Mr. FIA-X: Don't Fall For These Indexed Annuity Sales Tactics

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[Music]

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welcome to fun with annuities where

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every single week i welcome a celebrity

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guest expert that can help you maximize

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chapter two of your life listen learn

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laugh and love every minute of the most

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unique financial podcast on the planet

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let's get to it

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[Music]

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welcome to fun with annuities i'm your

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host stan the annuity man america's

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annuity agent license in all 50 states

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and guess what i am now recording this

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one

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from the mothership in las vegas nevada

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where our

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home base is where all the people are

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sitting and i've told them all to be

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quiet no actually we have a studio but

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i have

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a repeat guess arguably

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our most favorite guest and most

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requested guest because he tells it

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like it is when it comes about indexed

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annuities and if you've gone to the bad

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chicken dinner seminars and if if you're

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breathing

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someone's trying to jam one down your

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throat i don't care what you want need

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or tell them

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um it's horrific without further ado

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the infamous and anonymous

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um he calls himself good looking but

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fortunately he's wearing a mask

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mr

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f

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i a

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x how are you x uh yo doing all right

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how are you

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man you know um

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it's glamorous being me as you know and

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you said that many a time you know

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longing and yearning to be

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kind of like me and it's impossible

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but you know and this world that we're

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in mr f-i-a-x

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um

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there's a lot of crazy ads one of the

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ads and i shot you an email the other

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day and i

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i thought i was gonna have to call

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counseling or 9-1-1 these ads that were

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seen 11 return 13 return 15 return 7

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return 9 return returns that a hedge

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fund

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that if you watch the show billions

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that

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that

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what's his name axe x axel whatever

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he bobby axelrod would love if you

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haven't watched that go watch that show

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give us the would you please unload on

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this this is driving me nuts mr x do you

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want the technical version i want it all

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it's a bunch of crap there's your

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technical version it's fictitious it's

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live that's that that's that advanced

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that's that advanced degrees

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it's puffery it's made up it's you pick

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the term do you remember the old joe

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isuzu commercials where he would say how

2:38
his car could climb up the empire state

2:40
building it's it's like that

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that's the best way i can describe it

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i want to give your listeners

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the path because i think this is very

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important yes okay

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what these guys do is they will publish

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some crazy rate

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as you may call it clickbait clickbait

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it's what it is it's clickbait

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how they get the number is they just

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pull some random number off of some

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piece of advertisement that was laid out

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but i will tell you this right now

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it's never done that in real life

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real terms

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and if it has ever done that return in

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real life or real terms it was once

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it's not consistent it's not

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replicatable correct

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so but you click on it then what happens

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is this company that puts that out there

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will sell that click

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to uh

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boy do i use this term loosely a

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financial professional whoa stop now how

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much do they charge this financial

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professional to buy the name of this

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person

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it can be anywhere from free

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to about 300

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and the reason why it might be free is

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that person might do a lot of business

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with that company so

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they give him

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the opportunities

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okay or leads or whatever you want to

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call it your phone number your email

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your information for them

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basically

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now

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it costs a lot of money to generate

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these leads typically because you know

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stan you know how the internet is

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expensive you know if you have to use

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adwords or this or that or do whatever i

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dominated i actually suck all the oxygen

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the good oxygen out of the annuity room

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it literally can cost a lot of money so

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they sell these leads maybe two three

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four times

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so there's four maniacs

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trying to get their money out of that

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lead and that might be light

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so

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and i could tell this for you people

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have you've ever

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filled one of those sheets out and you

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get your free report

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oh it's not free it's going to take a

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lot of your time because you're going to

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get called from all these people

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and your time is your most valuable

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commodity correct

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bar none

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and they are going to call you and call

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you and call you incessantly

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until you stop answering you get so

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turned off and you want to know what an

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annuity might be the exact thing you

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need but how they approached you

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but it might be a different annuity type

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i always tell people i mean there's

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there's many types of annuities you can

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go to my side of the annuity and get the

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books there's not just index annuities

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the reason that those are pushed so

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incessantly they are the one of if not

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the highest commission's

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paying product out there even though

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commissions are built in this is the

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part of the the podcast we're going to

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do a disclaimer we have nothing against

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index annuities they were a great

5:29
product when designed in 1995 to get you

5:32
a little bit better hopefully better

5:34
returns than migrates or typical cd

5:37
rates they are not market products they

5:39
are not securities you are not going to

5:42
get market returns if you're the root at

5:43
the table if you're the sucker

5:45
at the table that truly believes that

5:48
you're going to get 8 and 9 and 12 and

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11 then you get what you deserve in my

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opinion what we're doing on this podcast

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is warning people now i also sent you an

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article this morning i know you're

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you're so uh busy x that i don't know if

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you saw it and let's not mention the

6:04
company let's not mention the company i

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don't want to mention the company but

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there's a company right now that's

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getting a class action lawsuit because

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they're using

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robo dialers and overseas dialers to

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call people to try to create leads to

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sell index and news and this is going to

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be the mother of all class action

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lawsuits don't you agree oh it's going

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to be a big deal they're because they're

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breaking the law because we have the the

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the phone laws that they do not call it

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yes

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yeah the caller lists and logs and stuff

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like that i guess one guy in that

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article got called 94 times in one day

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or something like that and it was like

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isn't this like and i don't know this

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don't quote me on this but isn't it like

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a ten thousand dollar

6:43
fine per yeah i thought it's some

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ridiculous it's some ridiculous number

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so it could be a huge i mean

