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Life Health > Annuities > Fixed Annuities

Keeping up with the annuity ‘Joneses’

By Stan Haithcock

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It is obvious that there is way too much “me-too-ism” going on in the annuity industry. Let’s discuss the reason it’s better to blaze your own path instead of trying to keep up with the annuity Joneses. Agents, FMOs and the annuity industry can and should change their current herd mentality. There are solutions to these “Keeping up with the Joneses” problems, so it’s important to look at how to stop chasing…and start leading.

Agent Jones

Annuity agents seem to be in rut when it comes to creative ideas and feeling comfortable with who they are. That’s hard to do when your internal marketer keeps screaming about some wonder agent that’s supposedly knocking the cover off of the ball. Always remember that there is usually another story behind the story. It’s humorous to watch agents now chasing after the Google Search name game and corresponding Internet video pitches. I also would love to know the failure rate of the weekend radio show dream along with the tons of corresponding advertising money being flushed down the drain. Buying overpriced and oversold Internet leads seems to have replaced the bad chicken dinner seminar money pit as the new agent Jones.

Solution: It’s all about your lifestyle and how you want your business to run or grow. Not everyone can be a marketing Michael Jordan, so stop trying to dunk when you either can’t or don’t like to jump. Be satisfied with the type of clients that you attract, do the right thing, and let the sales level happen naturally. Set achievable goals based on who you are and what type of agent you want to be, and then adjust your lifestyle accordingly. As for marketing ideas, you should know by now that there is no perfect solution. Create your own unique strategies, and stick to them long term. Be content with who you are, and take your own incentive trips.

FMO Jones

Not a lot of creativity in the main going on here. Most FMOs are still addicted to “corny sizzle blast” agent email marketing, and the over-the-top and predictable incentive madness. Because most FMOs are just glorified middlemen and are offering the same carrier products, they each claim that they can offer the best agent marketing or provide the highest overrides. Whatever! The end is near for most FMOs, they just aren’t honest enough with themselves to admit it.

Solution: There are a select few FMOs that are creating unique fixed indexed annuity (FIA) products and indices, and one that I know of that calls itself a DMO (Direct Marketing Organization) focuses on all things digital for the agent. It’s about time, because I think this computer/IPhone thing is here to stay. Kudos for the handful of FMOs that are at least trying to be unique and offer real value. I’m still waiting on the first FMO to offer incentive trips based on client satisfaction and the client’s understanding of the product that they purchased, not sales volume. I’m not holding my breath on this one. Let’s talk about attracting the right kind of agent that is all about doing clean business. Shouldn’t that be what FMOs want?

Industry Jones

We have riders, doublers, and the new sandwich-sounding income rider “stacking” method. Now carriers are scrambling to have the best “stacker.” Really! I know that the fixed annuity industry is somewhat hamstrung with low rates and overall regulations, but there is still a lot of room to separate from the securities world. There is one area where keeping up with the Joneses would be welcomed, and that is in the area of Deferred Income/Longevity Annuities (DIAs). We need more carriers in this space as a positive alternative to the typical agent income-rider pitch. Yes, I am for keeping up with the DIA Joneses.

Solution: As I mentioned in a previous article, I think the fixed annuity industry should move (i.e., run) away from the dream of market returns and focus solely on promoting transfer of risk contractual guarantees. I still can’t understand the agent fascination with the limited upside of most FIAs. The only conclusion that I can make is that this is as close as most “fixed only” agents will ever get to the equity markets. That’s not a bad thing, but I do think this explains the fixation on index option strategies, which I think is not where the client focus should be. Wouldn’t it be great if the industry pounded “contractual guarantees,” “transfer of risk,” and “peace of mind” even while the stock market continues to skyrocket? When markets eventually tank, people’s brains would automatically turn to fixed annuities. The message needs to be simple, coherent and repetitive. This idea is an absolute “no brainer” and I call on NAFA and the leading fixed annuity carriers to come together on this “single message” marketing strategy. As Steve Jobs so brilliantly said, “people don’t know what they want until you show it to them.” Exactly! Let’s show it to them and tell it to them, over and over.

I was recently in historic Savannah, Georgia and the nicest houses for centuries have been located on Jones Street. No surprise. Agents, FMOs and the industry leaders need to forget trying to keep up with the Joneses, and blaze their own unique and specific path.

For more from Stan Haithcock, see:

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