Annuities

2 Minutes to 4 Hours


Annuities

We’ve either done it or seen it – the mad dash through the airport, desperate to reach the gate before it’s too late.

 

I was recently flying home from Kansas City, Missouri to Fort Wayne, Indiana. My connecting flight in Detroit was running late. It was a Friday afternoon and bad weather was causing delays. My layover was less than hour, and as we landed, my phone pinged – my flight to Fort Wayne had begun the boarding process five minutes earlier. And there I was, stuck at the back of the plane waiting on others to get off.

 

I began checking alternatives. I could get a rental car and drive home (invariably over three and a half hours after dealing with the rental company and afternoon traffic). There was a later flight that would get me in about the same time or a little later. Or, I could run like fury and hope I made it to the terminal in time.

 

I decided to chance it. I ran through two terminals in Detroit’s airport and made it to the gate as the agent was making the last muffled boarding call.

 

I’d made it – just – with two minutes to spare.

 

I found my seat on the plane, stowed my carry-on, got comfortable and began to relax, knowing I would be home much earlier than if I had missed this flight. I could breathe again. From the time the notification popped up on my phone until the time I sat down, I was rushed, worried, anxious and feeling a bit irked toward the airline.

 

It’s entirely likely that our clients feel the same way about our industry – frustrated, anxious, and making last-minute decisions on their retirement. They only relax when they have a plan and they know they are secure in their income for life.

 

Retirement is creating more anxiety for more Americans than ever before. There are huge uncertainties due to longevity, health care, taxes, legacy concerns and charitable tendencies. Retirement is a time when Americans should be enjoying the fruits of their labor, not worrying further. We can help alleviate that anxiety by doing some simple things for our clients:

  1. Make a plan, and make it early. Our research shows the purchase of guaranteed income as early as age 55 for later use increases the probability of success in retirement income plans.
  2. Understand the three sources of guaranteed income: Social Security, pensions, and annuities. These are the only vehicles that can shift the risk of longevity.
  3. Educate clients on the benefits of guaranteed income in the portfolio, regardless of source.
  4. Teach clients the value of Social Security and how to make smart decisions about benefits.
  5. Use technology to better improve client interface and build client base to reach underserved markets.

 

If we focus our attention on income during retirement, and not just asset allocation and return, we will have a better conversation with clients. Those conversations will be more meaningful and helpful to a greater number of people.

 

Winning Strategy: Don’t wait to plan for your clients’ retirement. Talk about income with them and educate them on how guaranteed income makes a difference in the portfolio.

 

 

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.

 

retirement annuity time

Education is the New Product


Annuities

June is Annuity Awareness month, and that means we have a great opportunity to talk about annuity products. While the tendency is to focus the discussion around the benefits of products and their role in planning, it may not be the proper topic. While we might sell/place/transact an annuity purchase, the client, ultimately, is buying the ability to retire securely. The path to that security lies in education.

 

No one really buys a product for the product’s sake – they buy because they have been told that the product will solve a problem. It’s not the products we should be talking about; it’s the problems themselves, and the strategies we should be taking to alleviate those problems. Annuities are a great problem-solving tool, often for issues we are not addressing with our clients. Instead, we tend to ignore the issue because we are “wealth managers”, “not insurance agents”, or “focused on growing assets”.

 

Longevity is a major planning hurdle for clients. Predicting how long you are going to live is nearly impossible, making it difficult to plan the correct asset allocation, asset location and withdrawal percentage. If you ask your clients whether they feel they have enough money to live on for the rest of their life, most will say they don’t know, or are not sure. That should lead to a discussion about lifestyles, saving strategies, income generation and risk mitigation. Without having this discussion, your client is left with anxiety that builds over time and can only be calmed when they find another planner that solves the pressure point. That needs to be you.

 

Without the assurance of a plan to alleviate the pain now – or in the future – the client remains in distress. Worried clients could be swayed to the first planner that gives them a picture of security. Our industry needs to deliver the confidence to our consumers that we have a plan just for them, one that can solve their most pressing goals and concerns. Consumers deserve the right to feel that we are addressing their particular needs in the best possible way. They need to know that we are in the business of solving problems, without respect to a particular product. If that means better consumer facing material to help with the conversation, we’ll gladly work with your compliance department to help build it. As I wrote a couple months ago, our industry is the least trusted industry worldwide. Earning that trust starts with education – and it starts today.

 

Winning Strategy: Focus on finding out what really bothers your client and educating them on the problem and solving that problem without regard to product. Start this month to focus on education, not product.

 

 

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.

 

retirement education problem-solving

Annuity Awareness


Annuities

June is Annuity Awareness Month. While it’s tempting to focus on a particular product, I like to focus on client needs. There is a growing gap between retirement savings and potential income during retirement. In reviewing clients' finances, we frequently find that they fall anywhere from 15% to as much as 50% short in their chances of having income for their entire lifetime. That is scary for the industry – but it’s even scarier for the clients we serve.

 

I normally try to write at a high level about the industry, the changing role of financial advisors and the realities of today’s retirement landscape. I try to avoid talking about our team and our specific successes, but if you’ll indulge me for a moment, let me give a bit of a humble-brag on our team, our solutions and how we can help your clients retire securely.

 

Ash Brokerage knows annuities are important, which is why we continually invest in our retirement division. We offer a full platform for retirement income planning:

 

Tools

Our JourneyGuide software allows you to co-plan with your client and show them the effects of any decisions they make. It’s a great way for advisors to gain clients’ trust and show the overall value in retirement income planning. The added benefit is that you can be more efficient in your practice. We offer tools to help illustrate the value of FIAs over fixed interest products, and we can show how the insertion of an FIA can increase portfolio metrics.

