August 24, 2008
The minimum guarantees, guaranteed safety of principal, liquidity features, and the upside potential of some of the available strategies of some indexed annuities have greatly helped many of my clients. In addition, my clients have been financially rewarded without any fear of ever losing any of their principal--or even any of their profits after being posted to their accounts. The earnings are, of course, extremely impportant, but for many of my clients, the safety and security and peace of mind of having no risk of loss to principal is even more significant.
It is my belief that there is a place in almost every portfolio for a properly positioned indexed annuity. This, of course, is not a place for all of someone's dollars, but, in many cases, it is an excellent place (and often the very best place) for a portion of assets in a diversified portfolio.
It is also my belief that indexed annuities are not securities. They are fixed annuities with some very desirable characteristics and should continue to be viewed as just that. As long as clients and agents use these valuable tools properly, the added complication of classing them as securities is completely unnecessary and, in fact, unjustified.
Charles G. Linder CLU, ChFC