Something To Be Aware Of

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Mar 29, 2006 12:25 pm

Something to read so you can stay on top of your biz.  There's a lot of bad actors out there.


http://www.nasaa.org/NASAANewsroom/Current_NASAA_Headlines/ 4518.cfm

Mar 29, 2006 12:52 pm

Last year I lost one large account and it was to an indy who conned a confused elderly client into taking a $12,000 surrender fee hit to 1035 into a index annuity.  Prior to doing this the client met with a honest annuity specialist who recommended he stay with the annuity he had.  After the meeting the advisor called me to fill me in.  Even that didnt help.  They presured these people and scared them into doing the exchange out of one of the old Transamerica living benefits annuities that you cant even get any more.  


I called the state insurance commission and they did absolutely nothing.   I wish something could be done.  Even the seminar ads they send out fly below the radar screen of compliance.  THey say things in these ads I could never dream of putting out. 

Mar 29, 2006 4:38 pm

This is nothing new.  I see it all the time and just can't understand how people can be so stupid or gullible.  They want to second guess us as advisors, yet will willingly give their entire life savings over to what is essentially a traveling salesman.  Idiots.  Sometimes I think the clients deserve to be fleeced if they act like a bunch of brainless sheep.


I too wish that something could be done about it since it gives us all a bad name.  In my state there are more restrictions every year placed on us in the insurance and variable annuity business that it is becoming more and more difficult to do honest business transactions.  One which I do agree with is that a "senior" who buys a variable annuity cannot invest in the variable sub accounts for 30 days.  That way if they decide that they don't want to take the annuity, there would be no market loss.  They can waive this by signing. 

Mar 29, 2006 7:34 pm

This is an amazing, but disturbing part of human nature. The more fantastic (unrealistic) the pitch, the more people buy into it.

Mar 29, 2006 8:28 pm
babbling looney:

This is nothing new.  I see it all the
time and just can't understand how people can be so stupid or
gullible.  They want to second guess us as advisors, yet will
willingly give their entire life savings over to what is essentially a
traveling salesman.  Idiots.  Sometimes I think the
clients deserve to be fleeced if they act like a bunch of
brainless sheep.





Brainless Sheep?  C'Mon!  These often are elderly people that
have had a 50 year relationship with he local bank branch.  They
have 50 years or history following the advice of the respected
bankers.  It isn't their fault the banks now have 25 year old
dolts that have the ethics and loyalty of whore "advising" them on what
to do.



The problem is the industry, not the clients.

Mar 29, 2006 8:35 pm
rightway:
babbling looney:

This is nothing new.  I see it all the time and just can't understand how people can be so stupid or gullible.  They want to second guess us as advisors, yet will willingly give their entire life savings over to what is essentially a traveling salesman.  Idiots.  Sometimes I think the clients deserve to be fleeced if they act like a bunch of brainless sheep.




Brainless Sheep?  C'Mon!  These often are elderly people that have had a 50 year relationship with he local bank branch.  They have 50 years or history following the advice of the respected bankers.  It isn't their fault the banks now have 25 year old dolts that have the ethics and loyalty of whore "advising" them on what to do.

The problem is the industry, not the clients.



I find that elderly people are pretty wise. If someone is a stupid old person, they were also a stupid young person.

Mar 29, 2006 8:49 pm
rightway:
babbling looney:

This is nothing new.  I see it all the time and just can't understand how people can be so stupid or gullible.  They want to second guess us as advisors, yet will willingly give their entire life savings over to what is essentially a traveling salesman.  Idiots.  Sometimes I think the clients deserve to be fleeced if they act like a bunch of brainless sheep.




Brainless Sheep?  C'Mon!  These often are elderly people that have had a 50 year relationship with he local bank branch.  They have 50 years or history following the advice of the respected bankers.  It isn't their fault the banks now have 25 year old dolts that have the ethics and loyalty of whore "advising" them on what to do.

The problem is the industry, not the clients.


I was specifically referring to the traveling annuity/trust shows.  The same clients who only want their money in "safe certificates of deposit" and wouldn't dare take a chance on anything you are proposing, will give everything to someone they just met.  Must be the fancy suits.


