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Old 06-20-2012, 09:52 PM   #1
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Free Lunch, FIA

Donít shoot me yet, just wanted to relay a short story about fixed index annuities. Recently got a mail invitation for a sit down and review from an insurance company in exchange for a free $100 meal card in a couple of middle of the road restaurants, Outback Steak House, Carrabas, Bonefish Grill, etc. This was my second invitation as I threw the first away but I thought, what the heck, I would take them up on the offer. I called and an appointment was set up. I met with the gentleman for about two hours and I am sure he was glad to see me go, as I had him explain in detail the nuances, costs, how he got paid, etc. I ended the meeting saying there was too much information to digest at one sitting and I would get back to him. I filled out some form in order to get my meal card sent to me in the mail, he did offer that I could pick it up on a return visit. I explained mailing it would be the best method of delivery. Now I consider myself to be pretty much of average intelligence and the information he presented was very professional but somewhat confusing, reset options, bonus set up, high water marks, cap rates, participation rates, crediting methods, etc. and of course he didnít take his cut out of the mix as he was paid by the insurance company who he is basically an agent or broker for.

So this evening the Mrs. and I are walking around the neighborhood and a friend pulls up on his bicycle and is telling us what a good deal he got on this annuity he just purchased ! I asked him about some of the criteria, surrender time/penalties, fees, what index is mirrored, etc. and of course he didnít know, except that it was a good deal and it was insured by the FDIC ! This person is no dummy, college educated, retired early but has no clue when it comes to financial instruments. Not saying he got a good or a bad deal, just that he bought something he didnít understand and still doesnít.

Maybe I am missing something here but it seems like the financial industry will always come up with some new instrument to get in your wallet and there are plenty of people that will happily hand over a chunk of cash based on a proven sales pitch.

Forgot to ask him if he got the free lunch.
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Old 06-20-2012, 10:56 PM   #2
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Cool story, I often wonder what the % is of people who buy these things that actually have any idea what they bought. I would say it's very low as anyone that knew what it was wouldn't buy it.

When I had a broker I asked him how he got paid on a product he was trying to sell me on. His answer was the same, it didn't cost me anything as the ins company paid him. Gotta love it!
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Old 06-21-2012, 09:04 AM   #3
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I did a similar sit down with Ameriprise to get a free "companion" airline ticket. I soon realized that I knew more about investing than the kid trying to sell me. And the "free" ticket had so many poison pills in the requirements for its use that I threw it away.
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Old 06-21-2012, 09:09 AM   #4
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...Recently got a mail invitation for a sit down and review from an insurance company in exchange for a free $100 meal card in a couple of middle of the road restaurants, Outback Steak House, Carrabas, Bonefish Grill, etc. ....as too much information to digest at one sitting and I would get back to him. I filled out some form in order to get my meal card sent to me in the mail....
Has the $100 meal card arrived yet?
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Old 06-21-2012, 09:24 AM   #5
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Has the $100 meal card arrived yet?
Heh, the real question.
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Old 06-21-2012, 10:39 AM   #6
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Not yet but I do expect it, otherwise a call to the BBB may be in order.
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Old 06-21-2012, 10:41 AM   #7
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...maybe that's why I'm married. I honestly think I'm a very smart guy, but whatever the issue/question is, I discuss with DW. She has a tendency to ask [annoying??] right-on-the-mark questions that I had not thought of, and as a result I often have a different take on the issue.
Regarding OP's friend who bought that annuity, it just goes to show that no matter how smart people may be, salespeople are salespeople for a reason - they are good at it.
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Old 06-21-2012, 10:41 AM   #8
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Not yet but I do expect it, otherwise a call to the BBB may be in order.
Just make sure the card doesn't have a tracking device attached to it .
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Old 06-21-2012, 10:53 AM   #9
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I think the deal with the meal card is you have to have dinner with the broker.
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Old 06-21-2012, 10:58 AM   #10
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I think the deal with the meal card is you have to have dinner with the broker.
Oh, another chance to make a pitch.
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Old 06-21-2012, 11:22 AM   #11
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Maybe I am missing something here but it seems like the financial industry will always come up with some new instrument to get in your wallet....
As a lad during a much younger age (and unattached), I used similar words to "get into" an area of the "fairer sex", even though I did have an "instrument" (as you said).

