Anyone familiar with Axa Accumulator
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http://online.wsj.com/article/SB10001424052970204900904574302270919454880.html?mod=wsjcrmain
I don’t think it is a terrible product…
What that article doesn’t tell you is that you can get a VA with much lower fees and no annuitization required to take advantage of the income for life benefit. (GMIB versus Lifetime GMWB- Would you rather have 5%, but cash value is just reduced dollar for dollar by the withdrawals, or 5% but cash value is no longer in existence because you had to annuitize.) Also doesn’t tell you the advisor gets 7%. No wonder he’s pushing this product so hard.
We’re still waiting for the answer to the question as to what product will give him hundreds of thousands of dollars extra.
If you have a better product for him, do you have a committment that he will do business with you as opposed to going back to his guy to buy it from him? The products have lots of smoke and mirrors to them. You can count on the fact that if the market behaves in a certain way and the client does certain things, the AXA annuity will be better. You can also count on the fact that if the market behaves differently and the client does certaing things, the AXA annuity will be inferior. Be careful with comparing fees. Are the fees guaranteed? Also, be careful of guarantees that are too good. They can bring down an insurance company. Be careful with incorrect facts. For instance, does the product pay the advisor 7% or does it pay a gross dealer concession of 7%?The clients decision will not come down to product … it will come down to trust & relationship.
[quote=anonymous]We’re still waiting for the answer to the question as to what product will give him hundreds of thousands of dollars extra.
As volt said, I'm definitely going to work to get the client based on relationship not on product, but if it comes down to it, then yes, the fees (including fund) on this one run about 3.45%. If you could save 1-1.5% on fees, with a time horizon of 20-25 years, you are looking at a significant difference. Also, with the income riders, if the market is in an upward trend, the client would see a lot more value if he still had a cash value available to capture the gains and bump the income. If they are annuitized then it doesn't matter what happens in the market, they are stuck with the same payment for life. In any market, once they exercise the rider, if the client dies within the first few years, obviously that could make a couple hundred thousand dollars difference, also. If you have a better product for him, do you have a committment that he will do business with you as opposed to going back to his guy to buy it from him? The products have lots of smoke and mirrors to them. You can count on the fact that if the market behaves in a certain way and the client does certain things, the AXA annuity will be better. You can also count on the fact that if the market behaves differently and the client does certaing things, the AXA annuity will be inferior. Assuming similar performance of subaccounts, I can't think of a single instance where a lower fee product with the same step-up percentage and the same payouts for life (but without having to annuitize) will be outperformed by this AXA product. Be careful with comparing fees. Are the fees guaranteed? Also, be careful of guarantees that are too good. They can bring down an insurance company. The fees are in the prospectus. The operating expenses of the subaccount, can vary of course, but the M&E will still be significantly less than AXA. Be careful with incorrect facts. For instance, does the product pay the advisor 7% or does it pay a gross dealer concession of 7%? You are right, I stated that incorrectly. I meant to say 7% to his grid.[/quote]Don't take anything in my post to be looked as a positive with the AXA product. I don't know the details of it and I don't know what product you are using.
