Annuities

Numbers are telling a new story


Annuities

Our industry story used to read something like this: Markets are up and so are variable annuity sales or rates are up and so are fixed annuity sales. Today, it’s the opposite: The market is up while variable sales are down, and rates are down while fixed annuity sales are up. 

The numbers don’t lie. A recent LIMRA Secure Retirement Institute report showed total fixed annuity sales up 34 percent from last year, while variable annuity sales fell 5 percent. Fixed indexed annuities set a new quarterly record of $13 billion, up 40 percent over sales last year, capturing 52 percent of the total fixed annuity sales for the first time ever.  

It appears this is a new twist on our old story. So when I first saw this data, I asked many questions:

  • With rates so low and the market on the rise for nearly five straight years, who would possibly be interested in a fixed annuity? 
  • Why aren’t variable annuity sales through the roof?
  • Do the sales of the advisors I work with fall in line with these numbers? 
  • Is this the start of a real trend? Or is this just another fad in the financial services industry?  

Let’s review a couple of basic truths to see if we can reveal some answers.

  • The aging population still doesn’t feel safe in the market. 
  • Even after a prolonged attempt by the Fed to force investors into riskier assets, there’s still nearly $10 trillion on the sidelines in the form of CDs and money market accounts.
  • Added to the $3.5 trillion in short-term bond funds, we have nearly the same amount of money in safe asset classes (earning less than 1 percent per year) as we have in 401(k)s and IRAs combined.

In talking with the advisors I work closely with, I’ve come to realize that their numbers do in fact fall in line with the LIMRA numbers, and many of them are having their best years ever. They’ve embraced the concept that some people are investors while others are savers. Savers will never become investors, no matter how hard the Fed pushes, and they’re starved for safe alternatives. Advisors who are truly listening to the desires of the savers say they’re having a real impact on their business and their clients.

Is it a fad? Well, most fads have faded out after five to 10 years, and this movement just seems to be getting started. In fact, it looks like it could go parabolic over the next decade, especially as many of our investors look to become maintainers. So I guess the real question is: If you’re not making fixed and fixed indexed annuity sales to your clients, then who is?

Call us at (800) 589-3000 – we can help!

 

Annuities Retirement

Summer’s almost gone … but opportunities remain


Annuities

Throughout the summer, we’ve shared information and ideas on the complacency bubble, opportunity cost (otherwise referred to as cost of waiting), clients in transition, income generation and a plethora of other topics to encourage you to change your behavior, along with your clients’ behavior. We think we’ve presented some compelling ideas and data that have the potential to enhance your financial practice and help you manage client expectations. 

Throughout our dialogue, the market has continued to march upward, unabated by domestic and global issues that have developed. It seems almost unstoppable, but we know it can’t continue this trend indefinitely. Many advisors continue to choose the path of least resistance, and we see huge amounts of inflows continuing weekly into mutual funds, equities and bonds. I encourage you to keep positioning annuities for some of your clients where appropriate. 

Though there are many client scenarios for which you should consider using annuities, here are four prevailing ones that you’ll likely encounter:  

  1. Clients in your book of business over 59 ½ and still working: Discuss in-service withdrawals with them

  2. Clients within five years of retirement who are still fully invested in the market: Think about starting to lock in those returns with an indexed annuity

  3. Clients who have part of the $10 trillion sitting on the sidelines, waiting for advice: Consider alternatives such as single-premium deferred annuities or fixed index annuities

  4. Clients who have portfolios in need of risk reduction: Possibly reduce exposure to interest rate risk with a fixed index annuity

As we ramp back up from summer mode into what is generally the best third of the year, what type of advisor do you want to be? Are you the one who makes it happen, the one who lets it happen, or the one who says, “What happened?”

Let Ash Brokerage be your partner. We’ll help you make it happen.

Annuities

Trust and reputation


Annuities

Professionals have advice for everything, it seems. In the game of golf, they tell you to keep your head down. In real estate, it’s all about “location, location, location.”

In sales, trust and reputation are key to not only creating new relationships and helping new clients, but also in maintaining your current book of business. 

As an insurance producer, how does trust and reputation help you find new clients? Well, primarily by referrals. Successful producers are trusted and own a good reputation, therefore their clients may be more inclined to recommend them to other people.  

But what about your current clients? As their advisor, you can build even more trust, and grow your reputation by making annual policy reviews a must-do in your practice. What are the advantages of annual reviews?

  • Identifying any new client goals 
  • Reviewing beneficiaries to ensure accuracy
  • Looking for life-changing events that may change their needs and/or contract
  • Reviewing performance of current contracts
  • Implementing any reallocations
  • Reviewing lifetime income goals
  • Creating referrals

I am certain there are many more reasons to include annual reviews in your practice, and I would like to include one more: You will likely surpass your clients’ expectations by showing them that you really do care. You will increase your persistency, and will grow your reputation and trust in your community.

Remember, head down in golf, location in real estate, and trust and reputation in sales!

Sales Prospecting