Chris Hansen from Dateline on this forum
If you are not aware, Dateline NBC did an expose on Equity Indexed Annuities 2 days ago. Chris Hansen (known for his “To Catch A Predator” series) delved into the unsightly underbelly of unscrupulous practices by insurance professionals to prey on unsespecting seniors.
In other news, there is a poster on this forum named "Chris Hansen" who started topics relating to EIA's...Hmmmmmmmmmmmmmm...Could this be the same guy? Maybe doing some research for his show? Perhaps. Inquiring minds want to know... What do you think? Do a search on "Chirs Hansen" and see for yourself.It is a little coincidental. After looking at his posts, there is more to say it's not the Chris Hansen from Dateline than there is to say it is him.
I don't think Chris Hansen would come on here and talk about cold calling, sales assistants, or anything like that. But it is interesting and you'll never know.Who cares if it was him or not. He had a good story to share of those that do prey on the elderly…they should be exposed. That only allows those of us (that do the correct disclosures) to make more money and sell more legitimate annuities. It really is sad what those door to door insurance sales man do (sometimes).
Miss JCorrect Miss Jones. I mentioned here in the past of a client who was sold several EIA’s by an insurance agent in her Morman church. They have 12-15% surrender charges and she will be dead before they are free of surrender. I think it is great he did this segment.
I had a client come in yesterday who transferred his account from a wirehouse to a ‘trusted’ friend from church that sold him a SHIT annuity. Needless to say the only way to get his money out of the annuity is if he annuitizes it!!! Unbelievable, or pay a 10% surrender charge. I didn’t know people still sold annuities like that.
Miss JMan I would love a copy of that episode! I would just play that at a seminar as the opener…I cant stand the scum that sell EIA’s!
"Mormon" is the correct spelling. Unfortunately we don't have any agents IN our church. You of course meant an agent who was a member of the Mormon chruch. Not sure what that has to do with the scumbag selling her a crappy annuity. I know several scummy insurance agents in my town who are Mormons and many others who are not. I don't think us Mormons have a corner on the market.Correct Miss Jones. I mentioned here in the past of a client who was sold several EIA’s by an insurance agent in her Morman church. They have 12-15% surrender charges and she will be dead before they are free of surrender. I think it is great he did this segment.
Man I do despise them all and hope they get what's comin to them. Go Chris Hansen and anyone else who goes after them.
nestegg and Dark knight,
Are you both trying to say that everyone who sells an EIA is scum?The only people I've known to sell them are scum.
I hope Chris will make this a series and go into the other unethical things those guys do, such as calling after a year and suggesting they move their 10% "free" withdrawal into another annuity, the tax inefficiency of these things as estate planning vehicles, the myraid hoops you have to jump through to get all of the promises, etc. Huge surrender fees is just the tip of the iceberg.At the risk of being tagged as the EIA poster-boy for this board, Borker, you’re over-generalizing based on the scum you see operating in your market. Certainly, if you accumulate a significant piece of earnings in yoru EIA and die, then yes, you have to pay the piper at that point. Never mind the fact that you’ve been able to defer taxes for 20-30 years or more in some cases. Gee, there’s no value at all in that.
As far as hoops, if you're talking about the Allianz MasterDex 10 or something similar, then yes, I agree...your money is basically held hostage. If you are talking about the EIA I use most often, it's easier to get money from than a similar-term CD. Again, you're over-generalizing based on the scum you see in action. I'll ask again, the product I most often use is 5 years, pays some interest regardless of the market, gives some upside market participation AND allows you to walk away after five years with principal plus. Can you show me a mutual fund, VA, or stock that guarantees that? Hey I applaud your ethics and can sympathize with the fact that you are struggling to cope with that despite regulation, there are some real dirtballs in our industry. Just understand that I very much disagree with your premise that all EIAs are bad and all who use them are bad. It just ain't so in my world.After watching Hansen's "TO CATCH A PREDATOR" series last year I was waiting and hoping to see the police tackle the agents after they were "free to leave".
