Annuities pros and cons. We’ll pick apart the Barrons Annuity list, which is an annual thing they put in their publication. They call it the Gold Standard, looking at annuities.
Barron's article makes me scream at the top of my lungs, even though they have quoted me numerous times in the past. I always say the same thing to them, and they kind of meander my quotes. Whatever. But great publication. But every year, I get calls on this. I got one the other day. "Well, I was reading Barron was the other day, and they said this annuity's the best one."
Just a little history on Barron's. The first issue I looked up was in 1921. Clarence Barron was the founder, and it's a really good newspaper, magazine, whatever you want to call it. At the time of this taping in 2021, we're somewhat digital. I don't know how good of a transition they've made into the digital world, but back in the day when I first started with Dean Witter, Morgan Stanley, PaineWebber, UBS, you know, I got Barron's every day. It was like a thick newspaper, but it was for financial stuff. It was great.
But a few years back, they said, "Okay, we're going to give you the best annuities every year." And they break it down. The best immediate annuities. The best Deferred Income Annuities. The best-buffered annuities. The best variable annuities, the best Fixed Index Annuities. Annuity quotes are like a gallon of milk, meaning they change every seven to 10 days. So when Barron's puts out this article, the quotes aren’t real by the time it's printed. The quotes aren't valid. And the fact that they are pinpointing specific carriers, of which I represent, and saying, "This is the best one, and this is the best one, and this is the best one for this specific annuity type," it's insane.
I can't believe they continue to do that because of the call I got the other day. "Hey, Stan, The Annuity Man, America's annuity agent." And it was a client. He goes, "I read the Barron's article, and they said this was the best immediate annuity. Hey, let's go ahead and do that. Let's go ahead and buy that." Now, I went, "Whoa, slow down there, Johnny. What are you talking about? What do you want the money to do? Do you want it to be joint-life? Do you want to be single-life? What do we do? let's quote all carriers." Do you know what we did? We quoted all carriers, and the favorite one from Barron's, finished seventh in the contractual guarantees. So it's misleading for Barron's to say, "This is the best one." Come on. Annuities are commodity products.
Now, I know Barron's sell, advertising, and things like that, and it is kind of ironic sometimes to see advertisements from the carriers that finished on the list. I'm sure that's just happenstance. I mean, consumers, this all comes back to the media. Can you trust the media? Can you trust what the media's saying about politics? Can you trust what the media's saying about financial stuff? With this type of list, you can't because every single week, annuities change from the standpoint of contractual guarantees. So for them to put in a variable annuity, an index annuity, a Deferred Income Annuity, an immediate annuity, or Deferred Income Annuity, or a Qualified Longevity Annuity Contract and say, "These are the top five." Give me a break. That's ridiculous because everything expires. Quotes expire and companies; I’ll give a good example.
Remember when CDs were really high, and there was a C? Like let's say there's a five-year CD that you really liked, and you're driving down the road, and one bank had the five-year CD at a higher rate than the bank on this side of the road had the same five-year cd. Why? Because the bank, the bank with a higher rate, was trying to attract money to a specific amount—the same thing with annuities.
So for Barron's to put on paper, digitally, for the record, for all time, for trusting people to read, that's red Barron's forever. "Well, I guess if Barron says, that's the top one, then that's the top one, Stan the Annuity Man." Garbage. What they should do instead of the top list is they should take each type and fully explain it and have a video, preferably of me or someone as smart as me. Wait a minute that doesn't exist. But the point is, have education on the types and then say, "You've got to shop all carriers, and here's what to look out for. Here are the pros and cons of variable annuities. Here are the pros and cons of index annuities. Here are the pros and cons of Deferred Income Annuities. Here are the pros and cons of Qualified Longevity Annuity Contracts. Here are the pros and cons of index annuities, MYGAs, and whatever.
Here's another thing that drives me crazy. So, let's just say Barron says, "This is the best immediate annuity." There are 40 different ways to structure it, the last I counted. What structure are you doing? Are you doing life only? Are you doing joint-life only? Are you doing life with a cash refund? Are you doing a period certain? When are you starting the income? Are you starting next year in five months, six months, or two years? There are so many variables to how to structure it in the customization of annuities; you can't just say this is the best immediate annuity. If they're going to do that, then they have to have the best Single Premium Immediate Annuity for this quote structure, and this quote structure, and this quote structure. And 40 pages later, they've covered every quote structure, and by the time they print, it's irrelevant anyway, because annuity quotes are like a gallon of milk, and they expire every seven to 10 days. So by the time they print it, the editor looks at it, and they go to press; it doesn't matter anyway.
For people like me who understand markets, financial products, and annuities, Barrons loses me, and they lose credibility. And every time I see them go, "Man, who is approving that crapola? Who is approving that?" Or is the ad revenue so good they have to run it? And they go to these big carriers. We'll put you in the top five if you run a half a page ad. I hope that's not the case. Annuities are contracts. Annuities are commodities. They should be shopped for all carriers, with all carriers for the highest contract guarantee for your specific situation.
So when Barron's put into the top immediate annuity, or the top deferred income annuity, what the top deferred income annuity for a 70-year-old or 65 year old, or 62 year old, or 81 year old, or 77 year old, it's all different. It all changes. Barron's, I'm calling you out. Let's not make it a joke. We need that. We need that article. We just need that article to be better and to be factual.
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