By "Chaim" Victor Schramm, CFS®, CAS®, AIF®

Victor Schramm Receives a New Designation: The Certified Annuity Specialist (CAS®)

Annuities have been a focus of developing my expertise for quite some time. I think I’ve shared before that my first knowledge of Annuities was from a grandparent who had one. I was fascinated by the concept. I was first indoctrinated into the anti-Annuity world when I became an investment advisor, but something didn’t quite sit right with me about that. I’d seen them actually work. And the more I thought about whom they worked for, the more I became interested in finding the best way to use Annuities.

I’ve completed the Certified Annuity Specialist (CAS®) designation. This is a high water mark on my road to expertise in this area. As far as very specialized knowledge in this class of investments, there are not many and the CAS® was an obvious choice for me in many ways.

The truth about Annuity expertise is that it is not easy to get. There are not many truly objective, academic study courses on Annuities. What I really liked about the CAS® course work is that it is in fact quite critical of Annuities. It gives a great deal of space to critics of Annuity product design and the drawbacks of misusing them.

How Will You Use This Designation?

From a perspective of tax efficient growth, Annuities have actually been a central focus of Chaim Investment Advisors for some time. In any given year this could change, but it is, to the best of my knowledge, still fairly rare for a Fee Only firm like ours to delve as deep into Annuities as we have. At least in Oregon, where we’re based.

The CAS® is another step in the direction of gaining expertise in applying Annuities to real world plans. While many Fee Only planners who do use Annuities tend to stick to the mantra of “Annuities are good for tax deferred growth after qualified plans have been fully funded,” there are many other areas of planning where they are useful.

In the world of investment planning, there is wealth oriented investing and there is income oriented investing. The tools used for each of these purposes differ from each other, and Annuities are a cornerstone of income based planning.

Financial Planning is a major focus of my practice, and while there are schools of thought that have claimed one can simply invest in a diversified portfolio and earn market returns and expect that will yield the greatest success, in practice, I have not seen this be true for investors who actually need cash flow. Maximizing wealth involves taking on a fair amount of risk and doing so in ways that are low cost and prudent. Maximizing income can involve transferring risk from oneself to a small or large extent, and Annuities are one piece of that puzzle.

In short, implementing Annuities in Financial Plans that put income first is where this new designation helps the most..

What Does This Designation Cover?

There are many types of Annuities. Those who follow our YouTube channel or read this blog regularly will be aware that the diverse range of Annuities serve very different aims. Most of them have a place in the planning process. The CAS® covers the entire range of Annuities:

  • Fixed Rate Annuities
    • Including MYGA’s, Traditional Fixed Rate Annuities, etc.
  • Variable Annuities
  • Investment Only Variable Annuities (IOVA’s)
  • Variable Annuities with Living Benefits (such as Guaranteed Withdrawal and Guaranteed Income riders)
  • “Income” Annuities such as Single Premium Immediate Annuities (SPIA’s)
  • Annuity Death Benefits
  • Equity Indexed Annuities (EIA’s, technically a variety of Fixed Rate Annuity)
  • Annuity Titling, Contract Structure, etc.
  • Investing within a Variable Annuity
  • Advanced Financial Planning (i.e. Split Funded Annuities, Inflation protection guarantees, etc)
  • Estate Planning with Annuities
  • Annuities and Taxes
  • Annuitization

Many of you know I have a preference for Investment Only Variable Annuities (IOVA’s), and a number of you reading this now are our IOVA clients. The CAS® has actually enhanced this area of practice in an important way in that Annuitization- the process of turning your Annuity into an annual income stream- is an area of in depth study. Strategies to doing this most effectively are covered in depth, and there are some advanced planning concepts with this process that we’ve added to the roster of planning strategies.

Basically, the course is very in depth and covers most things anyone could possibly want to know about Annuities.

What Next?

Every time I get a certification or designation, people want to know what’s next. Some day, there may not be a “what’s next,” but right now, there is!

First up, I’m finishing a certification in Divorce Financial Planning that should be done by the summer. This covers the planning consequences and processes of divorce at a glance. There is another, somewhat more advanced study in this area that I may eventually get, as I enjoy working with divorce cases and will likely continue to delve further into that area. Interestingly, the CAS® is actually very closely related to my work with divorce planning and I’ve used Annuities in divorce in the past as a planning tool.

After that, I’ll be beginning the Chartered Private Wealth Advisor (CPWA) designation at Yale School of Management in July/August. That will take a full year to complete and will be a rigorous course of study specializing in serving High Net Worth and Ultra High Net Worth households.

After that, I may want to ease off the academic track for a bit. Once the Divorce certification is finished, I’ll have earned an Accredited Investment Fiduciary (AIF®) and CAS® designation, as well as two certifications (Divorce & Sustainable Investing at Candriam Academy in 2020). After the CPWA, that’d be three large designation undertakings in just three years. In any case, I haven’t planned my academic track further than that at this point, but am confident that is a robust line-up of expertise earning endeavors.

About Chaim Investment Advisors:

Chaim Investment Advisors is a Registered Investment Advisor firm in Eugene (and Portland), Oregon. It’s lead by Investment Advisor Victor Schramm, CFS®, CAS®, AIF®. While we’re not a strictly “religious” based firm compared to certain other national firms, we are a firm that takes traditional & Talmudic Judaism seriously as well as the diverse faiths of our clients.

Disclaimer:

This information is solely the opinions of Victor Schramm, CFS®, CAS®, AIF®. This is not a solicitation to buy or sell any public or private Security. Annuities are a diverse and complex class of investments and insurance contracts that often do not offer liquidity and have long term tax implications that should be considered in depth. Annuities, if used, should be part of a long term, well balanced, comprehensive Financial Plan.