You also get guaranteed market-like returns with NO downside risk.   It is statements like this that give these products a bad name.

The funny thing is that most pompous brokers don't understand that lots and lots of people are perfectly satisfied only making 6 or 7 percent with no chance of losing money.  You are absolutely correct, although, I'd expect the returns going forward to be lower than this, but that's just an opinion.   Our job is not to maximize returns.  Rather, it is to maximize the client's chance of achieving their goals within their risk tolerance.  Fixed annuities, regardless of their flavor, can play a part of this.

Climb down from that pulpit, Anon.



No one, and I do mean no one, says, “My broker is Anonymous. He helps

me maximize my chance of achieving my goals within my risk tolerance!

Lemme give you his card!”

[quote=Philo Kvetch]Climb down from that pulpit, Anon.

No one, and I do mean no one, says, "My broker is Anonymous. He helps
me maximize my chance of achieving my goals within my risk tolerance!
Lemme give you his card!"[/quote]

Damn, that was funny.

Very true.  

[quote=Bobby Hull]

[quote=joedabrkr] [quote=playball]Guess what? EIAs are not bad. They are sold by some of the most trusted and well respected banks and insurance companies.  You also get guaranteed market-like returns with NO downside risk.  They are the safest investments grandma can buy!  Not to mention, I get a beautiful commission check every time I sell one.  So while you fools are selling muni-bonds and mutual funds, Ill be flying by in my new Ferrari to your grandpa’s house!
[/quote]

I feel like I need to go take a shower after reading this post…

So name just ONE “well respected bank” and ONE “well respected insurance company” that sells EIA’s.

Not all EIA’s are bad, but there are a LOT of bad people selling EIA’s.
[/quote]

There are a lot of bad people selling fee-based accounts.

[quote=joedabrkr] [quote=Bobby Hull]

[quote=joedabrkr] [quote=playball]Guess what? EIAs are not bad. They are sold by some of the most trusted and well respected banks and insurance companies.  You also get guaranteed market-like returns with NO downside risk.  They are the safest investments grandma can buy!  Not to mention, I get a beautiful commission check every time I sell one.  So while you fools are selling muni-bonds and mutual funds, Ill be flying by in my new Ferrari to your grandpa's house!
[/quote]

I feel like I need to go take a shower after reading this post....

So name just ONE "well respected bank" and ONE "well respected insurance company" that sells EIA's.

Not all EIA's are bad, but there are a LOT of bad people selling EIA's.
[/quote]

There are a lot of bad people selling fee-based accounts.

[/quote]

There are some Bobby, no doubt.  I suspect the percentage of sleazeballs selling EIA's is much higher if you took an honest look at it.  I'm not, by the way, suggesting that you are one of them despite our good-natured jousting.

There are just lots of sleazy sales tactics used to sell EIA's, and I've noticed nobody has accepted the challenge of naming any reputable banks or insurance carriers that sell EIA's.  I know of only one, and frankly I wish they would stay out of the business because if it ever blows up in the press it won't help my VA business.
[/quote]

So...you couldn't sell an EIA without being sleazy?

Most of the EIAs I have seen have a 12+ year surrender schedule (I have seen 18 a couple of times).

I would like a person who sells EIAs to tell me this.  Why use an EIA with a 12 year surrender when I can buy an insured zero-coupon muni for (for example purposes) $.70 on the dollar, and put the other $.30 into a tax-efficient growth mutual fund?  In 12 years, I'm gauranteed to have my $1 of principal + whatever the mutual fund is worth. It's cheaper than an EIA, no surrender penalties, "no downside risk," I would argue better tax treatment, and you don't have to worry about some no-name insurance company going broke and losing ALL your money.

Why isn't that better? This is not rhetorical, I would really like to know.

[quote=joedabrkr]
There are just lots of sleazy sales tactics used to sell EIA's, and I've noticed nobody has accepted the challenge of naming any reputable banks or insurance carriers that sell EIA's.  I know of only one, and frankly I wish they would stay out of the business because if it ever blows up in the press it won't help my VA business.
[/quote]

Are you talking about Protective?  I think they have an EIA. I guess I would call them reputable.

[quote=now_indy]

Most of the EIAs I have seen have a 12+ year surrender schedule (I have seen 18 a couple of times).

I would like a person who sells EIAs to tell me this.  Why use an EIA with a 12 year surrender when I can buy an insured zero-coupon muni for (for example purposes) $.70 on the dollar, and put the other $.30 into a tax-efficient growth mutual fund?  In 12 years, I'm gauranteed to have my $1 of principal + whatever the mutual fund is worth. It's cheaper than an EIA, no surrender penalties, "no downside risk," I would argue better tax treatment, and you don't have to worry about some no-name insurance company going broke and losing ALL your money.