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it's a huge number and there's i think

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there's i'm not mistaken aren't there

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like multi-level marketing organizations

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that do

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indexed annuity sales this is all weird

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to me

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yeah there's there's definitely some

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mlms that that offer financial services

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not just but financial services yeah

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yeah i don't wanna yeah i don't wanna

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pigeonhole and i'm not putting down

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multi-level marketing i'm you know all

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you amway millionaires i love you but um

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the point is it's a weird way

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for people to make decisions on their

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retirement when it's a multi-level

7:23
marketing people that are selling it am

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i missing something ex i think there's a

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few things number one is look i'm not

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against anyone trying to earn a living

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and no then pay for their family and

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help them but i think we also have a

7:35
really big responsibility because we

7:37
need to do that for your family too and

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yeah i think when you sit down and

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you're going through this

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listen you know these guys are spending

7:47
money so they're calling you a jillion

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times

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and you go search for our newest you see

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all these crazy numbers that are

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attached to you know 11.04 10.99 6.7

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whatever the number is

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it's not that number i'm just telling

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you it's not that number it'll never be

8:05
that nice but how do they get away with

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what everyone asked me how okay stan the

8:10
annuity man america's annuity agent

8:11
licenses all 50 states and they do say

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all that before they ask the question

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and they say well if if what you're

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telling me

8:18
is true of course it is that's not going

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to happen then how can they get away

8:22
with it what is the answer x

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well they get away with the the lead

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stuff by

8:28
the people are basically quote opting in

8:31
for lack of a better term they filled

8:32
out the sheets how did they put the 11

8:35
number on there why isn't the industry

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clanking down on that clanking well i

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think that's part of the thing i think

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you're going to start seeing some of

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this is back casting in these formulas

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because interest rates like we've talked

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about i said when interest rates go up

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look out here comes the wild west and

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what happened you're right the wild west

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i told you after the first of the year

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when uh

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the uh after the first of the year

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you'll see all these wild crazy bonuses

8:59
to attract it because they've got a

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whole new pot of money to do what

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happened

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and remember upfront bonus is candy for

9:06
the stupid if you think if you think

9:10
that you're getting a deal and

9:12
especially with market losses the sales

9:13
pitch goes like this well we give you

9:15
this upfront bonus of 25 to make up for

9:18
the market losses can you destroy that

9:20
one for me mr fiax

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well there's several things that i would

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ask number one is is it real money

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i know that sounds like a crazy question

9:30
but is it real right

9:32
and what i what do we mean by that well

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typically what they do is you get that

9:36
25 to 35 percent bonus it goes into an

9:39
income account right as you know we have

9:42
explained income accounts are they real

9:44
money or fake money that would be called

9:46
a phantom account similar to your mask

9:48
that you have um for the people on all

9:50
the major podcast platforms mr fiax is

9:53
anonymous and he has the anonymous mask

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on so yes exactly so that money's never

9:59
so in theory if you say well i want to

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quit and take that money well you can't

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why because it's not

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credited to your account value it is

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related to an income value right there's

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a big difference in that

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the second part is they typically charge

10:13
a fee one of my favorite presentations

10:16
in the world about annuities is the

10:18
guarantee and safety of your principal

10:21
it is

10:22
the paramount of what an annuity is

10:24
safety and insecurity right sam right

10:26
correct but if i put a fee on it can i

10:29
invade the principal yes

10:31
yes

10:32
so when they tell you all your money's

10:34
safe you can never lose a penny put this

10:36
rider on it or buy this bonus guess what

10:39
they have just and you have just

10:41
violated the rule number one of why you

10:43
purchase an annuity safety of what

10:46
principle principle and so if you go if

10:50
if the income and we'll we're going to

10:52
go through this too mr x but if the

10:54
income right if you go five years and

10:56
you can with an indexed annuity in the

10:59
caps present participation rates let's

11:01
just say you don't get anything for five

11:03
years they're still taking the income

11:05
rider fee out

11:08
right regardless and most of the

11:11
companies without question they have

11:13
some type of roll up six percent seven

11:15
percent eight percent whatever that

11:16
number is it is guaranteed to increase

11:18
your fee costs by that every year

11:20
because if i put a hundred thousand

11:22
dollars in and let's just say it goes up

11:24
by seven percent so now it's 107 correct

11:27
that one percent fee comes off the 107.

11:30
next year it's 114 and change it comes

11:33
off the 114 but it gets deducted from

11:36
your account value which wasn't growing

11:40
you're going to see a reduction in your

11:42
money the real money the green stuff you

11:45
spend

11:47
so you have to be careful i'm not a big

11:50
guy on fees don't like feeds i find that

11:52
a lot of clients don't like fees either

11:55
i know you were one of the innovators

11:57
and leaders and actually the first

11:59
person that kind of was talking to me

12:00
about

12:02
not attaching the income rider to the

12:04
policy of an indexed annuity if you want

12:06
to try to get a little bit better than

12:08
cd type returns and then at the time

12:12
you need income at the end of the

12:13
duration of the surrender charge is

12:15
transferring that tax-free non-taxable

12:18
event to an immediate annuity i've made

12:19
that into a mantra and billboard

12:22
material as my gadospia but it could be

12:24
fiona spia it can be anything yeah look

12:28
we're big fans of indexed annuities i'm

12:30
just not big fans of the marketing

12:32
material i'm not even lesser of a fan of

12:34
how the agents present

12:36
i'm a huge fan of the concept i want to

12:39
get some upside potential without having

12:42
risk and when you say upside potential

12:44
ladies and gentlemen

12:46
we're not talking seven to ten percent

12:48
please please please please please

12:51
put your level of expectation in line

12:53
with reality i had a lady on a call this

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morning i said what what is your level

