Annuity Seminars: Who Is Picking Up the Tab for That?

Hi there. Stan The Annuity Man, America's annuity agent, licensed in every single state. I'm proud of it. Today's topic is a fun one. It's all about these annuity seminars, and the question that I'm going to answer in Stan fashion is who's picking up the tab for that very expensive steak dinner that you're going to get or that you've eaten? Who's picking that tab up?

This is a part of the annuity industry that I despise. I don't want to use the word hate, so let's just use the letter H and the number 8. I h8 those. I h8 the seminar circuit. And if you're a normal human being with a bank account that lives in a house, you're getting these postcards in the mail that say, "Hello, come join us for a steak dinner at XYZ Steakhouse," which you and I would never go to because they're charging $90 a steak for a filet mignon. Why are these agents doing that?

Swallow the Food, Not the Pitch

Typically, there's only one product type being pitched at the bad chicken dinner, expensive steak dinner seminar. It's an Indexed Annuity, Fixed Index Annuity. I have nothing against them. Nothing. We sell them, but we sell them as an efficient delivery system that is cost-effective for the Income Rider guarantee for lifetime income, period. We don't get involved in the hypotheticals, the theoreticals and all this stuff. If you go to the seminar and you've been to one, you know what I'm getting ready to say. They'll show you a chart, and they'll show unbelievable market returns. They'll say, "Market upside with no downside. Principal protection with market participation." You're smarter than that, okay? If it sounds too good to be true, it is every single time. And they'll put a slide up that says, "If you'd owned it 10 years ago, this is what you'd have gotten. Thirteen, twelve, ten seven, four, eight." In some states, that's illegal to even do. I wish it was illegal across the board. But what I would tell you to do with annuity seminars is go to every single one of them and eat for free. In other words, swallow the food, don't swallow the pitch. My mom, who just turned 85 in St. Augustine, Florida, is in better shape than all of us, walks six miles a day, vibrant, funny, the whole thing. I mean, listen, she has eaten hundreds and hundreds and hundreds of free meals on these annuity agents' dime, and then she'll tell at the end, "I'm Stan The Annuity Man's mom," and then they all vomit. But she eats. And now, she's taking her friends and she's from the south, so she'll call ahead of time and ask what the dessert is. She's a professional plate licker, as I say, and I've told her that. And she says, "That's not nuts."

Commissions

No, it's true, Mom. It's what you do, and ever since my father passed away six years ago, she has been a world-class seminar attendee. And then, she'll call me after and say, "He said I could get 13% on my money, and I wouldn't lose money." I'm like, "Mom, come on now. That's not smart." So, the question is, who's buying this? Who's buying your steak dinner? Of course, the agent's paying for that, but why is he stepping up to the plate? Why are they filling a room full of people to sell this Indexed Annuity? Yup, you got it. Commission. Now, all annuity commissions are built into the product. You don't see them. If someone says, "Well, there's no commission." They're lying, they're getting paid, okay?

But they are getting a commission to sell that product. And they might hit you with things like, "Well, it's got an upfront bonus. You get 10% or 20% or 25% for just signing the paperwork." Again, don't be dumb. Don't be stupid if it sounds too good to be true. It is every single time, and I call upfront bonuses, no offense to the industry, candy for the stupid. No philanthropist at the annuity company wakes up in the morning and goes, "You know what? I'm going to give money away today." No, they're for profit. They build it in. There's a hundred pennies in the dollar. So, a lot of times, the agents pay for these seminars, and a lot of times, they get the annuity company to pay for it or the middleman, what we call them, the business sales marketing organization, to pay for it.

One Size Fits All

But what I found, getting insight from my mom and her friends, her cackling hen friends in St. Augustine, Florida, is 99% of the time, they're pitching one product from one company. That's insanity! That has nothing to do with anyone's best interest and let me give you an example. Let's just say that you got a postcard in the mail, and it's not for an annuity seminar. It's a steak dinner at the greatest steakhouse ever that you'd never go to because it's too expensive, but it's for a doctor. Let's say the doctor is giving the seminar. What if that doctor got up in front of that whole room of 100 people and talked about one medication? One prescription they can dole out. One.