I was also anticipating someone to offer the insurance agent some chocolate chip cookies and lemonade they just made. scrim[quote=scrim67]
After watching Hansen's "TO CATCH A PREDATOR" series last year I was waiting and hoping to see the police tackle the agents after they were "free to leave".
I was also anticipating someone to offer the insurance agent some chocolate chip cookies and lemonade they just made. scrim[/quote] Yeah, I'm kind of surprised the insurance agent didn't bring condoms and booze too.[quote=scrim67]
After watching Hansen's "TO CATCH A PREDATOR" series last year I was waiting and hoping to see the police tackle the agents after they were "free to leave".
I was also anticipating someone to offer the insurance agent some chocolate chip cookies and lemonade they just made. scrim[/quote] Ha Ha ha.. That sure would have been funny. I like how the one guy stood up and called him an AssHole.Sorry for the misspelling Dark Knight…Why I put that in there is because this lady inherited 1.5mil and went to the district head guru of the church. He recommended this loser, who also was part of the religion and an elder??. I can’t keep track of the hierchy of the M church. He pushed her through very quickly because she was about to reach an age where she would not qualify. You know the old trick, show urgency to make the decision.
LOL - great clip. Anyone have a link to the actual show?
Indyone - I do not think all EIA's are terrible. I am referring to the aholes in my town that sell them to anyone with a pulse. They are too easy of a product to sell and abuse. There needs to be more disclosure. bspears - nearly every adult male in our church is an elder, it means nothing as far as position goes. Like I said, I have no doubt your story is true. I've seen the same thing happen. My only point is that it has nothing to do with the religion. I'm sure the "guru" has no clue what the other guy does and it was probably the only "financial guy" that he knows. If the people buying the products do not understand what is going on, how is some "leader guru" (who is probably a farmer or realtor since we have no paid ministry) going to know what is going on.I will agree with your thoughts…
ps. spears I hope you get the account - I'm sure the other guy is an ahole
Also, if that guy slammed the 1.5 into an EIA don't you think she could win in a lawsuit against him and/or the insurance company for suitability?Actually I have 350k of hers already and I guess the funds will come when she passes because of the relationship I have with her 2 children. I printed off the forms from the state insurance department to file a claim, but she is really faithful to her church and doesn’t want to rock any boats. She stated, “I know he did me wrong and he knows and God knows…that’s all that needs to know.”
That’s exactly the response I expected…I had a feeling she would be very hesitant to take any legal action against a fellow church member, even if she felt she was wronged. Eventually, he’ll be held accountable whether she initiates it or not.
I hope he burns.
J/K we don't believe in hell that way.something about passing to another room…
One thing I AM a believer in is karma. Call it what you want, but eventually, I believe we all get what we deserve…
I hope you’re right Indy, I hope you’re right
Indy,
If you say your EIA is on the up-and-up, then I believe you. And yes, I am referring to those who sell, among others, the MasterDex 10.My firm bans us from selling EIA’s. That speaks volumes IMHO.
scrim[quote=scrim67]My firm bans us from selling EIA’s. That speaks volumes IMHO.[/quote]
I understand your point, scrim, but I’m not sure I would put that much emphasis on what your firm bans. That tells you at least as much about the firm as it does the product or service banned.
For example, most of the wires or large non-indy B/Ds also prohibit reps (not their inhouse RIA, but you as the rep) from producing a comprehensive financial plan or having discretion over a client’s portfolio. Scary stuff, that.
Many B/D’s ban EIA sales. It’s a business decision as opposed to a “EIAs are bad” decision. In some cases, the sale of EIAs will mean lost revenue for the B/D while still having responsibility for oversite. We also can’t escape the fact that many of these products are ripe for abuse which make them a headache that the B/D simply doesn’t want.
