Tips etf (tip)
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[quote=B24]
No, I know EIA's have some value, but since I can't sell them, I have not taken the time to research them. I don't think they are bad products, I think they get a bad rap because of the number of reps that mis-represent them when they are sold. I have had several clients that own them, and had no idea how the surrender charges worked, many thought their returns equaled the market returns with a floor, etc. I am NOT saying all EIA sellers mis-represent them. I am just saying that the products could stand on their own, even when fully explained. There's just some slimy salesmen out there, and with all the nuances within ALL annuities, it just gives the "bad apples" more opportunity to "forget" some details. I personally think they are a good alternative for fixed income/conservative investors that want some market participation without the risk of the market.[/quote] B24, I agree with you. There are bad apples in just about everything. Bad apple salesmen and bad apple clients that choose to not remember what they were told. I was not talking about you personally in any post. I just strongly believe that some firms out there actually hinder their reps, and therefore their clients, due to what they can and can not do. I hope you didn't glance over the sentence I wrote where it said, "Talking about myself of course". I've got nothing but mad respect for you, B24.[quote=now_indy]Don’t forget that with a VA, every one one of the companies in the subaccounts would have to go belly up to lose 100% of your client’s cash. In the EIA, only one company (the issuing company) has to go belly up to lose 100% of your client’s money.[/quote]
Stupid.
Why don't you put that oversize brain to work, and tell me where I'm wrong.
I’ve only sold 2 EIAs in my career. I’ve never really cared for them but I’m having a change of heart. I just looked at the performance. The first 3 years they were credited 7%. Year four (last year) they didn’t lose a single penny. Also, when they are out of surrender they can completely walk away. Unfortunately, my b/d now makes you fill out 3 additional forms and write an essay if you want to sell one.
What traditional fixed annuities are you guys selling?[quote=snaggletooth][quote=B24]
No, I know EIA's have some value, but since I can't sell them, I have not taken the time to research them. I don't think they are bad products, I think they get a bad rap because of the number of reps that mis-represent them when they are sold. I have had several clients that own them, and had no idea how the surrender charges worked, many thought their returns equaled the market returns with a floor, etc. I am NOT saying all EIA sellers mis-represent them. I am just saying that the products could stand on their own, even when fully explained. There's just some slimy salesmen out there, and with all the nuances within ALL annuities, it just gives the "bad apples" more opportunity to "forget" some details. I personally think they are a good alternative for fixed income/conservative investors that want some market participation without the risk of the market.[/quote] B24, I agree with you. There are bad apples in just about everything. Bad apple salesmen and bad apple clients that choose to not remember what they were told. I was not talking about you personally in any post. I just strongly believe that some firms out there actually hinder their reps, and therefore their clients, due to what they can and can not do. I hope you didn't glance over the sentence I wrote where it said, "Talking about myself of course". I've got nothing but mad respect for you, B24.[/quote] No, I realize it wasn't pointed at me. And I agree, there are defintely clients that "misremember" the facts. Or they don't realize the gravity of the facts until they are faced with them years down the road (they need money, someone dies, etc.). Unfortunately, I think Jones chooses not to do certain business to protect themselves and the clients (and ultimately themselves) from advisors that mis-sell products, or don't know what they're doing. If we were OSJ's/had on-site branch managers, it would be much different. Instead, they hide behind the cloak of "doing what is right for the client". Sometimes I wish they would just say to all of us "ya know, some products just get financial firms into more trouble than others, like options, EIA's, etc. Since we have too many FA's to supervise remotely, we're just not going to enter those product areas." And be done with it. Instead, I have to hear 3 month newbies rail about how nobody at wirehouses do what's in the best interest of their clients. I sound like I'm bltching, but I'm really not. I like the firm, I just feel that the non-OSJ structure holds us back sometimes.[quote=Mike Damone]I’ve only sold 2 EIAs in my career. I’ve never really cared for them but I’m having a change of heart. I just looked at the performance. The first 3 years they were credited 7%. Year four (last year) they didn’t lose a single penny. Also, when they are out of surrender they can completely walk away. Unfortunately, my b/d now makes you fill out 3 additional forms and write an essay if you want to sell one.
