Where do you find independent annuity advice that you can trust? Just mention the topic of annuities, and you certainly won’t have any shortage of opinions coming out of the woodshed.
Many financial advisors and pundits are in the pro-annuity camp due to the strong contractual guarantees that only annuities give. On the other hand, annuity naysayers point to a few things, such as sometimes overly aggressive sales pitches, to make their case of annuity pessimism.
So, how can you find independent annuity advice that is somewhere in the middle: objective, honest, and focused on helping you become educated and make a well-informed decision? A good source will give you, among other things:
- Clear and publicly available information on annuities without any obligation on your part to access it
- The fundamentals of annuities and their role as the foundation of an overall retirement plan
- Straightforward questions to ask about annuities you may be exploring
- Upfront points on what annuities can do and what they can’t
- Clear outlines of the different annuity pros and cons
- Opinions on who is a good candidate for an annuity (millions of people, but not everyone)
- Clearly spelled-out details of the strong point of annuities – protections stemming from their guarantees – and what they can do for you
In other words, a credible source of annuity information will be upfront and clear about what annuity contracts can achieve – and also not accomplish – for you.
Why Do Annuities Sometimes Have Negative Press?
Some financial media articles hit annuities and those firms offering them as being a zero-sum game.
In fact, many of these articles effectively dismiss these one-of-a-kind contractual guarantees as something that shouldn’t be taken seriously. From misnomers such as “all annuities have high fees” to cases of some financial professionals not doing the right thing by their clients, some media figures would have you believe that these guaranteed contracts can bring little value to your retirement.
But here is where they fall short – and actually do a disservice to people who might otherwise benefit from having guarantees in their retirement plans.
Benefits That You Won’t Find Elsewhere, Guaranteed!
Annuities are contracts that put what would otherwise be investment risk on your part and saddle it on the insurance company’s shoulders. You are effectively being relieved of the risk that would come otherwise with your guaranteed income stream or protected money.
The insurer is also legally on the hook to maintain those contractual obligations it has promised to you. No other financial institution can ensure you have a guaranteed income and these other guaranteed benefits in the unique way that a life insurance company can!
What About That Annuity Wild West?
Yes, of course there are some bad actors in the annuity and retirement space. In their cases, the bad rap is well-deserved. And even one case of a financial professional not doing the right thing for their client is too much.
But you will also find bad apples in every industry and profession. On the flip-side, that doesn’t necessarily mean that industry is bad as a whole. Such is also the case here.
Here at SafeMoney.com, for example, we have helped tens of thousands of Americans find the retirement and annuity information that they needed – and assisted countless households with their unique retirement income planning needs.
You can find some testimonials from satisfied retirees here.
You Already Own One Guarantee. Why Not Have More?
All of that said, at the end of the day annuities are just one instrument among many in the financial toolkit. What separates them from other financial vehicles is their exclusive guarantees.
As record millions of people retire, the value of having guarantees for their retirement goals will continue to grow.
You may realize it or not, but you already have an annuity that is, in fact, a major income source for millions of Americans. It’s Social Security.
Just like with your Social Security benefits, income payouts from annuities are based on your life expectancy and the timing of when you start your income.
Of course, guaranteed income isn’t the only thing that annuities can contractually do for you. You can get guaranteed principal protection. Fixed-type annuities come with a guaranteed interest rate if you want predictable growth.
Your heirs can receive a guaranteed death benefit, and annuities can also give you contractual guarantees for long-term care, physical impairment, or other qualifying health situations where you might need the money.
For lifelong income, annuities lead the pack for providing you with a truly guaranteed lifetime income that you will receive as long as you live. No other financial vehicle on the globe can do this apart from your Social Security benefits.
The Difference Between Captive and Independent Advice
Okay, so you are still thinking about an annuity for your retirement. What now?
One crucial difference to understand is the difference between captive and independent advice. What does that mean?
Some financial professionals are captive agents with only one company, which means that they can only sell that company’s products and services.
On the other hand, independent agents work as brokers in the industry, and they are appointed with many different companies. This means that they can offer you the products from any company that best fit your needs in any given situation.
What About Advisors Who Don’t Sell Annuities?
Here is another kicker. Advisors who have fee models and don’t sell annuities aren’t always the ‘best’ source for all of the information on annuities, either.
Why? The financial market has thousands of annuity contract products available. For one, advisors with business models that don’t sell annuities don’t do active monitoring of the industry.
What might that entail? In a nutshell, monitoring all of the annuity product updates, annuity product changes, and latest industry developments in general.
What Factors Can Change in Annuity Contracts?
Some annuity products have been known to change even in monthly windows. To give an idea, here are a few things that can change within newly issued annuity contracts from prior contracts:
- Interest rates
- Guaranteed income payouts
- Annuity payout factors
- Contractual changes in guarantees
- Situations where the guarantees don’t apply
These are just a few of the ways in which one annuity contract can differ from another.