EIA's, in general, aren't the problem. The way that they get sold is often a problem. The insurance companies are very guilty for allowing the unsuitable sales of these products. Even if my B/D allowed the sale, I couldn't imagine selling one except in rare situations. I say that because it is rare that I sell a fixed annuity, but an EIA is certainly an acceptable substitute for a traditional fixed annuity in some cases.There is a point here that is being missed. That is, this is yellow journalism.
OK, you're all happy because the product targeted is something most of you don't like. That doesn't change the fact that this was a typical Dateline hatch job. Anyone here old enough to remember the exploding pickup truck debacle? For those who aren't, Dateline producers heard about a problem with GM pickup trucks. These were GMC and Chevy full size trucks. Seems that when the trucks were hit broadside the gas tanks would rupture causing a catastrophic explosion and fire. For dramatic effect they tested a GM pickup by ramming a car into it broadside and the sure enough, big fireball! Well, GM objected. They sued claiming the test was rigged. NBC, at first, stood by the story. Turns out though, the truck in the segment was rigged to explode and that's what they showed. What they didn't show or disclose until forced to was the several attempts to get a non rigged truck to explode. You would think that after ramming several trucks directly in the fuel tanks and not getting a fire that Dateline would have moved on. But instead, que the special effects guy. The resulting Hollywood magic cost NBC millions, the producers their jobs, and Dateline any trace of credibility. Now the Catch a Predator series has run into problems. Turns out the evidence chains have come into question. As viewers, we have to trust that the the transcripts of the online conversations are what Dateline says they are. If they would rig a truck to explode, how hard would it be to alter a transcript? Ethically, they are are as scummy as the people they purport to expose. The general public will not make a distintion between you, the honest financial advisor and the guys this segment showed. The final question posed in the segment advised not to buy equity indexed annuities. Regardless of your opinion of the product, the product didn't rip these people off, the agents did.Scrim, the reason your program bans EIAs is because your program managers are too lazy to investigate to see if there are acceptable EIAs and too lazy to do the necessary oversight for a product that they don’t want to learn. Edward Jones doesn’t do options. Does that mean options trading is never appropriate? The more I hear about your program management, the more I am led to believe that they are unnecessarily hamstringing you and doing a very poor job of supporting your efforts to service your clients. Isn’t your program the same one that requires a ridiculous amount of justification for annuity sales over a certain dollar amount? You may agree with this and be comfortable with the policies in place today, but I wouldn’t be surprised at some point that you come to the realization that management isn’t protecting your clients. Management is protecting their own butts because they are too lazy to do the appropriate oversight and due diligence and would rather treat you all as rookies who should just sell mutual funds. When you come to that conclusion, you’ll resent it and want out.
BG...I do remember that deal...thanks for the reminder. Didn't they end up using dynamite for the special effects? While I agree there are some real sleazeballs that deserve to be exposed, It's a real shame that NBC feels it necessary to tar an entire industry. Anytime I see blanket statements like "you shouldnt' buy an EIA", my first assumption is that there's probably another side to the story. If EIAs were as bad as these folks think, they'd be outlawed by now.[quote=BondGuy]There is a point here that is being missed. That is, this is yellow journalism.
OK, you're all happy because the product targeted is something most of you don't like. That doesn't change the fact that this was a typical Dateline hatch job. Anyone here old enough to remember the exploding pickup truck debacle? For those who aren't, Dateline producers heard about a problem with GM pickup trucks. These were GMC and Chevy full size trucks. Seems that when the trucks were hit broadside the gas tanks would rupture causing a catastrophic explosion and fire. For dramatic effect they tested a GM pickup by ramming a car into it broadside and the sure enough, big fireball! Well, GM objected. They sued claiming the test was rigged. NBC, at first, stood by the story. Turns out though, the truck in the segment was rigged to explode and that's what they showed. What they didn't show or disclose until forced to was the several attempts to get a non rigged truck to explode. You would think that after ramming several trucks directly in the fuel tanks and not getting a fire that Dateline would have moved on. But instead, que the special effects guy. The resulting Hollywood magic cost NBC millions, the producers their jobs, and Dateline any trace of credibility. Now the Catch a Predator series has run into problems. Turns out the evidence chains have come into question. As viewers, we have to trust that the the transcripts of the online conversations are what Dateline says they are. If they would rig a truck to explode, how hard would it be to alter a transcript? Ethically, they are are as scummy as the people they purport to expose. The general public will not make a distintion between you, the honest financial advisor and the guys this segment showed. The final question posed in the segment advised not to buy equity indexed annuities. Regardless of your opinion of the product, the product didn't rip these people off, the agents did.[/quote]Superbly said, BondGuy.
