How an Annuity Audit Added Income and Reduced Fees
The Story
An advisor was wondering if a replacement is available even after income payments have started on an annuity. We involved our Audit team and asked for a full analysis of the coverage.
The Problem
Many clients are holding onto older annuities they haven’t looked at in years. As time passes, needs change. In addition, newer products might offer higher rates, lower fees or additional riders that might be useful for current goals.
Client Profile
Betty, age 73, was taking payments from an existing variable annuity, with the goal of maximizing her retirement income. Her advisor assumed that once income is started the annuity couldn’t be changed.
Her existing annuity had the following features:
- Current value of $2.7M,
- More than $100,000 of annualized fees
- Generated an annual income of $218,947
How it Works
We met with the advisor and client virtually to gather the information we needed to analyze not only the income, but the fees and interest rates as well. We presented the full audit to the client, discussing what we found and offering additional alternatives.
The Result
After reviewing the coverage, we moved the policy from the current annuity to an FIA. We increased her annual income to almost $250,000 and reduced her fees 52%. And, because we transferred to an FIA, there was no market risk.
Looking through the book of business, the advisor was able to identify more cases that could benefit from an annuity audit.
Jim Dobler joined Ash in Jan. 2022 to develop our new Retirement Advanced Planning department. As a self-proclaimed data nerd with over 20 years in the industry, he loves looking at existing policies and comparing the solutions available on the market. In previous roles, Jim has been a financial advisor, a wholesaler, the head of sales for CANNEX and the president of an insurance agency.
