by GarySpicuzza » Wed Jul 14, 2010 05:03 pm
http://www.nafa.com/tmp/20100712-SEC151A_VACATE01.pdf
We therefore order that Rule 151A be vacated.
The Clerk is directed to amend the judgment filed July 21, 2009, accordingly.
The Clerk is further directed to issue the mandate 7 days after the issuance of this order.
Per Curiam
We therefore order that Rule 151A be vacated.
The Clerk is directed to amend the judgment filed July 21, 2009, accordingly.
The Clerk is further directed to issue the mandate 7 days after the issuance of this order.
Per Curiam
Posted: Thu Aug 05, 2010 06:20 am Post Subject:
Gary, No fixed indexed annuity accounts have lost money. Plenty of fixed annuity account owners have lost money.
A material misrepresentation??? How about a statement of fact.
I'm not claiming VAs to be better than FIAs. VAs have surrender charges. People can lose money in these products. My post has nothing to do with VAs I have no problem with FIAs. My problem is with you.
Again, you are doing exactly what I claim that you do. You are pushing indexed products by bashing variable products and those that sell them.
FIAs can stand on their own merits. The problem is people like you selling them in an unethical manner.
Posted: Thu Aug 05, 2010 01:03 pm Post Subject:
fkaksrku wrote:
Plenty of fixed annuity account owners have lost money.
fkaksrku, please post the statement of a FIXED annuity owner who has lost money that backs up your claim.
If you don't know how or don't have the computer technical knowledge on how to post an image on an Internet message board then please send the statement to:
Gary Spicuzza
P.O. Box 1960
Palm Harbor, FL 34682
I'll be happy to post it for you.
I'm from Missouri so you have to SHOW ME.
I love Internet thread wars!!!
Posted: Fri Aug 06, 2010 01:07 am Post Subject:
Warning numerous shameless web site plugs contained herein! :lol:
One of these days I'm going to be bored enough on a Thursday afternoon to listen to your radio show. Do you take callers? Please tell me you do.
fkaksrku,
With regards to losing money...
You must understand something, in the "SAFE" world, if you put $100,000 in an account and 10 years later your withdrawal value is still $100,000 you haven't "lost" any money. Don't attempt explaining buying power to them, that's not a word in the SAFE vocabulary.
Gary will be chomping at the bit to jump on me and defile "investment" products by talking about how they lose money, maybe even reference investment returns over the past 10 years with my $100,000 example, but what he and those who support him around here fail to address is my long time position that ordinary fixed annuities have higher guarantees and generally perform better. That in my opinion is a real "safe" investment.
Posted: Fri Aug 06, 2010 12:50 pm Post Subject:
BNTRS wrote:
8)
Warning numerous shameless web site plugs contained herein!
:PToo funny!
If an insurance agent isn't taking every opportunity to promote his/her/their products and services then they need to find another occupation.
:lol: By the way,...and speaking of shameless, gratuitous plugs...has anyone heard of James Spicuzza from The Trust Group? :wink:
Posted: Fri Aug 06, 2010 02:35 pm Post Subject:
It's Friday and I feel like playing on the Internet....
fkaksrku wrote:
Plenty of fixed indexed annuity owners have lost money. If one loses money because of a surrender charge, they have still lost money.
Please study the actual Fixed Annuity Statement below and let's discuss just how in dollars and sense flawed... fkaksrku's statement "IS."
This client of mine deposited $336,789 dollars on 6/29/2005.
Her contract value on 6/29/2010 (5 years later) is $336,789, exactly the same because she has been taking her interest earnings for income.
Her cash surrender value on 6/29/2010 is $321,671. THIS IS WHAT fkaksrku IS CLAIMING IS HER LOSING MONEY!
However, she's taken at minimum $45, 635 in interest earnings over the past 5 years and she still has her original premium of $336,789 dollars.
NOW, THEREFORE.... it's true that if she completely surrenders her contract she will receive $321,671 but to be dollars and sense correct you have to add back all the earnings she took as interest income over the past 5 years,....the $45,635 PLUS her cash surrender value equals $367,306 dollars and sense in her pocket which is $30,517 dollars more than her original investment.
