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.
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