2020

Annuities remain an industry mainstay, but it’s no secret that many clients have low awareness of how annuities can help them meet their financial goals. At the same time, others may not understand how an annuity can help them meet their goals.

(Related: What If Your Annuity Client Ends Up Using Medicaid to Pay for Care?)

Now that the new year has arrived, it is a great time to refresh your sales tactics and position annuities in a new light. As you settle into the first month of the year, consider these three sales tips you can rely on when encouraging prospects to build annuities into their financial portfolios. Taken together, these tips will help your clients understand why investing in an annuity is a sound choice — after all, hindsight is 20/20.

1. Offer stability and security.

The new year is an exciting time, but it can be a period of insecurity. At the start of the year, many clients are likely thinking about ways to preserve and grow their assets as retirement approaches. When talking to your clients, consider bringing up the fact that annuities can contractually guarantee lifetime income without loss of value. Position annuities in a way that champions their security and stability — after all, very few financial tools available today can match the fixed growth guarantee offered by annuities.

2. Create comparisons to other products.

If you encounter clients with low awareness of the beneficial impact of annuities, consider drawing comparisons to similar products that are more familiar. For instance, as clients age, they often place a larger portion of assets into nonstock vehicles — like bond mutual funds — that help ensure they enter retirement prepared.

To help clients weigh their options, think about how a fixed annuity like a bond mutual fund without downside risks might be more suitable to their needs. Instead of taking on the responsibility themselves, as they would with a bond mutual fund, many clients will enjoy the prospect of transferring the responsibility of a downside risk to an insurance company instead.

3. Embrace the future and respect the past.

Although many brokers in the industry have enjoyed highs over the past decade, some brokers have ultimately decided to exit the field altogether. Annuities have faced some perception challenges in the past, but more people are recognizing their benefits. This resurgence in annuities resulted in nationwide growth in 2019 and shows great potential in 2020 for advisors willing to put in the extra work.

For instance, while it may seem counterintuitive, it’s more important to complete the compliance paperwork required to serve your clients today versus five or 10 years ago. As the years come and go, professionals who possess strong communications skills and can meet expectations set before them will not only succeed but also will prosper.

Additionally, be sure to remember that the future promises ongoing change, and some practices warrant being maintained. For instance, despite the nature of today’s digital communications, consider taking the time to call a client and develop a grounded and meaningful relationship. Or, make personal connections through in-person meetings. Face-to-face interaction with clients provides additional opportunities to understand their needs and provide them with a custom-tailored financial portfolio.

Make 2020 your year.

The new year is still young. Remember that a new year is a new opportunity to rethink, reprioritize and re-strategize your annuity selling approach for the future. Your prospects are doing the same — why not meet them on their level?

By communicating the peace of mind annuities can offer and the specific benefits they provide, you’ll be one step ahead as the next year approaches. After all, hindsight is 20/20, but preparation is timeless.

 

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Rich Lane is the second vice president of individual annuity sales and marketing for The Standard. He has served on the board of the National Association for Fixed Annuities.