Posted: Fri Aug 06, 2010 11:49 pm Post Subject:
That is NOT what I am claiming is losing money. That is an example of making money.
Use that same client as an example. She made a contribution of $336,789 on June 29, 2005. If she took out all of her money in August of 2005, could surrender charges cause her to have a loss?
Since the answer is "yes", we both know that my claim is correct. We also both know that you won't admit that I'm correct because admitting that you are wrong isn't something that you are capable of doing. You are capable of changing the subject and beating up on variable products instead.
Posted: Sat Aug 07, 2010 07:45 pm Post Subject:
Which financial professional would have more credibility...One named Gary Spicuzza or one named fkaksrku?
:P :P :P :P Too funny, and, bluntly, too true!
If insurance agents and others would stop using the word "investment" in the same breath as the words "insurance products" much of the aggravation would disappear.
Life insurance (your choice of term, WL, UL, VL, VUL and all the variations within), fixed annuities, fixed-indexed annuities, variable annuities are, simply, not investments. Some of the products may have investment COMPONENTS, but the are subsidiary to the insurance contract itself.
"Losing money" is philosophical as well as practical. As BNTRS points out, one could start with $100,000 and ten years later still have $100,000. For all practical purposes, they have not lost a penny. Philosophically, most of us would surely agree they have lost purchasing power.
Like the oil companies say, as they take $50+ out of my account every time I fill my tank, "Gasoline, adjusted for inflation, is no more expensive today than it was in 1970." And the now-plugged hole at the bottom of the Gulf of Mexico owned by BP only resulted in an "oil spill" -- imagine what your kitchen would look like with a few million barrels of spilled milk!
We can all promote the different products around for their perceived benefits, but we all have to be willing to discuss their disadvantages. EVERY insurance product has its own set of disadvantages, and unless the applicant is aware of THOSE, they often make a decision to go forward because they have only been told of the "advantages".
Fixed annuities have a guaranteed rate of return that the contract owner has no control over. Indexed annuities have a fixed rate of return that neither the insurer or the owner have direct control over, but the insurer hedges its position with participation rates and rate caps and a minimum interest rate that is typically the same as other fixed annuities. Variable annuities have no guarantees, no fixed returns (outside the guaranteed fund, which probably is lower than that of any fixed or indexed annuity), and no limits on up or downside returns in the subaccounts.
Each of these, philosophically, can be an advantage or a disadvantage. Some, like subaccount negative performance, definitely has to be discussed as a disadvantage (but philosophically, plays a role in the risk-reward discussion the same as if discussing mutual funds or stocks and bonds).
So most of the ping-pong "bashing" that tends to occur here is one of philosophy. Gary's philosophy is probably closer to mine than mine is to "the anonymous" fkaksrku, so I respond more favorably to his, perhaps.
It makes no difference to me whether the SEC ultimately ends up regulating indexed annuities (although it probably shouldn't, and probably won't), but if they did, I would wonder why they aren't also regulating indexed universal life. The products are essentially the same, it's just the difference in the "bet" -- (a) will I die soon? or (b) will I live a long time?
The person who is betting on (a) probably needs some kind of life insurance, while the person betting on (b) probably needs an annuity. What type of product? Well, agents have their preferences, sometimes based on the client's needs and sometimes based on their own needs. The former is proper, the latter is ethically wrong.
If an agent honestly presents all of the negatives of a product alongside the positives, then the client has the opportunity to make an informed decision. But when agents conveniently choose to bypass certain aspects of a product, clients can be hurt.
They don't have to lose money for that to happen. They can be in a fixed annuity earning their 3% year after year. But maybe, had they known about it, they would have preferred to be in an indexed or variable annuity. To them, that could represent a loss even though they have a gain.
If I only talk of the disadvantages of other people's products, I do my own a disservice, because people will believe that my products have no disadvantages. So I have to be honest and speak about all products from both sides fairly, and let the client decide which is best for himself.
I may feel their decision is all wrong, but it's the one they make, and unless I've done something wrong deliberately, I am not responsible for their decision. (Just like inflation protection in an LTC policy, if the client DOESN'T want it, even though I know it's best for them to have it, I can't force them to take it, but I must get them to sign a document stating that they were told about it and that THEY reject it.)
