In Business Since 2001 We accept Paypal
Home for Writers for Publishers Article Directory Article Search
Guides
Article Marketing Secrets
20-Min Article Writing
Author Resource Box
35 Traffic Strategies
Kindle Uploads 101
Fantastic Fiction Decoded


Click Here to
see on Amazon


Site Navigation
Home

Writing Services
+ FAQ

FAQ

+ About Us
+ Blogs
Search Tools
+ Search Our Articles
Article Directory
+ Authors
+ Articles
Other Sites We Own
Writing Puzzle

Professional Book Marketing

Platt Publishing

Marketing Help


 
Article Teaser: There are over two thousand life insurance companies offering over fifteen thousand different annuities, and they run the gamut from horrific (I wouldn't offer it to an enemy) to outstanding...

Keep reading below...

The Good, the Bad, and the Ugly: Why Your Broker May Not Be Recommending The Most Competitive Annuity

Copyright (c) 2006-2017

There are over two thousand life insurance companies offering over fifteen thousand different annuities, and they run the gamut from horrific (I wouldn't offer it to an enemy) to outstanding (I own it myself, and recommended it my parents). To make matters more confusing, annuities can be very complicated, with lots of different hard-to-understand variations. Enter the insurance agent / financial advisor / broker, to whom most annuity sales are outsourced, and who get paid a commission from the insurance company when they sell you an annuity. Let's look at how they're paid and how that can create a conflict of interest that can leave you, the investor, with an inferior annuity and less retirement dollars.

When a broker sells you an annuity, the broker can typically select from a range of commission structures offered by the insurance company. Let's say you invest $100,000 in a variable annuity. The insurance company might offer the broker a choice of three commission structures: a) 5% up front and nothing ever again in the future - so the broker dealer would be paid $5,000 on your $100,000 and nothing ever again; b) 4% up-front and 0.25% per year (called a "trail") for however long you hold on to your annuity - so the broker would make $4,000 up-front and then 0.25% of your account value every year after the 15th month that you hold your annuity; or c) 2% up-front and a 1% trail beginning in the 15th month. These are just typical commission structures, and they vary from insurance company to insurance company, and from annuity to annuity, but you get the gist of it.

You may say that option "b" or "c" in the above example - where the broker gets a lower up-front fee and an ongoing trail - is better for you because the broker will work harder knowing that he is actually being paid to service the contract year after year, and it may help the broker think longer term. Furthermore, a long-sighted broker might think, "I'll take the lower 2% up front commission, and 1% each year thereafter, because if I do my job well and my client's account doubles over a period of time, then I double my trail." Then everybody wins, right?

For the most part, yes. But enter greed. I'm going to give you two real-world examples that will help you understand why some brokers are not working in your best interest, but in their own.

One typical example is when a broker offers an investor a standard annuity, and fails to mention that there is a "bonus" version of the same product that pays the investor an up-front bonus (and hence the broker a lower commission). Take two variable annuities offered by American Skandia: APEX II and XTra Credit SIX. Both have the same options and features, but the XTra Credit SIX pays the investor an immediate 6.5% bonus - meaning the minute you invest $100,000 in that annuity, your account value goes up to $106,500. Furthermore, both annuities have the same fees for the first ten years (1.65% at the time of this writing), but after 10 years the XTra Credit SIX fee drops to 0.65%. You may be asking, "Why wouldn't my broker recommend the XTra Credit SIX with its bonus and lower overall fees? Well, at the time of this writing the APEX II pays the broker a 5.5% up-front commission and after four years 1.25% annually. But the XTra Credit SIX bonus annuity pays the broker just 4.75% up-front and a 0.25% trail annually after the first year. An unscrupulous broker may not tell you about these bonus products because, in effect, they benefit the investor at the expense of the broker's commission.

Let's take a second example of how a broker's greed can keep you from the most competitive annuity. Suppose your investment profile makes you a prime candidate for a variable annuity with a reasonable surrender period and a great living income benefit. Two annuities come to mind: the Allianz High Five and the Ohio National Value. Both are competitive annuities, but I'd typically recommend Ohio National's Value because it gives has lower fees, a better living income benefit, and no trading restrictions. But guess what? The Allianz High Five pays the broker a whopping 7% up-front commission (no trail). Ohio National Value pays the broker a 5% up-front commission (no trail). An unscrupulous broker may not mention the Ohio National Value to net him or herself an extra 2% commission.

