Editor’s note: The following letters from a quartet of industry organizations were written in response to Charles Duhigg’s article in the July 8, 2007 New York Times, “For Elderly Investors, Instant Experts Abound,” calling into question advisors who market themselves to seniors with “impressive sounding credentials.” Here are a couple of excerpts from the article:
“Many of these titles can be earned in just a few days from for-profit businesses, and sound similar to established credentials, like certified financial planner, that require years of study, difficult tests and extensive background checks.”
“Many graduates of these short programs say they only want to help older Americans. But they are frequently dispensing financial counsel they are unqualified to offer, advocates for the elderly say.”
With so many different designations available with such varying degrees of difficulty, the topic invites scrutiny from the mainstream media. Unscrupulous sales tactics regarding product suitability is also a subject that has attracted media attention, and many halftruths, incomplete or inaccurate information about annuity products typically seems to accompany such coverage. Senior Market Advisor has always been a strong advocate for ethical practices and the value of annuity products. We have reprinted these responses in an effort to keep readers aware of how the industry is responding to negative, sometimes inaccurate media coverage.
What Your Peers Are Reading
ACLI RESPONSE TO
N.Y. TIMES ARTICLE
“For Elderly Investors, Instant Experts Abound” (front page, July 8) raises serious questions about the sales tactics of a handful of independent insurance agents.
Any consumers who believe that they have been misled by an insurance agent should immediately contact the insurance company backing the policy or the state insurance commissioner. Our industry does not and will not condone unsuitable sales of our products.
The confusion caused by the myriad designations for insurance professionals certainly must be addressed. But we must correct the negative picture you give of deferred annuities and industry
Annuity owners typically are not obliged to wait 10 years to draw benefits. Insurers generally offer fixed and deferred annuities that allow immediate withdrawals.
Nor is it true that deferred annuities are inappropriate for retirees. Retirees are living longer; many work part-time and earn income for years.
It is hardly inappropriate for these retirees to choose to defer a portion of their retirement income in exchange for a higher return. Indeed, many retirees still have dreams for the future that are best
financed by deferred annuities.
Retirement planning must be tailored to suit the needs of each individual retiree.
- Frank Keating
President and Chief Executive,
American Council of Life Insurers
NAIFA RESPONSE TO
N.Y. TIMES ARTICLE
On July 8, 2007, the New York Times published an article, “For Elderly Investors, Instant Experts Abound,” about allegedly improper sales of deferred annuities to seniors by licensed agents professing to be experts in giving financial advice to seniors. Their credential for making that claim was the fact that they carried the title “Certified Senior Advisors.”
It is not the intent of the National Association of Insurance and Financial Professionals to comment on the CSA designation; however, we do feel it is appropriate to point out that annuities, both deferred and immediate, can play a vital and valid role in sound financial and retirement planning. It is not the products that are abusive. It is the use or misuse to which they are sometimes put.
In fact, deferred annuities are an excellent vehicle for accumulating tax-deferred money over a long period of time in the context of a sound financial plan. Immediate annuities are outstanding products for guaranteeing a lifetime income to a retiree and, if they so choose, his or her spouse. And deferred annuities can become immediate annuities at any time the annuitant chooses.
NAIFA believes full and easy to understand disclosure of all the pertinent facts about these and all insurance and financial products are in the public interest. NAIFA members subscribe to a Code of Ethics that requires that they always act in their client’s best interest, based upon full knowledge of the facts of that client’s situation. NAIFA deplores any producer or other advisor who puts his or her own interest above that of their client.