Equity Indexed fixed annuities?

what’s it matter you can’t sell them if you’re a jones ir

Just asking an easy question, EZ. Please don’t respond if you are going to answer in that fashion in the future.

Too good to be true? No. A really good thing for people? Hell yes.

If you have a client who is happy with an average annual return of 6 to 8%, tax deferred, with all of their principal guaranteed, it's great. If you want an alternative to bonds or CD's, it's great.

A lot of money is going into these products because most people are happy with those types of returns. It's so easy to close on these deals because you KNOW the worst case scenario up front.

I like them because I get paid a 10% commission with a 100% payout. That's right bank brokers...If I sell a $100.000 Index Annuity, $10,000 gets directly deposited into my personal checking account.

thanks for the post, Dirk. Can a client really expect that rate on those annuities? The one I was lookin at the other day had a cap of like 7%. Participation rates of like 75% too…are they all like that?

Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.

Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 

I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.

No JonesIR you cannot achieve those returns here is why.  Say you get a 5yr. annuity and 1 of the years is negative.  Every other year the market is up 12% and as you said caps are around 7%.  That is an average of 5.6%. 

Also I have never seen an index annuity whose cap rate is guaranteed, typically the insurance company gives you 7% the first year, 6% the second, 5.5% the third the 5% might be the minimum cap. in this scenario your returns are likely to be between 4-5% with very little liquidity.

DD-

Tell us exactly how you describe the surrender charge. And what about the M&E? Oh did your clients receive 6-8% last year with the S&P earning 3%. I had an 84 year old in my office last week with 200K (out of 450K total) in two different EIA's from Jefferson Pilot, a good/strong insurance company. If we took the money out now he would be penalized 20K after having the damn thing for 7.5 years. He received 65% (I believe its called participation rate) of the index. 1 yr CD's paid much better.

The most disturbing sentence in your statement was the last. "I like them because I get paid 10% commission with a 100% payout." DD...I am no sage wise man, but I have been in this biz since 94. I was reared in the insurance world and got the hell out. These products are not in your client"s best interest. Just yours. And the company.

With an attitude like yours, the rest of us pay dearly. For the record EIA's are coming under tremendous scrutiny by the regulators. If you expect to be in this business for the duration, I would stay away from this investment. Or at the very least, increase your liability coverage.

[quote=bankrep1]

Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.

MasterDex 10 sucks. You have to annuitize to get your earned interest. In ten years, it's gonna bite a lot of brokers in the ass when clients find out the truth.

You have to go ten years to get between 6-8%. I'm not going to call you an idiot for comparing a 5 year average with a 10 year average.

Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 

I'm not going to call you a retard for thinking that they payout at LPL is 100%. Commissions on outside business, like insurance products, are paid at 100%. I'm surprised your ER hasn't told you about this.

I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.

I'm not going to call you an absolute imbecile for thinking that 22% of $150,000 is higher than 90% of $150,000.

[quote=bankrep1]

No JonesIR you cannot achieve those returns here is why.  Say you get a 5yr. annuity and 1 of the years is negative.  Every other year the market is up 12% and as you said caps are around 7%.  That is an average of 5.6%. 

I don't use an annuity with caps and I don't use 5 year products. Using your analysis, there's TON'S of people who would be happy with 5.6% over 5 years with a guarantee on their principal.

Also I have never seen an index annuity whose cap rate is guaranteed,

Wrong. I'd explain, but based on your current level of misunderstanding and the fact that you can't sell them anyway, it would be futile.

typically the insurance company gives you 7% the first year, 6% the second, 5.5% the third the 5% might be the minimum cap. in this scenario your returns are likely to be between 4-5% with very little liquidity.

DD-

What about your liquidity?

[quote=7yrvet]

DD-

Tell us exactly how you describe the surrender charge.

Accurately.

And what about the M&E?

There is no M&E. You should know that, smart guy.

Oh did your clients receive 6-8% last year with the S&P earning 3%.

I just got on the bandwagon in June. Interest is credited every year at the end of the contract year, not the calendar year. I'll let you know in June. My VA's earned between 15% and 25%, though.

I had an 84 year old in my office last week with 200K (out of 450K total) in two different EIA's from Jefferson Pilot, a good/strong insurance company. If we took the money out now he would be penalized 20K after having the damn thing for 7.5 years. He received 65% (I believe its called participation rate) of the index. 1 yr CD's paid much better.

Why are you adivising him to get out? Do you want to make some money off of him?

The most disturbing sentence in your statement was the last. "I like them because I get paid 10% commission with a 100% payout." DD...I am no sage wise man, but I have been in this biz since 94. I was reared in the insurance world and got the hell out. These products are not in your client"s best interest. Just yours. And the company.

You know nothing about me or my clients. I am in business to make money. You're right. You are not a wise man. If you were, and you were reared in the insurance world, you would not have asked me a stupid question about M&E charges in an EIA.

With an attitude like yours, the rest of us pay dearly.

Given a choice, I would rather me make money than you. I'm sorry you can't compete with me.

For the record EIA's are coming under tremendous scrutiny by the regulators.

I'm ok with that. My business can withstand any level of scrutiny possible. I use my own disclosure forms, which are much more thorough and comprehensive than any compliance officer has come up with. I think the biggest reason that I close a lot of business is that I'm not afraid to show all of the pimples. People don't want the best of all worlds, they just want to know what they're getting into.

If you expect to be in this business for the duration, I would stay away from this investment. Or at the very least, increase your liability coverage.

Noone has ever lost money in an EIA who stayed the course. Period.

It is obvious that those that are naysayers at least on this forum are not really knowledgable about how the EIAs work. Sounds like there a lot of junky ones out there though. Dirk, which ones are you familiar with?

[quote=JonesIR]It is obvious that those that are naysayers at least on this forum are not really knowledgable about how the EIAs work. Sounds like there a lot of junky ones out there though. Dirk, which ones are you familiar with? [/quote]

Send me a pm and I'll tell you.

[quote=7yrvet]

DD-

What about your liquidity?

[/quote]

My liquidity? I'm very liquid. I make more than I spend. How's yours?

I use my own disclosure forms, which are much more thorough and comprehensive than any compliance officer has come up with.

Holy Crap!!!!!  You make this stuff up as you go along don't you?  At least I hope so.

My VA's earned between 15% and 25%, though

So what? I have mutual funds in my own portfolio that have an annual returns of  25% to 38%.  This is not a valid comparison to an EIA.

Noone has ever lost money in an EIA who stayed the course. Period.

This is true.  It is also true that they gave up the possiblity to earn more outside of the indexed annuity and without the downside capital gains being taxed as ordinary income.  

Disclaimer: I have sold EIAs.....not many.... they can be appropriate in certain circumstances and they are very difficult to explain to the average client.

[quote=babbling looney]

I use my own disclosure forms, which are much more thorough and comprehensive than any compliance officer has come up with.

Holy Crap!!!!!  You make this stuff up as you go along don't you?  At least I hope so. Only when I'm trying to close a deal with a woman, if you know what I mean.

My VA's earned between 15% and 25%, though

So what? I have mutual funds in my own portfolio that have an annual returns of  25% to 38%.  This is not a valid comparison to an EIA.

I think the word "though" makes it clear that I'm not comparing VA's to EIA's. If you weren't a woman, you could follow a line of logic.

Noone has ever lost money in an EIA who stayed the course. Period.

This is true.  It is also true that they gave up the possiblity to earn more outside of the indexed annuity and without the downside capital gains being taxed as ordinary income.  

When your husband bought your car, he gave up the opportunity to make money with your money. When your husband bought the house, he gave up the opportunity to make money in the bond market. I'm sure you have a point, but it is well hidden by your hair.

Any man knows that the money made is interest and not capital gains. Interest income is taxed as interest income. Nothing new there.

Disclaimer: I have sold EIAs.....not many.... they can be appropriate in certain circumstances and they are very difficult to explain to the average client.

You would probably be able to explain them, if you understood them better.

the money made is interest and not capital gains. Interest income is taxed as interest income. Nothing new there

Right you are in the EIA, interest only, taxed as ordinary income deferred until withdrawn.

When your husband bought your car, he gave up the opportunity to make money with your money. When your husband bought the house, he gave up the opportunity to make money in the bond market. I'm sure you have a point, but it is well hidden by your hair.

You are so cute when you try to be sexist.   The point is that by putting money into an EIA the clients get the feeling that they are participating in the market but are actually foregoing the real opportunity to earn more.  They are doing so with the knowledge that they will not lose any money either.  Nothing wrong with that at all.  We all make trade offs in life. 

The problem arises when the clients don't understand the crediting methods and that sometimes those "bonus" annuities (EIA and VA) require annuitization.   That is how EIAs get a bad rep.  BTW: for 7yr vet.  Not all EIAs are tied to the S&P.  There are DJIA and other indexes used as well as a fixed income bucket for the super conservative scairdy cat customer.

I don't buy cars that lose money.  I consider my vehicles as investments and my cars/trucks appreciate in value so that I make a profit when I sell them, with the exception of my daily driver which I lease. 

[quote=Dirk Diggler][quote=bankrep1]

No JonesIR you cannot achieve those returns here is why.  Say you get a 5yr. annuity and 1 of the years is negative.  Every other year the market is up 12% and as you said caps are around 7%.  That is an average of 5.6%. 

I don't use an annuity with caps and I don't use 5 year products. Using your analysis, there's TON'S of people who would be happy with 5.6% over 5 years with a guarantee on their principal.

I like how you split my words 5.6% would be great but it is not possible because the insurance company lowers the caps.

Also I have never seen an index annuity whose cap rate is guaranteed,

Wrong. I'd explain, but based on your current level of misunderstanding and the fact that you can't sell them anyway, it would be futile.

Why can't I sell them?  I can sell anything you can Dirk.  I am very familiar with EIA's.  Name one product (the one you use) that has a guaranteed cap and participation rate for the entire surrender period..  (I know this question will be repsonded to with....YOu would understand give your a CFP/banker etc.) rookie

typically the insurance company gives you 7% the first year, 6% the second, 5.5% the third the 5% might be the minimum cap. in this scenario your returns are likely to be between 4-5% with very little liquidity.

