When Gary D. Wendell looks at today’s generation of guarantee-laded annuities and the sales numbers they’re generating, he sees “a great opportunity” for advisors to provide much-needed solutions to their clients, while beefing up their own business in the process.
“As an insurance product that gives some amazing guarantees to the client, annuities, I think, represent an excellent business to be in for people willing to put in the work,” says Wendell, an advisor with Asset Preservation & Insurance Services in Rocklin, Calif.
Business is indeed brisk, especially for advisors who deal in income annuities and indexed annuities, each of which hit record sales highs during the first nine months of 2012 ($25.7 billion for indexed annuities, up 4.5 percent, and $6.8 billion for income annuities, up 9 percent), according to the latest figures from Beacon Research. Meanwhile, net variable annuity (VA) sales jumped 44 percent from the second quarter of 2012 to the third, from $4 billion to $5.8 billion, according to figures compiled by Morningstar, Inc. And that was despite a Q3 dip in VA sales to $36.3 billion from $38.2 billion in the second quarter of 2012, a drop of 4.9 percent.
But fixed or variable, indexed or otherwise, annuities do not sell themselves. Indeed, veteran advisors like Wendell who today are thriving with annuity products attribute their strong production more to hard work—diligent preparation, an emphasis on relationship- and trust-building, a leave-no-stone-unturned approach to qualifying—than to a deft sales touch.
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Here are 10 producer-tested ways to turn your hard work into an infusion of annuity business for your practice.
1. Know your products cold. “I try to avail myself of any continuing education that’s available,” says Wendell, who specializes in fixed index annuities (FIAs), “because I always want to learn more about new products and features—what’s available that could help my clients. There are so many nuances with these products.” When product diligence helps an advisor to find an FIA with a 10 percent roll-up rate instead of one with an 8 percent roll-up rate, that makes “a drastic difference” for a client, adds Nolan Baker, CSA, of Retirement Specialists of Northwest Ohio. The result often is a drastically happier client.
2. Choose carriers wisely. “You want the insurance companies you are dealing with to be credible and financially strong,” says Christine Proulx, head of Proulx Insurance & Financial Services in Kingfield, Maine, adding that she only does business with insurers with a rating of A or better.
“My previous wife said I wasn’t a good salesman because I wouldn’t try selling something unless I thought it was the very best,” Wendell quips. “She meant it derogatorily, but I take it as a compliment.”
3. Prioritize solving problems over selling products. “I don’t try to sell people anything. You don’t want to come across as pushy,” explains Proulx, who like Baker and Wendell deals mostly in indexed annuities. “I only talk about the product when I’m presenting it in the context of a solution to their particular needs.”