Sunday, January 30, 2005
I received a call from a gentleman the other day who was retiring from a city job. He had an annuity with the city and wanted to do a rollover. He purchased the book from our site and said the information helped him significantly. Now for the ridiculous.
He asked me to help determine whether the agents that were talking to him were the right fit. I told him I could not offer specific advice but I would help him to determine the answer to that question. My first question was asking what they had recommended to him. He went on to explain that they had both (the two agents he met with) offered him different variations of variable annuities.
Now here's the thing. I asked him whether or not the agents discussed risk tolerance and need for liquidity before talking about specific annuities. He said no. Then I asked him how he felt about losing money. His comment was, "I don't want to lose a penny from my investments...I came to this country broke and this is my hard earned money and I don't want to lose it"
AND THAT'S THE RIDICULOUS PART. How can an annuity agent suggest a variable annuity to someone who states he DOESN'T WANT TO LOSE A PENNY??? That was enough for me to just ask him the question back...And I did.
You got to know what you want going in. Don't rely on an agent to tell you what's right. Do your homework. And by doing that, you will know the difference between the annuity or investment choices. Furthermore, when an agent recommends something, check it against your list and see if it matches.
Ignorance is not bliss!!!