Why Would My Financial Advisor Recommend a Fixed/Equity-Indexed Annuity Over an Equity Linked CD?
We can’t say for sure without knowing circumstances to the individual investor, but generally speaking Annuity FYI feels that fixed/equity-indexed annuities are a terrible investment. Unfortunately, these fixed/equity-indexed annuities pay financial advisors extremely high commissions, whereas equity linked CDs pay a relatively small commission. As such many unscrupulous advisors may recommend the annuity over the CD. Generally speaking, we vastly prefer equity linked CDs over fixed/equity-indexed annuities because the CDs have a shorter term commitment, are FDIC insured, and are much less expensive.
