I was in the middle of writing a completely different article for this week’s column, and was on the Internet doing some needed research on the topic. That’s when it happened: to the left of the screen, a display ad that promoted annuity returns of over 10 percent.
If you have a computer then you have seen these misleading ads, and they are so prevalent now that I have actually become numb to their constant appearance. However, when I went to a completely different site and saw another display ad from another site promoting 15 percent annual annuity returns, I had officially reached the breaking point with all of these inappropriate and non-compliant ads.
Unless you are one of the agents that are getting leads from these “too good to be true” ads and video pitches, you are probably sick and tired of answering the ridiculous questions you get from clients and prospects who are on the receiving end of these web pitches and corresponding agent follow-up meetings. Most that I run into are being pitched one annuity from one carrier. Unbelievable. This “one size fits all” problem is another issue I recently wrote about as well.
What I don’t understand is why these annuity web promoters have to deceive the public from the get go. Annuities are great transfer of risk products, and can stand on their own contractual merit. Why would you ever start a client relationship with a misleading pitch? And yes, using 10 percent or 15 percent in conjunction with the word annuity is misleading. With the 10-year Treasury currently at 2 percent or less, you are probably not going to see the planets align themselves to achieve double-digit returns, especially with a fixed indexed annuity (which I find is what most annuity Internet promoters are pitching).
I was recently on a LinkedIn discussion on Sheryl J. Moore’s AnnuitySpecs.com’s group, and Michael Coliton posted a great idea. He said: “The first thing we need to fix is self-governance, and hold the agents and advisors accountable.” Exactly. He’s completely right. It’s really that simple. We, as annuity agents, have to “self police” the annuity industry.
There’s a ton of us that have been sitting out here watching these Internet ads and web videos in horror, and waiting for the governing bodies and carriers to do something about it. Like you, I’m tired of waiting. I think that it’s time for agents to start “self policing” these non-compliant ads and contacting their state insurance organizations, national governing bodies, and specific carriers every time we see something that is obviously wrong. We, as an industry, have to protect these great products and hold agents accountable when they blatantly cross the line with their advertising practices.
Ironically, I think we would be doing these annuity web promoters a favor because they might be forced to realize that they don’t need to “push the advertising envelope” as they are currently doing. I truly believe that they could sell as many or more annuities by just shooting straight about these fantastic transfer of risk strategies. No sizzle strategies are needed to get the public’s attention. They already want income for life. They already want principal protection. They already want what the guarantees that annuities contractually have to offer. We just have to fully and properly explain it to them so that they can make a good decision.
All annuity agents have to be proactive to protect the annuity brand. There needs to be a call to arms for the “self governance” and “self policing” of all annuity promotions to the public. We also need to hold the FMOs and carriers accountable for the “sizzle selling” to the agents. These old, tired methods are uncalled for as well, and annuities do not need to be promoted like that anymore to anybody…agent or consumer.
We all need to go the NAIC site (www.naic.org) and hit the “States & Jurisdictions” tab to find out who to contact in your state if you see ads or promotions that you know have crossed the line. While we “self police” misleading web ads, we should also put all misleading ads under an industry “save the brand” microscope: TV ads, radio ads, seminars, mailers…everything! It’s like pornography you know a bad ad when you see it.
Every time you see a bad pop-up ad or display ad, take a screen shot of it and send it to your state insurance department and the carrier whose product you think the “promoter” is pushing. Every time you see a video that is pushing the limits on facts, send a link to them as well. Demand that they clean it up. Demand that they do their job and protect the consumer like they are supposed to do. Call it the “squeaky wheel annuity self-policing” theory. It will work! Imagine each state agency or carrier getting thousands of screen shots of a 10 percent annuity ad with the following four words, “Stop these ads now!” My guess is that they would stop pretty soon.
If all of the agents that are annoyed and embarrassed by these bad ads (local or national) would take action, then this embarrassing mess would get cleaned up. Talk to your friends in the business and ask them to join you in this effort. I recently started doing this, and it’s amazing the positive response that I’m getting. Every agent I speak with wants these ads to stop to protect the annuity brand for the long term.
Annuities shouldn’t be promoted on the Internet like diet pills or weight loss gimmicks. Right now, they are. Each agent has a voice and the power to exercise our right to be heard by the governing bodies and specific carriers concerning these ads. Let’s make sure to be heard loud, clear and often.
For more from Stan Haithcock, see: