Income For LifeThis article made me realize I need to make consumers aware of a potential financial hazard. Last week a press release came out describing how two Registered Investment Advisors in Illinois were penalized for recommending the replacement of existing annuity contracts. The transactions made these advisors a substantial amount of commission and were later found to be completely unsuitable for the consumers involved. Read the release here.
In the past couple of years, I’ve taken dozens of calls from people asking if they should replace a current contract based on the advice of another salesman. In every case, the answer has been NO! Aside from generating a fat paycheck for the new agent, there is usually little to no net benefit to anyone involved. Termination of an existing contract not only costs money in surrender penalties but also results in a loss of benefits from the former contract.
There is a lot of information out on the internet and a lot of people trying to earn your business. I know that many of you get informational emails from some of these sources just like I do. I want to know what you hear and what other advisors have to say. Some of the information is troubling to say the least. A few people out there actually advertise for annuity replacement. Be extremely cautious when contact with an advisor is made this way! In fact, if that’s how someone needs to attract clients, do the guy a favor and take your business elsewhere. He needs to find another line of work.
Many of the products sold today have a long list of benefits. Each available product has a specific strength that is meant to be used for a specific purpose. Some offer excellent guaranteed income, growth or death benefit guarantees but rarely, if ever, does one product do it all. Surrendering a contract for a greater benefit in one area will cause you to give up benefits in other areas. Besides, guarantees from product to product are usually close enough that it’s not worth the hassle.
If you are the victim of unethical sales practice you may have recourse but no one enters into a contract looking for that kind of hassle. The purchase of an annuity is supposed to relieve stress, not create it. Do your homework before you buy any financial product and look for a competitive analysis of any strategy. The more you know about your contract the better you’ll be able to tell the difference between a true advisor and a snake-oil salesman.
If you want some hard-hitting questions to ask any advisor who may or may not be acting in your best interests send me an email. I’d be happy to offer up a list of questions that can only be answered by the real experts out there.
You and your money deserve the most ethical approach.
Have a great week!
Bryan J. Anderson
800.438.5121
bryan@annuitstraighttalk.com
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It is better be alone than in bad company.
— George Washington
