Please take note of a response I gave to one of my new annuity agents concerned with that article: (We work with 40 insurance and annuity Carriers)

Thank you so much for forwarding this article. As with any news article, this one is no exception to include truth, fact, and prejudice. As in religion, there are always countless articles of anti-(name any religion) and pro evidence for the same religion.

To address a few points; there are credentials that are easy to get like the one Designation mentioned. Like the one mentioned, many can be gotten in 3 - 7 days of intense study. However, none can be gotten without a State Insurance License, thereby adding to the level of education that an Advisor has already received. As in any other industry, clients of the Financial Services industry have been wonderfully served in and out of retirement, as well as have been exploited. Firms such as Morgan Stanley, (the old Dean Witter) Fidelity, and Prudential have been fined and sued and charged for hundreds of millions of dollars for the strategies they and their Representatives employ. And these complaints, allegations, and charges have always involved stocks, bonds, mutual funds, options, commodities, as well as life insurance and annuities. This article below just happens to focus in on annuities as it's target. As extensive as the charges are against Allianz, (and XXXX does not endorse Allianz) the resulting fine and compensation to account holders if deemed guilty, would just be a drop in the bucket compared to the fines and client compensation resulting from the inappropriate sale of mutual funds alone in recent years.

As with any financial product, the suitability of the client is the main concern. Annuities are alternatives to what the client may be currently investing in, but should only be part of a diverse portfolio, again depending on the client's situation. In many cases, the annuity purchased for immediate income is a huge disservice and a mistake for the client - directly opposite of the comments in the article below. In many cases, annuities that are "annuitized" earn less than 1% interest during annuitization, and the real possibility exists in most designs, of the client losing even substantial amounts of their principal invested; the beneficiaries losing out on the supposed reason the client was investing in the first place! Though some products are designed so that the client must annuitize to obtain their investment back or to receive the "bonus" on premium invested, again XXXX does not endorse these products, and they are the focus of the charges against Allianz. The article referenced Old Mutual however as well. Not only does Old Mutual have products that give the client up to 10% of their money per year as a free withdrawal, they also include riders with many of their products offering free withdrawal amounts (in some cases freeing up the entire investment without penalty) for unemployment, disability, nursing care, and death. Most other companies and products also now have very liberal free withdrawal privileges if the client's situation changes from when they first made the investment. Like the product you will hear about in the conference call today, products are now also being designed with the same guaranteed income features the client cannot outlive, but without having to annuitize or losing a penny of their accumulated investment when they die. Yet, they still guarantee income and the investment may continue to grow in the same strategy it was before they began to take the income. If you ever have any questions as to whether an annuity is suitable for a client, please ask us here at XXXX. Together we have about 75 years of experience in the field, and know the design of products from dozens of Companies.

Another thing to be addressed is the commission you as an agent may make. Why should a real estate professional make 7%, or $35,000 on the sale of a $500,000 home? Why does my Physician charge $225 for a check-up that took him 35 minutes to perform? Why does my attorney charge $260 per hour to help me in my legal matters? The amount of fee-for-service is a relative discussion. Most mutual funds, in the "best fee structure endorsed by regulated authorities" charge 5% up front - from the client; as well as a trailing commission each year. The commission you as an agent makes from the sale of an annuity, is paid by the insurance company and does not come out of the client's pocket. Why does a physician have malpractice insurance? I was misdiagnosed 4 times with Cancer that almost cost me my life in 1999. Am I now to believe all services from every physician are now designed to mislead me or be only a source of profit for the physician? Incidentally, all the medical expenses for the misdiagnosing of my cancer and the resulting surgery cost $35,000. I never got any kind of compensation or reimbursement for their mistake. Attorneys also said if a lawsuit was filed, it would probably be to no avail. In addition, our industry has many safety valves for the client as protections; i.e. E&O insurance, State regulation, etc. The argument of education is also relative. The real estate professional only has to pass a test as well, to collect that $35,000 commission. This is something that can be studied for and completed in some cases 3 months. Obviously, articles have been written about outrageous commissions and deceptions they have used as sales tactics in selling homes. Once again, that 7% came out of the client's pocket!

So again the bottom line is not a new one; the client's needs should always be the primary concern, when they will be offered financial services. This includes; Where is your money being invested now? How much emergency money do you have on hand? Are you paying taxes on money you are not, or maybe never intend to use? Are you more comfortable preserving your investment that risking it for a large return, that may also result in a large loss? What amount of your lifetime savings do you want to leave to your heirs? Etc. etc. Then, as a licensed professional authorized to conduct business in the State of California, with the interest of the client foremost in your mind, you are given the right and privilege to request their trust and recommend solutions to their insurance and investment concerns.
And, we here at XXXX will help you every step of the way!

Pleased be advised that since "CRFA" is not used in your title Larry Klein @CRFA is using a link to this article to leave his website's visitors with the impression that his own program was not equally criticized. The priginal NY Times articles provides some information regarding Klein's extensive SEC,NASD and CFP suspensions and fines.

Where's the agenda? I'm afraid this arcticle is getting caught up in a battle between Insurance Companies and the large brokerage companies. This is a battle between saving vehicles in which the insurance company takes the risk and investments in which the client assumes the risk. Seniors should not be assuming the risk in retirement. This is also regional battle. The brokerage firms a mostly based in New York, the insurance companies that sell annuties are mostly in the Midwest. The NYT has an agenda it would not dear speak out against the brokerage companies,which are base in NY. Fixed annuities gained creditability during the market down turn of 2000-2002. Many seniors lost as much as 75% of there retirement accounts and where devastated financially by brokers that put them in innapropriate accounts. The only annuties that where hurt by the down turn were variable annuties that are sold through broker dealers.The article is directed at fixed annuities that even if the owner of the annuity liquidate a month after taking out the annuity would only loose about 10% of the account. Its also should be noted that when Charles Duhigg was with LA Times, he wrote stories on things like environment concerns, he did not write about financial matters. Again in LA there are no large brokerage houses. Its interesting that there are no articles from Duhigg on the the debacle on hedge funds or on foreclosures of Subprime loans. Again the NY banks and brokerage house might just pull there adds. This article is the worst type of pandering and should be viewed more as a informercial for the the brokerage house and not as credible journalism.