Meet Steve
Steve accepts six to eight new clients per month in order to serve each with optimal personal attention. There are no charges for initial consultations. To schedule your complimentary review, please call us at (480)902-3333. Ask for Barb. On Money Radio, hear Steve Monday through Friday from 8am to 9am, after Business for Breakfast. In the afternoon, listen to Steve with Sinclair Noe, Mondays and Thursdays at 4:35 p.m.

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January 14, 2013

By Lauren Van Mullem

Steve Jurich, Retirement Coach and President of IQ Wealth Management, speaks more like a favorite professor than an insurance agent, or even a retirement advisor. Unlike the breed of annuity agents  who use pressure tactics and tired lures like “free steak dinners” to gain captive audiences, Jurich’s priority is creating more informed consumers. He takes time to make sure his clients understand the range of options available to retirees so they become better educated investors on the whole. That time is a significant investment for Jurich (pronounced “Jur-itch”), but he believes the results his clients see in their portfolios make it worthwhile. It’s been said that “knowledge is power,” and when that knowledge is applied wisely, Jurich believes it can lead to an elusive destination: lasting wealth.

The amount of conflicting and ever-changing information in the media combined with market volatility and outright fear-mongering has made reliable information on wealth management a rare and valuable commodity. Annuities in particular have come through the media gauntlet battered - at a time when the right annuity might be the best foundation for ensuring lasting income during retirement.

As pensions have become a thing of the past in America, many investors are discovering or re-discovering the benefits of annuities. According to Jurich, annuities are the only regulated financial instrument that can contractually guarantee a lifetime income, and can help save retirees from investment mistakes that could result in income shortfall at the most critical time in their lives.

Yet journalists from Marketwatch, Smart Money, and the Wall Street Journal have portrayed annuity sales people as all but twisting the ends of their mustaches while tying retirees’ savings to railroad tracks. Smart Money’s article “Ten Things Your Variable-Annuity Seller Won’t Tell You,” quotes an insurance salesman referring to commission as the key reason for selling them. Jurich agrees that variable annuities may not be the right fit for truly moderate and conservative investors.  He points out that for the annuities he recommends, the compensation for the agent does not reduce the account value of the annuities by even one penny. He says “One hundred percent of my clients’ assets go to work on day one without reduction by fees.”

Still, the journalistic attack is relentless. When a popular television financial whiz like Suze Orman declares on CNN Money “I hate variable annuities” - and then shrilly repeats that sentence three more times with increasingly wider grimaces, you know you’ve hit upon a controversial subject. The danger is that it’s too easy for those unfamiliar with annuities to lump them altogether, as in the Kiplinger article, titled “The Great Annuity Rip-Off,” in which the writer calls out “unscrupulous agents” who manipulate seniors into overpriced, risky investments.

Jurich says, “I’m always amazed by journalists who place themselves higher on the rung of research knowledge than the Wharton School of Business, Harvard, Stanford, The University of Illinois, Boston University, Boston College, and the U.S. Government Accounting and Budget Office. All of these institutions promote the effectiveness of annuities as being part of the solution rather than the problem in securing dependable and sustainable lifetime income.”

Today’s retirees have had enough of self-serving and out of date advisors who still sell the same ideas that worked in the Bull markets of the 1980’s and 1990’s. Instead of seeking professional advice, 50 percent of middle-income retirees choose to turn to the internet for guidance on retirement planning – and 38 percent would rather ask family or friends than a professional, according to a study released by the Bankers Life and Casualty Company Center for a Secure Retirement. Jurich doesn’t blame investors for looking to other resources. Because of the poor experiences they may have had with advisors in the past and so many publicized corprorate miseeds, trust is the rarest of all commodities.

Finding a trusted advisor is more difficult than ever. A key reason is that the consumer can’t always be certain about who the advisor is working for. Series 7 brokers work for a broker dealer. Insurance agents represent the insurance company. Series 65 advisors are licensed as fiduciaries, meaning they are required to act in the client’s best interest. Jurich takes his responsibility as a Series 65 advisor very seriously. It is an important difference that consumers are wise to consider.  In fact, he says there are three types of annuity agents whom retirees have seen all too often.

“There’s the agent who believes he’s doing a good job, but hasn’t done enough research to give full financial advice, and might not even have a securities license – an insurance-only agent shouldn’t look at your securities portfolio. Then there’s the agent who understands how annuities work, but cares more about commissions and sales awards. They’re not willing to take the time to compare the best companies and payouts for you,” he says. The third type of agent is frequently seen in brokerage firms, and is the most dangerous to retirement funds – an agent Jurich describes as “the agent whose cheese has been moved.” This agent thrived in the good old days, says Jurich, when variable annuities and REITS were the greatest things to hit investors since the rise of tech companies. “They’re well-spoken, but have done no research on the new annuity options, which doesn’t stop them from giving you their opinions on them. What they’re saying is ‘I hope you buy a variable annuity instead of that hybrid one that I don’t understand,’” he says.

