understanding these things? (I also gave my opinion on their recent article about insurance agents "breaking the law" for 401(k) balances to insurance products.)
     
    DHK, Aug 16, 2019 at 12:27 PM
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