No insurance company would ever do this....

[quote=Dirk Diggler][quote=bankrep1]

Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.

MasterDex 10 sucks. You have to annuitize to get your earned interest. In ten years, it's gonna bite a lot of brokers in the ass when clients find out the truth.

You have to go ten years to get between 6-8%. I'm not going to call you an idiot for comparing a 5 year average with a 10 year average.

This was the highest return I saw in any EIA I did due diligence on.  The only reason it was 6.38% is because in 1994 or 1995 the S&P rose 2% or more each month for all 12 months.  This hasn't happened any other time in last 20 years so it's unlikely to happen again.  It's an anomoly.

Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 

I'm not going to call you a retard for thinking that they payout at LPL is 100%. Commissions on outside business, like insurance products, are paid at 100%. I'm surprised your ER hasn't told you about this. 

I know how it works 80/90/100 deoending on what you sell.  They have an ad on every other page of every magazine I get. 

I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.

I'm not going to call you an absolute imbecile for thinking that 22% of $150,000 is higher than 90% of $150,000.

Tell me how many independents are doing 150,000 a month there 2nd year in production?

[quote=bankrep1][quote=Dirk Diggler][quote=bankrep1]

Dirk show me an index annuity that will average 6-8%.  I have done due diligence and I can't find one.  The Allianz Masterdex 10 yr monthly avg was 6.38% 5yr. 3.8, but if you took out 1 year that was off the chart your returns look more like 4 to 5%.

MasterDex 10 sucks. You have to annuitize to get your earned interest. In ten years, it's gonna bite a lot of brokers in the ass when clients find out the truth.

You have to go ten years to get between 6-8%. I'm not going to call you an idiot for comparing a 5 year average with a 10 year average.

This was the highest return I saw in any EIA I did due diligence on.  The only reason it was 6.38% is because in 1994 or 1995 the S&P rose 2% or more each month for all 12 months.  This hasn't happened any other time in last 20 years so it's unlikely to happen again.  It's an anomoly.

Dirk I don't think anyone is jealous of your payout.  After all, if I wanted to be independent it's not exactly hard to do.  I believe if you call LPL they fly you out first class, put you up in the Ritz and shuttle you around in a limo, then sell you why 100% is better than 40%.  100% of nothing is still 0. 

I'm not going to call you a retard for thinking that they payout at LPL is 100%. Commissions on outside business, like insurance products, are paid at 100%. I'm surprised your ER hasn't told you about this. 

I know how it works 80/90/100 deoending on what you sell.  They have an ad on every other page of every magazine I get. 

I have a friend whose bank payout is 22% at first glance everyone says that sucks, however, he has about 15 people under him and gets paid 22% on all of their business.  Monthly his team does between 70-150K in production, not to bad at 22%.

I'm not going to call you an absolute imbecile for thinking that 22% of $150,000 is higher than 90% of $150,000.

Tell me how many independents are doing 150,000 a month there 2nd year in production?

[/quote] [/quote] [/quote]

I'm not aware of any that are doing $1.8mm/year, after two years. I don't believe your friend is, either.

He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 

[quote=babbling looney]

the money made is interest and not capital gains. Interest income is taxed as interest income. Nothing new there

Right you are in the EIA, interest only, taxed as ordinary income deferred until withdrawn.

When your husband bought your car, he gave up the opportunity to make money with your money. When your husband bought the house, he gave up the opportunity to make money in the bond market. I'm sure you have a point, but it is well hidden by your hair.

You are so cute when you try to be sexist.   The point is that by putting money into an EIA the clients get the feeling that they are participating in the market but are actually foregoing the real opportunity to earn more.  They are doing so with the knowledge that they will not lose any money either.  Nothing wrong with that at all.  We all make trade offs in life.

Just because YOUR clients feel that way, doesn't mean MY clients feel that way. How are you sending them this message? I suggest you stop doing that.  

The problem arises when the clients don't understand the crediting methods and that sometimes those "bonus" annuities (EIA and VA) require annuitization.   That is how EIAs get a bad rep.  BTW: for 7yr vet.  Not all EIAs are tied to the S&P.  There are DJIA and other indexes used as well as a fixed income bucket for the super conservative scairdy cat customer.

I don't understand how airplanes work and I don't need to know to realize the benefit of travelling in them. Lift and thrust or something like that, I hear.

I don't buy cars that lose money.  I consider my vehicles as investments and my cars/trucks appreciate in value so that I make a profit when I sell them, with the exception of my daily driver which I lease. 

How nice for you. 

[quote=bankrep1]

He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 

[/quote]

Any team of 15 people should be doing WAY more than that.  Your friends are averaging $120,000/year gross. With a 22% payout, they make an average pre-tax income of $26,400. Since the range you gave me has a low end of $840,000/year gross, these people are in serious trouble. I'm being generous by using the high end in my analysis.

Seriously...do you think things through before you try to stump me? You are presenting yourself as a very stupid bank worker.

[quote=Dirk Diggler][quote=bankrep1]

He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 

[/quote]

Any team of 15 people should be doing WAY more than that.  Your friends are averaging $120,000/year gross. With a 22% payout, they make an average pre-tax income of $26,400. Since the range you gave me has a low end of $840,000/year gross, these people are in serious trouble. I'm being generous by using the high end in my analysis.

Seriously...do you think things through before you try to stump me? You are presenting yourself as a very stupid bank worker.

[/quote]

You don't get it.  He has 15 bankers/reps that work on his team.  He is kinda in charge but also sees higher end clients.  The bankers are paid a salary plus a very small commission, the reps are paid a salary plus commission.  He is paid 22% of the team production.  I have the opportunity to go there, but I am happy building my biz in my institution  I'm a lone wolf, I like it that way. 

[quote=bankrep1][quote=Dirk Diggler][quote=bankrep1]

He is not.  His 15 person team is though.  And he gets paid 22% on all 15 of them. 

[/quote]

Any team of 15 people should be doing WAY more than that.  Your friends are averaging $120,000/year gross. With a 22% payout, they make an average pre-tax income of $26,400. Since the range you gave me has a low end of $840,000/year gross, these people are in serious trouble. I'm being generous by using the high end in my analysis.

Seriously...do you think things through before you try to stump me? You are presenting yourself as a very stupid bank worker.

[/quote]

You don't get it.  He has 15 bankers/reps that work on his team.  He is kinda in charge but also sees higher end clients.  The bankers are paid a salary plus a very small commission, the reps are paid a salary plus commission.  He is paid 22% of the team production.  I have the opportunity to go there, but I am happy building my biz in my institution  I'm a lone wolf, I like it that way. 

[/quote]

I'm not gonna say that you are full of crap, because I'm too nice.

Read Bank investment consultant magazine.  There are tons of examples of people like this.

[quote=bankrep1]

Read Bank investment consultant magazine.  There are tons of examples of people like this.

[/quote]

I'll get right on it.

You may want to refer to my earlier post on EIA's:

http://forums.registeredrep.com/forum_posts.asp?TID=1659&amp ;KW=eia

[quote=doberman]

You may want to refer to my earlier post on EIA's:

http://forums.registeredrep.com/forum_posts.asp?TID=1659&amp ; ;KW=eia

[/quote]

What's your point? EIA's don't do as well as the S&P? Neither do CD's or bonds. So what? Did you know that CD's do better than money market rates? Did you know that small caps do better than large caps? Did you know that apples do better than oranges? I could go on and on comparing things to irrelevant things, but there's no point in it. Now, if you're assuming that EVERYBODY'S objective is to perform EXACTLY in line with the S&P, with no prinicpal protection, then you've got a very valid point.

Even though you qualify, I refuse to call you an idiot.

DD-

Your ignorance to the possibility of problems with EIA shows your time in the business. The statement you have only been selling EIA's since June tells the rest of us your tenure.

Even if there are no M&E charges (I still need to look into that one) are you slamming 75+ in this product with horrendous surrender charges. If you are making 10% what time frame does the client have to keep it in without penalty.

Does your disclosure say to the client, "IF YOU NEED THE MONEY FOR ANY REASON, EXPECT TO RECEIVE LESS, MUCH LESS BEFORE THE SURRENDER CHARGE IS ELIMINATED. I wonder if that is one reason why I see more and more clients suggesting to me that they need to take a reverse mortgage or tap other assets because the annuity that their financial salesperson (who by the way is long gone from the business or won't return a phone call) sold them can't help them support themselves for care in the home,etc.

DD. Have you noticed the difference in font size in this response? Because I am willing to bet the farm your disclosure is half the font size. Most folks don't read them and older folks can't see the small print. Hell I am in my late 40's and I can't see it sometimes.

One last thought. If you are a real financial planner, you would understand the meaning of lost opportunity cost. What is the cost for not receiving the full index rate over their lifetime. I know it doesn't matter because chances are you will be one of those brokers who moves from firm to firm or b/d to b/d finding ways to maximize your return. After all you don't need clients, just prospects who buy once.

[quote=7yrvet]

DD-

Your ignorance to the possibility of problems with EIA shows your time in the business. The statement you have only been selling EIA's since June tells the rest of us your tenure.

Even if there are no M&E charges (I still need to look into that one) are you slamming 75+ in this product with horrendous surrender charges. If you are making 10% what time frame does the client have to keep it in without penalty.

Does your disclosure say to the client, "IF YOU NEED THE MONEY FOR ANY REASON, EXPECT TO RECEIVE LESS, MUCH LESS BEFORE THE SURRENDER CHARGE IS ELIMINATED. I wonder if that is one reason why I see more and more clients suggesting to me that they need to take a reverse mortgage or tap other assets because the annuity that their financial salesperson (who by the way is long gone from the business or won't return a phone call) sold them can't help them support themselves for care in the home,etc.

DD. Have you noticed the difference in font size in this response? Because I am willing to bet the farm your disclosure is half the font size. Most folks don't read them and older folks can't see the small print. Hell I am in my late 40's and I can't see it sometimes.

