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March 11, 2014 at 09:35 AM
I was talking with a fellow insurance agent recently, and he told me that one of his clients was disappointed because her fixed annuity gained only a few points in interest in 2013. She thought she could have done much better putting her money in a mutual fund. There are two other factors: She is in her 60s and plans to retire in two years.
Clients aren’t expected to understand compliance because they don’t hold or have to maintain insurance licenses. Agents, however, must keep compliance in the forefront of all their business. High-risk, high-return plans are most appropriate for young people with long investment horizons.
Mature individuals staring at retirement should be guided toward a conservative investment that will protect their principal.
My agent friend had done the right thing when he set up that particular account. At the same time, he brought to mind my own indirect experience at the receiving end of an agent with, shall we say, different standards.
