September 1, 2016


annuity“I Hate Annuities.” Should You?

Ken Fisher, Forbes columnist and founder of the investment firm Fisher Investments, says “I hate annuities. And you should too.”

We would like to address annuities and offer our help if you are thinking about buying one or own one.

First disclosure: Delta Investment Management does not sell annuities.

There are fundamental reasons to not like annuities. The three primary criticisms of annuities are:

1. High costs: Many financial advisers love to sell annuities. The high sales commissions are a big motivator. How high? Between 5%-12%! Additionally, ongoing fees can run as high as 2.5% – 3.5%.

2. Illiquidity: Many annuities have surrender charges which makes liquidating the annuity prohibitively expensive. The high surrender charges are used to offset the high commission fees paid out and the reason why the insurance companies need to lock you in.

3. Limited Investment Options: Many annuities have only 50 to 70 possible investment options. While 50 to 70 may seem like enough, in today’s financial markets, this can be materially limiting and be a significant drag on returns over time.

The criticisms listed above are valid. Rather than just “hate” annuities, Delta would like to offer you ways to capture the benefits of annuities and directly address the issues listed above. Delta has partnered with Jefferson National, DMA “2010 Financial Services Company of the Year” to reduce costs, improve liquidity and increase investment options.

With our partner, Jefferson National, we are now able to convert your annuity and life insurance cash value through a 1035 exchange (a tax-free exchange) into a low cost annuity with liquidity and a wide array of investment options.

Conversion of your existing annuity into a an annuity at Jefferson National and managed by Delta could:

1. Reduce Cost: Jefferson National charges only $20 per month to administer your annuity. Delta management fees range between 0.5% and 1.8%.

2. Improve Liquidity: Jefferson National and Delta do not have any surrender charges.

3. Increase Investment Choices: Rather than 50 to 70 possible investment opportunities, Jefferson National and Delta’s program offers roughly 360 separate choices. There are zero commissions on trades.

If you currently have an annuity and would like to see if it can be converted and what the financial advantages might be from conversion, please contact us by phone (415) 249-6337 or fill out this short form below to obtain a FREE conversion analysis.