After the last 12 months, security is on everyone’s mind as we roll into 2010. Dow Jones Newswires recently talked to six financial advisors to get their take on 2010, and it seems annuities will be a big player in financial plans next year.
William T. Baldwin, president and co-founder of Pillar Financial Advisors in Waltham, Mass., told the news agency, “Annuities have been shown to help reduce the risk of bad outcomes. They don’t leave you with much upside, but that isn’t what people are particularly concerned about. They’re concerned more about the downside. And so there is some room for annuities in a portfolio.”
Michael Joyce showed more trepidation. Thefounder and president of Joyce Payne Partners in Richmond, Va., admitted he is not much of a fan, but said he is more accepting of immediate annuities for certain clients who do not have a cash-flow stream and can stand the risk. “It gives certain people some comfort to have this cash-flow stream coming in, and there are some immediate-annuity products that have been different from traditional annuity products, which, I think, have not been good products because of high fees and expenses.”
New Providence, N.J.-based advisor Diahann W. Lassus recommended annuities as a way to protect clients from their own bad habits. “Every time we talk about annuities, I flash back to a client who sold a large interest in a company and had lots and lots of money, but he was really good at spending. And one of the first things we did was lock up money in an annuity,” the president and co-founder of Lassus Wherley & Associates said. “We locked it up so that they couldn’t go through all the assets. And many years later, that’s the primary asset, because they did, in fact, spend through a lot of the dollars.”