Several weeks ago, a feverish annuity agent/industry response was unleashed driven by the posting of the USA Today interview of Ken Fisher (KF), Founder, Executive Chairman and Co-Chief Investment Officer of Fisher Investments titled; “Why I still hate annuities: Here are the reasons these investments are bogus”, on LinkedIn. This was, yet again, another annuity attack in a long series of such attacks spanning many years. A long-time Ken Fisher marketing trademark.
There were several heated responses and an official Sheryl Moore of The Society of Annuity Facts and Education (SAFE) response to this post. I, never a fan of Ken Fisher, of course contributed. To my surprise, I received a phone call several days later from Mr. Fisher.
My phone (ring, ring)
GM: Hello, this is Gary Mettler the Annuity Maestro.
KF (Loathing): Gary, this is Ken Fisher, I just want you to know, I have been reading your immediate annuity dribble for years now and I hate you more than annuities!!
GM (taken back by such a statement): But, really Ken?
KF (Blubbering): Yes really!! All you do is sell immediate and deferred immediate annuities (DIAs), I can’t take it anymore! How do you expect me to make a living if I can’t twist and churn and even buy your clients out of their Contracts! You are killing me, just killing me! (Still Blubbering)
GM (calmly): But that’s the reason I sell them. I want their owners to know they will have a permanent and reliable income source. And every once in a while, I get to put a stake through the heart of the bad guy.
KF (Laughing): Well that’s just horse pucky! Gary, I’m not so bad, not really. And my income sources are well; almost reliable (tentatively). Anyway, why can’t you be like all the other good little annuity agents and sell FIAs, VAs, and other deferred contracts! I have bullseyes on their backs. You need to get with the program and modernize your practice. For God’s sake, think 21st century man, not 17th! My personal goal is to replace all this nonsense annuity business with my investment portfolios. I need to make ever escalating amounts of money (fee income), you know, onward and upwards!
GM: What do the regulators say about your business model?
KF: Regulators, Smegulators! They, don’t bother me, they’re all cowed, particularly, the States. It’s been years and not a single Boo from any State. I’m free to do and say whatever self-interested thing I want about annuity contracts. But, too bad you’re banned from even mentioning securities in any context (hee-hee!)
GM: Well you can take heart, Ken, you’re not the only person out there who would love to twist and churn or otherwise get these contracts surrendered. You can stand in line with: other RIAs, securities and real estate brokers, financial advisors, agents, ex-spouses, significant others, kids, siblings, caregivers, business partners, power of attorneys, creditors, conservators, attorneys, con men, fraudsters, governmental agencies, etc. (there is a lot of them!) We don’t call immediate annuities insurance for nothing!
KF (Sighing): Knowing I’m not the only one does gives me some comfort.
GM (matter of fact): Besides, I’m not as busy as I used to be with interests rates in the dumps (11+ years now) and with the industry spending all their vast wealth on developing their “flagship” contracts; FIAs, VAs, and other deferred contracts all with secondary lifetime income guarantees. I’m not a favorite industry son and with the exception of academia, I’m unloved. Immediate annuities are the whipping boy of many in and outside the industry.
KF (Angry): None sense! I just picked up a new Mid-West client and her son. Guess what? Low-and-behold, yet another Annuity Maestro SPIA! Gary, really, a $2 million IRA/SPIA (mother/Son)! What am I going to do with that!? All the good money is gone! (An RIA worst fear, a seven figure SPIA!).
GM (Sarcastically): Well that case was “suitable”. As you know (matter of fact), Ken, the mother owns several highly valued and non-leveraged income properties and has substantial gold and silver physical metal ownership while the son is a very successful real estate developer/manager entrepreneur and the proud owner of a string of antique cars. Per the Mother’s request, the annuity purpose was to protect her wealth, reduce her RMDs by 25% by escalating her future annual income and pass as much IRA value as possible to her son who, doesn’t have a lifetime retirement income of his own, via IRA ownership succession. Son also gets a COLA he would not otherwise qualify for if he inherited as “Beneficiary” and will not be regulated to using the SLT as are all other non-spousal individuals. Also, as an aside, there is absolutely no chance Son can commingle this wealth into his marital estate. It will forever remain his separate non-marital property. And all on a guaranteed basis!
KF (Laughing): Not only, can I not do that RMD thing and protect Son in that manner and excluding him from the SLT and give him a COLA, I don’t care for all that other asset crap, can’t make any money there! Its stocks and bonds Gary, stocks and bonds!
GM (Sincerity): Well there is always the certificate of deposit portfolio. Perhaps you can help there?
KF (Despair): Are you kidding me?! Bank certificates of deposit, just as useless.
GM: Ken, I didn’t realize you were such a fee grubber.
KF: Oh, yes, if you will … my clients are my own personal annual annuity! But that one works for me!
GM: It was real Ken, got to go. I just got a phone call on the other line, well, well, a Ken Fisher client!
KF (Insanely Pleading): Oh No, Mr. Gary! Not the SPIA treatment! Please, please, I didn’t mean any of it. I … (cutoff and placed on hold).
GM (second phone call): Hello Mr. and Mrs. Smith, $10 million? No problem. Ken Fisher? Why, yes, I know him, soul of a man! But, definitely not an insurance guy.
GM (Returning to Ken): Ken, hey, got to run!