What’s Covered in this ReviewIn this review, we’ll cover the following information on the AXA Structured Capital Strategies annuity:
- Product Type
- Current rates
- Realistic long term investment expectations
- How it is used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.What you will likely notice is that like just about any other annuity, the Structured Capital Strategies Annuity can perform quite well in certain areas. But, there are other areas that may not be up to par, depending on your specific financial goals, time horizon, and risk tolerance. If this is your first visit to our website and you aren’t familiar with us, we are a team of insurance and financial experts who focus on providing in-depth, and unbiased, annuity reviews. In these reviews, we lay out the good, the bad, and even the ugly – which is necessary if you truly want to determine whether or not an annuity is right for you. So, let’s get started!
AXA Structured Capital Strategies Annuity
Structured Capital Strategies
|Type of Product||Variable Annuity|
|Standard & Poor's Rating||A+ (Positive)|
|Phone Number||(800) 245-1230|
Opening Thoughts on the AXA Structured Capital Strategies Variable AnnuityAXA has been providing stability and reliability to its clients since 1859. The products that are offered through AXA allows investors to live with confidence and peace of mind, and can enable them to grow and protect wealth, as well as to leave a legacy. The company is the world’s second largest financial services provider, based on revenue (just behind Berkshire Hathaway), which stands at more than $147 billion for 2018, and a market cap of over $63.5 billion. AXA is also listed on the Global 2000 list for 2019, and holds the positions of #33 for sales, #382 for profit, #28 for assets, and #164 for market value. This insurer is an affiliate of AXA Equitable Holdings, Inc., a company that began trading on the New York Stock Exchange in May 2018. The company is considered strong and stable financially, and in turn, has earned high ratings from the insurer ratings agencies, including a(n):
- A (Excellent) from A.M. Best Company
- A2 (Good) from Moody’s
- A+ (Strong) from S&P
Before we get into the gritty details, here is some necessary legal information that needs to be disclosed…This is an independent AXA Structured Capital Strategies annuity product review and it does not constitute any type of recommendation to purchase or sell an annuity. AXA has not endorsed this review in any way, and I do not receive any compensation for providing this review. This information is meant to be an independent opinion so that readers may see my personal perspective when determining the potential advantages and/or drawbacks of this particular financial vehicle, and how it may or may not fit into their specific financial portfolio. Prior to purchasing any type of investment or investment product, it is important to pursue your own due diligence and to consult with a competent and properly licensed financial professional before moving forward. This way, you can more precisely ensure that the product and/or service fits in with your individual circumstances. All names, trademarks, and materials that were used in this annuity review are the property of their respective owners.
How AXA Describes The Structured Capital Strategies Variable AnnuityBased on AXA’s website, the Structured Capital Strategies annuity is a variable annuity that can “adapt to your unique investment style.” To take a more in-depth look at how this particular annuity could work for you, go HERE and then click on your state of residence in the drop-down menu. The AXA Structured Capital Strategies annuity allows the investor to choose one or more segments to invest in, each providing a return that is linked to the performance of an underlying market index. Some examples of these include the S&P 500, the NASDAQ 100, and the Russell 2000. With the Structured Capital Strategies annuity from AXA, you can keep your money at work, while at the same time, limiting your potential risk of loss. For instance, similar to with an indexed annuity, you can participate in the performance of various market indices such as the S&P 500 and the Russell 2000 – up to a set maximum, or “cap.” You can also customize a strategy that is right for you by choosing the index (or indices) you want to track, as well as the maturity date of the investments – I this case, for one, three, or five years. For more details on the AXA Structured Capital Strategies annuity, you can visit the product page HERE. Even with all of the nice features that are included with the Structured Capital Strategies product, it hasn’t been without issue (although most of the customer ratings have been positive, giving this annuity an overall customer rating of 4.5 stars out of five. To view customer reviews and complaints regarding the Structured Capital Strategies annuity from AXA, go HERE.
