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In the most basic way, annuity can be described as an investment contract that an investor enters in with an insurance company and enjoys special tax benefits. Adding it to your investment portfolio can prove very profitable but this starts by selecting the right investment and the right annuity advisor who understands your financial goals.
It is always advisable to adopt a conservative approach in investment particularly when one is approaching the retirement age. At this time, the nest-egg reaches its largest possible level and is very vulnerable to market fluctuations. This is why annuity is usually the better option.
There are many benefits that are associated with this option which include a guaranteed future cash flow and the retirement income increases every year. This is the easiest way to ensure that you pass something to your heirs and protect any of your assets from the creditors or probate.
It is the obligation of the advisor to organize his product so that all the requirements put forward by the customer are considered. This is done with the end goal of protecting the client assets and growing them whenever opportunities come by. Not all the products in the market are appropriate for the client and the consultant should always have this in mind.
A financial consultant should only encourage his client to go for that investment option that is in his best interest and not just anything. However, the consultant has a responsibility to educate the client on the investment vehicle that he is interested in or just curious about. These consultants are usually expected to adhere to a strict code of conduct, practice general ethical principles and avoid unfair marketing practices.
Some practices that should be avoided by any professional advisor in annuity market include using false information to advertise, avoiding and form of misrepresentation of facts when selling the investment products, the issues of defamation, rebating, using bait and switch to make client by what they had not planned for and twists.
In addition to these, these consultants too should completely avoid talking negatively about their rivals, the rival products and character unless there exists official records of civil or criminal nature committed by those rivals. Basically, they should use their energy to promote their products telling the clients how they stand to benefit.
When a consultant believes the insurance firm may be facing some financial problems in the near future, they prefer not to recommend products from such firms to their clients. This is in essence trying to protect the client, but is the right measures are taken, the solvency issues should not arise, after all evidence shows that annuities are the best way to mitigate against most risks including longevity risk.
There are several tips that can be helpful when locating the best insurance firm to take the annuity from. These include working with bigger firms which are known to be less prone to solvency risks, take advice from the rankings as put forward by Moodys, S&P and Fitch and ensuring that the engagement rules are very clear.
It is always advisable to adopt a conservative approach in investment particularly when one is approaching the retirement age. At this time, the nest-egg reaches its largest possible level and is very vulnerable to market fluctuations. This is why annuity is usually the better option.
There are many benefits that are associated with this option which include a guaranteed future cash flow and the retirement income increases every year. This is the easiest way to ensure that you pass something to your heirs and protect any of your assets from the creditors or probate.
It is the obligation of the advisor to organize his product so that all the requirements put forward by the customer are considered. This is done with the end goal of protecting the client assets and growing them whenever opportunities come by. Not all the products in the market are appropriate for the client and the consultant should always have this in mind.
A financial consultant should only encourage his client to go for that investment option that is in his best interest and not just anything. However, the consultant has a responsibility to educate the client on the investment vehicle that he is interested in or just curious about. These consultants are usually expected to adhere to a strict code of conduct, practice general ethical principles and avoid unfair marketing practices.
Some practices that should be avoided by any professional advisor in annuity market include using false information to advertise, avoiding and form of misrepresentation of facts when selling the investment products, the issues of defamation, rebating, using bait and switch to make client by what they had not planned for and twists.
In addition to these, these consultants too should completely avoid talking negatively about their rivals, the rival products and character unless there exists official records of civil or criminal nature committed by those rivals. Basically, they should use their energy to promote their products telling the clients how they stand to benefit.
When a consultant believes the insurance firm may be facing some financial problems in the near future, they prefer not to recommend products from such firms to their clients. This is in essence trying to protect the client, but is the right measures are taken, the solvency issues should not arise, after all evidence shows that annuities are the best way to mitigate against most risks including longevity risk.
There are several tips that can be helpful when locating the best insurance firm to take the annuity from. These include working with bigger firms which are known to be less prone to solvency risks, take advice from the rankings as put forward by Moodys, S&P and Fitch and ensuring that the engagement rules are very clear.
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