No Commission Annuities...but With an Annual Fee: Fun With Annuities

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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, licensed in all 50

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states, the top independent agent in the

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country. Some call me the tallest as

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well. 6'6 and a half, Zeke, if you're

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keeping score. Kudos to Zeke behind the

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camera. He's the uh the crying Hawaiian

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as they call him in the office, but uh

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very positive person. And also, I'm also

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the pioneer of contractual guarantees

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only pro approach to annuities, CGO, as

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I've trademarked it, Zeke. You know what

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I'm saying? All right. So, what's the

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topic today, Zeke? I don't know. Let me

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look. Hold on. Hold on. Hold on. Oh,

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yeah. I remember. Of course, I remember.

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I'm just playing with you.

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No commission annuities, but with an

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annual fee. I was reading an article

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recently which prompted this little

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display and commentary on this topic

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about no commission annuities. So, let's

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talk about commission. Okay. with

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annuities. All commission with annuities

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are built into the product. They're

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built in. It's not an add-on. It's built

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in. Period. End of story. Life insurance

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um companies issue annuities. Life

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insurance commissions are built in. Pay

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from the reserves from the company so it

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doesn't come out of your mouth. You put

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$100,000 into an annuity, you see

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$100,000 go to work for you. Now, on a

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side note, and Zeke, I will reel this

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back in. Everybody in my office, bunches

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of people. I mean, there's so many

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people coming through there, I had to

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give them nicknames because I can't

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remember their names, okay? But they are

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all licensed in all 50 states, but not

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on commission. Even though the agency,

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the annuity man, gets paid. I couldn't

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tell you what each product pay. I don't

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care because it's not about our number.

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It's about your number, right? It's

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about the highest contractual guarantee

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number you can find. So that you can go

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to my site, the annuityman.com, run

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quotes, all that. But understand the

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commissions are built in, it's paid from

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the company reserves. It's a net

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transaction to you. So when I read this

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article, and it's a good friend of mine,

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I'm not going to not going to mention

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his name because I know his company. I I

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respect what he does, but he got in this

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he got this article and he's uh no the

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no commission side of no commission

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annuities are really growing or

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something like that. I'm like, okay. Uh

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okay there there are sites that they

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sell no commission annuities to or

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provide them to fee only or fiduciary

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fee only type advisor or fee based

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advisors. So, I'm thinking to myself,

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and I, you know, Zeke, I went to

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college, right? Didn't attend a lot of

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classes, shot the basketball, played for

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University of Central Florida, still

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hold their free throw shooting record.

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By the way, that and $2 will get you a

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beer if you're just wondering. And I

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don't even drink, but the point is it's

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relevant. But I that's that's what I did

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to get through to get through college.

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But when I read it, I'm going no

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commission annuities, but with but with

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an annual fee.

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Re what I mean? Isn't that isn't that

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like isn't that like the same thing? I

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mean, isn't that the conundrum? Isn't

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that a contradiction? Isn't that Yes, it

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is. Okay. And I know my friend's going

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to call me go, "Stan, why'd you do that?

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You didn't give them all the I'm giving

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you all the details." So, if somebody

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is, you know, they sell you they sell

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you a mutual fund, they sell you a

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stock, they sell you a bond, they sell

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you ETF, they got some Bitcoin in there,

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and then they put in there an immediate

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annuity, and then they charge an overall

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fee. I'm like, "You're doing what?

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you're charging a fee on an annuity.

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There's a there's a firm out there. I'm

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not going to mention their name because

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then lawyers get involved and they're

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like, "Dan, you shouldn't have said

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that." You know, okay, but they sell

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index annuities. Index annuities are CD

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product. Typically, they lock in

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potential hypothetical theoretical CD

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like return gains and they charge a wrap

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fee to manage it. So my comment to that

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is, "So you're selling index annuities

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that can be locked in one day per year,

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yet you're charging an annual fee." I'm

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thinking to myself, "Huh? How's that

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even possible?" I mean, which leads us

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back to no commission annuities, okay?

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But with an annual fee. Now, I know what

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they're going to say. Well, your

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guarantees are better. No, they're not.

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Okay? Come on. All right. Come on. And

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I'm okay with f

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doucharies even though I think we all

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should be putting the client's best

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interest at first and we don't need a

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plaque on the wall to tell people that.

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But that's just my opinion. Okay.

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Fidiciary means you're doing good

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business the right way. You're looking

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at the client not like a hammer looking

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at a nail. You're saying, "How can I

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help?" And maybe I can't help, but I'm

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going to tell the truth regardless.

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That's in essence a fidiciary, but it's

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not a plaque on the wall that says I'm a

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good guy or I'm a good gal because

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that's what f means. Okay, I have a

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little problem with that. I know the

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fiduciary world's going to get mad at

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me, but you know, and I know that there

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are people behing behind that plaque

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doing bad things.

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All right. So, I'm not against my friend

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selling no no commission annuities,

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quote unquote, and then having the fee

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guy charge a fee, but I'm kind of in it

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kind of add up to the same thing or

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worse. I don't I don't know.

