Home Page
Annuities
Annuities
Annuities
Annuities
Tax Free Retirement Plans
Tax Free Retirement Plans
Tax Free Retirement Plans
Tax Free Retirement Plans
Social Security Benefits
Social Security Benefits
Social Security Benefits
Social Security Benefits
Lifetime Income
Lifetime Income
Lifetime Income
Lifetime Income
Life Insurance
Life Insurance
Life Insurance
Life Insurance
Header
Annuities Tax Free Retirement Social Security Benefits Lifetime Income Life Insurance


Whom to trust when buying an annuity?

Getting financial advice on complicated insurance products is, well, complicated.

Most life insurance with investment options, long-term care insurance and annuity products come with a dizzying array of options and many pages of fine print, the merits of which are debatable for your bottom line. That makes solid, unconflicted advice necessary.

But since most of these policies are sold on commission or with other incentives in mind, that means the salespeople are not necessarily recommending options that are in your best interest. They could be thinking about earning a cruise instead.

The money at stake is staggering. An annuity, which you buy with a lump sum to get payouts as you age, can cost hundreds of thousands of dollars up front, generating thousands of dollars in fees.

The person selling you the policy might not even understand all the implications for your retirement.

"The complexity of some insurance products has outstripped the financial adviser's ability to give reasonable advice," says Glenn Daily (glenndaily.com/), a fee-only insurance consultant based in New York.

The first stop on the road to an annuity for many folks is when they talk about retirement to a financial adviser, from whom it is possible to get solid, unconflicted advice if you choose a fee-only certified financial planner. This kind of adviser, known as a fiduciary because he or she pledges to make decisions based on your best interests, can tell a client what kind of annuity to purchase and then recommend a trusted salesperson - who will likely earn some kind of commission on the sale.

Some CFPs work on a hybrid model, charging an hourly fee for their financial planning, but can also sell you insurance.

"I tell clients I can be your agent, on commission, and I won't charge for that time. Or I can charge for the time, and work with another agent," says Ellen Siegel, a financial planner with Legacy Wealth Management Inc. in Plantation, Florida.

Another option is to employ a fee-only insurance consultant like Daily, who will offer an independent view on the policy you are considering. Fees are based on the case, but can run about $300 an hour.

"The vast majority of the time, people wind up doing something different after consulting with me," said Daily. "Sometimes it’s a minor tweak, but sometimes it's a major difference – like not buy the policy."

Trying to go it alone can be difficult because there is not a lot of independent research available for the average consumer, and policies from different companies are difficult to compare.

Some companies sell commission-free products directly to clients. Among them are Amica Mutual Insurance Company and TIAA, as well as Lincoln Financial Group, which offers a new fee-only annuity. But buyers should shop around, because the representative at one company will not have pricing to compare with any of the other companies' products.

Even a broker may not have the widest selection available, says Patricia Born, a professor of insurance at Florida State University's College of Business in Tallahassee, Florida.

SAFEST OPTION

Daily says the safest option to handle on your own is a single-premium immediate annuity, for which you pay a lump sum and then receive monthly payments. "You only have a few choices to make - it would not be that complicated to evaluate," he said.

( Read More: http://www.reuters.com/article/us-money-insurance-fiduciary-idUSKBN16125U ) 
Posted 11:15 AM  View Comments

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Home Page About Us Get A Quote Contact Us Life Insurance Insurance Website Builder