Annuities - Getting Out Before It's Too Late

Q. My husband and I signed on with an #### Financial Adivsor. Although we knew he was working for fees and commission; we trusted him and belived he would not steer us wrong.

At our second meeting with him he sold us two annuities (one for each of us) to the tune of $112,000 - rolling over our 401K's - I can't believe we signed without researching, but we did. I came home and researched - now we want to stop the transaction. I called his office, but I got his voicemail. I sent him an e-mail as well.

I read from the securities and exchange website that most annuities have a ten day (or more) free look period during which you can get out. I pray this is true for the one we signed - we didn't even read it; this type of action is so unlike us!?!

Please help? What should we do? And finally, should we consider our initial $500 fee a loss and leave this advisor? How do we find a good one in our area that is fee-based and trustworthy? We really want to find someone for life - we are in our early forties.

A. Your experience is typical. Regardless of what commission-based firms say about their financial plans, they are just a tool they use to sell you more product. They charge you $500 so that you will think their 'plan' is more objective, but it isn't. Frankly, you can get the same plan free at many banks because they are using it to sell you products too!

All variable annuities will have at least a 10-day Free Look Period and some have a 20-day period.

Yes, you should keep your money from going into these annuities. The internal fees are significantly more costly and provide little if any benefit to you. Your email should serve as proof, but I suggest continuing to get the advisor on the phone. You can also fax him a letter clearly stating that you want out under the Free Look Provision. If there is any number to contact the annuity company directly, call them and let them know and fax the letter to them as well.

The main thing is that you want to document that you sent them the message before the time period is up. If you talk to the advisor, have him send you an email verifying that he has been told of your wishes. An email with a 'read request receipt' is a second-best option.

These monies will need to be kept within an IRA so that you don't have to pay taxes. If you don't know where you want to transfer the money to you can have #### hold it in an IRA account but they will then probably charge you $75 to close it when you transfer the money a few weeks later. I do recommend you find another advisor. Once you do, you can set up an account and the #### annuity company will have a form that you fill out telling them who to transfer the money to.

As far as being able to recommend an advisor in your area, I can't because I don't know any personally. There are very few advisors I would recommend across the whole nation. In fact, if I were to die I would suggest my wife manage the life insurance proceeds on her own. Of course, since she is actively involved in all the articles I write, she has a pretty good knowledge of the industry and investing.

I will be happy to discuss this with you further and give you some ideas.

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Postscript:

Jeff,

Thanks for your quick response.

My husband and I drove over to #### and retrieved our original documents this morning. The advisor brought in his boss to continue the sales pitch, but we simply told them we wanted to look everything over and think about it first. The advisor stood to take copies of our paperwork, yet I informed him that we would feel better if he didn't. And I do feel better - we have our originals and time on our side.

I will discuss your letter and offer with my husband this weekend (with us both working long hours we are like two ships passing in the night,) and let you know if we would like more information.

Thanks again, for your quick response and your wonderful website.

- - - My pleasure. I'm glad it worked out well and am happy to help any way I can...Jeff

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