PROFESSIONAL SUMMARY

As interest levels stay low, investors - especially retirees - struggle to find yield wherever they can. Unfortunately, though, the necessity of earning a required return to pay for financial goals becomes the mother of invention for an array of investment strategies, both legitimate and fraudulent.


A newly released offering of rising acceptance is investing into structured settlement : definition contracts, which often declare to offer "no risk" rates of return in the 4% to seven percent range. Generally speaking, the chance for "high yield" (at least relative to today's interest rates) and "no risk" is a red light warning. But the actuality is that with organised settlement annuity investing, the bigger returns can legitimately be lower risk; the attractive return relative to other low-risk fixed income assets is not due to increased risk, but instead due to very low of the liquidity. Which means such investment offerings can possibly certainly be a way to create higher returns, not through a risk premium, but a liquidity premium.

The caveat to structured arrangement annuities, however, is usually that the opportunities can be so illiquid and the cash goes so irregular, they probably should at best only ever be considered for a very small section of a client's profile anyway!