A Murder of Crows

A few annuity, well specifically, SPIA agents, asked me to blog of my experiences working with ultra HNW individuals. Yes, contrary to almost all public opinion/knowledge, ultra HNW individuals do purchase SPIAs. Shocked?  Hank ($450 million) and his posse of similarly well heeled individuals formed a loose cabal of primarily self-made men who, as can be expected, had very strong opinions of what they were about and how to conduct their affairs.  I privately referred to them as; my murder of crows.

Other than the popular lifetime income need everyone exclusively talks about, SPIAs can be used for variety of different purposes. And these particular clients had no “price sensitivity”. In this case, SPIAs were primarily used as de-facto trust vehicles for “structured” bequests/giving. So indeed, a very tough crowd. Novice SPIA agents didn’t last too long. Also, it was easier when there was more SPIA contract “variability” being offered by the carriers vs. the feeble remaining shadow of this former robust market that exists today and contracts could be structured to protect all the parties.

So, the typical knee jerk reaction to this revelation is; 'well if they were making sizable gifts, where were the estate attorneys and their trusts?' It’s true, all these individuals and also their families had not just one but several estate attorneys. But, in their cases, mostly, the estate attorney relationship was an uneasy one. The feeling of this particular group was; they “needed” attorneys but, didn’t really welcome them. In other words, when they wanted to do something, they all felt, they didn’t need some attorney to quote; “hold their hands every time they went to the bathroom" (or something like that!). Such were the attitudes of these particular self-made individuals.

Hank and his crew purchase SPIAs for all kinds of individuals (family, “near” family, employees, domestic help, etc.) and for the benefit of primarily, smaller/local social support organizations that, unlike much larger such organizations, had difficulties raising money and also had very little in-house talent to effectively manage relatively large (to them) bequests. For example; I would receive a call to purchase a 250,000 SPIA for a local battered woman’s shelter.

Over the years, there were numerous SPIA transactions and you would think they would just drafted a trust right? But there was this attorney unease I previously mentioned and of course, all the annoying (to them) legal costs. Also because of their collective independence, they really didn’t want dozens of individuals to know about certain financial transactions they would rather keep quiet about. Such is human nature. 

A Real conversation

Phone: Ring, Ring

Hank: Gary, I just got a legal bill for $35,000! 

Me: And …. (thinking: why, are you call me about this?)

Hank: Well, I’m not paying it!

Me: Did they do the work? Your worth $450 million.

Hank: Gary you know how I got $450 million? 

Me: No, not really.

Hank: By not paying a $35,000 bill because someone asks for it!

(Such is the logic of a true curmudgeon.)

Hank: Gary, there is this local boys and girls club over in the next township and I want to buy them a $100,000 annuity can you get it done?!

Me: Sure Hank.

And over the years, on it went.  It’s interesting, human nature. For this group, I was only ever so slightly involved in their financial affairs remaining a simple “transactor” on the sidelines, really a member of the “specialty team”, never to play for any length of time in the “big game”. But it’s amazing how such a group is willing to “spill the beans” to you when they feel you don’t have a vested interested in their other affairs financial or otherwise. 

So, as a simple SPIA agent, I was able to gain an “inside” track and a peek into such interesting lives. My murder of crows are all deceased now. So, I don’t have another murder taking its place but, it was good while it lasted. Also, commissions were three to six times greater vs. today (another victim of ultra-low interest rates).  Agents recommendation; don’t be so quick to overlook the ultra HNW SPIA market simply because your peers and all the “talking heads” believe SPIAs are not appropriate for their needs. You don’t know what their needs are unless you ask. That’s it. Always keep Your Hand Up – The SPIA Story.