Indy, you say that EIA’s basically give you chance to make a little more or less than a fixed annuity. What’s really the point then? Is it really worth the trouble for you and your clients?
Separate question. Don't you think that small of an advantage is really not that huge of a deal and that the world would OVERALL be a better place if they were outlawed altogether? If Insurance co's and the gov aren't going to fix the problems why not just get rid of em. It would save a lot of problems.[quote=Dark Knight]Indy, you say that EIA’s basically give you chance to make a little more or less than a fixed annuity. What’s really the point then? Is it really worth the trouble for you and your clients? [/quote]
Yeah, why let people have the option of choosing one particular investment vehicle when they could get by with something else? Come to think of it, is it really worth the trouble to have so many mutual funds when so many of them are basically the same? What’s the point with all these choices?
[quote=Dark Knight]Don't you think that small of an advantage is really not that huge of a deal and that the world would OVERALL be a better place if they were outlawed altogether? If Insurance co's and the gov aren't going to fix the problems why not just get rid of em. It would save a lot of problems.[/quote]
Amen, comrade!! If Big Brother decides something isn't a huge advantage compared to something else, wouldn't we be better off to simply forbid it all together? It would save a lot of problems. Free markets and personal freedom can be so messy.
After that, I'd like to go after colors next. Let's face it - we have way too many colors than are necessary. Aqua and sky blue, for instance - who really needs both of them? And what the heck IS chartreuse, anyway? Sounds kinda shady, if you ask me. What would it hurt to outlaw a few of these shades?
[quote=Dark Knight]Indy, you say that EIA’s basically give you chance to make a little more or less than a fixed annuity. What’s really the point then? Is it really worth the trouble for you and your clients?
Separate question. Don't you think that small of an advantage is really not that huge of a deal and that the world would OVERALL be a better place if they were outlawed altogether? If Insurance co's and the gov aren't going to fix the problems why not just get rid of em. It would save a lot of problems.[/quote] That depends on when you're looking. When CD and FA rates are crap, I use EIAs. At the moment, FA rates are increasing to the point where your argument makes some sense, but that's not always true. When 5-year CDs and FAs are 3.5% and less, an EIA looks pretty attractive as an alternative. If the regulators want to outlaw the Allianz MasterDex 10, that's just fine by me, but to outlaw EIAs as a class takes a tool out of my toolbox when rates are low and/or when I want to diversify a very risk-adverse client.Morphius - I understand and agree with your point it is valid. Capitalism rules. My question though was really more of a theoretical question. Wouldn’t in fact more people benefit than those that would “suffer” if EIA’s didn’t exist. Note I mentioned IF the gov and market aren’t going to fix the problems that exist. That would of course be the better solution.
My real hope is just that they can control this problem a lot better than they currently do. Indy - good point on the rate situation, makes sense.[quote=Dark Knight]Morphius - I understand and agree with your point it is valid. Capitalism rules. My question though was really more of a theoretical question. Wouldn’t in fact more people benefit than those that would “suffer” if EIA’s didn’t exist. Note I mentioned IF the gov and market aren’t going to fix the problems that exist. That would of course be the better solution.