You have hundreds of people, all different health situations, ages, needs, etc., but they're going to sell one medication. You would be appalled, call the state, walk out, throw things. But that's exactly what the agent and advisor are doing at the annuity seminar. They're showing you one product or one product type that's a one-size-fits-all. That is insanity! Just be careful out there with these annuity seminars. I've never given one. I don't need to give one because we sell contractual guarantees. I do these blogs. But if you want to go and eat, go and eat. I'm all for that. But don't be buffaloed into signing paperwork. Another thing these people do, which I despise, is they'll say, "Just sign the paperwork and then make your decision later."

Never do that. Never ever, ever do that. Or if they say, "Well, you really need to move on this because the bonus is going away." Remember, the bonus is candy for the stupid. You're not going to do that either. Refrain from being high pressured by these people because they do have to pay for the steaks, but these commissions can be really high with Indexed Annuities, and that's the reason that's all you see at these seminars.

The Two Questions

A couple of other things, and I'll close us out on these seminars, annuity seminars. Number one, no annuity's one size fits all. At The Annuity Man, we ask two questions. What do you want the money to contractually do and when do you want those contractual guarantees to start? From those two answers, we can determine, A, if you don't need an annuity, you might not, and we'll tell you, and B, if you do, which one's going to provide the highest contractual guarantee? And then, we're going to try to use as little amount of money to achieve that specific number contractually for you.

Also, understand this: not only are you going to the steak dinner, chicken dinner, or whatever they're serving, and it's very expensive, but you get this great slideshow, and it looks too good to be true because it is. But if that person sells enough of it and sells enough of that specific annuity, typically an Indexed Annuity, then they get to go on an incentive trip to somewhere that you would never go. Italy, Bora Bora, Mexico, Cancun, Europe, whatever, because they sold a bunch of it. I wish those incentives would go away. They went away in the securities industry a long time ago, but they're still hanging on in the life insurance and annuity side. That shouldn't happen either. So, in addition to the high commissions and the one-size-fits-all, remember the medical example I gave you: there's no one medication for everyone, and there's not one annuity for everyone.

What It Will Do, Not Might Do

At the very end, if they sell enough of it, they get to go on a trip that you wouldn't believe how opulent it is, which tells you what the commissions are. You're smarter than this. Do not fall for the pitch. Do not tell me, "Well, he was a really nice guy and lady. They showed me pictures of their kids." Who cares? What does that have to do with your money? Do not fall for these old-school, slimy, good-time rock and roll nonsense sales pitches. You buy an annuity for what it will do, not what it might do. The will do is the contractual guarantees of the policy. If you really want to mess them up, say, "Hey, what's the contractual guarantee? Show me zero. Don't show me the hypothetical of unicorns chasing the butterflies, all the planets aligning themselves. Show me zero. Show me Armageddon. Show me the worst-case scenario." They typically will not do that, and if they do, then you have to ask yourself, why would I want to do that? Right? Right.

So, it's annuity seminar season out there. I think it used to be a typical six months out of the year. Now, it's all the time. My inbox gets flooded with these postcards, and they're all veiled. A lot of times, they don't even say the word annuity. Learn about Social Security, learn about lifetime income, learn about markets, and learn about inflation. And at the end of the day, they got one product they're trying to sell you. It's what I don't like about the industry. We're out here to change that. That's the reason I do blogs like this, so that thousands and thousands and thousands of you see it. You send it to your friends, you send it to the person that's doing the seminar and say, "You don't need to do this. You don't need to do this. There's not a one-size-fits-all product. This isn't a medication for all. This isn't a product for all." Tell him that and tell him Stan The Annuity Man told you to send it. My name is Stan The Annuity Man. See you next time.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.