Do Fixed Annuities Have Fees?

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Hi there, Stan the Annuity Man,

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America's annuity agent, licensed in all

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50 states in Puerto Rico. The question

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of the day is, do do fixed annuities

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have fees? Do annuities have fees? Let's

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just ask the general question because I

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hear a lot of people, I never bought a

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new thing. They got they're just fee

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laden. They're laden with fees. Spell

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laden, please. I mean, I hear that I'm

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like, uh, I'm getting dumber just

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listening to that. Seriously, some do,

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some don't. Um, but we're going to go

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over all of that. I'm going to explain

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it in a nice fashion. And I just got out

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all the anger. Just cathartic right

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there after this.

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So, do fixed annuities have fees? Let's

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just go through them one at a time. What

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fixed annuities are? The primary ones.

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Multi-year guarantee annuities, the

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annuity industry version of a CD. The

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answer is no. There are no fees. Fixed

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index annuities. um another CD product.

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They do not have any fees unless you

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attach an income writer. If you attach

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an income writer, then there are fees

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for the life of the policy. Single

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premium immediate annuities, the

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granddaddy of all annuities developed in

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the Roman times, a lifetime income

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product, no fees. Deferred income

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annuities, in essence, an single premium

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immediate annuity that you defer, no

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fees. qualified longevity annuity

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contracts, QLAC's developed in 2014 by

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the Treasury Department of IRS for use

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in your traditional IRA type accounts.

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No fees. Okay. So, of all of the main

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fixed annuity types, only one has a fee

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and only if you attach a a writer,

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typically an income writer for lifetime

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income benefit to that product. And that

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product is a fixed index annuity. Let's

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dig in a little bit further, though.

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Fees to you might mean commissions. All

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right, so we talked about product fees.

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Commissions. All commissions with all

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annuity types, including fixed

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annuities, are built into the product.

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It's a net transaction to you. Just

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think of it like this. The easier to

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understand the product, if you can

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explain it to a 9-year-old, which you

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should be able to never never buy an

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annuity you can't explain to nine year

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olds. No offense to the nine-year-olds,

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the commission is lower. The built-in

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commission is lower. The more complex

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the product, like an indexed annuity,

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the higher the commission.

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It's really that simple. So, QAX, QAX,

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DAS, and SPAS are kind of the same

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structure. Very simple. Pension

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products, no moving parts, no market

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attachments. They're non-correlated.

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They're just pension products. Easy to

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understand. I could explain it to a

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group of second graders and they'd be

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like, "Yeah, got it." I mean, low low

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commissions on those multi-year

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guarantee annuity. CDs, they're a CD.

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They work like a CD. I also call them an

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annuity bond because you're getting a

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guaranteed interest rate for a specific

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period of time and the specific annuity

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company is backing up that interest

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rate. Very, very simple. No, nothing

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more complicated than that. Very low

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commissions. It's when you do the index

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annuities with the caps and the spreads

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and the participation rates,

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those commissions are are can be very

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very high. Not saying the bad products,

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we use them only for the delivery system

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of the income writer guarantee. We do

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not look at the accumulation value

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because MAS beat index annuities for

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accumulation regardless of what anyone

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tells you. Now, a couple products we do

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not sell. Used to sell them in the past

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with my days at Morgan Morgan Stanley,

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Dean Wood, Pain Weber, and UBS. Uh

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variable annuities, we do not sell. We

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don't sell anything that doesn't have a

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contractual guarantee. Same thing goes

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for registered index linked annuities,

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no contractual guarantee. All of that's

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hypothetical and theoretical. We do not

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do that. You own an annuity for what it

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will do, not what it might do. And we

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ask two questions to even see if you

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need an annuity. What do you want the

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money to contractually do? And when do

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you want those contractual guarantees to

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start? Then we use the acronym pill,

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principal protection, income for life,

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legacy, long-term care to see if you

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need to contractually solve for one of

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those goals. I am the only person out

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here that says do not buy an annuity for

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for growth or non-G guaranteed returns,

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potential returns. I am correct. And the

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only reason no one follows me is they

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don't have the guts to say it. They also

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don't do the volume that I do on the

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fixed side. I've just burnt the boat. I

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burnt the boat on the truth and said,

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"Do not buy growth. If you want growth,

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buy the markets. Don't buy an annuity."

