Advisor Today > > March 2001

March 2001 Advisor Today Articles Online

Cover story: Sheltering Your Clients' Nestegg

By Paul M. League, CFP

The key feature of annuities lies in their tax deferral. Of the two annuity types mentioned, VAs offer a greater potential for asset growth through investment subaccount options tied to market performance. They are best suited for long-term investors who are not averse to taking risks. VA investments "breathe with the market," meaning performance rises and falls with changing financial market conditions, with the exact weighting of invested dollars within the VA subaccounts depending upon individual risk tolerance and investment objectives.

Making the Transition: Last Steps in Financial Planning

Donald Ray Haas, CLU, ChFC, CFP, MSFS

The next-to-last step in the six-step financial advising process is implementation - also known as closing the sale, or putting your client's financial plan into action.
For a commissioned advisor, this is how compensation is mostly derived. Likewise, for a fee-and-commissioned advisor, this is another source of compensation. Even for fee-only advisors, who charge for assets under management, implementation is often a large part and sometimes the only form of compensation.

E2E: New, More Salable Wine in Old Bottles

Gary E. Adkins, MPA

Are you currently selling annuities? If you are, have you taken advantage of the equity-indexed annuity opportunities over the last five years? Although bond rates are lower and call option prices higher, the S&P 500 stock index is reasonably strong, and the industry is still creating aggressive indexed products for you to market, expanding on the indexes offered. These include, the Dow, the Russell 2000, the NASDAQ and various bond indexes such as corporate, high yield and convertible. Consider this: sales of equity-indexed annuity products exceeded $5 billion last year, which outperformed the previous year.

Managing money: Recipe for Retirement

James P. Ruth, CFP

Maybe this recipe-for-retirement cake will help answer some of the questions. First, grab a mixing bowl from the kitchen cupboard. Then, pull three mutual funds off the pantry shelf. Stir in one growth and income fund, one long-term growth fund and one international fund. Or, season to taste as your tolerance for risk will allow. Cooking with the best ingredients helps ensure the best result; so select funds that have lower expenses and risk. Mix the ingredients thoroughly, reinvesting all dividends and capital gains. Pour the contents into a baking pan and allow it to bake in the oven for 20 years.

Lighter Side Of Life: I Hate Insurance

Penny Righthand, CLU, ChFC

I have many retorts to that comment:
"That's OK. Insurance doesn't care much for you either." Or, "That's all right. Lucky for you, they don't ask that question on the application." Or, "I hate penicillin, too, but I take it when I need it'" But today I wasn't in the mood to engage in even friendly banter on the subject of the product everybody loves to hate. I've seen too many situations lately in which insurance either did or would have come in really handy.

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