My real hope is just that they can control this problem a lot better than they currently do. Indy - good point on the rate situation, makes sense. [/quote] Some people have their money in CDs where the real rate of return is potentially negative. They run the risk of running out of money. Should CD's be banned? Something like 6% of term policies pay off, should those be banned, since 94% don't pay off? Knives are good to cut food with, but some people use them to stab others. Should they be banned? These might be a stretch, but it's not the CD's, Term LI, knives, or EIA's. By getting rid of a product that can help somebody, to avoid someone suffering from it doesn't make sense. That's because it's not the EIA, it's the insurance agent. Ultimately the consumer needs to know what they are buying. How many pieces of literature do you give a prospect/client? How many of them actually open it? It's not your fault they don't. They should be opening it, reading the fine print, looking at the prospectus. In a perfect world, the client should be able to trust the person selling the product. But we know it's not a perfect world. For the record, I have not sold any EIA's. But it's not because I think the product is a rip off. There hasn't been a situation yet that I have had to use it. The clients I focus on are not in that market. But if I came across someone who wanted that guarantee and needed better return than a CD or money market, it might make sense. I'm with Indy on this...the surrender period is important and I couldn't see locking away money for 10+ years to benefit too many folks.I’ll add for clarification, that I can count the EIAs I’ve used on one hand. At the same time, one of them I sold was to an aunt who is extremely risk-adverse. It made sense as other alternatives five years or less were running 3% at the time. Thus far, she’s averaging about twice that.
“That’s because it’s not the EIA, it’s the insurance agent.”
In many instances, it is also the EIA. The insurance companies need to share in the blame. There is absolutely no reason why they should approve the sale of an EIA with a 15 year surrender charge that doesn't get waived at death to a 73 year old looking to leave an inheritance.DK, the whole government should protect us thing is a slippery slope. Do you really want government fuctionaries making decisions for you? And where does that end? Too much regulation is a problem in this country.
I'll give you a case in point: Let's say your spouse wanted to set up a simple baby sitting service. In most states your spouse would have to have facilites that contain certain per child square footage requirements, have triple sinks, changing tables, and meet the same sanitary codes as full time day care centers. Additionally, the facility would have meet certain staffing requirements, including having a full time director and a director of curriculum. Both these individuals need to meet certain educational requirements the least of which is a four year degree. All staff must submit to criminal background checks conducted by the state. The curiculum must meet certain state mandated requirements. Next comes the local zoning requirements, which because the state classifies you as a day care center so do they. You need a dedecated water supply just for the fire surpression system. By the way, did i mention that you need a fire surpression system? At this point your spouse says, but all I want to do is watch a couple of kids for a few hours a day? The state and town say Ok, but you must comply, not only for the well being of the children, but for yours as well. And non compliance will be dealt with via severe penalties. And so it goes when the state makes the decisions for our own good. The government can't do anything as well as the free market. If EIAs aren't a good thing the free market will eventually send them to the circular basket. We need less government, not more.BG...I'm starting to think I've got your party affiliation wrong...that sounded positively Reagan-esque.We need less government, not more.
When he fired the ATC I wasn't much of a fan. However, living in the highest property tax state in the nation, NJ, where it's Ok to spend $7,000,000 on party connected consultants to develope a plan to sell the Turnpike, but then close state parks to save $4,000,000, has made me a real Reagan groupie. We could use a guy like him.
[quote=Dark Knight]
Example: Drugs and the FDA Many medical drugs are not approved by the FDA because the negatives outweigh the positives. Should those drugs be legal because they can help some people? [/quote] Things we consume where the negatives outweigh the positives: chocolate cake, beer, Krispy Kreme donuts, pancakes with syrup, etc. Shouldn't we regulate these items, as well? If we get universal health care, look for it to happen. Far fetched? Nah. If Uncle Sam is paying for health care, doesn't that give them the right to restrict consumption of these "dangerous" foods? ...Didn't your father ever tell you: "If I pay your bills, you live by my rules"?So let me get this straight, each of you who is calling for less goverment not more actually believes we need less oversight for EIA’s?
