I have always been told sales is similar to a teenager’s first car – if you turn the car off to get gas, you aren’t 100 percent sure it will start again. It inevitably does, but you really have to work at it.
The summer lull is over and many advisors tell me they don’t have a reason to contact their clients. The stock market continues to be bullish and clients aren’t complaining. Low interest rates don’t seem attractive enough to reach out to clients. There is a lot of complacency in our industry.
Let me give you a few reasons to contact your clients right now:
The stock market has reached several all-time highs in recent months. There are many signs that the market growth has slowed, or it may be ready to turn to a bear market. Signs such as high P/E ratios and dividend yields resemble those pre-financial crisis. Talk to your clients about sweeping gains off their IRAs using a tax-free direct transfer and lock in the gains from the account. You can protect your clients from a potential bear market and still keep them linked (subject to caps) to equity indices or asset allocation strategies.
The number one fear of Americans remains living past their assets and not having enough income. You can reposition your client’s portfolio, maybe making the portfolio more efficient, by implementing a deferred income annuity strategy. This will help take some longevity risk off the portfolio by making sure your client has income for the rest of their life, irrespective of their asset values.
Earlier this year, the 10-year Treasury reached an all-time low. While no one can predict when rates will rise, the Fed has signaled a potential increase in interest rate policy. This will eventually have a ripple effect on bond prices. Take the time to sit down with clients and talk about that risk. Annuities as short as a five-year duration provide higher yields than 30-year Treasuries as of today (Sept. 9, 2016). Now is a perfect time to diversify the interest rate risk and protect bond portfolio values.
Those are just a couple of reasons you should call clients today. If they don’t start your sales engine, you might have to keep trying to start that old car. Too often, we get lazy as an industry and think that because our clients aren’t calling us they don’t want to hear from us. I challenge you to think differently. I suspect our clients want to hear from us. In fact, they probably think that’s why they are paying us – to reach out and lead them through the complexities of retirement income planning.
Don’t wait for clients to reach out with a difficult situation. Take the initiative to reach out to your clients now and give them options to protect their retirement income savings.
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.”
© 2018 Ash Brokerage LLC.