Admittedly, I am no annuity expert, seems most can't even decipher exactly what these products even entail, but can't help but think my parents got taken for a ride today, while there is nothing I can do about this, it is veryyy aggravating!
My grandmother died 1 month ago and my parents have been going through the estate. Tonight my Dad informed me that his "investment advisor" reviewed the "investments" that were now passed to him from my Grandmother (these "investments" were NOT with his "advisor"'s firm, but with another high fee leach, a big name you would know).
Apparently, nearly all of the money was in bonds. My Dad's advisor apparently told him how bonds are risky, particularly in the last few years. He proceeded to convince them to move ALL of the money out of the bonds at the other firm and to invest ALL of the money in a 10 year indexed annuity.
The conversation with my Dad was not all that long, but he mentioned the "bonus" he will receive, which was approximately 10% of the total amount. He has bought annuities in the past with "guaranteed returns", so I asked if that was part of this annuity and he said, "There is no guaranteed return on this one, but there is a cap, the most I can make in a year is 4.9%". He also said the most he could take out is 10% per year, penalty free.
Based on what I've read about these snake oil salesmen online, my parents are the perfect mark, the fear tactics about losing money would play quite well with them.
I know this is not my money, but can't help but be pissed at these "advisors" for preying on them and not happy with my Dad for just making such a rash decision so quickly.
On a scale of 1-10 just how "bad" are these 10 year indexed annuities? I know commissions on annuities are sky high, anyone have any clue as to what these "salesman" will take down from today's sales pitch? I bet they are drinking a beer tonight talking about all the money they extracted from my grieving parents, makes me sick.
One last note: These "advisors" have progressively converted my parents to nearly 100% annuities in the last 5 years. Seems everytime I hear about the latest one it's a longer term, but tonight's 10 year annuity is by far the longest term so far.