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Are you aware that US Allianz offers a 403(b) plan that you can 90-24 transfer into that offers all of the following:

 

1. Guaranteed No Loss of Invested Principle

2. Guarantee Investment Returns the Greater of

a) Current value of the contract OR

b) Guaranteed Annual 3% increase on purchase payments (invested principle) OR

c) The highest contract value on the anniversary date of the contract

 

3. A 4% - 8% bonus paid on the amount of principle invested

4. 49 Mutual Funds from top companies to invest in

 

Contact me if you need more information.

 

John K

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Hi John K,

 

Are you aware that you could get in lots of trouble by advertising products on the internet without approval from your broker-dealer or the NASD? By the way where is the prospectus, isn't it a law that you have to offer a prospectus when selling something.

 

Are you also aware that what you said was a complete misrepresentation. Did you mention that the guarantee only applies after a term period and that you MUST annuitize to get your money back and the annuitization rates are next to nothing or highly manipulated. Are you aware that fees in relation to the value is ridiculous? Are you aware that there are not 49 mutual funds available - they are called Sub-Accounts in a variable annuity Mr. K.

 

Please don't waste our time or insult our intelligence with your ridiculous products that make you more money than your clients. Please do not post anything else on this board unless it is something of value and not a sales pitch, otherwise next time it might be the NASD knocking on your door.

 

ScottyD

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John,

Scotty said it all. Don't waste you time around here. No mention of all the costs associated with all of your feel good worthless guarentees. SEC warned people about those so called bonus annuities, not to mention that to put 403b money into a high priced annuities is worthless. They are paid for by even higher fees.

Steve

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Guest eddie-Investor Alert On Variable

NASD Takes Disciplinary Actions For Variable Annuity Abuses And Issues Investor Alert On Variable Products

Washington, DC — NASD announced today as part of its ongoing efforts to curb abuses in the sale of variable products, that it has censured and fined InterSecurities, Inc. of St. Petersburg, Florida, $125,000 for having inadequate procedures and systems governing its sale of variable products and its handling of customer complaints. In addition, in three separate enforcement actions, not related to the InterSecurities matter, NASD announced that it filed complaints against individuals for unsuitable sales of deferred variable annuities.

"There has been a dramatic increase in sales of variable products in the last several years and the marketing efforts used by some variable annuity sellers deserve scrutiny - especially when seniors are the targeted investors," said Mary L. Schapiro, NASD Vice Chairman and President of Regulatory Policy and Oversight. "Sales pitches that confuse or frighten investors violate NASD rules and will be the subject of enforcement action." For this reason, NASD today issued an Investor Alert to help investors better understand variable annuities before purchasing one. The alert, Variable Annuities: Beyond the Hard Sell, can be found at www.nasdr.com/alert_variable_annuities.htm.

InterSecurities was charged with failing to adequately address customer complaints that were made against it. As an affiliate company of InterSecurities, Western Reserve Life Assurance Co. of Ohio (WRL) received nearly all customer complaints concerning InterSecurities' sales of variable products. Because WRL determined whether each was a "complaint," InterSecurities failed to have records of all complaints and report them to NASD as required by NASD rules.

InterSecurities also did not have procedures in place to ensure the proper registration, training or supervision of individuals that handled customer complaints, adequate guidelines for customer complaint investigations or adequate reviews of its complaint handling process. In addition, over the course of more than four years, InterSecurities had inadequate procedures and systems governing the sale of variable products. In settling these matters, InterSecurities neither admitted nor denied NASD's findings.

In other enforcement actions announced today, NASD filed three separate complaints against individuals for unsuitable sales of variable annuities. They include:

Ralph T. Grubb, at the time employed by Banc of America Investment Services, Inc., was charged with an unsuitable sale of a deferred variable annuity to an 18-year-old high school senior who was seeking a safe investment for a $30,000 legacy while in college. When she graduated from college, she intended to use the funds for a down payment on a house or to buy a car. However, the annuity contract was subject to a ten percent additional tax on distributions prior to age 59 ½ and carried surrender charges that would have still been in effect when she intended to liquidate her investment. The complaint also alleges that Grubb's recommended allocation of 100 percent of the customer's premium to one equity sub-account within the annuity was unsuitable in relation to the customer's risk tolerance, and that the customer had no need for the death benefit feature of the annuity because she was unmarried and had no dependents. Moreover, the customer was in the lowest marginal tax bracket and had no need for tax deferral, a principal reason that people purchase variable annuities. The complaint further alleges that Grubb made an unsuitable sale of a deferred variable annuity to the customer's father for the investment of a legacy received by the customer's 16-year-old sister.

