by John Darer® CLU ChFC MSSC CeFT® RSP CLTC
Annuity.org is setting annuitants up for a risk of loss in suggesting that selling a portion of your single premium income annuity (SPIA), and by implication structured settlement, it could help your asset allocation. Annuity.org opines that "if your investment portfolio is unbalanced and you’ve tied up so much money in stocks and bonds that there’s not enough cash to meet your immediate needs, dipping into your SPIA ranks as a plausible solution".
They go on to say "For some investors, liquidating some of these annuity payments provides an agility (sic) to handle present expenses and increase future earnings. In short, by pursuing other investments they might find they can make more money (or faster money) than holding onto future SPIA payments".
Let's face a few facts
- Common Stocks and bonds are liquid investments which can generally be reduced to cash within 3 business days where the market is open.
- Selling structured settlement payment rights requires court approval and transactions may take 2-3 months.
- Selling your structured settlement payment rights will result in a guaranteed loss of capital. You lose none of your payments by simply enjoying your "salary"
- Depending on how long a security like a stock or bond has been held, it may qualify for long term capital gains treatment.
Consider the admission made by Annuity.org "dipping into your SPIA ranks as a plausible solution".Definition of plausible "superficially fair, reasonable, or valuable but often specious" [Merriam-Webster]
The transfer of payment rights from annuities and structured settlements is under-regulated and there is an inherent danger in taking investment advice from someone or some entity who/which does not possess relevant credentials (and is in this case, undermined by their own admission).
According to my search of FINRA.org and an investment adviser search with the SEC, neither Raymond G. Apelado, nor Annuity.org LLC are listed as investment advisers or registered with FINRA. Yet Annuity.org appears to be giving investment opinions and soliciting people to act on that advice by completing a form which includes personal information so that they can get a quote. Whether or not Annuity.org does the funding or they gets someone else to do it, they proclaim that they are a for-profit company.
According to information posted on its website, Annuity.org, LLC, a for-profit company registered with the Florida Secretary of State, which lists Raymond G. Apelado as managing member. The Better Business Bureau listing shows an address which corresponds to Box 160 at the UPS Store at 401 Las Olas Blvd in Fort Lauderdale, however a January 2015 filing with the State of Florida shows an Orlando address. .Mr. Apelado is the CEO of Launch That in Orlando, Florida, which, according to its BBB report, "offers information and referrals to consumers effected (sic) by asbestos, mesothelioma and side effects of prescription drugs" on websites sponsored by a Washington DC law firm.