12:57
of expectation for returns

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and she said to me

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seven to nine percent i said stop

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there are hedge funds in this country

13:06
that would kill

13:08
to get seven to nine percent annually

13:11
year after year fear she goes well that

13:12
just seems normal to me that seems

13:14
acceptable of course she'd never seen

13:15
that in her life but her but her

13:17
pickleball friend had told her that they

13:19
can get 7-9 and what they were talking

13:21
about mr x was of course the income

13:25
writer growth which is a phantom account

13:27
it's not real money so i want to go back

13:29
to that expectation i truly believe

13:32
things stay where they're at five to

13:34
seven percent is is

13:36
realistic it might even be on the low

13:38
end of realistic but it's still that's

13:40
realistic that should be your

13:41
expectation anything above that gravy

13:44
anything but you're gonna get you're

13:46
gonna get zeros if you hold up an

13:48
indexed annuity for a 10-year time

13:50
period

13:52
there's probably going to be a couple

13:53
years of zero in there which is fine

13:55
don't say zero is your hero i'll kill

13:57
you right now

13:58
figuratively of course because i hate

14:00
zero zero's a hero that's a joke but the

14:03
point is you're not gonna lose money but

14:05
that will then filter down the returns

14:08
from years past because what happens mr

14:10
x if you get seven one year and zero the

14:12
next that's three and a half for two am

14:14
i right my math

14:16
i talk a lot about that with with people

14:18
in training and i i mean there's so much

14:21
to go through but i'll give you one

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little snippet on indexed annuities

