I would challenge every advisor in this business to ask yourself the following question: Are YOU talking yourself out of fixed or fixed index annuity sales because YOU think they’re not a good value for your customers?
In my travels, I often come across new advisors who cannot believe that fixed and fixed indexed annuity sales are having a record year. They actually seem to feel sorry for me until I explain now is a great time to be in the business.
Right now, clients are looking for ways to get better yields without risk. There has NEVER been a better time to sell these products since other low-risk alternatives are at all-time lows for returns. I always compare the value of an annuity against a five-year CD. Back in 2008, you could find a fixed annuity rate at 5 percent, with indexed annuity caps around 8 percent. Five-year CDs were also at about 5 percent. So the leverage between the CD and the fixed annuity was nothing, and the index cap came out a little ahead.
Today’s rates are a different story. Five-year CDs are at 1 percent, with a five-year fixed annuity at about 2 percent and index caps about 5 percent. The leverage for the fixed annuity is now two times the CD, and the index cap five times! So I would argue that now’s a much better time to sell these products than five years ago, not to mention we also now have very innovative income riders available.
Don’t talk yourself out of annuity sales – the public is starving for them!
© 2018 Ash Brokerage LLC.