I agree about the problem of the supposedly trusted bank schlepping annuities inappropriately.  It is an industry problem and needs to be fixed.  Ha ha. as if.  Dirk is right stupid young and stupid old.  Stupid is as stupid does.. 


When I get upset about this stuff I drag out the 3 kinds of people mantra.  I've posted this before. 


Those you can help, they have means, desire and are willing to take advice. 


Those you can't help, have the desire but no means, living from paycheck to payceck or on a limited income.  You would like to help them but you can't do much.


Those that are too stupid to help. They may have money....lots of it. But won't listen, won't take advice and make stupid decisions. 


Learn to recognize the first group. Feel sorry about the second and run like h3ll from the third.

Mar 29, 2006 8:53 pm
babbling looney:
rightway:
babbling looney:

This is nothing new.  I see it all the time and just can't understand how people can be so stupid or gullible.  They want to second guess us as advisors, yet will willingly give their entire life savings over to what is essentially a traveling salesman.  Idiots.  Sometimes I think the clients deserve to be fleeced if they act like a bunch of brainless sheep.




Brainless Sheep?  C'Mon!  These often are elderly people that have had a 50 year relationship with he local bank branch.  They have 50 years or history following the advice of the respected bankers.  It isn't their fault the banks now have 25 year old dolts that have the ethics and loyalty of whore "advising" them on what to do.

The problem is the industry, not the clients.


I was specifically referring to the traveling annuity/trust shows.  The same clients who only want their money in "safe certificates of deposit" and wouldn't dare take a chance on anything you are proposing, will give everything to someone they just met.  Must be the fancy suits.


I agree about the problem of the supposedly trusted bank schlepping annuities inappropriately.  It is an industry problem and needs to be fixed.  Ha ha. as if.  Dirk is right stupid young and stupid old.  Stupid is as stupid does.. 


When I get upset about this stuff I drag out the 3 kinds of people mantra.  I've posted this before. 


Those you can help, they have means, desire and are willing to take advice. 


Those you can't help, have the desire but no means, living from paycheck to payceck or on a limited income.  You would like to help them but you can't do much.


Those that are too stupid to help. They may have money....lots of it. But won't listen, won't take advice and make stupid decisions. 


Learn to recognize the first group. Feel sorry about the second and run like h3ll from the third.



Amen to ALL of that!

Mar 30, 2006 1:18 am

I lost a client to one of these clowns described in the article.  They had a super portfolio which had done quite well.  Advisor liquidated it all and plowed it into index annuities with 10 yr surrendur charges and non traded REITS.   It killed me!  What a waste.

Irony was that this guys assistant had no clue how to get the transfers done and made a mess out of the paperwork.  After about the third phoen call to them, I called the client and said "Hey look I've tried to keep you from hurting yourself, and then like a gentleman tried to handle the transfers despite my concerns.  These people you are dealing with are incompetent fools and I'm mailing the paperwork back to them.  Re-submit it to my back office when you have it done correctly."

Mar 30, 2006 8:27 am

I know two guys who left EJ. All they do no is sell Allianz index annuities. he made 200k last year doing this.


btw, "respected bankers"? These guys will do anything to open a cd or checking acct. They're just as sneaky as the above.

Mar 30, 2006 10:07 am

I can see that easily how someone could make that kind of money selling Allianz.  I run accross them all the time in my area and it's like they seem to have no compliance watching over them.  Their seminar ads are over the top and they will 1035 regardless of the surrender fee and no one seems to do anything about it.


In my case, my client was once a respected scientest however he had some bad medical problems that affected his ability to think clearly.  He also turned into a jack ass and would berate his wife in my office over small matters.  He was an easy mark to take advantage of. 

Mar 30, 2006 10:20 am
Malcolm:

Last year I lost one large account and it was to an indy who conned a confused elderly client into taking a $12,000 surrender fee hit to 1035 into a index annuity.  Prior to doing this the client met with a honest annuity specialist who recommended he stay with the annuity he had.  After the meeting the advisor called me to fill me in.  Even that didnt help.  They presured these people and scared them into doing the exchange out of one of the old Transamerica living benefits annuities that you cant even get any more.  


