As an independent advisor, Steven A. Plewes enjoys the freedom to run his business as he sees fit. Working entirely from home through a cloud-based system, Plewes helps his clients — who span 20 states — reach their financial goals by specializing in wealth management and retirement planning. Careful to use annuities that are tax-efficient and low-cost when he can, Plewes believes that annuity products support his philosophy that one’s portfolio is only as good as the income it can consistently generate.
We sat down for a Q&A with Plewes to pick his brain about marketing and selling annuities.
1.How do you spark interest in annuities?
I sit down with clients and explain to them that there’s a difference between needs and wants, especially in retirement. In our practice, we introduce the concept of annuities by creating awareness through our website, which provides focused information about a level of guaranteed retirement income. By creating this, we help our clients become more receptive to having a discussion regarding the use of annuities in their retirement plan. Additionally, we spend time educating our clients during our quarterly reviews and through our online GoToMeeting Web sessions. We provide clients with third-party articles to help explain annuities in more basic or direct terms and support the concept. That, and the fact many people either have no pensions or their pensions are being shut down, drives people to ask us how annuities work, why they should consider them, and if they are a good product for them to be involved in.
2. Do you partner with business for cross-referrals?
We work in conjunction with a long-term care specialist in our area. We outsource our long-term care insurance to the specialist, and then he refers the clients back to us to calculate a single premium immediate annuity amount that will fund the long-term care. After going through a planning process with us, many clients discover they either want or need long-term care insurance. Since we choose not to specialize in that arena, we refer the client to our outsourced partner. When clients discover how much long-term care can cost, they look for ways to minimize or reduce the cost. One way to do that is to create a single premium immediate annuity stream of income which will fund that annuity over time. There is a breakeven point after which clients will save money on their premiums going forward. If necessary, based on any increase in premiums, we will purchase an additional SPIA in order to fund the increase going forward.
3. How do you educate prospects about annuities?
In my opinion, Social Security is the ultimate annuity. A majority of people receive pay-out at age 70 and at a rate higher than any commercial carrier could ever offer. We educate our clients regarding the maximization of Social Security and then use other guaranteed income sources such as a pension, if they’re lucky enough to have one, as well as rental income or other sources of annuities to supplement Social Security. Once we’ve defined a client’s need in retirement, we work to fully fund that using single premium immediate annuities and variable annuities to create a level of guaranteed income that allows them to sleep well at night. With any additional money they have, we create a traditional portfolio.
Yes. Technology is changing the way we market annuities. A good example is tied to a major corporation in our community that recently decided to shut down their pension. They are offering current and former employees who had not yet taken their pension benefit the option of taking a lump sum payout, versus taking a guaranteed income. Many of these people are too young to lock in an option they may not receive for another 10 or 15 years. We have been using LinkedIn and our network of existing clients within that company to market ourselves as experts in the area of retirement income planning. This word of mouth or viral marketing has been successful. We have a steady stream of people who are contacting our office to have us analyze what would be the best option for them, lump sum versus an annuity payment. By taking a lump sum, we can offer them additional options, which would include liquidity. We can really dial in exactly how much money they need in retirement after they’ve maximized Social Security. In many cases, it will free up additional capital which can be optimized over the long-term in a traditional portfolio. We feel this is a tremendous opportunity, and by referring people to our websites using word-of-mouth through the company, referrals and social media, we’ve been able to reach many more employees within that corporation. We feel we’ll be quite successful this year in capturing assets and selling annuities where appropriate.
Also, we are able to use our digital tools to tailor our messages to clients regarding guaranteed income and the use of annuities. Whether they are single premium immediate annuities, deferred income annuities or variable annuities with guaranteed living benefits, we are able to customize a message demonstrating how these products can be beneficial to a client planning for retirement. Customizing messages and websites was not available to us years ago; it makes it easier to educate our clients on Social Security. Something as simple as an email with third-party articles in PDF form allows us to get information to clients regarding annuities. Additionally, we create videos with an iPhone that are linked to an email and sent to the client to raise their awareness regarding annuities and their use. They can forward this email (which, of course, includes links to our website) to other colleagues they may work with.