Trying to Become Successful at Annuities

[gymguy]

So my brother is trying his best to become successful at selling annuities. Currently he has a connection with a guy who can put him in front of a few highly interested people per month. This is great and all, but its just not enough.

His goal is to find a way to create a system so to speak where he can consistently write new business. He has funds to invest in marketing if need be. I know he is not series 7 licensed.

So here are my questions:

What are some of the ways you annuity guys get new business?

What kind of marketing, if any, is most effective?

Is cold calling at all effective for this type of business? If so, what is parameters would you filter when buying cold call data?

Thanks for your time. I do appreciate it.

 

[DHK]

Annuities (like all forms of insurance) are a solution to a problem. Until a problem is identified and exposed, it isn't a problem.

What kinds of problems do annuities solve?

1) Will I run out of money?

2) How much income can I withdraw from my retirement portfolio accounts and have my money last the rest of my life?

3) What is "reverse dollar cost averaging" and how could it permanently affect my retirement portfolio while taking income?


In my opinion, annuities are best sold as a portion of one's larger portfolio in order to guarantee a portion of their assets.

There's Van Mueller's favorite questions:
- "Do you want to be rich, or would you like to absolutely, positively guarantee that you will never be poor?"

- "If I can show you a way where, even if you run out of money, you won't run out of income, would you want to know about it?"

- "Do you have a strategy that guarantees that you will never run out of income? Would you be interested in working with me to develop one?"


Once he knows what his product does, he can then define his approach and define his ideal target markets.

 

[gymguy]

Annuities (like all forms of insurance) are a solution to a problem. Until a problem is identified and exposed, it isn't a problem.

What kinds of problems do annuities solve?

1) Will I run out of money?

2) How much income can I withdraw from my retirement portfolio accounts and have my money last the rest of my life?

3) What is "reverse dollar cost averaging" and how could it permanently affect my retirement portfolio while taking income?


In my opinion, annuities are best sold as a portion of one's larger portfolio in order to guarantee a portion of their assets.

There's Van Mueller's favorite questions:
- "Do you want to be rich, or would you like to absolutely, positively guarantee that you will never be poor?"

- "If I can show you a way where, even if you run out of money, you won't run out of income, would you want to know about it?"

- "Do you have a strategy that guarantees that you will never run out of income? Would you be interested in working with me to develop one?"


Once he knows what his product does, he can then define his approach and define his ideal target markets.

This is great stuff, and I appreciate your feedback. I am sure my brother will too. Ill pass on this info asap.

However, I am still trying to help him identify a way to consistently get new clients. I sell Final expense over the phone. I know what problem my product solves and I know my target demographic. However, and I say this with the utmost respect, just because I know those things, does not inherently mean I know how to find new FE business.

Again, your info is great and surly will help him, so thank you for that. I can tell your post took some time.

 

[DHK]

New Edward Jones reps go door-to-door. It's a way for people to "size you up", look you in the eye and sense your sincerity.

I'd go door-to-door and introduce myself and talk about some of the problems you help families and retirees address in their long-term financial planning. Don't bother with a list. Most homeowners are families needing to prepare for retirement (and need life insurance themselves), or are retirees themselves.

I have a couple of "talking points" flyers that I put on my facebook page. Depending on his compliance department, etc., it could be a good starting point.

Retirement Talking Points: https://www.facebook.com/davidkinde...0.1424840938./913301765355942/?type=1&theater

Family Planning Talking Points: https://www.facebook.com/davidkinde...0.1424840938./913301612022624/?type=1&theater

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And yeah, my post took a lot of time - a few years at the school of hard knocks to put all that together!

 

[gymguy]

New Edward Jones reps go door-to-door. It's a way for people to "size you up", look you in the eye and sense your sincerity.

I'd go door-to-door and introduce myself and talk about some of the problems you help families and retirees address in their long-term financial planning. Don't bother with a list. Most homeowners are families needing to prepare for retirement (and need life insurance themselves), or are retirees themselves.

I have a couple of "talking points" flyers that I put on my facebook page. Depending on his compliance department, etc., it could be a good starting point.

Retirement Talking Points: https://www.facebook.com/davidkinde...0.1424840938./913301765355942/?type=1&theater

Family Planning Talking Points: https://www.facebook.com/davidkinde...0.1424840938./913301612022624/?type=1&theater

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And yeah, my post took a lot of time - a few years at the school of hard knocks to put all that together!

You are the man! Thanks again

 

[TevisVerrett]

Buhravo to DHK for Van Mueller's Questions. . . that was HUGE!

A definite download and warchest item.

Grateful thanks!

 

[davephx]

In my opinion, annuities are best sold as a portion of one's larger portfolio/QUOTE]

Exactly !!!

With the gains in the last 5-6 years I am starting to de-risk portfolios by creating a secondary liquidity bucket using IA's or perhaps for younger clients IUL. The great recent market has done more than twice as well as the post tech bubble recovery before the 2008 crash.

The key is while I expect over the long term equity investments are going to outperform any insurance protect I seek protection from having to sell equities after a significant decline which would lock in the loss.

Lets say we have another market crash in 5 years (I don't expect it sooner but who knows).. I mean like 20-30% not just a short term 10% correction like now. Client takes income if needed from gains while market is good and locks in gains.

If market goes down 20% client can access the IA - on a say 10yr IA after 5 yrs the surrender cost in excess of the 10% annual free withdrawal is only 5%. This is much cheaper than locking in a 20% market loss if needed to take from equity investments. Heck even in 1st year a 10% surrender after the 10% free withdrawal would be better than taking from equities if we had a say 20% loss and money was needed.

For the 10 years I can get client a 5% cap S&P500 pt-pt with no losses and what is most important is no reset. So you don't have to recover losses to get to gains like you do in the equity bucket.

I have lots of $500k-$1mil+ equity portfolios with great returns but am starting to suggest de-risking them with maybe $100k-$200k in IA's. I like one with a 5% cap and a bailout rate of 3% which makes it less likely the cap rate will go down to that. Over the next few years with higher interest rates IA's may be able to raise instead of lower the caps as they have to put less in the bond side.

I do not use most bonds (other than floating rate secured debt) at all in portfolios. We have enjoyed 30 years of declining interest rates very favorable to bonds. The cycle with near all-time low rates should reverse.

Anyone looking at bonds should understand their duration. Even a 5 yr bond duration will lose about 5% of every 1% increase in interest rates. The 10-year treasury now about 2% has a historical more normal average of about 7%. Many bonds today may be more risky than equities if we ever get back to normalized interest rates.

Corporate bonds may have more risk than Treasuries since we have such a huge excess demand for Treasury debt. For years now we have had at Fed auctions 3-4 times the bids for bonds that what is available, especially with the drastically reduced deficiet and lower amount of Treasuries issued.

So while the bond market for downside equity protection use to be good to reduce risk, it may not be today. Enter some good IA's maybe make much more sense.