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I know everyone's trying to pitch you

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this annuity that can do protect the

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principal or buffer the principal or

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shield the principal. You get all these

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upside too. Come on now. Come on. Go buy

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the markets if you want real growth. If

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you want contractual guarantees, buy

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annuities. But when it comes to fees,

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okay, we've covered the fees of the

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products. Um, and by the way, variable

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annuity fees high. Um, average, last

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time I checked, was 3% annually for the

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life of the policy. you know, all of

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them combined. Some are two, some are

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four. That's really high. And then Ryas,

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they have they have their own fees as

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well. We won't go into that, but there

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are fees within that. Now, let's go one

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more step with fees. This one's going to

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maybe pop the uh top of my cap off here.

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If anyone any advisor is trying to

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charge you a fee to manage a fixed

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annuity,

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to me, that's financial malpractice.

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That's That's insane. I'm going to man

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I'm going to manage this contractual

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guarantee for you, sir. What are you

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managing, Fred? It's a contractual

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guarantee. There's It is what it is. I

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read the contract. It's going to do this

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because it's a contract and you're going

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to charge me a fee. Duh. Come on. You're

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smarter than that. So, if anyone's

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trying to charge you a a rat fee on a on

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an immediate annuity, QAC or deferred

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income annuity, they're either that

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advisor is either stupid or a sociopath.

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If they're trying to to charge you a fee

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on a MA, which is a CD product, look

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them in the eye and say, "Would you

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charge me a fee on CDs?" And then if

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they char, this is my favorite, there

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are people out there that charge an

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annual fee to manage an indexed annuity,

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a fixed index annuity that only credits

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the gains one day per year. The other

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364, you're a annuity unit.

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Look it up. Okay? There's no

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justification. Bring the letters. Bring

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them industry stantheanuityman.com.

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You know I'm right. you you should never

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allow anyone to wrap fee an indexed

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annuity. That is insane. It's financial

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malpractice in my opinion. Same same

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thing with variable annuities. Variable

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annuities you someone should not be

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charging you a fee to manage it. There

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are no load variable annuities out there

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that you can manage yourself and

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circumvent the fee. As for Ryas, same

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thing. If you want growth boat, go buy

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growth. Don't buy annuities for growth,

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please. Yes, I'm the only one out here.

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And you got to say, wait a minute. Why

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would Stan, top agent in the country,

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licensed in all 50 states? Why would he

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be the only one saying that? It's not

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because I'm just this pure contrarian

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with that has a mohawk. I don't have a

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mohawk. The point is it's true. I still

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can't believe the sales pitches I hear

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about growth with annuities. Coming from

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Wall Street where real growth happened,

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Morgan Stanley, UBS, all those people.

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Then I come over here to become Stan the

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Annuity Man. Of course, here I am and

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there's people out here who are going

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Morgan upside with no downside and an

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upfront bonus. And I'm thinking it's a

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goof. Like we're on Candy Camera.

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Remember that you old people out there?

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Like it's a joke. It's not a joke.

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That's that's how they they're selling

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these things. And I've yet to really

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find anyone very happy with the

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accumulation story. I'm sure there's one

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out of a thousand somewhere. I know who

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is happy, the agent selling the dream.

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Understand this. When you buy the dream,

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you're going to own the contractual

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reality. So, getting back to the

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original question, fees on fixed

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annuities, none, unless you attach a

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rider to an index annuity. And if you do

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that, you're probably talking to us

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because that's the only way that we use

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indexed annuities as a delivery system

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for the riders. The other fees,

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commissions, they're all built into the

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product. The more complex the product,

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the longer the surrender charge the

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product, the higher the commissions.

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Just remember that. The more simple proc

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customer the product is, the lower the

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commissions. And then the last thing

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about fees, don't let anyone charge you

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a wrap fee to manage an annuity. That is

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highway robbery and in my opinion,

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financial malpractice. And if there's a

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fiduciary out there saying that it's the

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right thing to do, they need to take the

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plaque off the wall. All right. One last

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thing. I did a uh a video on how

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annuities can help your family. I know

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you're saying, "What? What?" No, not my

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family. Your family. Okay, your family

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and I'm giving specific examples that I

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use with my daughters, my wife, um

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things that you could use with your

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grandchildren, other children, etc. It's

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worth a watch. It really is. Go to my

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site, theanuityman.com. You can download

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my owner's manuals for free. You can get

9:05
me for free. You can book a call, free

9:08
consultation, or you can email me,

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stantheanuityman.com.

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Hey, thanks for joining me doing one of

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these every single day until I heel over

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and die, which could happen.