Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: JAX -new thread

Subject: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: JAX -new thread

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: : : : : : : : : : : : : : : : : : : : : : : Jax, lets start a new thread. I will post UNDER your responses to keep it mor clear and linear. : : : : : : : : : : : : : : : Eric : : : : : : : : : : : : : : ------------------------------------------------- : : : : : : : : : : : : : : Jax, : : : : : : : : : : : : : : VA's are tricky as to whom you sell them to and why. : : : : : : : : : : : : : : If the client wants the death benefit, why not Life Insurance? You can leverage assets instantly, and they go tax-free to heirs instead of in a VA. Fund a SPIA, and use the payments to fund the Life policy...(and you get paid twice :) : : : : : : : : : : : : : : The death benefit isnt very helpful if you cant lock in gains with a step up rider, and those add expense, and cut off at certain ages. Also, lets remember, you have to DIE to take advantage of a death benefit. Living benefits can help there, but again...more expense. : : : : : : : : : : : : : : Annuitization should NOT be an option...there is no flexibilty after you make that irrevocable decision. If the client wants income...what about Bonds? Tak Free Munis? : : : : : : : : : : : : : : I sell VA's for their flexibility. The client can keep contributing tax deferred, but can be in or out of the market in a phone call. : : : : : : : : : : : : : : Eric : : : : : : : : : : : : : Why not sell life ins.? That is a different story. : : : : : : : : : : : : : Let's say that we only use the standard death benefit of return of prem. , then the VA becomes like a MF, with the downside guarantee. For very little, your client can have a stepped-up death benefits, and No VA I sell does the death benefit go away at any age. : : : : : : : : : : : : : I deal in the senior market mostly. Life ins, which I sell a lot of ,VUL, it is good for transferring wealth, but itis not for everyone. Look at the surrender charges in life ins. : : : : : : : : : : : : : Some people want to annuitize, however, I don't recommend it in most cases. : : : : : : : : : : : : : I do a lot of systematic withdrawls. In fact, I have a lot of clients withdrawing from the VA to the VUL in the same company. : : : : : : : : : : : : --------------------------------------------------- : : : : : : : : : : : : Jax, : : : : : : : : : : : : Step-up in Death Benefit does go away, as early as 70 in some contracts. Of course, the plain ole' DB never goes away. : : : : : : : : : : : : The problem with the downside protection, is they have to die to get it. : : : : : : : : : : : : Have you looked into the split annuity? : : : : : : : : : : : : Most goes into a fixed, that will grow to the original principal amount in x yrs. The rest goes into a VA to get growth potential. : : : : : : : : : : : : Worst case scenario, the client is guaranteed principle and doesnt have to die, and the growth is theirs as well. : : : : : : : : : : : : Eric : : : : : : : : : : : The stepped-up benefit that I could sell levels off, it never goes away. : : : : : : : : : : : You say you have to die to get it, that is right. What happens if you die with a MF? : : : : : : : : : : : I am familiar with the split concept. : : : : : : : : : : : Normally, I sell the standard death benefit. : : : : : : : : : : : What VA and Vul do you sell? : : : : : : : : : : : : : : : : : : : : Jax, : : : : : : : : : : I sell Hartford, and our proprietary VA underwritten by Achnor National. : : : : : : : : : : The Step up goes away Jax, it just depends when. You still may have locked in the DB, but the step-up ALWAYS goes way at a certain age. The DB stops stepping-up at a certain age. The rider cant be on the contract after certain ages. I think the oldest one out there is 90 (Allmerica?) : : : : : : : : : : Like I said, the downside protection of the VA is good, it is just that you have to die to get it. I just think there are better ways to protect the downside, and not have to wait for death. : : : : : : : : : : My philosophy is if they are young, go agressive in the market. : : : : : : : : : : If they want to protect principle, try fixed annuities. : : : : : : : : : : If they want income, use bonds. : : : : : : : : : : If they want flexibility of fixed and variable accounts, with tax benefits, use the VA. : : : : : : : : : : Eric : : : : : : : : : The annuities that I sell, the stepped-death benefits do NOT disapperar at any age. They may have a max. age that the DB does not step-any more, let's say age 86, but it stays at that level for life. : : : : : : : : : Anchor National's death benefit stops at age 90 on some of it's annuities. : : : : : : : : : Maybe you are selling the wrong annuities. : : : : : : : : : : : : : : : : : : You say you use bonds for income, what is wrong with taking a withdrawal from an annuity? : : : : : : : : --------------------------------------------- : : : : : : : : Jax, : : : : : : : : Regarding the step-up, we are saying the same thing with different words. The Stepping up goes away, but the DB locked in doesnt go away. : : : : : : : : I dont sell the step-up at all, so the VA's I sell work for me. I do alot of Interest Averaging, and Split Annuity Plans to turn "savers" into "investors." : : : : : : : : As far as Income, Munis are tax-free, and do not eat into the principle. : : : : : : : : With a VA, income from it may be exposed to many things: : : : : : : : : -If the VA is underperforming, the income may have surrender charges, & eat into the principle. And if you are under 59 1/2 there is a 10% IRS penalty. : : : : : : : : -If the VA is making gains, there will be taxes due on the income. : : : : : : : : Eric : : : : : : : : -----------------------------------------------Jax, : : : : : : : How can you have surrender penalties on withdrawls from VA's when the 10-15% free withdrawal is based on prem. paid in? : : : : : : ----->Not all VA's have that 10-15%; not only that, why would you risk spending down principle, if income was your objective? : : : : : : : I