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Posted on 1/31/24 at 11:12 pm to Saint5446
quote:
Advisor was VERY upset when he found out about the transfer,
I guess he was.
Aside from what everyone else has said about annuities, no financial advisor has a right to get upset with you over what you do with your own fkn money.
quote:
in hindsight I probably should have called him before doing it as a courtesy.
You didn't owe him squat. He worked for you, and he did a piss poor job of it. It may not be an exact comparison, but an alleged "financial advisor" selling you annuities with front loaded commissions is not entirely unlike one of your employees skimming from you. Fire him.
Posted on 2/1/24 at 4:54 pm to Saint5446
quote:
Am I wrong in my thinking? Were these appropriate retirement vehicles for someone in their mid 30's?
He’s never going to retire if people don’t buy them. Products designed to be sold, not bought.
Posted on 2/2/24 at 10:46 pm to La Place Mike
quote:
How do you know they are not getting a square deal and what makes you an authority on the subject?
Have you seen the EJ fee structures and the financial products they push? All it takes is walking into an EJ office and feign financial ignorance and see what kind of ride they try to set you up for.
High AUM fees, high load funds, insurance products, annuities, etc.
These structures and products are tools used by salesmen masquerading as FA, Wall Street, and insurance companies to siphon money away from well-meaning, financially illiterate common folks.
I am certainly no authority, but if you are taking up for EJ then I question your motive or understanding of how they operate.
Posted on 2/3/24 at 3:38 am to TigerToGeaux
quote:
Have you seen the EJ fee structures and the financial products they push? All it takes is walking into an EJ office and feign financial ignorance and see what kind of ride they try to set you up for. High AUM fees, high load funds, insurance products, annuities, etc.
I can’t speak for any individual experience with any EJ financial advisor, but their fee structure is pretty much smack dab in the middle of pack for full service firms.
This was taken right off their website. LINK
Like I’ve said every single time FAs at any firm are discussed - it is highly dependent on your individual experience. There are great FAs at every probably every large firm. The idea that there are inherently better advisors at _______ vs _______ is asinine.
I’m acutely aware the Money Talk is full of DIYers and not the target market for FAs, but many of you paint with very broad brushes when the truth is much more nuanced.
This post was edited on 2/3/24 at 3:39 am
Posted on 2/3/24 at 11:31 am to slackster
I am a licensed banker and as interest rates have gone up, i have sold several wealthy bank clients large fixed annuities funded with nonqualified dollars. They love the guaranteed rate, term, and tax deferral features. I even had one roughly 65 yr old guy that was tired of his retirement being
subjected to market risk so we put his funds into a 5 yr qualified annuity at 5% and he is happy. I have had FAs tell me they would never sell anyone an annuity, that it is a selfish move. What's your take? (these fixed annuities have all been feeless).
Edited to say all of these annuities were sold to folks over 60
subjected to market risk so we put his funds into a 5 yr qualified annuity at 5% and he is happy. I have had FAs tell me they would never sell anyone an annuity, that it is a selfish move. What's your take? (these fixed annuities have all been feeless).
Edited to say all of these annuities were sold to folks over 60
This post was edited on 2/3/24 at 11:34 am
Posted on 2/3/24 at 11:38 am to Tig3rman
quote:
I have had FAs tell me they would never sell anyone an annuity, that it is a selfish move. What's your take? (these fixed annuities have all been feeless).
That is their choice. However, it doesn't mean annuities aren't suitable in certain situations.
Posted on 2/3/24 at 2:55 pm to Tig3rman
quote:
I am a licensed banker and as interest rates have gone up, i have sold several wealthy bank clients large fixed annuities funded with nonqualified dollars. They love the guaranteed rate, term, and tax deferral features. I even had one roughly 65 yr old guy that was tired of his retirement being
subjected to market risk so we put his funds into a 5 yr qualified annuity at 5% and he is happy. I have had FAs tell me they would never sell anyone an annuity, that it is a selfish move. What's your take? (these fixed annuities have all been feeless).
Edited to say all of these annuities were sold to folks over 60
Simply put, the annuities are lazy.
Someone wants a 5 year guaranteed return, they can most likely find something better than an annuity.
