No. of Recommendations: 0
I thought you all might enjoy this...the guy knows I'm asking questions regarding specifics of the contract and about fees...his comment, "...only 1 in 100 people understand annuities..." at the end particularly entertaining...he won't even divulge the damn fees!

>>>Start of email>>>

Greetings. Unfortunately, I am not able to provide you by e-mail with all the materials you have requested. They should either be faxed to you or sent to you by mail. At the same time, most of the information you have requested are available in details in your annuity contracts. However, I will do my best to provide you with answers to some of your questions.

1 - There is a $30 contract fee for accounts with balances less than $50,000. For accounts with balances over $50,000, there is no annual fees.This is a normal practice in the industry and American Express fees are much lower than our competitors.

2 - Charges, including management fees, etc. differ among sub-accounts. Charges in our annuities are among the lowest in the industry (according to Fortune Magazine) and the total charges do not exceed similar charges on mutual funds. I have already given you a brochure on cost comparisons and if you can not place it I will send you another one.

3 - For surrender charges, you should consult your contracts. Normally, if you do not surrender your contracts for eight years, these charges will disappear.

4 - I have to fax or mail you the Morning Star reports on sub-accounts.

5 - I will e-mail you the ticker symbols of the underlying mutual funds in my next e-mail.

6 - For investment options, you should consult your contracts. I will also try to mail you a complete list of all investment options along with the analysis of the accounts.

7 - You are right. I get paid to manage your accounts by commission. The latest balances of your accounts are approximately $200,000. I receive annual commissions on these balances in accordance with the following formula:

Balances % 1000 x 2.5 x.85 = annual commission. or,
$200,000 % 1000 x 2.5 x .85 = $425
As you see, I receive a commission of $425 to service and manage your accounts for one year.I spend at least one hour per month and 12 hours per year to service and manage your accounts. On the average, I charge $500 an hour for financial consultation. On that basis, I have to charge you at least $6,000 annually to compensate for my time. Lat year, we agreed for an annual fees of $1,200. Unfortunately, so far no payments have been made. You might claim that your accounts have not done well. I fully agree with you. But if you compare the performance of your accounts with the performance of the market in general, you will see that your accounts have done far better than the overall market which is still 50% below its peak in March 2000. Your accounts are long term investments. Give us some more time and then compare the results.

I hope I have been able to answer some of your questions. I will also fax and mail you the materials you have requested. Thank you and best personal regards.

Further, I would like to bring the following points to your attention in order to clarify my answers to your questions:

1 - The $425 commission I receive annually for servicing and managing your accounts is paid by American Express and is not taken fron your accounts.

2 - For any payment you make to your non-qualified annuity, American Express adds 1% purchase bonus. This means that when you pay $1,000 into your account, $1,010 is credited to your account.

3 - As instructed in your e-mail, I will not make any changes in your investment options unless authorized by you.

Finally, in order to clarify every unclear points in your mind, it is absolutely necessary to have a meeting as soon as possible. Annuities are complex products. Without exaggeration, only one in one hundred financial advisors understand them, let alone ordinary investors. Their advantages are not known to everybody. If we have this meeting, we will be able to resolve the problems better and easier. If you wish, you can bring anybody with you. Thank you and best regards.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.