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RESISTING Sales Pressure • Don't take anything for granted. • Don't be pushed around. • Ask the right questions. • Don't make rash decisions. • Don't be sold – be informed! CTAinvest.or g CTA Risk Management & Business Initiatives & Development Department 1

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RESISTING Sales Pressure

• Don't take anything for granted.• Don't be pushed around.• Ask the right questions.• Don't make rash decisions.• Don't be sold – be informed!

CTAinvest.orgCTA Risk Management & Business Initiatives & Development Department

Page 2: California Teachers Association - Role play slides

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Let’s ROLE PLAY

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Sales Pitch #1

This investment is guaranteed. Do you really want to take a chance with your retirement money?• But don’t I already have a guaranteed retirement benefit through my pension?• Don’t guaranteed investments generally have low returns?• Aren’t annuity guarantees dependent on the strength of the insurance

company?

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Sales Pitch #2

Annuities are tax-deferred, which means you won’t pay taxes on the appreciation until you start taking your money out at retirement.• But aren’t 403(b) and 457 plans already tax-deferred?• Do I receive an additional benefit by putting a tax-deferred investment into a

tax-deferred account?

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Sales Pitch #3

You’ll want to take advantage of all these extra annuity features.• Guaranteed withdrawal benefits.• Bonus rates.• Death benefit riders.

But these cost extra, right? Why do I need a death benefit rider when I already have life insurance?

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Sales Pitch #4

Why put money into mutual funds? The stock market had a bad decade.• Yes, but historically, over the long term, stocks have outperformed other

investments, right?*• Don’t mutual funds generally offer some level of diversification, which can

help me manage market cycles?

* Source: Ibbotson

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Sales Pitch #5

All investment have fees, and don’t worry, this product has low fees. • Don’t fees have a significant impact on the amount of money I will have in

retirement?• Please provide a comparison of the fees in this plan with other competitors• What income do you receive if I buy this product?

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Sales Pitch #6

Several of your colleagues have already decided this is a good investment.• Are you saying that I have the same risk tolerance, goals and needs as my

colleague?

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Sales Pitch #7

You need to decide today.• I have some questions for you first, can you please complete pages 16-

18 of the CTA consumer guide on advisor fees?

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Sales Pitch #8I’m a licensed insurance agent and I also have my FINRA license. I am very qualified to help you with your 403(b) plan.• Can you put your recommendations in writing to me, disclose your

compensation and all fees in this plan? • Are you acting in a fiduciary capacity?  

Oh, no, not the fiduciary request!

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Where Can I Find a FEE-ONLY Financial Planner?

• National Association of Personal Financial Advisors at www.napfa.org.

• Note: Members of NAPFA are required by the organization to sign a fiduciary oath.

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SUMMARY and Next Steps for You• Check out your broker on FINRA BrokerCheck,

www.finra.org/Investors/ToolsCalculators/BrokerCheck • Learn how to check out investment advisors at

www.sec.gov/investor/brokers.htm• Check the SEC’s Investment Adviser Search at

www.adviserinfo.sec.gov/(S(41ijtj55w0eqob55jhkhvcag))/IAPD/Content/Search/iapd_Search.aspx

• Read the CTA consumer guide on fees• Revisit your plan with your advisor

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Consider a DIRECT INVEST VENDOR

• Consider using a direct investment option. No sales force – you work with a registered investment advisor over the phone

• Many companies offer online financial tools, professional management and online advice. The company representative is paid a salary – not on commission or tied to any plan

• Generally lower fees• Financial engines/tools are objective, unbiased modeling tools.• Financial Engines at www.financialengines.com – a personalized, objective

retirement plan developed by a Nobel-prize winning economist

Ask: Did your “advisor” use a financial model to recommend your investment options?

Web site not affiliated with CTA and is provided for information only. No endorsement is implied.

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About to Retire? Don’t be a TARGET!

• Financial services companies targeting baby boomers’ assets

• Increased marketing for IRA rollovers from retirement plans

• Television, print ads, etc.• Direct mail• “Free” educational seminars• Bombarding marketplace with “innovative” (new)

options

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Disclaimer

• This presentation is designed to provide general information in regard to the subject matter covered. It is neither an offer to sell, nor a recommendation for you to purchase, any investment security or annuity contract. It is provided with the understanding that the California Teachers Association (CTA) is not engaged in rendering legal, tax, accounting, investment advice, or other professional financial services to the viewer. CTA does not guarantee the accuracy of the information contained herein.

• We strongly recommend that any person using the information provided in this presentation seek counsel from his/her own professional financial advisors to determine its applicability to his/her own personal situation.

© 2011 California Teachers Association

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