Annuity Advisors: Questions to Ask

If you are looking for a secure investment that will generate a steady income stream for the rest of your life, then annuities may be the answer. Annuities can offer guaranteed lifetime payments and reliable income streams with little risk to principal. If you’re looking to hire an advisor or learn more about annuity investment, check out

However, before you invest in an annuity, it is important to understand all the risks involved. In this blog post, we will discuss some questions to ask when considering an annuity advisor.

Four important questions to ask:

  1. Do you have a fiduciary responsibility to me?

An annuity is a contract between the investor and an insurance company. The advisor works for the insurance company, not you, so they have no fiduciary responsibility to your interests unless you are their client in another capacity as well (i.e., if they also manage part of your investment portfolio).

If you want someone working for you and your interests, then ask to see a fee disclosure statement if they refuse or give excuses (“We do it in another state,” “We only have fiduciary advisors on large accounts”) that should be a red flag.

  1. How is your compensation structured?

Your advisor should be compensated solely by the annuity products they sell. If you are paying a commission, ask for a specific dollar amount and explain what it covers (i.e., how much does this protect my initial review or ongoing advice?). The answer will likely make you uncomfortable – commissions can run over 20% of the purchase price.

  1. Can I get a contract in writing?

You deserve to have all of the details of any financial transaction spelled out clearly. You should never sign any documents without fully understanding them and asking for clarification if anything is unclear. If your advisor refuses, you can safely assume it’s because they don’t want to put their work into black-and-white for you to review.

Your contract should include a clear list of services, fees associated with each service and the length of time they will be provided, when your money is due back to you if applicable (i.e., surrender charges), how often contact will occur, or what triggers that contact (i.e., phone calls every quarter), and when fees can be changed.

  1. Do you have any conflicts of interest?

Your advisor should never recommend an annuity or other product that would benefit them rather than you. Instead, they should tell you all the available options and why they recommend one over another. If your advisor cannot provide a detailed explanation for their recommendations, this is cause for concern.

In conclusion, annuities can be a great product, but they should never be treated as anything other than what they are: financial instruments with risks and fees. So before you make any decision to invest in an annuity, ask yourself if it is worth the risk of losing your money for good.

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