Bankers vs. Brokers. The Winner Is: The Insurance Guy?

Ive seen the scenario a thousand times--Husband and wife stumble into my office, looking as though they’ve just disembarked from one of those queasy-worthy, theme park roller coasters.

Being placed smack-dab in the middle of the most epic financial tug-of-war in history, they want to know what to do with their hard-earned retirement dollars. It’s a familiar scene I’ve become accustomed to over the past 15 years. It’s the exhausting battle between Banker vs. Broker.

Today’s Baby Boomers have their work cut out for them. They’re wrestling with how to deal with their retirement money. As husband and wife, they may have different risk tolerances. Perhaps she’s a little more conservative with their money, while he is willing to spend more and take a few more risks.

Unfortunately, his 401K account took the financial beating of a lifetime in 2008.  He can’t decide which is worse: the amount of money he lost or the heavy-weighted “I told you so!” from his wife, which is sure to last longer than his now-questionable retirement dollars.  One thing is for sure, neither of these two wants to go back to work, ever, and they’re afraid.

With this, the husband and wife dash to their bank with security in mind and the FDIC in their heart.  The "Banker" assures them, “You’ve found the right place!  If you commit to a 60 month CD, not only will you get this amazing, state-of-the-art toaster oven, but you’ll also receive a whopping 1.5% rate guaranteed to not increase for 5 years.”

With stainless-steel toasters and financial safety like this, who needs enemies? They know that the silent thief; inflation is going to devour their savings faster than you can say “Jimmy Carter”.

With that, the couple trots over to a stock broker who also assures them that they’re in the right place, but is able to offer something a little different.  Ironically, they see the sign on his desk that reads “Past Performance Does Not Indicate Future Value” as the advisor shows them how well a particular fund has done in the past.  They know the risk; they’ve been down this road before. They can’t imagine losing any more money at this stage of life.

So, as the couple confides to the "Broker" at one of the big brokerage firms, they explain to him that they are now "no-risk” kind of people. There’s no time left for gambling with their future.  With a smile, the stock broker says, “Good news. You’ve found the right place” as he explains to them that through him, they are able to:

•Ignore requests for zero risk and place you in a conservative fund

•Charge account commissions and fees that rival the IRS

•Define all losses as “PAPER LOSS” even though it looks a lot like money is disappearing

•Earn taxable dividends that get reinvested, so instead of actually receiving some additional income, all they get are the taxes.

I am their insurance guy and retirement advisor.  I've just explained how an Indexed Annuity plan will protect and guarantee their funds from any negative market years, while also being able to guarantee a steady income for the rest of their lives.

Additionally, a Fixed Indexed Annuity plan allows this couple to:

•Participate in a portion of the S&P 500 positive years for growth

•Include tax deferred growth

•Provide access via penalty-free withdrawals to their funds

•They pay no commissions or management fees

Relieved but dumbfounded, the couple shakes their head and wonders why that after all of these years, they haven’t ever heard of this plan before.

Well, I’d like to know the exact same thing.

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