Coming out of a bankruptcy or losing a high paying job, people are often put back to square one in a financial sense. As a result, perhaps all of their saving are lost, or even worse, their retirement nest egg. Often they are digging out of a massive financial hole, and in doing so, the client needs to make very hard financial decisions.
What does it take to get a saver to move their money? Apparently not that much. According to an insurance company representative, they are writing new business hand over fist because their company offers the highest guaranteed fixed rate of interest for a specific number of years within a deferred annuity.
In the past, financial advisors have relied on a well-balanced portfolio of stocks and bonds to manage a client’s risk versus return. While the concept is widely accepted, if you ask 50 different financial advisors what a well-balanced portfolio of stocks and bonds looks like, you'll likely get 50 different answers.
What is the one big risk that Certificates of Deposit (CDs), fixed annuities, and fixed indexed annuities share? Interest-rate risk. For example, you could miss out on higher interest credited to your savings if current rates increase during the penalty period of the fixed interest-bearing vehicle of your choice.
How many indexed annuities do you own? Your answer should be at least “one” if you are recommending them to others. My belief is if you are selling them, you should own them. If you don’t, you are not credible.
Indexed products: You’ve seen one, you’ve seen them all, right? WRONG! Fixed Indexed Annuities (FIA) have been sold in the United States for over two decades. Sales of FIAs have skyrocketed in recent years as their popularity increased.
In 2004 Morgan Spurlock released a shocking documentary called Super Size Me on the health risks of eating fast food. Although a bit extreme, Spurlock’s documentary followed him for an entire month as he only consumed fast food for breakfast, lunch, and dinner. The results? He gained weight of course!