Question for the RIA,What do you charge for putting clients in to index CD, Do you charge AUM, If yes how do you explain to client your value, They can go to the bank and the bank broker will be happy to sell them CD without fees, He makes commision on sale, Is there such a thing as a no load index CD?
more sophisticated investors rather than just savers. A fiduciary duty generally precludes commision accts. Equity-linked products are really a zero coupon bond plus some derivative; they need 27 pages to explain all the whys and wherefores of the rules. RIAs generally do managed accounts of well-thought-out risk management. Indexed CDS appear to be a bit of a gimmick that makes a lot of money for the investment bank behind it since they write all the rules. Maybe I am wrong- but I see it at as a way to get the CD buyer (saver) to actually have to pay a commission for once.
It is basically the same idea as EIA,For the guaranteed part of the portfolio, Instead of client keeping his money in a plain vannilla CD, Where he is limited to 2-3 % put him in index where at least he gets some upside.
Are you saying FDIC is stronger/better run than a highly-rated insurance company?
I am answering the question “what is the difference”. Also, many people DEMAND FDIC and annuities therefore do not appea to them. So the enterprising investment banks came up with this very profitable way to make CD buyers finally pay someone a commission!
Annuities are for retirement,Some people want there money to be available before they turn 591/2