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Everything posted by 403bannuitysalesman

  1. I am not a troll and I have not sold an annuity in an unethical way intentionally. I always tell my client there maybe better alternatives to this product and that this is a high cost vehicle that locks their money up for a long time. Unfortunately, many don't seem to care as they are told to get an annuity by the teacher down the hall and that it was the best thing ever. I am just vetting my frustration at how unethical this practice can be and how some of these 403b reps are presenting this product. Some of these teachers are only putting $12.50 a check and a lot of it going to pay the fees/expenses. There were over 1500 403b Variable annuity contracts written by just one company in my small area last year and there are more than 4 companies that sell the 403b variable annuity.. The average fee/expenses on these contracts were around 2.2%, $30 admin fee, and a 12-year surrender charge. I don' t know if they are being trained this way or are just willing to say anything for a dollar. Maybe they want to make a trip, get a bonus, or are afraid of losing their benefits. I don't know how long you can go on misrepresenting a product (lying about expenses, guaranteeing returns, calling it a mutual fund, etc) before it catches up with you. I have approached superintendents about putting in a low cost, self-directed 403b-7 alternative, but after talking to their principals, they say there is no interest. The principals don't even know the difference between an annuity and custodial account, so I don't understand how they know enough info to say there is no interest. So they keep on promoting the 2.2%, $30 admin fee, 12-year surrender charge, 403b-1. We have been told not to come into certain school districts, but some reps totally ignore whatever the district says and still sneak in (they work by their own rules). Many have been kicked out numerous times, but come back again and again. What can the districts do, as some of these companies are the largest providers in the district, and even though they have been told countless times not to come on the school grounds, they completely ignore the district's rules.
  2. Here is another moral dilemma. We are told not to talk about cheaper alternatives when educating prospects. We are told to only mention those products that benefit us, regardless if it is not as financially beneficial to the client. If we do not offer it, we are not supposed to talk about it. Our job is not to educate people, but sell them a product that gets us paid. A day in the life of 403b salesman: I had an appointment with a teacher after school to talk about the 403b. I mentioned other low cost options available in addition to a 403b and the teacher didn't realize there were fees in these things and her husband takes care of this kind of thing. I get back to the office and find out that someone was told by a 403b representative in the lounge that he should move a 403b annuity over to another 403b annuity and pay the 8% surrender charge to take advantage of the great small cap returns in his own variable annuity. I asked myself: Why are you moving from one high cost annuity-to another high-cost annuity, chasing small cap returns, and locking your money up for another 12 years. If you don't have access to a lower cost option at your district, and you understand the volatility of the small cap sector, all that is needed to do is switch your fund line up. This was never told to you because it does not benefit the 403b representative's commission.
  3. Personally, I don't like taking advantage of people. I see so many individuals listening to the wrong individuals when it comes to investing their hard earned money. There is no screening as to who can come into the teacher's lounge. Personally, I think 403b sales agents should be banned from school districts. I think vendor fairs should go the way of the dinosaur. I think 403b sales agents should work on salary and not commission. I find it amazing that there are agents that have worked 40 plus years in the financial industry and have not helped one educator start a mutual fund or low cost retirement platform - only annuities. Annuities are only for a specific type of person...there is no way that 80% of teachers under 30 need a 403b pre-tax annuity instead of a mutual fund ROTH IRA or 403b-7 custodial account. But that is basically the only product that an insurance agent pushes because of the huge commissions they generate.
  4. I am so frustrated...there is so much deception in this 403b business. You cannot trust most of us-many will lie straight to your face. I don't know how some can sleep at night knowing what they are doing. People are told to roll over their old 401k into a 2.2% annuity when they already have an annuity through TRS. Why do they need another annuity at 35 years old with no kids, no spouse, don't need a death benefit, not looking for an annuitization factor, and looking for growth in their portfolio. I think this job is one of the slimiest, greasiest, jobs in America.
  5. When I try to inform them about getting a low-cost providers installed for choice, administrations look at me like a deer in the head lights...they do not want to make a mistake or seen as doing something incorrect, so they do nothing. They would rather keep the status quo and not rock the boat. It is crazy that in the year 2018, districts with over 2k teachers in them have only annuities to choose from.
  6. You are correct. We are sharks and are looking at our bottom line first and foremost. If we were not, more younger teachers would have ROTH IRAs or low-cost 403b-7 choices in their school. I would be hesitant to trust an annuity salesman with my money. The problem is many administrators have not even heard of Vanguard. I spoke to one today and he didn't even know what a ROTH IRA was. I told him about low cost retirement plans, but it is over their head at this point.
