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A finanical advisor is recommending that I transfer 300,000 dollars from my 301b account to allianz because it will earn more interest and can be stretch to reduce taxes for my heirs. Is this a good move? He stated that the principal will never be lost.
Is allianz a safe company?Quote:
Originally Posted by invester
I am not familiar with a 301b account - what is it?
I personally have been burned more than once with annuity contracts, specifically variable annuities. I know nothing about Allianz, but things to be careful of include:
1. Fees. There are fees to set up the account, fees to add to the investment, fees to withdraw, etc.
2. Lack of flexibility - often there are fees and penalties if you want to take your money out.
3. Lack of transparency - the investments were not in mutual funds that you could track, but rather special funds set up and managed by the insurance company. It was very difficult to compare returns of the investment with the market.
4. If this is a variable annuity with a life insurance component, the actual cost of the life insurance may be very, very high. You are better off just buying term insurance, and use standard investments like mutual funds and CDs for your investments.
Keep in mind that your "advisor" may be making a nice commission on whatever he sells you - if this is the case, he has a conflict of interest that you need to be aware of.
There are too many factors to consider without an in depth analysis by a trained financial planner, (preferably an advisor with the right credentials from an organization such as a National assoc of certified planners) I don't think there is enough information given to give you an answer. I prefer to do business with planners whom you pay a fee to for their services rather than one who may earn a commsiion selling you a particular product. I would want to know you age, assets, liabilities, net woth, marital stutus, dependency status, income and from what sources as well as you tolerance for taking risks and other information. Annities are good for certain people and bad for others. Annuities basically offer a lifetime income, an income that one can never outlive. No other financial tool offers a lifetime stream of income that one cannot outlive but on the other hand, the return on the investment is somewhat limited. Some annuites offer a tax shelter on the interest earned. Other investments might not be tax sheltered. They contain "surrender" penalties that can be quite substantial if, for example, the annuity were surrendered even as much as 10 0r 12 year later. They may save on estate taxes if set up in such a manner to reduce those taxes. Since this is a sizable sum for most people and you haven't described the planner's qualificiations or affiliations or how he will be paid for his services and we don't know other relavant details of your particular personal situation, I don't think anyone here can give you a quick easy answer. But I can tell you that you can check on Allianz's financial strength, etc, and other details by reviewing a copy of A.M. Best, a fimr which rates, provides info on insurance companies. I would be willing to venture they are A or A plus rated by Best. Very few life insurance companies go belly up or become insolvent but I don't thnk any reputable fiancial planner would or should ever state that you principal won't be lost. I have seen life companies become insolvent but it's rarre and even when they do, they liabilities are usually protected by various State guaranty associatons where all companies doing business in a State are required to share and share in proportion to their writings in the State, in any losses. I would seek a 2nd, even 3rd opiniion maybe, from another good planner, a CPA or even a tax attorney prior to the investment.
As a financial advisor - both for Allianz, ING, Midland National, GILICO - I would never, ever recommend putting all of an investment in one annuity. Annuities are excellent investment vehicles, but any financial advisor worth his.her weight would perform an analysis on your current and future needs and expectations. I would not recommend placing all of your hard earned money into only one vehicle. He is correct in the fact that the principal - as well as any interest declared every year is secure and would not be lost.Quote:
Originally Posted by invester
Yes, it's pretty safe -- one of Germany's and world's top financial organizations. My former boss worked for them for a while and had a good experience, but that's just a personal note. Checkout Yahoo! Finance for a professional opinion and stock info. Allianz stock traded on New York Stock Exchange has grown from $5 to almost $23 in last four years. That's a sign of a good business model and, I suppose, safety of doing business with them. Also, do adhere to other posters' wise advice.Quote:
Originally Posted by invester
Absolutely do NOT do it. Allianz has six class action suits pending against them right now and another one pending against them by the Minnesota Attorney General. Just do a Google search for "Allianz Lawsuits." Buyer beware!
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