One last thought. If you are a real financial planner, you would understand the meaning of lost opportunity cost. What is the cost for not receiving the full index rate over their lifetime. I know it doesn't matter because chances are you will be one of those brokers who moves from firm to firm or b/d to b/d finding ways to maximize your return. After all you don't need clients, just prospects who buy once.

[/quote]

Wow! You're an angry man. Doesn't it scare you that you can have such an emotional reaction to a bunch of words on your computer monitor?

The only thing that angers me is when naive new brokers think they have real knowledge. You, and many others like you, make it incredibly difficult for the rest of us.

I have said this before, we all are in this together. When one does something that makes the headlines it affects us all. We are in the business of trust. Perhaps you ought to rethink your strategy. It just might save your career.

Independents have so much freedom, I am not one, but I wonder how your compliance department at your b/d would feel about having your own disclosure form. Did you happen to get it approved before you started sell EIA's?

Good luck, bad habits are extremely difficult to break when you see $$$. There is a sucker born all the time. Funny thing is that you might feel that it is your paying customers who ultimately will pay the price. I would suggest you look in the mirror very closely. I am not angry, just concerned for our industry. Hope that clarifies.

[quote=7yrvet]

The only thing that angers me is when naive new brokers think they have real knowledge. You, and many others like you, make it incredibly difficult for the rest of us.

You've got me confused with someone who wants to make things easier for you. Too bad you can't compete with me.

By the way...I've been in the business since 1999, which makes me a 7yrvet.

I have said this before, we all are in this together. When one does something that makes the headlines it affects us all. We are in the business of trust. Perhaps you ought to rethink your strategy. It just might save your career.

First, we are not in this together. I'm in business for me, my family, and my clients. You don't fit into the equation. I try to take clients away from othere brokers. Do you think  I should be sitting around singing KumBayah with you? Second, my strategy is making me a lot of dough. Why would I rethink it? Finally, if people didn't trust me, I would be out of business.

Independents have so much freedom, I am not one, but I wonder how your compliance department at your b/d would feel about having your own disclosure form. Did you happen to get it approved before you started sell EIA's?

My disclosure form is an addition to the firm's disclosure form. Compliance loves it. Thanks for asking.

Good luck, bad habits are extremely difficult to break when you see $$$. There is a sucker born all the time. Funny thing is that you might feel that it is your paying customers who ultimately will pay the price. I would suggest you look in the mirror very closely. I am not angry, just concerned for our industry. Hope that clarifies.

I know what you mean. I've been reading the obituaries and crossing the names out of the phone book for 20 years. As much as I want to stop, I can't seem to quit for more than 2 or 3 days.

That was an interesting article that doberman posted on page three. There doesn’t seem to be anything wrong with them…but I bet there are many people that sell them purely for the high pay out.   Thank you all for the dialogue…Dirk thanks for offering your thoughts too.

DD-

There are no words for you but greed. You are the type of advisor that all of us (excluding you) should continue to try and weed out. No wonder you are selling high commission products.

Your own words are so prophetic;

First, we are not in this together. I'm in business for me, my family, and my clients.

[quote=7yrvet]

DD-

There are no words for you but greed. You are the type of advisor that all of us (excluding you) should continue to try and weed out. No wonder you are selling high commission products.

Your own words are so prophetic;

First, we are not in this together. I'm in business for me, my family, and my clients.

[/quote]

Son, just how are you going to weed me out? You can't even compete with me. You're jealous because your firm haircuts the crap out of high commission products, so you can't enjoy them like I do.

Personally, I believe Dirk is a phony. Either he's not in the business, at all, or he's simply studying for the 7. Because he has nothing to offer me, in the way of intelligent discussion or debate (besides lacing his replies with the word "retarded"), I will no longer give him any response.

However, if he really is a broker, his tenure in this business will be shortlived and will, no doubt, end very, very badly for him. Of course, that's after it will have ended very, very badly for his clients.

I'd have to agree, wait for it......

I think Dirk is a rookie, 6 months in and is someones phone bitck.  He has trouble getting along with others so he comes on here pretending to be a big shot arrogant prick when in all reality he is a lil' girl.  Suckin' up to daddy or Uncle Ray in hopes one day they will pass along the book so Dirk can provide for his boyfriend, I mean wife.  His screen name is probably who he fantasizes to be or be with...

[quote=doberman]

Personally, I believe Dirk is a phony. Either he's not in the business, at all, or he's simply studying for the 7. Because he has nothing to offer me, in the way of intelligent discussion or debate (besides lacing his replies with the word "retarded"), I will no longer give him any response.

However, if he really is a broker, his tenure in this business will be shortlived and will, no doubt, end very, very badly for him. Of course, that's after it will have ended very, very badly for his clients.

[/quote]

Thanks for the attention. I would probably say the same thing if I had brought a knife to a gunfight, like you did.

[quote=bankrep1]

I'd have to agree, wait for it......

I think Dirk is a rookie, 6 months in and is someones phone bitck.  He has trouble getting along with others so he comes on here pretending to be a big shot arrogant prick when in all reality he is a lil' girl.  Suckin' up to daddy or Uncle Ray in hopes one day they will pass along the book so Dirk can provide for his boyfriend, I mean wife.  His screen name is probably who he fantasizes to be or be with...

[/quote]

If I were told what to sell and were on a 30% payout at a bank, I'd say the same thing. Of course, I could get upset about what you're saying about me or I can smile at the 1099's that have been arriving in my mailbox. Actually, I'm frowning because now I have to pay taxes.

P.S. A 1099 is something you get when you work for yourself. You wouldn't understand.

[quote=bankrep1]

I'd have to agree, wait for it......

I think Dirk is a rookie, 6 months in and is someones phone bitck.  He has trouble getting along with others so he comes on here pretending to be a big shot arrogant prick when in all reality he is a lil' girl.  Suckin' up to daddy or Uncle Ray in hopes one day they will pass along the book so Dirk can provide for his boyfriend, I mean wife.  His screen name is probably who he fantasizes to be or be with...

[/quote]

DD may come across as arrogant, and you don't have to like him, but I can vouch for the fact that he has been in the business for way longer than you think, and from what I can tell(without seeing his bank deposits or 1099's) he's making some major bank.

You may find his views to be controversial, but he really believes in what he is doing and his passion comes through.....so that is what you see.

Belive me or not.  "nuf said.

Joe

I think if you sell an Index Linked Annuity, your license should be revoked.  The 2% per month cap is never clearly explained to clients and it a good market, you cripple them.  If you owned these over the past 3 years, you're returns where mediocre compared to the S&P 500 because the big runs game in spurts.

If you want principal protection and 6-7% upside, look at a real annuity like AXA or ING.  The Index linked annuities are all about YTB. (yield to broker). 

Dirk I've got to hammer you on this one, Indexed Annuities are a joke.

   1.  no one mentioned dividends, what happens to the 2% a year yield on the s&P?  That's right, the insurance company.

   2.  the litmus test is if you would buy one at age 60 yourself, if the answer is no, then don't sell them.

   3.  Annuities now are ticking tax time bombs.  With the lowered long-term capital gains and dividend rates, how can you justify selling this garbage, especially if the plan is handing the money down?

   4.  Participation rates capped, average annual returns comparable to burying your money, huge surrender penalties, these are jokes.

   5.  Here's a better option, better for the client.  Buy a ten year government agency note or insured muni with 60% of the money (that way it guarantees the full return of principal in 10 years) and put the other 40% of the principal in SPY ETF with dividend reinvestment.

[quote=youcanhatemenow]

Dirk I've got to hammer you on this one, Indexed Annuities are a joke.

   1.  no one mentioned dividends, what happens to the 2% a year yield on the s&P?  That's right, the insurance company.

Wrong. Options are used to generate the growth. Options don't get dividends, therefore the bank doesn't get them. Nice try.

Also, people who don't want their money to be in the market like EIA's. Their money is NOT exposed to market risk. If you're not gonna take the risk, you shouldn't be entitled to dividends.

   2.  the litmus test is if you would buy one at age 60 yourself, if the answer is no, then don't sell them.

I don't know what my situation will be at 60. I am faiirly risk averse and I can see myself owning EIA's at sixty. I own one now and I'm happy with it.

   3.  Annuities now are ticking tax time bombs.  With the lowered long-term capital gains and dividend rates, how can you justify selling this garbage, especially if the plan is handing the money down?

Annuities earn interest, not cap gains. Interest is taxed at the ordinary rate, not CG rates. Why is that so shocking to you?

   4.  Participation rates capped, average annual returns comparable to burying your money, huge surrender penalties, these are jokes.

You can't have the best of all worlds, can you?

   5.  Here's a better option, better for the client.  Buy a ten year government agency note or insured muni with 60% of the money (that way it guarantees the full return of principal in 10 years) and put the other 40% of the principal in SPY ETF with dividend reinvestment.

How is paying taxes every year, so that the tax payments have no chance of compounding on a tax deferred basis, better than making more money in an EIA?

[/quote]

You've really demonstrated that you don't know too much about EIA's. Here's a good idea for you...go learn about them, see how they can be a good fit for a lot of people, quit assuming that you have to make people a LOT of money to  make people happy, and quit fighting the fact that a LOT of money is going into these products.

DD-

Try used cars. Really, you can put yourself first without an ethical moment to consider. Don't forget the patent leather shoes. Always attracts a higher commission.

Whenever a product becomes THE MOST IMPORTANT THING in your bag of tricks, you are doomed. Mr. Diggles will go down and out of the business as soon as his U4 or reputation reflects. My guess and already others on this forum would say sooner than later.

[quote=7yrvet]

DD-

Try used cars. Really, you can put yourself first without an ethical moment to consider. Don't forget the patent leather shoes. Always attracts a higher commission.

Whenever a product becomes THE MOST IMPORTANT THING in your bag of tricks, you are doomed. Mr. Diggles will go down and out of the business as soon as his U4 or reputation reflects. My guess and already others on this forum would say sooner than later.