  7. What do you personally invest in ? I have a ROTH IRA and 401k, along with ETFs and no-load nonqualified mutual funds. I am very fee and expense ratio conscience. What does your company retirement plan look like? It is a 401k for employees. What level of training do you and your colleagues actually receive in investment principles...you must have a series 6 and 63 to sell variable annuities. Some agents have a series 66/65 and series 7, along with CFP. What is the corporate culture like where you work: It is stressful as it is commissioned based and you are only as good as your last sale. What is the turnover rate in this industry: there is a very high turnover rate in this business. What can a salesperson get away with? A salesperson can get away with a lot, but if the client holds them accountable, there will be consequences. Unfortunately, the client usually has no idea what he/she is being sold or what their rights are. Does your company promote any ethic standards when dealing with clients? I would say this answer changes from company to company, but by and large, the companies do stress ethical standards for employees. The problem is this is a commission-based work force, so there is always a moral dilemma in my opinion. Do you do what's best for the client or best for my pocket book. It is hard to turn town 7k day in and day out. Who supervises you and what is their mindset concerning selling dubious products...we are supervised by a manager and our broker/dealer gives us annual inspections and approves our solicited rollovers. I think most of them are ethical and do the right thing, but if the representatives gives misleading/deceptive info to them, they will approve the rollovers. They are only as good with decision to approve as the info the representative provides to them. I think that is a problem as the rep can make up whatever fictitious number to make the rollover seem legitimate. There is no database the broker dealer uses to see if the rep is telling the truth when they send the paperwork to justify rolling from annuity-to-annuity. Most rollovers are approved because of skewed numbers. Do you believe the administrators are complicit in what is going on with these 403b annuity sales? I think the administrators are clueless and have no idea what is going on. They do not have the knowledge base to make informed decisions and are at the mercy of whatever we tell them. How are investor complaints handled if someone raises concerns about how the sale was handled with perhaps mistruths and deceptions? there is an investigation by broker dealer and they take it quite seriously. The representative better have good notes. How does your company feel about fiduciary responsibilities and rules. Ours is on board. I think some companies are moving away from annuities because of this and over to the 403b-7. The problem is they will charge a wrap-fee and/or use loaded mutual funds. So, other than no surrender charges, there will still be fee discrepancy in my opinion.
  8. To answer the first part your questions: How much does an annuity salesperson make a year? That depends on book of business you inherit and your assets under management (AUM). It can be all over the board- as low as 36k to well over 100k. I know some very successful agents that make over 500k a year or more. It can be a huge money maker. The trails on a huge book of business for some agents are 5k to 12k a month. In certain states, you can roll some of your pension after you retire to an annuity, so salesmen in those states are hugely successful. How are you paid. You can make over 3% on rollovers, so if prospect has 200k in a 403b, we can make about a 7k pay out if they roll it over, which takes about 30 minutes. That is why rollovers are so focused on. We can make over 8% on new yearly 403b contributions started. So if a teacher puts in 2400 a year, the agent makes over $170 and 2.5% every year there after on monthly deposits. They also get a trail for their AUM that is based on your total book of business, which I have seen range anywhere from $600 to 12k a month. If a teacher maxes out on their 403b, they make over 8% on their first year contributions. I have had salespeople tell me that they make very little selling annuities. Is that true. I've heard that said over and over. Annuities are a great money makers and agents build their pension off of them. Where else can you make 7k in 30 minutes. It is a pyramid scheme. The older agents at the top with the biggest books of business and newer agents at the bottom, trying to work their way up. I know many agents retire very wealthy. If you stick it out, you can be making well over 250k a year by the time you retire. What is discussed in your training meetings: How to get in front of teachers and district employees to market your 403b annuities. Going the pre-tax route is stressed in some companies regardless of whether it is best, because more money goes into the deposit and you make more money from it. Also, how to protect your annuities from other annuity salesman. There is always poaching going on between annuity companies, much to the teachers detriment. Teachers most of the time have to pay at least 5% surrender charge every time an annuity is rolled over.
  9. I would like to see mandatory enrollments via a low-cost provider implemented, similar to what they do in the private sector. Most teachers will not sign up something on their own. They need someone to hold their hand and tell them they are doing the right thing. That is why the annuity rep is so successful. They are face-to-face with the client, reassuring them, making them feel good.. Until they have mandatory enrollments or these low cost providers send someone into the schools to do the face-to-face thing, the 403b annuity will continue to thrive.
  10. I agree 403b annuity salesman should not be in the schools...all they cause is confusion with their deceptive sales practices. I deal with this everyday as one of them. What you are working against is the heard mentality....one of the teachers swears by this annuity salesman and is very influential, and all the teachers respect him/her, so listen to that person over common sense. Case in point: I spoke to a teacher a little while back about starting a ROTH IRA via a low cost provider in lieu of using the districts 403b-1 annuity plan, which I am a part of. She had promised her peer though to meet with this 403b annuity rep before doing anything (her peers' son was best friends with this young rep and wanted to do him a favor). I told her to not to sign anything until after reviewing all the details. Well, she signed up for it after the rep told her the total fees were only 1.2%, the admin charge went away after 6-years, and that he only partly works on commission. After reviewing the contract, I find out the total fees were at least 2.2%, and the $30 admin fee didn't go away until the pot reached 25k and he was in a broker role in this situation. In addition, the contract used retail shares, instead of institutional and had 12b-1 fees.. She was going to sock $200 a month into this crappy product. I asked her why she signed up for it after our conversation and she said she couldn't remember all the details about what to look for, her husband got along great with the kid, and she said the rep was staring at her and she didn't want to make him feel bad, so she signed up for it. It was an sale based clearly on emotion and feelings and not logic and common sense.
