We had a reader complain the other day about rates on Secondary Market Annuities and his perception of a lack of liquidity on the payment stream. Bryan replied and thought it would be a good response to publish here.
Here is the response:
Thanks for getting in touch and sharing your thoughts on our business process.
We do have slightly lower rates than many competitors and for good reason. First, all or our deals are owned by us prior to a final transfer to the new buyer. That requires capital which comes at a cost. As a result we do not experience the fallout that others do at the expense of our clients. Our clients are never asked to place money in an attorney trust account for what sometimes amounts to several weeks at a time. We hold client money for less than 24 hours before a deal closes completely.
Second, our transfers are not illiquid. We transfer payments rights to our buyers via an assignment from a business trust. That gives our clients the ability to reassign those payments should financial circumstances change for the individual.
This process is the result of our experience in doing business with every other company who posts deals for sale. The previous process was quite often cumbersome to deal with and cost us plenty of sales with clients who simply did not like the waiting period with little or no information regarding the status of their pending transfer.
Because of all this we have a much higher cost structure and can still beat primary market fixed rates when it matters most. We no longer compare ourselves to other marketers of SMAs because there is no comparison. Our process is cleaner and easier to use with the same result people really want- Higher safe money yields.
Thanks again for giving me the opportunity to clear the air in regards to our business. Feel free to reach out any time if you’d like more information.
All my best,
Annuity Straight Talk