Think my f-i-l got taken by an annuity/insur company

[JohnDoe]

I have been managing my father-in-law's IRA for the last 5 years or so in a fidelity account. I've been doing pretty good with it as it's up over 4% YTD with a 30/70 split.

Several companies seem to be contacting him every month about annuities, hence my annuities questions a while back. I've been talking him out of all kinds of stuff. I did suggest a SPIA when rates rebound.

Today I got email alerts that 6 trades were executed. So when I call to see to what happened, I am told that the account has been liquidated and is on it's way to jackson.com.

Anyone ever heard of them? I can't wait to see what they talked him into. I would be shocked if they actually offered him something in his best interest.

 

[Texas Proud]

I would be calling him up ASAP and asking HIM what is up... and see if it can be reversed....

But might already be to late...

 

[toofrugalformycat]

At least in Oregon (likely other states too) you should have a short grace period in which one can back out of such an agreement, even if signed. Time may be of the essence if you want to help your f-i-l undo something. My sibling (who at the time sold annuities!) successfully got an elderly relative out of a bad annuity agreement in such a situation.
So if you are concerned, don't sit on your hands.
I know nothing of jackson.com, but that doesn't mean anything. I do know of many annuity salespeople preying on the elderly and the uninformed.
Best of luck.

 

[JohnDoe]

I think as this point there is not much I can do.

I am having the wife call him back (I don't have his cell number) and see if he wants me to look over whatever they sold him.

I might need the groups help to find the holes in it. I really only researched SPIA's a while back.

EDIT: He is bringing the paper work over next week. I guess he is not interested in bailing on it. Apparently, his girlfriend hooked him up with Jackson National Life insurance company.

 

[braumeister]

I've been doing pretty good with it as it's up over 4% YTD with a 30/70 split.

Have you been communicating about this regularly with your FIL?

Somehow I get the feeling that his perception of your management may not have been as favorable as your perception of it. Couple that with a good sales pitch and it would be easy to see why he might make a sudden decision to change things (however rash that decision might actually be).

 

[Rustward]

In Texas you can back out of the contract within seven days. Find out what the law is in your FIL's state and act quickly.

 

[JohnDoe]

Have you been communicating about this regularly with your FIL?

Somehow I get the feeling that his perception of your management may not have been as favorable as your perception of it. Couple that with a good sales pitch and it would be easy to see why he might make a sudden decision to change things (however rash that decision might actually be).

Probably not as much as I should. I see him every week in a social setting so we don't talk about it too much. He did complain last week about the market fluctuations and keeps asking me about an annuity. When he said market fluctuations, I assumed he meant the DOW because his account isn't very volatile.

However, I assumed we would have a serious discussion before he went and did something crazy like this.

 

[brewer12345]

Jackson National is an annuity specialist. Bet you anything you like that the sales pitch was long on sizzle, short on steak and that the product he is going into is pretty much incomprehensible to 99% of the population.

 

[FinanceDude]

Most if not all annuities have a 30 day free look period. It will be fairly easy to cancel once he gets the policy.......

However, he is your FIL, you might not have the same umph as if your wife questioned him about it.........

 

[arebelspy]

I echo the 30 day grace period. I've read contracts for several and have frequently seen that. Look into it. But if he's sold on it, it may be tough convincing him to change his mind, then he'd lose face in front of you and whoever sold it to him...

 

[haha]

I think as this point there is not much I can do.

I am having the wife call him back (I don't have his cell number) and see if he wants me to look over whatever they sold him.

I might need the groups help to find the holes in it. I really only researched SPIA's a while back.

EDIT: He is bringing the paper work over next week. I guess he is not interested in bailing on it. Apparently, his girlfriend hooked him up with Jackson National Life insurance company.

I would back away fast. He fired you, without even telling you that you were being fired.

AMF, FIL!

 

[justplainbll]

Good luck. I had to beat the annuity vultures off with a stick when renewing my mother's CDs.

 

[chinaco]

Fear and Greed makes people susceptible to the pitch. Running to an annuity out of fear... (IMO is a bad way to go about it).

IMO a SPIA can be effective (if applied properly). But putting together the overall financial plan and structure takes some analysis... just for the planning part. Assuming an acceptable company and product has been identified. There is a big question to be answered... how much is actually needed and how does it fit into the context of the overall plan? What is he hoping to accomplish? These products are tools that are (should be) used for very specific purposes!!!

