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Old 08-07-2015, 03:42 PM   #141
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The spreadsheet and a summary of this thread would make a good FIRE site sticky.
If I encounter the subject in the future I would have to search this site to find this thread.
Agree that it could make for a good sticky. If it doesn't you can always 'Subscribe' to the thread, which keeps it in your Control Panel.
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Old 08-07-2015, 03:53 PM   #142
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... you can always 'Subscribe' to the thread, which keeps it in your Control Panel.
+1

I often subscribe to or bookmark threads I want to be able to find again at some point in the future.
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Old 08-07-2015, 03:55 PM   #143
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I can appreciate the fact that this exercise is not for everyone. ...

I really didn't expect him to follow up with me after he left my home, as I made it clear to him that I would thoroughly investigate any product he pitched to me, and I would not purchase it until I fully understood it.

I give the guy credit for having the stamina to keep coming back.
This thread continues to be interesting. You are like his big game fish on a line (his product) that might not be strong enough to reel you in, but he has lost nothing if the line breaks and you swim away, so he is playing you too. At a minimum he is using your responses to refine his presentation and arguments for the next fish if and when he loses you. Or maybe the line holds and he tires you out so that you feel pity for him after playing him for so long and you invest a small amount. And if he's really lucky now or later he exhausts you and hauls you into his boat to become your adviser--skillful fishermen catch big fish all the time that could have swum away. Keep us posted!
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Old 08-07-2015, 05:06 PM   #144
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OP,

I think you should just let it go even it is "entertainment". I can just see one of your future posts saying "he gave me a great report with little expenses, etc".

They are salesmen for a reason.
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Old 08-07-2015, 05:27 PM   #145
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OP,

I think you should just let it go even it is "entertainment". I can just see one of your future posts saying "he gave me a great report with little expenses, etc".

They are salesmen for a reason.
I do not plan to contact him, so unless he chooses to call me again, I would imagine we are done. For that matter, I've never once called him to ask for information or request a meeting. I have just accommodated his requests to speak or get together.

One thing I did notice is that he has no email address on his business card, and only sends things through snail mail. At first I thought it was because he's an older guy and perhaps just doesn't care to use email. But now I suspect it is quite deliberate. He is avoiding any written communication with his prospects so that there is no paper trail on any of the claims he has made about his products. If someone files a FINRA complaint, he can claim he never made any such promises and attribute it all to a verbal misunderstanding. And given that he is a salesperson, and not a fiduciary, he only needs to meet the very weak suitability standard anyway. Although I suspect the claims he has made to me would violate FINRA guidelines, even if only subject to a suitability test.
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Old 08-07-2015, 05:34 PM   #146
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From my spreadsheet (SPX 1950-2015) , a 0% (no loss) floor saves you from a -11.8% (average) loss. For a 12% cap, the average gain when above 12% is 22.7% -- which gets capped at 12%. The average gain when between the floor and cap is 6.6%

People don't realize how often the S&P500 annual gain is more than 12%.

Below 0% = 27% of the time
Above 12% = 44% of the time
Between = 29% of the time.

So.. about 1/4 of the time you avoid losing -12%, about 1/2 the time you get 7%, about 1/2 the time you get 12% when you should have gotten 23%.
Overall, you miss 11% gain twice as many times as you avoid 12% loss. That's a net loss right there.

The average annual gain is 8.8%, the average gain with cap & floor is 7.2%.

AND...you don't get the dividends which is about 3.5%.

AND...they charge you fees in the range of 3%-5%.

Oh, and if they feel like it, they can reduce the cap from 12% to 1%.

==================

It took me quite awhile to come to the realization of what you said. They hold your money, take a huge skim off the top, and then cover your down years with what's left of your own money.

Thank you Rayvt This tells the whole story very succinctly, and the angle to sell is no losses. Do we understand the financial instruments they use behind these products, futures contracts and fixed income on monthly basis?


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Old 08-08-2015, 10:02 PM   #147
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The moderators have discussed making this "sticky". We agree it's a very interesting and useful thread, but not quite to the level of a "sticky". So subscribe or bookmark it if you think you'd like to reference it later - and there is always the search box, which I find generally gets me to what I was looking for in 2 or 3 screens.

Thanks to all for this very informative exchange!
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Old 08-08-2015, 10:33 PM   #148
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This thread continues to be interesting. You are like his big game fish on a line (his product) that might not be strong enough to reel you in, but he has lost nothing if the line breaks and you swim away,
Experienced salespeople are not like Captain Ahab after Moby Dick. They are looking for an easy, quick sale. It's a game of numbers. This agent must a be a rube, anyone who depends on production to support his family would have been gone weeks ago. There are always potential customers who will buy the product, not reluctant brides who want to tease.

Ha
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Old 08-09-2015, 12:53 PM   #149
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OP,

I think you should just let it go even it is "entertainment". I can just see one of your future posts saying "he gave me a great report with little expenses, etc".

They are salesmen for a reason.
It's entertainment. Pure and simple.

I've attended dozens of these deals, as I posted, but the key is to never agree to an appointment with the insurance agent stock broker slow walkin', fast talkin' financial advisor. Nothing is sold at the seminar.

