Make it or take it?


Whether your prospects are more concerned with “Making It” (accumulation) or “Taking It” (locking in the highest amount of retirement income) or both, recent innovations in Fixed Indexed annuities (FIA) can meet their needs.

Perhaps it sounds too similar to the inflammatory and divisive stereotype of the American public during a presidential election, but identifying where your prospects stand on the “Make It — Take It” scale can prove invaluable in leveraging recent product enhancements for FIA products.

Make It

FIA’s have been criticized recently for having caps that are “too low,” thus limiting earning potential. While caps are historically on the lower end, significant opportunity still exists.

  • Uncapped Option – Designed to minimize the effect of volatility in today’s markets, this dynamically managed option shows well historically and may provide the growth potential your prospects are looking for or need to make up lost ground. (100 percent participation rate with annual spread)
  • Uncapped option + 50% – Add a reasonable policy fee or wait to take income for 10 years (still well below those on VA’s) and your prospect will receive an additional boost to their annual index returns.


Take It

  • Increasing Payout Percentage – Not your standard age banded payout percentage, this rider provides an annually increasing payout percentage for each year that the contract is in accumulation.
    A 50-year-old client, after a 10 years of accumulation, can lock in a 5.5 percent to 7.0 percent payout. (Selection based on single/joint, level/increasing payout at time income is taken – not at issue!) With a 20-year hold, the range increases from 8.5 percent to 10 percent. 

    A 60-year-old client, after a 10 years of accumulation, can lock in a 7.5 percent to 9.0 percent payout. (Again, selection based on single/joint, level/increasing payout at time income is taken—not at issue!) With a 20-year hold, the range increases to 9.0 percent to 13 percent.
    Many consumers are purchasing this rider primarily to lock in these percentage options.

  • Increasing Lifetime Income at Payout – If income is important now, won’t it be even more so in the future? Regardless of the severity of future inflation, prospects must plan for the need for even more income in the future.
    This feature enables your prospect’s future guaranteed lifetime income to increase every time there is an index credit earned – even if the account value goes to $0. While this doesn’t mean guaranteed, annual income increases, it does provide for welcomed income increases periodically.

Allocating a portion of you prospect’s portfolio to a FIA with a combination of uncapped growth, uncapped growth with guaranteed increasing payout percentages and /or guaranteed lifetime increasing income, can provide your prospects with a cost-effective means to increase their comfort in retirement, be they “Makers or Takers.”

No Better Time for Advisors


When you look back on your career in financial services, has there ever been a better time to be a financial advisor? Has there ever been a time when sound financial planning has been more needed than right now? Clients have access to more information, more analyses, and more financial opinions than ever before. The result? More confusion. More fear. More doubt as to which direction to take. 

Just turn on your favorite financial network, and listen to the well-credentialed featured guest telling you exactly what to expect from the financial markets in the days ahead. The arguments are well thought out and convincing. But, after the next commercial break, a new guest is introduced … Equally credentialed. Equally compelling. The only problem is that this guest is making the exact opposite predictions for the future of the financial markets. Is there any wonder why clients are so confused and in need of your services more than ever? 

When you recommend fixed and indexed annuities, your clients will appreciate having the opportunity to earn reasonable rates of return without having to worry about the preservation of their principal. In addition, when appropriate, you also can enhance the annuity value by adding a death benefit, a lifetime income rider, or a long-term care rider. In doing so, your clients can feel comfortable with the direction of their financial future. 

There truly has never been a better time to be a financial advisor.

Lessons Learned on Mt. Everest


Recently, Mount Everest claimed 12 lives while Sherpas guided people toward the summit. It marked the deadliest day in the mountain's history, and 2014 is one of its deadliest years even though the climbing season has just started. Historically, most people lose their lives on Everest during their descent – not in their climb. 

There are several risks associated with the descent. Fatigue is one of the biggest issues following the long climb to the summit. Falling behind the guides during the initial descent can lead to poor decisions or quick movements at high elevations. Descending too quickly creates a condition where fluid builds in the lungs. Ironically, most deaths have occurred within 8,000 feet of the summit during descents. 

Financial professionals can use the descent of Everest as analogy for working with clients. They need to pay careful attention to several aspects of the process – they need to be attentive Sherpas, or guides. First, the initial parts of the de-accumulation of assets are most critical. Mistakes in the early years of changing to the income phase can produce serious ripples throughout retirement. Sequencing of returns plays a major role during these initial retirement years. 

Second, clients tend to make quick decisions … usually because they haven't planned in the five to 10 years leading up to retirement. We must work with clients to reposition their assets to preserve and protect them in the descent from working years to retirement. One of the largest fears for most Americans is the transition from accumulating assets to depleting them. 

Finally, we have to pay attention to our clients throughout retirement. The landscape fluctuates with rapid changes in market performance. We must keep our clients' best interests in mind and recognize that they prefer a steady income. 

Annuities provide an income stream that creates steady, consistent income. They allow for the consistent disbursement of assets over a client's lifetime while averting one of their biggest fears – outliving their income. Taking away the risks of income early in retirement allows a planner to focus on longer-term asset growth to sustain inflation-protected income. Call Ash Brokerage for more details about helping your clients on the dangerous descent of retirement income planning.

Retirement: A simple math problem


Most clients think retirement is a complicated process.  Follow these easy steps to make retirement simple:

Step 1: Identify your desired retirement income and years until your retirement date. 

Step 2: Calculate  your Social Security income based on your retirement date. 

Step 3: Subtract your desired income from your Social Security benefit.  This number is the number we need to concentrate on. 

Step 4:  Use a guaranteed income product to provide the needed income at retirement. 

With a diverse lineup of fixed indexed annuities with lifetime withdrawal benefits, single-premium immediate annuities and delayed income annuities, Ash Brokerage is here to help you guide your clients towards sustainable income during retirement. Call the Ash Brokerage Annuity Team today.

A Fresh Perspective


Recently, I spent the weekend in Houston, Texas. Most people would not think anything of it. However, after spending the last 16-20 weeks in northern Indiana with sub-freezing temperatures, the warmth of 80-degree days and sunshine made it feel like I was in a different world. I felt recharged, re-energized and refreshed with just a small change.

It made me think about our industry. How often do we as financial advisors get in a rut and need a fresh perspective? It seems we get in the habit of making successful sales presentations based upon one product filling a general solution. Too often, I hear advisors telling my firm they do not talk about longevity planning and insurance. Can we be so selfish and concerned about our own business as to not think it is our clients’ business that we must focus on for success? Yes, I speak and write about efficiency and effectiveness in financial services offices. But it's time to make sure our clients' retirements and legacies remain effective and efficient, first and foremost.

For example, all of us have a responsibility to have a meaningful discussion with our clients about the impact of Congress' potential decision to accelerate the taxation on retirement accounts to the next generation. This might be the most destructive piece of legislation introduced, and I would guess that 90 percent of our clients are unaware of what Congress wants to do.

Clients expect leadership from their advisors. We must continue to earn their trust by having the difficult conversation that we don't want to have with them – the one about death and taxes. Positioning a client’s assets for flexibility, income and estate planning should be our focus. That means that we need a fresh perspective with every client we meet, just like the change in temperature. We must be up to date on our tax legislation, product offerings, and solutions available for unique strategies. Focusing on those aspects important to the client will ultimately define our success as an industry.