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Top Articles - Annuities - Oversight Needed On Equity-Indexed Annuities
The sale of Equity-Indexed Annuities has increased 45% the first 6 months of this year. I’m concerned that the vast majority of those sales are unsuitable for the investors buying them. Oversight by the Securities and Exchange Commission (SEC) and the National
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
Association of Securities Dealers (NASD) is desperately needed to protect retirees from being taken to the cleaners by agents hungry for the large commission. Read on to find out how this oversight will benefit you.
For almost 2 years now, I’ve been warning pe
For almost 2 years now, I’ve been warning pe
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ple against buying Equity-Indexed Annuities. Hopefully, my articles have caused agents all across the country to lose sales. That’s why I am regularly attacked and berated by agents. When I started, I was a ‘lone voice in the wilderness’. Now, the SEC and the N
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
SD are interested in the situation. The national media are covering the story more regularly. The chorus of voices calling for change is growing. For example, The Wall Street Journal had an article on October 15th that echoed my complaints.
Greater regulation
Greater regulation
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
nd oversight of these products is needed because, even though they are technically an insurance product, they are being sold as an investment. Anyone looking at their sales literature can plainly see that. With promises of market gains and the ‘guarantee’ that
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ou won’t suffer any losses, this investment is promoted as the answer to all your concerns. Investors are buying it as an investment, not insurance. Therefore, they should be regulated as investments and not as insurance.
Investors will benefit if Equity-Index
Investors will benefit if Equity-Index
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
d Annuities are classified as an investment. It will reduce, but not eliminate, the potential for abuse. Here’s why.
First, being classified as an investment will result in better disclosure of the risks involved with this product. Equity-Indexed Annuities are
First, being classified as an investment will result in better disclosure of the risks involved with this product. Equity-Indexed Annuities are
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
complex products. Many of the agents selling them don’t even understand their intricacies. Consumers are not adequately warned of the dangers they face in these products. Most think they can’t lose money in this investment and that’s simply not true.
For insta
For insta
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
ce, many of those purchasing one of the most popular Equity-Indexed Annuities fail to realize that if they pull their money out of the contract when the contract matures that they won’t receive the index-related returns they thought they would. In fact, those w
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
nting a lump sum from this specific product after 10 years would be GUARANTEED of making a total return of about 1.5% for the entire 10 year period. Few would ever buy this investment if they clearly understood that.
Second, those selling investments are requi
Second, those selling investments are requi
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
ed to make sure that the investment they sell is suitable for the person they’re selling it to. When a commission-based investment is sold, it is reviewed by compliance officers to verify suitability. Compliance officers closely scrutinize investment sales beca
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
use it’s their job to protect their firm from lawsuits and regulatory fines. And they know that their firms may be audited by the SEC.
No compliance officer would approve the sale of an Equity-Indexed Annuity for 100% of a person’s investable assets—but I see
No compliance officer would approve the sale of an Equity-Indexed Annuity for 100% of a person’s investable assets—but I see
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
hose recommendations all the time. No compliance officer would approve of a transaction where the investor pays a large penalty on one annuity contract to transfer the money into an Equity-Indexed Annuity. This has become such a problem, though, that the NASD h
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
s issued warnings about it.
Third, the high commissions equity-indexed annuities offer create a huge conflict of interest for the advisor. If you were an advisor and had the choice of making 2% or 15% on an account, which would you choose? Is it any wonder equ
Third, the high commissions equity-indexed annuities offer create a huge conflict of interest for the advisor. If you were an advisor and had the choice of making 2% or 15% on an account, which would you choose? Is it any wonder equ
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ty-indexed annuities have become so popular?
The Wall Street Journal article arrives at the same conclusion that I have--older investors should avoid equity-indexed annuities. And yet, who are these agents going after the most? Older investors, of course, beca
The Wall Street Journal article arrives at the same conclusion that I have--older investors should avoid equity-indexed annuities. And yet, who are these agents going after the most? Older investors, of course, beca
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
se they’re the ones with the most assets.
Don’t be surprised if in the not-too-distant future, new regulations emerge to reign in the wild-west world of equity-indexed annuities. Until that day arrives, don’t fall for the equity-indexed annuity sales-pitch. Th
Don’t be surprised if in the not-too-distant future, new regulations emerge to reign in the wild-west world of equity-indexed annuities. Until that day arrives, don’t fall for the equity-indexed annuity sales-pitch. Th
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
re are much better ways to earn a decent market return with low risk, and you don’t have to give up control of your money to do it.
Have a financial question? Send me an email and I’ll personally respond, free of charge. Go to www.guardingyourwealth.com and cl
Have a financial question? Send me an email and I’ll personally respond, free of charge. Go to www.guardingyourwealth.com and cl
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
ck on ‘Ask Jeff’.
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As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
visor may be one of the most
costly mistakes you'll ever make -- and what the profitable alternatives
are.
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elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
tp://www.guardingyourwealth.com/SpecialReports/FinancialSelfDefense.htm
In addition to being a nationally syndicated columnist and Certified Financial Planning Practitioner, Mr. Voudrie provides personal, private money management services to clients nationwide
In addition to being a nationally syndicated columnist and Certified Financial Planning Practitioner, Mr. Voudrie provides personal, private money management services to clients nationwide
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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