Ken Fisher takes out full page ads that say “I HATE Annuities and You should too!” This ad frustrates many financial advisors and can cause clients to have a negative perspective on why annuities are a necessary part of your retirement plan. The negative connotation just adds on to the Suze Orman’s and Dave Ramsey’s of the world who pass out misleading and often incorrect information to our clients. Ever have any of your clients bring a copy of an article written by Ken Fisher to a meeting with you? Not sure how to handle the objections? 

I am 100% positive than Ken Fisher LOVES annuities. Let me tell you why. He has run an absolute brilliant marketing campaign. Annuities, in this case, Variable Annuities are an easy target. They DO have higher fees than many other investment products. So when he looked across the landscape of investment products, he had to find a product that was WIDELY OWNED that had HIGHER fees than him. See, the dirty little secret of Ken Fisher is that HE has high fees too! He can’t pick on Vanguard or Fidelity -NOPE – because their fees are LOWER than his. Well, there are a lot of products that have high fees – real estate, options, futures, gold, and commodities. But which of these is widely owned and can be TRANSFERRED to a Ken Fisher investment account with just a couple of signatures? Variable Annuities! Viola! He found the PERFECT target. 

So this Anti Variable Annuity campaign has helped Mr. Fisher grow a large practice and make a very respectable income. Rest assured, if you call his number, you will NEVER get Ken Fisher. You will get one of his many employees who will be more than happy to transfer your Variable Annuity to a Ken Fisher account. Should this be allowed? Are they working in the best interest of their client? I can’t speak for every client situation but what I can say is that math and science PROVES that the only way to hedge longevity risk is with an annuity. Where is the fiduciary responsibility of an advisor that does not have an annuity as part of a retirement plan? 

Now let me tell you why Ken Fisher will HATE annuities in the future. Math and science proves that only some form of an annuity will hedge longevity risk. Stocks won’t do it, Bonds won’t do it, CDs won’t do it. See, Ken Fisher does NOT tell the whole story. Let me, as Paul Harvey said for years, tell you the REST OF THE STORY… 

Yes, Variable Annuities DO have higher fees than comparable Mutual Funds. Do you know WHY that is??? It is because these Variable Annuities have GUARANTEES that Mr. Fisher does not have. GUARANTEES that really only matter when the market goes down. Lately the market has been close to all time highs. Guarantees don’t matter much when markets are hitting highs. They can pick on the fees, on the commissions and anything that will reduce your returns. 

But I know something that Mr. Fisher seems to not know. That markets CRASH and they can actually go down – A LOT! And WHEN that happens, and mark my words, it will, then Mr. Fisher will actually HATE Annuities. Why? Because he will likely be paying and paying to end the HUGE lawsuit that he will find himself up against. All of these people who moved their money to Ken Fisher have LOST those guarantees – guaranteed death benefits, guaranteed accumulation benefits, guaranteed withdrawal benefits, guaranteed income benefits. All of the guarantees that caused the fees to be higher. They are now GONE. 78 Million Baby Boomers who are near or in retirement – the ones who follow Ken Fisher will be in a boat load of trouble with their retirement. 

Some other half-truths of Ken Fisher – he says “your broker could have received a commission of 8% or more.” Does he mention that the 8% did not come out of your account? Nope. 

Does he mention that a commission is a one-time fee, paid for by the issuing company? Nope. 

Does he mention that HIS fees WILL come out of the client’s account FOREVER? Nope. 

Does he tell the client all of the guarantees they are giving up? Nope. 

Does he explain the difference between different types of annuities? Nope. That Income Annuities are not even FEE products, they are SPREAD products? NOPE.

Does he explain to clients that they really MUST use an annuity to take longevity risk off the table? NOPE. 

Does he tell them that PhD’s around the world recommend that you at least cover your basic expenses in retirement with guaranteed lifetime income? NOPE. 

Does he stress the need for tax diversification using life insurance as well? NOPE. 

Does he stress the importance of having a plan for Long Term Care? NOPE. 

Look, don’t be duped by a marketing genius. Focus on helping clients have guaranteed lifetime income and help them remove key risks from their lives during retirement. Always remember: Tom Hegna LOVES Annuities and YOU should too! 

If you are looking for a way to educate your clients about why annuities have to be part of their retirement plan, become a member of Tom Hegna On Demand. I'll personally help each of your prospects understand why they should love annuities as much as we do!

Tom Hegna