How Financial Advisors Might “Pitch” The AXA Structured Capital Strategies AnnuityWhile variable annuities are not quite as popular today as they were several years ago, index annuities have grown a great deal in popularity – especially over the past three to four years. One reason for this is their “win-win” scenario of providing the opportunity for growth, along with protection of principal factor. So, certainly one of the key features that are offered on the Axa Structured Capital Strategies Annuity – even though it is a variable product – is the fact that it also provides investors protection of principal, at least up to a certain extent, while at the same time offering the potential for growing funds based on market performance. Investors may also like the fact that they can transfer between investment options at the end of one, three, or five-year segments. Although this is touted as a benefit or feature – an investor should keep in mind that in some cases, having a quarterly review with their advisor may not be often enough to make necessary changes to really make a difference when the markets are rising or falling. Now think about being restricted to making changes every one, three, or five years. It sounds like it might be too little, too late to really make a difference. Likewise, because people are living so much longer today, one of the biggest fears on the minds of many retirees and investors who are saving for the future is running out of income. With that in mind, the guaranteed income for life is also a big selling feature here, as with any annuity. If you plan to use the Structured Capital Strategies annuity from AXA as a source of income, you should take into careful consideration the projected income from this annuity. There are other products out there that will offer higher levels of guaranteed income and even greater protection from market downsides. There is no perfect product or investment, so your priorities should be clear right at the start. You should know before signing any contract whether your objective is to create a source of income or to grow your money over time to build a legacy for your family, because as much as your advisor might lead you to believe that both can be done inside of the same account, the truth is quite the opposite. It’s important to be careful, though. Why? For one thing, this annuity can still be exposed to extensive market downturns – and along with that, investors can still suffer the loss of principal. With that in mind, you still need to take stock of your true risk tolerance prior to moving forward with this particular annuity contract. Regardless of how an insurance or financial advisor might present this Structured Capital Strategies annuity from AXA to you – which quite frankly, will typically be in the best light possible – one way to really tell how a product performs is to read reviews from real customers. In order to check out the AXA Structured Capital Strategies annuity reviews, go HERE; so that you can see for yourself the good, the bad, and possibly even the ugly. Also, because it has the index feature – and therefore the performance cap – you could be limited in your upside returns. If you’re wondering if this annuity is right for you, or if you have questions and need a little help getting pointed in the right direction; just reach out via our secure contact form here.
What About the AXA Structured Capital Strategies Annuity’s Fees?Variable annuities tend to be some of the more expensive investment vehicles available, and the AXA Structured Capital Strategies annuity is no different. Investing in Choice Segments can provide you with access to higher Performance Cap Rates, and potentially greater Segment performance. However, this can also come at a cost. For instance, according to the product’s fact card, “the cost to invest in a Choice Segment is 1% per year of duration. As an example, this cost would be 3% for a 3-Year Segment and 5% for a 5-Year Segment. However, the Choice cost is waived if your Index returns are negative, and is partially waived if your Index returns are positive but less than your applicable Choice Cost.” The annual account fee will range from .65% to 1.25%. This is what you pay AXA to administer the account, send you statements, and take your phone calls when you have any questions – a hefty amount for simply answering the phone and sending out your account information. Remember, you have intervals of three and five years when you can make adjustments to your investments, and this option also has a fee of 1%. Additionally, when those “Choice Segments” make a positive return, you will be deducted 3% from the returns on the three-year option, and 5% off the top of the earning for the 5-year segment. Now, what about the investments themselves? Well, that’s actually the cheapest part of this whole account. The annual operating expenses for the portfolios you invest in ranges from just 0.61% to 0.71%, which leads us to believe that if you want capital growth, it’s very likely you could go out there and find similar investment options – if not the exact same options – and cut out the middleman completely.
The Annuity Gator’s End Take on the AXA Structured Capital Strategies Variable AnnuityWhere it works best:
- When considering the AXA Structured Capital Strategies annuity, it can often work best in scenarios where an investor wants to be invested in the market, but yet is concerned with taking on too much market risk. This is because this contract will provide the ability to invest in equities, while at the same time offering a built-in downside protection feature.
- This product is also a good option for those who are worried about outliving their savings/income in retirement, as it provides a guaranteed lifetime income feature.
- Because there are surrender charges for withdrawing funds in the early stages of this contract (through Year 5), investors should consider this to be a longer-term financial endeavor.
- The contract also offers the opportunity of a death benefit for a named beneficiary (minus any fees or withdrawals), so it can provide a way for an investor to leave a legacy to his or her heirs.
- If an investor is not planning to use the income benefit, then this may not be an ideal product, and other, more suitable alternatives should probably be reviewed.
- Also, because of the index component of this annuity, the maximum opportunity for market growth can be cut short due to the cap. Therefore, in exceptionally high growth periods, the investor may not be able to realize their full potential return.