Kevin S. Jones was charged with an unsuitable switch of variable annuities. At the time, Jones was employed at Raymond James and Associates, Inc. The customer, a self-employed rancher, needed access to her funds and had an investment time horizon of two to seven years. During the sixth year of her ownership of a $300,000 variable annuity, Jones recommended that she switch to another variable annuity in the amount of $315,000, for which Jones received a commission of $8500. The original variable annuity would have allowed the customer penalty-free access to her money in eight months, but the switch resulted in limited access to her investment for the next nine years. The switch also caused the customer to pay a $1600 surrender fee. The complaint further alleges that the switch resulted in no significant improvement in the death benefit for the customer and caused the customer to pay substantial increased annual costs. Over a six-year period, these increased costs depleted the $15,000 bonus offered by the second variable annuity.

Gregory Hunter of Edward Jones, Inc., was named in the third action and charged with an unsuitable sales transaction. In this case, the customer had a portfolio worth approximately $250,000 that generated monthly income averaging approximately $1,500. Hunter recommended and sold to this customer a $60,000 deferred variable annuity by liquidating a portion of her portfolio. The net effect of the transaction was that the customer's portfolio now generated monthly income that was insufficient to cover her monthly expenses requiring the customer to make regular monthly withdrawals of $360 from the annuity for living expenses. Given the customer's need for current income and the fact that she did not need benefits offered by a variable annuity such as tax deferral or a death benefit, the transaction was unsuitable.

Under NASD rules, individuals and firms named in complaints can file a response and request a hearing before an NASD disciplinary panel. Possible sanctions include a fine, suspension, bar, or expulsion from NASD.

These cases are the latest in a series of special examinations conducted by NASD that focused on the sale of variable contracts.

NASD has issued alerts to both firms and investors to help ensure that these products are properly sold which can be found at:

www.nasdr.com/alert_exchange_lifeinsurance.htm

www.nasdr.com/pdf-text/9935ntm.pdf, and

www.nasdr.com/pdf-text/0044ntm.pdf.

Investors can obtain more information and the disciplinary record of any NASD-registered broker or brokerage firm by calling (800) 289-9999 or by sending an e-mail through NASD's Web Site at www.nasdr.com.

NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business -- from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and member firms. For more information, please visit our Web site at www.nasd.com.

 

 

 

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I purchased an annuity last fall through an agent which was the same kind of thing. I can't touch anything without penalty for ten years. There were perks like bonuses, etc. discussed and the fact that the interest rate could increase as the market improved. I rolled 9,489.00 into the annuity. When I looked through the information sent to me by the company (which I should have looked through earlier) I found the the agent had only invested $7,405.00 of MY MONEY. It will take me the whole ten years to earn back what it cost me to buy the thing!! Do I have any recourse?

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Dear Seq,

 

$7405 divided by $9489 = 78 percent. So let's get this right. You gave the company $9489 and they kept 22 percent or $2084 and invested $7405. Are you sure you got your facts right?

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S,

 

That sounds very odd to me, yes you may have some recourse. First, you need to have documented proof that you sent the $9000+ into the company. Second, check your statements for the "initial" investment to see if that amount matches the amount you sent in - it is possible that you have mistaken the current value for your initial investment. In other words the broker invested the full amount but it has now loss 22% of it's value since then. Another possibility is that there was an upfront load (commission) however I find this improbable as I haven't seen many products being sold these days with 22% upfront commissions - agents usually try to hide the commission - again, I could be wrong. If I am wrong and the broker actually only invested $7,405 of your money than you have been stolen from. You will need to docuement everything and then file a complaint with the company that issued the annuity as well as the department of insurance - do not do this until you are sure that your money has been stolen or that things were not fully disclosed to you. Look through your statements and post the names of the contracts along with the type of contract and give us as much information as possible - we may be able to guide you through the process to see if you have actually been wronged.

