March 7, 2009

Many regulators have been clamoring recently about what they feel have been less than honest annuity marketing tactics employed by financial planners and insurance companies in order to get fearful investors to fork over their life savings in return for risky products that didn’t suit their objectives. Specifically, they are targeting sellers of so-called ‘variable annuities’ for misrepresenting the amount of exposure these products have to the financial markets overall and to the equity markets in particular.

The recent elimination of trillions of dollars in global net worth includes hundreds of billions dollars invested in index funds by insurance companies seeking moderate long-term returns on the principle they are given in return for a steady flow of annuity payments. As global equity markets have plummeted to their lowest point in over ten years, regulators fear that much of the principle that is supposed to repaid over the course of the annuity is lost, and that – as a result – insurers a) won’t be able to cover the payments and that b) in the case of variable payments, those depending on annuities as a primary source of income will not be able to make ends meet with payments that have in some cases fallen by as much as 50%.

Yet it is unclear just who is in the wrong here, if anyone, or if regulators are rattling their sabers in a concession to public pressure. Except in cases of outright fraud, investors are expected to have carefully read and understood all the prospectuses, all of which also include information necessary to make informed decisions about whether or not to purchase an annuity.  Yet since so many of the buyers of annuities are older and have difficulty understanding (let alone reading) much, they could be easily convinced by a salesperson saying something that totally contradicts the acknowledgement of risks found in the sales literature.

The case against variable annuity sales is compelling when we consider the demographic of the victims – mostly older people or either know nothing about personal finance or do not have the wherewithal to manage their own finances at all. Yet should we let a couple of bad apples ruin it all? Guidelines governing annuity marketing already dictate that a variety of investor-aimed disclosures must be made in order for a sale to proceed; in cases where that is not adhered to, the crime is fraud, and it should be pursued as such.

Savers and investors should always know exactly what they are getting into and should buy financial services from individuals they trust. They should verify all claims made by a salesman by referring to sales materials and should feel justified – compelled, even – to alert the authorities should they find that a salesperson is misrepresenting the risks that concur with variable annuities.

December 3, 2008

Private banking has been affected in recent months with the collapse of well known U.S. brands of individual banks. Everywhere you look the changes are still occurring. Before one new local bank was constructed, its assets were purchased by another, even larger brand bank which hopes to maintain its grasp on its own assets and liabilities with the injection of government purchased preferred shares and ownership rights. As more banks become victim to bad investments and the hopes of a government bailout, as the dust settles after this banking “shakeout”, your private finances will ultimately be under tighter scrutiny and regulation by your national government.

What every accounts holder should know about their money today is that now, more than ever, your assets are more at risk in a U.S. bank than it would be offshore. Offshore private banking could allow you to take back control of how and when your government gets to tax your assets. Maintaining private offshore banking accounts have begun to lead the way in personal realignment of financial liabilities and how they affect your ability to continue to be successful.

It’s not just for the rich anymore. Anyone who wants to keep their equity protected should consider offshore private banking because this strategy can actually offer many people a way to save more, make more, and keep more, now and in the future. Private offshore banking and taxation are not the same as on-shore banking and taxation. Get advice on the preeminent tools you can use to get the most from offshore private banking, and you will learn the best way to avoid the natural course of taxation currently enforced in the U.S. for U.S. companies and individuals.

May 22, 2008

Hiring a San Francisco independent financial planner is not an option that many of us consider, for a variety of reasons. Some of us feel we make better decisions on our own. Others do not think that they have money problems. But hiring a financial planner is a smart move for many, and here are a few reasons why:
Someone from the outside can see more clearly.

Probably the most important reason to hire a San Francisco independent financial planner is that he or she will not be emotionally bound to your money. You have emotional reasons for some of the money moves that you make – a planner will not. Your planner will be able to objectively tell you whether or not you are making a smart decision with your money.
They are more educated, financially.

Financial education in this country is mediocre at best. How many of us truly understand how to analyze our money choices and make coherent, intelligent decisions? A San Francisco independent financial planner is experienced in the money world, and knows how to maximize the return on your investments.
Two heads are better than one.

Logically speaking, having more input on your financial decisions allows you to consider options that may not have occurred to you before. Your San Francisco independent financial planner will have ideas you have not thought of, and can push you to think harder and consider more options than you thought.