Annuities

Success and Consistency


Annuities

As many know, I am a big college basketball fan.  When you look at some of the most successful programs in the country, you’ll find one thing in common: consistency in coaching. Coaches like Roy Williams at North Carolina, Coach K at Duke, Bill Self at Kansas and Rick Pitino at Louisville have all been at their schools many years.  Some years have been better than others at those schools, but no one can deny those programs have stamina and a level of excellence that is well above the average college program.  Even with successful programs that have seen coaching changes over a period of years, the same culture will likely exist throughout the program.

 

Having a quality coach at the helm is equivalent to having consistency in your retirement portfolios.  There will undoubtedly be market downturns and volatility, but consistency provides a powerful motivator for our clients to remain with their plans.  Consistency comes from us always being in communication with our clients, even in difficult market times.  We must be a consistent voice for our clients and prospects, providing information, education and advice—even when our clients don’t want to hear what we have to say.  Plus, we need to listen and react to our clients’ biggest concerns—turning their assets into retirement income. 

 

Vehicles providing guaranteed income could create the kind of stamina and consistency in a portfolio our clients seek.  It’s not that the entire portfolio needs to be guaranteed—far from it.  In fact, our research shows that between 18-28 percent of income should be guaranteed to optimize the retirement income.  That leaves plenty of assets to be invested in an allocation strategy that can protect purchasing power due to inflation. 

 

Our industry needs to look at new ways to provide guarantees and create consistency and stamina for retirement income.  Several vehicles can reduce the pressure—or improve upon—a systematic withdrawal strategy.  We need to educate our distributors, broker-dealers and advisers on vehicles like HECMs, income annuities and Qualified Longevity Annuity Contracts (QLACS).  All are underutilized today but could provide valuable benefits to our clients’ retirement income portfolios. 

 

Winning Strategy:

  Think like a successful college program or sports franchise.  Add consistency to your retirement income portfolios for more success with clients

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities 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.”

Annuities success business practice

Innovation in Simplicity


Annuities

At a carrier conference earlier this year, I had the chance to listen to Robbie Bach, the former president of entertainment and devices at Microsoft. Responsible for developing and building out Xbox, Xbox 360, and Windows Mobile, along with other entertainment aspects of the computer giant, Robbie spoke about how he turned the online gaming division into a profitable business. Because it wasn’t always profitable. In fact, his division lost $7 billion in one of its early years.  

What Robbie Bach did to turn a huge loss into a gaining market share – and ultimate success for Microsoft, even in the demanding Japanese market – was turn toward simplicity. He outlined three major components to delivering innovation:  

 

1. Business

Robbie looked at his business in a different way. He started charging a subscription-like fee for the use of his online games. Every vendor told him no, but he thought it would be an innovative way to price the services. Eventually, people began to gravitate to his model because they could share the gaming experience, talk to friends and see other people online. It wasn’t that the games were different – but the business model was.

2. Experience

This isn’t what you might think. Having experience on your staff is not the focus of innovation. Instead, we need to turn our attention to the client experience. How our customers view us is far more important than the number of years our staff has been working. Take Uber as an example. The company isn’t using any new technology – they only have cars and a mobile application. But, they took a look at the experience offered by taxi services and improved upon it. Microsoft took a look at improving the customer experience in gaming and communicating. It changed the way people play video games. 

3. Technology

Without question, technology plays an important role in innovation. However, it should not be the focus. Instead, we need to keep the first two points as priorities and look to see how technology can accommodate or improve them. Not the other way around. 

Clearly, our industry needs innovation. However, we are often paralyzed by the enormity of “trying to be innovative.” I challenge you to think simply, not big. The timing is right to evaluate your practice. Find ways to transform your business model and create a more valuable client experience, with or without the help of technology. 

 

Bottom Line

Time has changed our industry, so it’s time to change the way we do business. Change can doesn’t have to be complicated, however. Look to simplicity for innovation. 

 

Learn More

Robbie Bach: http://www.robbiebach.com/

 

About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets.

 

innovation simplicity simple business

Don’t forget this solution for businesses


Annuities

We all know annuities are a great solution for retirement. But have you ever considered annuities as a retirement solution for businesses? If you’re working with business owners and executive-level clients, ask if their company has a defined benefit pension plan. 

Why? Traditional pension plans have become a thing of past as 401(k) and other contributory plans have overtaken the retirement landscape. As a result, many businesses have decided to do two things: 

  • Freeze and eventually terminate an existing defined benefit pension plan
  • Shift all or a portion of their plan benefit obligations to a third party 

Here’s how it works: Businesses with a defined benefit pension plan can remove plan liabilities from their books by transferring the risk to a group annuity issued by a top-rated insurance company. This transfer allows the company to eliminate premiums paid to the Pension Benefit Guaranty Corporation along with significant cost savings in the plan administration. These cost savings can be reinvested in their business. Most importantly, the transfer allows the company to make good on the benefit promises made to their employees.

Plan participants benefit from the transfer because it ensures payment of the plan benefits promised to them at retirement that may include guaranteed income, the ability to provide ongoing income for a joint annuitant, and options such as payment frequency or cost-of-living adjustments.

You don’t have to be an expert to help your business clients execute this unique solution – Ash Brokerage has a dedicated team who can do it for you. You should call us – (800) 589-3000 – to learn more or to start identifying opportunities today. 

 

 

retirement business

Don’t forget this solution for businesses


Annuities

We all know annuities are a great solution for retirement. But have you ever considered annuities as a retirement solution for businesses? If you’re working with business owners and executive-level clients, ask if their company has a defined benefit pension plan. 

Why? Traditional pension plans have become a thing of past as 401(k) and other contributory plans have overtaken the retirement landscape. As a result, many businesses have decided to do two things: 

  • Freeze and eventually terminate an existing defined benefit pension plan
  • Shift all or a portion of their plan benefit obligations to a third party

Here’s how it works: Businesses with a defined benefit pension plan can remove plan liabilities from their books by transferring the risk to a group annuity issued by a top-rated insurance company. This transfer allows the company to eliminate premiums paid to the Pension Benefit Guaranty Corporation along with significant cost savings in the plan administration. These cost savings can be reinvested in their business. Most importantly, the transfer allows the company to make good on the benefit promises made to their employees.

Plan participants benefit from the transfer because it ensures payment of the plan benefits promised to them at retirement that may include guaranteed income, the ability to provide ongoing income for a joint annuitant, and options such as payment frequency or cost-of-living adjustments.

You don’t have to be an expert to help your business clients execute this unique solution – Ash Brokerage has a dedicated team who can do it for you. You should call us – (800) 589-3000 – to learn more or to start identifying opportunities today. 

business annuities 401k retirement planning