[/quote]

I happen to love what I do. I'll be the first to admit that it's not for everyone. Why would I want the headaches associated with unhappy clients? I make too much money for that crap. That's why I only take clients who are right for me and my business and refer the rest to a few friends in the office. Of course, they split commissions with me and refer annuity clients to me.

Joe,



What makes you so sure about Dirk?  He seems like a complete fraud.

[quote=BankFC]Joe,

What makes you so sure about Dirk?  He seems like a complete fraud.
[/quote]

Why would you say that? I don't think YOU'RE a fraud. I believe that you ARE a bank broker with a low payout and a limited menu of things that you can sell.

Poor little Dirk,



I can sell anything you CAN…and more than you DO.  I don’t limit
myself to EIA’s.  I am an advisor, not just a hack salesman like
you.

[quote=BankFC]Poor little Dirk,

I can sell anything you CAN...and more than you DO.  I don't limit myself to EIA's.  I am an advisor, not just a hack salesman like you.
[/quote]

Don't tell my bank about it. They think that those direct deposits are real.

Good comment.  Made a lot of sense.  Yeah.    

Bank FC

Dirk will never get it. 

Dirk,

1099 income sucks!  You have to pay social security twice.  Don't tell me about tax benefits I was paid 1099 income for 3 years, the only benefit is you get to see big checks but you don't get to keep them.  If that gives you a hard on good for you.  It is about what you keep to what you make.

Before you get your start with your antics ... unreimbursed employee expenses...

[quote=bankrep1]

Dirk,

1099 income sucks!  You have to pay social security twice.  Don't tell me about tax benefits I was paid 1099 income for 3 years, the only benefit is you get to see big checks but you don't get to keep them.  If that gives you a hard on good for you.  It is about what you keep to what you make.

Before you get your start with your antics ... unreimbursed employee expenses...

[/quote]

If you don't think you're paying for your ER's side of SS, you're a moron. It comes out of the money that they make by pimping you out. The only free lunches come in mousetraps, big boy.

I'm not sure that losing the deductibility of EE expenses below 2% of AGI is better than taking them above the line.

Also, I have a hard time figuring out how a 90-100% payout on a 1099 is worse than a 30% payout on a W-2.

[quote=bankrep1]

Dirk,

1099 income sucks!  You have to pay social security twice.  Don't tell me about tax benefits I was paid 1099 income for 3 years, the only benefit is you get to see big checks but you don't get to keep them.  If that gives you a hard on good for you.  It is about what you keep to what you make.

Before you get your start with your antics ... unreimbursed employee expenses...

[/quote]

When one is earning substantially ABOVE the social security ceiling, the other tax benefits(greater ease of deducting expenses) far outweigh the self employment tax....

Dirk, unfortunately you must have fallen on your head as a child, allow me to rebuke your moronism.

   1.  no one mentioned dividends, what happens to the 2% a year yield on the s&P?  That's right, the insurance company.

Wrong. Options are used to generate the growth. Options don't get dividends, therefore the bank doesn't get them. Nice try.

Also, people who don't want their money to be in the market like EIA's. Their money is NOT exposed to market risk. If you're not gonna take the risk, you shouldn't be entitled to dividends.

You make my point.  Dividends are important to overall return.  Also, options are used only infrequently in EIA's. Take a look at insurance companies statement of financial stability and look at their assets, their primary investment is usually the S&P index to cover their EIA exposure.

   3.  Annuities now are ticking tax time bombs.  With the lowered long-term capital gains and dividend rates, how can you justify selling this garbage, especially if the plan is handing the money down?

Annuities earn interest, not cap gains. Interest is taxed at the ordinary rate, not CG rates. Why is that so shocking to you?

You make my point again.  With capital gains and dividends capped at 15% tax, why pay as much as 35% later when you pull the gains out of the annuity?  Do the math.

   5.  Here's a better option, better for the client.  Buy a ten year government agency note or insured muni with 60% of the money (that way it guarantees the full return of principal in 10 years) and put the other 40% of the principal in SPY ETF with dividend reinvestment.

How is paying taxes every year, so that the tax payments have no chance of compounding on a tax deferred basis, better than making more money in an EIA?

Did you not read this one?  Notice I said government agency note OR INSURED MUNI.  If you want compounding, buy a zero.  You probably don't even know what a zero is anyway.  By the way, once again, do the math the last 50 years on the market.  This strategy KILLS the returns in EIA and is 96 percent tax efficient if you use muni zeros.

[quote=youcanhatemenow]

Dirk, unfortunately you must have fallen on your head as a child, allow me to rebuke your moronism.

   1.  no one mentioned dividends, what happens to the 2% a year yield on the s&P?  That's right, the insurance company.

Wrong. Options are used to generate the growth. Options don't get dividends, therefore the bank doesn't get them. Nice try.

Also, people who don't want their money to be in the market like EIA's. Their money is NOT exposed to market risk. If you're not gonna take the risk, you shouldn't be entitled to dividends.

You make my point.  Dividends are important to overall return.  Also, options are used only infrequently in EIA's. Take a look at insurance companies statement of financial stability and look at their assets, their primary investment is usually the S&P index to cover their EIA exposure.

First, you are assuming that people want to risk their money in the market. People who buy EIA's DON'T want the risk. They UNDERSTAND that they won't meet or beat the market. Fourth, you've really demonstrated what an imbecile you are by not knowing this stuff.

   3.  Annuities now are ticking tax time bombs.  With the lowered long-term capital gains and dividend rates, how can you justify selling this garbage, especially if the plan is handing the money down?

Annuities earn interest, not cap gains. Interest is taxed at the ordinary rate, not CG rates. Why is that so shocking to you?

You make my point again.  With capital gains and dividends capped at 15% tax, why pay as much as 35% later when you pull the gains out of the annuity?  Do the math.

Most cap gains in index funds are short term, which is taxed EVERY year at the ordinary rate.

It's impossible to pay 35% in income taxes on one's income. Do the math.

   5.  Here's a better option, better for the client.  Buy a ten year government agency note or insured muni with 60% of the money (that way it guarantees the full return of principal in 10 years) and put the other 40% of the principal in SPY ETF with dividend reinvestment.

How is paying taxes every year, so that the tax payments have no chance of compounding on a tax deferred basis, better than making more money in an EIA?

Did you not read this one?  Notice I said government agency note OR INSURED MUNI.  If you want compounding, buy a zero.  You probably don't even know what a zero is anyway.  By the way, once again, do the math the last 50 years on the market.  This strategy KILLS the returns in EIA and is 96 percent tax efficient if you use muni zeros.

Imputed interest. Go look it up. People have to pay taxes from other sources of cash. I can't believe you opened your big mouth without knowing this. Consider your moronism rebuked.

[quote=Dirk Diggler]

Most cap gains in index funds are short term, which is taxed EVERY year at the ordinary rate.

[/quote]

Short term cap gains on index funds make up the majority of their gains? Got a source for that one?

[quote=Dirk Diggler]

It's impossible to pay 35% in income taxes on one's income. Do the math.

[/quote]

Uh? The top rate is currently 35%, so what do you mean by this?

[quote=mikebutler222][quote=Dirk Diggler]

Most cap gains in index funds are short term, which is taxed EVERY year at the ordinary rate.

[/quote]

Short term cap gains on index funds make up the majority of their gains? Got a source for that one?

Nope. I made it up.

[quote=Dirk Diggler]

It's impossible to pay 35% in income taxes on one's income. Do the math.

[/quote]

Uh? The top rate is currently 35%, so what do you mean by this?

Standard/itemized deductions bring the marginal rate down to the effective rate. I can't believe that after all of those firms you've been with you haven't picked that up.

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

Most cap gains in index funds are short term, which is taxed EVERY year at the ordinary rate.

[/quote]

Short term cap gains on index funds make up the majority of their gains? Got a source for that one?

[/quote]

Nope. I made it up.

[/quote]

Uh, no kidding. "Red handed" is what they call this one. Or, if you don’t want to be kind, you call it “lying”.

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

It's impossible to pay 35% in income taxes on one's income. Do the math.

[/quote]

Uh? The top rate is currently 35%, so what do you mean by this?

[/quote]

Standard/itemized deductions bring the marginal rate down to the effective rate. I can't believe that after all of those firms you've been with you haven't picked that up.

[/quote]

Ohhhh, a "all those firms" retort. I'm cut to the quick. After all, I should feel bad about that, shouldn't I? I mean, the big bad boys selling (some FORMERLY SELLING) insurance products and/or working for Jones tell me I should.  And just why is that again? 

Back to the subject. I find it hard to believe a real CPA would hide behind an "effective rate" canard. 35% IS the top rate and it's completely possible to pay it, especially on the last dollar earned.

 BTW, at that 35% rate (who knows, you may earn enough to have to pay it someday) there are things called "phase outs" of deductions, thereby reducing the effect of the deductions.

[quote=mikebutler222]<?:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /><O:P>

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

Most cap gains in index funds are short term, which is taxed EVERY year at the ordinary rate.

[/quote]

Short term cap gains on index funds make up the majority of their gains? Got a source for that one?

[/quote]

Nope. I made it up.

[/quote]

Uh, no kidding. "Red handed" is what they call this one. Or, if you don’t want to be kind, you call it “lying”.

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

It's impossible to pay 35% in income taxes on one's income. Do the math.

[/quote]

Uh? The top rate is currently 35%, so what do you mean by this?

[/quote]

Standard/itemized deductions bring the marginal rate down to the effective rate. I can't believe that after all of those firms you've been with you haven't picked that up.

[/quote]

Ohhhh, a "all those firms" retort. I'm cut to the quick. After all, I should feel bad about that, shouldn't I? I mean, the big bad boys selling (some FORMERLY SELLING) insurance products and/or working for Jones tell me I should.  And just why is that again? 

Back to the subject. I find it hard to believe a real CPA would hide behind an "effective rate" canard. 35% IS the top rate and it's completely possible to pay it, especially on the last dollar earned.

