Bank Secrets Revealed Part I

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Feb 13, 2007 2:07 am

Bank Broker to prospect, "I have this great rate of 6% that you should own with all your money!"


    (not telling the client about the 10 year surrender penalty, the base rate of 3% that the contract drops to in the second year, the 7% commission the broker pockets, or the fact that they will never hear from the bank broker again.)

Feb 13, 2007 8:33 am

Compare this to the pitch of an indy:



I have this product that allows you to participate in the market with no losses ever. (They fail to mention the caps, what happens in years when the market has begative returns or the fact they are earning 11%+ commission)





Oh and the wirehouse pitch:



We have all these resources, we are wall street. Our stock picking abilities will only lose 1/2 your money this year or I can put you in this account managed by someone else and collect 1.5% per year for doing nothing.



Feb 13, 2007 9:23 am

Rankstocks,


You seem quite childish.  Brokers move from channel to chanel, and it doesn't change what they do or how they do it.


Being indy doesn't make you any better morally.  A couple months ago, I was helping a lady with her mother's estate, and she mentioned her husband was rolling over his 401K with a indy here in town.


I called him, and over the course of our conversation, I learned it "tracked the stock market (S&P),"  "guaranteed never to lose any money" and was a 20 year surrender.


I almost fell out of my chair.  An EIA with a 20 year surrender, sold by a "financial planner" at an indy.


Was it you?


Feb 13, 2007 10:42 am
BankFC:

Rankstocks,


You seem quite childish.  Brokers move from channel to chanel, and it doesn't change what they do or how they do it.


Being indy doesn't make you any better morally.  A couple months ago, I was helping a lady with her mother's estate, and she mentioned her husband was rolling over his 401K with a indy here in town.


I called him, and over the course of our conversation, I learned it "tracked the stock market (S&P),"  "guaranteed never to lose any money" and was a 20 year surrender.


I almost fell out of my chair.  An EIA with a 20 year surrender, sold by a "financial planner" at an indy.


Was it you?




Generally that is true, although a good indy advisor does normally have far less in the way of pressure or coercion to use certain "favored" products, and at least at the large indy's, a far broader menu of products from which to choose, and generally less pressure to hit a monthly or annual quota.

But there are good and bad eggs in every channel.

Feb 13, 2007 10:46 am

Its quite amusing how some on this forum feel the need to constantly trash other channels and ways of doing business. There are some deep rooted issues going on there...

Feb 13, 2007 11:39 am
BankFC:

I almost fell out of my chair.  An EIA with a 20 year surrender, sold by a "financial planner" at an indy.



What kind of commission do you think that thing paid out?

Feb 13, 2007 11:58 am
BankFC:

Being indy doesn't make you any better morally. 


Really!?  On this board I get the distinct impression that if you aren't indy you are just a step above Jack the ripper.  If you're with Jones you're one step below. 

Feb 13, 2007 12:05 pm

There are two things I detest: 1. people who stereotype. 2. primerica reps.

Feb 13, 2007 3:06 pm
skolbrother:

There are two things I detest: 1. people who stereotype. 2. primerica reps.



I think any rational person on this board can admit, there are good advisors at every firm and channel, and bad advisors at every firm or channel.  Bashing a firm or channel based soley on the actions of an individual is stupid at best.

Feb 13, 2007 3:30 pm
joedabrkr:
BankFC:

Rankstocks,


You seem quite childish.  Brokers move from channel to chanel, and it doesn't change what they do or how they do it.


Being indy doesn't make you any better morally.  A couple months ago, I was helping a lady with her mother's estate, and she mentioned her husband was rolling over his 401K with a indy here in town.


I called him, and over the course of our conversation, I learned it "tracked the stock market (S&P),"  "guaranteed never to lose any money" and was a 20 year surrender.


I almost fell out of my chair.  An EIA with a 20 year surrender, sold by a "financial planner" at an indy.


Was it you?




Generally that is true, although a good indy advisor does normally have far less in the way of pressure or coercion to use certain "favored" products, and at least at the large indy's, a far broader menu of products from which to choose, and generally less pressure to hit a monthly or annual quota.

