|
|
Discussion on Equity Indexed Annuities: Are they the real deal or junk products? within the Annuities Forum, part of the Insurance Agents and Brokers Forum category.
I meant to write, "allows their money to continue to grow tax" DEFERRED, not tax free.... |
|
Views: 4598 - Replies: 186
|
06-21-2007, 08:12 PM
|
#43
|
|
Guru
|
Quote:
Originally Posted by kingedgars
|
Allianz is the top carrier for EIAs because they have among the highest commissions available to agents. The reason their commissions are so high is because most of the Allianz products offer a huge bonus to consumers (10-12%) for the first year on a customers money. Often tied to this bonus, the annuity has to be annuitized or has a rediculously long surrender period (sometimes 12 years). I am sure the high commissions caused many agents to engage in unethical sales tactics..
Not all EIAs are bad. Some companies offer excellent products that in many cases are much better than CD's and traditional fixed anuities. Even the high bonus products can be suitable if disclosed properly and sold in the proper situations.. It's the bad agents out there not selling products correctly that give us all a bad name!
|
|
|
|
06-24-2007, 01:46 PM
|
#45
|
|
Guru
|
Well, luvs, this has been an interesting discussion.
I agree, EIA's are not for everyone. However, I would absolutely argue that the older one gets, the less actual stock market exposure one should have, and that includes contact with stock brokers at wirehouses (you can call them whatever you want, but they are simply glorified stock brokers).
READ THIS ARTICLE:
http://www.businessweek.com/ap/finan.../D8PJGSRO0.htm
I have encountered this type of behavior in the past, with all kinds of wirehouses in the mix. It is truly disgusting.
With respect to Allianz, I have only sold walkaway products and none for years. Their other products were (are?) frightening, and the lawsuits are only starting...
GamePlan is owned by Allianz. Allianz has an exceptionally high override payment to the FMO, so nearly every FMO wants your Allianz contract. Disgusting.
Don't forget to review the FMO sticky on this board.
|
|
|
|
|
06-24-2007, 05:11 PM
|
#46
|
|
Guru
|
Quote:
Originally Posted by Chris
I'm new to this forum and I don't have my securities licenses. Why aren't people with security licenses allowed to give their general impression of different investments? I understand that each person is different, but what harm is there in generalized information with the understanding that it is an opinion and not specific to any one person?
|
Securities licensed individuals are well trained (under threat of their license) to realize that investment information is specific to the individual. It's hard to make general statements without it being misinterpreted by someone. What's good general advise for someone in the aggressive growth mode is usually lousy general advise for someone in the capital preservation mode.
For most securities people, any advise given in a written form has to be approved by the compliance department of the broker-dealer they work for. WAY to much of a hassle....
On the other hand, most will gladly talk to you on the phone....
Dan
|
|
|
|
|
06-25-2007, 12:54 PM
|
#47
|
|
Expert
|
The pressure on SEC to regulate and register all EIAs and those who sell them is increasing. Here's an informative discussion: http://www.actuarialoutpost.com/actu...ad.php?t=60315
------------------------------------
I thought this WAS a real job! 
|
|
|
|
|
06-25-2007, 03:40 PM
|
#48
|
|
Guru
Join Date: Sep 2006
State: 
|
Anytime a sales force is being trained to tell people "all upside and no downside" or things like "cannot lose your money" you have to know it's gonna hit the fan sooner or later.
I had two marketing companies contact me to sell annuities. I baited both of them and kinda played along. Safe to say I felt like taking a bath after both of them finishing telling me how to close deals.
Also, although we are all paid more as the premium increases that also requires clients to spend more money. Am I gonna convince someone to get a $2,600 a month health insurance premium? Not likely.
However, with annuities - and take a 10% commission level - the more you get people to invest the more you make - no ceiling. So if you can talk that senior into putting $200,000 into an annuity to cashing out all CDs and other investments you stand to make a $20,000 commission. Horrible.
So how does an agent answer this question from a senior:
"Ok, I'd LOVE to get this annuity! I have $600,000 in CDs and investment. How much do you think I should put in?"
Last edited by healthagent : 06-25-2007 at 03:46 PM.
|
|
|
|
|
06-25-2007, 11:28 PM
|
#50
|
|
Guru
Join Date: Sep 2006
State:
|
The question is what is in place to stop an unethical agent from taking advantage of a senior and having them put their entire life savings into an annuity? Are their any checks and balances? Does anyone have a responsibility to call a 78 year old senior and go over that $500,000 annuity she's buying? I know if I had an agent who turned in 5 Right Start PPO plans in a row I have an ethical responsibility to call those clients and make sure the sale is proper. Who's the gatekeeper for annuities?
|
|
|
|
|
06-26-2007, 01:14 AM
|
#52
|
|
Guru
|
There are suitability forms that have to be filled out. There are always going to be unethical agents in all sectors of financial services sales. If I go sell 20 Right Start Plans, as a GA to Assurant, I doubt my RSD would say anything. Should he, yes, but not all checks and balances systems are fool proof. I will eventually get sued and that's the end of it. Should EIAs be regulated as securities products. I will answer no..... due to the fact the customers do not hold actual securities. Should agents be selling 10% bonus products that require annuitization and have virtually no liquidity... no... Perhaps a more thorough look at new applications or a principle review requirement similar to that required on securities products would solve some of the problems with unethical sales. The bottom line is anytime money is involved with any type of sales (insurance, cars, houses, etc...), there will be bad apples.
|
|
|
|
|
06-26-2007, 11:21 AM
|
#53
|
|
Expert
|
In its 1986 announcement of Rule 151, the "Safe Harbor" rule for insurance, the SEC wrote several paragraphs about indexed products. It said that all indexed products that determine the rate at the end of the period, i.e., by looking back at the past year's (or month's) change, are outside the safe harbor. Most EIA company attorneys skip over that SEC discussion of indexed products, and (because the SEC refuses to issue legal opinions) then opine that the company doesn't need to register EIAs as securities.
If the emphasis in sales of an annuity is its investment value, the SEC (Rule 151) says it is outside the safe harbor (i.e., it's a security). EIAs are all sold based upon investment value (not because they assure a life income, which is its insurance value). Although insurers don't invest much of the EIA premium in stock indexes, the index (S&P 500) basis shifts the investment risk to the investor. Shifting investment risk to consumers also places EIAs outside the safe harbor, making them securities.
State securities offices have become much more active lately in revoking licenses of agents who tout EIAs in lieu of other investments. They have begun to enlist the support of state insurance departments in such cases. Promoting EIAs as safer or offering better returns than other securities is a securities transaction, requiring NASD licensure as well as compliance with securities laws.
|
|
|
|
|
06-26-2007, 11:26 AM
|
#54
|
|
Guru
Join Date: Sep 2006
State:
|
Well written.
|
|
|
|
|
06-26-2007, 04:57 PM
|
#56
|
|
Expert
|
You're selling investment safety, not annuity benefits. That makes it a security. Yes, you need a securities license. (In my state, the state securities office will ask the DOI to pull your insurance license for touting EIAs over other investments--and it will be done.)
Last edited by JMO Fan : 06-26-2007 at 04:59 PM.
|
|
|
| | | | | | | | | | |
