Tuesday, May 8, 2012

"Americo EIA"? BEWARE! Indexed Annuities Are A Safety Trap

 If American Senior Benefits knocks on your door and wants to sell you "financial security", grab your wallet.  

Here's some important information about Equity Indexed Annuities (or Indexed Annuities) that you won't hear from Shannon Nelson, Jonathan Young, Kelly Dachlter...and the rest of the crew being sued for fraud!

 Left: Jonathan Young
We found this cryptic tweet from Jonathan Young, American Senior Benefits' Senior Partner. Young's bio includes this boast: "Mr. Young qualified as a President’s Honor Circle member, ranking him in the top 1 percent of insurance agents in the nation." Bankers Life, the company presently suing Young for fraud and other charges, does indeed have a President's Honor Circle, but we're certain that the only circle Young's a part of is the ninth and final circle of Hell.

Pay close attention to the "Americo EIA" in the following tweet:

Americo EIA for 3162 comm, 55k prem shark and señor ref weXsell
The word equity previously tied to indexed annuities has been removed to help prevent the assumption of stock market vesting being present in these products.)
Indexed annuities are regulated by 51 different state insurance departments, many of which don't try as hard as they could to screen out crooks. While everyone who applies for a securities license must undergo an FBI background check with fingerprinting, only 17 states ran such checks for would-be agents as of March 2009, according to a Government Accountability Office report. (The main reason, says the GAO: lobbying. The insurance industry is the nation's sixth-largest political giver). 
Even though Equity Indexed Annuities are technically an insurance product, they are being marketed as an investment. But all an agent has to do to be able to sell them is sit through a five-day course and pass a simple test on health and life insurance. 
Oh, and fog up a mirror!
Unfortunately, most of these so-called "financial advisors" are compensated solely by the commission they receive from selling financial products. The more they sell, the more they make. If they don’t sell, they don’t eat. This alone creates a tremendous conflict of interest between them and the client. 
Consumers understand that conflict of interest in other purchases they make. You wouldn’t expect a car salesperson to recommend a vehicle that isn’t offered by their dealership. So consumers view the salesperson’s recommendation with a healthy dose of skepticism.

That same skepticism should be applied to the purchase of financial products as well. Those who purchase mutual funds or stocks are fully aware of the commission they’re paying. However, few Equity Indexed Annuity consumers are aware of the commission their advisors are making off of their purchases.

This is why  Equity Indexed Annuities may be the "Next Big Investment Scandal". The hidden conflict of interest between an advisor and client is greatest when an Equity Indexed Annuity is being recommended. There are huge incentives designed to motivate an advisor to recommend an Equity Indexed Annuity over any other financial investment they offer–incentives that aren’t disclosed to the client.

An advisor can make more commission from selling an Equity Indexed Annuity than they can from any other investment they offer. A lot more. In some cases, the amount of commission is three to four times greater than on an investment like a mutual fund.

1 comment:

  1. To this day... I still meet with people who bring me their Bankers Life index-based annuity contracts and have absolutely no idea what it is. Those older Bankers Life EIA's were pretty simple in comparison to those offered by Shannon Nelson and the others over at American Senior Benefits in Traverse City. I will admit that an EIA can have its place but never in the manner that Shannon Nelson's crew sells them. they are overly complex insurance annuity contracts to begin with and why on earth would anyone want to deal with such huge surrender charges? The bigger point is that the selling style (errr, I mean it isn't so much a selling style as it is a slickly persuasive David Blain trick) of those insurance agents guided by the egomaniac Shannon Nelson, formerly of Bankers Life and Casualty, now with American Senior Benefits, actually HURT people. Seek out ex-Bankers agents and current felons (really) Margaret Zimmerman, Jonathon Brzezinski, Gary Singer or any of the other too-numerous to list agents who used to work under Shannnon Nelson and crew. These aforementioned felons and other current agents like Jonathon Young sure can sell the pants off folks. Too bad that the folks being "sold" maight just be your parents or grandparents.