I called the state insurance commission and they did absolutely nothing.   I wish something could be done.  Even the seminar ads they send out fly below the radar screen of compliance.  THey say things in these ads I could never dream of putting out. 



Maybe if you did a better job they wouldn't even listen to someone else.

Mar 30, 2006 10:34 am

Met with a prospect who about two years ago was persuaded by a "senior planning specialist" to liquidate a $400K TIAA Cref 403b and move it all into 4 different index annuities. The 403B was diversified and had done very well over the years. The rep set up 4 different "legs", with about 100k in 4 different firms EIA's. The AVERAGE surrender charge was 13.5% with about 11 years left. Client is 76 and almost died when I explained what happened to him. Based on his withdrawals he will start taking above the 10% free corrideors on the first z"leg" and start incurring some nasty surrender charges... Needless to say, the prospect will be writing some letters to the State insurance dept and the companies to see what can be done.

Mar 30, 2006 11:00 am

Maybe so Dirk.  But when you are dealing with someone who is not mentally clear it is tough explaining why the living benefits he owns are better than the wonderful index annuity he has been pitched.  We met three times in person and he was still not clear on things.


His illness made him erratic and suspicious and it was just one of those deals that I could do nothing about.  Maybe I can still learn from smaller and less experienced advisors like you Dirk so I am open to any advice you could give me for how I could have saved the situation.  Thanks for any advice you can give.     

Mar 30, 2006 9:01 pm
Malcolm:

Maybe so Dirk.  But when you are dealing with someone who is not mentally clear it is tough explaining why the living benefits he owns are better than the wonderful index annuity he has been pitched.  We met three times in person and he was still not clear on things.


His illness made him erratic and suspicious and it was just one of those deals that I could do nothing about.  Maybe I can still learn from smaller and less experienced advisors like you Dirk so I am open to any advice you could give me for how I could have saved the situation.  Thanks for any advice you can give.     



I think I can help. How about if you realize that people buy what they want, not what they need? Although there have been times when people want what they need. The sale was closed and all YOU had to do was fill out the paperwork and keep it for yourself, but instead, you had to go tattletale to the state. Sucks to be you.

Mar 31, 2006 10:19 am

I think you are confused Dirk.  The sale was closed.  How else could the 1035 it out of my office?  But anyway, thanks for your words of advice.  I will be sure to take them under consideration.    

Mar 31, 2006 10:28 am
Malcolm:

I think you are confused Dirk.  The sale was closed.  How else could the 1035 it out of my office?  But anyway, thanks for your words of advice.  I will be sure to take them under consideration.    


Call me crazy, but I would have had them rescind the transfer and offer them either something else or the same thing with new paperwork. Yes, the sale was closed and you, as the incumbent, should've spent more time figuring out how to get paid on it and less time tattling to the state.

Mar 31, 2006 11:05 am

Boy you sure are a sparky little rooster arent you Dirk. 


Well I'll take all that advice under consideration also even though just between you and me they really aren't the smartest utterances I've ever read.  But no matter.  Keep up the good word my little friend. 


I've got to get some work done now.  It's a beautiful spring day and I want to get out of here.


Mar 31, 2006 11:18 am
Malcolm:

Boy you sure are a sparky little rooster arent you Dirk. 


Well I'll take all that advice under consideration also even though just between you and me they really aren't the smartest utterances I've ever read.  But no matter.  Keep up the good word my little friend. 


I've got to get some work done now.  It's a beautiful spring day and I want to get out of here.




I'm here to help. Enjoy your weekend.

Mar 31, 2006 11:52 am
Dirk Diggler:

The sale was closed and all YOU had to do was fill out the paperwork and keep it for yourself, but instead, you had to go tattletale to the state.


Not even Dirk can be serious in suggesting that the correct course of action in this case was to find a way to make the unsuitable sale yourself. If so, his stay in the business will be a brief one.