But Gary is definitely right . . . if you are willing to bash him or his philosophy (or me and mine, doesn't bother me in the least if you do) . . . you ought to at least be willing to put your own name to your comments. Not some garbage your fingers find on the lpaskerpo9yu8rql; erg (gobbledygook for "keyboard").
Posted: Sat Aug 07, 2010 08:04 pm Post Subject:
fkaksrku writes . . .
If she took out all of her money in August of 2005, could surrender charges cause her to have a loss?
The concept is true, but the contract owner did not, so the premise that people lose money in indexed annuities because of it is false. People buy homes, finance them for 30 years, with a monthly payment, let's say, of $3000, and let's say, sell them after 2 years. Their monthly payments might be almost 90%-95% interest in that time. Because the housing market is flat, they sell for $10,000 more than they paid. Would you say they made money or lost money? Most people would say they made money.
I would say they lost money. They paid $72,000 in payments, reduced the principal by a few thousand dollars at most, and if they were not going to buy another residence, would have $10,000 in taxable gain (subject to the lifetime exclusion, of course).
If they sold at the end of 30 years of making payments, for double the original purchase price, what would the answer be? Profit or loss?
Again, I would say loss, because in those 30 years, they easily paid 3 or 4 times the original purchase price in principal and interest to their lender. Money in hand does not always = a profit.
I own a stock or bond or mutual fund. The market has a bad day. I did not sell. But everyone wants to know how much I lost. What's the answer, fkaksrku?
NOTHING! I lost nothing because I did not sell.
Your premise that surrender charges = a loss is a non sequitur. Unrealized gains and losses are an accountant's pipe dream, and part of a mutual fund's "investment returns." They mean absolutely NOTHING until they are realized.
We can "what if" ourselves to death . . . doesn't change the fact that until a contract owner surrenders a life policy or an annuity, "losses on paper" are not real losses.
You cannot speak of surrender charges in an indexed annuity in any manner that makes them more or less than surrender charges in a variable annuity. They are identical in concept, and they are an insurance company's way of trying to eke out a profit in a worst case scenario -- the client takes the money and runs.
It's more of a carrot-and-stick issue. "Stay with us long enough and the surrender charges go away" applies equally to both fixed/indexed and variable annuities (but "stay with us that long and you could lose all your money even without a surrender charge" only applies to a variable annuity). Do you discuss it that way? Most agents don't.
Agents love to talk about taking "tax free" money out of a cash value life policy. But, please, tell me what happens when someone pays $10,000 in premiums and takes $15,000 out in "tax free" policy loans and then lets the policy lapse?
OOPS! $5000 taxable gain!! OOPS!! Maybe just enough gain to bump the fellow into the 31% tax bracket. OOPS!! Now all of his income is taxable at the 31% rate. OOPS!! He might have to pay a penalty for being more than 10% underwithheld for the year. OOPS!! I guess it really wasn't tax free afterall, was it? OOPS!! E&O lawsuit coming. OOPS!! You don't have E&O insurance? OOPS!!
fkaksrku . . . You need to discuss apples as apples, not as oranges.
Posted: Sun Aug 08, 2010 12:29 am Post Subject:
Max, read the posts more carefully. What you’ll see is that Gary said that nobody has ever lost any money in a fixed indexed annuity. My response is that because of surrender charges it is possible to lose money. I’m not calling an unrealized loss, a loss. I’m simply point out a FACT that it is possible to lose money. I’m not comparing FIA’s to any other product. I made no comments as to whether they were good or bad products. A FIA contract can never go down in contract value, but someone who buys an FIA can lose money.
As for you giving me a hard time for being anonymous, you know that is B.S. I’m willing to bet that you are not currently affiliated with a broker/dealer. I say that because your posts here would be considered advertisements and as such your B/D would want to approve them in advance. I can’t post under my name even if I wanted to do so. If I could, I would.
Posted: Sun Aug 08, 2010 03:50 am Post Subject:
I say that because your posts here would be considered advertisements
Based on what interpretation of securities law?
My response is that because of surrender charges it is possible to lose money
While your statement is not untrue, that is not the context in which his remarks were framed, and you know it. By the same token you could say that the income tax a person pays on their gains constitutes a loss, and that would be a mischaracterization as well.
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