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Certified Annuity Specialist®

As of May 27, 2011, I completed all requirements for the Certified Annuity Specialist® (CAS®) designation offered by the Institute of Business & Finance (IBF). The CAS® is the only nationally recognized annuity designation which focuses on various aspects of traditional fixed-rate, equity indexed and variable annuities. CAS® certification requires mastery of contract structure, tax ramifications, strategies, income structuring, and principals of asset allocation.

Education in this area is important because there are several trillions of Dollars invested in annuities. These products are often sold because they have appealing guarantees or investment structure however these products are typically quite complicated and many of the financial salespeople who sell them do not have proper education in the products that they sell. For example, it is estimated by the IBF that at least one third of all annuity contracts are not titled correctly.

In addition, the commissions on the sale of deferred annuities are typically much higher upfront than a similar mutual fund or advisory account which makes the recommendation naturally conflicted. Having the proper education helps me to fairly evaluate whether an annuity product is appropriate. While annuities in general have received bad press over the years, I believe this is mostly due to the high pressure sales often associated with annuity salespeople as well as senior being taken advantage of when sold annuities that are not appropriate for their situation. That being said, annuities do have their place.

For example, a traditional fixed-rate deferred annuity can lower the volatility of a portfolio by replacing some of the bond portfolio with a fixed-rate annuity. Fixed-rate annuities can also help taxpayers who are in high brackets avoid the annual tax on their regular savings. Immediate annuities which are for retirement income purposes provide a stream of income in exchange for a lump sum investment. These products have shown to reduce the risk of outliving one's assets.

For additional information on whether any type of annuity is appropriate for you, don't hesitate to contact me.

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