But there are good and bad eggs in every channel.



I would add, too, that sadly the EIA whores and "senior specialists" that love the EIA products are, unfortunately, most concentrated in the indy channel, mostly at the smaller b/d's that will tolerate that crap.

Feb 13, 2007 3:49 pm

Actually, the EIA whores and "senior specialists" that love them are generally not securities licensed at all.

Feb 13, 2007 6:12 pm

Uh guys...I'm pretty sure that rank isn't indy either (which means the next thread is probably "Indy Secrets Revealed Part I").  As I recall, rank is an EDJ rep and has a real burr under the saddle regarding Raymond James...used to have a tag line that said something to the effect that you could work at a bank or out of your house if you worked with RayJay.


Regardless of where he works...he's an idiot.

Feb 13, 2007 11:48 pm
gad12:
skolbrother:

There are two things I detest: 1. people who stereotype. 2. primerica reps.



I think any rational person on this board can admit, there are good
advisors at every firm and channel, and bad advisors at every firm or
channel.  Bashing a firm or channel based soley on the actions of
an individual is stupid at best.





Yes!  You should make sure your B/D fits with YOUR business model. Good is Good.

Feb 14, 2007 1:55 am

Indyone,


    If you can't take the heat....... 


    Let's be honest, how many brokers with over 5 years experience haven't run across several of these annuities paying 3% or 3.5% that were sold by a bank broker promising big rates?  If you haven't seen several of these, I'd like anyone to post the contrary.

Feb 14, 2007 2:30 am
joedabrkr:


I would add, too, that sadly the EIA whores and "senior
specialists" that love the EIA products are, unfortunately, most
concentrated in the indy channel, mostly at the smaller b/d's that will
tolerate that crap.





http://ir.american-equity.com/phoenix.zhtml?c=147784&p =irol-irhome



Why fight it, when you can own it?

Feb 14, 2007 11:50 am
rankstocks:

Indyone,


    If you can't take the heat....... 


    Let's be honest, how many brokers with over 5 years experience haven't run across several of these annuities paying 3% or 3.5% that were sold by a bank broker promising big rates?  If you haven't seen several of these, I'd like anyone to post the contrary.



I wasn't a bank broker 5 years ago, however, I have found it HARD TO COMPETE with fixed annuities coming out of there five year surrender sold back in 2001-2002.  They have been getting 4% plus and 5% plus when CD's were paying next to nothing.


Don't believe me?  Call Lincoln, and ask them about where their Step Five contracts have been over the past five years, and compare that to the national CD average over the past five years.


The fixed annuities OUTPERFORMED the CD rates. 

Feb 14, 2007 2:08 pm
rankstocks:

Indyone,


    If you can't take the heat....... 


    Let's be honest, how many brokers with over 5 years experience haven't run across several of these annuities paying 3% or 3.5% that were sold by a bank broker promising big rates?  If you haven't seen several of these, I'd like anyone to post the contrary.




You know the real issue that no matter what channel you can say the same..How many wirehouse accounts have you seen that have mutiple A share purchase at full load.. ect .. Like it has been said again and again. .IT IS the people period

Feb 15, 2007 8:57 pm

You know I sold a crapload of fixed annuities in 2001. I sold the Nationwide Platinum V it is a step up annuity I think most of the people started at 5% and it went up .15% every year, so for you home gamers that means those people earned 5% then 5.15% when there friedns were getting 2% (waiting for rates to rise) and their stuff is coming due and they are earning 5.75%... Who do you think they are going to call? Wait, I call them it's called a 1035...

Feb 16, 2007 11:21 am

It's easy to distinguish between those on this board who have been in the business, have knowledge, etc and those who don't isn't it...


Feb 16, 2007 3:57 pm

Hopefully they will regulate EIA's soon.  If it's pitched like an investment, it's an investment.  We aren't talking sub-accounts here.  Look at the name "EQUITY indexed annuities"  Big word being equity, little one being indexed, like an index fund.