You’ve seen his TV commercials or his ads in magazines and newspapers. He spends a fortune on these negative advertisements every year.
According to Forbes, he’s worth over $3 BILLION dollars. He earned the bulk of his net worth by managing investors money (minimum investment is $500,000) and collecting quarterly fees.
Nothing wrong with that. We are fiduciaries too and our firm charges fees for two of the stock/bond market “risk buckets”. But there are 3 risk buckets – not just two. (text continued below)
So what about the Principal Protected risk bucket? The one that cannot lose money and takes “sequence of returns” risk off of the table? What about providing a guaranteed lifetime income without any market risk?
He doesn’t offer any investments that solve those problems. Maybe his multi-millionaire clients don’t need those types of investments.
He since his investments are mostly in stocks (he’s under-performed the market by about 2% a year after fees since 2002). He lost -8.5% in 2000, lost -24.1% in 2002, -42.6% in 2008 and lost -8.2% in 2011.
What about those multi-millionaire and everyday regular folks that do NOT want to take market risk with 100% of their money?
What about those folks who like the idea of an additional pension-like income that is guaranteed for the lives of one or even both spouses?
I guess, as far as he’s concerned, it’s all or nothing. He thinks all annuities are a rip-off.
Now, fixed and indexed annuities are NOT the be-all and end-all. No financial product or solution is. But they compare very favorably to other Principal Protected accounts like CD’s, T-bills and savings accounts.
Each type of investment clearly goes into one of the 3 Risk Buckets. He only uses two of them.
Well I can help my clients work with all 3 risk buckets in order to meet their retirement goals. And as far as I’m concerned, it’s the right thing to do!
all the best… Mark
PS – my “Retirement Income Planning” book describes using all 3 Risk buckets to eliminate as much sequence of returns and longevity risk as possible. I’ve updated it with 14 brand new pages about a month ago too!