Founded in 1997, AAAI was set up to maximize the ability to manage investment portfolios through the independence of being a captive agent with the ability to participate in low-cost and pure “NO LOAD” no commission mutual funds. We are licensed in both the securities industry and as insurance agents for life and health. Our greatest strength as a firm is our greatest asset to you: our position as an independent financial services firm. Because AAAI is independently owned and operated we work directly for our clients and you alone represent the life-blood of our livelihood.
We do not work for any insurance companies and we do not work for any broker dealers; again we work directly for our clients. We cannot over emphasize the importance of maintaining your independence when buying and using financial service products. While many financial advisors call themselves independent they in fact are often only independent as 1099 (independent contractor) tax status only in fact representing captive interests with broker dealers and insurance companies.
Having entered the investment community as investment counselors rather than insurance agents, we are not big fans of the insurance industry. We are portfolio managers first and while we sell insurance products as they have a place in financial planning we also know the less you spend on insurance products the more you have to invest and the more you will have in your golden years. See opportunity cost in our insurance section. As such, we feel the amount of insurance one has is a personal decision based on the risk/reward relationship they are willing to assume. We actually have some distaste for the insurance part of our business simply because as soon as you mention it some people want to show you the door. We are portfolio managers who sell insurance not insurance agents who call themselves financial advisors or financial planners who are actually glorified insurance sales people.
The solution to the seemingly complex, mind boggling numbers and types of products from insurance companies is first to maintain your independence and second to be very careful about buying packaged products. Insurance companies love to bundle insurance with investments so they can charge the consumer inflated commissions and fees far in excess of what you would pay if you bought those products separately. While some of these products warrant consideration in financial planning, as a consumer you want to know you need this hybrid animal before you own the insurance contract.
In the 1980’s insurance companies sold variable policies projecting that due to the investment sub-accounts attached to the life insurance policy the client in 20 years would not only have a nice nest egg in the investment portfolio but a paid up life insurance policy to boot! Well, fast forward 20 years and with interest rates declining not only did many policy holders not have a paid up policy, they had no nest egg in the investment portfolio and additionally they were being asked to increase the premium to just keep the death benefit in force! Perhaps each generation of Americans gets bad insurance products sold to them. And how can we know how well some of the new products that have not seen the test of time will perform relative to the insurance agent’s projections?