Why isn't that better? This is not rhetorical, I would really like to know.

[/quote]

Most EIA's I've seen are not over 10 year surrender periods. People who understand EIA's (not you) will look at your statement and realize what an ass you are.

What will happen to the value of those zeroes when interest rates go up? That will "force" the client to hold them to term. Kinda like a surrender period. The last time someone lost all of their money in an EIA, for ANY reason, was never. The last time anyone lost ANY money in an EIA, other than than taking a surrender charge, which THEY cause to happen, was never.

Remember Orange County?

[quote=Bobby Hull][quote=joedabrkr] [quote=Bobby Hull]

[quote=joedabrkr] [quote=playball]Guess what? EIAs are not bad. They are sold by some of the most trusted and well respected banks and insurance companies.  You also get guaranteed market-like returns with NO downside risk.  They are the safest investments grandma can buy!  Not to mention, I get a beautiful commission check every time I sell one.  So while you fools are selling muni-bonds and mutual funds, Ill be flying by in my new Ferrari to your grandpa's house!
[/quote]

I feel like I need to go take a shower after reading this post....

So name just ONE "well respected bank" and ONE "well respected insurance company" that sells EIA's.

Not all EIA's are bad, but there are a LOT of bad people selling EIA's.
[/quote]

There are a lot of bad people selling fee-based accounts.

[/quote]

There are some Bobby, no doubt.  I suspect the percentage of sleazeballs selling EIA's is much higher if you took an honest look at it.  I'm not, by the way, suggesting that you are one of them despite our good-natured jousting.

There are just lots of sleazy sales tactics used to sell EIA's, and I've noticed nobody has accepted the challenge of naming any reputable banks or insurance carriers that sell EIA's.  I know of only one, and frankly I wish they would stay out of the business because if it ever blows up in the press it won't help my VA business.
[/quote]

So...you couldn't sell an EIA without being sleazy?

[quote=Bobby Hull][quote=now_indy]

Most of the EIAs I have seen have a 12+ year surrender schedule (I have seen 18 a couple of times).

I would like a person who sells EIAs to tell me this.  Why use an EIA with a 12 year surrender when I can buy an insured zero-coupon muni for (for example purposes) $.70 on the dollar, and put the other $.30 into a tax-efficient growth mutual fund?  In 12 years, I'm gauranteed to have my $1 of principal + whatever the mutual fund is worth. It's cheaper than an EIA, no surrender penalties, "no downside risk," I would argue better tax treatment, and you don't have to worry about some no-name insurance company going broke and losing ALL your money.

Why isn't that better? This is not rhetorical, I would really like to know.

[/quote]

Most EIA's I've seen are not over 10 year surrender periods. People who understand EIA's (not you) will look at your statement and realize what an ass you are.

What will happen to the value of those zeroes when interest rates go up? That will "force" the client to hold them to term. Kinda like a surrender period. The last time someone lost all of their money in an EIA, for ANY reason, was never. The last time anyone lost ANY money in an EIA, other than than taking a surrender charge, which THEY cause to happen, was never.

Remember Orange County?

[/quote]

Plus in a zero coupon bond you have zero liquidty.  At least in the EIA you have the ability to take a free withdrawal during the surrender period.

You don't have to be sleazy to sell EIAs. I've sold them and I don't consider myself a sleazy agent.  I use the ones with the 10 year or less surrender periods.   ING and RBC both have nice products.  The problems that we see are from agents who have inappropriately sold long surrender annuities without fully explaining the product. Allianz is in a lawsuit right now over this.    The other issue is when agents put all or the majority of the client's money into a restrictive investment like an annuity (of any kind).

[quote=now_indy]

[quote=joedabrkr]
There are just lots of sleazy sales tactics used to sell EIA’s, and I’ve noticed nobody has accepted the challenge of naming any reputable banks or insurance carriers that sell EIA’s.  I know of only one, and frankly I wish they would stay out of the business because if it ever blows up in the press it won’t help my VA business.
[/quote]

Are you talking about Protective?  I think they have an EIA. I guess I would call them reputable.

A few links to info about the lawsuit.

http://www.lawyersandsettlements.com/case/allianz.html

http://www.insurancenewsnet.com/article.asp?n=1&innID=20 0705122160.15_0ad600164f9af60b

I'm dealing with some client's who put about 400K into Allianz annuities and they didn't realize that they had little liquidity (only 5% free withdrawal) and that they had to annuitize to get their money out of the contract.  Its part of a pension/profit sharing plan and if a few of their employees retire in this year, they are going to have to liquidate other investments that are doing much better than the performance of the Allianz annuity.  We are going to annuitize one of the contracts this year and the other the next year to get the money out as quickly as we can (over a ten year period).   