Please raise your hand if you believe the insurance and securities oversight bodies should DECREASE their oversight of the sales practices being used on seniors with EIAs.Hand Raised.
As long as the sales rep can produce proof that the prospect was provided the pertinent information. For example, concerning CDSC's, if the senior was provided information showing that the EIA had a 15-year CDSC, but still signed on; the sales rep has done their job, in my opinion. Or maybe we should just ban old people from investing in anything other than CD's. Does that sound good, "big brother"? Listen, I don't sell EIA's, but if you want to invest in something like that and you're aware of its characteristics, go for it. It's called freedom. Freedom to be smart, freedom to be stupid. The alternative is called Clinton / Obama; i.e., communism.From a legal, CYA standpoint, you're probably correct, doberman.
However, I feel very strongly against the idea that "providing information showing that the EIA had a 15-year CDSC" is sufficient. It takes me a significant amount of time to become even vaguely familiar with the intricacies of these things, and you honestly believe a 75-year-old retired oil refinery worker is going to have even the slightest clue as to what they're getting themselves into? Sure, you can get away with it legally, but is it the right thing to do ethically and morally? I'm patiently waiting for the day when I get to casually discuss EIAs with the guys across town who sell them exclusively. I promise you I will be able to stump them on some very basic features of the contracts their peddling. Crooks...Hand raised.
More government protection eqauls trading rights for protection. The more we expect government to protect us from ourselves the pathetic we become.DarkKnight, my hand is also up. I am not a seller of EIA’s. The problem isn’t lack of oversight. It’s oversight without teeth.
Improved/increased don't use semantics to disagree with me when you are actually agreeing.DarkKnight, my hand is also up. I am not a seller of EIA’s. The problem isn’t lack of oversight. It’s oversight without teeth.
Well, while you may not agree with me I sure as heck agree with you. (not sure what the difference is.) Amen to your post 10 times over.
[quote=Dark Knight]Well, while you may not agree with me I sure as heck agree with you. (not sure what the difference is.) Amen to your post 10 times over. [/quote]
You said: "Listen, all I really want is for increased guidance and oversight."
Anon said: “I would like decreased oversight with lots of teeth.”
So you agree with Anon that you disagree with you? Or do you disagree that Anon doesn’t agree with your disagreement about agreeing? Or … um …
What were we talking about again?
Again you are trying to mix a bunch of words, the point is that I want these bastards gone after just like anon. Maybe I didn’t use the right words, so sue me. I hate what these crooks do and so apparently does he. I hope you are having fun with a he said he said blah blah blah. Maybe you guys just like to argue.
[quote=Dark Knight]Again you are trying to mix a bunch of words, the point is that I want these bastards gone after just like anon. Maybe I didn’t use the right words, so sue me. I hate what these crooks do and so apparently does he. I hope you are having fun with a he said he said blah blah blah. Maybe you guys just like to argue. [/quote]
Now I really disagree with that! Let’s argue that point a bit …
I was having some fun with you, dark knight. Relax a bit, will ya? You can buy the next round …
New client arrived after years of dealing with an insurance only rep. I have to say the client is mostly at fault here, they kept doing things that just did not make sense. The clients son finally stepped in after he learned the ins. agent took $10k form the client to invest in a failing restaurant. I mean this is out right insurance fraud lose your license type of stuff. What else did he sell her? Multiple EIA's, each year the free surrender went into a new one. And a Universal Life policy that supposedly had a LTC rider, which upon my review had no such rider and now every dollar of her money is either in EIA's and the one UL. And of course the minor interest in a failing restaurant that the agent is slowly paying her back for. What is the client doing, waiting to get paid back before she reports him! So, bad agent but worse a foolish client. I recommended they talk to the insurance guy downstairs!
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