Let me start with this basic truth as a Retirement Advisor & Annuity Advisor – THE ANNUITY GUYS ARE GUILTY – of believing annuities should be an important part of a well balanced retirement portfolio. We admit our bias in that we believe annuities are proven financial instruments that will provide safer, more secure growth and reliable lifetime income throughout retirement. However, finding a trustworthy licensed retirement financial planner with true annuity expertise to correctly balance your portfolio may not be as easy as one would think!
Likewise beware, you would be hard pressed to find any Registered Investment Advisors, Financial Planners or Annuity Salespeople who are truly unbiased, however, most will try to persuade you that they are in fact objective and unbiased. There are also many advisors that take a more balanced view toward securities and annuities and the roles they play to balance a retiree’s portfolio yet all of them will still have a unique bias based on education, training, experience, financial product availability and even at times their own self-serving motives…[continued below video]
Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.
[continued]…What we want to impress upon you is that most bias is not necessarily bad; however, by knowing the type of advisor you are working with you can more readily pin-point their bias as acceptable or unacceptable, being wary if necessary. Within the industry we have two primary types of advisors – 1) commission driven insurance agents and securities brokers – working under a sales oriented Suitability Legal Standard, 2) fee-only advisors and fee-based advisors – working under a best interest of the client Fiduciary Legal Standard. Each advisor type has its share of good and unfortunately some bad advisors. Ultimately, you should choose an advisor based upon their ability to assist you in accomplishing your financial goals and do so in the most economical and efficient way possible, which does not always translate to the cheapest or the most expensive. There are times when paying a fee for genuine financial planning can open the door to more possibilities than just the free advice that is often offered by competing commission based sales people who may each claim their solution is best. It is also possible to work with a series 65 licensed financial planner who exercises full and open disclosure who also willingly accepts a commission, in place of fees from their client, as fair compensation for in-depth financial planning (identifying and minimizing conflicts of interest are the keys to success in this type of no fee arrangement).
Remember genuine referrals can be your best friend when choosing any advisor (warning; disregard written internet testimonials about advisors, many are fake).
Here is an good article by Ken Little that examines some of the pros and cons of each advisor type.
What Type of Financial Adviser do You Need?
By Ken Little at About.com
Do you need the services of a professional financial adviser? Many people find that having a professional look at their total financial picture and bring it in focus is a valuable service.
As I discussed in part one of this two-part series, people often turn to financial advisers when they don’t have the time, energy or talent to manage a complex financial life.
If you think the services of a professional sound like something you could use, the next question becomes which type of adviser do you pick.
Generally, who can classify financial advisers two ways:
- How they are compensated
- Professional designations
How they are Compensated
There are three basic ways you compensate financial advisers for their work. Each of the three methods has some good points and some weaknesses. In the end, you should choose the adviser you feel will do the best job for you and worry less about the method of compensation. The compensation methods are:
The fee-only adviser develops a comprehensive plan that lays out how you can reach your financial goals. However, it leaves the actual execution of the plan to you. The adviser doesn’t sell any products or services other than the plan itself.
The strong points of fee-only financial advisers are:
- Comprehensive plan – Fee-only advisers usually produce the most comprehensive plan since this is their sole product.
- Objective recommendations – Since the fee-only advisers make no money off sales of any products, their recommendations are not driven by potential commissions.
- Customer interaction – Fee-only advisers are more likely to spend time educating customers on various aspects of the plan since it will be up to the customer to execute the plan.
The weak points of fee-only financial advisers are:
- Cost – Fee-only advisers charge more than other types of advisers since they do not take any other form of compensation.
- Execution – Some customers find they are not much better off with a plan in their hand if they have to perform the execution also.
- Updating – As things change, the plan needs updating, which may involve additional costs.
Fee and Commission or Percentage of Assets
The second method of compensation of financial advisers includes a fee and commissions. The fee, which is usually substantially less than what a fee-only adviser would charge covers the cost of building the plan and commissions cover the cost of execution.
A variation on this compensation plan involves an annual fee based on a percentage of assets in your accounts. The fee compensates the adviser for monitoring your investments and making recommendations.
The strong points of fee plus commission advisers are:
- Plan development – The fee plus adviser develops a plan for the customer that lays out suggested strategies for reaching the customer’s goals.
- Execution – Because the fee plus adviser receives compensation from executing the plan, the adviser is there to execute the plan.
- Multiple products – The fee plus adviser often sells or has access to multiple products such as insurance in addition to investments, so much of they can do much of execution.
The weak points of fee plus commission adviser are:
- Objectivity – There is always the question of how objective the advice will be when it results in a commission for the financial adviser.
- House products – Fee plus advisers may push house products (certain mutual fund^s or life insurance products, for example), which may not be the best choice for your particular situation.
- High-price products – There is a danger the fee-plus adviser will pick products for your plan that pay higher commissions over other equally good, but lower commissioned products.
The third method of compensation is commission only. The financial adviser receives their only compensation from products they sell you.
