So, this guy who is handling my MILs estate is selling my husband an annuity

[K8-EEE]

He is inheriting money and the guy my BIL put in charge of distributing the estate works for Axa and so of course is selling us axa products (Cornerstone Retirement Variable Annuity.)

He is a good salesman - I do like the idea of having money to hand down to the kids, but I hate the idea of being sold what really are insurance products by the guy who IMO should just be cutting us a check.

My dad says: "Run like hell!" My husband says, his brother has known the guy since college and he's so honest and has so many happy clients and etc. etc.

When push comes to shove I guess it's HIS inheritance and his money and so his decision but the whole thing is really bugging me!!

[elleng]

1. I understand,

Last edited Fri Jun 15, 2012, 07:39 PM - Edit history (1)

don't want to pay an insurance company for such services, BUT just learned I've lost $3,300 this year in my very widely diversified portfolio. Its managed, and I pay a small % annually, but DO incur the risks that go with investing.

[Common Sense Party]

2. Tell your husband to proceed with extreme caution.

Variable annuities aren't for everybody. There can be some high fees (near 3% annually) and some lengthy penalty charges--money may be locked up for several years.

I don't make recommendations, other than to say: he should look before he leaps. There may be less expensive ways to accomplish what he wants to do.

(Is the prospectus for this product really 1700 pages long? If so...yikes.)

http://www.advisorone.com/2010/06/01/annuity-analytics-axa-equitable-retirement-corners

[K8-EEE]

3. Holy cow!! I don't even have a prospectus....I have some kind of "Scenario"

I'm gonna ask about that!!! Thank you so much.

[Common Sense Party]

4. Well, I looked online after posting that, and the prospectus I found

was "only" 380 pages--but then there were supplementary pieces I did not look at.

My feeling is, if it takes them that many pages to say what the thing is and what it's supposed t do, it might be too complicated.

[K8-EEE]

5. ZOMG the annual fees are 3.2%!

I'm not a financial genius but that sounds ridiculous! IS THAT RIDICULOUS??

[elleng]

6. Pretty high, I'd say,

but I can only compare with a bundle of managed funds I have, for which I pay 1.20% annually.

[K8-EEE]

7. OK so I was doing some research and my state is one of the 7 that charges tax on these

That is 2.35%. He didn't even mention that - he is from out of state (NY) but is licensed to sell this crap here. Did he know that or did he know it and not tell us - and which is WORSE?

[elleng]

8. BOTH is worse!

Charges tax on what? The EXISTENCE/OWNERSHIP of an annuity? Taxed when? My 'gains' will be taxed when I realize them, that is, when I take something out; that is, Capital Gains.

[K8-EEE]

9. Well that's just the thing for the annuity you don't pay Capital Gains you pay REGULAR TAX RATE

In in our case we would pay our regular tax on the 'gains' AND 2.35% CA state tax on the premium! OUTRAGEOUS!

[Common Sense Party]

10. I hope your husband is thinking twice or thrice about this.

One question to ask the AXA guy is what kind of commission is he getting to sell this thing to your husband?

I'm not opposed to a salesman earning a fair commission for helping someone out, but if the guy is going to earn 6% or 8% to lock your husband into some expensive, complicated investment that makes little sense, I have problems.

[K8-EEE]

11. I did a lot of research and put my foot down OVER MY DEAD BODY. My problem is

That my MIL died without a will which was a big mess, my BIL ended up being executor and putting his good buddy here as administrator of the estate.

OK GET THIS: his 2 brothers have received their portion of the estate AND THEY BOTH PUT ALMOST ALL OF IT INTO THIS ANNUITY. Because he was not licensed to do biz in CA he did not send us the $$ until he had the license!

Originally I said it didn't set well with me and I was against it but everybody was acting like I was being paranoid or "didn't understand" etc.

Finally prevailed on my hub (who is too busy at work to deal with it) by compiling a lot of articles and asking him if we could at least get 1 non-biased 2nd opinion as was suggested here.

My hub saw the light reading some of the articles so we never really paid for a consultant. But this guy is in charge of the estate so we have to get the check from him!!

SO FAR WE HAVE ASKED 3 TIMES SINCE SUNDAY AND HE KEEPS RESPONDING LIKE "OF COURSE NO PROBLEM SENDING THE CHECK BUT..." and then launching into yet another complicated sales pitch on what we don't understand. Laced of course with a lot of fear about "what ifs" that could happen.

My last response was "we share your fears about our financial well-being, however, we will be addressing them using a different financial strategy that will be directed by a fee-only, non-commissioned Certified Financial Planner and that decision is absolutely final.

Since we cannot put our plans in place without the money, you can best help us by expediting the check. Please let us know when we can expect it.

[Common Sense Party]

12. Good for you.

The brothers can do what they want. If they want to jump off a financial cliff, that's their choice. But you and your husband don't have to take the fall with them if you don't want to.

[K8-EEE]

13. My husband is a successful artist - and completely uninterested in finances

I think he thinks of his oldest brother as "the smart one" and he is. He's an architect, but what I'm finding is you can be brilliant at what you do and just be utterly unsophisticated and vulnerable when it comes to things like this. These products have 800 page prospectuses and you can bet the sellers know the ins and outs and are only telling you what appeals to you. There's almost no way to fully understand those things so you think, wow, he understands all this he must really know what he's doing!

