Buyer Beware! Part III

| November 05, 2018
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As a follow up to the first and second piece I wrote on Buyer Beware, I wanted to continue to draw attention to certain “offers” that are being sent to the owners of annuity products that we had used over a span of years from 2001 to 2015. As we had recognized during this time period, the products being offered by a variety of insurance carriers were compelling and, in most cases, highly advantageous to the client. The ability to invest with participation in the markets through the fund choices offered by each product while shifting the risk of the market to the issuers of these products was both highly compelling and unique.  Certainly the use of riders such as a Guaranteed Minimum Income, Withdrawal or Death Benefits offered unique certain advantages to investors that are very difficult to match these days. 

As I indicated, these are legal contracts that must be obligated by the issuing party and therefore cannot be modified beyond contract stipulations by the insurance carriers.  “Offers” are being made by the issuers of these coveted products. As I suggested many of these offers are NOT in the best interest for the majority of clients.

To make matters worse, the fact many of these carriers will pay a commission to a broker whose clients accept these offers is an inherent conflict of interest in providing a fiduciary duty and standard of care.  Previously, an article came out in Investment News which echoed my concern and also considers who may best benefit from these “offers.” Please click on the following link to see the referenced article: Insurers still grappling with costly variable-annuity promises

Two days ago, another article appeared which casts a shadow on an offer now being made by Ohio National.  I agree with the articles critique of the “offer” and that only a minority of clients may benefit by agreeing to accept the "enhancement" amount to surrender their contracts. Contrast this with the fact that the vast majority of advisors would benefit by selling another commissionable product with the proceeds from a contract surrender.  The buyout will take the form of an “enhancement amount”- essentially, a cash incentive to encourage contract holders to either surrender their contract or exchange it for a different product with another carrier.  Please click on the following link to see the new article in question. 

In regard to RZ Wealth and how we do business as a Registered Investment Advisor, Certified Financial Planner (CFP®) and Accredited Investment Fiduciary (AIF®), it is both our privilege and requirement to always putting our clients’ interests first.  In addition, we no longer offer securities products on a commissionable basis, we are paid to manage assets not to sell you a specific security product. 

Thank you again for your business and your loyalty and best wishes to you for a happy, healthy and fulfilling future. 


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Our team at RZ Wealth is committed to helping clients prioritize and understand their needs to best guide them with insightful wealth management including financial, education, retirement and estate planning.

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