14:25
which i find very interesting yes the

14:27
way that they credit their interest it

14:29
could be one year two year three year

14:31
meaning that you have to wait till the

14:33
end of that term and then they actually

14:34
credit your interest

14:36
i will bet you

14:38
um

14:39
hot dog or whatever you want about

14:40
stamina

14:43
when you sat down to have the

14:44
explanation of an indexed annuity did

14:47
the agent explain to you that you don't

14:49
get the interest credited until the

14:51
anniversary date and if you you should

14:53
pull out money for say

14:55
a need like i need five grand right now

14:57
or if you were to pass away in between

15:00
those two points whether it's one year

15:02
two years three years right you get zero

15:04
interest

15:06
for that time frame there's only

15:09
two companies i can think of off the top

15:11
of my head that will credit interest

15:12
prior

15:13
yes to the anniversary date so think

15:15
about this folks i'm going to do some

15:16
mental math for you you put a half a

15:18
million dollars

15:20
let's say the s p index is up 10

15:23
for the year

15:25
okay

15:26
but you died one day short of your year

15:29
anniversary stay on how much interest

15:31
gets credited to you that would be a

15:32
zero that would be the goose egg you'd

15:34
be getting a zero so now the

15:35
beneficiaries come in and say oh mr stan

15:38
you did such a great job of bomb i saw

15:40
the market was up 10

15:42
where's my 550

15:44
or 525 five something

15:47
yeah where's my where's my a little

15:49
whatever the cap spread participation

15:51
rate was whatever the game was where's

15:53
my interest oh yeah mom didn't pass away

15:55
on the right day so you don't get that

15:57
interest hey mr fix explain the 120 and

16:01
150 participation rates

16:05
well it's 20 for 50 more than 100 there

16:07
you go no i understand that but

16:10
but here's here's how they're doing that

16:12
okay it's not a gimmick it's not a catch

16:15
we have seen a dramatic rise in interest

16:17
rates

16:19
okay so this inflation all these things

16:21
that are happening to us we've seen

16:23
dramatic rise in interest rates sure so

16:25
now the insurance companies they

16:27
basically have leftover dollars because

16:30
they go buy a bond well they were buying

16:32
a bond at two percent now the bonds five

16:34
percent so they don't have to shell out

16:35
as much money to back the guarantee in

16:38
the product fair

16:39
right so they have more money left over

16:41
so there's a few things they can do with

16:43
it they can just keep it in their

16:45
pockets

16:46
or they can enhance the product so what

16:48
they're doing is they're saying look

16:49
we'll get by more leverage in the

16:51
product because we have these leftover

16:52
dollars that's about the

16:54
basic explanation of it which is a great

16:57
thing

16:59
it's wonderful

17:00
but i want to go back to the 150 200 300

17:03
percent of what what are you getting 150

17:06
200 300 percent of because i'm going to

17:09
tell you this these indices that they

17:11
come out with

17:12
haven't returned deadly

17:16
the only the only one that that

17:18
benchmarks i

17:20
what's the benchmark of investing

17:23
it's the s p mhm the goal is to always

17:25
beat the s p right but they come out

17:27
with all these different kind of indices

17:29
why because

17:31
you know and that's that's the hope that

17:33
we've been hoping for is that they will

17:35
stop allowing the back testing of

17:37
indices indexes that's for people in the

17:40
south because i am from the south i'd

17:41
call it an index indexes

17:44
no back testing of anything that hasn't

17:48
back tested up to when it was

17:50
when it was um created so if it was 10

17:52
years ago run a 10 year back test if it

17:54
was a month ago run a month back time

17:58
but you can't run a 10-year back test on

18:00
a month-old industry index but

18:03
but it's not what they do is they take

18:04
these fictitious 10 years and say if we

18:06
would have did this 10 years ago hear

18:08
what it would have done well you don't

18:10
know that and here's why because you

18:12
don't know what would have happened

18:13
would they have done invested this way

18:14
would the market go that way but there's

18:16
so many variables that you can't

18:20
you you can't do that and but how they

18:23
get around is they say

18:25
big word hypothetical big words like not

18:28
you know back testing isn't fast

18:30
performance isn't indicative of a

18:32
current result

18:33
that's how they cover their backside

18:37
but as the consumer

18:40
you feel like okay well this is what

18:42
this should be doing and and it doesn't

18:44
and then that's when

18:46
the consumer gets upset

18:48
that guy's a cr he's crooked and you

18:50
know uh and then we get a blackout

18:53
yeah the industry is earning its black

18:55
eye right here i'm telling you it's it's

18:57
because i read an article the other day

18:59
and you might read the same article that

19:01
banks

19:02
were the leading distribution channel of

19:04
annuity sales

19:05
which should scare the absolute

19:09
out of everybody because

19:12
that's entry level

19:14
no offense to bankers no offense that

19:15
people in the working in the banks

19:17
that's entry-level stuff a lot of these

19:20
people do not understand

19:22
annuity types they're only talking about

19:24
one annuity they only have one

19:26
wholesaler coming in and telling about

19:27
one annuity

19:29
what is your me and you predicted this

19:32
because annuity companies were going to

19:34
find the distribution channels to sell

19:36
as much as they can

19:38
what's your take on the banks but

19:40
there's nothing wrong with that i like i

19:42
said i agree

19:44
it's how the people do it and the bank

19:47
channel is typically someone that

19:50
and i don't want to offend anybody but a

19:51
lot of the guys that are in the bank

19:53
they're either new or they've been there

19:54
for so long they're never leaving

19:56
because they're so comfortable it's it's

19:58
where you cut your teeth i guess for

20:00
lack of a better term sure and you're

20:03
right they're they're only allowed to

20:05
sell what the bank or the board or

20:06
whatever approves they don't have you

20:08
know eight thousand choices like you do

20:10
stan they they have what what gets they

20:13
got five or they got five or six or

20:15
whatever

20:16
we'll call it a handful i don't want to

20:18
be you know yeah let's say a handful is

20:20
a handful is nice last time we were on x

20:24
