Yes and No.  As an indy, one can take their business direction in just about any direction.  The annuity may have something to do with asset protection from litigation as many Dr's choose that route.  As far as fee based acct holding funds bought at NAV--that's pretty standard stuff.  The trail is often credited back to the account as a fee offset and also no-loads can be purchased as well in such an account.

I do very little in the annuity area.  My question is how does an annuity provide asset protection unless it is annuitized.  Also, if someone went after my clients assets and the client chose to annuitize at that time, wouldn’t that result in a legal action that the client would loose leaving ther assets still attached?  This is just with standard ownership and not the use of trusts that I am speaking of.     

Are these annuities popular among Indy's?

Have you seen the commissions on those things?  Of course they are popular!!  Actually I think that a retirement account with such a large amount in an EIA is only to benefit the agent and not especially the client.  Although there is something to be said for having some of your money in an investment where you cannot lose anything.  Worst case scenario is that they have a minimum yield (about 3%).  Then they might become more aggressive with the remaining investments given that they have a guaranteed floor.

[quote=babbling looney]

Are these annuities popular among Indy's?  

Have you seen the commissions on those things?  Of course they are popular!!  Actually I think that a retirement account with such a large amount in an EIA is only to benefit the agent and not especially the client.  Although there is something to be said for having some of your money in an investment where you cannot lose anything.  Worst case scenario is that they have a minimum yield (about 3%).  Then they might become more aggressive with the remaining investments given that they have a guaranteed floor.

[/quote]   

babbling looney, Checkout the facts first................

You need to talk to your Annuity Wholesalers, many of the Variable Annuities, will offer a 5% or 6% GMIB Income benefit, some clients want the risk of the market, but do not want to loose the earnings or principle from their investment.    many Brokers do not really understand the benefits available today in Annuities.  Some Firms like Edward Jones does not allow these GMIB products, and yours might be one of theses?

Get educated on them, they can help your clients and help you.   

Old school was never put a clients "IRA"in an "ANNUITY", today it's the only way to guarantee them an INCOME for LIFE they can't loose and you can't give guarantees with Mutual Funds or Stocks.  

Many clients need and want guarantees on a portion of their assets, especially when they are retired, they don't want to spend their "Golden Years" at the "Golden Arches" or at Wal*Mart as a greeter. Yes there are higher fees with Annuities, but what is really in the best interest of your client, since neither you or they can see the future.

I use managed portfolios within Annuity products with guarantees based on what my clients needs are, to help diversify my clients portfolio.   A little known fact, but some of the Annuity Funds have better returns, even with the higher internal expenses, because of the lack of surrenders than the regular Mutual Fund does? Again talk to your wholesalers...........

Ah, management costs on top of a higher fee product. Good work Player. Yeah! You've learned a lot.

In an IRA? Come back in a year and brag that one up.

Higher returns don't come as a result of lower surrenders in anuiuites. It is a different trading style. Yeah, you've learned a lot.

Is that what your first firm taught you? The one prior to Jones?

[quote=Guest1]

Ah, management costs on top of a higher fee product. Good work Player. Yeah! You've learned a lot.

In an IRA? Come back in a year and brag that one up.

Higher returns don't come as a result of lower surrenders in annuities. It is a different trading style. Yeah, you've learned a lot.

Is that what your first firm taught you? The one prior to Jones?

[/quote]

Guest1,

Hopefully we could carry on an intelligent conversation on here without a jerk like you just slamming away without any FACTS!

How about giving some numbers and facts if you disagree, instead of your BS and slamming?   You Edward Jones types only slam, bring on some honest discussion, if you can?

Why are you so afraid, that all you can do is SLAM?  

I like to use variable annuities, even in IRA accounts, for the
GMIB.  If a client is nervous or asking to get out of the stock
market, I send them to our VA guy…period.



These cardioligists are unaware (so they say) of the 10 year time
commitment along with the cap structure on the annuities.  I have
acquired 4 of these as new clients so far, and they are all like this:



$750K initial premium (NQ) in EIA.  $250K initial in a wrap
account with about 8 good mutual funds @ 1.5% on top of the fund fee’s
(12B-1 reimbursements I am not sure about). Each one  invested 1
Million initially.  They are in their early to mid 50’s. 



