Some agents believe that an informed client is a dangerous client.
If you?re in that group then you?re likely being left in the dust when it comes to selling fixed annuities.
Annuity Sales are Up
Beacon Research just released numbers and fixed annuities are red hot. How about these numbers:
- Total sales in 2014 were $91.5 billion, a whopping 17.3 percent increase over 2013.
- Both fixed indexed annuities and income annuities had record sales years.
- There was a 411 percent increase in sales of fixed indexed annuities (FIA) through independent broker-dealers, in large part according to Beacon because of living benefit riders.
So, why now?
2008 may be far in the rear view mirror but the memories linger. Many mistakes were made in the year or so running up to the downturn that turned seriously south in late 2008. The biggest mistake many made was not protecting their flanks.
Fixed Annuities are Evolving
Fast forward to today and you find a much different environment. Clients are asking for things like safety, security and guarantees. And, what better to offer them than something that provides an income stream where their principal will never be lost. If that doesn?t get your attention, then I don?t know what will.
Clients are officially smarter.
The run to fixed annuities is rooted in helping clients diversify and spread risk. We like to call it playing defense. Clearly there?s demand for offensive products like stocks and variable annuities, but our clients are loving the simplicity of fixed annuities.
A client who recently purchased a fixed annuity called me up in tears because she was so grateful she had moved her money to a fixed annuity. When we started talking a couple of months before she didn?t know the difference between fixed and variable annuities. What really got her attention was in the short span from the time that she decided to go with the fixed annuity to the time the money was moved, her account lost $22,000 of value in the market. That?s enough to make anyone cry.
Clients are also wising up to the fact that Social Security may not meet their needs. If you look closely at your statement?and you should insist everyone should do that?you?ll see a note indicating Social Security payouts will start decreasing in 2033. I won?t rehash why that is happening, but it?s only 18 years away.
We use the lifetime payout rider with many clients to ensure they aren?t caught short. And, if the client passes away the spouse may get a spousal continuance that will allow them to continue getting payments based on their age. It?s a great solution. Check out our full Q&A with a top annuity producer for more common annuity sales questions.
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