We Went to a Steak Dinner Annuity Pitch. The Salesman Wasnâ…


Of course, showing the S&P 500 with reinvested dividends would also do that.

In any event, Mr. Schwartz said, Mr. Halaby should not be using that chart, because the company has discontinued the annuity it depicts.

“It is expected that our independent producers will use current materials,” Mr. Schwartz wrote in an email, using industryspeak for salespeople who don’t work directly for the insurance companies.

When I asked Mr. Halaby about that, he told me that someone who had not been working for him for very long put the old chart in the pamphlet. He added that the chart behind him at the dinner, which to my eyes looked identical to the one in the pamphlet, was in fact different. He would not tell me what company had created it.

American Equity’s updated chart, which it sent me Thursday, shows the S&P 500 — still with no reinvested dividends — doing a bit better than a hypothetical indexed annuity for a period starting in 2006 and ending in 2017. To Mr. Halaby’s credit, he made no outsize promises during the dinner. “The primary thing is not to lose your money,” he told the crowd. “My job is not to make you rich.” It was reasonable, he said, for those in attendance to expect their money to grow 3 to 6 percent annually in an equity indexed annuity. Some people thought it was a compelling pitch; there was a smattering of applause when his presentation ended.

Such annuities may be suitable for some risk-averse retirees who are tired of owning stocks. But as I wrote a decade ago, you can probably get better returns during retirement (and not be penalized for taking too much out too soon) by investing mostly in ultrasafe bonds and adding some stock index fund exposure too.

There are probably plenty of advisers who sell useful products over a steak dinner. But as my experience here demonstrates, you shouldn’t show up for one without doing a couple of things. First, conduct a quick online search about the host, including a check of the central database for stockbrokers’ black marks and the similar ones that state insurance departments maintain. Mr. Halaby’s run-in with the state is right there on the first page of his Google search results.

Then, read any and all fine print, even if it requires a magnifying glass. Ask lots of questions. AARP published a good list several years ago, though I’d add another one: Why aren’t referrals from happy customers alone enough to keep you in business?

Zoomd Reports

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