One of my jobs at the Insurance Pro Shop is to help agents come up with the best recommendations for their clients. It’s an awesome responsibility. And one I don’t take lightly!
All of us in the financial industry have a huge responsibility. Every time we meet and talk with a client we are guiding and advising them on their financial lives. It is a huge burden to have on your back. We are dealing with people’s livelihood. If we don’t do our jobs correctly we can leave families devastated. On, the flip-side, when we do our jobs well, we give families hope, and a bright and secure financial future. Hopefully, you recognize this and truly care about the people you are meeting with. If not, I challenge you to rethink being in this industry.
If you do truly care about people, and are anything like me, there have been times when you have second-guessed yourself. Some questions and doubt might creep into your mind… Am I really doing what is best for my clients? Is that fixed rate annuity at x% good enough? Would they be better off investing in the market? And the questions go on and on! If these thoughts have ever crossed your mind, take pride in that. It means you care and are doing your best to put your clients in the best financial position possible.
It you are concerned about whether you are doing a disservice to your clients by recommending a fixed rate annuity at x% or having them put their money into cash value life insurance, then let’s look at the S&P 500, because it is the most common benchmark used to evaluate and compare investment returns.
In 1999 the S&P 500 ended at 1469.25. In 2016 the S&P ended with a historic high of 2,238.83. If you were to average the return over those 17 years, the actual average return is about 2.51%. (and that is ignoring annual fees!) So, if you had sold them a 3.0% fixed annuity they would have made more money.
Remember, by law we are required to remind our clients over and over again, “Past Performance Is Not An Indicator Of Future Results!” We have no idea what the future holds. No one does. We can only hope the market will do well, but we can’t be sure.
Also remember, for many people, this is the only money they have available to them for their retirement. Can they afford to lose any of it? If they lose money, what would that do to their retirement income? If their income goes down, will they need to start taking some of their investment principle? If they start taking their investment principle, could they eventually run out of money? Is it worth that risk?
If you want to make sure you are doing right by your clients, you need to have a real conversation with them. If you are doing a ‘1-size-fits-all’ approach, you may want to rethink what you are doing. Are you actually doing what’s best for your client? It is crucial to find out what their goals and priorities are.
I know one of the biggest issues I have seen recently when helping agents on their cases, is that the client’s original agent ignored or didn’t take the time to find out what the client actually needed or wanted… growth, liquidity, safety, guarantees, lifetime income, minimize income taxes, etc! Instead the agent put them into one of the hot new ‘income rider’ variable or index annuity products. While these products do guarantee an income, the income is based on them never needing or touching the investment principle. Is that providing what most people actually need and want?
This brings me to my final point, how can we know what’s best for them? Half of the time, our clients don’t even know what they really need or want. Many times, they don’t even know what kind of questions to ask you. There is slim to no training out there for the average family on their finances. Our country is sadly, very ignorant on their financial situations. So, if they don’t even know, how are we supposed to figure out what is best for them? Simple, ask questions! Get them thinking, and find their needs and ultimate desires.
There is much more to selling annuities than just offering ‘income riders!’ Do a proper fact-find; ask them all the different questions so you can find out their desires and tailor a plan to meet their exact needs and wants. The best part about doing this, you will close significantly more cases, and you won’t get replaced. Plus, people will refer you to everyone they know!
To find out more on how you can help your clients, the different approaches you can take, what questions to ask them, and how to truly be a hero to your clients, give us a call!
Toll-Free 877-297-4608 or Direct 770-443-2852
By Alex Villa, CTA
Insurance Pro Shop
“I have been working with Jeremy Nason at the Insurance Pro Shop on Annuity & Life cases for the past couple years with great success. In a nutshell, I have found that my IMO’s have tunnel vision when it comes to case design. And to be blunt, most are not good at it. They tend to focus primarily on pushing product. Jeremy, on the other hand, is the polar opposite of an IMO and he uses both his creativity and case design experience to maximize the benefits for the client in a simple, easy to understand, illustration. He does a great job of comparing the client’s current plan to the “new proposed plan” that we developed in a collaborative manner. As a result, his process helps the client see clearly the major differences between what they’re currently doing and what they should be doing, if they want to live a safe, secure, comfortable retirement and meet their overall goals and objectives. I have found that when I use Jeremy’s system and his easy to understand two page illustrations, the majority of the time I end up making the sale.”
Andrew Maisch – NJ (10 years) March 2016