Financial Advisors

Why does everyone hate indexed annuities? Who would turn down the potential of 12% annual returns with a guarantee that they can't lose any money, all for free and even a bonus?

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What annuity is there where client could potentially get 12% return with caps and participation rates I have yet to see an index annuity the even has the potential of making 810 12% in a year. If you do your research you will find that on average an index return provides a 2 to 3% Max return. I can get that in a fixed liquid portfolio with very little downside risk and more potential upside. Most indexed annuities have long surrender periods 9 10 15 years. Unfortunately indexed annuities tend to be sold as a product not as a planning solution. I'd rather use a fixed annuity over an indexed annuity. I have reviewed indexed annuities the past and will continue to do my due diligence and periodically look at them I have yet to find a single reason to have a client purchase them in fact the one time I did sell it to a client I very much regret it

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The Russian trolls have infiltrated the ‘Bowl to sow discord and divisiveness That’s the only explanation for this post.

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The point to point crediting system is the most creative solution I have seen for folks/clients that want equity exposure with some protection/buffers. Allianz, Brighthouse are two we have used!

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This again?

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I think a lot of the bashers have no idea what todays EIAs look like. In their head they are the junk of the 90’s with 15 year surrenders, 2% caps, and 10+% commissions. 2017’s EIA are 7 year surrenders (same as fixed and VAs) with a 6% cap, no fees and a 5% commission. Every product has its place

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Foresight, those are the same guys selling VAs with 4.25% fees

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Unless of course you listen to too many Ken Fisher ads

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EIA's as a bond portfolio allowing clients to be more aggressive on the equity side. Has it's place

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Ahhh. I don't think u understand how Jackson works at all.... First off your fees are way off,. 2nd there are no Investment restrictions un like pru and lincoln; and Jackson has a built in joint benefit without having to pay for a joint rider. I have taken the time to actually read word for word of each contract and talked to legal of each firm. I don't buy into what the wholesaler tries to sell me....and cheaper doesn't mean it is better.

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Without jumping into the fight, both products have a place or they would not exist. I look at FIA as a bond replacement with little growth potential. I look at the better VA’s as more of a growth vehicle. There are many bad expensive VA’s that restrict true investment choice and have long surrenders. There are many FIA with low caps and long surrenders. Treat every client as you would want to be treated in the best product for their goals and everyone is golden.

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Indexed annuities are fixed products. So something like 90% of the proceeds go into bonds. That means that insurance companies need to make sure that actuaries calculate the participation rates to ensure that the average earnings are less than bonds so that they can make the spread. Insurance companies are in business to make money. So indexed annuities will almost always earn less than bonds. So why not cut out the middle man?

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smartfunny
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I’d rather use fixed for downside protection and diversified funds for upside. Why use one product that does both less efficiently?

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There are fixed index annuities that have no cap or uncapped rates and 100% or higher participation rates rates with no fees at all. Had indexes up 20% to 30% for 2017 and now can't lose those gains. You have to do your homework as there are bad index annuities with low caps and participation rates

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You can marry two point to point annuities , preserve a decent upside, and reduce the beta meaningfully

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I agree with FA 1. EIAs are not all they’re cracked up to be. Very overused and abused. Why not just use a VA with a lifetime income rider instead? I’ve never had to apologize about using those (sparingly). Pru and Lincoln Choiceplus are my favorites.

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Fa1 why would you use a va with an income rider and 3-4% fees and all the downside risk on cash value instead of a fia with an income rider for .85-.95% fee and no downside risk? You obviously have no idea what you are talking about. Tell me exactly how they are abused in relation to VAs?????

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Why Pru and Lincoln over Jackson?

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Jackson is the in I’m referring to with 4.25% fees. 1.25 DB, 1.25 income rider, 1.0 avg MF, 1.0 admin and .65 for 7 Years on the 5% bonus. Then there is a recapture on the bonus. Tell me how that is a good deal ?

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I 1035 that garbage into a fee based va just because her other agent had her maxed out on fixed annuities. Cut her fees in half and made up the 6% surrender in 7 months

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I’m sure they have some strip down contracts but this one was nasty. I’ll get the name tomorrow. Very nasty contract

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