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A Sales Pitch From A Financial "Advisor"
Old 04-02-2015, 01:15 PM   #1
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A Sales Pitch From A Financial "Advisor"

I’m currently working part time at a construction company for pocket stuffings. Someone (I think a job applicant) left a brochure from a Financial “Advisor” at the reception desk. I’d been holding on to it in case they come back but after reading through it, I’m not giving it back!

The product is Fixed Indexed Universal Life Insurance. The rate of interest is based on the S&P 500 “subject to a maximum cap with guaranteed earnings that will never be less than 0%.” (Sounds good so far, right?)

Charges and costs – “a 7.5% premium will be deducted from premiums paid up to the annual target premium (whatever that is). A 5% premium expense charge will be deducted from premiums made in excess of the annual target premium. Each month the company will deduct the cost of insurance charge, unit expense charge, account value expense charge, rider charges, and an $8 expense charge from account value.”

Expenses aside, my favorite part is the last page of the attachment:
“Assume you put $6,000 annually into your IRA for retirement;
And assume you are in the 33% tax bracket (25 Federal, 8% CA);
This 6% saves you $2,000 annually in taxes.
Is this a good idea?” (oh those stinking, rotten IRAs!)

How do these people sleep at night?
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File Type: pdf Financial Advisor.pdf (623.1 KB, 74 views)
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Old 04-02-2015, 01:22 PM   #2
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Garbage like this turned me into the "Anti-Annuity Troll." As long as garbage like this is allowed to be sold to people, we have no meaningful financial regulation.
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Old 04-02-2015, 01:30 PM   #3
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How do these people sleep at night?
Dreaming about their commission checks...
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Old 04-02-2015, 01:43 PM   #4
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We just got anther "free gourmet dinner" mailing. This one says they'll tell us how to protect our income in a "violate" market. Yeah, "violate". I'd have a whole lot of confidence handing my money over to them.''


Now that I'm retired I really want to go to one of those things and ask impertinent questions, but so far I haven't gotten up the nerve.
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Old 04-02-2015, 01:43 PM   #5
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Hey Zantastic, can you pm me with the name of the insurance company selling this junk ? I want some, not the financial product , but to invest in the company selling it. Must be raking in the $$$
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Old 04-02-2015, 01:45 PM   #6
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This one says they'll tell us how to protect our income in a "violate" market. Yeah, "violate".
Sheesh. Everyone knows they meant 'violet'...
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Old 04-02-2015, 02:23 PM   #7
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No they meant 'violent' which is how they should be dealt with!
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Old 04-02-2015, 02:24 PM   #8
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Or maybe they meant they were going to 'violate' you and it was a Freudian slip!
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Old 04-02-2015, 02:26 PM   #9
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And of course, any time that you have way less money than you would otherwise have had... well you are going to save on taxes! It's a no brainer!
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Old 04-02-2015, 02:29 PM   #10
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Now that I'm retired I really want to go to one of those things and ask impertinent questions, but so far I haven't gotten up the nerve.
It's a waste of time and the food isn't worth the hassle. Most of these guys are pretty slick with their presentation and gloss right over anything you think is impertinent. If you start agitating, I suspect someone will lead you to the door.
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Old 04-02-2015, 03:05 PM   #11
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Hey Zantastic, can you pm me with the name of the insurance company selling this junk ? I want some, not the financial product , but to invest in the company selling it. Must be raking in the $$$

Great plan! No sense keeping this to ourselves. 😉

The insurance company is Old Mutual and it trades on the London Stock Exchange.

The info I redacted on the attachment related to the "advisor" and his company. Redacted to protect the... Oh, what the heck... The company is in Southern California - Pension Plan Solutions. Be sure to tell them that Zantastic sent you. 😊


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Old 04-02-2015, 05:11 PM   #12
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We just got anther "free gourmet dinner" mailing. This one says they'll tell us how to protect our income in a "violate" market. Yeah, "violate". I'd have a whole lot of confidence handing my money over to them.''


Now that I'm retired I really want to go to one of those things and ask impertinent questions, but so far I haven't gotten up the nerve.
Yeah, and the first question would be "What in hell is a violate market"? (Holding up the mailing)
And the second question would be "Do you really think I would be stupid enough to invest my hard earned money with someone who doesn't know how to spell volatile?"
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Old 04-02-2015, 07:59 PM   #13
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How about the grammar on the title of the OPs attachment, "...Utilizing Tax Free Insurance Taxation ...".

IRA page seems designed to play to people's hate of paying taxes, showing the $60k in taxes saved by contributing to an IRA costs you $360k in taxes when you withdraw it.

My favorite part is the assumed 7.4% rate forever. Wonder what orifice they pulled that out of. Gotta give their legal credit, making them show the guaranteed 0% rate lapses the contact at age 64.


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Old 04-02-2015, 09:13 PM   #14
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Just trying to understand those numbers reminded me of the timeshare presentations I have gone to. They intentionally make the numbers harder than they need to be to confuse you, like this seems to be set up to do.
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Old 04-03-2015, 11:41 AM   #15
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How about the grammar on the title of the OPs attachment, "...Utilizing Tax Free Insurance Taxation ...".
...........
Show me someone who uses the work "utilize" instead of the word "use" and I will show you a BSer.
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Old 04-05-2015, 05:54 AM   #16
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to bad there are still poor plans like this being sold. most plans today are much much better.

while they are poor proxy's for market investments if they have guarrantees they can be decent bond and cash replacements.

i am not a lover of variable annuity products regardless. i do see a big use for immediate annuity and some fixed income annuity products though combined with your own investing..
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Old 04-05-2015, 09:07 AM   #17
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Just looked at the PDF.... the guaranteed column shows zero value at age 65.... Who wants to bet that is more likely to happen than the 7.4% example
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Old 04-05-2015, 03:09 PM   #18
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i went to see a seminar and one of the products was the prudential defined income annuity.


while not a bad product if compared to holding cash and bonds in your portfolio i could not seeing it act as anything but a fixed annuity.

looking at the prudential defined income variable annuity you see starting the annuity at 55 and deferring to 65 gives a single about 9k a year based on 100k.

it has a 5.50% guaranteed minimum growth on the money you give them up until you draw an income. it also has a variable sub account in the ast bond index.

with 2.90% in fees the bond index will likely never be higher than the minimum guaranteed growth rate.

you cannot get access to that money that is given via the growth rate. you get 1/10% a year of it for every year you delay drawing .


assuming a 50/50 mix of cash and bonds , you can see drawing 9k a year from 100k in cash and bonds would be down to zero in just a bunch of years needing refilling from stocks.

the annuity income is never reduced by the years prior spending and goes on forever requiring less equities to be sold for inflation adjusting.

that is the power in using these annuity products.

they provide higher rates of cash flow even if not a roi.



here is the break out of the annuity. the annuity gator did a great job on the spread sheet actually looking under the hood.





this is for a joint plan

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Old 04-05-2015, 04:56 PM   #19
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I recently had an investment guy show me a similar plan... universal life... pegged to the S&P 0% lower side, 13% cap... participation 100%...reading more of the details... cap and participation can change every year... no ideal of fees... including life insurance rate... the idea was to max fund the policy. you also have to be careful... if you take an income from it tax free and the policy lapses... everything becomes taxable. In the one I looked at, small print... if you don't keep the policy to maturity... you get none of the equity participation.

Buy life insurance for life insurance.... not investing.
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