I don’t believe there is such a statement. I’d recommend the Socratic method: don’t make statements; ask questions. "Please help me understand how such a thing is possible. Three decades ago, the Dow was under 900. Two decades ago, it was under 2800. Today, it’s over 10,000. So you can’t be generalizing about the market; you have to be saying something about your own experience, which is apparently much worse than the market. Is that right? Do you want to talk about how that happened? Would you like me to describe to you how my way of advising people can prevent it from happening?"

My pleasure. (1) The phenomena to which you refer are noise. The idea that the long-term pricing mechanism of the market could be seriously and lastingly skewed—that the market could become and remain mispriced—because of trading strategies is illogical. Another trading strategy, seeing the mispricing, would instantly come in on the other side of the trade, and wipe out the arbitrage. Trading strategies not only don’t misprice markets, they cancel each other out. The more market participants—regardless of their strategies—the more efficient markets must become over time. (2) There are only four determinants of long-term equity values. They are: earnings, cash flows, dividends, and the future expectations thereof. Everything else is noise.

As a program of general guidelines:

(1) Put two years’ living expenses in a money market fund.

(2) Put the rest in a diversified portfolio of managed and/or pooled equities.

(3) Begin withdrawing from the equities at 4.5%. Escalate this at 3% per year.

(4) At some pre-determined point—say, when the account is down 20% through a combination of market decline and withdrawals—stop the withdrawal from equities and switch to the money market fund for a year.

(5) After a year, re-assess your position in consultation with your client, with the option to continue drawing from the money market fund for a second year.

(6) Treat these as guidelines, not rules. Their main attraction is that you are always acting on a plan rather than reacting to the markets.

This question, which appears to be about annuities, isn’t at all. It’s about something much deeper, which is the issue of your client communication and control. If you have someone moving a six-figure amount to another advisor, without seeking your counsel, that person was never a client, and you inexplicably affected not to notice. I’m not prepared to say she didn’t do anything wrong; what I say is that you enabled her to do what she did by never completing the relationship—by allowing it to remain in some grey twilight where the important things were left unsaid, or where she felt she could ignore them...and you. This is 100% your fault.

But what’s even scarier is that you think this may be a generalized problem, and are seriously considering "playing defense" not by acting to deepen and strengthen your clients’ reliance on your counsel, but by showing them a product you do not believe is right for them, as some sort of misguided competitive pre-emption. (The only ray of light in all this—and a very faint ray it is—is that you are exactly right about the applicability of annuities with "living benefits." Their proper application is to situations where the client is at significant risk of running out of money and/or is so fundamentally petrified of equity volatility that he requires the psychological support of the guarantees.) In other words, your proposed solution addresses the symptom and not the disease.

Were I you, I wouldn’t embark on a campaign of running around showing people annuities, or even telling people why you don’t think they need them (which will only cause them to nod sagely, pat you on the head, and then start finding out all about annuities the minute the door closes behind you). I’d start running around, all right. But I’d be running around having deep philosophical conversations with my clients. "Are you happy with what we’re doing? Do you continue to understand what we’re doing, and why? Are there questions or concerns you have—about anything at all—that for whatever reason you’ve been reluctant to raise with me? Is there anything you need, or just want, me to explain again? Do you know in your bones that what I have you doing is out of deep and abiding concern for your long-term well-being—for the maintenance of your dignity and independence in retirement?"

The risk to your practice—and I perceive it to be grave—is not the onset of "competitive" products or advisors. (I do not know anyone at the top of this profession who thinks for a moment that he or she has any competition for the minds and hearts of their clients.) It is The Great Unsaid—the things your clients are feeling that they are not comfortable telling you. Again, the bad news is that this is all your fault, but the great news is that you can fix it.