Great News for Annuities

April 15, 2015 – Yesterday was a great day for annuities!

According to a report in InvestmentNews, Ken Fisher is leaving the building.

You may have never heard of Ken Fisher but you’d be hard pressed to miss him if you’ve ever spent any time on Google trying to figure out what to do with your retirement money.

He’s the guy who goes around saying (and presumably paying decent money for ad space to have him quoted saying) “I Hate Annuities” and beseeching others to do the same.

When you’ve dedicated your professional life to helping people using various types of annuities to improve their lives as I have and understand firsthand how valuable they can be, it’s hard not to be offended but such an antagonistic statement.

“Hate” is a very strong word. Most of our parents and teachers frowned upon our usage of it when we were children.

Negative advertising and fearmongering must work, though, and I’m sure those ads directed more than a few people to Fisher’s $60 billion money management firm.

For that reason alone, he shouldn’t hate annuities. He should love them!

Don’t get me wrong. I don’t begrudge him the success of his advisory firm one bit.

And even though it’s not the focus of our practice, you’ll never catch me unilaterally advocating against actively managed funds or passively invested mutual funds. They obviously have a place in the financial planning discussion.

But so do annuities and Fisher knows this. Or should.

I take issue, however, with anyone who uses incendiary half-truths and red herrings to cast aspersions on an entire industry that serves such a public good. Especially when I’m suspicious of that person’s motives.

Hopefully, the investing public is smart enough see this tactic as the self-serving sleight of hand that it is.

When a guy like Ken Fisher says he hates annuities, people would be well advised to be doubtful.

If fictitious oil baron J.R. Ewing said he hated solar energy, wouldn’t you feel you intuitively understood why?

Eventually, possibilities become clearer for those who look under the surface to explore what else might be driving the negative sentiment.

A quick trip to the calculator reveals that if Fisher could capture even a fraction of the $2.36 trillion in annual annuity purchases made over the past decade as reported by LIMRA Secure Retirement Institute, it would be a hefty boost to his personal net worth.

According to the authors of the scholarly Rational Decumulation, annuities are one of the most cost effective and least risky asset classes for generating retirement income for life. They have been around since the Roman Empire and they’re not going away anytime soon.

If the InvestmentNews report is accurate, the same cannot be said for Ken Fisher.

And those of us annoyed by his audacious ads won’t mourn his departure.