The annuity props up the return with huge penalties for early withdrawals. I've even seen huge withdrawal fees when an annuity is not fully surrendered and the withdrawal amount is below the surcharge limit. The insurance company is going to get their money out of the annuity.
That said... if you don't want to look for a better return and you don't mind huge surrender penalties and withdrawal fees, then by all means. Take out the annuity if simplicity is what you want (i.e. a sales rep dying to sell you one and is willing to make the process painless).
Posted on 2/3/24 at 3:01 pm to Tig3rman
quote:
I am a licensed banker and as interest rates have gone up, i have sold several wealthy bank clients large fixed annuities funded with nonqualified dollars. They love the guaranteed rate, term, and tax deferral features. I even had one roughly 65 yr old guy that was tired of his retirement being subjected to market risk so we put his funds into a 5 yr qualified annuity at 5% and he is happy. I have had FAs tell me they would never sell anyone an annuity, that it is a selfish move. What's your take? (these fixed annuities have all been feeless).
I don’t mind fixed annuities, particularly for qualified money, as an alternative to bonds and/or CDs. They have a place in some portfolios.
I know people may find this shocking, but humans are emotional and do not follow sound financial advice all the time. As a result, fixed annuities can be a reasonable compromise.
Posted on 2/3/24 at 3:12 pm to meansonny
quote:
Someone wants a 5 year guaranteed return, they can most likely find something better than an annuity.
Depends on the rate environment, liquidity needs, and comfort with market value fluctuations. Guaranteed minimum rates after the surrender period can also be beneficial.
Fact of the matter is a lot of people would rather 5.1% for 5 years with an A rated insurer over 5-5.2% on an A rated corporate bond sleeve.
Posted on 2/3/24 at 4:44 pm to slackster
You have a lot of validity to your statements. However I can’t look past the conflict of interest of FA that are not fee-only advisors. I would 100% agree with you if we were discussing fee-only FA, but that is not the case with EJ or many other firms.
Some people just don’t want or can’t do their own financial planning, but I am certain that those folks would be better served with fee-only FA.
Focusing on only the base management fees is only one part of the cost of going with fee-based FA.
Some people just don’t want or can’t do their own financial planning, but I am certain that those folks would be better served with fee-only FA.
Focusing on only the base management fees is only one part of the cost of going with fee-based FA.
Posted on 2/3/24 at 5:01 pm to TigerToGeaux
Fair enough, but most of the industry is heading to fee only soon anyway. As far as I know, EJ didn’t even have a fee-based platform 15 years ago. Now it looks like they have 4 fee based platforms according to their website.
DOL rules and the broad trend in the industry is making fee-only the future. Advisors certainly don’t mind either in my experience.
DOL rules and the broad trend in the industry is making fee-only the future. Advisors certainly don’t mind either in my experience.
Posted on 2/3/24 at 7:50 pm to slackster
It would be great for consumers/investors if it shifted to true fee-only. Will have a lot of advisors struggling to make their nut since they can’t make ends meet selling high cost, fee heavy products that are sold all day long to financially ignorant folks.
I would venture to say MOST advisors make equal to or more on SELLING financial products versus AUM pay. The way they see it, they can “double dip” by selling a product that pays them on the front end and also rolls dollars into their AUM as well. If they will switch to AUM only they will see a pay decrease.
Also raising the fiduciary duty standards for any and all people that market themselves as “financial advisors” would be better for consumers/investors.
I would venture to say MOST advisors make equal to or more on SELLING financial products versus AUM pay. The way they see it, they can “double dip” by selling a product that pays them on the front end and also rolls dollars into their AUM as well. If they will switch to AUM only they will see a pay decrease.
Also raising the fiduciary duty standards for any and all people that market themselves as “financial advisors” would be better for consumers/investors.
Posted on 2/3/24 at 8:16 pm to TigerToGeaux
quote:
would venture to say MOST advisors make equal to or more on SELLING financial products versus AUM pay. The way they see it, they can “double dip” by selling a product that pays them on the front end and also rolls dollars into their AUM as well. If they will switch to AUM only they will see a pay decrease.
Not true at all, at least at any respectable firm. It’s either or.
ETA- for example, my income would literally double if my entire book switched to fee-only.