 BTW, at that 35% rate (who knows, you may earn enough to have to pay it someday) there are things called "phase outs" of deductions, thereby reducing the effect of the deductions.

[/quote]

You're grasping, jobhopper.

[quote=Dirk Diggler]

You're grasping, jobhopper.

[/quote]

LOL, no, little fella' they're called FACTS, we try to use them in this business.

BTW, do detail for us why I should feel hurt by the "jobhopper" comment? I could use a laugh.

[quote=mikebutler222][quote=Dirk Diggler]

You're grasping, jobhopper.

[/quote]

LOL, no, little fella' they're called FACTS, we try to use them in this business.

BTW, do detail for us why I should feel hurt by the "jobhopper" comment? I could use a laugh.

[/quote]

You should be proud. Quite proud.

Dirk,

Let's just say Mikebuttler and I haven't seen eye to eye on many things here (I'll leave it at that), but for you to make personal attacks based on an unfair advantage really shows your pitiful demeanor.

Before you start calling people "jobhopper" and the such, why don't you post your CRD # for everyone to see?

I can't wait... 

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

You're grasping, jobhopper.

[/quote]

LOL, no, little fella' they're called FACTS, we try to use them in this business.

BTW, do detail for us why I should feel hurt by the "jobhopper" comment? I could use a laugh.

[/quote]

You should be proud. Quite proud.

[/quote]

As I suspected, litte fella', you're just a passing bit of gas.....

[quote=BankFC]

Dirk,

Let's just say Mikebuttler and I haven't seen eye to eye on many things here (I'll leave it at that), but for you to make personal attacks based on an unfair advantage really shows your pitiful demeanor.

Before you start calling people "jobhopper" and the such, why don't you post your CRD # for everyone to see?

I can't wait... 

[/quote]

I'll give you 10 to 1 the little gasbag passes on your offer. He's already shown himself to be of such low caliber that he'll just make things up, he's not worth enough to worry about or to ruin this forum over.

No doubt he'll crawl back to the pals he has at the ex-insurance salesman's coffee klatch where they high-five each other over selling EIAs for the 10% payout and call honest people with integrity “pikers”.  At least we won’t have to wipe him off the soles of our shoes anymore or allow him to disrupt what has become a fun and somewhat useful board.

[quote=BankFC]

Dirk,

Let's just say Mikebuttler and I haven't seen eye to eye on many things here (I'll leave it at that), but for you to make personal attacks based on an unfair advantage really shows your pitiful demeanor.

Before you start calling people "jobhopper" and the such, why don't you post your CRD # for everyone to see?

I can't wait... 

[/quote]

I'll tell you what...you hold your breath and when I post it, I'll ask around for "blueboy" to let you know.

[quote=mikebutler222][quote=BankFC]

Dirk,

Let's just say Mikebuttler and I haven't seen eye to eye on many things here (I'll leave it at that), but for you to make personal attacks based on an unfair advantage really shows your pitiful demeanor.

Before you start calling people "jobhopper" and the such, why don't you post your CRD # for everyone to see?

I can't wait... 

[/quote]

I'll give you 10 to 1 the little gasbag passes on your offer. He's already shown himself to be of such low caliber that he'll just make things up, he's not worth enough to worry about or to ruin this forum over.

No doubt he'll crawl back to the pals he has at the ex-insurance salesman's coffee klatch where they high-five each other over selling EIAs for the 10% payout and call honest people with integrity “pikers”.  At least we won’t have to wipe him off the soles of our shoes anymore or allow him to disrupt what has become a fun and somewhat useful board.

Does your branch manager know that you are using his resources to play on the internet all day? Do you think he'd like to know?

[quote=Dirk Diggler][quote=mikebutler222][quote=BankFC]

Dirk,

Let's just say Mikebuttler and I haven't seen eye to eye on many things here (I'll leave it at that), but for you to make personal attacks based on an unfair advantage really shows your pitiful demeanor.

Before you start calling people "jobhopper" and the such, why don't you post your CRD # for everyone to see?

I can't wait... 

[/quote]

I'll give you 10 to 1 the little gasbag passes on your offer. He's already shown himself to be of such low caliber that he'll just make things up, he's not worth enough to worry about or to ruin this forum over.

No doubt he'll crawl back to the pals he has at the ex-insurance salesman's coffee klatch where they high-five each other over selling EIAs for the 10% payout and call honest people with integrity “pikers”.  At least we won’t have to wipe him off the soles of our shoes anymore or allow him to disrupt what has become a fun and somewhat useful board.

Does your branch manager know that you are using his resources to play on the internet all day? Do you think he'd like to know?

[/quote]

Ohhhh, a threat. Golly, I'm just shivering. I bet the guys at the coffee klatch gave you that idea. It must really suck to need that kind of crutch.

Anybody have a rag handy? I seem to have picked up something smelly on the sole of my shoe….

[quote=mikebutler222]<?:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /><O:P>

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

Most cap gains in index funds are short term, which is taxed EVERY year at the ordinary rate.

[/quote]

Short term cap gains on index funds make up the majority of their gains? Got a source for that one?

[/quote]

Nope. I made it up.

[/quote]

Uh, no kidding. "Red handed" is what they call this one. Or, if you don’t want to be kind, you call it “lying”.

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

It's impossible to pay 35% in income taxes on one's income. Do the math.

[/quote]

Uh? The top rate is currently 35%, so what do you mean by this?

[/quote]

Standard/itemized deductions bring the marginal rate down to the effective rate. I can't believe that after all of those firms you've been with you haven't picked that up.

[/quote]

Ohhhh, a "all those firms" retort. I'm cut to the quick. After all, I should feel bad about that, shouldn't I? I mean, the big bad boys selling (some FORMERLY SELLING) insurance products and/or working for Jones tell me I should.  And just why is that again? 

Back to the subject. I find it hard to believe a real CPA would hide behind an "effective rate" canard. 35% IS the top rate and it's completely possible to pay it, especially on the last dollar earned.

 BTW, at that 35% rate (who knows, you may earn enough to have to pay it someday) there are things called "phase outs" of deductions, thereby reducing the effect of the deductions.

[/quote]

SB, do you mislead people about tax BENEFITS in this manner, also? You can't have it both ways, jobhopper.

Actually, Mike, there is no “phase out” on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I’ll know more in a few weeks when I get my taxes wrapped up.

[quote=mikebutler222][quote=Dirk Diggler][quote=mikebutler222][quote=BankFC]

Dirk,

Let's just say Mikebuttler and I haven't seen eye to eye on many things here (I'll leave it at that), but for you to make personal attacks based on an unfair advantage really shows your pitiful demeanor.

Before you start calling people "jobhopper" and the such, why don't you post your CRD # for everyone to see?

I can't wait... 

[/quote]

I'll give you 10 to 1 the little gasbag passes on your offer. He's already shown himself to be of such low caliber that he'll just make things up, he's not worth enough to worry about or to ruin this forum over.

No doubt he'll crawl back to the pals he has at the ex-insurance salesman's coffee klatch where they high-five each other over selling EIAs for the 10% payout and call honest people with integrity “pikers”.  At least we won’t have to wipe him off the soles of our shoes anymore or allow him to disrupt what has become a fun and somewhat useful board.

Does your branch manager know that you are using his resources to play on the internet all day? Do you think he'd like to know?

[/quote]

Ohhhh, a threat. Golly, I'm just shivering. I bet the guys at the coffee klatch gave you that idea. It must really suck to need that kind of crutch.

Anybody have a rag handy? I seem to have picked up something smelly on the sole of my shoe….

[/quote]

Ok guys-I realize that some of this was playful jesting and spirited debate.  Some of it, however, is not.  This forum can be entertaining and useful, and I'd hate to see it get out of control.

I'm not calling for censorship from anyone else.  We all know how we feel about that.  I am calling for a little bit of restraing and maturity.  Just a little bit, though, as certainly we want to keep having fun! ;-)

If the product is going to give them a bond like return Dirk, why wouldn't you just sell them a bond, which has advantages over the EIA like:

1) Much Better liquidity (which also has implications for a clients "safety", which you make a lot of references to)

2) Much easier to understand 

The only conclusion I have come to in researching these products is that they are designed to deceive the client into believing that they are going to get "market like" returns (taken from the brochures of many different EIA's).  Now, just like the politicians who dress up terds with names like "No child left behind act", or "The Patriot Act" or try to bend "Global Warming" into "Global Climate Change", to manipulate the perception of these issues (No I'm not a Liberal, just examples that came to mind), these annuities shout from their rooftops about the magical land of "market like" returns without "market like" risk.

Sure, Dirk, there are people out there who these might be appropriate for, but if you were to clearly explain this product along with a bond with similar credit risk (and to explain that they will have similar returns under the best of circumstances) to the issuing insurance company and similar maturity as the surrender period and were to ask your client which one they would want, Do you think they'd say "Gee Dirk, gimme that super complex gizmo that takes a CPA or CFP to fully understand"

Also, the compounding benefits of tax deferal are very minimal at best( and surely don't outway the safety offered in a more liquid instrument) if the proceeds are going to actually be spent.  You should know this as a CPA.

I have no interest in getting into a pissing match, because frankly Dirk, you are much more witty than I and your diggler is certainly bigger than mine.  Plus, I get the impression that you sincerely believe in what you are selling, so I'll make no judgements about your motives here.

I'm White and Jewish. My diggler can't be bigger than yours.

Just to set the record straight. I ONLY do business with people who need what I do. That's it. Period. I have a very narrow focus. I know it sounds crazy, but my business has exploded since I committed to this approach. Criticizing me is like criticizing a heart surgeon because he doesn't do brain surgery. It makes you guys look really dumb.

I'm not interested in being a jack of all trades, like you guys are. It doesn't pay as well. There's a million of you out there. How many guys do you know that are positioned in people's minds as annuity specialists?

