Annuities might be just the ticket for jittery clients
Reading time? 5 minutes
Our own Drew Gurley went on a bit of a rant this week when we started talking about the latest movement in the markets. Suffice it to say we deleted some of the ranting, but behind it all was a good reminder for us all: Redbird has some awesome Annuity options that can help clients lower their risk (with upside gain) in a volatile market. Read on?
Q. What concerns you about today?s markets?
A. ?I do not have a crystal ball, but I can see events that are happening in our economy and stock markets similar to 2007 through 2009. The stock market is finally reacting to a stagnate economy, unemployment continuing to stay at or above 7% (let alone the people that have given up or have lost their benefits)and the Federal Reserve reducing Quantitative Easing to the banks.
?It would be different if the banks were using the $75 billion per month they receive to lend businesses and individuals? which they are not! Rather, it appears they invest all of this money into the stock market for huge short term gains, giving the false impression of continued and sustained growth. Truly the only ones making money right now are the banks.?
Q. How are clients reacting to this possible correction of the markets?
A. ?People?s lives and retirement hopes are the casualties of what appears to be another market correction. Prior to 2007 most of my clients would not be too worried because they knew the market would correct itself in due time. Well, most of those clients had never been through a recession like the one we just exited. That has completely changed their attitudes about the markets, so with the possibility of a pretty significant correction right in front of us they are no longer just taking it in stride.?
Q. While we?re not financial advisors, what can you tell agents to say and do with clients at this dicey time in the markets?
A. ?Three things First, make sure your clients understand the reality of their situation if they are 50 years or older: they do not have the time horizon to regain losses from a market correction or, worse, another recession.
?Second, help clients understand the risks of their current investments. Many people invested in the stock market do not realize the fees and costs they pay. Many do not understand they have NO guarantees in the market. Nada. Zilch. Zip.
?Third, help clients, especially those 50 years or older, develop an approach to their investments for retirement using the insurance products at your disposal. They needproducts that have NO downside risk with all of the upside gain potential. They need to protect what they have and receiveguarantees of no loss of their principal or future contributions, no market risk, no costs, no fees and no loss of any interest growth. Yes, this is possible.?
Q. Where do you start the discussion with a client who is worried about having enough money for retirement?
A. ?Safety and security is whatour clients need and we have a few products that offer both. Fixed and Fixed Indexed Annuities (FIA) are a great place to start. They guarantee no loss of principal or future contributions. These annuities guarantee No Loss of Bonus that the client receives DAY ONE! Also, they guarantee No Loss of any Earned Interest! There are no costs, no fees and no market risk (the only cost is for the lifetime pay out rider). There is also a Guaranteed Ratchet and an Annual Reset (ratchet closes in all gains and resets to the lowest indices number, so the client gets most of the gains with growth). These products protect our clients? retirement and give them peace of mind.They are looking for no downside risk with upside gain potential.?
Q. You often talk about agents? responsibilities. What do you say to the agent that simply sees his/her job as selling insurance?
A. ?As agents it is our job to help protect our clients and their futures. Remember, with some exceptions, all your clients have ever heard their whole lifeis ?the Market, the Market.? It?s always about the person that makes 30%, 40%. We all know that most customers only want to hear about the gains and never the losses. Well, most of the clients we talk to have reached an age where they no longer have the time horizon to recoup losses.
?We offer safe alternatives, not just insurance. We need to help them make good decisions to take away the volatility and uncertainty of their future? to protect their retirement and put it in safe, guaranteed products??
Editor?s note: those of you who know Drewor have attended one of our training sessions you are fully aware of Drew?s passion for helping clients. And, let?s be clear, he is passionate making sure clients understand the risks in today?s markets. Please feel free to call him and let him take you to the next level of this discussion (yes, there?s a lot more he has to say!).
- Networking really works the BNI way. Making time to prospect is hard. We spend most of our time cleaning what we?ve hauled into the boat and not enough time trying to catch more. For those of you who have embraced the idea of building a business instead of just selling insurance, then consider joining Business Network International, more commonly known as BNI. While it is a commitment of your time, it is an excellent way to meet leaders and up-and-comers in your community. Several of our more successful agents use BNI as one of their key networking tools. Give it a look (the link will get you to the page to help you find your local chapter).
- All newsletters are not created equal. Remember the last time you clicked on a link to subscribe to an online newsletter thinking it would really help you? If you haven?t already labeled it as spam then you?re likely deleting most that show up in your in-box. However, there?s one source we read religiously: LifeHealthPro Daily. Ten minutes a day surfing around this site and you?ll begin to feel much more engaged and on top of all the change we face.
- 5Star improves process to help agents save clients who cancel. Clients cancel for all kinds of reasons? some cannot be saved BUT many can. What often keeps agents from saving clients are slow carrier processes and snail-like communications (e.g. using U.S. Mail to notify agents of the cancellation).5Star has introduced a program to notify agents by email when there is a cancellation. Policyholders calling to cancel will be asked to submit their request in writing. At the same time, the policy is taken off automatic bank or credit card draft and placed on monthly direct bill. The writing agent will be notified by email of the client?s intent to cancel, thus giving the agent a much better chance of saving that client. For more information contact 5Star?s Agent Support Group at 866-465-0647.