Due to current low interest rates, fixed annuity sales may not be getting any easier but that doesn’t mean the product doesn’t have value for the right clients. Have you changed your approach so your clients can utilize the benefits of a fixed annuity when planning for their retirement? If not, you should. It’s a must to making the sell. Read on…
I won’t waste your time talking about how annuity sales used to work. You got that, right? The problem is those outdated methods don’t work today. Clients are not going to jump up and down and yell “sign me up now!” if you talk with them only about the current rate they will get. The conversation needs to be longer, more thorough and focus on the benefits of a fixed annuity. They are there, they are important and they are worth talking about. Actually, they always have been, but now they are what will make the difference.
Here’s a refresher if you haven’t thought about it in a while. Start by asking your clients one of these simple questions:
- “Do you have CDs that are renewing at a lower rate than you would like or had before?”
- “Would you be interested in seeing how a fixed annuity may be better for you than a CD for your personal long-term goals?”
- “Would you like to be able to decrease the amount of taxes you are paying each year?”
- “Are you worried about saving enough for retirement and if what you have saved will be enough?”
Sure, you may have a few clients who don’t respond in a “move the conversation forward” way, but I seriously doubt it will be the majority especially if the clients you ask are age 50 and over. With the opening these types of questions will create you can then move the conversation to discussing how you can help them to:
- Obtain a higher rate than their renewing CD. Annuities still do that.
- Receive guaranteed growth, guaranteed minimum interest rates and if they so choose guaranteed lifetime benefits. Our current environment has made guarantee a very comforting word.
- Defer taxes. Annuities permit your clients to defer taxes on earnings until retirement years when typically they are in a lower tax bracket.
- Diversify their portfolio market risk. Our current financial environment has made risk a very discomforting word.
Even after talking through these four key points could they still be resistant? They might. In today’s environment clients may also be concerned about access to their funds and what happens if they “tie” their money up in a lower-rate product for a number of years and during that time rates go up.
Valid concerns and questions that today you must address as well.