and every time i somehow

20:26
i get the hate mail

20:28
on things that you say which is

20:30
fantastic yeah because i don't have to

20:32
answer it so it's correct send all your

20:33
hate mail to the stats perfect correct

20:35
well you don't you don't have this

20:36
recommendation for any of you agents

20:39
that think stan and i don't know what

20:40
we're talking about oh my god

20:43
bring it

20:44
i recommend this

20:47
i and stan will personally have a 10

20:49
minute phone call with you not a

20:51
screaming match a legitimate

20:53
10 minute conversation correct

20:56
and i will mathematically

20:58
not feelings

21:01
not oh but the company or the people

21:04
said this i will mathematically show you

21:08
how flawed your system is

21:11
or your sales pitch whatever your sales

21:13
pitch is

21:15
whatever the sales pitches that agent is

21:16
hanging on to

21:18
i will show you it in real time real

21:20
numbers real everything and destroy the

21:23
made up stuff the back casting because

21:25
you want to know what the day the index

21:27
goes on is the only day that matters

21:28
everything before that really shouldn't

21:30
count because it was all fictitious by

21:32
the way one of here's a quick little

21:34
game for all you insurance guys this

21:36
isn't for your consumers this one's for

21:38
the insurance guys

21:39
you need to put a zero on every one of

21:42
your illustrations for that last year

21:44
because they only have a one in 365

21:46
chance of dying on the right day

21:49
and that zero is going to affect that

21:51
return dramatically that's genius i

21:54
never i mean i

21:56
you know the reason i hang out with you

21:57
mr fix uh obviously you're you know you

21:59
have the the nice cars and things like

22:01
that but i learned something that is

22:03
absolutely true

22:05
that last year they're not going to get

22:08
the index return because 98 of the

22:11
companies will give you a zero unless

22:12
you die on the right day right so when

22:15
you say oh this average this for these

22:16
years but if i die prior to that day i

22:19
have to put the zero for that average

22:21
which screws everything up and the

22:23
companies can always tell people you

22:24
know

22:25
the companies can change the rules on

22:26
how the cap spreads and participation

22:28
rates are are

22:30
are calculated they have to because if

22:32
things get adverse in the financial

22:34
market they have to have a way to hedge

22:36
their bet and protect your money and i'm

22:38
okay with that but i don't need to

22:40
understand how the rules go and how

22:42
you're explained right and more

22:44
importantly i'm just telling you i know

22:45
they've never explained it a million

22:47
freaking years that

22:50
if you don't die on the right day you

22:51
don't get interest i know they haven't

22:53
by the way friggin was with two g's mr f

22:56
i a x question

22:58
and we covered this the last time in

23:00
that and we

23:02
i got some really angry ones on this one

23:04
and i'm like whatever

23:06
buffer annuities i don't sell buffer

23:08
annuities buffer annuities are in the

23:10
securities realm okay

23:12
um i call them copay annuities they're

23:15
copay

23:16
people lose their mind because i've

23:18
called them copay annuities

23:21
them copay annuities how about margin

23:23
call of duty you want to call margin

23:24
annuity margin call annuities i like

23:26
copay because people understand copay

23:28
100

23:30
i'm going to shelter x amount of the

23:31
risk after i've sheltered the wrist and

23:33
you'll guarantee

23:35
that you take the rest of that

23:37
well if you're going to do that just go

23:39
play the market and check exactly

23:42
i'm not giving financial advice i'm just

23:44
saying and for me my opinion was if i'm

23:47
going to say shelter 15 of the loss

23:51
well

23:52
but i'm only gonna get x of the upside

23:55
why wouldn't i just roll the dice and

23:57
take all the loss and take all the

23:58
upside here's the other thing that i

24:00
always ask people to ask their their

24:02
master of the universe is if you're

24:04
paying that person a fee

24:08
and a management fee

24:10
then why in the world would you allow

24:11
them to sell you sell you a packaged

24:13
product that needs no management

24:17
oh i've seen that

24:19
going through statements or yeah i used

24:21
to see people with bonds in wrapped

24:23
inside their account and the the manager

24:26
was charging one percent to manage the

24:28
bonds i'm like triple a tribulation sure

24:30
dude

24:33
just sits there

24:34
or or the ones that kill me are indexed

24:37
annuities in a fee

24:39
situation where you lock in the gains

24:40
one day per year tell me i just i i have

24:45
to people at firms that sell this and i

24:47
know they're annuity

24:49
gurus that oversee the annuity i always

24:51
tell them just explain to me come on my

24:53
podcast and explain to me

24:55
the rationalization

24:57
of charging an annual fee for an indexed

25:00
annuity

25:01
that no one's taking me up on that bring

25:03
it because i would love i'm going to

25:05
have you on with me because i want to

25:06
hear that i want to hear it i want to

25:08
hear that justification that so

25:09
basically you're charging you what you

25:11
you want me to pay one percent for a

25:13
parking spot

25:15
that doesn't need any maintenance yes

25:18
which by the way

25:20
we could talk commissions yeah paid the

25:22
people are paid up front

25:26
they're paid up front so they're

25:27
supposed to service that contract from

25:29
all the way through whether it's five

25:30
years six years ten years

25:32
whatever it is

25:33
their job is to share that which i think

25:36
is great because if you think how the

25:37
broker works the broker gets a fee every

25:39
year yeah

25:40
annuities have a surrender charge so

25:42
let's say it just starts at ten and goes

25:44
down one percent a year ten nine eight

25:45
seven six five so take it five years

25:48
right at the end of five years my

25:49
surrender charge is five percent right

25:52
right

25:53
brokers make about one to one and a half

25:56
so that's somewhere between five and

25:57
seven and a half percent and you got

25:59
risk

26:00
so i have people say oh i don't want to

26:01
survive you have surrender charges well

26:04
let's see what your broker charged

26:05
you're two and a half percent of the

26:06
head of the game with me and i didn't

26:08
jeopardize your money

26:10
what are you seeing new in the index

26:12
annuity world other than consolidation

26:15
and big

26:16
