In the most basic way, annuity can be described as an investment contract that an investor enters in with an insurance company and enjoys special tax benefits. Adding it to your investment portfolio can prove very profitable but this starts by selecting the right investment and the right annuity advisor who understands your financial goals.
Why annuity and not any other investment plans offered financial institutions like banks, insurance firm, mutual funds or even stock exchange? There are many answers to this, but most people approaching retirement age prefer this option for the reason that they do not want to expose their life savings to market fluctuations.
The main types of annuities include the variable annuities, fixed annuities, the immediate annuities and value filed annuities and equity indexed annuities. All these are options have significant variations and each can be recommended when the financial goals of the client are considered. It is the job of your consultant to advice you on what can work best for you.
Annuities come in several types which include immediate annuities, the equity indexed, variable and fixed annuities. Each of these varies in one way or the other and has its own merits and demerits. It is the job of your consultant to outline all these for you and tell you which option is the best and which one is not.
A financial consultant should only encourage his client to go for that investment option that is in his best interest and not just anything. However, the consultant has a responsibility to educate the client on the investment vehicle that he is interested in or just curious about. These consultants are usually expected to adhere to a strict code of conduct, practice general ethical principles and avoid unfair marketing practices.
Some practices that should be avoided by any professional advisor in annuity market include using false information to advertise, avoiding and form of misrepresentation of facts when selling the investment products, the issues of defamation, rebating, using bait and switch to make client by what they had not planned for and twists.
In addition to these, an annuity consultant must adhere to the same rules governing all other players in financial sector. This include talking ill of the services, products and character of their competitors (unless there are proven criminal or civil records to support their case). They should instead focus their effort on informing the current and prospective clients on what the stand to benefit from after they buy the proposed product.
Many financial consultants would not recommend their clients to buy products from insurance firms that have issue with the going concern. With good ground work however, the client investment may not be at risk at all. They are the best option to mitigate against the longevity risks.
Here are the tips for consultants in this market, it pays to go with bigger insurance firms as they have less solvency risks and is well diversified, pay close attention to ratings by S&P, Fitch or Moodys, and clearly understand the rules of associations and the limits. This should ensure that clients get the best products from them.
Why annuity and not any other investment plans offered financial institutions like banks, insurance firm, mutual funds or even stock exchange? There are many answers to this, but most people approaching retirement age prefer this option for the reason that they do not want to expose their life savings to market fluctuations.
The main types of annuities include the variable annuities, fixed annuities, the immediate annuities and value filed annuities and equity indexed annuities. All these are options have significant variations and each can be recommended when the financial goals of the client are considered. It is the job of your consultant to advice you on what can work best for you.
Annuities come in several types which include immediate annuities, the equity indexed, variable and fixed annuities. Each of these varies in one way or the other and has its own merits and demerits. It is the job of your consultant to outline all these for you and tell you which option is the best and which one is not.
A financial consultant should only encourage his client to go for that investment option that is in his best interest and not just anything. However, the consultant has a responsibility to educate the client on the investment vehicle that he is interested in or just curious about. These consultants are usually expected to adhere to a strict code of conduct, practice general ethical principles and avoid unfair marketing practices.
Some practices that should be avoided by any professional advisor in annuity market include using false information to advertise, avoiding and form of misrepresentation of facts when selling the investment products, the issues of defamation, rebating, using bait and switch to make client by what they had not planned for and twists.
In addition to these, an annuity consultant must adhere to the same rules governing all other players in financial sector. This include talking ill of the services, products and character of their competitors (unless there are proven criminal or civil records to support their case). They should instead focus their effort on informing the current and prospective clients on what the stand to benefit from after they buy the proposed product.
Many financial consultants would not recommend their clients to buy products from insurance firms that have issue with the going concern. With good ground work however, the client investment may not be at risk at all. They are the best option to mitigate against the longevity risks.
Here are the tips for consultants in this market, it pays to go with bigger insurance firms as they have less solvency risks and is well diversified, pay close attention to ratings by S&P, Fitch or Moodys, and clearly understand the rules of associations and the limits. This should ensure that clients get the best products from them.
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