Uh, didn't work for me, either ...
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Old 06-21-2012, 02:09 PM   #12
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Yes, those FDIC insured annuities are really hot. What are they thinking?
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Old 06-21-2012, 02:54 PM   #13
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Yes, those FDIC insured annuities are really hot. What are they thinking?
I about spit up in my mouth a little bit, but kept my mouth shut, nonetheless.
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Old 06-21-2012, 09:35 PM   #14
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Not yet but I do expect it, otherwise a call to the BBB may be in order.
By the time you actually get a $100 voucher, your time invested on the project will put you below minimum wage...
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Old 06-22-2012, 08:16 AM   #15
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Hey, here's an idea. As a group we could collectively patronize these turds selling these products and take advantage of their "free" lunches but steadfastly refuse to but anything from them. If enough people did that it would be become a losing game to them and they would stop hosting free lunches.

OTOH, I really have much better things to do with my time - like nothing - but the fact that these clowns take advantage of the unenlightened burns my (you-know-what).
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Old 06-22-2012, 09:04 AM   #16
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By the time you actually get a $100 voucher, your time invested on the project will put you below minimum wage...
I have about two hours invested and actually learned more about why I would not want an annuity, so not all is lost. After I recieve my meal card, I'll be glad to post the information if anyone else might be interested in getting a meal card. Heck it is for $100.
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Old 06-22-2012, 10:55 AM   #17
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I still occasionally do the "free dinner" thing because in Paradise, a free dinner is worth more than most places I've lived. The "entertainment" value is asking embarrassing questions of the presenter (also, telling horror stories to my table mates about similar products - see my recent EIA tale elsewhere) I'm surprised I still receive invitations from time to time. I would think there would be a "do not invite" list shared among the "financial product" companies. YMMV
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Old 06-22-2012, 11:03 AM   #18
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I don't get invited to many of these, but if I do I am never the obnoxious naysayer. I have a lot more identification with the guy who is trying to make a buck than with anyone who would give him money to manage. I have met nice people at my table, mostly those who have worked hard and scraped a bit together, not necessarily any more perfectly honesly than the guy who is trying to relieve them of some of it. Perfection is not found in this world.

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Old 06-22-2012, 11:26 AM   #19
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I did a similar sit down with Ameriprise to get a free "companion" airline ticket. I soon realized that I knew more about investing than the kid trying to sell me. And the "free" ticket had so many poison pills in the requirements for its use that I threw it away.

When I was retiring from the Navy I went through one of the "transition" seminars. There was a guy in the class who had already signed on with Ameriprise, was moonlighting with them and was planning to work for them full-time after he retired from the Navy.

He apparently approached the seminar facilitator and made a pitch to address the class and the facilitator let him. In fact, the way the facilitator introduced him, you would have thought it was Milton Friedman or John Bogle whom we were blessed to have in our midst.

The guy was obviously fishing for clients (although he was careful to say that he couldn't have any financial relationship with anyone militarily junior to him until after he retired. However, he could refer such people to his non-military Amerprise boss.) Anyway, this guy gave a very superficial run-down on investments. His coup-de-gras was the "Rule of 72." He very seriously asked the class if anyone had heard of the Rule of 72 as if he had been let in on some financial secret known to but a few. I waited a bit to see if anyone would answer and when they didn't, I raised my hand and explained what it is. This guy was blown away to think that any mere mortal would possess such inside knowledge.

I concluded that if an Amerprise rep thought the Rule of 72 was a sophisticated concept, I wanted nothing to do with them. Ever.
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Old 06-22-2012, 11:29 AM   #20
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I concluded that if an Amerprise rep thought the Rule of 72 was a sophisticated concept, I wanted nothing to do with them. Ever.
What you should have said was that the Rule of 72 refers to the amount of time in years it would take for your portfolio to increase above the Ameriprise fees..........
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