huge distribution companies being

26:18
developed yeah i see big i see big

26:21
consolidation where you're gonna have

26:22
four or five players that control the

26:24
whole

26:25
shebang like control it from from the

26:27
agent standpoint

26:29
but from the product the products that

26:31
they make and how they deliver it

26:34
so there's there's gonna be it's gonna

26:35
be like the big banks

26:38
better better than the big banks the fat

26:40
what's the fact

26:42
the fed's just made up of what

26:44
the big banks they sit in the room and

26:46
they have their martinis and

26:48
you know just figure out how they're

26:50
gonna take over the world right are they

26:52
everyone knows the fed's not owned by

26:54
the government the fed is private it's

26:56
not government

26:57
people don't really

27:02
understand this the second thing i see

27:05
is once again the wild west i just

27:07
looked yesterday i had a gentleman send

27:09
me oh look at this new index and i just

27:11
laughed at it it was comical it's been

27:13
out 14 months

27:15
it's in the hole since the day it

27:17
started hasn't been a penny but their

27:19
advertisement says well we made x over

27:22
the last whatever

27:24
the last whatever didn't ever exist so

27:26
how could you have made anything but

27:28
even with the last whatever the return

27:30
was

27:31
less than three and three-quarters

27:32
percent

27:34
i'm like i wouldn't market that i

27:36
wouldn't be proud of that that's that's

27:38
not a proud thing to do it's kind of

27:40
what what are you what are you hearing

27:42
from the distribution networks for the

27:45
consumers out there and most 98 of

27:47
people listening to this are consumers

27:50
even though agents should be required um

27:52
what are you hearing from the

27:53
distribution networks from the

27:55
standpoint of what they're trying to

27:57
sell obviously the index annuity

28:00
is the most

28:01
profitable for the for these field

28:03
marketing organizations

28:07
what the consumer's big concern is right

28:09
now is inflation

28:11
that's the consumer's big deal so of

28:13
course yeah we're gonna start seeing

28:15
more of this income of an increasing

28:17
income you're going to see more of uh

28:20
you know

28:20
trying to keep with inflation and and go

28:23
that way but if you remember stan way

28:25
back when until 708 everybody kept

28:27
saying oh here comes inflation there

28:28
comes inflation and then it it finally

28:30
got here so but you're going to see a

28:33
lot of that i think you're going to see

28:34
a lot more of

28:36
you know

28:36
with these income riders if you buy

28:38
income and say it's ten thousand dollars

28:40
today

28:41
does it buy ten thousand dollars five

28:43
years from now

28:45
no

28:46
so that static level income i think is

28:49
going to play itself out because if you

28:52
had a ten thousand dollar check today

28:54
it's only worth nine thousand because we

28:55
got ten percent inflation well and if

28:58
any indexed annuity companies offering

28:59
an increase they're severely lowering

29:02
and drastically lowering that initial

29:03
payout they're just giving you your

29:04
money they're just giving you your money

29:06
over time stealing your money right

29:09
there but you're not solving for

29:11
inflation even though that's what the

29:13
the sales pitch says at the bad chicken

29:14
dinner seminar correct um

29:17
you know i told someone today this i say

29:19
it probably four or five times every day

29:20
when i'm on the phone

29:22
if it sounds too good to be true without

29:25
exception

29:26
in in between the two of us there's

29:28
probably

29:29
55 years of experience

29:33
without exception if it sounds too good

29:35
to be true feels too good to be true

29:38
it is

29:39
it is period there is no perfect product

29:43
so someone's saying you get a 25 up

29:45
front bonus you get market upside with

29:46
no downside you get free long-term care

29:48
and you get a lifetime income stream

29:50
that increases

29:52
i'm begging you as a human being

29:55
to not be the sucker at the table yes we

29:57
are based here in las vegas we have

29:59
offices across the country but

30:01
there's a lot of people come to vegas

30:02
and leave

30:03
feeling pretty bad i don't want you to

30:06
to leave the the bad chicken dinner

30:08
seminar signing up for this thing

30:10
and also too if someone says you hey

30:12
let's go ahead and sign the paperwork

30:14
because we don't want to miss this bonus

30:15
so let's go ahead and sign the paperwork

30:17
don't do that there's never urgency to

30:19
buy an annuity urgency is for you to

30:21
fully understand and just remember

30:22
there's more than just one type and

30:25
unfortunately in the indexed annuity

30:27
space there's a lot of hammers out there

30:28
looking for nails i think you would

30:30
agree with me x well oh without question

30:33
i i look i love annuities

30:36
i will be an annuity person to the day i

30:38
die

30:39
but they are not a panacea they do not

30:42
fix all they do not cure all not

30:44
everybody needs an annuity no not

30:46
everybody needs a stock

30:48
market everyone has a different unique

30:51
need and a good advisor is going to find

30:54
out what that need is but you will find

30:56
that a majority advisers that you talk

30:57
with already have their mind made up of

30:59
what you should have and they haven't

31:00
listened to what you need and you come

31:02
to me you say i have a sore throat i

31:04
think i might have covet and i sprained

31:05
my ankle they'd be like you know what

31:07
give me an annuity you need an indexed

31:09
annuity with an upfront bonus

31:11
yeah yeah the income will take forever

31:13
for your strained ankle it'll be

31:14
fantastic

31:15
do us all a favor x because i'm going to

31:18
dig into your brain here you're play the

31:20
role of the consumer you've been pitched

31:23
an indexed annuity

31:25
start asking questions to the agent what

31:28
questions would you ask

31:29
well my first question and i think this

31:32
is most important is what does it

31:34
explain the index to you

31:38
what okay so i'm going to get this

31:39
interesting what's the index

31:42
and when you say explain what do you

31:44
want to hear from the agent well i want

31:46
to hear a competent explanation of what

31:48
what is the index what's in it and how

31:50
does it work

31:53
if they can't do that

31:54
void they're done oh my god you're going

31:57
to kill 90

31:58
just like that

32:00
question number two

32:02
um i would probably ask is

32:04
[Music]