only sell the standard DB. : : : : : : ----->Me too. : : : : : : : You have more opportunity for gains in a VA as opposed to a muni. : : : : : : ----->Not in the last 2 years you dont. All the VA's were hit HARD. Remember Jax, Munis are for INCOME, not gains. You have just as much an opportunity for LOSS in a VA as you have for gains. When someone needs income, the DB doesnt help them. When the bond is called it is usually at par, there is your downside protection. : : : : : : : In a VA, you have 9-10 different fund managers and can rotate from one fund family to another without a taxable event nor any sale charges. : : : : : : ----->True, I agree, but they are not suitable for income. It makes no sense. Munis have no expense, income is tax-free, and the interest is guaranteed. A VA is not a suitable vehicle when a client needs income. : : : : : : : I sell several million $ $$ of each. : : : : : : I invest anywhere between 1.5 million and 2.5 million each month. Im not sure what this has to do with anything. Jax, are you series 7 licensed? : : : : : : : I also sell some index annuities. : : : : : : ----->I dont sell much of these. : : : : : : : Sell whatever blows up your skirt.\ : : : : : : ----->Unsure as to how I should take this statement. From your posts, it seems VA's and MF's are all you sell. I dont agree with this philosophy. It may not be what you do, but if it is, it is the same as PFS...the one size fits all syndrome. In order to really fill all the clients needs, ALL the innvestment product types must be available....and this includes Bonds (Munis, corporates, govt, etc), Preferred's, and Stocks, CRT's, and all life products. Also needed are fixed annuities, which you havent mentioned selling. A real Planner or Investment advisor must usa ALL of these tools. : : : : : : : I also set up ILIT and fund them with 2nd to die life ins. : : : : : : ----->Thats good, especially when dealing with large estates. Do you set up the ILIT? Or do you have a lawyer do it?????? : : : : : : Eric : : : : : Obviously, since I am not an attorney, I don't set up the trust myself but use an attorney. : : : : -----> I wasnt sure if you were or not. : : : : : I disagree that a real planner has to sell everything. No, I don't cram everyone into the same package, I define my market that fit who I want to work with. I sell very little MF. I sell a lot of VA's and VUL's. I sell a lot of third party money management. : : : : ----->You and I differ here. I think a real Planner HAS to be ABLE to sell everything. The options must be there. VA's & VUL's just do not fit all the time. : : : : : I sell no stocks or bonds. I do not actually plan, as in develope a complete financial plan. I find out where a client wants to go and show him how to get there. : : : : ----->I do the same thing. There is no actual "Plan" that is written up like a PFS FNA or anything. However, without all the products available, you cant fill all the cliens needs with three products. It simply cant be done. What if the client is over 90? It is VERY unsuitable to sell them a VA, or a fixed annuity for that matter. What is they need guaranteed income? What can you do? What if a client doesnt want managed money?.....getting charged a wrap fee on top of losing money? I just wont do that to my clients. : : : : Eric : : : Jax, : : : I sell very few people over the age of 90. : : ----->But the fact remains, there are people who need investments for which an annuity would be unsuitable. : : : I think that VA's can do anything that stocks can do. : : ----->That is a very disturbing statement. Individual Debt and Equity Securities can do MANY things VA's cant. And vice-versa. There are no surrender charges in Stocks, there is no M&E, there is no internal or admin expenses. There is guaranteed tax-free income in bonds. What if you dont want the diversificaion level of a fund? Your statement is just plain incorrect, and if that is what you tell your clients, then you are not only not living up to your fiduciary responsibility, you are just plain lying. : : : I believe that dynamic money management is worth the fee. My third party money managers has always out performed buy and hold. : : ----->Your money managers have ALWAYS returned more than 8-10%????? After their fee??? I dont think so. All the brokers I know, use third-party money management because they are lazy, and want the 2% trails. Money Managers do not out perform buy and hold....where do you get that info? : : : I sell some fixed annuities. : : -----> That is good, so do I. : : : If you disagree, that is OK with. That is what I meant by selling whatever blows up you skirt. : : ----->OK :) : : : The M-E on the Nationwide VA that I sell is .95. : : : Did you say that your M-E was 1.2? : : ----->1.4, But I dont use M&E as a selling point. : : : All annuities that I have ever heard of has aleast a 10% free withdrawal feature. Nationwide has had 6 funds that has over a 6-9% return over the last 12 months. : : ----->OK, but I dont use returns or withdrawl features as a selling point. What you are doing is trying to fit the client to the product, instead of finding a product to fit the client. I saw the same thing at Primerica. Individual debt and equity securities are a 'must have" in any real financial advisors arsenal. VA's and MF are very important as well, but they are only some of the products needed. : : If a client came in with 300k, he is retired, and wanted the income off of it, what would you do?Eric : : : Eric, : I would take care of him. This in not my first rodeo. There are many different ways of meeting this persons objectives. : Since I have never been with PFS, I don't know how they would do it. I just don't that yours is the only correct way.\ : What I wouldn'T do is to take him down to the local bank , find a young fellow fairly new in the business, and say "would you take care of this guy since I know not what I do." : Like I say, sell whatever blows your skirt up. : Mean while, why don't we stick to dealing with yen koung. I don't anymore education.

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