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Variable Annuities?
Point-Counter Point Debates
Question:
Annuities are a controversial product in the financial services industry today; especially variable equity annuities. They are often touted as a solution to the retirement income question for medical professionals. Many sales consultants and financial advisors advocate their use; while others absolutely detest and abhor them. And, it has been said that annuities are often sold, but rarely purchased.
For example, insurance fee components are high, sales-loads are great, and most annuities are deferred, but few are annuitized. Some are even sold within qualified retirement plans by fear mongering salesmen/women.
And so, what is your opinion on this controversial subject and ever-evolving contentious financial product? Please omit the default “it depends on the client and situation” answer-of-choice; and clearly opine pro or con; and why.
Parsing aside; will annuities remain a bane, or finally morph into a more transparent and efficient product in the future? And, what are some alternatives for physician investors and healthcare executives? Cogent, thoughtful and experienced repliers are appreciated; sales slogans and aphorisms are not. Please opine?
Related Information Sources:
Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759
Financial Planning: http://www.jbpub.com/catalog/0763745790
Risk Management: http://www.jbpub.com/catalog/9780763733421
Healthcare Organizations: www.HealthcareFinancials.com
Health Administration Terms: www.HealthDictionarySeries.com
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Filed under: Financial Planning, Investing, Point-Counter Point
Neutral Opinion
Variable annuities are neither good nor bad; rather it is how they are used.
For example, sub accounts must be monitored quarterly. If the client is in an annuity that is falling, my rule-of-thumb is to get out if down 10% or more. And, it makes sense to follow several that you are not invested in, so that one or two are “warming-up in the bullpen” when those in the field falter.
So, quarterly reviews, diversification and my 10% down-and-out rule are guiding principles to a good investment made even better by current tax savings.
Tom Anthony
Georgia
770.536.2742