Why Your Annuity Advisor Should Be The Best In His Game

By Essie Osborn

In layman's words, annuity is described as an investment deal between an investor and an insurance company where the investor enjoys some tax advantages. Adding it to your portfolio of investment can be a very good financial move particularly when you are approaching the retirement age and you do not want to expose your life savings to turbulent fluctuations in market trading. In order to get the best deal however, you need a good annuity advisor to lead you through.

It is always advisable to adopt a conservative approach in investment particularly when one is approaching the retirement age. At this time, the nest-egg reaches its largest possible level and is very vulnerable to market fluctuations. This is why annuity is usually the better option.

They have several benefits some of which include the fact that they guarantee that you cannot run out of money, increase in future retirement income is guaranteed for every year, protects asset from the creditors and probate and is the safest way to pass more to heirs as inheritance.

Annuities come in several types which include immediate annuities, the equity indexed, variable and fixed annuities. Each of these varies in one way or the other and has its own merits and demerits. It is the job of your consultant to outline all these for you and tell you which option is the best and which one is not.

A financial consultant should only encourage his client to go for that investment option that is in his best interest and not just anything. However, the consultant has a responsibility to educate the client on the investment vehicle that he is interested in or just curious about. These consultants are usually expected to adhere to a strict code of conduct, practice general ethical principles and avoid unfair marketing practices.

Some practices that should be avoided by any professional advisor in annuity market include using false information to advertise, avoiding and form of misrepresentation of facts when selling the investment products, the issues of defamation, rebating, using bait and switch to make client by what they had not planned for and twists.

In addition to these, these consultants too should completely avoid talking negatively about their rivals, the rival products and character unless there exists official records of civil or criminal nature committed by those rivals. Basically, they should use their energy to promote their products telling the clients how they stand to benefit.

Many consultants prefer not to recommend annuities to their clients once they realize that there is a possibility that insurance company may be having financial difficulties in the future. Annuities are actually the best way to militate against longevity risk. It is the opportunity to protect the client from the financial problems the insurer is facing.

Here are the tips for consultants in this market, it pays to go with bigger insurance firms as they have less solvency risks and is well diversified, pay close attention to ratings by S&P, Fitch or Moodys, and clearly understand the rules of associations and the limits. This should ensure that clients get the best products from them.

About the Author:

No comments:

Post a Comment