Besides his role as a securities advisor, Jurich is a leading expert on Hybrid Index Annuities and Index Universal Life Insurance ( . He is also a licensed life and annuity agent authorized in multiple states, a Registered Investment Advisor, the Editor-in-Chief of, and host of the Journey to Wealth show on Money Radio. In fact, he’s a little like the Hybrid Annuities he favors – a blend of virtues. He acknowledges that while retirees want the secure income fixed annuities provide, they’re rightly wary of the hard sell, hidden fees, penalties and surrender charges. In short, they are reluctant to settle for a less than an ideal solution to keeping their money secure. This hesitation has created a demand for an annuity with all the benefits and none of the much-touted risks or exorbitant fees.

Part of Jurich’s work is to educate retirees on all their annuity options, with their strengths and weaknesses. The popular immediate annuities have the benefit of providing guaranteed payouts for your entire life, which “If you live to be 87, that’s an average investment. If you live longer, it’s a great investment. If you die prematurely, the insurance company keeps your money – that’s not acceptable for most people,” says Jurich.

One of the main concerns keeping retirees up at night is the question of whether to try for higher interest rates at greater risk to their invested money, or to invest in the safest products that eke out interest rates that don’t even match inflation. While immediate annuities can promise as much as a 9.56 percent income payout, the problem is this: “If you put your life savings into that and die early, your money is gone,” says Jurich. Another option is a Joint Immediate Annuity, which reduces income to 6.2 percent, but continues if there is one surviving spouse. If both spouses die, however, the heirs are left with the same problem – the money tied up in that annuity is gone. Before the hybrid annuities, these immediate annuities were two common options for retirees wanting both a higher interest rate and safety. However, the new hybrid annuity offers income riders that create a pensionized lifetime income stream with the added benefit that the principle passes to beneficiaries with no surrender charges.

The fixed annuity, one of the other central branches of the annuity tree, acts like a savings account at a bank: investors can use it to save, they can take their money out at any time (with a surrender charge), and while their money is in the fixed annuity, it accrues interest. “You don’t lose money in the stock market, but you don’t make money either – interest rates are far too low for that,” says Jurich. This is when variable annuities start to look good.

Five years ago, variable annuities offered attractive programs: “They would guarantee whatever the stock market did on the upside, or 7 percent, whichever was higher,” says Jurich. But variable annuities place the risk on the investor, and your return is based on the performance of the mutual funds you pick. You also have fees that are deducted annually. If the stock market does poorly, you suffer a drag on your portfolio. “The insurance company, when it did its math to give that deal, assumed the stock market would do a 6 percent average since 2000. Then we had 12 years of no growth. So now, the life insurance companies have rolled back all those benefits. They’re taking away those guarantees, and investors are left to float with the market,” says Jurich.

What makes Hybrid Index Annuities a different breed from the rest is “a blend of the potential for the upside of the market with the ability to have an insured income, but with the protection of principal value,” he says. They combine the best of what other annuities offer, Jurich promises, “You don’t have to worry about losing money, and there are still competitive rates of payout.” Unlike variable annuities, there are no annual fees for management. These products pay index interest, while not being tied to the market. Yet, when the market rises the Hybrid investor receives credited interest. Jurich explains, “Think of a bank account that gets its interest rate from the stock market – your formula is that you’ll get more interest if the market rises, and if the market falls, you don’t lose anything. You can never lose what you’ve already made. No risk, no fuss, no fees. That’s why you’re seeing a rise in demand for these. It’s a great combo. Builds like a pension, and you won’t lose money in your retirement.”

But what happens to your money if the worst should happen to you? It’s a tough question, but one with surprising answers. There are multiple exit plans, such as an annual penalty-free withdrawal of 10 percent – ample liquidity for most. And if the annuity holder dies, the annuities Jurich recommends wave surrender charges on death, allowing spouses and children to inherit without paying to get the money out. But let’s say there’s a medical emergency requiring long term, or at-home care. You can build in a “Long Term Care Annuity” to provide extra income to pay for long term care costs. It’s that kind of flexibility, in addition to the Hybrid Annuity’s ability to avoid losses and give reasonable gains, which makes it an ideal cornerstone for providing pension-like stability in a retirement portfolio. Jurich calls it a “SWAN” strategy, an acronym for “Sleep Well At Night.”