32:06
how does it credit

32:08
so tell me okay so here's how the

32:10
engine's working

32:12
how much of that horsepower do i get

32:16
show me an example give me an example

32:18
better than that is better than show me

32:20
an example teach me how to calculate the

32:22
example

32:23
on paper uh paper just draw a line down

32:25
the middle piece of paper and just give

32:27
me a show the mathematical formula it's

32:30
a very simple formula if it's the right

32:32
answer

32:32
yeah because it's very simple but

32:34
there's all these like we say these

32:36
these crazy indices that are coming out

32:38
with all these

32:39
goofy things that are you

32:43
you said something the other day that

32:44
just cracked me up and i've used it a

32:45
couple times you said you know people

32:47
realize when they get their sp their

32:49
policy for their index annuity that some

32:50
mathematical formulas have letters in

32:52
them

32:54
yeah i thought math was numbers i didn't

32:57
know there was all kinds of signs i

32:58
didn't know i didn't know there's

33:00
parentheses and ends and

33:02
well these prophecies are coming on the

33:04
statements because i'll tell you what

33:05
for all of you folks in the precious

33:06
communities and for all you folks that

33:08
purchased income riders we're upside

33:10
down in the market so you're gonna have

33:12
a zero year which is great you didn't

33:13
lose any money which is wonderful that's

33:15
fine that's what they're for except for

33:18
one problem they put a

33:20
rider on there which has a

33:23
fee so you're going to see a little

33:25
bracket on your statement of x amount of

33:27
dollars coming out one percent of

33:29
whatever that value is

33:31
in most cases right big brush here and

33:33
you're going to say what the heck are

33:35
these brackets and then go that's them

33:36
taking money out for that rider out of

33:38
your real money for their fake money

33:41
would you ask an agent what percentage

33:43
of index annuities represents their

33:45
sales

33:47
um

33:50
i would not but i like that question so

33:53
because if they say it's 100 of my sales

33:56
well

33:58
i really believe if it's more than 50

34:00
it's a red flag because

34:02
indexed annuities don't solve for

34:04
specific things they're not one size

34:06
fits all as they're sold so you know

34:09
i always ask two questions and this is

34:10
part and you bring up a really good

34:12
topic because

34:14
i see this sales presentation here's

34:17
your annuity

34:18
here's the income forever if you go to

34:20
the nursing home we'll double that

34:22
income to pay for your nursing home you

34:24
have to go to home health care we'll pay

34:26
for this sure

34:27
so they're trying to bundle all this

34:29
stuff into these one

34:31
like you know like a big swiss army

34:33
knife sure

34:34
but there's only 100 you know pennies in

34:36
the dollar i mean right it's going to

34:37
come from somewhere right and so when

34:39
they pencil all this together

34:42
in reality is here's how i see annuities

34:45
and your people will hate me for for not

34:48
your people the the

34:50
my people love you the agents that

34:52
listen to us will hate us yeah my people

34:54
love you i'm a big believer in that

34:56
annuities are about for safety

34:58
security

34:59
and eventually to establish an income

35:01
that your clients cannot outlive right

35:04
okay i don't need an income rider to do

35:06
that they've been doing that since the

35:07
times of the romans right okay so the

35:10
income rider was built as a great

35:12
revenue stream for the insurance

35:13
companies yeah it guarantees but i can

35:15
guarantee

35:16
income for life with

35:18
a spear

35:19
well an income riders really kind of

35:21
come for life with

35:23
you know annuitizing my current annuity

35:26
i don't need your angry writer and pay

35:28
for you to let me have access to my

35:29
money

35:30
and income riders really just got

35:32
popular after the 2008 debacle and

35:34
people it just it just kind of popped

35:36
after that and now it's commonplace and

35:38
understand that if you want to transfer

35:40
your annuity most annuities will not

35:42
accept your index annuity transfer

35:44
because you're leaving the income

35:47
benefit on the table you're not

35:49
transferring that amount and up front

35:51
bonuses to transfer it is a misdemeanor

35:54
well it's funny as you were saying that

35:56
that was literally getting ready to come

35:57
out of my mouth it's a mystery i'm under

35:59
my mask yes the reality is this and this

36:02
is and this is tough clients for the for

36:04
the clients on the phone sure

36:07
so you put your money in this annuity

36:09
let's say the annuity doesn't perform

36:10
does horrible yes okay

36:13
so you put in you know because the index

36:14
didn't work okay right so you put that

36:17
they put an income right around there

36:18
and i i just had a call with this the

36:20
other day

36:21
so the income account is i'm just gonna

36:23
make up numbers say 500 000 in the fake

36:25
money income account right sure

36:27
but my accumulation value is like

36:30
four and a quarter yes

36:32
i've made less than two percent a year

36:35
yes for the six years i've been in the

36:36
account

36:38
i hate it i don't want to be here

36:41
anymore stan i hate it

36:44
guess what folks it's tough

36:46
you're stuck you're stuck to get the

36:49
benefit and annuity companies when you

36:52
transfer an annuity to another annuity

36:54
you have to do a side-by-side

36:56
mathematical comparison contractual and

36:59
the one you're going to has to be better

37:01
contractually not hypotheticals and

37:03
theoreticals than the one you're coming

37:05
from and if someone's trying to do that

37:09
might want to look at the application

37:10
they're filling out the suitability they

37:12
call it suitability and it's a really

37:14
big deal it's a huge deal in the

37:16
industry they really are trying to clamp

37:18
down

37:19
so now

37:20
i'm stuck

37:22
i can't go anywhere

37:24
and i feel horrific for this poor client

37:27
that this other guy got into because the

37:30
marketing company that he worked with to

37:32
get the annuity from they call him a

37:34
wholesaler the wholesaler he went to yes

37:37
aimed him in the wrong direction

37:39
definitely and you know why he got aimed

37:41
in the wrong direction because they

37:43
manufacture the product

37:45
and they get and they get paid more

37:46
because they manufacture they do get

37:48
paid more and they have commitments and

37:50
they have things to do and so it's it's

37:52
all about stuff in the i mean so there's

37:53
a lot in it

37:55
you know how does it get cleaned up ex

37:58
how does it get linked up i mean do do

38:01
you have any ideas that me and you can

38:04
take over the industry and clean this

38:06
stuff up

38:07
well you know what it's kind of like

38:09
everything else if you keep making more

38:11
rules and more laws that doesn't that

38:14