The top variable annuities in the marketplace are among the best investment vehicles for helping people achieve their retirement goals, including financial independence and peace of mind. Finding the right people that can, and will, make the right recommendations is the ultimate challenge. How can you make sure your broker is recommending the most suitable and competitive annuity? A few simple guidelines:

1. Don't buy an annuity that you don't understand. If you invest in something you understand, you significantly reduce your chance of being taken advantage of.

2. Never buy an annuity from someone who cold-calls you. These strangers are the least likely to give you the best recommendation.

3. Make sure that if your financial advisor is recommending an annuity, they have a lot of experience in working with annuities. The average financial planner who deals mainly in stocks and mutual funds is quite likely to fall into the "trustworthy but unknowledgeable" camp.

4. Look up your financial advisor's NASD record (including customer complaints and regulatory actions), free of charge, at http://pdpi.nasdr.com/PDPI.

5. Be leery of someone trying to sell you "non-registered" products like the now very popular Equity Index Annuities (EIA's). Many of these so-called financial professionals only have an insurance license, and may bad-mouth variable annuities and mutual funds because they are not licensed to sell them.

6. Finally, take the annuity recommended by your financial advisor and call a free, independent annuity resource like Annuity FYI (www.annuityfyi.com) and see if you get the same recommendation. If not, ask why. This will start a dialog between you and your financial advisor that will help educate you and give you confidence in your advisor (or expose your advisor's shortcomings).



About The Author: Shop Amazon - Top Gift Ideas
Tom Hamlin is CEO of Annuity FYI, a free and independent resource for learning about, comparing, and selecting the best annuity products on the market. It is available to both individual investors and financial professionals at: http://www.AnnuityFYI.com.

Follow "The Phantom Writers" on Twitter (@phantomwriters)
to be notified when new articles are made available.


VOTE ON THIS ARTICLE
Needs Work >> 0 - 1 - 2 - 3 - 4 - 5 << Excellent Article

Tell our authors what you think about their article.



Top-Level Category: Finance Articles || Related Categories: Shopping Articles

10 Most Recent Articles Written by Tom Hamlin

All of Author's Articles on this site:

Most Recent "Finance" Articles

Credit Card Companies Reward Consumers Who Shop Around
Written by: Braxton Heitz | Distributed: 2012-11-20 | Word Count: 1159 | Page Views: 4387 | Votes: 13 | Rating: 2.00
With Ronald Reagan came mass deregulation in many industries. One of the industries that benefited from deregulation was the financial industry. As a result, hundreds of new financial companies were introduced to the American consumer during the 1980's. With the sudden explosion of new competitors in this industry, credit card companies began to struggle with how to retain existing customers and to recruit new customers.

What My Mother Taught Me About Credit Cards And Family Finances
Written by: Braxton Heitz | Distributed: 2012-11-12 | Word Count: 1285 | Page Views: 4096 | Votes: 23 | Rating: 2.52
My mother is an amazing woman. She made some of the hardest jobs imaginable look easy. No matter how hard her day was, she always had a smile and perfect hair.

Understanding Your 401(k), IRA and Other Pre-Tax Investments
Written by: Irene A. Majchrzak | Distributed: 2010-08-03 | Word Count: 1005 | Page Views: 3120
What does all of the bad economic news mean to you, the average investor. Well, if you are still working and contributing to your pre-tax 401(k)'s, 403(b)'s, or IRA savings your strategies for salvaging your retirement will include reviewing all of the investment options found in your 401(k), etc.

Xerox Follow Apple on the Comeback Trail
Written by: Jennifer Robinson | Distributed: 2010-07-27 | Word Count: 1238 | Page Views: 3754 | Votes: 3 | Rating: 0.00
In many ways the companies share similar fortunes. Apple (founded by Steve Jobs, Stephen Wozniak, Ronald Wayne) produced the first successful personal computer with a graphical operating system. Xerox (founded by Chester Carlson, Joseph C Wilson) were the inventors of Xerography (later called the photocopier).

