Jeremy Anderson with Edward Jones in Nacogdoches takes pride in keeping a close watch on his clients' portfolios. Recently he detected several hundred thousand dollars missing from an elderly client's account. Sure enough, two indexed annuities had been purchased. Anderson said, " Luckily we were able to catch it in time to know what was going on. After further looking into what our client had been sold it would have cost her $58,000 should she needed to get out of it in the first year. "
You can lose control of your portfolio, or at least don't have access to your own money for a very long time. Anderson said, " Anywhere from 11-16 years, being if you needed your money out in the first year it would cost you upwards to 16% to get your money. On a $300,000 investment, you're looking at close to $30-40,000 just to get your money out of there. "
Your first introduction to an indexed annuity, may come with an invitation mailed to your house for a free dinner. Anderson picks up a printed card mailed earlier this month in a mass mailing. " This one in particular says age 50 and older are very welcome to attend. " The first bite to the bait may be purchasing a trust. All that information is sometimes sold to unlicensed annuity salespersons.
Indexed annuities are so risky that even regulatory agencies send out warnings. Pulling up the industry's regulator Anderson reads, "FINRA even has an alert on index annuity." www.finra.org