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Life Transitions Open Complicated Doors

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What You Need to Know

  • Lifequakes happen three to five times in the life of a typical person.
  • Some are happy. Some are not.
  • During transitional periods, simple solutions may look like the best solutions.

Working in financial services, I appreciate that the only constant in life is change.

I see it firsthand every day.

And while bad experiences tend to work themselves out with time, the continual series of life phases requiring transitions can often feel overwhelming.

Bruce Feiler, author of “Life is in the Transitions: Mastering Change at Any Age,” interviewed hundreds of people about their life transitions. His findings showed a major life change occurs every 12 to 18 months, on average.

Huge ones — what Feiler calls “lifequakes” — happen three to five times in each person’s life.

As Feiler explains, some lifequakes are voluntary and happy occasions, while others are involuntary and unwanted.

Life transitions most often fall into a few general categories — like marriage, death of a loved one, divorce, or moving to a new home.

In reality, however, these transitions can appear different for everyone.

And many are not this “typical.” Your role as a financial professional may be to limit the scope (and impact) of fundamental life transitions for your clients.

This is where financial planning conversations begin.

Let’s face it … planning for retirement can already be complicated. Helping clients plan for retirement alongside their emotionally driven transitions can be downright daunting.

Given the uncertainty many clients navigate, financial professionals may wonder how best to proceed, how far into the future to look, and what they could do now to set their clients up for long-term success.

What do you do when you’re in the middle of a “transition period” but need to make a financial change? Where do you turn when you may need your assets in the not-so-distant future, but not quite yet?

A short-term mindset can create unique needs.

When a client is planning for retirement, it’s imperative to think about the long term, and a comprehensive plan should include strategies to help clients live comfortably in retirement for many years to come.

But those in transition often call for a more short-term approach.

This could mean a client is experiencing a “typical” transition like receiving an inheritance or proceeds from a home sale … or something less common and more unique to their situation.

They may also be “stuck” in transition.

Perhaps they’re close to retirement and simply burned out on making decisions.

This type of client may be tempted to park their money and let it grow while they fine-tune their next steps.

Whatever the case may be, clients sitting in transition have a unique set of needs and concerns.

1. They may not be comfortable committing to a financial product with a long surrender period.

They don’t know what may change in the next few years and what their financial position may look like, so they don’t want to “tie up” their money in case it’s needed in the next transition.

2. They’re looking to grow their money, but they’re hesitant to expose it to too much risk.

They want to put their money to work, but they don’t want to worry about the ups and downs of the stock market or losing their hard-earned dollars.

3. They’re even more concerned about inflation.

Inflation is on the minds of many, so finding ways to combat — or keep up — with its impact on savings is likely a topic that will come up.

4. They’re likely looking for something simple.

They’ve made enough decisions about their portfolio, and they may not want to add a complicated investment option.

They may even think that less maintenance is better.

Unique needs create opportunities.

These unique concerns have created an opportunity in the marketplace.

For those clients who feel uneasy about putting their money away for a typical five to ten years in a traditional fixed indexed annuity product, it may be time to look for an alternative solution.

Financial professionals and clients alike may appreciate having a shorter-term FIA that provides them opportunity for growth to combat some inflation, protection of premium from market downturns, and potentially more stable interest rates.

They provide the same amount of downside protection as traditional FIAs and offer comparable growth potential.

And because their growth is linked to the performance of an underlying index, they can perform better than other fixed-rate products, even if the growth isn’t guaranteed.

It’s likely that some of your clients are going through transition periods in life because the age-old adage of “change being the only constant” is true.

These clients may need a simple and stable retirement option to carry them through the transition into the next phase of life.

A fixed indexed annuity with a short-term commitment may be a valuable option to offer your clients, so they can simultaneously participate in growth potential, protect their premium, and focus on their transition and not their portfolio.


Melissa Scheuerman. (Photo: Sammons)Melissa Scheuerman is vice president and head of business development for Sammons Institutional Group.

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