Putting the Client First: Fees and Commissions in Variable Annuity Contracts

Cordell, David M.; Tombs, Joseph W.
September 2005
Journal of Financial Planning;Sep2005, Vol. 18 Issue 9, p40
Academic Journal
This article discusses the issues concerning fees and commissions in variable annuity contracts. Some salespersons who call themselves financial planners recommend variable annuity contracts that contain expense structures that work to the disadvantage of their clients. Variable annuities are marketed as tax-advantaged accumulation vehicles for retirement, but unfortunately, expenses associated with ownership of a variable annuity can be onerous. The good news with variable annuities is that the dividends are tax-deferred, as are any capital gains. But when the money is withdrawn during the liquidation phase, all the increases in value, both from dividends and capital gains, are taxed at ordinary marginal tax rates.


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