  11. There is something I forgot to mention. Many times buying an annuity is based on feeling and emotion. I hear It "feels" like the right thing to do. It is an emotional, not logical sale. If you can connect with your prospect, you can get the sale. I can tell a teacher all about the negatives of the product, but if they "feel" like it is a good thing to get, they will buy it regardless of what I say. Also, when I speak to young teachers about retirement, and I recommend for them to go to a ROTH IRA mutual fund via Vanguard, Fidelity, T.R. Price, etc. in place of investing in the district's 403b-1 pre-tax plan, the teacher does NOTHING. They have no confidence at all in investing and want someone to do it for them and they would rather pay for the annuity than do it on their own. If I don't sign them up, another annuity company will. I cannot go online and sign them up in a target fund...they have to do it themselves. This is a more difficult problem than just saying "no" to annuities.
  12. Hello, I think some do know what we are doing. During vendor fairs we discuss among ourselves different topics, such as investing in index funds and using lower cost products to fund retirement. It would never be advertised though, because that would be self defeating. You are told to not over educate or to not tell too much. Others will not share this knowledge with educators because they feel it is not their job to educate on things like that and if they can't take 5 minutes to google "investing101" or "how the 403b" works, it's on them. It is a moral dilemma for me. I do talk to my peers about what I discussed on this board, but many say that if it was not for us, they would not be investing at all and it is better to invest in a sub-par product, than no product at all. I do know that some insurance companies are worse than others when it comes to suspect practices. I agree it has to do with how they are trained to sell the 403b. Some of the trainers and supervisors of these younger salesman have multiple disclosures on broker check for different issues. I don' t understand how someone with multiple disclosures in the financial industry should be in charge of training the salesforce in how to sell 403b annuities. It is very coincidental that those with a disclosure or two seem to get promoted the quickest.
  13. Hello all, I am a 403b annuity sales representative and am in agreement there needs to be massive changes in the way 403b annuities/custodial accounts are sold to non-for-profit employees. In the schools, teachers have no clue what they are being sold to them by us, as we explain it like a 401k for teachers (which is half-truth). We are told to dumb it down and explain it like in the most elementary terms possible. Most teachers don't even know what they have when they sign up for it (call it a 401b or something like that). Fees and surrender charges are rarely mentioned and when they are, the teachers look at you like a deer in the headlights. Employees are under the impression the 403b provider has been vetted by the school and endorsed by the administration, however, many in the administration don't even know the difference between a ROTH and a Traditional IRA, let alone what to endorse when picking the right retirement vehicle. I have been told by administrators not to mention fees and expenses to staff because some can't even balance a checkbook, let alone understand what I am trying to explain. It can be like a kid at Christmas for the annuity salesman in the schools. Where else can you walk the halls, knock on doors, introduce yourself, and get an appointment all at the same time.. You can tell the teacher anything and there is little accountability. We call ourselves advisors, even though we are working as brokers selling commissions and no one knows the difference. Teachers open their whole financial portfolio to people who call themselves "advisors", who they just happened to meet, in a teacher's lounge the week before. Annuity salesman compete with other companies for rollovers and rarely explain the consequences of moving the money to a new contract. I have seen individuals move their money to three different annuities in 4 years and pay thousands in surrender charges two or three times, chasing a better return shown by the newest 403b salesman (and these where administrators by the way). To the 403b salesman, it is all about enrollments and rollovers. Rollovers are where the big money is and the way to get that big pot of money moved to you is to show better returns than the current annuity company. One of the easiest ways to get them to move the money is by showing all the small cap returns of the last year and showing what the current client is missing in this current bull market. Another way is to show the weaknessof the current client's 403b. This has been presented by some salesmen by showing the quarterly returns as the annual returns (many teachers don't know how to read their statement) and to be critical of their current fund line up. This is how they get the teacher to move immediately most of the time. They don't realize they can just change the fund line up and you don't have to take out a new contract. Some teachers have two or three annuity contracts at one time and like to see which one performs best. Broker/dealers of some of these insurance companies approve some of the craziest rollover requests . I have seen rollovers approved by a company going from a lower cost annuity to a higher cost annuity AND the teacher paying surrender charges to make this switch and this be their second or third rollover in 5 years (chasing small-cap returns shown to them). Many of the annuity salesman I work with are young and right out of college Some I think are using this as a stepping stone and don't realize or care of the financial consequences of who they might be hurting with their recommendations. I would be reticent of anyone I met in the teacher's lounge giving out financial advice...this is just my opinion of course from working in this field everyday..
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