The best advice is for him to educate himself and understand that there is a process that should be followed in identifying how much is needed (and why it is needed). Then do the company/product analysis. Assuming an acceptable deal is found.. figure out the options... then proceed. Don't let fear drive one to a poor knee-jerk decision.

Fees matter, rates matter, the deal matters (the contract, constraints, riders if used, etc). Consider advising him to analyze it further (do his homework) before he makes a permanent decision. You might ask him to see what else is available (other comparable products from other companies) and get comparative quotes from several highly rated companies. That will enable him to take some time to study it closer and compare products. Who knows... he might learn a little and make a more informed decision.

Be sure to check the companies ratings. He should check for complaints at this state insurance commission and do some homework about the company.

As others have stated, if he has already signed.. that free look period is the way out (but it has to be exercised pretty quickly).

 

[donheff]

I would back away fast. He fired you, without even telling you that you were being fired.

AMF, FIL!

+1 The last thing you should do is force your opinions on someone who knows better. Recipe for disaster. Bet the annuity has some sort of joint life provision with the girl friend.

 

[JohnDoe]

I would back away fast. He fired you, without even telling you that you were being fired.

AMF, FIL!

I kind of agree with this.

I don't think it's my place anymore to get involved. I helped get him out of high load, high expense MF's from Wachovia to Fidelity years ago and now he left Fidelity.

 

[JustCurious]

I kind of agree with this.

I don't think it's my place anymore to get involved. I helped get him out of high load, high expense MF's from a Wachovia to Fidelity years ago and now left Fidelity.

Very wise.

 

[plex]

You can check what's up, but that will be about it, since it is his money. Personally, I'd feel much less open to bailing him out later in life when he realizes how much he has screwed up. If he wants to make his own bed, let him sleep in it later.

 

[braumeister]

I''m sure you'll do the right thing, but here's one more thought.

You probably like the guy, or you wouldn't have managed his money for him.
So you might consider, after he shows you what he did, writing up your analysis of his move. Show the costs he incurred, the path he has locked himself into, and the down sides of the deal compared to what you were doing.

Of course, that would take a thorough analysis of the annuity, which might be more work than you want to do, especially now, but it's an idea.

 

[pb4uski]

JNL is actually a pretty decent company as annuity writers go, but I'm sure whatever the agent put him into was in the agent's best interest.

You may want to show him his IRA results for the past 1, 3 and 5 years and explain that while markets go up and down that a disciplined approach in a diversified portfolio will perform quite well and that he need not worry about the market going up and down.

If he is still in the free look period where he could cancel the annuity but still wants the annuity - well - you can't push a rope.

 

[FIRE'd@51]

However, he is your FIL, you might not have the same umph as if your wife questioned him about it.........

You haven't mentioned what your wife thinks about all of this.

 

[clifp]

You haven't mentioned what your wife thinks about all of this.

Arming the wife with the info might be a good approach. Ultimately, his purchasing of annuity impact both her future inheritance and potentially both of you if in the future if he needs expensive nursing care.

 

[sheehs1]

I think as this point there is not much I can do.

I am having the wife call him back (I don't have his cell number) and see if he wants me to look over whatever they sold him.

I might need the groups help to find the holes in it. I really only researched SPIA's a while back.

EDIT: He is bringing the paper work over next week. I guess he is not interested in bailing on it. Apparently, his girlfriend hooked him up with Jackson National Life insurance company.

Let's hope the girlfriend didn't hook herself up as the beneficiary.
Let us know how this turns out.

 

[chinaco]

While it may not be a good idea to push the issue... sharing information is a good idea (IMO). Most people want the decision to be simple.... so in their mind.. they make it simple. Often they have buyers remorse.

Go to the public library and get a book on the type of annuity that he is considering... at least it will describe the basic issues.... maybe one of those dummies books.

Another bit of advice.... remind him that he does not have to commit all of the funds at once! Just in case he is going all in!

 

[rescueme]

You can check what's up, but that will be about it, since it is his money. Personally, I'd feel much less open to bailing him out later in life when he realizes how much he has screwed up. If he wants to make his own bed, let him sleep in it later.

My thought exactly, on this situation.

Heck, I have enough worry on keeping my/DW's financial affairs in order. I don't need "extra work" to monitor other's (whom I'm not responsible for) plans.

 

[Rustward]

Is the OP even sure his FIL bought an annuity?

All this buzz is interesting, especially because it is based on so little information.