The realization of annuitization

Like all agents, I get calls from FMO/IMO internal marketers going down their call list trying to recruit agents for their override cause. It’s cold calling at its best, and I normally play along because these “young bucks” don’t have a clue about my business model. On a side note, wouldn’t it make sense for these phone soldiers to at least Google an agent’s name and find out a little information to make the call more credible? Maybe that’s just my methodical nature, but I’m just saying.

Over the last few months I have done my own “mini study” with the 25 or so annuity cheerleaders that have called, so I can see how much they actually know about annuities and where their knowledge gaps (if any) exist.

Because I am a fixed-only independent agent, the majority of recruiting calls come from FMO/IMO marketers that primarily focus on indexed annuities. Most are just following marching orders from the boss to lead with their annuity and carrier of choice for whatever reason. The majority is always pitching a high bonus or rider percentage that I guess is supposed to mesmerize me into delusions of sales grandeur by just repeating their same “shiny thing” message to the uneducated and uninformed annuity dream-catching consumers. My first reaction is usually that the pitch is so elementary and “sizzly” that I wonder what agent on the planet would be attracted by this type of phone script. 

As soon as they take a breath after they finish reading, I always ask them to tell me about the best annuitized products they currently offer. By the way, that is after I nicely blast them for always starting off the conversation with “Do you sell annuities as part of your practice,” which happens after I have just answered the phone “Hello, this is Stan The Annuity Man.” Just a hint to the young FMO headset cult, when someone uses the word annuity when they answer the phone, the logical thought progression is that they probably sell annuities.

It’s spelled A-N-N-U-I-T-I-Z-A-T-I-O-N

After asking the broad “annuitization” question, the normal response that I have found is the sound of crickets chirping. Annuitization! The horror! Most have only learned and bought into the income rider story, which is a very good one in certain situations, but doesn’t cover the complete income needs category. As an example for income-later proposals, I always show income riders and longevity annuities (DIAs) for target date needs, and list the top contractual quotes based on the specific client situation. Sometimes riders win. Sometimes longevities win. But every single time, I explain the good and the bad of both strategies so the client can choose the one that sounds best for them. For income-now needs, SPIAs are the obvious choice.

Who is responsible?

I don’t blame these aggressive annuity FMO evangelists because they are just spewing the company line. Who I blame are the people that are training them, and the owners of these FMOs that seem to be basing their product promotions on the best carrier compensation deal they can get. We all know that this is one of the primary factors for too many decisions made at most FMOs, and why the overall annuity distribution system needs to be viably questioned and changed.

The problem with this message direction hierarchy is that the annuity army privates plod forward with this “rider only” story to the masses of annuity agents looking for that next idea to latch on to. That’s not a healthy solution for an industry that already suffers from a “one size fits all” stigma and sales perception.