Payday Advance Loans Are Now Only One Toll Free Call Away
Written by: Tom Tierney | Distributed: 2010-07-27 | Word Count: 599 | Page Views: 2446
A friend of mine recently went through financial troubles and asked me, knowing that I'm a finance writer, if I could push him in the right direction for a short term loan to help out with his expenses. Here's his story:

Stock Market Falls Sharply
Written by: Irene A. Majchrzak | Distributed: 2010-07-27 | Word Count: 879 | Page Views: 2772 | Votes: 4 | Rating: 1.00
The stock market has been having a bad week. Wednesday the market ended the day down over 300 points. I heard reports that this was the result of investors taking their profits. Happens all the time. Then within a few days, the prices on many great stocks is so low that the investors are buying the stocks right back up.

Finding the Best Credit Card Applications
Written by: Jeffrey Weber | Distributed: 2010-07-27 | Word Count: 403 | Page Views: 2138
Online credit card applications can be confusing. That's the way the banks want them. This article will help eliminate some of the confusion.

Do You Know the Difference Between an Investment Advisor and a Broker?
Written by: Tome Tomaj | Distributed: 2010-03-11 | Word Count: 408 | Page Views: 2755 | Votes: 4 | Rating: 4.25
As an fee-only investment advisor I come across clients from all walks of life. Lately I have noticed something in common with many of these investors. Many do not know the difference between an investment advisor and a broker who manages and/or makes securities recommendations for their clients' investment portfolios. With the almost unprecedented volatility in the securities markets, you cannot afford to dig your head in the sand when it comes to whom is managing your assets.

Understanding Term Life Insurance and Getting Quotes
Written by: Brian Greenberg | Distributed: 2010-01-13 | Word Count: 520 | Page Views: 2523 | Votes: 1 | Rating: 2.00
Buying term life insurance can be a scary process but understanding the different types of life insurance can remove the fear. What you should know about term life and how requesting life insurance quotes online can be easy and very convenient.

The Decline in the Personal Savings Rate - What Happened to the Discipline?
Written by: Tome Tomaj | Distributed: 2009-12-15 | Word Count: 873 | Page Views: 3249 | Votes: 4 | Rating: 1.75
As more and more American baby boomers are nearing and entering their retirement years, many of them are concerned about whether their retirement savings will last them long enough to ensure their current quality of life, and rightly so.

Most Viewed "Finance" Articles

A Better Way To Sell A Structured Settlement - Via Auction
Written by: Clayton Frantz | Distributed: 2007-11-30 | Word Count: 1342 | Page Views: 10187 | Votes: 10 | Rating: 2.20
Structured settlements were introduced in Canada and the United States in the 1970's. They were introduced as an alternative to lump sum payments, common in insurance settlements and lottery winnings. In the decades since, they have also been accepted as legal financial instruments in England and Australia. In a nutshell, a structured settlement by legal definition is a statutory agreement to pay a specified sum of money over a period of time, on a payment system.

Using a 401K Loan to Stop Foreclosure
Written by: Daniel Lamaute | Distributed: 2008-02-11 | Word Count: 465 | Page Views: 8797 | Votes: 17 | Rating: 1.94
A bankruptcy or foreclosure can cripple one's ability to obtain decent credit for many years. In addition, some employers and landlords won't hire or rent to a candidate with terrible credit history. Thus, it is a good idea to discuss all options with a financial planner before ending in bankruptcy or foreclosure.

What Does Short, Long, Flat And Square Mean In Forex Trading?
Written by: Sam Beatson | Distributed: 2006-10-11 | Word Count: 525 | Page Views: 6746 | Votes: 20 | Rating: 2.90
Short, long, square and flat explained in terms of forex trading (Spot FX).

Why Over 3,000 US Companies Have Chosen the Frankfurt Stock Exchange to Go Public
Written by: Ron Crowe | Distributed: 2008-07-31 | Word Count: 786 | Page Views: 6407 | Votes: 16 | Rating: 2.00
The Frankfurt Stock Exchange, one of the world's largest trading centers for securities, has over 3,000 United States companies listed. North American and other foreign companies are choosing Europe, over the United States, to go public because of the punishing Sarbanes Oxley Act introduced in the United States in 2002.

