OMG, Fidelity is not an Index Annuity Fan!

OMG, Fidelity is not an Index Annuity Fan - earlebird.com

When did not being a fan of a certain investment become so personal?  The index annuity market has a watchdog named Sheryl Moore that bleeds index annuities.  She only has superlatives about this oft oversold and over recommended annuity product.  Please keep in mind that, surprise, she has an agenda.  She makes a living as a consultant to insurance companies by helping create new products.  She also is a hired speaker for insurers and index marketing firms for their sales meetings.  And last but not least, Sheryl sells index annuity data she compiles quarterly at a pretty good sum.  So suffice it to say, no one has more skin in the index annuity game than Sheryl Moore.

In her weekly blog, it seems Sheryl is a bit outraged by what she has been told lately by two index annuity agents. It seems Sheryl has reason to believe that Fidelity (Fido) has slandered her favorite annuity product.  Check out her blog title of “Is Fidelity Investments on a Mission to Deceive Index Annuity Prospects and Policyholders?”  Ok, so Fido is not a fan of index annuities.  Fido is a top discount broker and of course, one of the biggest names in mutual fund industry.  But they have internal brokers that sell variable annuities, wrap accounts, fixed annuities and just about any investment available.  In fact, Fido is one of the biggest sellers of immediate annuities in the country.  So Sheryl, Fido can sell anything, but why do they choose not to sell index annuities?

I’ll tell you why.  They don’t peddle index annuities because, like most large financial institutions, they find the products too difficult to explain.  And, they are even more difficult for customers to understand.  Fido believes that vagueness creates compliance risks.  If customers don’t understand the investment they purchased, there’s a higher probability that those customers will be a compliance burden.  That’s why large Banks and brokerage firms only want to sell transparent products.  To these institutions, the index annuity risks outweigh the product benefits.

Sheryl explains that Fidelity brokers are using a negative Money Magazine article to help persuade account holders not to purchase index annuities.  She ends up concluding that Fido and the mutual fund industry are paying off financial magazines to write seething pieces on the index annuity industry.  By placing advertisements in the magazine, the companies coerce the magazine into writing anti-index annuity articles.

Sheryl, the real competitor to the mutual fund industry is exchange-traded funds (etf’s.  And in these periodicals, etf”s are not critiqued, they are extolled.  C’mon Sheryl, when are you and your cronies going to realize that index annuities will not be embraced by big institutions until the performance and crediting methods become more clear and transparent.  Index annuities have a place, but like all investments, they do have limitations.  Just remember, don’t hate Fido for not drinking the kool aid.

Pay-it Forward:

Teach your post-grad the importance of optimism.  No business has ever been created without optimism.  Thinking positively is the secret to success.  When was the last time negativity created a business?  Keep them grounded and realistic, but emphasize the need for an optimistic mind.  It’s tough these days, but it costs nothing to have a positive attitude!

 

Earl E Bird

I'm Earl E. Bird and I am very concerned about saving for my senior years. I am amazed at the stumbling blocks that exist when saving for retirement. That's why I take my time when making decisions on building my nest egg.

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About the author

I'm Earl E. Bird and I am very concerned about saving for my senior years. I am amazed at the stumbling blocks that exist when saving for retirement. That's why I take my time when making decisions on building my nest egg.

More posts by | Visit the site of Earl E Bird

 
 
 
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