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Industry Spotlight > Broker Dealers

Brokers want more training to boost FIA sales

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Today’s brokers understand that information is power. They know that the better informed and trained they are, the better they’ll be able to communicate with and meet the needs of their clients – and increase sales.

A majority of brokers are looking for some help in how to recognize when a fixed indexed annuity (FIA) is appropriate for clients, and how an FIA fits into a larger retirement income plan. Brokers are also looking for more product-specific information to communicate to their clients, as well as some sales training. And in addition, many brokers want to understand the various regulations governing FIA ownership and the tax implications for each client.

According to the participants in the Fixed Indexed Annuity Study sponsored by Athene, brokers are looking for additional training covering retirement income planning as well as more in-depth product knowledge, which they hope will spark sales of FIAs. Nearly seven in 10 respondents – both experienced brokers and those with little experience in annuity sales – said they would benefit from training or sales assistance.

Retirement income planning, suitability: In particular, brokers cited an interest in learning how to help clients see how an annuity would contribute to their overall, comprehensive retirement plan. In fact, 61 percent of respondents said they would like some training on retirement income planning. Nearly as many study participants – 57 percent – want to learn how to tell if an FIA is appropriate for a client, and nearly half want some help in how to determine if a product is not suitable.

Many states require that brokers complete a state-approved training course before they can sell, solicit or recommend annuity products to the public. Brokers can typically take courses online, but annuity suitability training courses may be available locally or regionally. The National Association of Insurance Commissioners (NAIC) offers an online self-study course that meets the four-credit training requirement established in NAIC’s Suitability in Annuity Transactions Model Regulation adopted by many states.

Product education, sales training: Not only do brokers want retirement income planning training, they’re also looking for more concrete knowledge on FIAs. A majority – 59 percent – of participants in the Athene study said they would like product design training.  In addition, nearly as many (58%) of responding brokers also said they are looking for specific guidance on how to sell FIAs. This information is readily available: The very best source of specific FIA product education typically comes from the individual companies offering the annuities.

Regulatory requirements, tax implications: Clients generally have questions about the tax ramifications of a potential FIA, and they also want to know about the regulations governing the annuity industry. They want to know their tax liability, and they want some assurance that their investment will be safe. Brokers who can come to meetings armed with this information can help put their clients’ minds at ease.

About 47 percent of brokers in the Athene study are looking for more information on regulatory requirements, and 44 percent want more information on the tax implications of FIA ownership. While the tax implications vary with each individual clients, regulatory information is readily available online.

Fixed indexed annuities are not considered securities and aren’t regulated by the Securities and Exchange Commission (SEC). FIAs are regulated at the state level. For more information on each specific state’s regulations, visit the National Association of Insurance Commissioners website