by GarySpicuzza » Sat Feb 28, 2009 02:26 pm
Who sells what?
Broker-Dealers and their "Certified Clueless Clown" FINRA "Registered Representatives" have done great harm to the American public's Life Savings, 401Ks, IRAs and other Private Pension Plans by selling unsuitable Variable Annuities with little or no insurance training or understanding of risk management whatsoever.
The first graphic below is actual 2007 sales figures showing the break down of who sells what.
Variable Annuities are SOLD by STOCK BROKERS not Insurance Agents.
The second graphic below is an actual client statement, used with permission, that shows EXACTLY, in dollars and cents painful detail, why these products are per se' UNSUITABLE for persons over the age of 60.
It's these jack assterisk "Registered Representatives" that you read about ALL THE TIME in the newspaper. Please understand these Certified Clueless Clowns had to get an insurance license to be able sell the infamous bloated pig with lipstick known as a Variable Annuity but THEY ARE NOT insurance agents....they are Stock Brokers.
Many of them hide behind the letters CFP after their names to mask the fact they are actually commission paid salesmen of financial services and products just like... ALL "other" financial services advisors.
NOBODY is paid a salary or hourly rate in this business.
The actual statement below is your "Typical Variable Annuity."
Broker-Dealers and their "Certified Clueless Clown" FINRA "Registered Representatives" have done great harm to the American public's Life Savings, 401Ks, IRAs and other Private Pension Plans by selling unsuitable Variable Annuities with little or no insurance training or understanding of risk management whatsoever.
The first graphic below is actual 2007 sales figures showing the break down of who sells what.
Variable Annuities are SOLD by STOCK BROKERS not Insurance Agents.
The second graphic below is an actual client statement, used with permission, that shows EXACTLY, in dollars and cents painful detail, why these products are per se' UNSUITABLE for persons over the age of 60.
It's these jack assterisk "Registered Representatives" that you read about ALL THE TIME in the newspaper. Please understand these Certified Clueless Clowns had to get an insurance license to be able sell the infamous bloated pig with lipstick known as a Variable Annuity but THEY ARE NOT insurance agents....they are Stock Brokers.
Many of them hide behind the letters CFP after their names to mask the fact they are actually commission paid salesmen of financial services and products just like... ALL "other" financial services advisors.
NOBODY is paid a salary or hourly rate in this business.
The actual statement below is your "Typical Variable Annuity."
Posted: Sat Feb 28, 2009 04:48 pm Post Subject:
wow!! hopping loss of almost $ 11952 just within 1 year on the beginning amount of $ 30650.with variable annuity.
If i calculate it in terms of percentage loss in a year it will come to 38-39 %.
so it has depreciated your portfolio value by 38-39 % within 1 year.
Instead
if they have put it with the fixed index annuity or fixed rate annuity how much would have been the gain?
Gary can you tell me what are prevalent fixed index and fixed rate interest rate?
So that i can do the math and give the viewers the exact scenario about the gain!!
anyway thanks garry for whole this stuff as it is really an eye-opener. :wink: :wink:
Posted: Sun Mar 01, 2009 12:39 am Post Subject:
Thank you for asking Amit:
if they have put it with the fixed index annuity or fixed rate annuity how much would have been the gain?
$30,650 in premium paid into a Traditional Fixed Annuity that offers a 10% premium bonus would have produced the following results.
February 12th 2008 $30,650 premium PLUS 10% first year bonus equals a beginning year one Account Value of $33,715.
The GUARANTEED first year interest is 3%.
$33,715 PLUS 3% tax deferred interest equals a End of Year one (1) or on February 12th 2009 the client would have an Account Value of $34,726.
Now let me provide you some :shock: eye :shock: popping math.
The client who bought the FIXED Annuity on February 12th 2008 has $34,726 on February 12th 2009.
The, Certified Clueless Clown, FINRA "Registered Representative" who sold the now 80 year old man the Variable Annuity cost his client $11,982 of his life savings in one year and on February 12th 2009 the client has only $18,668 dollars left.
Yes, Amit...that's a 39.09% LOSS in one year.
But it's actually worse than that.
The client with the Traditional FIXED Annuity will get ANOTHER 3% GUARANTEED interest on his $34,726 in year two (2) bringing his End of Year two (2) Account Value to $35,767 on February 12th 2010.
Now for the :shock: eye :shock: popping math:
Do you know what type of IMPOSSIBLE market gain the client with this bloated pig with lipstick Variable Annuity would have to get to just break EVEN with the FIXED Annuity next year? Feb 2009 to Feb 2010.
It's 86.24%....just to stay even.
Want to know the truth about money?
Money is plentiful for those who understand the 7 simple rules of its acquisition.
#1) Start saving.
#2) Control your expenditures.
#3) Guard your money from loss.
#4) Safely earn money on your money.
#5) Make your home a profitable investment.
#6) Insure a future income.
#7) Increase your ability to earn more money.
The Five Laws of Money.
#1) Money comes in increasing quantity to any person who will set aside not less than 10% of their earnings to create an estate for their future and that of their family.
