These are not your granddads’ annuities!

The key thing to understand is that we are not talking about old-school commissioned annuities sold by insurance agents with long, multi-year lockups and potentially high internal expenses.

Fee based annuities are designed with the fiduciary, fee-based, advisor in mind.

BASIC FEATURES:

One-Year Contract:
Most of the fee-based annuity contracts we work with are a one-year annuity contract. You read that right, a one-year annuity.

If you want to exit the annuity after one year, you get out, no charges. Old school annuities are famous for their expensive back-end surrender charges.

No Explicit Annuity Charges.
The fee-based annuities we work with usually have no explicit internal charges, and the fee you pay is the advisory fee just as you would in any other fee-based investment account.

Remember, olde school commission-based annuities are famous for their high back-end surrender charges, and with variable annuities their high internal charges

WHY USE FEE-BASED ANNUITIES?

Downside Market Protection:
We can build-in downside market protection by using “buffers”. A buffer protects you from a certain percentage of a stock market downturn over the 12 months of your annuity contract.

For example, a moderate investor may want 10% downside protection. If their selected stock index goes down 9% over the course of their 12-month contract they suffer no account value market loss (remember, there is still the advisor fee). If, however, the stock market index went down 13% over their 12-month contract, the investor would then incur a 3% loss.

A slightly more conservative investor might want a 15% or 20% downside protection buffer.

We also have options for 20%,40%, and 100% downside buffer protection. Full disclosure, the 100% downside protection options may have a 4-year surrender charge or a 5-year Market Value Adjustment (explained in detail if recommended).

Upside Market Participation:
On the flip side if your selected stock market index increases over your 12-month contract, you would receive some positive gain up to a pre-determined return “cap". The cap is lower for the increasing amount downside buffer protection you choose.

Various Market Indexes.
Fee-based annuities have several different market indexes to link your investments to including the S&P 500, NASDAQ, Russell 2000. Other specialty/custom indexes may be available.

There are many unique features to fee-based annuities that help us manage your investments in a unique manner.

Fee-based buffered annuities are an excellent option for the investor that has accumulated assets, would like a decent upside stock market return potential but would also like to avoid some amount of a future stock market decline.

They are also a good choice for any investor that has a low or moderate risk profile.

Often, we use fee-based annuities in tandem with other traditional investment portfolios (mutual funds, exchange traded funds, stocks, ands bonds).

FIDUCIARY ADVISOR

We are working on your behalf as a fiduciary advisor, and we will recommend a fee-based annuity if we believe it could be to your benefit. Our clients are increasingly using fee-based annuities as part of their overall investment strategy.

One of my prospective clients recently said, “I didn’t know these existed”. That is common feedback. In fact, if you talk to a commissioned insurance agent, they probably are saying the same thing inside their mind.

It is our fiduciary duty to discuss all the options avialable to our clients. If you goals and objectives warrant a discussion of fee-based annuities know that we will review the options in detail. Then it is your choice to choose to whether or not to integrate a fee-based annuity into your investment plan.

Do not disgard the idea of a fee-based annuity until you have a thoroug understanding of how these products can protect your investments and their flexibility.

Our clients are increasingly gravitating toward using fee-based annuities.