Scott Burns Article........

[Art G]

I do not think this is so. Certainly it is nowhere near as much "rigorous training" as it takes to become a doctor, which seems to be a comparison and analogy often cited. In fact, having gone through this training and received my license to sell these products myself, I can tell you exactly how "rigorous" it was. It was NOT difficult at all, and anyone who tries to obscure the details of these investments with "trust me I've been to rigorous training" should be highly suspect.

For what it's worth, the generally lackadaisical attitude of the class did change and students perked up considerably when we got to the section that discussed fees and commissions to be earned selling these annuities. Fascinating to see people's self-interest kick in.

You've got a Series 7? It's supposed to be the third toughest behind the MCATS and the CPA exam. Now if you're just talking about getting an insurance license, I'd agree. There's also the CE necessary. I guess it all boils down to how much effort you wish to do. I take due diligence pretty seriously.

 

[cjking]

Then how do they manage to build all those big buildings and have their names put on major league stadiums?

If you were paying more attention, you would have noticed that I was talking about a mostly hypothetical product. It follows that no real company has made real profits from it, hence none of the money has gone into big buildings and stadiums. Those are funded by products we both wouldn't buy. For example, annuities recommended by comission-based financial advisers.

 

[Art G]

Based on the amount of fertilizer you've spread so far today, they should really be taking off. Sincerely.

Wow you're clever. I hope there's enough social security for people like you.

 

[Alan]

Keep goings folks, the cut and thrust of this debate is riveting. Does 1 or 2 bad years in the market always bring a flood of annuity debates like this?

There is plenty of data showing that in down years money flows out of the market into cash. I wonder if down years also produces a big jump in annuity purchases. If that's the case then it drums up the image of a ship labeled "Stock Market" in heavy seas while sharks are circulating waiting for people jumping overboard.

 

[haha]

If doctors were paid on commission for procedures, yep...I'd be a bit worried about their recommendations.

They are, aren't they? Isn't that what fee for service means?

Ha

 

[REWahoo]

I see a lot of similarities between doctors an annuity salesmen. Except prior to the procedure the doc warns you... and uses some lubricant.

 

[cute fuzzy bunny]

Hmm, I'm screwing it up by using an HMO. They'd prefer to avoid seeing me when they dont have to and would much rather I email them or they talk to me on the phone.

Of course, if I decide an office visit is important to me, they'll see me later on today and I'll be seen within 5 minutes of my appointment.

All of this is possible because they're equally interested in keeping costs down and in my staying reasonably healthy. Of course, they can control the cost issue and offer more care per dollar because theres no 3rd party insurance company involved.

 

[unclemick]

Keep goings folks, the cut and thrust of this debate is riveting. Does 1 or 2 bad years in the market always bring a flood of annuity debates like this?

There is plenty of data showing that in down years money flows out of the market into cash. I wonder if down years also produces a big jump in annuity purchases. If that's the case then it drums up the image of a ship labeled "Stock Market" in heavy seas while sharks are circulating waiting for people jumping overboard.

Yep - people and sharks being what they are! - It's the hormones - but does anybody listen to me? .

I remember my raging debates with the Brit engineers in the 70's - buy Swiss annuities they said - you can't depend on $ or pounds or govt.'s.

First Thatcher and then Regan got elected and someone published the famous 'stocks are dead' article.

So what's the going rate on Swiss annuities now?

heh heh heh - I still have a few gold and silver coins in the old safe deposit box - I think.

 

[Rich_by_the_Bay]

They are, aren't they? Isn't that what fee for service means?

Ha

Oh, Lord no. Fee for service means I get paid directly for what I do. Office visit, appendectomy, etc. all have associated fees, either based on time or complexity of the service.

Commission means that you come to see me for a headache. I can take a few minutes and make a 95% accurate diagnosis of tension headache, I get my office visit fee. Or, I can send you to the hospital for a $2500 MRI study. On commission I would get, say, 10% of that fee. Such billing is illegal by the way, for medicare and others. It is also considered unethical.

