For all the exploration and activity that’s taken place regarding the upcoming retirement of baby boomers, too little attention has been paid to a critical period encompassing the years just before and just after retirement.

Even less attention has been paid to the challenging issue of compliantly communicating with all those prospects.

This article explores both issues with the goal of identifying ways for maximizing the industry’s success. As it turns out, annuities are central to the story–and their sale will escalate due to the twin trends of retirement needs and web technology.

The first trend relates to the 10 years before and after retirement, what may be called the transition management phase of retirement. As will be seen, annuities will be needed to provide downside protection during this period.

First some background: In general, financial services companies have sought to highlight the differences between the accumulation and retirement distribution phases of financial life. While investing and tax strategies are divergent in these phases, the real story is much more complicated.

There is a critical third phase that needs to be addressed. It is the transition management phase. This phase bridges the accumulation and distribution phases, beginning 10 years prior to retirement and continuing for 10 years after. Over this 20-year period, the investor may transition from being risk averse to what may be described as loss averse.

This occurs for good reason. Approximately half of one’s total retirement assets are accumulated in the 10 years immediately preceding retirement, according to current industry understanding. Investment losses occurring during this transition period can have a potentially devastating, life-long negative impact on the level of retirement income able to be generated. So placing downside protection under the accumulated assets holds great appeal.

The 10 years immediately following retirement also require downside protection under the accumulated retirement assets, since the assets are now a critical component of long-term income generation success. The probability is high that investment losses in the first few years after retirement are likely to result in total exhaustion of portfolio assets. Research shows that while the risk of “portfolio ruin” is reduced in the later retirement years, it’s not entirely eliminated even in the second and third decades of retirement.

Financial services companies that are eager to meet the retirement income needs of baby boomers would be wise to focus on this transition management phase and the customer’s preference for downside protection during this period.

Products offering downside guarantees combined with upside growth potential are well positioned to meet the need. But, given the sheer size of the assets under management and the enormous amount of longevity risk that potentially needs to be managed, today’s products will likely not be the complete answer. That will take visionary products designed for income-generation, some of which are already on the drawing board.

Until such products arrive, annuities will appeal to advisors and investors who are looking for guarantees. These will be fixed and variable annuities generally, and indexed annuities in particular. The increased focus on these products should help accelerate annuity sales.

Annuity sales will escalate for another reason, too. That is the insurance industry’s growing realization that it hasn’t used web-based technology to its advantage in marketing and selling annuities (and other products) to baby boomers.

For example, a typical advisor’s website is basically online reading. Yet, busy customers expect streaming videos and multimedia as the method to communicate why a product or solution makes sense. In many places, from San Diego to Boston and Honolulu, broadband connections are the rule rather than the exception. How much longer can the industry go without properly connecting its intermediaries via these online opportunities?

It is widely expected that half of today’s financial advisors will be retired within 10 years. This means they will retire at the very time when the greatest number of baby boomers will be requiring transition management guidance. If the industry fails to deliver web-based technology solutions designed to help intermediaries engage these boomers, this will spell the demise of the industry’s greatest sales opportunity.

Alternatively, if the industry begins to focus on its communications challenges, it will be better positioned to address the transition management needs of its boomer customers. It will also deliver the key missing ingredient required to ignite expanded productivity of its intermediary distribution channels. The clock is ticking.