The importance of a diversified product offering

Making difficult decisions today is necessary to bulletproof your practice from inevitable changes in the industry that can negatively impact your business. I am talking about the highest level of strategy that we need to engage in to protect our livelihood.

Let’s look at an example that involves the timely topic of compliance and regulation. So many of my colleagues solely have an insurance license and are selling fixed indexed annuities as the only financial weapon in their arsenal. Now before I proceed, I must reiterate the fact that I absolutely and unequivocally love fixed indexed annuities. I have used them very successfully in my practice alongside other financial and investment vehicles.

My point here is aimed at the regulators who are starting to swarm the fixed indexed annuity industry, eyeing some of the patterns in one’s practice that can raise some red flags. For example, imagine the FIA producer who sells the same product from the same insurance company to 95 percent of his clients. This is common practice in our industry as producers gain comfort with certain products and companies. If I was a regulator, this would be a major cause of concern for me.

Just imagine the conversation: How could every one of your clients, Mr. Producer, miraculously have financial goals and needs that can be addressed by placing their money in the same exact annuity product? When you market for new clients, how are you able to target only those prospects whose financial needs will be addressed by purchasing this same product? In fact, Mr. Producer, each year you must be forced to turn down hundreds of prospects who are seeking to purchase an annuity because they want to buy a product that has a shorter surrender period, a different crediting method or is underwritten by a different insurance company than the treasure of an annuity that you strictly sell.