On commission, there is generally considered unethical incentive to order more and do more based on my own financial interests. Under fee for service, you know you are getting charged for the visit; it is a matter of whether my subsequent recommendations are done free of additional financial gain.

FWIW, I don't buy the contention that the presence of a big, fat incentive is not a factor in how sales people behave. Maybe more some than others, but if it didn't affect behavior, it would be built into the system.

 

[Art G]

Oh, Lord no. Fee for service means I get paid directly for what I do. Office visit, appendectomy, etc. all have associated fees, either based on time or complexity of the service.

Commission means that you come to see me for a headache. I can take a few minutes and make a 95% accurate diagnosis of tension headache, I get my office visit fee. Or, I can send you to the hospital for a $2500 MRI study. On commission I would get, say, 10% of that fee. Such billing is illegal by the way, for medicare and others. It is also considered unethical.

On commission, there is generally considered unethical incentive to order more and do more based on my own financial interests. Under fee for service, you know you are getting charged for the visit; it is a matter of whether my subsequent recommendations are done free of additional financial gain.

FWIW, I don't buy the contention that the presence of a big, fat incentive is not a factor in how sales people behave. Maybe more some than others, but if it didn't affect behavior, it would be built into the system.

After I got up from the floor, I decided I needed to respond here.
If I'm understanding you, you're saying that a doctor would never do unneeded processes because it would be unethical. However, in the next paragraph you don't believe sales people have the same ethics?
So, Doctors are above other "regular type" people I guess. I guess that M.D. license gives you a conscience you can't get otherwise.....I've got some bad news for you. I can tell you plenty of stories of med mal cases.
All I can say is "WOW!!"

 

[Art G]

Keep goings folks, the cut and thrust of this debate is riveting. Does 1 or 2 bad years in the market always bring a flood of annuity debates like this?

There is plenty of data showing that in down years money flows out of the market into cash. I wonder if down years also produces a big jump in annuity purchases. If that's the case then it drums up the image of a ship labeled "Stock Market" in heavy seas while sharks are circulating waiting for people jumping overboard.

I believe the whole point of the thread was that Scott Burns concluded that people needed a living benefit annuity. Not because of the down market, but because of the lack of pensions.

 

[Rich_by_the_Bay]

If I'm understanding you, you're saying that a doctor would never do unneeded processes because it would be unethical. However, in the next paragraph you don't believe sales people have the same ethics?
So, Doctors are above other "regular type" people I guess. I guess that M.D. license gives you a conscience you can't get otherwise.....I've got some bad news for you. I can tell you plenty of stories of med mal cases.
All I can say is "WOW!!"

Actually, what I said was:

I don't buy the contention that the presence of a big, fat incentive is not a factor in how sales people behave. Maybe more some than others, but if it didn't affect behavior, it would be built into the system.
​

Sorry, I can't find in my post the words that you are so vigorously reacting to.

 

[cute fuzzy bunny]

I'd like to see the ratio of doctors and annuity salesmen who took on their respective careers because they really, really wanted to help people.

Art, if you're randomly falling on the floor, perhaps you'd be best to seek out a doctor and quietly see if you can get your money back out of those annuities. I dont have any data on the life expectancy of guys that fall to the ground but I'm betting its not very good.

 

[Alan]

I believe the whole point of the thread was that Scott Burns concluded that people needed a living benefit annuity. Not because of the down market, but because of the lack of pensions.

I simply observed that in the 3 years I have been a member of this forum, I've never seen so many annuity threads. FWIW, I am very fortunate to have a non-COLA pension due in 18 months which should cover 75% of retirement expenses in year 1, so I don't need to consider another annuity.

But I do find the debates interesting.

 

[cute fuzzy bunny]

Simple math Alan. You can make a lot of money selling annuities. We have a lot of money.

 

[W2R]

Thread closed while you hotheads cool off, hopefully with a cool beverage and most judicious posts...