Variable Annuities Suck

Yes, I said that out-loud and in print! Variable Annuities Suck!  Ken Fisher says, “should not be legal as they currently exist,”  I tend to agree with Mr. Fisher on this.  When people ask me about the Department of Labor (DOL) fiduciary standard that is being suggested I say, “I welcome it.  In doing so, in my opinion, variable annuities will be removed from the market!”  I get an odd look from people.  “Why is that?”, they say.  Because I have not seen one that lives into the fiduciary standard.  If the standard in very simple terms means that you will only and always do what is in your client’s very best interest – variable annuities fail this test.

How can ALL VA’s fail?

How can an entire class of annuities fail the fiduciary test?  Simple, if there is another product that better fits a clients needs, then it *must* be used.

FAIL!

When a variable annuity and a fixed index annuity (FIA) start at the same time and sit for the same period of time (say 10 years) I have yet to see a variable annuity that beats the best FIA.

When talking about all VA’s I’m excluding liquid VA’s on the Registered Investment Platform.  They won’t win many races, but they fill on void.  That void is reduced fee products to store investment assets that simply aren’t needed for income or that want to avoid taxation during your lifetime as well as can be moved in and out of assets (sub-accounts).

I hope to not offend anyone who owns a variable annuity, only those who blindly sell them.  I get it, you were trained to believe they are good.  Time for new training.

If you own a variable annuity and want support in exiting the annuity, call us.  We’ll in vest a little time in you if you’ll in vest a little time too.  Our office number is 408-459-8383.  Ask for Rick and say you want to stress test your variable annuity.

NEVER!

This article attempts to remove the sting (or stink) Ken Fisher is leaving.  I quote, ‘Tarnishing all annuities over some bad sales practices is “ridiculous,”‘ Milevsky says.  Well, how are bad sales practices ever good?  I realize I am throwing the baby out with the bath water.  I have never had a client in the office who was sold a variable annuity who could tell me exactly how it worked, what fees they pay and how the “insurance agent” who sold it to the was paid and likely continues to be paid.  NEVER!