Fixed Annuity Payouts?

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Jan 24, 2007 2:01 pm

I'm interested in what some of you get paid on a 7 and 10 yr fixed annuity? 


Disclaimer:After 2.5 yrs in the buisness I have not sold one annuity and only consider doing so under much insistance from the client.  The money is in a fixed annuity coming due this year.


Here at Jones we get 2% gross with of course 40% payout equals .8%. 


Also curious to your current rates?  best here is 5.15 for 7 yrs and 5.3 for 10 yr.


Thanks  


Jan 24, 2007 6:26 pm

Jones is probably giving you a 2% haircut. Most 5 year fixed annuities pay a commission north of 4%. I get the whole commission paid at 100%. Fixed and Indexed annuities do not go to the grid.

Jan 24, 2007 6:51 pm

Anyone else chime in?  Fixed annuities at 100%, is that common among Independent BD's?

Jan 24, 2007 6:56 pm
gad12:

Anyone else chime in?  Fixed annuities at 100%, is that common among Independent BD's?



Why do you care? Are you going to leave EDJ to sell one fixed annuity to one client? Fixed annuities are not securities and you do not need a broker/dealer to sell them. The day after the ins. company gets the clients money, the commission gets wired to my personal checking account.

Jan 24, 2007 7:33 pm
gad12:

Anyone else chime in?  Fixed annuities at 100%, is that common among Independent BD's?



Yes. 100% payout. No override.  As Inner Child says you don't need a B/D to sell fixed annuities.  They have nothing to do with that business.  You do need to tell them what outside business you are doing: insurance, life, health etc.


Most fixed annuities are about 4 to 6% commission.  EIAs have much higher commissions (7 to 10%).  I have done just a few EIAs in my career and my B/D frowns on those as well.  While we are at it, V/A contracts pay anywhere from 3 to 7%.  The higher payout is if you take the commission all up front and forego trails.  Most V/S contracts that I have sold are in the 3 to 4% range with annual trails of .5 to 1%.  These are all just rough estimates.

Jan 24, 2007 7:41 pm

Oh .... and rates on fixed annuities


7 yr annuity 5.5%   5% commission


6 yr 6.7/3.7  if over 50K  5%commis  


5 yrs  6.6%/3.6% 4% commis


10 yr annuity with 5 yr bail out provision  4.25%  6.25 commission


All with A or better rated insurance companies. 

Jan 24, 2007 8:07 pm

Thank you all for the info very informative.  No I decided long before this annuity to leave EDJ.  Obviously that would be a stupid reason unless the annuity was for a kabilillion dollars.

Jan 24, 2007 8:34 pm

So does this sound right?


Client has 800k 7 yr fixed annuity due later in the year. 


If I'm a Jones IR, I can give the client 5.15% for 7yrs.  Jones haircuts to 2% then pays me 40% so I make $6,400.


If I'm Independent, I make 5%, with 100% payout so I make $40,000?????????!!!!!  Plus I can give the client a higher rate? 


This seems crazy!!!!!!  Maybe I'm missing something?



Jan 24, 2007 8:40 pm
gad12:

So does this sound right?


Client has 800k 7 yr fixed annuity due later in the year. 


If I'm a Jones IR, I can give the client 5.15% for 7yrs.  Jones haircuts to 2% then pays me 40% so I make $6,400.


If I'm Independent, I make 5%, with 100% payout so I make $40,000?????????!!!!!  Plus I can give the client a higher rate? 


This seems crazy!!!!!!  Maybe I'm missing something?





The only thing you're missing is "the boat."

Jan 24, 2007 10:58 pm
gad12:

So does this sound right?


Client has 800k 7 yr fixed annuity due later in the year. 


If I'm a Jones IR, I can give the client 5.15% for 7yrs.  Jones haircuts to 2% then pays me 40% so I make $6,400.


If I'm Independent, I make 5%, with 100% payout so I make $40,000?????????!!!!!  Plus I can give the client a higher rate? 


This seems crazy!!!!!!  Maybe I'm missing something?



No you're not missing anything.  That's how much the GP's(and the folks at the wires) are skimming out of the advisor's pockets.....it's pretty wild, right?

Jan 24, 2007 11:23 pm

Unreal. 


It should be a crime. 


Not just because they do it, but that they hide it from us and brag about the great 40% payout.

Jan 24, 2007 11:44 pm

uh oh...sounds like the lights are coming on...

Jan 25, 2007 12:19 am
Indyone:

uh oh...sounds like the lights are coming on...



yup!

now wait until he has to go to the next sales meeting and listen to their bs....

Jan 25, 2007 11:27 pm

Who offers the 5.5% fixed with a 5% payout?

Jan 25, 2007 11:33 pm
Indyone:

uh oh...sounds like the lights are coming on...



More and more every day.  Itchin to get out of here.

Jan 26, 2007 5:48 pm

Anyone w/Ray James or knows about them.  Are they also allowed to use fixed annuity providers besides the ones on their approved list?