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What about Annuities
Annuities are a product that we rarely recommend to our clients, even though they are sold extensively by financial salespeople, most of whom do not have a fiduciary responsibility.
In our experience, annuities typically only meet the needs of a very small segment of the investing public.
Why are they sold so frequently?
It may have something to do with the exorbitant commissions they pay to the salesperson. Unfortunately, the worse the annuity and the longer the surrender charge period, the higher the commission it pays. To make matters worse, annuities usually contain significant hidden ongoing fees and charges. Over time, these expenses create an unnecessary and significant drag on the investor’s returns.
There is a solution.
For most investors, there are other more flexible and cost effective ways to invest. While we rarely recommend annuities to our clients, for those investors that are trapped in high-cost annuity contracts we do have a solution. We work with annuity companies that offer “stripped” annuities. They are traditional variable annuities that pay no commissions and therfore have no surrender fees. Also, their ongoing fees are a fraction of what traditional annuity contracts typically charge. We also provide the option to manage the funds within the “stripped” annuity using Paragon’s proven investment strategies.