But this all probably sounds like the sales pitch we’ve heard about variable and lifetime annuities. Jurich is very frank when he lays out the most common concerns: “Retirees are worried about the loss of control that came with older style annuities. Specifically, they were concerned about the inability to take out money without paying penalties, about the inability to change the income stream, and about the possibility that when they died, the insurance company might keep the remaining value of their annuity.” “The new generation of hybrid index annuities addresses all of these concerns,” says Jurich.

Jurich sees hybrid annuities as a way to provide an insured income foundation that can last two lifetimes – yours, and your spouse’s. It’s that search for stability that has been the central driving force in Annuity evolution. Jurich says “The Baby Boomer generation cannot stand to see another 2008,” referring to the stock market decline that deeply diminished the savings of thousands of soon-to-be retirees. “The Hybrid Index Annuity helps them get into a position where they have the ability to capture the upside of the market with no annual management fee or mutual fund costs, and they have a guaranteed withdrawal benefit rider which has a pension-like income that will vest over time – almost like you’re working again.”

With 50,000 Baby Boomers celebrating their 60th to 65th birthdays every day, we may have only seen the beginning of the evolution of retirement investment strategies. After all, it’s the generation that refused to go along with the status quo for their entire lives – they won’t stop now. And their demands, enforced by their investment choices, are powerful. Having kept close tabs on investment trends, Steve Jurich is poised at the crest of that wave: “Right now, 9.43 trillion dollars are sitting in cash vehicles as people are moving away from the stock market. The demand for that risk, for the potential upside in the stock market, has shifted sideways. The smart investor is asking where they can go to ensure a stable retirement income. That’s an area now of demand. Hybrid index annuities exist because of that demand.”

All written content on this site is for information purposes only.  Opinions expressed herein are solely those of IQ Wealth Management and our editorial staff.  Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness.  All information and ideas should be discussed in detail with your individual adviser prior to implementation.  Fee based financial planning and investment advisory services are offered by IQ Wealth Management, a Registered Investment Advisor in the State of Arizona. Insurance products and services are offered through American Fortress Retirement Planning Association, DBA IQ Wealth Management. The presence of this web site shall in no way be construed or interpreted as a solicitation to sell or offer to sell investment advisory services to any residents of any State other than the State of  Arizona or where otherwise legally permitted.  All references to locations outside of Arizona relate to our insurance services division only. Steve Jurich is a licensed life and annuity agent authorized in multiple states including California. (License 0b85609, American Fortress Retirement Planning Association, DBA IQ Wealth Management ). Because our portfolios often allocate a combination of securities and insurance based products, we believe it is important for the consumer to understand the difference. Securities can and do lose money. Fixed index annuities should be viewed as long term income vehicles. Guaranteed Withdrawal Benefits are optional rider benefits for premium avaialble on some annuities, not available in all states. All guarantees are contractual guarantees provided by the claims paying ability of the insurer. Early surrenders beyond penalty free withdrawal privileges may incure surrender charges. Withdrawals prior to age 59 1/2 may incur tax penalties. Income rider values are are designed to generate contractually guaranteed income streams based on pooled reserves, and are separate from accumulated values. No specific investment, tax, or legal advice is being given and no offer is  made to sell or buy any security, nor any specific insurance product. Always consult your tax preparer for tax advice. Past performance of all financial vehicles and indexes should not be relied upon to predict future results.Income and withdrawal guarantees on fixed index annuities refer to income values, not interest rates on accumulation values.  Income withdrawal benefits are drawn from accumulation values. When withdrawal rates exceed interest rates on accumulation values, accumulation values are in position to fall. When withdrawal rates are less than interest rates on accumulation values, accumulation values are in position to rise. See your annuity documents for details.

Always consult your tax preparer for tax advice. No principal or employee of IQ Wealth Management offers tax preparation or specific tax advice related to your tax return.
Life insurance and annuity product guarantees are subject to the claims paying abilities of the insurer. Past performance should not be relied upon to predict future results, and income withdrawal benefits are not the same as accumulation values.  Fee based investment advisory services provided by IQ Wealth Management, registered trade name of Registered Investment Advisor Lincoln Financial Advisory Group, LLC, and Global Financial Private Capital, LLC an SEC Registered Investment Advisor. This document  is intended to provide general information about our firm, our services and as a method for contacting us. No information herein shall be construed as an offer to "buy," "purchase" or "sell" a security. We will only render investment advice, recommendations or services after the following conditions have been met: 1. Delivery of our form ADV Part II. 2. Execution of an Investment Advisory and/or Financial Planning Engagement Letter. A fee is not required to open an annuity account or transfer an IRA.