What traditional fixed annuities are you guys selling?[/quote] I look at quotes on 6 different firms and pick the best. It seems like Met has been the best recently (I am usually looking at shorter maturities, and also a lot of Immediates).[quote=Mike Damone]I’ve only sold 2 EIAs in my career. I’ve never really cared for them but I’m having a change of heart. I just looked at the performance. The first 3 years they were credited 7%. Year four (last year) they didn’t lose a single penny. Also, when they are out of surrender they can completely walk away. Unfortunately, my b/d now makes you fill out 3 additional forms and write an essay if you want to sell one.
What traditional fixed annuities are you guys selling?[/quote] Excluding the 15 year Alliance products with 10%+ commissions to the advisor, can someone please discuss the Cons of EIA's? Is it true that only those products deserve the bad rap? If the advisor and the client are willing to sacrifice some of the results of the market for elimination of downside fluctuation, what else is bad about them? ETA: on a typical product, what is surrender schedule, and what are advisor commissions?look, you can paint every eia with a broad stroke or you can spend some time and find one which fits your criteria. i have sold maybe 3-4 of them in my career, had completely shied away from them, beginning in about 2004. after revisiting them recently and looking at alot of changes which have been made to address our concerns, they are nowhere near the same product they were 5+ years ago.
sure, you can find the 10 year surrender schedule with a low cap, minimal participation, and paying 12% commission, but there are plenty out there which are exactly opposite of this scenario.
with interest rates on fixed products so darn low, i feel i have clients that might benefit from an eia at this point. i am not going to sit here and say “eia bad bad bad” without first exploring them a bit more.
[quote=LuvIndy][quote=Mike Damone]I’ve only sold 2 EIAs in my career. I’ve never really cared for them but I’m having a change of heart. I just looked at the performance. The first 3 years they were credited 7%. Year four (last year) they didn’t lose a single penny. Also, when they are out of surrender they can completely walk away. Unfortunately, my b/d now makes you fill out 3 additional forms and write an essay if you want to sell one.
What traditional fixed annuities are you guys selling?[/quote] Excluding the 15 year Alliance products with 10%+ commissions to the advisor, can someone please discuss the Cons of EIA's? Is it true that only those products deserve the bad rap? If the advisor and the client are willing to sacrifice some of the results of the market for elimination of downside fluctuation, what else is bad about them? ETA: on a typical product, what is surrender schedule, and what are advisor commissions? [/quote]Why should we discuss the cons when you have done such a great job inventing your own?
I’ve got EIA’s on the books that EVEN if the client paid the surrender charge, they would be WAY WAY ahead of clients in my VA’s…WAY AHEAD.
Dudes I’m not trying to bitch, I’m trying to better understand what a good EIA looks like compared to the reputation they’ve been given by the media/industry.
i’m with you in that regard LuvIndy. i would like to know which EIA’s people here are using simply to point me in the direction of what they consider to be a “good product.” from there i can decide.
who are the EIA issuers you guys/gals are using?
JNL, Allianz, American Equity, ING are a few you could look at. Of those, let the client choose.
The two contracts that I sold were JNL. I used JNL because it was a clean and simple contract with no moving parts. They also offer a variety of different surrender schedules to meet your client’s time horizon.
I've also heard that ING has similiar clean and simple contracts but I can't speak from experience.I was buying the hell of a 3% 6-year TIPS we had in inventory a couple weeks ago. Ended up buying around 400k for clients. That same TIPS is down to just over 2% now. Doesn’t mean there is still value, but some of the easy money is out of these. I’d focus on some of the mid term rates, as that seems to be the sweet spot.
TIPS have been substantialy over priced since Nov. You really should take any gains NOW. Occassionally TIPS become ‘mis=priced’ – ie. deviate from par. You’ve got to track the price of these instruments directly, not via an ETF.