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Results of a New Survey
[By Staff Reporters]
In the interactive June edition of Investment Advisor magazine, Savita Iyer-Ahrestani reported on a new study of annuities.
Of course, subscribers of the Medical Executive-Post already know that more and more Americans are counting on financial advisors to help them prepare for a secure retirement; rightly or wrongly. And, this includes physicians and medical professionals.
But, what if the “advisors” are not up to the task – or even just product salesmen – as reported by Iyer-Ahrestani?
The Spectrem Group Survey
Mitch Politzer, senior VP of Lincoln, Nebraska-based Ameritas Advisor Services, had a suspicion that might be the case, so he teamed up with Chicago-based market research firm Spectrem Group and put together a survey aimed at testing advisor know-how and opinion on the kinds of investment products available on the market today.
Results
“The results of the survey showed that most financial advisors are really very skilled at investing for their clients, as they’re driven by equity markets (and to a lesser degree bond markets) and a desire to outperform industry benchmarks,” Politzer says.
“This works for the accumulation phase of a client’s life, yet advisors are less skilled when they have to shift gears for the phase of a client’s life when they’re interested in income and sustaining their assets.”
Gun-Shy on Annuities
Most advisors, Politzer says, seem to have dated beliefs about various retirement products, are slow to innovate, and most are gun-shy when it comes to annuities. According to the survey, 70% of advisors are concerned about locking their clients into a long-term retirement income product, and if they do, they would prefer the product not be an annuity.
Assessment
This survey of professional advisors shows strength in the “accumulation-phase” that is not matched when it comes to income and asset preservation during the “distribution-phase.” www.MedicalBusinessAdvisors.com
And, are FAs really shy about annuity product sales with their traditionally high commission rates?
Conclusion
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Filed under: "Advisors Only", Estate Planning, Financial Planning, Insurance Matters, Investing, Surveys and Voting | Tagged: annuities, financial advisors |
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More on Annuities,
It is no surprise that I have never been a big fan of annuities; especially variable annuities. They are sold by fear mongering insurance agents, and carry excessive loads, surrender fees and all sorts of other charges; often along with sub-account trading fess, commissions, percentages, etc.
Readers, please remember, insurance is for risk-transferrance and reduction; and investing is a risk. They may be used individually; but generally should not be linked together as a hybrid. Confusion and high costs typically result; good for the insurance agent perhaps, but often bad for the annuity owner.
Nevertheless, I will admit that some annuity salesman have been “crowing-of-late”, and perhaps rightly so. With the recent financial meltdown, this may be one time which allows them to deservedly gloat a bit; especially the more ethical and honest agents.
Now however, we are learning that some life insurance and annuity companies that insure millions of Americans – and some medical professionals and physicians – and are entrusted to help protect their families or pay the bills in their golden years are caught in a downward spiral eerily similar to the one that has brought down banks and brokers.
For example, life insurers Hartford Financial Services, Principal Financial Group, Lincoln National, and others, all have significant exposure to mortgage-backed securities and other risky debt instruments. They’re reporting huge losses that could trigger a meltdown. This could wipe out shareholders, who already have suffered declines of 20% to 40% in the past week alone.
Customers with annuities or insurance policies might have to turn to state insurance backstop funds and settle for only a portion of the money they were expecting.
And so, the circle of suckers begins anew; but this time not without some modicum of shadenfreude.
Full disclosure: I am a former insurance agent, registered investment advisor and Certified Financial Planner™
Dr. David Edward Marcinko; MBA, CMP™
http://www.CertifiedMedicalPlanner.com
[Publisher-in-Chief]
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The annuity dilemma is well known
And now, the President wants to encourage people to turn over part of their retirement savings in order to get an annuity or some other form of guaranteed lifetime income. Of course, the total cost to the government is not known.
But, this could be a boom to annuity salesman.
Marvin
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The case against immediate annuities … for doctors
http://www.hcplive.com/finance/articles/case_against_immediate_annuities?utm_source=Listrak&utm_medium=Email&utm_term=%2ffinance%2farticles%2fcase_against_immediate_annuities&utm_campaign=Physician
Tom
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Annuity Update:
Tom – Insurance agents will face more stringent annuity compliance requirements and increased liability for making unsuitable recommendations if a new model regulation is adopted.
The model reg (Suitability in Annuity Transactions) was created and adopted by the National Association of Insurance Commissioners (NAIC).
And, it picked up strategic support last month when the executive committee of the National Conference of Insurance Legislators (NCOIL) voted unanimously to endorse it.
Marvin
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More on Annuities [IMHO]
Annuities provide a guaranteed income for life. They protect from longevity and sequence-of-returns risk, and can protect from inflation risk if a real annuity is purchased.
But, annuities do not provide any growth potential or potential to leave an inheritance, and in general they are not liquid if more funds are needed for an emergency [Social Security and employer defined-benefit pensions also fit into this category].
Sorry!
Dr. David Edward Marcinko MBA, CMP
http://www.CertifiedMedicalPlanner.com
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Take the Money and Run?
You have a client who participates in a defined benefit pension plan at work. She’s near retirement and needs to make a decision: take the money as a lump sum, or receive a monthly lifetime annuity-style payment?
What advice should you give? Are you up to it?
http://registeredrep.com/wealthmanagement/finance_lump_run/?NL=RGR-01&Issue=RGR-01_20120409_RGR-01_141&YM_RID=marcinkoadvisors%40msn.com&YM_MID=1303691
Fred
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