#2) Money grows diligently and contently for the wise owner who finds for it profitable, safe and reliable investments.
#3) Money stays with the cautious owner who invests it under the advice of those wise in its handling.
#4) Money slips away from the person who invests it in businesses or purposes with which he is not familar or which are not appoved by those skilled in its keep.
#5) Money flees from the person who would force it to impossible earnings or who follows the alluring advice of tricksters and schemers or who trusts it to their own inexperience and romantic desires for investments.
Posted: Sun Mar 01, 2009 01:02 am Post Subject:
1) Start saving.
most of the time people stumbles here only.
Control your expenditures.
when you use money in physical form ( paper cash) instead of e-cash,credit card,debit card you tend to control your expenditure.(it's related to psychology) if anyone has anything to say about this statement they can PM me.
Guard your money from loss.
why to put our hard earned money on any risky scenario where there are chances for losses and we being at no fault in the picture.
Safely earn money on your money.
put your money with govt bank's and earn interest on it as they are the safest heaven.(Gobement check never bounce! am i right garry?)
i will comment on remaining three in next thread. :wink:
Posted: Mon Mar 02, 2009 10:54 am Post Subject:
Hi Gary, what I've understood from your opening post is that the variable annuity is an unsuitable option for people over 60 yrs of age. However, is it then alright for a young individual to buy variable annuity? If so, when should he start ideally?
Posted: Mon Mar 02, 2009 03:30 pm Post Subject:
is it then alright for a young individual to buy variable annuity? If so, when should he start ideally?
I won't find any logic for the craze of variable annuity.Firstly i will never put my money where there are chances of erosion of the principle amount.(it's very likely even for the young people that they will be loosing some part of their principle amount if they invest with VA.)
Better you purchase term insurance along with put your money where growth is safe & secure without any chance of erosion of principle.
So both the criteria will be achieved. Safety + insurance.
thanks :wink:
Posted: Tue Mar 03, 2009 01:48 am Post Subject:
Hi Gary, what I've understood from your opening post is that the variable annuity is an unsuitable option for people over 60 yrs of age. However, is it then alright for a young individual to buy variable annuity? If so, when should he start ideally?
Personally, I wouldn't put one dime into a Variable Annuity as they violate the Safety of Principal aspect inherent in ALL annuities EXCEPT Variable Annuities.
My comment regarding a "maximum issue age of 60" is because at age 60 a person has a fighting chance to recoup what they've lost during the next 10 years.
Losing a substantial amount of principal at age 70 and above, the person simply doesn't have life expectancy on their side to get back to even.
That's my point.
Further, even if you could break even over the next ten years from age 60 to 70 you would have effectively had zero growth on your money because you're only back to what you had 10 years ago. Also one must risk what's left of their principal in the market chasing impossible returns and hope the market doesn't crash AGAIN.
The typical fees charged in a Variable Annuity are about 3% per year. That means the contract has to earn 6% per year each and every year just to have the cash values stay even with a FIXED Annuity that doesn't put the client's principal at risk with the day traders playing stocks like a flee market swap meet.
Posted: Wed Mar 04, 2009 02:29 pm Post Subject:
with the day traders playing stocks like a flee market swap meet.
Garry! i like your terminology for the behavior of the stock traders. nice match. :wink:
Posted: Wed Mar 04, 2009 09:47 pm Post Subject:
See the links below for clean full size versions of the above graphics.
http://wsm.ezsitedesigner.com/share/scrapbook/12/127233/2007AnnuitySales.gif
http://wsm.ezsitedesigner.com/share/scrapbook/12/127233/TypicalVariableAnnuity.jpg
Every time a Variable Annuity implodes the news media always tags insurance agents with malfeasance when in fact it's the Broker-Dealers and their Certified Clueless Clown "Registered Representatives" who sell these unsuitable products.
These are the so-called "financial advisors" who HAD to get an insurance license to be able to sell this bloated pig with lipstick with little or no insurance training whatsoever.
These people wouldn't know risk management is they had a mouth full of it.
Posted: Thu Mar 12, 2009 11:14 pm Post Subject:
Another very interesting point is that many "registered representatives" call themselves financial planners, and yet really have not earned the CFP designation. Not many of the people who call themselves financial planners have actually passed the 10 hour exam. Then again, book smart is completely different than common sense!
I have been a financial advisor, business consultant, and work on the insurance side...and have NEVER recommended a variable annuity. I do use annuities frequently...but they are FIXED.
Insurance agents as a whole get a bad wrap from a lot of different angles, and unfortunately it won't change as long as there are those that are out there producing with their own interests at heart. If we were all professional, had the client's best interest in mind, and acted with the utmost integrity...think of how easy it would be to sell insurance.
The only thing we can do is make sure that we are doing the right thing, right time, with the right client. EVEN IF NOBODY IS WATCHING!
Posted: Thu Mar 12, 2009 11:46 pm Post Subject: insurance
Insurance agents as a whole get a bad wrap from a lot of different angles, and unfortunately it won't change as long as there are those that are out there producing with their own interests at heart.
I couldn't have said it better myself!!Add your comment