Close Close

Life Health > Annuities > Variable Annuities

Advisors Share VA Wish List

Your article was successfully shared with the contacts you provided.

New York

Financial professionals say they would like to see variable annuity manufacturers cut distribution costs, expand product options and add better wholesalers.

The financial professionals — Craig Bernard, Kelly Campbell and Joan Valenti — shared their ideas for insurers in the VA market here during a general session at a marketing conference organized by NAVA, Reston, Va.

“I think you pay us too much,” said Campbell, a founder of and principal at Campbell Wealth Management Inc., Fairfax, Va. “The reason why variable annuities have received such bad press and are perceived by consumers as a poor choice is because it pays out more than other products. If the product costs could be lowered to be more in line with my managed account business, I absolutely could do a lot more business–easily doubling or tripling my sales numbers.”

All of the panelists agreed that VA wholesalers should offer advisors more practice-enhancing tips and services.

Too many manufacturer reps are ignored because they simply pitch new products or product features, the panelists said.

Campbell said he would most like to know about the strategies of stellar producers who have doubled or tripled their own sales.

Bernard, president of Madison Investment Center, Madison, Conn., said wholesalers are well-positioned to gather and tell such success stories because of the many opportunities they have to meet with advisors when on sales calls.

Even if they don’t have sales ideas to share, wholesalers could find advisors more receptive to their calls if they come to meetings knowing more about a financial professional’s expertise, market orientation and plans for growth.

Wholesalers also could benefit from ratcheting up their education level, panelists said.

Few wholesalers are Certified Financial Planners, said Joan Valenti, a Farmington, Conn., advisor and CFP.

Some manufacturer reps could improve their social skills, Valenti added.

Valenti cited the example of a wholesaler who, after having failed to win her business for more than 10 years, first bought her a pumpkin pie (which she didn’t like), then a CD of French-Canadian pop singer Celine Dion (whom she does like). The problem: The wholesaler tried handing her the CD during a company move to a new office location, seemingly oblivious of the fact that she could accept the CD only if he took possession of a large and heavy box she was holding.

“Some of these wholesalers don’t have two wits about them,” Valenti said. “They need to learn how to deal with people, as well as their likes and dislikes. Also, most wholesalers, who are men, don’t know how to treat women who are in business. If [manufacturers] could educate these folks about how to deal with women, they might get a bit further with the female advisors of the world.”

The session panelists also talked about VA product features.

VA sales might improve if manufacturers made variable annuities more flexible by enabling advisors to more narrowly tailor features and charges to the client’s needs, panelists said.

Bernard said clients should be able to choose among different levels of both living benefits and death benefits.

Valenti and Campbell agreed, each noting that clients also would benefit from having a wider choice of investment options, such as exchange-traded funds and real estate investment trusts, in the products’ subaccounts, and also more flexibility in determining the ratio of equity assets to fixed-income assets.

“In light of what’s happening in the markets, the clients who are the happiest are the ones who can see changes that I make to their portfolio,” Valenti said. “But many VA product models only allow the client to choose among standard investment allocations that are dictated by a manufacturer’s hedging strategy.”

Product concerns aside, the panelists said their practices flourished during the year past, despite the economic downturn.

Bernard said he enjoyed a 10% gain in revenue in 2008, while Valenti and Campbell reported increases of 18% and 38%, respectively. The advisors attributed their good fortune in part to increased communications with clients–and more time spent on the job.

The panelists also acknowledged that the year past has, at times, been an emotional roller-coaster.

Valenti recalled one particularly emotional encounter.

“One client who came to my office said, ‘Joan, the reason I’m here with my wife is to thank you for saving my life. I was about ready to commit suicide yesterday.’ He was in tears. This has been the most trying time of my 26 years in the business.”

Bernard said, “We have to spend a lot more time with clients now just managing expectations. But the work has its rewards. One client who has a significant amount invested in annuities came to my office for a review of his portfolio and, at the close of the meeting, said, ‘Thank you,’ and gave me a hug. That’s what makes being in this business so worthwhile.”


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.