The wildest thing is my BIL is very, very frugal with everyday purchases. He is the type who will drive all over town looking for gas that is two cents cheaper. And yet I can tell that he invested $300,000 without even comparing the damned variable annuity to any other variable annuities! HE WILL BE PAYING $10,000 IN FEES JUST THIS YEAR - if he had bought the same thing but gone with Vanguard he could save $7000 a year and he plans to be in this 10+ years. But obviously he didn't REALLY look at it because I'm convinced anybody who really looks at this thing would not only not buy it but NOT be friends with the guy selling it. IT'S THAT BAD.

[elleng]

14. Glad to see you've gotten so far with this,

learned so much etc.

Executor has responsibility to get you the cash, I'm sure you know.

Best of luck!

[K8-EEE]

15. I'm really starting to think Mr. Annuity Asshole ran off with our $$ or something.

I put in a formal request to him AS ADMINISTRATOR OF THE ESTATE to send us our portion of the inheritance. I asked when and by what method it would be sent. Hey -- I'll take electronic transfer like NOW??? But if you put a check in the mail, I'm happy to camp by the mailbox.

The answer I got was this letter that started out "Of course, it's easy to get the money, there's just one form that [BIL] has to sign. But from your previous emails I see there is a misunderstanding with some of the fees and benefits we were talking about...

AND THEN A 3 PAGE ANNUITY PITCH!!!

ARRRRRRGH!!!!!!

I answered this by saying "I'm glad it is easy to get the money because I want it as soon as possible so please email me when the check is sent, thanks!" Totally ignoring the sales pitch. I also added that I would be camping by the mailbox until it came. *CRICKETS!!** That was Monday afternoon and he did not respond all of today!

Tonight I sent another email entitled "URGENT REQUEST FOR CHECK!" We dont have any urgent need actually but it's none of his business. I had already ASKED when they would send it now I'm TELLING them when. I requested the "easy process" take place tomorrow, that the check be issued and mailed June 20 and if they could email me after is sent thankyouverymuch.

Again, both my BILs have received their entire inheritance! IN MARCH! And we would have received ours too if we had bought this god damned annuity. WHAT A SCAMMER!

[elleng]

16. HOPE you're not right, about him running off w funds.

He probably doesn't want to be reminded about his legal liability for failing to administer properly, and in light of his role re: annuity sales, NOT good for his career/reputation.

HOPE he's got adequate resources to pay you, and happy you're pursuing him. Next, if check not received w/in week: 'You will be hearing from our attorney.'

Fingers crossed.

[K8-EEE]

17. The saga continues:

In the 3 page pitch letter included an "anything can happen" pitch re: the death benefit. "opportunity" and he mentioned that his 29 year old son had just has a stroke PROVING again that anything can happen and blah blah.

Then yesterday "the fax machine was broken" so there was a problem getting the forms. Do people still use fax machines? He has already sent me scanned documents.

I sent a NEW email saying URGENT REQUEST FOR CHECK STATUS. We don't really have an urgent need for the check, what I have is an urgent check to put 3000 miles between my money and this scammer! I requested the check be issued and mailed today, Wed, June 20.

My SIL sent a tersely worded response saying it would go out today and hope all was well. LOL.

I said great well if it DOESN'T go out today let me know.

Then at the end of the biz day I get a letter from Scammy McScamface saying that he has been attending the son with the stroke and the check will go out tomorrow via FedEx Overnight.

IT BETTER!! I am counting to 100 trying to talk myself out of emailing him "hey you should have cut the damn check when I asked for it, you had time to compose a 3 page pitch letter after your son had a stroke, trying to sell your POS scam!!

OH MY GOD THIS GUY IS ON MY LAST NERVE.

[elleng]

18. Glad y'all are on it,

and glad your SIL is on it!

[SheilaT]

19. There are laws about how long someone is allowed to take to settle an estate.

There's some specific time period to pay all bills and taxes. It's somewhat under a year.

There should also be a probate court or something like that, which you might be able to contact.

Oh, and if his fax machine was broken, he could have hustled himself off to Staples or any other place that has public fax machines.

Do threaten legal action. This guy is not on the up-and-up and I'd be very concerned, were I in your shoes, that he's already done something with the money.

[Common Sense Party]

20. Did you get the check?

[K8-EEE]

21. Just got it today! WOOOHOOO!!

I guess we should save the celebrating for after it clears, LOL, but wow what bad blood this guy created in the family. It's almost like my BIL is mad we didn't do it cuz we hurt the guy's feelings or something. Cry me a river, ya know?

[Common Sense Party]

22. Good. I'm glad to hear it. And to heck with your BIL.

What YOU guys do with YOUR money is YOUR business. You don't owe anyone anything. There's no unwritten universal law that states you MUST buy an overpriced, shoddy annuity from some shady character.

[K8-EEE]

23. The clincher is that they visited us in May and got the royal treatment

The visited us (we live in L.A.) and honestly I slaved over fixing up the guest room, figuring out what the hell to feed them (several variations of meat and potatoes, yawn) drove them to The Getty and Dodger Stadium and basically all over the place (they are afraid to drive here) borrowed a friend's house in Palm Springs for the weekend and etc. etc.!!

They had a great trip and were pretty appreciative but now are not even returning my "no hard feelings about the annuity thing, right?" email....sheesh!

I am now kind of obsessed with rip off annuities. Was reading on a financial forum, how these guys were saying "don't work at Axa" because "advising" is 100% sales and they make you troll your friends and family for prospects (aka suckers.) One of them called it "The Cutco of financial institutions" referring to the expensive knives pedaled by everyone's kids (I have a whole set!)

And get this: YOU HAVE TO PAY RENT ON YOUR CUBE THERE!! How Republican can you GET. Apparently if you make it past probation period you get it reiumbursed or some such??

So, both the way they do business and the way they treat their employees should be illegal IMO!