doesn't work it doesn't they need to

38:15
take the people when they do catch them

38:17
and make examples out of them to clean

38:19
it up for certain well in podcasts like

38:22
this that are that are so

38:24
anti i mean anti what their heat people

38:27
hearing we're pro annuity we're pro

38:29
index annuity but this type of podcast

38:32
is

38:33
is like a unicorn in the annuity

38:35
industry because no one talks like this

38:37
i'm anti-behavior of how these things

38:39
are done you give me 10 minutes you get

38:41
on the phone with me for 10 minutes and

38:42
you i want you to explain to me what you

38:45
tell a client when you sell an income

38:47
you're talking to an agent yeah and also

38:49
and i always tell people too

38:51
from a consumer standpoint most people

38:53
listen to our consumers

38:55
if you cannot explain what you're buying

38:57
to a nine-year-old

38:59
do not buy it no offense to

39:00
nine-year-olds it's really that simple

39:02
and most people can't explain it

39:05
listen these things are very complex

39:07
they cannot explain what's in it how it

39:10
works yes

39:11
okay

39:12
then if they can't explain it you'll

39:14
never understand it because they're the

39:17
translator so i'm with you stan if you

39:19
don't understand what they're talking

39:20
about don't sign

39:21
no of course not of course not that just

39:24
makes total sense this kind of a warren

39:25
buffett approach we're kind of nearing

39:27
the end mr fiaax it's always

39:30
it's always a pleasure because

39:32
i learned something you gave me the

39:34
10-year thing today i learned something

39:36
from you you've forgotten more than most

39:38
people will ever know about index

39:40
annuities you've been in it you saw that

39:42
you were at the i think you're at their

39:43
initial meeting

39:45
early

39:46
um you know drinking coffee with the

39:48
grand pubs as they were putting this

39:49
thing together in 1995 i mean you have

39:52
seen it all and i've known you for a

39:53
long time and you have been a great

39:55
mentor for me

39:58
in the indexed annuity space and my

39:59
clients thank you because they're buying

40:02
the contractual guarantees they're

40:03
buying these things for the right reason

40:06
we probably sell more indexed annuities

40:08
than most agents would ever dream of we

40:09
sell them for the right reasons

40:11
and when they fit they don't always fit

40:14
most the time they don't fit but

40:15
sometimes they do have a situation this

40:17
morning where it fit perfectly for a

40:20
gentleman well the reality is a very

40:21
simple one stan you know i could take a

40:24
screwdriver

40:26
you know i can take a screw and a hammer

40:27
and i get to screw it

40:29
just give me a hammer and a screw or i

40:30
get a screwdriver and screw the screw in

40:32
yeah it is that simple it's it's i mean

40:35
it's not much more than that i'll get it

40:38
in there don't you worry about it it's

40:39
just not the effective in the right way

40:42
look some people need immediate movies

40:44
some people need uh

40:46
migas which are very attractive right

40:48
now the rates are great and rate

40:49
increases are gonna happen again and

40:51
just wait we're going to have another

40:52
rate increase too i believe yeah

40:54
with uh you know you're a bond expert

40:56
you traded bonds forever used to yeah

40:59
yeah i mean you get this there's i mean

41:01
there's some serious stuff on the road

41:02
and safety and security is great

41:05
is there's a demographic title wave of

41:07
people looking for guarantees

41:08
unfortunately there's some people in

41:10
front of that tidal wave that are don't

41:12
have your best intentions

41:14
i'm not saying i'm perfect i'm just the

41:15
walking middle finger of annuity truth

41:17
i'm going to tell you the truth yeah

41:19
period and that's hard though because

41:21
some people really don't want to hear

41:22
the truth because i know people want to

41:24
be sold they don't want to hear the

41:25
truth no they do they want they want me

41:28
to show them you know the circus mirror

41:30
that shows them to be either skinny or

41:32
big however they want to look you want

41:33
me to bless what you did like if it's

41:35
not right i can't bless it i know i get

41:37
a lot of that i get a lot of those

41:38
emails all right here we are my mic drop

41:40
moment the last bit of the um podcast

41:43
because people hang around for this

41:44
because they know that you're going to

41:45
bring it

41:46
mr x

41:48
mike drop moment five four three two

41:50
one go

41:52
well it's the last quarter of the year

41:54
so here we go everybody's gotta make

41:56
their deals um so

41:59
be careful of the sales people because

42:00
they're probably trying to win a sales

42:02
contest at the end of the year right yes

42:04
sales costs are going to rather so your

42:06
retirement may be their trip to hawaii

42:08
so be careful

42:09
make sure that's fact

42:12
i mean it's true as it gets okay you're

42:15
gonna have um

42:17
you're gonna have you're gonna see a lot

42:18
more stuff you're gonna see more product

42:20
get ready it's gonna be they're gonna be

42:21
slinging it left and right

42:23
you're gonna see all kinds of crazy

42:25
advertisements which returns with all

42:28
that and here's the reason why is

42:29
because they know people are

42:32
worried about what's going on yes

42:35
who could it be yes

42:37
turn on the tv and name one thing you

42:39
see that says wow everything's going

42:40
great everything's great yeah

42:42
yeah no so uh that's gonna come and then

42:45
uh

42:46
let's see here

42:48
uh this one's out of the woods this

42:49
one's this one's this is a wall that's

42:51
why we're here we wanna hear it

42:54
i think you will see one more fire sale

42:57
so to speak okay before the year's over

43:01
to just fill up those coffers for one

43:03
last run because i i promise you they

43:05
have a record year and yeah this year

43:08
without question they're gonna pile on

43:09
and do the bonus and all that stuff one

43:12
more how long yep you'll see more

43:14
console for us we'll see more

43:15
consolidation we're gonna see more

43:17
purchases you're gonna see more people

43:18
buying people yeah just certain groups

43:22
yeah we're all gonna get bought up and

43:23
be controlled by a handful of big groups

43:26
well listen mr fix always a pleasure the

43:28
people are always asking when you're

43:30
coming back on

43:31
i asked for this one because i was so

43:34
well

43:35
it coincided with me getting inundated

43:37
where you know people were like oh my

43:39
gosh we're getting killed can you have

43:40
him back on and of course we will so we

43:42
did and we're happy to have you and we

43:44
look forward to the next time

43:46
godspeed to you mr fix you are a

43:48
treasure to the annuity industry i want

43:50
to thank everyone on the podcast

43:52
platforms and the fun with annuities

43:53
youtube channel i will see you

43:55
next time

44:01
[Music]