This pension money should never have been put into this type of product.  The agent, who is no longer at the B/D he was representing gee I wonder why) make a big killing on commissions and the clients are now strapped to an inappropriate contract for the next 10 years.

[quote=joedabrkr] [quote=now_indy]

[quote=joedabrkr]
There are just lots of sleazy sales tactics used to sell EIA's, and I've noticed nobody has accepted the challenge of naming any reputable banks or insurance carriers that sell EIA's.  I know of only one, and frankly I wish they would stay out of the business because if it ever blows up in the press it won't help my VA business.
[/quote]

Are you talking about Protective?  I think they have an EIA. I guess I would call them reputable.

[/quote]

I would not call them reputable per se.  Allianz is who I in mind.
[/quote]

YOu do Allianz VA's? Haven't they already blown up in the press?

[quote=Dust Bunny]

A few links to info about the lawsuit.

http://www.lawyersandsettlements.com/case/allianz.html

http://www.insurancenewsnet.com/article.asp?n=1&innID=20 0705122160.15_0ad600164f9af60b

I'm dealing with some client's who put about 400K into Allianz annuities and they didn't realize that they had little liquidity (only 5% free withdrawal) and that they had to annuitize to get their money out of the contract.  Its part of a pension/profit sharing plan and if a few of their employees retire in this year, they are going to have to liquidate other investments that are doing much better than the performance of the Allianz annuity.  We are going to annuitize one of the contracts this year and the other the next year to get the money out as quickly as we can (over a ten year period).   

This pension money should never have been put into this type of product.  The agent, who is no longer at the B/D he was representing gee I wonder why) make a big killing on commissions and the clients are now strapped to an inappropriate contract for the next 10 years.

[/quote]

Did they buy that MasterDex 10? That thing is a piece of crap.

[quote=Bobby Hull][quote=Dust Bunny]

A few links to info about the lawsuit.

http://www.lawyersandsettlements.com/case/allianz.html

http://www.insurancenewsnet.com/article.asp?n=1&innID=20 0705122160.15_0ad600164f9af60b

I'm dealing with some client's who put about 400K into Allianz annuities and they didn't realize that they had little liquidity (only 5% free withdrawal) and that they had to annuitize to get their money out of the contract.  Its part of a pension/profit sharing plan and if a few of their employees retire in this year, they are going to have to liquidate other investments that are doing much better than the performance of the Allianz annuity.  We are going to annuitize one of the contracts this year and the other the next year to get the money out as quickly as we can (over a ten year period).   

This pension money should never have been put into this type of product.  The agent, who is no longer at the B/D he was representing gee I wonder why) make a big killing on commissions and the clients are now strapped to an inappropriate contract for the next 10 years.

[/quote]

Did they buy that MasterDex 10? That thing is a piece of crap.

[/quote]

Yep.  That's the one 

[quote=now_indy]

I would like a person who sells EIAs to tell me
this.  Why use an EIA with a 12 year surrender when I can buy an
insured zero-coupon muni for (for example purposes) $.70 on the
dollar, and put the other $.30 into a tax-efficient growth mutual
fund?  In 12 years, I’m gauranteed to have my $1 of principal +
whatever the mutual fund is worth.

Why isn't that better? This is not rhetorical, I would really like to know.

Jackson National also has some EIAs, one even with a 5 year surrender.

[quote=Bobby Hull][quote=joedabrkr] [quote=now_indy]

[quote=joedabrkr]
There are just lots of sleazy sales tactics used to sell EIA's, and I've noticed nobody has accepted the challenge of naming any reputable banks or insurance carriers that sell EIA's.  I know of only one, and frankly I wish they would stay out of the business because if it ever blows up in the press it won't help my VA business.
[/quote]

Are you talking about Protective?  I think they have an EIA. I guess I would call them reputable.

[/quote]

I would not call them reputable per se.  Allianz is who I in mind.
[/quote]

YOu do Allianz VA's? Haven't they already blown up in the press?

[quote=azdawn]Jackson National also has some EIAs, one even with a 5 year surrender.[/quote]

I've just started using the 5 year and it's a slam dunk to sell. We're forced to do something at the end. We can do another 5 years and get paid again or we can do something else and get paid again. Most importantly, we can close deals with people that like the idea of EIA's, but couldn't commit to a longer surrender period.