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Trash Journalism Hit Job




https://www.latimes.com/business/story/2020-03-08/a-new-insurance-rule-undercuts-retirement-advice-reliability


A shopworn example of a hack journalist with mediocre standards working for hire. He’s either an ignoramus, a biased liar, a poor researcher or a combination of those traits. He wouldn’t know an FIA (Fixed Indexed Annuity) if it was sitting on his lap. He picked one poor specific example of an FIA to denigrate. Here’s a compilation of his biased jive:


“financial advisors getting paid to steer people (as if stock brokers don’t steer people); the insurer pitches the product (insurers don’t pitch the product); ‘an attractive rate of return’ (he’s mocking what he thinks is an annuity selling point); a complicated formula that that encompasses a ‘cap rate’ (only complicated for a simpleton)”


– Let’s pause here to uncloak some financial education for the chowderhead: FIAs have several interest crediting methods and combinations of those methods. There’s caps, margins and participation rates and under those categories are annual, monthly and multi-year point-to-point, daily averages, and inverse performance triggers, to name a few. There are several indices to choose from, not just the S&P 500, and some credit interest with greater than 100% participation rate with no cap. A knowledgeable insurance agent would be able to give a clear understanding of these features to the consumer considering an annuity – Now let’s get back to this hack’s biased patter:


“That strategy (U.S. treasuries with a stock index fund), which of course pays no commission (he’s suggesting that not earning a commission is altruistic. There are documented client statements available where FIA owners captured a 100% return in 8 years, had guaranteed income paying 6% for joint lifetimes with no market risk since the bull market began in 2009, AND the agent earned a commission); it’s not in any saver’s best interest to choose the annuity (it’s not in any reader’s best interest to believe the slanted namby-pamby falsehoods regurgitated by this hack); an otherwise expensive lifetime income option (there are several insurance companies that offer a no-fee lifetime income option. That’s ZERO FEES for journalists that don’t comprehend what no-fee means and lack an ability to do proper research); the ‘risk’ of outliving his savings (risk is in quotes to suggest that there is no risk of outliving one’s savings – tell that to all the homeless people)”


Sadly, this journalist’s jaded attempt to discredit annuities is futile. Readers of this article will recognize a charlatan, a fraud, and a faker when they see one. The worst of all possible worlds is one in which peddlers of trash journalism are taken seriously. Shame on Bloomberg for allowing this guy to write articles for them and shame on the LA Times for reprinting this hogwash.

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