“Ten trillion dollars are sitting on the sidelines right now,” says Eric Taylor, vice president of annuity sales, Genworth Financial.
$10 trillion dollars: in bank accounts, squirreled away in mattresses, buried in backyards? I let that number sink in for a moment. It seems unfathomable. It becomes a mantra. Ten. Trillion. Dollars.
As I ponder the amount, I almost fall off the comfy couch where Taylor and I are sitting at the NAILBA 31 Conference being held at Orlando’s JW Marriott Nov. 14-17. And I have a little secret I don’t want to share with Taylor — I have no idea how many zeroes are in a trillion.
The best advisors, the cream of the crop, will succeed in any market, Taylor tells me. “They’re resilient that way. Maybe they wish the rates were better,” he adds. But who doesn’t, right?
For those top advisors everything is relative, says Taylor. They will get theirs. What about the rest of the advisory population? There’s that ten trillion dollars just sitting there waiting for a product or investment or advisor that makes sense.
But does anything, investment-wise, make sense these days to consumers? Maybe. At least Taylor wants to think so.
In regards to client psychology, consumers seem reluctant to get back in the game. Even the boomers, those most resilient of consumers, are feeling the bruises of more than a decade of extreme market volatility. Can we blame them?
They were gut-punched by the dot-com debacle, hammered by the housing bubble and, finally, they were humbled by the market crash of 2008. If there’s a silver lining to those negative stories, it’s that volatility leads to safety.
Yes, boomers have been burned by bad investments, but they still need to have their retirement ideas resolved, Taylor says. And for the first time there’s stickiness to their interest in safe products, in particular, fixed indexed annuities.
“We’re seeing more traction with the registered rep space,” says Taylor. Where in the past, the push might have been for variable annuities, now, the FIA business is attracting more and more of that business. “The clients see the upside with the indexed product and the added plus that the downside is off the table.”
The clients could put their money in more financial instruments then ever, because there have never been so many choices, but as Taylor reiterates, there’s really never been a better time to have them in places such as FIAs.
We get ready to leave our couch for the keynote address with Major Dan Rooney. We stand and shake hands. There’s a lot of “cash looking for a home,” Taylor reminds me. How could I forget — ten trillion dollars, hiding, waiting, hibernating for now, until an advisor uncovers it.
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