Variable Annuity in a Roth IRA

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  • Avatar MarathonPhysician 
    Status: Physician
    Posts: 1
    Joined: 08/08/2019

    Im in the process of transferring out from my FA, luckily only have small amount with him but noticed he put a variable annuity within an IRA that I had done several years ago and really haven’t touched or put additional money into over the last 5 years. Any idea why he would do this? I am assuming there was some advantage to him? Even with researching I can’t figure it out. It is a small amount but just curious why it was done. I only noticed it when I was transferring the $1800 to vanguard.

    Thanks for the help




    #237277 Reply
    Avatar ajm184 
    Status: Other Professional
    Posts: 635
    Joined: 07/14/2017

    Greed is the simple answer.  This is what I can gather from an experience my father’s former FA went through.  Say the FA is short of a certain ‘collective’ goal or it is only say $20K of special x sold to get to the next compensation tier for a quarter/year.  Well, if you have a decent book of business, and you have trade authority or client who don’t question recommendation, your can shove a small amount in certain number of accounts.  What do you know!!!, the FA has made the ‘golden’ FA of the quarter with a 4 day trip to the Bahama’s at the clients expense (literally and figuratively).

    #237510 Reply
    Avatar Peds 
    Status: Physician
    Posts: 4405
    Joined: 01/08/2016
    It is a small amount but just curious why it was done.

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    to make them money.

    cancel it, get out if its truly that small.

    #237519 Reply
    Avatar JBME 
    Status: Spouse
    Posts: 523
    Joined: 03/26/2018

    Why don’t you ask your FA directly and then get back to us on what his answer is? Obviously his answer won’t be truthful so go in armed with information (like look up the annuity and find out the fee structure) and ready to call him out, just to make yourself feel better today

    #237551 Reply
    Faithful Steward Faithful Steward 
    Status: Financial Advisor, Small Business Owner
    Posts: 509
    Joined: 06/12/2017
    Any idea why he would do this?

    Click to expand…

    Unless you purchased it for the specific purpose of accessing living benefits (which is doubtful), I can’t think of a single legitimate reason.

    I am assuming there was some advantage to him?

    Click to expand…

    If the advisor worked on commission, I’m sure it was to maximize commissions.

    Sorry to hear that you were taken advantage of. This is why I’m so cynical about those in my profession.

    Michael Peterson, CFP® | Faithful Steward Wealth Advisors | (717) 496-0900

    #237554 Reply

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