You people are quick to assume that I don't know what I'm doing or that I'm out to screw people. You couldn't be more wrong on both points. Are you guys aware that there is a direct relationship between telling the whole truth and closing the sale? I give people more credit for being smart enough to take in all the facts and arrive at a good decision. I don't assume that the public is as stupid as you do. People love my frank, candid approach to them.

I don't have a problem helping people understand what I do. If they don't understand, they're out. Just because YOU can't explain things clearly doesn't mean that I can't.

Now, go put some numbers on the board so your boss will let you have your chair back.

Dirk,

Do you have any comments on the bond vs annuity question?

Diggler not bigger than mine?  I saw the movie.

Ohhhhh, I get it now, you're not the REAL Dirk Diggler.  Stupid me.

[quote=joedabrkr]Actually, Mike, there is no "phase out" on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I'll know more in a few weeks when I get my taxes wrapped up.[/quote]

We were talking "income" along the lines of "no one pays 35% on their income", and the standard deduction was mentioned as a reason why the marginal and effective tax rates differ. It's those deductions, standard and personal, that have phase outs, I wasn't talking about business deductions. I suspect you're right about business deductions.

[quote=Dirk Diggler][quote=mikebutler222]<?:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /><O:P>

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

Most cap gains in index funds are short term, which is taxed EVERY year at the ordinary rate.

[/quote]

Short term cap gains on index funds make up the majority of their gains? Got a source for that one?

[/quote]

Nope. I made it up.

[/quote]

Uh, no kidding. "Red handed" is what they call this one. Or, if you don’t want to be kind, you call it “lying”.

[quote=Dirk Diggler][quote=mikebutler222][quote=Dirk Diggler]

It's impossible to pay 35% in income taxes on one's income. Do the math.

[/quote]

Uh? The top rate is currently 35%, so what do you mean by this?

[/quote]

Standard/itemized deductions bring the marginal rate down to the effective rate. I can't believe that after all of those firms you've been with you haven't picked that up.

[/quote]

Ohhhh, a "all those firms" retort. I'm cut to the quick. After all, I should feel bad about that, shouldn't I? I mean, the big bad boys selling (some FORMERLY SELLING) insurance products and/or working for Jones tell me I should.  And just why is that again? 

Back to the subject. I find it hard to believe a real CPA would hide behind an "effective rate" canard. 35% IS the top rate and it's completely possible to pay it, especially on the last dollar earned.

 BTW, at that 35% rate (who knows, you may earn enough to have to pay it someday) there are things called "phase outs" of deductions, thereby reducing the effect of the deductions.

[/quote]

SB, do you mislead people about tax BENEFITS in this manner, also? You can't have it both ways, jobhopper.

[/quote]

Feel free to point out the errors, BDG. After all, it's only fair given that I pointed out your errors/fictions on the cap gains on index funds and the top rate being 35% on personal income.  

Dirk said:

 I don't assume that the public is as stupid as you do. People love my frank, candid approach to them.

Reply:

I appreciate that you are frank and cadid, never the less I have worked with some extraordinarily educated people, who struggle with understanding investing basics.

I equate it to this:

I am an accomplished musician and assuming that you are not, if I sat down and tried to explain to you (however candidly) the basics of music theory; including modes, harmonic relationships of intervals, circle of fifths, time signature and rhythm; your head would be spinning before I even got through explaining to you why the Aeolian mode and the major scale (ionian mode) have the same exact notes yet sound very different.  Same goes for an auto mechanic trying to explain why the anti-matter combustion chamber needs to have it's positronic fluid checked and that it is the proper viscosity so the Flumer coils don't overheat.

Point is, your clients don't understand it no matter how candidly you explain it.  If they were capable of understanding it they wouldn't need to rely on trusting you to buy it themselves (and save on the 10% commission).  People love the confidence that a frank approach offers, not the data.

Dirk said:

I'm White and Jewish. My diggler can't be bigger than yours.

Reply:

What, did they shave a little too close during the circumcision?

[quote=Dirk Diggler]

You people are quick to assume that I don't know what I'm doing or that I'm out to screw people. [/quote]

Fair or not, that's the sort of responses you'll get when most every post has an I-get-paid-X%-on-every-dollar-I-place component to it. Dipping into making things up, name calling, threats and attempts to leverage the lack of anonymity on the part of some here while jealously guarding your own makes the picture even worse. Perhaps if we can get past all of that we have have a useful exchange here and not a food fight.

[quote=joedabrkr]

Ok guys-I realize that some of this was playful jesting and spirited debate.  Some of it, however, is not.  This forum can be entertaining and useful, and I'd hate to see it get out of control.

I'm not calling for censorship from anyone else.  We all know how we feel about that.  I am calling for a little bit of restraing and maturity.  Just a little bit, though, as certainly we want to keep having fun! ;-)

[/quote]

Joe, with all due respect, this shouldn't be addressed to "guys", there's a single party that turned two straight forward questions on assertions made into a series of threats and name calling. We shouldn't have to beat around the bush as to who's the culprit here. The fact is he's doing it on several threads.

[quote=dude]

Dirk said:

 I don't assume that the public is as stupid as you do. People love my frank, candid approach to them.

Reply:

I appreciate that you are frank and cadid, never the less I have worked with some extraordinarily educated people, who struggle with understanding investing basics.

I equate it to this:

I am an accomplished musician and assuming that you are not, if I sat down and tried to explain to you (however candidly) the basics of music theory; including modes, harmonic relationships of intervals, circle of fifths, time signature and rhythm; your head would be spinning before I even got through explaining to you why the Aeolian mode and the major scale (ionian mode) have the same exact notes yet sound very different.  Same goes for an auto mechanic trying to explain why the anti-matter combustion chamber needs to have it's positronic fluid checked and that it is the proper viscosity so the Flumer coils don't overheat.

Point is, your clients don't understand it no matter how candidly you explain it.  If they were capable of understanding it they wouldn't need to rely on trusting you to buy it themselves (and save on the 10% commission).  People love the confidence that a frank approach offers, not the data.

[/quote]

The people I work with don't care HOW things work. They want to know WHAT it will do for them. Do you need to understand how to fly an airplane in order to get on one? I'm done with you. You're an idiot and I have an appointment in half an hour to get ready for, to add $100,000 to an existing annuity. It's so easy to sell someone something that they already have. I love this business!

[quote=Dirk Diggler]

I'm White and Jewish. My diggler can't be bigger than yours.

Just to set the record straight. I ONLY do business with people who need what I do. That's it. Period. I have a very narrow focus. I know it sounds crazy, but my business has exploded since I committed to this approach. Criticizing me is like criticizing a heart surgeon because he doesn't do brain surgery. It makes you guys look really dumb.

I'm not interested in being a jack of all trades, like you guys are. It doesn't pay as well. There's a million of you out there. How many guys do you know that are positioned in people's minds as annuity specialists?

You people are quick to assume that I don't know what I'm doing or that I'm out to screw people. You couldn't be more wrong on both points. Are you guys aware that there is a direct relationship between telling the whole truth and closing the sale? I give people more credit for being smart enough to take in all the facts and arrive at a good decision. I don't assume that the public is as stupid as you do. People love my frank, candid approach to them.

I don't have a problem helping people understand what I do. If they don't understand, they're out. Just because YOU can't explain things clearly doesn't mean that I can't.

Now, go put some numbers on the board so your boss will let you have your chair back.

[/quote]

DD-This kinda speaks to my point a few posts ago.  This was a great post until the last couple of sentences where you just HAD to take swipes at the other fellow(s) with opposing opinions.

As others have pointed out I tend to be a little sarcastic, so I understand the temptation.  But-in the case of this ongoing debate, it has the effect of throwing gasoline on the fire of personal conflicts and clouding the substance of the relevant discussion.

Look, ultimately this is a place where you are free to share your opinion, but I had to throw in my 2 cents worth.

Joe, I love you like a brother, but when a bunch of people who think they know what they're talking about start proving that they don't, I'm gonna spank them a little.

It's all just a bunch of words on the computer screen. None of us should take this stuff too seriously. I'm sorry if I've hurt anyone's feelings. Mine haven't been hurt in the least. Sociopathy sure has it's rewards!

Actually, Mike, there is no "phase out" on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I'll know more in a few weeks when I get my taxes wrapped up.

You are correct Joe.   Expenses and deductions are generally a direct write off in the tax year they are incurred, with the exception of items that are amortized.  For instance if you own your building, as my husband does for his business, we take the deduction over many years.  Large equipment, such as backhoes and tractors, are depreciated over a few years for the initial capital investment, and interest expense can also be a deduction. Of course there is recaputure if the asset is sold.

This is one of the best parts of being independent. You can really take advantage of good tax planning to reduce your taxes.

[quote=babbling looney]

Actually, Mike, there is no "phase out" on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I'll know more in a few weeks when I get my taxes wrapped up.

You are correct Joe.   Expenses and deductions are generally a direct write off in the tax year they are incurred, with the exception of items that are amortized.  For instance if you own your building, as my husband does for his business, we take the deduction over many years.  Large equipment, such as backhoes and tractors, are depreciated over a few years for the initial capital investment, and interest expense can also be a deduction. Of course there is recaputure if the asset is sold.

This is one of the best parts of being independent. You can really take advantage of good tax planning to reduce your taxes.

[/quote]

Just like I said...they're taken above the line. Mike's a little new at this stuff. Give him a break.

[quote=Dirk Diggler][quote=babbling looney]

Actually, Mike, there is no "phase out" on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I'll know more in a few weeks when I get my taxes wrapped up.

You are correct Joe.   Expenses and deductions are generally a direct write off in the tax year they are incurred, with the exception of items that are amortized.  For instance if you own your building, as my husband does for his business, we take the deduction over many years.  Large equipment, such as backhoes and tractors, are depreciated over a few years for the initial capital investment, and interest expense can also be a deduction. Of course there is recaputure if the asset is sold.

This is one of the best parts of being independent. You can really take advantage of good tax planning to reduce your taxes.

[/quote]

Just like I said...they're taken above the line. Mike's a little new at this stuff. Give him a break.