They w*rk for leads. What little printed matter that they pass out is vague and meant to be used to follow along with the dog and pony show that is presented.
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Old 08-09-2015, 01:45 PM   #150
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Not true in all cases for these free dinners, but there may be some rebate of "advertising" dollars to the FAs from the insurance companies they shill for...
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Old 08-09-2015, 02:29 PM   #151
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I'm sure I'm the exception here, but I get no pleasure from driving off the lot with a brand new car, but find it exceptionally stimulating to spar with the car sales people during the negotiation process. When they finally agree to my number, the game is over and I feel a bit of a letdown that the best part of the process is ending.

So I could care less about whether he paid for my dinner (which was mahi-mahi by the way, not a big steak fan). But the opportunity to have some fun with him...priceless.
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Old 08-09-2015, 05:24 PM   #152
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Not true in all cases for these free dinners, but there may be some rebate of "advertising" dollars to the FAs from the insurance companies they shill for...
That's true enough but only if the "producer" has a history of selling the insurance product at a rate that makes them all a lot of $. Nothing wrong with being motivated by making money, but logic says that all of these costs are located in the marketing section of the budget.

The free lunch being consumed today is being paid for by current customers of the FA.
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Old 08-09-2015, 05:28 PM   #153
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Attachment 22027

Well done, sir, well done. Excellent selection of timeframe, and kudos for ignoring dividend returns. Clearly, Variable Universal Life has done well for you these past 15 years.
you are correct , i just re-checked . the last 15 years saw 1.82% real returns dividends included, not the 2.20 we were up to earlier . .

basically my new money i added did fine but anything prior pretty much was at a crawl the last 15 years in large caps or a total market fund which is basically a s&p 500 fund because of weighting .

i am not saying linked insurance policy's are good . just saying the last 15 years has basically been way below average dividends included. .
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Old 08-10-2015, 12:10 PM   #154
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I've read this thread through today, beginning to end - have looked at it a couple of times before. I have attended a couple of these type of dinner/sales pitches myself. First time was by myself out of curiosity, and the 2nd time was for a teaching moment for my wife (dangerous and stay away) if I should not be around. The second pitch was at a steak house Each time was not the same people/company and in different areas of the country (we've moved a lot over the years for career advancement)

I did not read this posted in replies on this topic, so I thought I'd put it out there for the benefit of the readers. I became aware that not all attendees for the free meal and presentation are off the street "Plate Lickers" (I really liked that comment posted on this thread earlier). Some had to be plants working for the company that the presenter works for, or just free-lancers out to rob his thunder and eat his free dinner as well. Got a couple of business cards and offers to help us with our investments from people pretending to be attendees. One was single and the other was an older couple. As mentioned, the presenter left after his pitch. I assumed this was to take the pressure off and for his assistant to get the information on potential pigeons. He ate alone in a separate area, but not out of sight of anyone leaving the presentation. I am surprised that they did not ask for our mailed invitation, as it gave us the opportunity to leave them with made up information on the card collected by his assistant. Guess they just write off people like us and make enough off those they hook.....
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Old 08-10-2015, 01:16 PM   #155
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Fritz,
Good points you make...
At first I was suspicious, as I could not understand an FA giving away so much for so little in return. I thought there must be a lot of plants. I did find that on a few occasions I would stick around and overhear attendee A talking to the FA in very friendly way. One gentleman did tell me he was a current client.

There is a significant percentage of plate lickers. Some go on all sorts of expeditions for free weekends, like listening to real estate deals, and other interesting things.

So yes, I am a plate licker. I do listen, don't argue, and usually enjoy watching others. I usually count heads, and try to estimate the total cost of that one night. I usually conclude that the FA needs just one convert, who will probably stick around for a few years until they realize something is amiss.

If there are 25 in attendance, and the meal is decent, the out-of-pocket cost might be $750.00? That's chump-change.
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Old 08-10-2015, 02:47 PM   #156
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I have always wanted to go to one of these dinners for entertainment value, but I have never received an invite. Either I am too young, or the letters after my name keep me off the mailing list.
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Old 08-10-2015, 03:00 PM   #157
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I have always wanted to go to one of these dinners for entertainment value, but I have never received an invite. Either I am too young, or the letters after my name keep me off the mailing list.
I guess I'm too low class as I don't get any invites either. It must be that because I don't have any letters after my name. I've even taken to opening junk mail letters if it looks even remotely like it'll be one of those invites but so far no joy.
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Old 08-10-2015, 03:13 PM   #158
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Not sure what letters after your name could influence this. It's zip code plus age - that's my best guess. I guess MD might get you a few more points.
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Old 08-10-2015, 03:22 PM   #159
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we went to a few david lerner dinners.

good food and they do put on a very lively presentation.

they have all the answers for all the hecklers that go.

while the presentations are interesting and sound great it is more in what is not said that tells the story .

i can see how those with no knowledge succumb to the allure of the presentations .
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Old 08-10-2015, 04:20 PM   #160
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Not sure what letters after your name could influence this. It's zip code plus age - that's my best guess. I guess MD might get you a few more points.
Heh, CFA. I know my dedicated Schwab rep is sufficiently cowed that he has not called me in over a year.
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