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Leads me back to this and it's it's like

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the it's like the bad index annuity

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pitches out there. And I always tell

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people, they'll call me up, "This guy

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told me you get a 25% upfront bonus.

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You're going to get market return, son,

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and protect the principal, and you're

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going to get free long-term care without

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getting underwritten."

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If it sounds too good to be true every

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single time, okay? If if you go, "Wow,

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that sounds fantastic," then don't buy

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it. If you can't explain it to a

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nine-year-old, then don't buy it.

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Everything that we show are contractual

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guarantees only. You're never going to

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go, "Wow." No, you're going to go, "Hm,

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that's going to work." But it's not

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sexy. Okay? Any any annuity pitch that

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sounds sexy, it's not. Okay? It's it's

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it's it's the wizard behind the It's the

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Wizard of Oz behind the curtain. No, no,

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no, no, no, no. But I I'm okay. I'm I'm

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glad that the fee only advisors and the

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registered investment advisors and all

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the masters of the universe who used to

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go never buy an annuity. I can manage it

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and we'll just use the 4% rule and just

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peel off the gains. Well, the 4% rule

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has been stomped and beaten like a puppy

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dog. Zeke, that's terrible.

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But that's that the 4% rule is not even

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relevant. Okay, everybody from me to

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Wade Foul, that's PF AU for all of you

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to keep a score, have shot that down

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factually for years and years and years

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and years and years. So if your advisor

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goes, I use a 4% rule instead of a

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lifetime income guaranteed annuity.

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Okay, I take a pill for six-pack abs.

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Super. We're in the same boat. Neither

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of it works. Okay, my my comment is if

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you trust that fee only advisor that

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that fiduciary

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and and the feebased or what whatever

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you're doing and they want to they want

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to purchase annuity it makes sense to

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you then great that's fine and you're

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okay with the fee then great that's fine

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but what I want to tell you is that's

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that's not there's no breakthrough there

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okay there's just not um I'm just glad

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that that my friend has set up a company

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that helps advisors overcome the annuity

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word that they think is a curse word

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when every single one of their clients

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already own an inflation annuity called

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social security when every single client

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of theirs owns R, you know, an IRA

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that's kicking off RMDs, which is an

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annuity. When when a lot of their

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clients already have a pension, which is

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an annuity, I'm glad that they're

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finally coming on board and going, you

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know what, in my feebased practice, you

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know, uh I'm going to start including

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annuities, non-commissioned annuities,

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right? Hey, I know what I'm talking

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about. I used to work for Morgan

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Stanley, Dean, Whitter, Payne, Weber,

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UBS, been on that side of the le ledger,

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so I understand what they're doing and

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they do a valuable service. Um, instead

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of people just trying to throw darts at

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it, okay? They're at least

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professionally throwing darts at it.

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Okay? But just understand, shop all

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carriers, shop as many places as you

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can. These are commodity products.

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Annuities are commodity products.

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There's not one that's better than the

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other. The one that's best is the one

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that solves for your situation with the

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highest contractual guarantees. Ask two

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questions and two questions only. What

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do you want the money to contractually

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do and when do you want those

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contractual guarantees to start? From

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those two answers, either me or whoever

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you're working with should be able to

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say you either don't need an annuity or

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here's the annuity type that might fit

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and then explain the limitations and the

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benefits. a after quoting all carriers.

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There's nothing complex about the

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annuity business. I guess that's the

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reason I was attracted to it, Zeke. But

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when I got out here, the only people

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making it complex are the people selling

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it. I see some of the proposals and

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limit and uh and illustrations. I'm

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like, wow. You know, strip it down to

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the contractual guarantees. Why, Stan?

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Because you're signing a contract, a

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transfer of risk contract. You're

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transferring the risk to the life

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insurance company that issuing the

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annuity. Okay, that's all it is. So,

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you're transferring the con the the risk

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to that life insurance company that is

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issuing the annuity. And for lifetime

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income, it has to be A+ or better.

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Period. Because with artificial

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intelligence, medical breakthroughs are

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are shortening in length. They're just I

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mean, they're just hammering it, which

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means we're going to live longer, which

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means the payments will be lower.

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Lifetime income right now is a bargain.

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Okay. So, no commission annuities but

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with a fee. That's a pretty That's a

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pretty big butt, Zeke. Zeke's like,

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"What? You did you say big butt?" Yeah,

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I said big butt. That's pretty big. Big

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big butt. That's a pretty big butt. And

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I cannot lie. No other news I can deny.

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You know, I'm getting in this thing

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where I'm rapping a little bit, which is

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good. It might be It's not a midlife

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crisis because I'm like in my 60s, which

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means I live to 120, which could happen

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with AI. And in that case, the lifetime

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income guarantees I have in place is a

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bargain. They're a bargain right now. I

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don't know when that's going to change,

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but they are a bargain.

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And that was really good, if I don't say

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so myself. No offense to my friends out

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there trying to push the no commission

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annuities with a fee. Um, but just shop

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all carriers. Don't don't don't get

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buffaloed, as they say at University of

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Colorado, buffaloos.

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My name is Stan the annuity man. That

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was fun and fun with annuities.