[/quote]

Says the guy who made up the "short term cap gains" line and didn't know the top income tax rate 

[quote=babbling looney]

Actually, Mike, there is no "phase out" on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I'll know more in a few weeks when I get my taxes wrapped up.

You are correct Joe.   Expenses and deductions are generally a direct write off in the tax year they are incurred, with the exception of items that are amortized.  For instance if you own your building, as my husband does for his business, we take the deduction over many years.  Large equipment, such as backhoes and tractors, are depreciated over a few years for the initial capital investment, and interest expense can also be a deduction. Of course there is recaputure if the asset is sold.

This is one of the best parts of being independent. You can really take advantage of good tax planning to reduce your taxes.

Dirk,

A wholesaler stopped by my office today touting a crappy fixed annuity (AIG and Ohio National blow it's doors off) and guess what else...yeah that's right...an EQUITY INDEXED ANNUITY!!! 

This one wasn't too bad.  No cap, 100% market participation in the S&P...you can lock in your gain 1 time, and get 2% thereafter until the surrender is up in 7 years.  Decent product, but not good enough.

Why not sell the the Nationwide All American Gold VA product with the lum sum guaranteed return of principle after 7 years?  Same principle guarantee, PLUS you can invest in a DIVERSIFIED portfolio (aka small cap, mid cap, int'l, etc)...which will probably yield more than the S&P over that stretch...

EIA are just sh**ty VA's in drag.

But then again, is I was just a CPA with an insurance license, I guess I'd like EIA's too...

Was the 7 just too hard for you???

If a client is conservative I would just subscribe to the KISS theory.

A 40/60 asset allocation would most likely beat an EIA return in most every five year scenario.

EIA's are too expensive and too illiquid.

Just my .02

scrim

BankFC said:

EIA are just sh**ty VA's in drag.

Reply:

Couldn't have said it better myself

[quote=babbling looney]

Actually, Mike, there is no "phase out" on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I'll know more in a few weeks when I get my taxes wrapped up.

You are correct Joe.   Expenses and deductions are generally a direct write off in the tax year they are incurred, with the exception of items that are amortized.  For instance if you own your building, as my husband does for his business, we take the deduction over many years.  Large equipment, such as backhoes and tractors, are depreciated over a few years for the initial capital investment, and interest expense can also be a deduction. Of course there is recaputure if the asset is sold.

This is one of the best parts of being independent. You can really take advantage of good tax planning to reduce your taxes.

[/quote]

I'm just so glad I said "no" to the backhoe salesman, because I don't want to mess around with depreciation schedules....

[quote=Dirk Diggler]

Joe, I love you like a brother, but when a bunch of people who think they know what they're talking about start proving that they don't, I'm gonna spank them a little.

It's all just a bunch of words on the computer screen. None of us should take this stuff too seriously. I'm sorry if I've hurt anyone's feelings. Mine haven't been hurt in the least. Sociopathy sure has it's rewards!

[/quote]

Appreciate your frankness, man, and didn't intend to single you out.  That post was merely a good example.

All I'm suggesting-and I think everyone gets it, is that we can bring the volume down a notch and still have a spirited debate and a little fun too.

[quote=joedabrkr][quote=babbling looney]

Actually, Mike, there is no "phase out" on deductions on 1099 income when you are directly matching business expenses against that income.  At least not as I understand it.  I'll know more in a few weeks when I get my taxes wrapped up.

You are correct Joe.   Expenses and deductions are generally a direct write off in the tax year they are incurred, with the exception of items that are amortized.  For instance if you own your building, as my husband does for his business, we take the deduction over many years.  Large equipment, such as backhoes and tractors, are depreciated over a few years for the initial capital investment, and interest expense can also be a deduction. Of course there is recaputure if the asset is sold.

This is one of the best parts of being independent. You can really take advantage of good tax planning to reduce your taxes.

[/quote]

I'm just so glad I said "no" to the backhoe salesman, because I don't want to mess around with depreciation schedules....

[/quote]

LOL.... Well I don't actually use the backhoe in "my" business...but I can talk about it to my clients, who also own John Deere green.  Can ya tell I'm in farm country?  My office doesn't have anything expensive enough to require depreciation.

Why not sell the the Nationwide All American Gold VA product with the lum sum guaranteed return of principle after 7 years?  Same principle guarantee, PLUS you can invest in a DIVERSIFIED portfolio (aka small cap, mid cap, int'l, etc)...which will probably yield more than the S&P over that stretch...

EIA are just sh**ty VA's in drag.

As I recall, EIAs came out in the early to mid 1990's as a way for insurance agents to be able to compete with securities licensed advisors who were able to sell fixed and variable products. Since the market was in an upward trend at that time the cap or percentage of participation in the indexes wasn't such a big deal.  Heck,  70% participation in a positive 25% market was heaven for the fixed income investor.  The insurance agent couldn't help but be a hero. 

Those same EIAs didn't perfrom so well when we had back to back to back negative index performances.  A well managed VA or equity and bond portfolio was able to still have positive returns even if the indexes were tanking.  I know that is true, because I did it. My clients lost nothing in the years from 1999 to now and have they some nice gains.  EIAs during a fairly flat market like we have had in this past year are just not going to perform up to the level of even a certificate of deposit or a good short term bond.  I know Dirk is making money hand over fist.....but I'm willing to bet his EIA clients are not.

[quote=scrim67]

If a client is conservative I would just subscribe to the KISS theory.

A 40/60 asset allocation would most likely beat an EIA return in most every five year scenario.

EIA's are too expensive and too illiquid.

Just my .02

scrim

[/quote]

Really? How much do they cost?

[quote=babbling looney]

Why not sell the the Nationwide All American Gold VA product with the lum sum guaranteed return of principle after 7 years?  Same principle guarantee, PLUS you can invest in a DIVERSIFIED portfolio (aka small cap, mid cap, int'l, etc)...which will probably yield more than the S&P over that stretch...

EIA are just sh**ty VA's in drag.

As I recall, EIAs came out in the early to mid 1990's as a way for insurance agents to be able to compete with securities licensed advisors who were able to sell fixed and variable products. Since the market was in an upward trend at that time the cap or percentage of participation in the indexes wasn't such a big deal.  Heck,  70% participation in a positive 25% market was heaven for the fixed income investor.  The insurance agent couldn't help but be a hero. 

Those same EIAs didn't perfrom so well when we had back to back to back negative index performances.  A well managed VA or equity and bond portfolio was able to still have positive returns even if the indexes were tanking.  I know that is true, because I did it. My clients lost nothing in the years from 1999 to now and have they some nice gains.  EIAs during a fairly flat market like we have had in this past year are just not going to perform up to the level of even a certificate of deposit or a good short term bond.  I know Dirk is making money hand over fist.....but I'm willing to bet his EIA clients are not.

[/quote]

I love all the attention I'm getting. You guys have taken the bait. I am in control of everyone! I am the master of this domain.

Yes, but are you master of YOUR domain?

[quote=Dirk Diggler][quote=babbling looney]

Why not sell the the Nationwide All American Gold VA product with the lum sum guaranteed return of principle after 7 years?  Same principle guarantee, PLUS you can invest in a DIVERSIFIED portfolio (aka small cap, mid cap, int'l, etc)...which will probably yield more than the S&P over that stretch...

EIA are just sh**ty VA's in drag.

As I recall, EIAs came out in the early to mid 1990's as a way for insurance agents to be able to compete with securities licensed advisors who were able to sell fixed and variable products. Since the market was in an upward trend at that time the cap or percentage of participation in the indexes wasn't such a big deal.  Heck,  70% participation in a positive 25% market was heaven for the fixed income investor.  The insurance agent couldn't help but be a hero. 

Those same EIAs didn't perfrom so well when we had back to back to back negative index performances.  A well managed VA or equity and bond portfolio was able to still have positive returns even if the indexes were tanking.  I know that is true, because I did it. My clients lost nothing in the years from 1999 to now and have they some nice gains.  EIAs during a fairly flat market like we have had in this past year are just not going to perform up to the level of even a certificate of deposit or a good short term bond.  I know Dirk is making money hand over fist.....but I'm willing to bet his EIA clients are not.

[/quote]

I love all the attention I'm getting. You guys have taken the bait. I am in control of everyone! I am the master of this domain.

[/quote]

Are you going to hypnotize us next?  Please be careful so you don't bruise my inner child. 

EIA's expenses are convoluted to say the least.

My best guesstimate would be somewhere around 1.5% annually.

My firm prohibits the sales of EIA's for compliance reasons hence my knowledge is self-admittedly limited.

scrim

[quote=scrim67]

EIA's expenses are convoluted to say the least.

My best guesstimate would be somewhere around 1.5% annually.

My firm prohibits the sales of EIA's for compliance reasons hence my knowledge is self-admittedly limited.

scrim

[/quote]

Not sure that you can even quote a 'cost' because they pay a return based on a formula tied to an index, with various caps and other conditions too.  I don't really use them.  They look intriuging to me, but too many moving parts IMHO.

Exactly why I said they are convoluted.    

Similar to when a client thinks a certificate of deposit is "free".  

I'm sure there are lots of other examples consumers view as "free" when in reality they are quite expensive.

scrim

Dirk here’s a question for you.  You suggested a munizero has imputed taxable interest.  Tell me how?

[quote=scrim67]

EIA's expenses are convoluted to say the least.

My best guesstimate would be somewhere around 1.5% annually.

My firm prohibits the sales of EIA's for compliance reasons hence my knowledge is self-admittedly limited.

scrim

[/quote]

I respect you honesty.

[quote=youcanhatemenow]Dirk here's a question for you.  You suggested a munizero has imputed taxable interest.  Tell me how?[/quote]

I didn't suggest that.

[quote=joedabrkr][quote=Dirk Diggler][quote=babbling looney]

Why not sell the the Nationwide All American Gold VA product with the lum sum guaranteed return of principle after 7 years?  Same principle guarantee, PLUS you can invest in a DIVERSIFIED portfolio (aka small cap, mid cap, int'l, etc)...which will probably yield more than the S&P over that stretch...