Advantages and Disadvantages of Individual and Group Health Insurance
Written by: Kevin Kielty | Distributed: 2009-04-01 | Word Count: 639 | Page Views: 5722 | Votes: 12 | Rating: 2.25
The cost of individual and group health insurance coverage varies greatly as does the type of coverage they both offer. Making the switch can bring some surprises.

How to Hide Assets
Written by: Rocco Beatrice | Distributed: 2007-01-19 | Word Count: 507 | Page Views: 5512 | Votes: 10 | Rating: 1.20
How to hide your assets by repositioning your assets through an irrevocable trust with an independent trustee.

How to Avoid Private Mortgage Insurance (PMI)
Written by: Jim Cramer | Distributed: 2008-02-20 | Word Count: 523 | Page Views: 4787 | Votes: 6 | Rating: 2.50
There is more than one way to get your desired home without having the 20 percent down payment and avoid PMI at the same time.

The Effect of Inflation and Deflation on Retirees
Written by: Irene A. Majchrzak | Distributed: 2009-10-27 | Word Count: 1324 | Page Views: 4516 | Votes: 5 | Rating: 1.00
When we worry about how long our retirement income will last, we consider so many factors. The current economy is causing a drain on 401(k)'s and IRA's. So we have become much more cautious about withdrawing money to use it as part of our pensions.

9 Questions To Answer Before You Prepay Your Home Mortgage
Written by: Frank Oakerson | Distributed: 2006-08-02 | Word Count: 1257 | Page Views: 4433 | Votes: 15 | Rating: 1.93
We are all different. At different times in our lives we have different goals and needs. You can ask different experts in financial planning, Texas mortgage brokers, and your banker "should I prepay on my home mortgage?" and you will get answers from "that is the greatest idea" to "that will be the worst financial mistake you will ever make". So what is a person to do? Let us look at 9 things you need to consider and have answered before you "prepay your home mortgage".

Credit Card Companies Reward Consumers Who Shop Around
Written by: Braxton Heitz | Distributed: 2012-11-20 | Word Count: 1159 | Page Views: 4387 | Votes: 13 | Rating: 2.00
With Ronald Reagan came mass deregulation in many industries. One of the industries that benefited from deregulation was the financial industry. As a result, hundreds of new financial companies were introduced to the American consumer during the 1980's. With the sudden explosion of new competitors in this industry, credit card companies began to struggle with how to retain existing customers and to recruit new customers.

Highest Ranked "Finance" Articles

Identity Theft: The New Threat to Your Credit
Written by: Josh Pike | Distributed: 2006-08-24 | Word Count: 363 | Page Views: 3510 | Votes: 8 | Rating: 4.00
When we think of thieves, images of burglars creeping into homes and apartments come to mind. However, there are new thieves that can take much more than your money or possessions. If your personal information falls into the hands of an identity thief, your credit and finances can be ruined.

In Fear of Retirement
Written by: Daniel Lamaute | Distributed: 2008-05-08 | Word Count: 646 | Page Views: 2777 | Votes: 7 | Rating: 3.86
Many baby boomers are staring at retirement like a deer caught on oncoming headlights. They are not sure what to do or what else to do. They fear that whatever they have in savings just might not be enough. Less than 1 out of 5 workers felt very confident about having enough money for a comfortable retirement, according to the April 2008, EBRI Retirement Confidence Survey. And with good reasons, inflation is zooming at the same time that asset values are flagging.

A Recipe for Good Credit
Written by: Josh Pike | Distributed: 2006-08-17 | Word Count: 369 | Page Views: 2411 | Votes: 7 | Rating: 3.57
If your credit is not as good as you want it to be, take action now! It's easier than you think to improve your credit.

Equipment Financing and The Five Cs of Credit Evaluation
Written by: Sean Marten | Distributed: 2007-10-17 | Word Count: 698 | Page Views: 2912 | Votes: 6 | Rating: 3.50
Equipment financing lenders, as well as banks, use the Five Cs to evaluate loan applications: Character, Credit, Cash Flow, Capacity and Collateral. However, while banks look at small-to-medium size companies from a Fortune 500 perspective, equipment financing companies see applicants from a small business perspective, which highlights a sixth C: Common Sense.

