The truth about the “Super 7 Annuity” sales pitch

By:  Stan The Annuity Man

alertI was forced to write this article.  I didn’t want to, and even contacted a business acquaintance who is actually one of the main people at the newsletter that is promoting this “Super 7 Annuity” garbage.  He told me that he would share my concerns with a couple of his editors, and they would be in touch.

That was over a month ago.

I’ve still never heard from them and it doesn’t look like I will, which forced my hand to do this CONSUMER ALERT piece to save people from one of the most fraudulent sales pitches I’ve seen in a long time.

By the way, when you go by the name ‘Stan The Annuity Man’, that means I thought I had ‘seen it all’ in the world of annuity advertising and promotion.  However, this “Super 7 Annuity” nonsense has set the misleading hype bar to a new level.

So it’s time to factually tear this misleading promotion to consumers to pieces.  Starting with the most obvious…

Not even an annuity

First, and foremost, the “special report”/ sales pitch that falsely proclaims that there are 3 types of annuities; immediate, deferred, and this so called “Super 7 Annuity.”

The most important thing to reveal in this ridiculous story is that the “Super 7 Annuity” is not even an annuity.  How do I know this? I spent time digging to find out exactly what annuity this was or could be.  What did I find? It is Main Street Capital Corporation (MAIN). That would mean one thing, it’s a corporation that trades publicly on the NASDAQ Exchange.  Last time I looked an annuity is not a publicly traded contract. In fact, it is a contract between the policy holder and the issuing insurance company or an individual agreement between the investor and the insurance company, plain and simple. Main Street Capital Corporation is not even an insurance company! It is a business development company specializing in long-term equity and debt investments in small and lower middle market companies. For more information, follow this link.

How did this typically respected newsletter service decide to mischaracterize a stock into an annuity contract… only they can explain. My job is to set the record straight as it relates to the annuity claims. I am hoping their next “special report” will not be called “Single Premium Immediate Annuity (SPIA) The Best Dividend Stock in the World!”  That would make as much sense as the “Super 7 Annuity” being called an annuity versus the stock that it really is.

Most misleading financial ad in history

Steve Van Wie, of nationally respected Van Wie Financial, contacted me recently after one of his clients asked him about this “Super 7 Annuity” report.  After Steve did some thorough research, he concluded this could be the most misleading financial ad he has ever seen.  It’s hard to argue against his point. He could not believe the blatant mistruths embedded into the “special report” and attached audio pitch. Recently, Steve spoke out about this on his weekly radio show warning his listeners about the “Super 7 Annuity” and to not fall prey to the hype.

Newsletter Hype Nonsense

Before the internet became an accepted form of information gathering, hard copy financial newsletters were all the rage for legitimate (and some shady) money prognosticators.  The ‘go-go’ hard copy newsletter days are long gone, but have been re-birthed online and unfortunately a few cater to the naive and financially illiterate across America. Enter the “Super 7 Annuity” special report from one of these newsletters. As Stan The Annuity Man it is my job to make you aware of these potentially harmful and misleading reports… and from my view, this is one of those to be avoided, deleted and flushed down the advertising hype toilet… plain and simple.

Rhymes with “Duck”……but doesn’t walk like one

To put it in a simpler form, MAIN (the ticker symbol) does not look like an annuity duck or walk like an annuity duck because it’s NOT an annuity.  Annuities are the only product on the planet that can guarantee a lifetime income stream regardless of how long you live.  Annuities are regulated at the state level by the National Association of Insurance Commissioners – NAIC (www.naic.org).  Annuities are safety rated by four primary ratings agencies (S&P, Moody’s, Fitch, A.M. Best), and are scored and ranked by COMDEX.  Annuities are issued by insurance companies and don’t trade on any stock exchanges. None of the above apply to the “Super 7 Annuity”!

Newest Income Strategy

The advertisement claims this is the “Newest Income Strategy” for investors. The last time I looked a stock that pays a dividend is basically as old as the stock market… after all, specific stocks have been paying dividends since they were invented. I would view that as the same old thing… not something new.

The ad goes on to claim it could pay out more than three times the average annuity. The promotion is an 8 – 10% annual income without fees seen in a regular annuity. Interesting, since it currently pays a dividend of 6.54% and is subject to market volatility… i.e. the price will go up and down with the value of the underlying company. In addition, there have been price swings of more than 35% since going public in 2007.

The ad also claims that the income stream does not expire on your death… you can pass it on to anyone you wish… without losing one cent of its value. Wow! What happens if the stock goes down in value? They (the newsletter) are assuming it cannot go down is my guess, and that is simply false, misleading and non-sense.

This is not a “New Income Strategy” it is just another dividend stock and it should be evaluated with the same due diligence you would use on any investment of this type. Don’t fall prey to the hype and be smart about where you are putting your money.

Investor Awareness Needed

As individual investors we need to take the time to investigate before we buy. Falling for misleading advertisements is easier than you think. After all, using the word annuity brings with it the connotation of safety, guarantees of both principal and income, regulation and stability. The “Super 7 Annuity” could not be any further from being an annuity if it tried. Yes, it pays a dividend. Yes, they have been around for nearly nine years. But… it can fluctuate in value, it can lose money, the dividend is not guaranteed, it may not be safe in various market cycles, and it is not regulated. Don’t buy the hype!

Investing money for income is a challenge that every investor faces. The goal is to make wise decisions based on the facts, risk, and objectives… it is important to start with the true informational facts and not information that is misleading.

I am Stan The Annuity Man… I am telling you plain and simple… the “Super 7 Annuity” is NOT an annuity in any way, shape, or form. Buyer beware.

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