[quote=anonymous]

babbling looney, you can't agree that an eia is a bad investment because...

An EIA is a savings vehicle, not an investment.  It carries no market risk, but plenty of other risk.  Therefore, a securities license is not needed to sell the product.

I must also commend you for pointing out that Putsy's posts show that he doesn't understand the product (even if he's correct about it usually not in the client's best interest)

[/quote]

How is it possible that an EIA isn't in the clients best interest? Are you so naive that you think that everyone who sells them are out to F the client? Did you know that there happens to be a LOT of people who want to take a chunk of money, put it aside, and safely make 5-8% on a tax deferred basis?

It sounds like you pikers deal with piker clients who have to TRY to make a lot of money. You don't know that people with a lot of money are more interested in not losing it and are willing to accept modest returns.

Some of you people really freak me out with your ignorance.

I don't do annuities, and really don't understand EIA all that well.  However, I received a call from an insurance company pitching their EIA.  I was informed that the annuity would offer a minimum of 3%/year, with an upside capped at 7% as year, regardless of the upside of the S&P.

Huh!? I asked the rep who in their right minds would recommend this product?  The best you can do is 7%, and your average return would be around 5%.  When I can purchase a T-bill that is guaranteed offering as much, what's the allure? Suffice to say, he didn't have much of an answer.

SOB,

You and Diggler should partner up and really screw clients in the arse with your EIA slinging... Keep making that 10% commission, but shut the F- up with that talk about EIA's being good products....

Cranky SOB,

I very much understand the ins and outs of EIAs.  I don't have any problem with them as a product.  They are neither good nor bad.  They are appropriate or inappropriate based upon the situation.  I do have problems with many of the people who sell them and how they are sold. 

Do you really think that someone has the opportunity to make 8% on a fixed product over a long period of time?  I certainly don't.  Do you think that they can't make less than 5%?  I do.  3%-6% is much more realistic. 

You may be very ethical in how you sell the product.  However, I have never met someone who owns an EIA and actually understands how the product works.  Most of these people actually believe that their money is in the market, but  that they don't have market risk.

There is absolutely no reason to expect an EIA to outperform a traditional fixed annuity, but it is possible.

[quote=The Judge]

I don't do annuities, and really don't understand EIA all that well.  However, I received a call from an insurance company pitching their EIA.  I was informed that the annuity would offer a minimum of 3%/year, with an upside capped at 7% as year, regardless of the upside of the S&P.

Huh!? I asked the rep who in their right minds would recommend this product?  The best you can do is 7%, and your average return would be around 5%.  When I can purchase a T-bill that is guaranteed offering as much, what's the allure? Suffice to say, he didn't have much of an answer.

[/quote]

You're right. YOu don't understand them very well.  

[quote=anonymous]

Cranky SOB,

I very much understand the ins and outs of EIAs.  I don't have any problem with them as a product.  They are neither good nor bad.  They are appropriate or inappropriate based upon the situation.  I do have problems with many of the people who sell them and how they are sold. 

Do you really think that someone has the opportunity to make 8% on a fixed product over a long period of time?  I certainly don't.  Do you think that they can't make less than 5%?  I do.  3%-6% is much more realistic. 

You may be very ethical in how you sell the product.  However, I have never met someone who owns an EIA and actually understands how the product works.  Most of these people actually believe that their money is in the market, but  that they don't have market risk.

There is absolutely no reason to expect an EIA to outperform a traditional fixed annuity, but it is possible.

[/quote]

That's interesting....ONe of the selling points to EIA's is that they're NOT in the market. People like that. Have you ever flown on an airplane? Do you know how to build one?

I agree that the client does not need to understand the inner workings of the EIA.  However, when someone flies in an airplane, they at least understand that they are flying and not riding in a bus. 

I believe that if you describe fixed annuities and variable annuities to a typical person who owns an EIA, they incorrectly think that they own a variable annuity with a minimum yearly guarantee.

As long as people sell EIAs and talk about "market returns without market risk", the product will continue to get beat up.  On the other hand, if it's described as a fixed annuity where the crediting method is partially tied to the change of a market index as opposed to the general portfolio of the insurance company, many of the problems will go away.

[quote=anonymous]

I agree that the client does not need to understand the inner workings of the EIA.  However, when someone flies in an airplane, they at least understand that they are flying and not riding in a bus. 

I believe that if you describe fixed annuities and variable annuities to a typical person who owns an EIA, they incorrectly think that they own a variable annuity with a minimum yearly guarantee.

