I’m one of those people that must have the radio, TV and multiple computer screens running at the same time to have my brain work properly. I guess this comes from my previous life in the stock business where data is king, and I have carried that information overload habit with me to this day.
As my multiple screens are running in my office, I recently have seen local and national TV, Internet and radio ads for agents that are blatantly promoting annuities, yet the word “annuity” is never used. Phrases like “reasonable rate of return” (this one bothers me the most!), “my clients never lost a penny,” “safe money retirement planners,” and “we never charge you a fee” are hammered away at the unknowing and uninformed. We all know these are code words and phrases for annuities, and most likely leads to the client getting an annuity shoved down their throat. If that’s the end game, then why not use the word annuity from the beginning of the selling and informational process? Why not let the consumer know from the start?
Last week, I was on the phone with a CEO of a major annuity carrier interviewing him for a future article, and he said that he wished there was a way for his company to not use the word annuity to describe their products. He preferred using “tax-deferred investment account” instead of annuity. Huh! It’s an annuity! I’m sure that after this article, I will start seeing and hearing the phrase “tax-deferred investment account” instead of the word annuity as the newest subtle catch phrase. I sure hope not.
I get that “annuity” is the curse word of the financial world. Agents will argue that the uninformed media is to blame for this, and the media will point to the supposed rogue annuity agents selling their one-size-fits-all incentive cruise ticket annuity. Both have valid claims in my opinion, but is not reason to avoid the word annuity when promoting the specific product strategy.
“Oh, by the way….”
My plea to everyone that sells annuities is to use the word ANNUITY from the get go. Don’t hide behind the words “senior,” “retirement,” “safe money,” etc. I know that a lot of annuity sales organizations have these words in their company titles, and that many advisors sell other products like stock and bonds. However, if you are getting ready to recommend annuity, you have the responsibility to tell the client that you are going to show them an annuity. Annuities are nothing to be embarrassed about, and the “oh by the way” strategy is disingenuous and reeks of “bait and switch.” I occasionally run across people that purchased an annuity that didn’t know they had purchased an annuity. What? I know (hope) this is rare, but it should never ever happen.
I’m so proud (or crazy) of the word annuity that I named my company Stan The Annuity Man, and I call myself Stan The Annuity Man. Yes, this is the purest definition of “burning the boat.” This obviously repels any potential clients that want no part of any annuity, and I’m OK with that. Putting the word annuity at the forefront of everything I do was actually part of my overall business and marketing plan because I wanted every potential client to know exactly what I do, and exactly what we would be discussing. As the annuity addict meeting introduction would go: “Hello, my name is Stan The Annuity Man. I only recommend annuities, and am proud of it!” And the reader says: “Hello Stan.”
Industry oversight needed
I keep pounding this drum about industry oversight, but nothing seems to happen. It’s kind of like the question, “If a tree falls in the forest, does anyone hear it?” The corresponding question is “If the annuity industry has an easy fix to the problem, does anyone hear it…or care?”
Why doesn’t it make sense for the annuity governing bodies (along with the carriers) to fund a National Annuity Promotion & Advertising Regulatory Enforcement Board? Yeah, I just made that up, but you get my point. This group’s sole purpose in life would be to monitor all radio, TV, direct mail, email and Internet ads to make sure of their accuracy and transparency. In addition, they would monitor and regulate FMO (and carrier) promotions to agents, which is where some of the true fraud and sizzle currently takes place. It’s logical to predict that if FMOs are crossing the line with their annuity promotions, then the agents will follow suit. Are you listening FMO sizzle houses?
Wouldn’t it be nice to have one place and one group that would police the Wild Wild West of annuity advertising? Currently, you can get away with absolutely anything, and I do mean anything, I live in the Jacksonville, Florida area, and there is some of the worst annuity misinformation ever that’s being promoted on local radio and TV. If there are worse annuity advertising examples, then I don’t have the stomach to see or hear it. With all of the money being made by the annuity carriers, there is no excuse for not putting this type of regulatory board together. My guess is that the carriers really don’t want to, because it might interrupt the money flow. Sad, but true.
So remember all of you annuity salespeople, the word is ANNUITY. There’s nothing wrong with using the word ANNUITY. Stop tip-toeing around it. Use it and be proud of it! And as for the annuity industry, I say once again, please be proactive and do something before you are forced unwillingly by someone else to take action.
For more from Stan Haithcock, see:
- The annuity industry needs its own Series 7 exam…now
- A trip to nowhere
- Keeping up with the annuity ‘Joneses’