This post was edited on 2/3/24 at 8:19 pm
Posted on 2/3/24 at 8:48 pm to TigerToGeaux
quote:Sounds like a good way to shed clients.
I would venture to say MOST advisors make equal to or more on SELLING financial products versus AUM pay. The way they see it, they can “double dip” by selling a product that pays them on the front end and also rolls dollars into their AUM as well.
Posted on 2/4/24 at 9:32 am to slackster
quote:
I am a licensed banker and as interest rates have gone up, i have sold several wealthy bank clients large fixed annuities funded with nonqualified dollars. They love the guaranteed rate, term, and tax deferral features. I even had one roughly 65 yr old guy that was tired of his retirement being subjected to market risk so we put his funds into a 5 yr qualified annuity at 5% and he is happy. I have had FAs tell me they would never sell anyone an annuity, that it is a selfish move. What's your take? (these fixed annuities have all been feeless).
I don’t mind fixed annuities, particularly for qualified money, as an alternative to bonds and/or CDs. They have a place in some portfolios.
I know people may find this shocking, but humans are emotional and do not follow sound financial advice all the time. As a result, fixed annuities can be a reasonable compromise.
_______________________
This is much more reasonable than all the "experts" acting like they know exactly what the OP should do with the few comments in the original post. We don't know the context that led to the initial decisions. What was the OP's history? What did he convey as primary goals? Subsequent posts made the advisor sound suspect, but advice to fire with little facts is immature.
I don't own any annuities and am not recommending them. But they can be a good choice for some.
Downvote away. Don't care.
I am a licensed banker and as interest rates have gone up, i have sold several wealthy bank clients large fixed annuities funded with nonqualified dollars. They love the guaranteed rate, term, and tax deferral features. I even had one roughly 65 yr old guy that was tired of his retirement being subjected to market risk so we put his funds into a 5 yr qualified annuity at 5% and he is happy. I have had FAs tell me they would never sell anyone an annuity, that it is a selfish move. What's your take? (these fixed annuities have all been feeless).
I don’t mind fixed annuities, particularly for qualified money, as an alternative to bonds and/or CDs. They have a place in some portfolios.
I know people may find this shocking, but humans are emotional and do not follow sound financial advice all the time. As a result, fixed annuities can be a reasonable compromise.
_______________________
This is much more reasonable than all the "experts" acting like they know exactly what the OP should do with the few comments in the original post. We don't know the context that led to the initial decisions. What was the OP's history? What did he convey as primary goals? Subsequent posts made the advisor sound suspect, but advice to fire with little facts is immature.
I don't own any annuities and am not recommending them. But they can be a good choice for some.
Downvote away. Don't care.
Posted on 2/4/24 at 10:16 am to slackster
Issue I have with fee-only is it is typically an AUM model. I don’t agree with the variable expense model based on value of assets managed. The marginal “effort” for each additional dollar invested doesn’t equate to greater value for the client. It’s similar to real estate agents making their 3% regardless of house price. I will acknowledge the reduced rates per incremental threshold of AUM that some firms put in place to try to address what I am referencing.
I’m more of a proponent of a fixed fee relationship based of the specific asks / tasks of the FA. This would most specifically tie work product to fees charged.
I’m more of a proponent of a fixed fee relationship based of the specific asks / tasks of the FA. This would most specifically tie work product to fees charged.
Posted on 2/4/24 at 2:19 pm to lynxcat
quote:
m more of a proponent of a fixed fee relationship based of the specific asks / tasks of the FA. This would most specifically tie work product to fees charged.
Yeah that model hasn’t caught on a ton because people seem to struggle paying $5,000 for a financial plan, but will pay $5,000/yr on $500,000 without batting an eye. People are weird.
ETA people are just accustomed to paying financial fees as a percentage of assets. Every expense ration known to man - even at hallowed Vanguard and Fidelity - is a percentage of assets.
This post was edited on 2/4/24 at 2:40 pm
Posted on 2/4/24 at 4:57 pm to slackster
Yup, absolutely. Much easier for $5K to get scraped off AUM than asking someone to cut a check for $5K. I think people would question the fees more if they saw a cleaner line of sight to the annual cost of a FA.
Posted on 3/9/24 at 8:49 am to slackster
I posted that comment at $39,000
Up to $68,000
Up to $68,000
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