Annuity Straight Talk Review

This one is tough for me to do but I have to get ahead of it.  If a complaint is lodged against me publicly then I’m going to respond publicly.  Earlier this week I was surprised to get my first negative review on the Better Business Bureau website.  Since I tell everyone about the good then it’s only fair that I also tell everyone about the bad.  I believe this is more or less a misunderstanding but I’ll share the story and you be the judge.

Here’s a screenshot of the complaint…

I met Dolores in 2019.  She was being pulled in a lot of directions like most other people so I took my time explaining all her options.  We talked a lot about social security, Medicare and retirement distributions.  She was in a good position with savings so there was no hurry to rush into anything.  In order to give her solid explanations, I wrote a couple of newsletters because she was dealing with fairly common concerns and the information would help other people as well.  When I’m able to do that for anyone it represents a lot of effort on my part to spend extra time getting it right.

When Dolores started buying annuities she stuck to multi-year fixed annuities.  She was adverse to risk and didn’t like the complexity of indexed annuities.  But, she wanted the highest rates and those were only found with B rated companies.  That is one of the principles I will never compromise so I offered only lower rates from more stable companies.  Other agents were more than happy to get the business and that was fine with me so long as she understood the risk and ended up getting what she wanted.

This process took the better part of a year and we had a good relationship throughout.  Looking back I think that she realized I had done a lot for her and decided that she would give me some business.  She asked what I had but didn’t like any of the fixed annuities I recommended so I told her it might be a good mix to add an indexed annuity.  Leverage the low rates and take the chance at earning more.  Plus, the annuity I offered was issued by an A+ company so it was the highest quality paper in her portfolio.

She hesitantly took the deal and committed about 15% of her portfolio to the indexed annuity.  It was hardly the type of allocation that would make or break her retirement.  The index options we chose for the first year did not perform well and the market as a whole was mostly flat and maybe even down on the year.  The indexed annuity only gained a tiny amount of interest in the first year.  Dolores was not happy about that and immediately expressed her regret about not buying another fixed annuity.  

Between the first and second year the stock market reached an all time high but pulled back to finish the year lower.  It was a frustrating time for everyone.  Dolores was not happy again and let me know about it.  She threw up her hands and put all the money in the fixed account for the third year so she could make about 2%.  The plan was to reevaluate things after one year and that brings us to this year.

As is typical, I email when I get a statement and let people know about the time frame.  This isn’t what I do with everyone because everyone likes to deal with it differently but I sent Dolores an email the day after her anniversary.  After not hearing back within a week or so I called and left a voicemail.  Because I can’t change allocations without the consent of the contract owner, it’s going to stay the same for the fourth year if we do nothing.  Well nothing was done so the contract will earn the 2% fixed rate once again.

Let’s not forget that she has very safe money earning 2%, hasn’t lost a penny and is not paying fees for this.  It’s not earning as much as the fixed annuities she owns but she hasn’t been very aggressive with it either.  On top of all this she has pulled about 30% of the initial investment from the contract by maximizing free withdrawals a couple of times.  That’s really one good lesson when it comes to underperforming annuities.  You can always slowly get out of it and incrementally place money elsewhere.

This is not the case of a bad annuity, rather bad timing.  Dolores came to me each year, expressed regret about the purchase and leveled accusations about my level of honesty and the expectations I set from the beginning.  Of course I defended myself and any reasonable person knows that these types of things are never one-sided.  I have a strong hunch that much of her opinion is coming from the other people she did business with.

Either way I plan to still service the contract so long as she keeps it and perhaps I will be able to change her mind.  For anyone who buys an annuity from me, stay on the email list and please let me know if you change your email or phone number.  I need to stay in contact with you and don’t have the time to fly all over the country.  Be patient with the contracts you buy and understand there is always an explanation when things don’t work out.

I certainly left this story civil and left personal commentary out of it.  Please let me know what you think but return the favor and keep it objective.  We have much more to gain when we treat each other well.  I’ll be back next week with something that is hopefully much more productive.


Full Podcast Episode: Annuity Straight Talk Review