I think you can see the inherent problem with this arrangement – it is in the adviser best interest to sell you something. A person who works on a commission only basis is a salesperson. [Read More…]
Using OutCome Based Planning™ for Your Retirement
We practice and recommend a "Holistic - OutCome Based Planning™ process when considering annuities." This approach has the effect of balancing your overall portfolio so you can meet your retirement objectives by "first identifying the least amount of your investments or savings (if any) that should be considered for annuities." OutCome Based Planning™ analyzes and models multiple outcomes so you can clearly identify your best income and growth opportunities.
"The Annuity Guys will only call if you request help". Hence, when you are ready for specialized help we will be available."Working with an Experienced Fiduciary Financial Planner can help you Avoid a Trial & Error or Risk Based Retirement"
This type of approach does take considerably more time, effort and analysis which will show you mathematically the successful possibilities by comparing various outcomes rather than trying to sell or convince you of that "so-called one best solution." Clients frequently tell us that this process removes some of the confusion and emotion to help them objectively identify a better retirement plan; rather than just ending up with the most convincing salesperson or advisor.
When requesting help you can be assured of working with an experienced Annuity Guys' Retirement Planner who is independently insurance licensed and securities licensed as a fiduciary financial planner having access to the vast majority of annuity companies in helping you choose the best annuities using a holistic-outcome based planning approach. We consider the high quality advisor recommendations we make to our website visitors as a direct reflection back on our commitment to serve all client's with a high standard of excellence in financial planning for retirement.
Based on survey feedback on advisors from our website visitors, we eliminated about two-hundred local advisors and now only recommend a few that we consider experienced vetted Annuity Guys' Fiduciary Advisors. Many local advisors continue requesting us to recommend them as a vetted advisor. However, our reputation and future business is driven only by satisfied website visitors. So, unfortunately we've had to tell the vast majority of local advisors no, since we changed our business model four years ago. At that time we stopped trying to satisfy everyone with local advisors, we now primarily work with individuals who are comfortable using today's internet technology to their fullest advantage by working with a select group of vetted, experienced and knowledgeable Annuity Guys' Fiduciary Planners.
Selecting the Best Annuity & Retirement Income Advisor
Are you willing to work with one of our retirement and annuity advisors based on their experience and expertise as a first priority rather than being limited by a local or regional area? The good news is that technology has forever eliminated our geographical limitations and leveled the playing field for everyone! As a result of today's technological advances, all of us can now work confidently with experts in any field including personal finance. We are no longer confined by regional or local boundaries limiting our choices and ultimate success. A high quality advisor is now as close as a click or phone call away.
"There is no room for trial and error when it comes to choosing MarketFree® Annuities or a Successful Retirement Planner."
"There are no undo buttons in retirement so it is vitally important that you do it right the first time!"
We are fortunate to have a select few who we believe are truly the highest qualified advisors out of about two hundred licensed insurance agents that we eliminated. Your survey feedback is what helps us make these tough decisions. Our advisors have an independent financial practice, specializing in annuities and retirement planning, which helps ensure that you are given the best options available for your retirement planning.
"It takes an experienced expert to know how to structure annuities for income, inflation, growth, return of principal, and tax advantage."
"Anyone can sell you an annuity; however, it takes a truly qualified and experienced advisor to know how to structure them for income, inflation, growth, return of principal, and tax advantage. Typically, there is not just one that can accomplish all of these objectives. It is how an advisor structures multiple annuities in balancing your total portfolio that makes it possible to achieve your most important retirement objectives."
Why Searching for the Best Annuities on Your Own Can be so Frustrating...Almost everyone nowadays turns to the internet for answers on everything - from buying new widgets to researching just about everything under the sun; and finding the best annuity is no exception!At first, it may seem that researching will be straightforward but the more time you spend researching them, the more frustrating it can be. Why is this? First of all, it does not take long to realize that gimmicks abound - such as warnings and alerts from salesmen who just want your attention so they can sell you one or the "too good to be true" claims of 8% to 14% **guaranteed interest and of course the claim that you can get the full market upside with no downside risk! If you have done any research you have heard all of these claims in advertising which are mostly half truths and not fully explained.So how can you find the best annuities on the internet? The truth is... you can't! And what is even more frustrating is all the conflicting points of view from so called experts. There are well over 6,000 different annuities - all designed for different reasons, so is it any wonder that the deck is stacked against the average researcher or do-it-yourselfer. Add to that the fact that they pay high enough commissions to attract a plethora of both good and bad agents. This does not make annuities good or bad; they are simply a financial tool that truly benefit those who use them correctly.How can you find the best annuities for your unique situation?
- Use the internet cautiously;
- Work with a vetted and experienced specialist;
- Do not settle for that one dubious best plan. Compare multiple Outcome Based Plans to decide on the one that is truly best for you;
- Be keenly aware of scare tactics and hyperbole - avoid those advisors and websites;
- Avoid websites that are focused on rushing free reports, rates and quotes to get your contact information they are rushing you to speak with them, instead, take your time and choose someone you are more comfortable with that works on your time-table;
- Know the Five Vital Factors (listed above) that an experienced specialist must answer before helping you select the best options for your situation;
- Watch this telling video "Avoid Annuity Gimmicks, Amateurs and Charlatans"...
** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
They are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.
*Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping our website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this website. He still maintains his insurance license in good standing and assists his current clients.
Our vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)
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