Reverse Mortgage Costs Are Not Too High
Written by: N. Sioris | Distributed: 2008-07-29 | Word Count: 1120 | Page Views: 2625 | Votes: 6 | Rating: 3.50
Reverse mortgage costs are repeatedly cited as one of the main reasons for seniors not to get a reverse mortgage loan. However, the same folks that harp on costs as being a reason not to use this financial resource rarely offer a less expensive option or an alternate proposal. Don't fall into the trap of listening to the negative hype without doing your own research. Find out what the true costs are and whether they are justified or not. Compare the cost of a reverse mortgage to the cost of selling your home, downsizing or moving into assisted living. Pull back the curtain and take a good look, then make your own determination. Don't base your decision on an uninformed friend, relative or media reporter.

Medicaid Asset Protection
Written by: Rocco Beatrice | Distributed: 2007-01-23 | Word Count: 646 | Page Views: 3067 | Votes: 7 | Rating: 3.43
Learn how to include senior Medicaid asset protection as part of your senior tax planning strategies. What are the tax implications of Medicaid and why it needs to be planned carefully? About seniors Medicaid asset protection as part of the senior tax planning strategies. Explains the new 5-year look back provisions for seniors to qualify for Medicare assistance into nursing home program.

How to Invest in a Rough Economy: Investment Advice from the Experts
Written by: Sarah Simmons | Distributed: 2009-07-08 | Word Count: 692 | Page Views: 2278 | Votes: 8 | Rating: 3.38
The stock market crash of 2008 lost many investors a lot of money, and had many other investors bailing out of stocks for the safety of savings and checking accounts, treasury bills and gold. However, it is still possible to invest - and yes, even make money - during the current rocky economy.

Section 179 - 4th Qtr Tax Saving Strategy for Small Business
Written by: Sean Marten | Distributed: 2007-12-05 | Word Count: 345 | Page Views: 3774 | Votes: 6 | Rating: 3.33
Use the power of available deductions to boost your business's bottom line in 2007. Purchase new or "new to you" used business equipment now. Then place it in service by December 31st to realize exceptional tax savings.

Why You Should Buy a Home Now
Written by: Clint Wooley | Distributed: 2007-01-09 | Word Count: 588 | Page Views: 2458 | Votes: 9 | Rating: 3.22
These days there is literally too much information for first time homebuyers to make a decision sometimes. Fear can prevent first time home buyers from ever acting on their dream of home ownership. When you look at facts, though, buying a home makes as much sense now as it ever has.

Payday Loans - Convenience and Danger
Written by: Fred Vanhoosen | Distributed: 2008-12-08 | Word Count: 1027 | Page Views: 2432 | Votes: 6 | Rating: 3.17
Payday / Cash Advance Loans are a godsend for those consumers who truly have a temporary short-term cash need, but what is a blessing for one consumer can easily be a nightmare in the offing for another consumer whose financial needs are more dire and long-term in nature. Get the facts before you select this kind of loan product.












Download an eBook today
 
Directory Navigation
Locate By Author

Locate By Category:
ALL Categories
Arts & Crafts
Arts & Entertainment
Automotive
Business - Offline
Business - Online
Career
Computers
Education
Family
Finance
Food & Drink
Health & Wellness
Home & Garden
Humor
Internet
Nature & Pets
Real Estate
Religion
Self Improvement
Shopping
Society
Sports & Recreation
Technology
Travel & Leisure
Uncategorized
World Events
Writing & Speaking

Change Number of Results:
50 - 100 - 200 - 500
Article Reprint Rights
Creative Commons License

This work is
licensed under a
Creative Commons
License


You are not required to show the creative commons license notice when you reprint this work.
Article Publishing Tools
Print Article
Email-to-Blog
HTML Source Code
Text Newsletter Format
Link Back HTML

Blog Publishing Tools

Internal ID: #2807
Article Statistics
Word Count: 1036

Total Views: 4601

Article Rating: 2.90 of 5
Votes Cast: 10

More Articles By Author:




Article Title Search:

Widow Search
Right Blinker
Google
Yahoo!
Zuula
Bing
Cuil

Last Distribution Date:
2006-05-12 14:00:00






All Articles are Copyright © 2001-2017 of the Defined Authors.

All other material and images on this site are:
Copyright © 2001-2017, ThePhantomWriters.com