What will we be covering in this annuity review?
In this review of the Transamerica Advisory Variable Annuity, we will be going over the following details:
- Annuity type
- Features of the annuity
- Advantages and potential drawbacks
- How the annuity may be “pitched” to you
- Where it may or may not work well
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you’ve been doing any research on the Transamerica Advisory Variable Annuity, you may have already noticed that it is somewhat similar to many other variable annuities in that it will perform well in some areas, while it will come up short in others – depending on your particular financial goals.
However, before going out and making a commitment on this annuity – or for that matter, on any annuity – it is highly recommended that you first have a good understanding of just exactly how the product works so that you know what you can anticipate.
Annuities are complex products, and the more “bells and whistles” that they offer, the more confusing they tend to be. This is the case even for well-educated consumers. Because of that, many investors aren’t really sure what they are purchasing – only to find out after they’ve locked themselves into the product, it really isn’t all that it was cracked up to be.
Unfortunately, though, by that time, it is typically much too late to get out of the annuity contract – at least not without incurring some significant surrender penalties. And going this route is definitely not the way to grow and/or protect your hard-earned savings.
That’s where the Annuity Gator comes in!
Annuity and Retirement Income Planning Information You Can Trust
If you’ve never visited our website before, then please allow us to personally welcome you here to Annuity Gator. Our company is made up of a term of financial and annuity pros who focus on providing in-depth, unbiased reviews of all types of annuities online.
We’ve been at this for quite some time now – far longer than our competitors have – although you may have landed on some of their websites, too. Many of these other sites will work hard to lure you in by making some pretty bold claims, such as:
- Highest annuity rates
- Low fees
- High payouts
- 7 – 8% annual return
While we wish that this information was true, the reality is that these websites are really only giving you part of the story. On our website, however, you will find that we dig into the good, the bad, and yes, even the ugly.
So, although our annuity reviews don’t always paint a nice rosy picture of these financial vehicles, they can help you to realistically anticipate what may happen going forward if you buy an annuity. They could also stop you from buying the wrong annuity before it’s too late.
This isn’t to say that annuities are bad products – not even the variable ones! In fact, quite the contrary. We think that annuities have a place in many investors’ and retirees’ portfolios…provided that it’s the right annuity for the individual’s specific needs and objectives.
That being said, if you’ve come here looking for more details on the Transamerica Advisory Variable Annuity, you are definitely in the right place. So, without further ado, let’s dive in!
The Transamerica Advisory Variable Annuity at a Glance
|Product Name||Advisory Annuity|
|Type of Product||Variable Annuity|
|A.M. Best Rating||A|
|Phone Number||(800) 797-2643|
Opening Thoughts on the Transamerica Advisory Variable Annuity
Transamerica has been in the business of helping its clients to grow and protect wealth since 1904. Founded in San Francisco, the company grew and expanded quickly – even in the early years of financial turmoil in the United States.
In 1999, Transamerica was acquired by the Aegon Group, one of the world’s leading providers of life insurance, pensions, and asset management. Aegon’s 25,000 employees support more than 29 million customers around the globe.
As of year-end 2019, total assets equaled more than $130 billion, with a total capital surplus of nearly $7.5 billion. The company has nearly $42 billion of invested assets. So, all told, Transamerica is considered strong and stable from a financial standpoint.
Transamerica Life Insurance Company, which is headquartered in Cedar Rapids, Iowa, is Transamerica’s insurance arm, and is a strong contender in the insurance and annuity arena. The company has received high ratings from the insurer ratings agencies, including a(n):
- A from A.M. Best
- A+ from Fitch
- A1 from Moody’s Investor Services
- A+ from S&P Global
While variable annuities have taken somewhat of a back seat to other, safer, alternatives like fixed and fixed indexed annuities over the past decade, there is a definite niche for these products – particularly with those who are seeking the opportunity for a higher rate of return, as well as the tax-deferred growth of assets.
Before we get into the gritty details, here are some necessary legal disclosures…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Neither Transamerica nor Aegon have endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
For additional information on how to compare variable annuities so that you can decide which may be the best one for you, click here in order to obtain our free truth about variable annuities report.
How Transamerica Describes Its Advisory Variable Annuity
On its website, Transamerica describes the Advisory Variable Annuity as a product that offers the opportunity of taking full control of your investment.
This annuity is focused mostly on the long-term investor who is seeking a way to add to their tax-deferred growth, along with the flexibility to go with a portfolio that best fits their specific needs.
The Advisory Variable Annuity offers multiple portfolios that are designed by Vanguard and Dimensional Fund Advisors. These include U.S. equity investments and alternative investment options, as well as global/international offerings, and even a hybrid allocation. Plus, as with most variable and fixed indexed annuities, there is also the ability to choose fixed-income alternatives.
With its Non-Transamerica investment options, you could further diversify your investment options and allocations within the Transamerica Advisory Variable Annuity. To check out the Advisory Variable annuity’s investment options, go here.
As an added bonus, the Advisory Variable Annuity from Transamerica offers low management fees and M&E (mortality and expense) charges. There are also no built-in commissions or surrender charges.
There is also an option to add a death benefit, which can help with leaving a financial legacy for loved ones. If you are interested in taking a peek at the “fine print” for this annuity, you can download the Transamerica Advisory Variable Annuity prospectus here.
How a Financial Professional Might “Pitch” this Annuity
Given its long list of features and investment options, it is likely that a financial or insurance advisor would describe the Transamerica Advisor Variable Annuity as a way to enhance and grow your retirement portfolio, as well as a way to supplement and protect your retirement income down the road.
But keep in mind that, while variable annuities can certainly allow you to grow your money on a tax-advantaged basis, there could also be some risks. In fact, variable annuities are designed for doing two main things. These include growing principal and producing retirement income. But in reality, these types of annuities are not really all that good at producing income. One reason for this is because of the risk that they present to the investor, as well as to the insurance companies that offer them.
