Variable annuity companies should deliver a simpler message and simpler variable annuity products.[@@]

Many speakers echoed that theme here earlier this week at the annual meeting of the National Association of Variable Annuities, Reston, Va.

A simpler product is easier for the advisor to understand, increases sales, reduces suitability problems and reduces the risks related to features such as guarantees, the speakers said.

Annuity sellers need a consistent message and a consistent goal of putting the customer first, according to John Kennedy, national sales director of the brokerage division at PLANCO, a unit of Hartford Financial Services Group Inc., Hartford.

“Brand is important and there is no question that we use it to our advantage,” said Kennedy of Hartford’s trademark stag logo. For advisors, brand can help eliminate a step in the sales process, Kennedy added.

But “there are companies that do not have the best brand but still do a boatload of business,” Kennedy said. He suggested that insurers can succeed by offering products that really serve the customer, not simply the products that happen to be popular today.

The importance of making annuity products simpler for the advisor to sell is evident in one of the top-selling variable annuity products on the market, says Jeffrey Oster, a registered principal and branch manager in the San Francisco office of Raymond James Financial Services Inc.

The product’s chassis has not changed in the last 10 years. That makes it easier for advisors to sell the product and notice any feature changes, and that clarity has contributed to the product’s long-term success, Oster said.

Companies should avoid taking the approach of “I’ll offer you a GMDB and raise you a GMWB,” said David Zander, a principal at Achaean Financial, Fort Wayne, Ind. Instead, he said, a company should deliver a message and a product that set the company apart.

Reaching the consumer with a unique product and message requires simplifying language, Zander said. For example, he said, Microsoft Word’s spellchecking system shows that ?annuitization’ is not a word. Simpler terms have to be created, he said.

Advisor education is also important, according to Mark Tully, a senior vice president-annuity distribution and sales with The Phoenix Companies Inc., Hartford.

If a product offers advisors a chance to sell a variety of riders, then someone needs to do a good job of educating advisors about when those riders should be used, Tully said.