I am not too terribly critical, and I do not do EIA’s, but the concern
was their assumption they were in a fee based relationship and were
sold on “flexibility”.  The 4 I have transferred want to take the
issue to the NASD and/or insurance commisioner as far as the EIA’s
go.  I was just surprised that each one had identical portfolios
and had so much in the EIA. 



None-The-less, they are dumping everything, taking a big CDSC and going
in a different diretion.  The Indy firm will be charged back the
commissions they were paid, which was 10% (I checked on this- bad day
for them coming next month) and the doctors are going to try to get
some of their CDSC back.



BTW- Big Bad Expensive ML will be charging roughly 1/2 of what they were paying before.

Several years ago I would not have even considered a annuity in a IRA but things have changed. Last November I invested some of a clients assets in an annuity with a death benefit. Well the client died last month! He made 9% on the annuity so the death benefit will not pay out but it was a nice piece of mind for the spouse and (ME).  

I still will not use EIA's though!   

Player.....Read the post first......

The op was talking about indexed annuities, by which I assumed that he meant equity indexed annuities and not variable annuities.   I do a lot of business in variables and occaisonally some in EIAs.  I also have IRA variable annuities for the guarantees.   You are not telling me anything I don't already know.  The commissions on variables are generally 5 to 6 % or less if you take trails.  The commissions are huge on EIAs  anywhere from 8 to 15%!!

The problem is that most EIAs are sold by insurance agent only types because it is all the CAN sell, and it is usually sold improperly.  No complete disclosure of the product to the client, older clients who don't understand the length and restrictions on the product and most of all stressing the cash "bonus" without disclosing that the product has to be annuitized to get it.  From what I see, most EIA sales are a hit and run from a greedy insurance agent.  

PS. not to diss entirely insurance guys.  I sell insurance too.

Player, Rightway answered your question to me. And Babs clarified that you did not read (or comprehend) the original post.

As to VA's in IRAs, not touching that one. I feel that is going to a big problem with the regulators real soon. AARP just ran a scathing article (few months ago) regarding this practice.

The most common criticism of a VA in an IRA is that you have a tax def inv in a tax def acct.  The belt and suspenders thing.  That's crap and here's why.

How much of a VA's M&E and/or admin expense goes toward providing the client with tax deferral.

Answer:NONE

Yes VA's are more expensive than funds, but the good ones provide a lot more protection for the client than a naked fund does.(and that's what clients are paying for)  How many death benefit claims were paid out by VA's in the last 5-6yrs.  Would those clients have been happier with funds.

What the Suze Ormans of the world along with the 25yr old writers of financial tabloids dont understand is that helping individuals reach their fin goals is a more an emotional than academic undertaking.  If having an implied guarantee will allow a client to take some risk in the market, and stick with the plan you have set up, the VA is wel worth it's add'l fees. 

That's just been my experience.

The tax deferral is not the issue, the GMIB is.  IRA or not, the GMIB stands on its own.



I am not a fan of the EIA’s though.

I dont like EIA's and have never done one, but my above posts were in response to this:

[quote=Guest1]

Player, Rightway answered your question to me. And Babs clarified that you did not read (or comprehend) the original post.

As to VA's in IRAs, not touching that one. I feel that is going to a big problem with the regulators real soon. AARP just ran a scathing article (few months ago) regarding this practice.

[quote=exdrone]

I dont like EIA's and have never done one, but my above posts were in response to this:

[quote=Guest1]

Player, Rightway answered your question to me. And Babs clarified that you did not read (or comprehend) the original post. GUEST1 you didn't pay attention 

As to VA's in IRAs, not touching that one. I feel that is going to a big problem with the regulators real soon. AARP just ran a scathing article (few months ago) regarding this practice.  Check out the postings here and you are alone on your comments, Drone 

[/quote] [/quote]

exdrone,

We do not offer or sell EIA's either, but as you can see if I say something is BLACK, Guest1 will say it is WHITE, he has no mind at all, just blind hate because I make him see the TRUTH AND HE CAN'T HANDLE IT ! Just look at his changing postings here?   The conversation was on Annuities I just changed it to VA's from EIA's.

The fact is I was trying to say is there are places for VA's even in IRA's, and I too have paid out Death Benefits on VA's the last 5 years and thank God the clients had VA's in their IRA's, I know their families love me and turned over their accounts to me, and it had nothing to do with FEES, but what was RIGHT for the client, and it's not always American Funds, or a self-Directed IRA.