 

ScottyD

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Guest Guest_LBJackson

So one stray dog walks onto this little playgound and the old hounds send him scurrying for cover.

 

Why not let John K into the discussion and debate his approach point by point? Then, if I were a novice to this site, I might be able to follow the trail to its logical conclusion.

And discover on my own that that type of product, Allianz or otherwise, is not the best vehicle for me.

 

Instead, we get a, what shall we call it, witch hunt, bash and smash? Does anyone know what this product is? who is the provider? is it a variable or an equity indexed annuity? Persoanlly, I never heard of a VA giving out bonuses, of course i do not pay that much attention to it.

 

And then general assumptions are pulled out of the air upon which conclusions are drawn. ScottyD - I have never heard of an agent making a commission as high as the first year's surrender penalty on an annuity, you seem to differ. Why not point out that annuities are passe as investment vehicles for 403(b)s and move on?

 

Where's Mike Devault? We could use a little civility.

 

Why, I'm lecturing y'all...Please pardon my lack of usual southern manners.

 

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LBJ,

Most of the time, I agree with your posts and you provide valuable information to my colleagues. But your last post really threw me. First off, nobody here is preventing John B from commenting on his product. To say that somehow Scotty or anybody else is preventing him from commenting is totally absurd. These sales people come, pitch their products, and never come back. That silence speaks volumes. Secondly, I read Scotty's post about five times and I find nothing bashing about it. He is simply asking the good questions that John K will probably not answer.

Finally, if you want facts I have some. Yes, it is entirely possible to get screwed with a high surrender fees. I paid in excess of 20% on not one but two of those worthless annuities, even after asking this rip off agent that I did not want a product that had a surrender fee.

Given objective information, of course, educators would stay away from these products. Since John K will not return, how can we extract the facts? The 403b world is still full of treachery. After all these years, teachers are still getting ripped off by typical TSA sales.

The information on this site is just about the only place educators can get information that will help them as you say make up their own mind. Are the posts nice and civil all the time? Absolutely not. We get messy, immature and sometimes over react. However, this should not be confused with bashing. Remember, this site was created because there is a huge problem with 403b plans with K12 districts and teachers' unions. Changing an entire culture of finances and educators will not be nice and civil, especially when it comes to commissions, power and market share of the sales people at stake. However, this site is very civil compared to the out and out war with financial advisers and teachers at the morningstar.com 403b forum back in the late 90s.

Have a good day,

Steve

 

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Guest Guest_LBJackson

Steve,

 

I agree with your response. Apparently, I looked at this thing coming from a different angle, i.e. debating the subject with John K, without considering the others. It would take very little to see which "side" would be the wisest choice. Personally, I do not care what prople make as much I care on how much something costs me. The trade-offs or compromise of benefits v. costs will produce value. Upon inspection, Annuities are just not a good value for TODAY.

 

Alas, again you are correct on assuming John K. will not return. And I guess that says it all. I was mixing for a good fight...er...debate. Never crossed my mind that he would not return.

 

I was all ready to combat this fool with items plucked from the Wise Guide and the 403b Commandments.

 

I think my intent was there, but I did not articulate it well enough. I was hoping that John K. would have taken the bait and debated.

 

I still think that something should go out in the form of a checklist to evaluate a salesperson, if the agent does not pass, then one should think twice about using his services. How many bad haircuts does it take to change barbers/beauticians? If the above posts were posted in every lunch room in every school, would it make a difference? I would hope so, but I doubt it.

 

In future, I will keep my mind onto the subject at hand.

 

Steve, thanks for pointing this out. It just gets a little frustrating sometimes.

 

LBJackson

 

 

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LBJ,

No problem. I totally understand your frustration. Back at morningstar.com agents did debate their products with us. But not at this site. We need to keep vigilance when a sales person posts here and never comes back. It is very insulting to say the least when they do not answer questions. But on the positive side, their silence proves our point to everyone that they only have their best interests at heart and contempt for educators' financial well being. That is a powerful message. They know that their product will not stand up under our critique. The sales force NEEDS ignorant, dependent and naïve educators to pay for their fat commissions, excessive fees and inappropriate investments for 403b plans.

Have a good day,

Steve

 

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