Casey's Thoughts - Fees & Investments

Casey’s Thoughts – Fees & Investments

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In a recent article on FinancialPlanning.com it was reported that Equitable told teachers their variable annuity fees were $0.00, SEC discovered. As a result, Equitable was charged with misleading retirement savers about hefty fees on variable annuities highlighting gaps in investor disclosures about the complex products.

“Equitable Financial Life Insurance agreed on July 18 to pay $50 million to settle SEC fraud charges alleging that it sent “materially misleading” account statements to 1.4 million annuity holders over the past six years. Equitable, a target of critics who assert the company is predatory toward teachers, a core market for the annuities industry, left out the products’ two main fees and 97% of the revenue from the contracts, the SEC said.”

I see this as another stain on an industry that doesn’t need any more help losing the trust of the public. These types of stories really hit us hard at Crown Haven Wealth Advisors because we come from humble beginnings, and we truly believe that it’s our job to ensure our clients worry less about their money and spend more time enjoying their lives.

That means those that work in the financial industry MUST be transparent. They MUST act with integrity. They MUST under-promise and over-deliver. They MUST act as fiduciaries and put YOU first.

In short, they should treat you as they would hope to be treated.

Here’s the deal: Variable Annuities have fees. Period. End of story. They have M&E fees, 12b-1 fees, administrative fees, mutual fund fees, income rider fees, etc…

Variable annuities are basically the entire reason you think “fees” when you hear the word “annuity” – because they’re literally the only type of annuity that have fees as an automatic component of the contract.

HOWEVER, That doesn’t mean all annuities are bad, and it certainly doesn’t mean all people who use the many types of annuities as a tool (out of many) to build a holistic retirement plan are as duplicitous as these folks who told these poor teachers their fees were $0.00.
It’s for this reason that it is so important to arm yourself with knowledge!

We’ve spent hundreds of hours compiling dozens of resources for the general public to consume. Learn about this commonly misunderstood retirement vehicle, as well as many other topics.

If you have more specific questions or want us to perform an annuity audit for you, reach out to us or schedule a visit – we’re here to help.

Casey Marx

It’a Just a 2% Fee, Right?

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There are things you can control in other things you can’t and you need to control and and hold on to with every fiber of your being the things you can control because there’s so much you can inflation cost of goods geopolitical conflict Wall Street greed how long you live All these things you can’t control so it kills me on a daily basis clients come in and they show me their statements and then I analyze just the risk and and it’s just completely inappropriate and then the fees they’re paying.

For example a 2% fee on a deposit of $500,000 over a 15-year period reduces that investment by $487,000 over that 15-year period assuming that your advisor is a superhero and gets you 7% return annually and you never go backwards That’s insane so $500,000 would turn into $1,082,000 whereas if you didn’t have that 2% fee you would have $1,511,000 which for those keeping score at home is about the amount of your initial investment so people here are 2% fee or 1% fee or 50 basis point fee and they think that’s no big deal It’s a huge deal because it destroys the miracle of compounding interest.

Risk has its place but understand what you’re doing and quite frankly my clients are smart people they’re not stupid people It’s just not their expertise and so if I go talk to an engineer about something I’m not going to be up on his furniture I’m not going to be up on the the vernacular that is exclusive to that expertise so if you starts running around in circles around me talking about what he does and this and this and how this is so great and and he’s trained to do that You know I’m at a loss I don’t know what to do

It all comes back to education for us It’s teaching people The great thing about working with something that’s positive is that you’re not afraid to lift the curtain You lift the curtain you show people and they come to the natural conclusion that what you do is best for that and that’s a it’s a good position to be sitting in.

If you want a second opinion on your existing financial plan for retirement contact us for a complimentary consultation.