As long as people sell EIAs and talk about "market returns without market risk", the product will continue to get beat up.  On the other hand, if it's described as a fixed annuity where the crediting method is partially tied to the change of a market index as opposed to the general portfolio of the insurance company, many of the problems will go away.

[/quote]

Agreed.  That is the main problem with EIA's.  They are primarily sold by insurance-only agents, who have no other types of products or securities to offer.  They have no compliance dept. keeping them on the straight and narrow, and no NASD audits or arbitration to fear.  They can almost say or do whatever they want, including giving their unsuspecting clients a false sense of hope (ie. double digit returns) and talk about their EIA's being "in the market".

EIA's were a better product when interest rates were low.  Then they filled a nice gap between traditional fixed and VA's.  Now, with fixed rates fairly high, where clients can get 5-6%/yr, the upside of the EIA is getting less and less, especially when there's a risk of having a year where they would get only 0-3% credited because of poor S&P performance.

Cranky SOB- Yeah, I don't know too much about EIA's.  Fortunately for my client's and my production levels, I know tons about effectively managing money.  It's great not to have to rely on packaged products that have to offer so much "juice" to entice brokers to sell them. 

Reminds me of the "principle protection" funds that were all the rage about 3-4 years back.  Absolute garbage.  These funds are almost down in value after the S&P has rallied 50%.  Yet, so predictable.

[quote=The Judge]

I don't do annuities, and really don't understand EIA all that well.  However, I received a call from an insurance company pitching their EIA.  I was informed that the annuity would offer a minimum of 3%/year, with an upside capped at 7% as year, regardless of the upside of the S&P.

Huh!? I asked the rep who in their right minds would recommend this product?  The best you can do is 7%, and your average return would be around 5%.  When I can purchase a T-bill that is guaranteed offering as much, what's the allure? Suffice to say, he didn't have much of an answer.

[/quote]

No one in their right mind who cares about their clients or their own reputation would offer this product. 

First of all the 3% guaranteed return is not 3% compounded annually.  The 3% is usually for the lifetime of the contract.   That part is not disclosed.  Probably because the insurance salesman doesn't even understand his own product.  All he knows is the "talking points" to get people to buy.

Most of the EIAs I've seen have a cash bucket option where you can take part of your money off of the table and get a guaranteed 3 to 3.5% return.  This is in case the market index didn't have any gains at all, so now your client is getting less than a money market rate on less than their full amount invested.  Cool huh?

If all a person wants is a savings vehicle why in the world would you chose an EIA. Having your gains capped at an uncertain 7% a year and possibly actually receiving less than that, in addition to having your principle locked up for 10 to 15 years, is NOT a good deal for your client.  Yes I have seen 5 year EIAs but their guaranteed returns aren't that hot either. 

If you want to give your clients a safe 'savings opportunity' (for those who do not want to be in any growth vehicles), why not buy some short term, no longer than 3 to 5 year maturities, yielding average 5%, keep some in cash in a 4.5% money market to take advantage of rising interest rates.  Or if they want a higher guaranteed % return and are willing to lock their money up for 10 years buy a portfolio of quality bonds yeilding 6 to 7%.  It isn't hard to find those in this current market.

Oh I know.  No commish.

[quote=STL Indy][quote=anonymous]

I agree that the client does not need to understand the inner workings of the EIA.  However, when someone flies in an airplane, they at least understand that they are flying and not riding in a bus. 

I believe that if you describe fixed annuities and variable annuities to a typical person who owns an EIA, they incorrectly think that they own a variable annuity with a minimum yearly guarantee.

As long as people sell EIAs and talk about "market returns without market risk", the product will continue to get beat up.  On the other hand, if it's described as a fixed annuity where the crediting method is partially tied to the change of a market index as opposed to the general portfolio of the insurance company, many of the problems will go away.

[/quote]

Agreed.  That is the main problem with EIA's.  They are primarily sold by insurance-only agents, who have no other types of products or securities to offer.  They have no compliance dept. keeping them on the straight and narrow, and no NASD audits or arbitration to fear.  They can almost say or do whatever they want, including giving their unsuspecting clients a false sense of hope (ie. double digit returns) and talk about their EIA's being "in the market".

EIA's were a better product when interest rates were low.  Then they filled a nice gap between traditional fixed and VA's.  Now, with fixed rates fairly high, where clients can get 5-6%/yr, the upside of the EIA is getting less and less, especially when there's a risk of having a year where they would get only 0-3% credited because of poor S&P performance.

[/quote]

Did you know that your grocery store has no compliance department, either?

