New Florida Annuity Fraud Law

[mickeyd]

Not sure how much the CE class will help, but the $30k fine should get their attention.

Quote:

As part of the new law, agents licensed in Florida must take a minimum of three hours of continuing education on the subject of suitability in annuity and life insurance transactions. It also imposes fine maximums of $30,000 for each "willful violation of twisting, churning and submission of fraudulent signatures."

Florida's Tougher Annuity Fraud Laws Take Effect this Year - Articles - Financial Planning=

[ziggy29]

"Suitability." That's the key word. So many people are sold these things that don't need them and for whom they aren't appropriate. In reality, for brokers and salesmen who push these things, there should be some fiduciary duty to the client, IMO.

And the other thing is that there should be more transparency and disclosure about the fees and commissions being charged on many of them.

Unfortunately, these people have given even legitimate annuities such a bad name that even some people who might benefit from an appropriate low-cost annuity stay away.

[FinanceDude]

Quote:

Originally Posted by ziggy29 "Suitability." That's the key word. So many people are sold these things that don't need them and for whom they aren't appropriate. In reality, for brokers and salesmen who push these things, there should be some fiduciary duty to the client, IMO.

There IS a fiduciary duty to the client, but many firms, particularly insurance firms, that duty is overlooked.

Quote:

And the other thing is that there should be more transparency and disclosure about the fees and commissions being charged on many of them.

The lobbyists are paid to see that doesn't happen........

[haha]

Quote:

Originally Posted by FinanceDude There IS a fiduciary duty to the client, but many firms, particularly insurance firms, that duty is overlooked. The lobbyists are paid to see that doesn't happen........

Transparency is public enemy #1 to vendors. For a counter example, our modern high quality discount brokers are really the eighth wonder of the world.

Ha

[FinanceDude]

Quote:

Originally Posted by haha For a counter example, our modern high quality discount brokers are really the eighth wonder of the world.

Yes, and no. It is easy to do business with them, but recourse is non-existent. I lost track of the number of folks who tried to sue Ameritrade and Etrade for poor or non-execution of trades in the tech meltdown. Few if any got any recourse. It's pretty easy to set up a discount broker. Our firm's average trade is $29.00, more than the $7 or $10, but not obscene........

[haha]

Quote:

Originally Posted by FinanceDude Yes, and no. It is easy to do business with them, but recourse is non-existent. I lost track of the number of folks who tried to sue Ameritrade and Etrade for poor or non-execution of trades in the tech meltdown. Few if any got any recourse. It's pretty easy to set up a discount broker. Our firm's average trade is $29.00, more than the $7 or $10, but not obscene........

Well, no way am I criticizing your business model, or trying to name the only high class financial businesses that exist.

However, in over 30 years with my discount broker thay have maybe messed up twice, and each time they made it good.

They are less good on very stressed days, as the site may go down, and at these times they are close to impossible to get on the phone.

Ha

[saluki9]

Quote:

Originally Posted by haha Transparency is public enemy #1 to vendors. For a counter example, our modern high quality discount brokers are really the eighth wonder of the world. Ha

Until of course you start to consider...

1. Their continued acceptance of poorly disclosed payoffs for shelf space of their "preferred" lists of mutual funds.

2. Their "fuzzy" (to be kind) prices on their bond inventories which often had rediculous markups.

3. That for years they many of them (and some still do) routed their customer orders to second and third tier exchanges and ETNs to make up for their low commissions

[ERD50]

Quote:

Originally Posted by saluki9 Until of course you start to consider... 3. That for years they many of them (and some still do) routed their customer orders to second and third tier exchanges and ETNs to make up for their low commissions

Does this result in a transaction outside the bid-ask seen on the screen?

I almost always place limit orders, just to avoid surprises. It is pretty rare for me to see a slow or no fill when it appears that the order should hit (though I don't usually monitor a level 2 quote, so maybe some big orders were ahead of me).

Also, the one thing that impresses me is how often my limit order is filled at a price that is *better* than my limit order (price has moved in the seconds it took me to place the order). It seems to me it would be pretty easy to fill that at my price with something they just picked up at the better price, and I'd just assume it was a few second delay or entry order or something.

-ERD50

[FinanceDude]

Quote:

Originally Posted by saluki9 Until of course you start to consider... 1. Their continued acceptance of poorly disclosed payoffs for shelf space of their "preferred" lists of mutual funds. 2. Their "fuzzy" (to be kind) prices on their bond inventories which often had rediculous markups. 3. That for years they many of them (and some still do) routed their customer orders to second and third tier exchanges and ETNs to make up for their low commissions

yeah, but at least their trade execution prices are cheap......

[haha]

Quote:

Originally Posted by saluki9 Until of course you start to consider... 1. Their continued acceptance of poorly disclosed payoffs for shelf space of their "preferred" lists of mutual funds. 2. Their "fuzzy" (to be kind) prices on their bond inventories which often had rediculous markups. 3. That for years they many of them (and some still do) routed their customer orders to second and third tier exchanges and ETNs to make up for their low commissions

Well, 1 and 2 do not apply to my broker, or at least to my useage, as I don't care what their preferred list of mutual funds is.

Anyway, I am sure your firm is much, much better. Still, the discount brokers seem to have found a small niche.