 

Business Solutions

We have developed a broad small-business platform around retirement issues. Moving pension plans from plan sponsors to carriers reduces the costs to small business, making them more profitable and more desirable for succession planning. And, the transaction secures the income for those loyal workers. We assist businesses and their attorneys with plaintiff cases and workers’ compensation payouts in an efficient and effective manner. Recently, we have reinvested and added non-qualified business structures to our arsenal of business services. These structures allow the seller to defer income to meet their needs and control taxes along the way.

 

Education

Knowledge is more important than ever before. Our team of wholesalers is now 20 strong, with collectively 500 years of experience in the field. Our internal desk will expand throughout 2019 to complement our growth. We also host regional meetings such as Retirement Income University, Go-Giver: The Five Laws of Stratospheric Success, and StoryBrand: Clarify Your Message.

 

Client Workshops

Gaining new clients is always important in building a successful business. Our turnkey seminar partnership with White Glove Workshops allows you to expand your client base with quality content and economical packaging for your target market. If you already run a successful seminar marketing strategy and just need content, we have over 15 slide decks with FINRA letters for your firm to review and use.

 

We have never been more bullish on retirement income education and the use of annuities. With the largest retirement demographic ever, and a gradual reduction in savings rates over the last two decades, financial planners have a challenge: create more income for longer periods of time with less assets than ever before. If we don’t reinvest in our businesses, our clients will lose – and not just lose us.

 

Winning Strategies: Join me in reinvesting in the retirement income industry and helping clients retire more securely.

 

 

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.

 

retirement annuity annuities

Preparedness


Annuities

A lot of people come into our office or ask me at industry events how we’ve been able to grow our annuity business four times as fast as the industry. Several things come to mind, such as the willingness of ownership to invest in the business, the commitment to the business plan, and a push toward constant innovation. However, most people talk about how we have prepared. In my recent book, Free Throws for Financial Professionals, I talk a lot about my time as manager for the Indiana University basketball team in 1987, particularly Coach Knight’s preparation style for games.

Coach was hailed as a strategic genius on the court. His preparation didn’t go unnoticed: one sports pundit was quoted as saying, “Give Coach Knight a week to prepare and he is likely to win the game.”

I don’t disagree. But over the years, I’ve come to believe Coach’s success came down to practice and preparation rather than any particular gifts of genius. He was relentless in preparation. He knew his business – his team – better than anyone else. I would argue that he actually knew the tendencies of the other team better than their coach in some situations.

The student managers (myself included) kept statistics at every practice, starting with the first drills in October all the way to the national championship game. The stats were compiled every day for the coaches to see a summary of shooting percentages, assists, rebounds and turnovers. The coaches would view the practice footage to see which tactics were the most effective. In addition, we broke down the stats on the cuts that started the offensive sets. Coaches would ask why we were performing better with one set in particular over another. For the answer, they looked at the daily video tape. As the season progressed, the coaches had more and more data to rely on to make in-game decisions. They understood the tendencies, the strength and the success we had against multiple defensive set ups and plays. It wasn’t luck. It was being prepared.

Financial planners need to have the same sense of intensive preparation. We need to understand our metrics better than anyone else. We have to know – I mean really know – our target clients, how often they want to meet, the time commitment each client needs, and the areas where we are most likely going to succeed. If we don’t understand our business, we will be inefficient and ineffective for our clients. In other words, we will lose the game because we can’t make adjustments.

Winning Strategy: Preparedness wins over talent and price in any situation. Be a champion. Know your business and prepare for success.

About the Author
Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.  

retirement preparation

Racing and Retirement


Annuities

Every year in May, I get excited for the return of the Indianapolis 500. It’s called The Greatest Spectacle in Racing for a reason: every Memorial Day weekend, nearly 300,000 people pack themselves into a stadium around a 2.5-mile oval just west of Indianapolis. This race involves 33 cars on a track, driving at speeds exceeding 220 mph, and the flying start is one of the most exciting moments in racing. You can see team colors around the track – bright, vibrant, and distinct. The cars flash by in a blur, and yet have the same distinct color pattern.

Lasting between 3 and 5 hours, this particular race becomes more about endurance than speed. Engines fail. Accidents happen. Mistakes in the pit force a car off the track. Any number of issues can come up over 500 miles, so winning requires razor-sharp focus.

Isn’t that just like retirement planning?

There is so much trouble that can come along on your way to the finish line – healthcare costs, long term care events, inflation, tax bracket changes and uncertain life expectancies. Clients have to stay in the race in order to win it with some level of guarantee until they reach the finish line.

It’s not where you start retirement planning so much as how you finish it. In 102 races, there have only been 20 winners that have started from the fastest qualifying position. Don’t panic if your client doesn’t seem to have enough assets – just think differently about how to help them get to the end of the race. Keep them in a position to maintain momentum, maneuver smoothly in traffic and pull away from the pack.

Client’s retirement funds must have the power to grow – hopefully, free of taxes during the accumulation phase so that the account has more money to produce income. At the same time, the portfolio must have some level of risk mitigation, especially in the final 10-15 years of accumulation. There has to be a balance of protection and growth.

As the final 20 laps tick down, the tactics change. Drivers get more aggressive; crew managers position the car for the optimum level of fuel to make it faster, yet still get to the finish. The sequence of return risk is no different. However, there are better ways to mitigate the potential risks. Planners have to find a way to get maximum income for the longest period of time while protecting inflation risks and price fluctuations.

It’s a long race with many levers that have to be pulled in order to win– not just assets under management with a questionable withdrawal percentage. Having flexibility, consistency, and power ultimately wins the race.

Winning Strategy: Make sure your clients cross the finish line by keeping them in the race first and then focusing on strategies that keep them out of trouble.

About the Author
Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.