[quote=The Judge]

Cranky SOB- Yeah, I don't know too much about EIA's.  Fortunately for my client's and my production levels, I know tons about effectively managing money.  It's great not to have to rely on packaged products that have to offer so much "juice" to entice brokers to sell them. 

Reminds me of the "principle protection" funds that were all the rage about 3-4 years back.  Absolute garbage.  These funds are almost down in value after the S&P has rallied 50%.  Yet, so predictable.

[/quote]

It's funny...I don't assume that you take clients who are unsuitable for your style of management. Why do you assume that I take one's who aren't suitable for what I do? I happen to think that Ford cars are crap. Does that mean that Ford dealers are evil? Does that mean that there aren't SOME people who really like to drive Fords?

Did you know that your grocery store has no compliance department, either?

So.....?? When the vegetables go bad in the refrigerator or the steak isn't the quality that they advertise, it isn't going to affect my ability  keep me from being able to buy different groceries at a different store.

Or to be able to retire with a comfortable income.

I don't think you should be allowed to play with sharp pointy objects.

"No one in their right mind who cares about their clients or their own reputation would offer this product. "

I know ethical, knowledgeable agents who sell some EIA's.   Is there something wrong with a fixed annuity in the right situation?  If a fixed annuity is ok, why would it not be ok to buy one that has the possibility of performing better than other fixed annuities? 

I don't know of a single EIA that has a 3% lifetime guarantee.  Which one caps gains at 7%?  Do you have a specific example?

(Personally, I have never sold one, but we have to paint an honest picture.  My reason for not using them is that I do not expect them to perform better than traditional fixed annuities.)

[quote=anonymous]

"No one in their right mind who cares about their clients or their own reputation would offer this product. "

I know ethical, knowledgeable agents who sell some EIA's.   Is there something wrong with a fixed annuity in the right situation?  If a fixed annuity is ok, why would it not be ok to buy one that has the possibility of performing better than other fixed annuities? 

I don't know of a single EIA that has a 3% lifetime guarantee.  Which one caps gains at 7%?  Do you have a specific example?

(Personally, I have never sold one, but we have to paint an honest picture.  My reason for not using them is that I do not expect them to perform better than traditional fixed annuities.)

[/quote]

Why would I give you an example? If you want to stop looking like an ass, go find out for yourself. You and your opinions are silly and have no impact on my life. I love what I do, I make a lot of money doing it, and I don't perseverate on what other people are doing, like you do.

[quote=cranky sob]

I love what I do, I make a lot of money doing it, and I don't perseverate on what other people are doing, like you do.

[/quote]

Isn't that the philosophy of every criminal in history?

cranky sob, I don’t know if I perseverate since I don’t know what the word means.   I wasn’t quoting you when I asked for an example.  I’m the one on this board who is at least closest to your side since I don’t think that they are an evil product that should never be sold. 

[quote=anonymous]I don't know of a single EIA that has a 3% lifetime guarantee.  Which one caps gains at 7%?  Do you have a specific example?[/quote]

http://www.ingvfc.com/cyberlink/ing/forms_ingva/fixed_rates/ new/124375.pdf

ING Secure Index 7

-3% min. guarantee on 100% of the money.

-only a 0.55% spread on $75k+ policies, when using the monthly averaging index strategy (the only one I'd put a client into).  It has no caps, no other moving parts.  Right now, this is the only EIA I'd sell with a good conscience.  Even it's fixed bucket gives a good rate (4.5%) which is better than most traditional fixed annuities I'm seeing out there.  For the client that can't make the jump from CD's and FDIC insured investments to VA's, mutual funds and other securities... the ING Secure Index product is a good bridge product to get them going that direction. 

Thanks. 

[quote=STL Indy]

[quote=anonymous]I don't know of a single EIA that has a 3% lifetime guarantee.  Which one caps gains at 7%?  Do you have a specific example?[/quote]

http://www.ingvfc.com/cyberlink/ing/forms_ingva/fixed_rates/ new/124375.pdf

ING Secure Index 7

-3% min. guarantee on 100% of the money.

-only a 0.55% spread on $75k+ policies, when using the monthly averaging index strategy (the only one I'd put a client into).  It has no caps, no other moving parts.  Right now, this is the only EIA I'd sell with a good conscience.  Even it's fixed bucket gives a good rate (4.5%) which is better than most traditional fixed annuities I'm seeing out there.  For the client that can't make the jump from CD's and FDIC insured investments to VA's, mutual funds and other securities... the ING Secure Index product is a good bridge product to get them going that direction. 

[/quote]

What's the commish?