In fact, because the value of a variable annuity can – and typically does – fluctuate so much, the insurance carrier that offers it can really only guarantee a lesser amount of retirement income than that of a “safer” alternative such as a fixed annuity… for the exact same amount of money that you’ve deposited.
It might seem somewhat silly, then, to endure countless sleepless nights hoping that the market doesn’t “correct” itself when you may not gain any more in an equity-based product than you would with something that’s guaranteed. So, if your primary goal for purchasing an annuity is to use it for producing income in the future, then a variable annuity may not be your best option.
That being said, when it comes to the investment aspect of variable annuities, these financial vehicles can offer you the opportunity of unlimited growth. Plus, if you have already “maxed out” other tax-advantaged accounts like an IRA or a 401k plan – but you still want to add more money so that it grows tax-deferred – a variable annuity could be a nice alternative.
But here again, this comes with the “tradeoff” of downside risk – and in some cases, it could be a substantial amount of such risk. In addition to that, variable annuities are also known for having high fees. And, while Transamerica touts that the fees on this annuity are less than the industry average, you could still find yourself paying more than 0.52% each year – and that doesn’t include the cost of any additional rider(s) you may choose to include. Taking all of this into consideration, it can be even more important than ever for you to be sure that the benefits of this – or any – annuity are well worth it.
Fees to Anticipate on the Transamerica Advisory Variable Annuity
The Transamerica website states that the Advisory Variable Annuity offers low costs – which includes low management fees and low mortality & expense charges – and that the average annual expenses on this annuity are more than 70% lower than the industry average.
But are they really?
If you look at bit further into the fine print, Morningstar states that the “Actual expense ratios for the Transamerica Advisory Annuity range from 0.39% to 0.93%, depending on the investment allocation.
This expense ratio includes a(n):
- Administrative fee of 0.10%
- M&E risk fee of 0.17%
In addition, the expense ratio excludes additional fees that would apply if the Return of Premium Death Benefit rider is elected – in which the charge is 0.47% per year. In addition, contracts that have balances below $25,000 are subject to a $25 annual maintenance fee.
So, it definitely pays to do your homework and determine where and how much you may be charged, because when all of these “low” fees are added up, they could still have a significant impact on your overall return.
The Annuity Gator’s End Take on the Advisory Variable Annuity from Transamerica
Where this annuity works the best:
- For those who are looking for the opportunity to attain market-related growth
- For those who are seeking lifetime income
- For those who are seeking a way to diversify their assets
- For those seeking an additional method of leaving a legacy
- For those who wish to obtain additional tax-deferred growth and have already maxed out their 401(k) and IRA options
Where the Transamerica Advisory Variable Annuity works the worst:
- For those who have a low risk tolerance
- For those who do not intend on using the lifetime income feature
If you’ve been going back and forth with the thought of purchasing a variable annuity – or any annuity, for that matter – but you’ve been hesitant to move forward because you just aren’t sure which annuity might be right for you, it is important that you know all of the ins and the outs of a particular product before you sign on the dotted line.
This is because an annuity should always be considered as a long-term financial commitment – and if you do end up determining that a particular annuity just isn’t for you after you’ve purchased it, it can be fairly expensive to get out of it.
If you’re still leaning towards the purchase of the Transamerica Advisory Variable Annuity, then you can be assured that you will have some flexibility in terms of “customizing” the annuity to fit your particular needs. Plus, there are some other nice advantages that you could attain. However, this annuity may also fall somewhat short – particularly if you are seeking safety of your principal. With that in mind, there could be a better product that fits your specific needs.
In any case, the only way to know for sure whether or not the Advisory Variable Annuity from Transamerica is the annuity for you is to have it tested. We would be happy to provide this testing for you, at no cost or obligation. So, just simply contact us here via our secure online contact form now.
Have Any Additional Questions or Concerns? Notice Any Mistakes in this Review?
We realize that this variable annuity review went a bit long. So, we appreciate you sticking with us through here to the end. But we truly feel that it is much better to “err” on the side of providing “too much” information than not enough. That being the case, if you feel that this review was beneficial to you, please feel free to forward it on to anybody else who you believe would also benefit from it as well.
Also, as humans oftentimes do, we understand that information about annuities can change quickly. Therefore, if you happened to notice any details in this review that were out of date or that need correction, please let us know that as well, and we will get it fixed quickly.
Are there any other annuities that you would like to also see reviewed?
If you have checked out our list of annuity reviews and there is another annuity (or more than one other annuity) that is not currently in our annuity review database, but that you would like to see reviewed, please let us know the name of the annuity or annuities and our team of annuity “geeks” will get right on it. So, be sure to check back with us soon to see any updates.
The Annuity Gator
P.S. If you would like to read more of our Transamerica annuity reviews here are some links to check out:
- Independent Review of the Transamerica Axiom ll Variable Annuity.
- Independent Review of the Transamerica Variable Annuity Series O-Share.
- Independent Review of the Transamerica Variable Annuity Series C-Share.
- Independent Review of the Transamerica Variable Annuity Series B-Share.
- Independent Review of the Retirement Income Plus Variable Annuity by Transamerica.
- Independent Review of the Transamerica Variable Annuity Series X-Share.
- Independent Review of the PrincipiumSM III Variable Annuity by Transamerica.
- Independent Review of the Transamerica Vanguard Variable Annuity.
- Independent Review of the Retirement Income Plus Variable Annuity by Transamerica.
- Independent Review of the Transamerica Variable Annuity Series L-Share.
- Independent Review of the Transamerica Advisor EliteSM II Variable Annuity.
- Independent Review of the Transamerica I-Share Variable Annuity.