• Stephen Gardner

Ripped off by a bad annuity?

I want to share a recent experience I took lead on where I learned of a man being ripped off by a variable annuity. This is kind of a sad story, but it has a positive outcome. So I’m working with a new client that was referred to me from one of my existing annuity clients. This new person I am working with has his retirement money inside of an old variable annuity and unfortunately, he is being ripped off. Really ripped off!


After running his annuity program through our proprietary software and seeking out the small print online, we found out his total annual fees are over 3%. This is bad. Very bad! In Tony Robbins book, Money: Master the Game, Tony points out that for every percent of annual management fee charged, a person will lose a decade of money in retirement. This gentleman has been with this current firm for over a decade and some things about the firm were not disclosed to him; some negative things. After doing our research and confronting the current advisor for actual data, he came to find out that after giving this group nearly $300,000 twelve years previously, his money had only grown by $8,800.


Yet, the advisor had made over $98,000 in fees. Put yourself in this gentleman's shoes for a minute. He is up $8,800 after 12 years and his advisor is up $98,000. It was not easy for me to rip off this band aid and share my discovery with the client. However, whether he moved forward with me or went a different direction, he needed to know his current path was bleeding him dry due to fees and market loss.


Having read my lump sum chapter in my book Taming Wall Street which focuses on growth focused annuities and other safe money programs, he told me how the book really opened his eyes to the recurring and lasting damage of market loss and fees. It never occurred to him that he was being ripped off. He just thought his money wasn’t growing. In his defense, he is a very successful doctor and medical practice owner so he is very busy and trusted his outside investment team to have his back.


If you feel like you are being taken advantage of in fees or you worry that your money should be further ahead than it is, we can run a report that will show us how your money could have performed, the actual fees being taken and how much risk your portfolio is exposed to currently.


Right now the market sits at the top of the longest running bull market in stock market history. After over 300% growth with no major drops in nearly 11 years, you have to ask how much more can the market rise before a major drop occurs?


Now might be the best time to take your money and profits off the table and shift over to a safer approach until the market drops. Then position yourself to ride the market back.


Now is definitely the time to make sure you aren’t being ripped off in annual management fees. Very few people are aware of the fact that the annual management fee is applied each year to your growth and to your existing principal. Imagine a real estate agent taking an annual fee every year you own your home. That is what it is like, yet Wall Street works hard to blur the lines, bury the fees and skim off your account after they’ve declared the gross increase on your account.


Jack Bogle, founder of Vanguard, said the magic of compound interest is erased by the devastation of compounding management fees.


As Americans, we are busier than ever. Working longer and harder than ever. Please lift your head from your work for a day to review your plan, the amount of risk exposure you have, the actual fees being taken for managing your money and your growth plan going forward as we are at the top of the market. Don’t get ripped off and don’t be left behind when the market drops.


If I can be helpful or you would like me to send you a copy of Taming Wall Street, please reach out to me at Stephen@yourbridgeplan.com or call our office.


The future is bright and the potential is great. You are in control of your fees and your level of risk, if you choose to be.




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Stephen teaches about money, finance, getting out of debt and building tax free wealth.