No. of Recommendations: 5
I thought it would be cool to send you all the dialogue between myself and this "financial advisor" that sold my folks the annuity...I think it will validate Fool's opinion on have been removed but I think at the very least it's educational..if no one's interested I'll stop posting updates so let me know.

Email dialog with some notes:

From me
> I'm still having some difficulty figuring our your
> fees. So are your fees .85%? Does this include the
> Mortality and Expense Risk fee of .95%?
From advisor
> Do not be confused. My commission has nothing to
> do with management fees, mortality charges,etc.
> which are charged to your sub- accounts by AMEX. My
> commissions are paid by AMEX out of their own pocket
> and not charged to your accounts. They pay me 85%of
> .25% of your total accounts. If balances of your
> total accounts are $200,000, then my commission is:
> $200,000x85%x.25%= $425.

Notes: As you can see, the advisor is completely disregarding
the fees from American Express as kind of a "Well that's not
my commission so don't worry about that" kind of way. After
additional research the annual fee for have the annuity is in fact
.95%, add his .2125%, add the average fund expense fees, .85%, and
a MAV option which adds .15% and you'll find the fees to be a
whopping 2.1625%!!! This does not include the $1200 flat fee he is
charging for "managing the account"

From me:
> I appreciate your rate but am more
> interested in looking at the performance of the
> funds I currently have invested in and comparing
> those funds with similar funds and find that the
> American Express funds are amongst the lower
> performing funds this year. I've researched some of
> the funds in Morningstar Can you explain this?
From advisor:
> This is not true. I have picked up better
> performing funds for your accounts. However, we can
> always change them with other funds without any
> charges to you.

Notes: Here are the ticker decide

AXP Blue Chip Advantage IBLUX
AXP High Yield Bond INEAX
AXP New Dimensions INNDX
AXP Strategy Aggressive INAGX
AXP Equity Select INVPX
AXP S&P 500 Index ADIEX
AXP Small Cap Advantage ASAAX

From me:
> In doing some additional research we noticed
> our SEP-IRA's have been placed inside of the
> annuity. Can you please explain what the advantage
> to this is? I'm not sure if I understand correctly
> but I believe a Sep-IRA can be opened without an
> annuity and grow tax deferred. One can also deposit
> up to 25% of the schedule c income into a Sep-Ira up
> to a maximum of 40,000. So can you explain what we
> may be missing here? Are we getting double tax
> deferral?
From advisor:
> Until last year you could only contribute 15%
> to your SEP-IRA with the maximum of $25,500. The law
> changed it to 25% not exceeding $40,000. For this
> reason, initially I set up a dual plan (SEP-IRA and
> Money Purchase Plan) for you in order to maximize
> your contributions. Now, since the law has changed
> you have to rollover your Money Purchase to your
> SEP.

Notes: Although he is correct with the SEP-IRA they could
have only invested $25,000 anyway so the point is completely
without basis. He has yet to show why he has put their IRA's into
the annuity.

Advisor's final comments:
> Why I have placed your investments in annuities,
> there are several advantages. I will mail you my
> analysis. I hope I have answered your questions. Even though
> it takes a lot of my time to answer your questions,
> I will be more than happy to clear your minds from
> any ambiguities until you perfectly understand the
> logics of your investment strategies. Best regards.

Notes: As soon as I receive his "explanation" I will post. I love the point he makes, "Even though it takes a lot of my time...", hmmm, at $1200 a year plus $425 commission I would think he could at least spend 15 minutes answering questions.

More to come...
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.