Comparing Apples and Oranges
Ask any financial advisor who puts together portfolios for clients, and they will tell you about how much time they devote to researching, monitoring, and evaluating funds into which they might put client money.
There are thousands of mutual funds and ETFs alone. That is a lot of options. Why wouldn’t this same principle of due diligence not apply to the many annuity products that are available, as well?
Competent, honest financial professionals keep up with current trends and new ideas that can help their clients achieve their financial goals with a minimum of risk and maximum growth over time.
Whom Should You Turn to for Annuity Guidance?
Of course, many honest and competent advisors still work as captive agents. They can help you in some instances, because the solutions that they offer may happen to be the ones that meet your objectives.
But independent advisors can always give you a much broader selection of alternatives to choose from. Most of them are fully committed to helping you achieve your financial goals without worrying about which products will bring the highest payday.
Here is another point to consider. In their unique broker model, independent agents and advisors go to bat for their clients “against” the insurance companies, so to speak. Meanwhile, captive agents are only working for their lone parent company.
You may want to keep this distinction in mind as you search for the right financial professional to guide you.
How Can We Help You?
Here at SafeMoney.com, we are committed to providing our clients with top-notch, unbiased advice on annuities and how they work. And we are also committed to doing this in a way that a novice can easily understand.
Brent Meyer, president and co-founder of SafeMoney.com, has been an outspoken advocate for both independent financial professionals and the consumers who work with them. Brent himself has almost 20 years of experience in the financial industry.
His background includes being a marketing director for a business unit of a well-known global insurance company, the owner of an independent wealth brokerage, and a serial entrepreneur.
SafeMoney.com has appeared on numerous media and online outlets including CNBC, U.S. News Money, MarketWatch, Fox Business, Reuters, CNN, ProtectWealth.com, and more.
Feel free to contact us if you would like to explore how our network of independent financial professionals can assist you.
Sorting Through Your Options for Annuity Guidance
You want objective, independent annuity information from someone who not only understands annuity products and their features, but also their limitations.
Your financial professional should know exactly how an annuity can best solve various problems, including:
- Lifetime income for as long as someone lives
- Supplemental income to Social Security and other guaranteed income sources
- Maximizing income in retirement from a retirement portfolio
- Paying for costly health expenses
- Protecting must-have savings from market drops
- Creating tax-diverse or tax-efficient income streams in retirement
- Giving loved ones a guaranteed enhanced death benefit
- Creating legacy income streams for dependents or heirs post-annuity owner’s death
- Having buffer income for emergencies or long-term care impairment
- Keeping can’t-afford-to-lose savings locked away for later life goals
The Right Annuity Agent Looks at Your Complete Picture
All of these problems have their own timeline, along with tax, legal, and financial implications that require precise knowledge and execution. Your financial professional should understand these issues, and how they can arise before they actually occur in your situation.
They should also know how to implement these solutions in your plan so that they are properly executed at your time of need or sooner. To put it concisely, a high-quality insurance or financial professional offering annuity solutions isn’t just in the business of making a quick sale.
They will stick around to help you work out all of the details and not disappear after the sale is made.
Who Is Offering You Objective Annuity Advice?
So how do you know your financial professional, or an online source you are looking at, is giving you dependable, independent annuity advice?
They spend time listening to you, learning about your situation, your goals, and your concerns. They also actively make an effort to learn about your complete financial picture if you both mutually decide working together makes sense.
This is vitally important because assets that you have elsewhere can impact the solutions that you receive from your annuity expert.
For example, if you have substantial money in IRAs that is invested aggressively, then you can be more conservative with the money that you have with your SafeMoney.com financial professional.
How Else Can You Tell the Difference?
Another trait of a good annuity specialist is they encourage you to ask questions and make you feel at ease before you commit to any contract-buying decision.
They always take the time to clearly explain the product features, any applicable fees and expenses, and the limitations of the product that they are selling. For example, annuities offer less liquidity than other more liquid instruments do.
Good advisors always talk about the pros and cons of implementing the solution by going over them with you after you have discussed your goals and situation with them.
The Bottom-Line to Great Annuity Advice
Annuities can do great things for many people. But they do have some limits, just as all financial products do. The key is finding out where they can solve problems for your unique situation.
The disclosure of those shortcomings also stands as proof that you are working with a competent, honest advisor or agent.
Are you still looking for the right financial professional to help you? No sweat. Many experienced independent financial professionals are available at SafeMoney.com to be of assistance to you.
Get started by using our “Find a Financial Professional” section to connect with someone directly. You can request an initial appointment to discuss your circumstances. Should you need a personal referral, call us at 877.476.9723.