Ha

[Freddy]

Quote:

Originally Posted by haha Transparency is public enemy #1 to vendors. For a counter example, our modern high quality discount brokers are really the eighth wonder of the world. Ha

I agree discount brokers are a huge help for investors, however the majority of do-it-yourselfers got killed in 2008. It do not matter which asset class was used. The median loss was probably 35-40%.

A decent financial planner or annuity salesman, if they sold a decent equity index annuity or fixed annuity lost their client zero money. I am not talking variable annuities which I would avoid at all costs.

Annuities are far from perfect but a decent planner can get a retiree or near retiree in shape to be able to probably retire. Do it yourselfer generally have no clue on the implication of taxes, bear markets losses and other issues. The news is littered with stories each day of sophisticated senoir investors who were hammered in 2008.

Financial publications like Money and Smart Money bash annuities while praising mutual funds. Why? All the biggest advertisers are mutual fund companies.

Investors who were dumb enough to hold actively managed MF in non-retirement accounts avged losses of 30 to 40% plus will probably also pay capital gains taxes even though they lost money! Never saw this in an annuity. Bankers selling CD's yielding 3% are allowing their customers to fall behind inflation of 5 to 7% (the real inflation rate). Why are the mutual fund companies, discount brokers who flog MFs or bankers not facing fines and jail time? How about the magazine flogging MF?

Many investors would do far better in universal life insurance which had equity indexes, no downside, death benefits, tax-free withdrawl at retirement plus returns that can average 8%. Money and Smart Moeny will never mention that and will bash insurance because they run no ads in their magazines.

[Nords]

Quote:

Originally Posted by Freddy A decent financial planner or annuity salesman, if they sold a decent equity index annuity or fixed annuity lost their client zero money. Annuities are far from perfect but a decent planner can get a retiree or near retiree in shape to be able to probably retire. Do it yourselfer generally have no clue on the implication of taxes, bear markets losses and other issues. The news is littered with stories each day of sophisticated senoir investors who were hammered in 2008. Many investors would do far better in universal life insurance which had equity indexes, no downside, death benefits, tax-free withdrawl at retirement plus returns that can average 8%.

Welcome to the board, Freddy. I think.

In a most general sense similar to the one you're using, it's usually not a good thing when a member's debut post defends the subjects you've chosen to promote. It tends to make the other posters wonder about your background and your agenda. Of course I'd welcome your subsequent introductory posts which would no doubt prove me wrong. But I'm skeptical.

As for DIY investors who pursue retirement without benefit of planners while lacking in universal life insurance-- have you considered the demographics of this board? Do you expect a rousing chorus of consensus regarding your statements? Just curious...

[ERD50]

Quote:

Originally Posted by Freddy Quote: Originally Posted by haha Transparency is public enemy #1 to vendors. For a counter example, our modern high quality discount brokers are really the eighth wonder of the world. Ha I agree discount brokers are a huge help for investors, however the majority of do-it-yourselfers got killed in 2008.

Freddy, do you understand the difference between "transparency" and "volatility"?

-ERD50

[M Paquette]

Quote:

Originally Posted by Freddy I agree discount brokers are a huge help for investors, however the majority of do-it-yourselfers got killed in 2008. It do not matter which asset class was used. The median loss was probably 35-40%.

Hi, Freddie. Welcome to the Early Retirement Board.

We had a survey a few weeks ago on losses in the current market fluctuation. The median came in around 20%, which, given portfolios split between equities and fixed income, was actually pretty reasonable.

Quote:

Many investors would do far better in universal life insurance which had equity indexes, no downside, death benefits, tax-free withdrawl at retirement plus returns that can average 8%. Money and Smart Moeny will never mention that and will bash insurance because they run no ads in their magazines.

"can average" And after loads, commissions, sub-account expenses, and account expenses and fees? Returns may be somewhat less.

Gains, if any, withdrawn from the account are taxed as ordinary income and do not receive favorable capital gains treatment.

Borrowing against the policy avoids immediate taxes, but there may be additional fees, and once you start to borrow against a policy you must keep it in force. Should the policy lapse, all the earnings borrowed become immediately taxable.

A more reasonable investment for the long term would be low cost tax managed funds and index funds. Gains on these are taxed at long term capital gains rates, maxing out at 15%. Distributions are kept small, much smaller than from actively managed funds.

For an immediate and reliable income stream, you could consider a single payment immediate annuity from a low cost provider. Don't go over the state guaranty funds limit for any annuity with any one company, usually $100K.

[Bestwifeever]

Welcome to the board, Freddy. I look forward to reading more of your posts.

In addition to CuppaJoe's suggestion above, feel free to post to our Hi, I Am... (http://www.early-retirement.org/forums/f26/) forum and introduce yourself, as most new members do.

[brewer12345]

Let's see: trusts the state insurance regulators, likes EIAs, looking at EIUL, pitching fixes annuties. Lemme guess: insurance salesman? Not a particularly scrupulous one? Hi Jack, Bye Jack.

[unclemick]

What we have hear(heh heh) is a failure to communicate.

Pssst Wellesley = 5.5% SEC yield as of 2/13/09.

Perhaps a few bars of gimme that old time religion - in Norwegian of course.

I had no trouble grasping Mr Bogle's little story promoting his new book - Enough. Slightly off the this subject but I'm retired.

heh heh heh - with Target Retirement 2015 in my 16th year of ER, I'm working on the rap version - even though not a rap fan. .