I'm just reading your post and you sound dangerous because it sounds like you don't know what you don't know. "but if it comes down to it, then yes, the fees (including fund) on this one run about 3.45%. If you could save 1-1.5% on fees, with a time horizon of 20-25 years, you are looking at a significant difference." A significant difference in fees can make a big difference. Since you are talking about an annuity product with guarantees, you can't save him 1.5% because a product doesn't exist that is "all in" for under 2%. Let me know if I'm wrong. If you are going for the upward potential, you are hurting him by using a VA. You are doing a VA for 2% and could do mutual funds for under 1%. Over a 25 year span, if the underlying investments return 8%, the extra 1% of fees of the VA will lower the amount of money that he has by more than 25%. In any market, once they exercise the rider, if the client dies within the first few years, obviously that could make a couple hundred thousand dollars difference, also. So what? 1) The person has to care of what happens when they die. 2) You are ignoring the fact that the difference would swing the opposite direction if they live "too long". "Assuming similar performance of subaccounts, I can't think of a single instance where a lower fee product with the same step-up percentage and the same payouts for life (but without having to annuitize) will be outperformed by this AXA product. " Take a look at the product that you are planning on using. Let's assume that the client's goal is to have as much guaranteed income as possible starting 15 years from now. Assume that the subaccounts return 0% every year. How much guaranteed monthly income will he have starting in 15 years if he is 60 years old today and is investing $100,000? With the AXA product, he should be somewhere between $1200-$1400. (That's a guess, but it should be a pretty good one.) I'm willing to bet that this is better than your product and I don't even know what your product is. You can even assume that AXA is going to increase all of their fees and your product will keep them the same. Don't even attempt to compete if you don't understand the worst case scenario with both products. I'm willing to make two bets. 1) You don't know what the worst case scenario is with your product for my scenario. 2) The worst case scenario in this scenario is worse with your product than the AXA product. The fees are in the prospectus. The operating expenses of the subaccount, can vary of course, but the M&E will still be significantly less than AXA. The operating expenses can vary. The M&E can also vary. How do you know that it will remain significantly less than AXA? The fees for the riders can also vary. You can know that the current fees are less. You can't know that the future fees will be less.Client went with the Axa VA. The FA managed to convince him that he is guaranteed 8% now, not just 5%. The client doesn’t understand annuitization or the way the rider works, despite all my attempts to explain it. Oh, yeah, and the FA has 2 complaints in the last year on brokercheck for VA sales.
This client is going to be surprised when the account value starts dropping.
You still failed to see how to get the business. There was a wedge that you could have placed in the relationship and it had nothing to do with this VA or that VA. You were stuck in the my product is better than your product. That will NEVER win you business. You never understood what the client's goals were........Client went with the Axa VA. The FA managed to convince him that he is guaranteed 8% now, not just 5%. The client doesn’t understand annuitization or the way the rider works, despite all my attempts to explain it. Oh, yeah, and the FA has 2 complaints in the last year on brokercheck for VA sales.
This client is going to be surprised when the account value starts dropping.
I did everything I could to establish his goals. We discussed income needs while retired, what his plans were in retirement, family situation. I went at this from every angle I could think of.
I did change my method when I went back to him, thanks to the advice from everyone on here, and really talked about the level of service I would bring and building a portfolio instead of just pushing him into one product, but he still was stuck on this annuity. Who wouldn't be, if they thought they were locking in an 8% rate for life? I wish I knew a way I could have went about this differently, but I feel that I did everything in my power.[quote=MsBroker]I did everything I could to establish his goals. We discussed income needs while retired, what his plans were in retirement, family situation. I went at this from every angle I could think of.
I did change my method when I went back to him, thanks to the advice from everyone on here, and really talked about the level of service I would bring and building a portfolio instead of just pushing him into one product, but he still was stuck on this annuity. Who wouldn't be, if they thought they were locking in an 8% rate for life? I wish I knew a way I could have went about this differently, but I feel that I did everything in my power. [/quote] I didn't mean to beat on you about that, but in a sales situation if you let the conversation be product vs product then you lose.... You remember in sales train where you learned about features vs benefits? You talked about features too long, benefits are " whats in it for them". Why did he like annuities?I appreciate the feedback. I want to know how to never have this happen again, because it makes me sick to think about what will happen when his account value starts to dip. He already said he will pull it out at that point and take the hit.
He liked the annuity because he thought he could make a guaranted 8% but also get the market, if the market did better. The benefit to him when presented this way is a risk free way to get market gains and guaranteed income for life with no risk of a declining value in a down market. He was very risk adverse. He just kept telling me, well, I've made up my mind, so I'm going to give this a try.Don’t do business with or work for these criminals. Here's what I witnessed at AXA?
• Numerous client complaints from unsuitable investment recommendations and poor customer service.
• Reports of dishonest activities and taking advantage of customers, driven by greed with a total disregard of industry regulations.
• Illegal kickbacks and ponzi schemes have been reported with charges and litigation pending against this company.
• There are reports of the sales force not meeting regulatory requirements to conduct business as registered investment advisors.
• Testimonials from employees and customers reveal disturbing facts about compliance violations, unethical behavior and criminal activities.
beware, did you even bother reading this year old thread? You are off topic but your copy and pasting ability is impeccable. You have two identical posts about AXA on two different AXA threads. You must really hate them.