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Steve Scanlon (Photo: Equitable)

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5 Ways the Individual Retirement Planning Market Is Changing: Equitable Exec

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Twenty-five years ago, a big life insurer might have offered an annuity.

The annuity could help someone save for retirement.

Now, Steve Scanlon says, life insurers are moving beyond the time when the individual retirement toolbox held one big, heavy, all-purpose hammer.

“This is not the annuity of 1995,” Scanlon said earlier this month, in an interview. “It’s no longer one-size-fits-all.”

What It Means

Scanlon is the head of individual retirement at Equitable, which has been one of the top U.S. life insurers since 1859. It has helped develop the modern U.S. annuity market, including the market for registered index-linked annuities.

Scanlon’s job gives him a window with a view of the insides of the American financial planning machinery.

Last summer, he was focusing on the need for flexibility to help people get past the effects of the COVID-19 pandemic.

Now, he’s talking not just about the idea of flexibility, but the wider range of tools available to meet a wide and growing range of client needs.

Inside the Planning Clockwork

Here are five things Scanlon is saying about annuities and retirement planning now.

1. The world has changed.

Last summer, Scanlon saw the retirement planning community starting to get over the COVID-19 pandemic, and to get past the brief period of pandemic-related volatility that occurred in  the spring of 2020.

Now, he said, “you have interest rates going up. You have inflation. We haven’t talked about inflation in 20 years.”

Meanwhile, he said, volatility is still there.

Scanlon is working with a fairly stable group of advisors, with an influx of new advisors offsetting advisor outflow.

One challenge is that many of the new advisors have entered the financial services sector after the 2007-2009 Great Recession.

“They haven’t seen a bear market yet,” Scanlon said.

2. Advisors’ role is evolving.

Scanlon talks to some agents and advisors who continue to focus on traditional retirement, insurance and financial sales and planning tasks.

But the pandemic gave clients more time to think about their lives, and it’s given advisors more time to think about what planning is, Scanlon said.

“The expectation is that we understand our clients,” he said.

In some cases, he reported, planners are helping clients think about issues such as personal wellness, work-life balance issues and exploring personal goals.

3. The annuities have changed.

When Scanlon meets with veteran advisors who have not made much use of annuities, he finds that the product menus puzzle them.

“People are surprised,” Scanlon said. “They’re like, ‘I had no idea they’d evolved so much. This is really different from what I remember.’”

For many veterans taking a second look at annuities, one thing to get used to is the rise of registered index-linked variable annuity contracts.

4. Insurers can now do a better job of matching the tools with the jobs.

Scanlon said Equitable annuity specialists often start by asking advisors, “Tell me about what the client wants to do.”

In the past, he said, Equitable sold annuities that could help people save for retirement.

Now, he said, Equitable has specific products that can help clients with specific goals, such as protecting a portion of portfolio value, or all portfolio value; creating a source of retirement income; and managing taxes.

In some cases, he added, the right tool could be a permanent life product.

But the need to plan for retirement continues to be a key driving force.

“People are looking for all sorts of ways to solve for income,” Scanlon said. “Income questions in general are at a premium.”

5. Chairs and tables improve the matching process.

Over the past two years, the Equitable distribution team has tried to explain the nuances of the new annuity products and product features through videoconferencing calls.

Now, Scanlon said, face-to-face meetings are back, and he predicted that will help companies like Equitable do a better job of showing what all of the new tools can do.

Even now, he said, “it’s a relationship business.”

Steve Scanlon (Photo: Equitable)