Annuities

How You Can Find More Clients with Pension Risk Transfer


Annuities

Our sales team talks with a lot of advisors over the course of our travels. Most conversations center around the need to grow the advisor’s business. 

 

As I’ve discussed before, part of The Go-Giver philosophy is the Law of Compensation: Your income is determined by how many people you serve and how well you serve them. Deploying this law through pension risk transfer sales can help you drive your firm’s revenue and increase the number of people you serve. 

 

Pension risk transfers will be a significant market over the next decade. For advisors, it’s a great way to meet new prospective clients through a business contact. It opens the door to a group of employees with the approval of the employee’s human resource department or company’s leadership. What a great introduction to new people! 

 

Companies of all sizes have pension liabilities that are at risk of hurting the enterprise. Pension plans carry longevity risk for the plan sponsors, interest rate risk for the pension fund managers and investment committee, and cost increases that concern C-suite leaders. When working on pension risk transfers, you can reduce or eliminate several problems for the employer:

 

  • Reduce a liability that shows up on the balance sheet (if not fully funded)
  • Avoid the increasing cost of administering the pension plan in the future
  • Shift the risk of employees living longer than funds can support payments
  • Eliminate the risk of interest rate fluctuations and equity market volatility 

 

There are several reasons that an employer would want a retirement income specialist in their office to talk with their employees about options on pension risk transfer decisions:

 

 

Pension risk transfers create a win-win-win scenario for the advisor, the employer and the employees. The employees gain the advantage of talking to a retirement expert on-site, which is viewed as an added benefit at no cost to the employer. The employer gains the ability to transfer their risk to an insurance carrier, and eliminate or reduce the risks to their balance sheet and cost structure of maintaining a pension plan. The advisor wins by helping more people and serving them better, which is the basis of the Law of Compensation.

 

Winning Strategy

Help more people and help them with their most complex problem – retirement. You can do both by working in the pension risk transfer market. 

Policy Review - 10 Ideas For Existing Life Insurance

Craving More?

Watch the replay of our webinar where we talk how pension risk transfers can be an effective tool for defined benefit plan sponsors seeking solutions for rising costs and longevity risk.

Watch Now

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

Pension Risk Transfer IRA Annuities Retirement

Ever Consider In-Service Withdrawals?


Annuities

I realize you’ve heard about the opportunity with baby boomers more than a thousand times, but it’s vital that boomers be adequately prepared for retirement. With one misstep, years of planning could be jeopardized.  Not safeguarding their life’s work from a market downturn while transitioning into retirement could be devastating.

Your clients’ 401(k)s need some level of principal protection, and now may be the perfect opportunity to educate them about aged-based, in-service withdrawals at market highs. The strategy works by completing a direct rollover with a portion of their employer’s retirement plan into a fixed index annuity within an Individual Retirement Account. Keep in mind the IRS allows age-based, in-service withdrawals; however, each plan may have its own particular restrictions. In some cases, withdrawals may be based on service credits or subject to a vesting schedule. The benefits of an in-service withdrawal include more control over assets, additional income and wealth transfer options, and the opportunity for more investment strategies.  

It may be the perfect time for this strategy considering history and today’s market levels. Take a look at the S&P 500 index, for example. In the last 14 years, the S&P was nearly cut in half twice. According to the Federal Reserve, U.S. median household net worth decreased by 39 percent between 2007 and 2010, consequently reducing 18 years of gains during that time period. 

The Bottom Line: Help protect your clients’ nest eggs and create the retirement lifestyle they hoped for. Ash Brokerage will help you in selecting an appropriate fixed indexed annuity with the latest crediting strategies and cutting-edge GLWB’s to help maximize lifetime income while keeping the nest egg intact in the event of a market downturn. 

in-service withdrawal IRA 401k