EIA are just sh**ty VA's in drag.

As I recall, EIAs came out in the early to mid 1990's as a way for insurance agents to be able to compete with securities licensed advisors who were able to sell fixed and variable products. Since the market was in an upward trend at that time the cap or percentage of participation in the indexes wasn't such a big deal.  Heck,  70% participation in a positive 25% market was heaven for the fixed income investor.  The insurance agent couldn't help but be a hero. 

Those same EIAs didn't perfrom so well when we had back to back to back negative index performances.  A well managed VA or equity and bond portfolio was able to still have positive returns even if the indexes were tanking.  I know that is true, because I did it. My clients lost nothing in the years from 1999 to now and have they some nice gains.  EIAs during a fairly flat market like we have had in this past year are just not going to perform up to the level of even a certificate of deposit or a good short term bond.  I know Dirk is making money hand over fist.....but I'm willing to bet his EIA clients are not.

[/quote]

I love all the attention I'm getting. You guys have taken the bait. I am in control of everyone! I am the master of this domain.

[/quote]

Are you going to hypnotize us next?  Please be careful so you don't bruise my inner child. 

[/quote]

It won't be necessary. You guys are already so obsessed with me that it's taken on a life of it's own.

Dirk,

I really wanted an answer to my original post...why would you sell an EIA (S & P only) over a VA (diverse investment choices) with a lum sum guarantee with the same surrender schedule?

I think the answer is pretty obvious. 

You make more money by far selling EIAs than using a VA.  As a self professed "annuity specialist" I also suspect he can't sell a VA since you need to have at least a series 6 securities license. 

BL,

Dirk also has claimed to sell VA's as well as traditional securities products, He's series 7 licensed. 

Dirk:

You're a funny guy.  I like your sense of humor although I don't know that it's appreciated by most.  Although I will say that it's difficult to have an objective debate with you.  I think most people want (key word here) to come here to discuss issues in an objective meaningful manner, not to get distracted by petty pissing matches (not to imply that that's your goal here). 

I'm not sure why you are here, most of the posts I have read from you are either bragging about how much you're getting paid, dropping sh*t on other brokers who work at banks and essentially behaving in an ego-centric, narrow minded fashion.  I'm sure you could care less about what anyone elses perceptions of you are (probably a healthy attitude to have to some degree). 

I guess the litmus test for whether you are ethical and in line with client expectations is:

Would you allow your clients to read all of your posts on this board?

Then allow them to read Babbling Looney's, MikeButler's, Indyone's, BankFC's and Mine.

How well do you think you would compete then?  The great OZ was all powerful until the curtain came down. After the curtain came down he was just a circus side show act trying to fast talk his way out of a jam and then bailed out of town.

I have a new nickname for Dirk:  Mr. 10%

[quote=BankFC]

Dirk,

I really wanted an answer to my original post...why would you sell an EIA (S & P only) over a VA (diverse investment choices) with a lum sum guarantee with the same surrender schedule?

[/quote]

I do WAY more VA business than EIA's. My VA's have HANDILY done much better than the S&P, on a consistent basis.

[quote=dude]

BL,

Dirk also has claimed to sell VA's as well as traditional securities products, He's series 7 licensed. 

Dirk:

You're a funny guy.  I like your sense of humor although I don't know that it's appreciated by most.  Although I will say that it's difficult to have an objective debate with you.  I think most people want (key word here) to come here to discuss issues in an objective meaningful manner, not to get distracted by petty pissing matches (not to imply that that's your goal here). 

I'm not sure why you are here, most of the posts I have read from you are either bragging about how much you're getting paid, dropping sh*t on other brokers who work at banks and essentially behaving in an ego-centric, narrow minded fashion.  I'm sure you could care less about what anyone elses perceptions of you are (probably a healthy attitude to have to some degree). 

I guess the litmus test for whether you are ethical and in line with client expectations is:

Would you allow your clients to read all of your posts on this board?

Then allow them to read Babbling Looney's, MikeButler's, Indyone's, BankFC's and Mine.

How well do you think you would compete then?  The great OZ was all powerful until the curtain came down. After the curtain came down he was just a circus side show act trying to fast talk his way out of a jam and then bailed out of town.

I have a new nickname for Dirk:  Mr. 10%

[/quote]

Thanks for the attention.

Your welcome.

So if there are VA's out there with the same principle protection and better investment options, why would you EVER do an EIA...

10%  

[quote=BankFC]

So if there are VA's out there with the same principle protection and better investment options, why would you EVER do an EIA...

10%  

[/quote]

Oil and Gas projects make people more money than Mutual Funds. Why would you ever do a mutual fund? Afterall, you can lose money in either one, anyway.

Poor comparision.

If you can invest in two seperate contracts...each with guaranteed return of principle after x number of years....one with a single investment option (EIA), and one with many (VA)....which do you choose?

Me:  The VA, because of better performance potential

You:  The EIA, because of the higher payout to you

You make my job easier.

"Me:  The VA, because of better performance potential

You:  The EIA, because of the higher payout to you"

And the scud missile may have just landed a direct hit.....

I get higher payouts over the same contract period with the VA that I use than than an EIA. 

I think that your Scud is a dud.

Philo:

When you take into consideration the time value of money (the 10% invested now at say 6%), the difference is not that great, also if you consider that it takes much less work to sell an EIA and get paid now than to be on the hook for retaining a client for the next 10 years to receive a trail.  Much better to get paid now and move on, from Mr.10%'s perspective. 

I can't say that I blame him though, there are days when I think it would be better to just charge a big % now and move on.   Who know's what will happen over the next 5 to 10 years, death, unforseen circumstances, maybe I'll want to trade in my suit and tie for moccassins, tie die and a volkswagon van.  Tangible money now definitely has a value over intangible money in the future. 

I prefer to get paid today. Anything could happen. I could become disabled, I could die, I could start another business, etc... Why would I risk someone else getting paid for my sale?

Also, how much would they have to pay you to take assets out of your hands that you could be churning, I mean managing for a fee or commissions? I need to be paid at least a point per year.

[quote=BankFC]

Poor comparision.

If you can invest in two seperate contracts...each with guaranteed return of principle after x number of years....one with a single investment option (EIA), and one with many (VA)....which do you choose?

Me:  The VA, because of better performance potential

You:  The EIA, because of the higher payout to you

You make my job easier.

[/quote]

Comparing VA's to EIA's is really dumb. Two different products for two different objectives.

Dude, if you think an EIA is an easy sell, I congratulate you.

My use of EIAs is admittedly limited, but in learning the product, I found them to be complex, intricate and sophisticated investments.  Further, with a nod towards full disclosure, I spent quite a bit of time and effort to make sure the client fully understood what we were doing.

And no, TVM was and is not a consideration.

Of course EIA's are not an "easy sell", the tone of my post was comparing the effort and time of selling the EIA now v.s a VA.  the VA will require you to continue to provide good service to retain the client and receive the "higher payout" over the 10 year period, whereas once the EIA is sold, one can move on without their pay being affected.  I think my post was pretty clear on this point:

also if you consider that it takes much less work to sell an EIA and get paid now than to be on the hook for retaining a client for the next 10 years to receive a trail.

From a compensation and business standpoint, you'll make more $$ with the EIA 10% payout now, than 2.75% plus a 1% trail over the next 10 years, if you account not only for the time value of money but also the value of your time.  By selling th EIA you would have more time to go out and get new prospects and sell more PRODUCT.

2 cents (if it's worth that)

Dirk,

Please tell me the difference in the EIA client and the VA with principle guarantee client????

BankFC, I think you know the answer to that one.  Fish get the EIA, lizards get the VA, monkeys get the Fixed annuity and human beings get the stocks, bonds and mutual funds.  It's an evolutionary thing.

He may also use the gene pool depth guage.  The shallower the gene pool the client has, the more profitable the sale becomes.

Can someone recommend a GOOD Allianz EIA - I’ve read some negative comments on some of Allianz’ EIA’s and would like to know what EIA someone would recommend.   And Why?

[quote=milos]Can someone recommend a GOOD Allianz EIA - I've read some negative comments on some of Allianz' EIA's and would like to know what EIA someone would recommend.   And Why?[/quote]

I'm not crazy about allianz, but I've done a little of the Master Dex 5. Stay the hell away from the MasterDex 10. It gives the client a 10% bonus, but they HAVE to annuitize to get the interest that they've earned. That one is going to come back to bite a lot of people on the butt. I just met with  a couple who bought it and we had to take a surrender charge to get them into a VA, which is what the want/need. They had no idea how crappy it was.

What do you think is the best Equity Indexed Annuity - from the perspective of what is the best one for the client.   Thanks.

[quote=milos]What do you think is the best Equity Indexed Annuity - from the perspective of what is the best one for the client.   Thanks.[/quote]

Sorry to revive an old thread, but take a look at ING's Secure Index 5.  I have my 7 and my 66, but still use EIA's when needed (if an older client is freaked out by securities).

S&P Monthly Averaging, no caps, annual reset/lock in, 100% participation, only 5yr surrender (with 10% free annual wd).  The only moving part is the spread, which is only 0.25% for premiums over $75000 (0.75% for amounts under 75k)

It only pays 4% commission to the rep, but it's actually a very good product for the client (something rare in the EIA world).  For clients not looking for income guarantees (ie. perhaps a good VA w/ a 5% income rider) and want something more short-term (if they're coming from CD's), it's a very good product and simple to explain to them. 

Only one moving part, the spread, which is only 25 basis points, and no risk if the market has a down year.  Seems to be too good to be true when you see alot of the other garbage EIA's (American Equity comes to mind) out there that are 10-15 yr surrender's, with huge spreads or low caps (but pay the agent 12% commission of course). 

ING has a similar 5% bonus product if you need to 1035 out of a bad annuity still in it's surrender period, but it's a 10yr product and the spread is 55 basis points instead of 25 (but the commission is 8.5%).

AmerUS has some decent products too, but they are only A rated and typically have longer surrrenders (but higher commissions).