The Annuity Lead

The annuity business is very competitive.  Not only are you competing with other annuity agents, but also with the possibility that the money from a potential client could be deposited into an IRA or a different retirement plan altogether.  Obviously, you want to be the one that the client entrusts with their money, so you need to find a way to make yourself stand out to sell annuities. 

One way to show that you’re an expert in the financial field is by earning specific professional designations.  Think about it – when you’re looking for a new health care provider, would you trust anyone without the “MD” designation?  If you’re an annuity agent and you don’t have a professional designation, you may find yourself losing clients to agents with better credentials.  Just having your insurance license may not be enough to make a living selling annuities.

Some of the better known professional designations include:

• CFP (Certified Financial Planner)
• ChFC (Chartered Financial Consultant)
• MSFS (Master’s of Science in Financial Services).

Each of these designations has different requirements you must meet before you can begin using it.  The CFP designation is one of the most widely recognized in the industry, although you’ll need to take several courses and pass a board exam before you can use the credential.  The ChFC, on the other hand, requires some coursework, but no exam, while the MSFS credential comes from completing a two-year graduate level program.  All of these will make you a far more competent financial advisor and significantly impact your annuity sales.

In addition, there are many professional designations for annuity agents who focus specifically on selling to seniors.  Some states don’t allow annuity agents to use these designations – depending on the wording – so it’s important to check with your state board before you pursue them.  These designations include:

• CSS (Certified Senior Specialist)
• CSRS (Certified Elder Planning Specialist)
• CLTC (Certified in Long Term Care) – this professional specializes in planning for care in nursing homes and assisted living facilities.

For more information on the specific requirements of each credential and the schools that offer the necessary training courses, visit www.brokerworldmag.com.  Depending on your schedule, you may be able to find courses can be taken either online or by correspondence.

At first, these courses may seem expensive – especially to someone just starting out in the annuity business.  But by earning a professional designation, you give yourself several advantages:

• You learn more about selling annuities and marketing annuities. The classes go beyond what you can learn on the job or in a basic college course.  For example, if you earn the CLTC designation, you’ll learn much more about long term care and nursing homes than you would just sitting behind your desk.

• If you want to market to a specific group like seniors, a credentialing program can help you learn more about how to tailor plans to them and their unique needs.

• Professional designations build trust with clients.  When a certain set of letters appears after your name, clients know you’ve taken the time to learn more about how to help them with their financial needs, and will reward you with increased business.

• Often when someone sees a designation after your name, they’ll ask you, “What does it mean?” This gives you a perfect opportunity to market your services to clients you never would have met otherwise.

If you sell annuities, compare earning professional designations to the steps an educator takes to advance in their career.  Most school principals begin as teachers with bachelor’s degrees.  Later on, they earn master’s degrees – usually in administration – to learn more about working as school principals.  As you progress in your career, you may find that you need the additional education and qualifications provided by a professional designation course to advance in the field of selling annuities.

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The absolute worst thing you can do when selling annuities is to use a “one size fits all” sales process, marketing annuities in the same way to each of your prospects.  Think about it – just like no single pair of pants really fits everyone in the world, every one of your prospects will respond differently to the many emotions and motivations involved in the annuity buying process.  For example, one buyer may be swayed by the security offered from the guaranteed payments of an income annuity, while another may respond more to tax-deferred benefits of fixed and variable annuities.  It’s up to you as the agent to understand your prospect’s specific goals and needs to have success at annuity selling.

But how do you begin the process of understanding your annuity prospect?  You can’t really ask, flat out, “Tell me about your secret motivations.”  At best, your comfortable will feel uncomfortable and move on to another agent, while at worst, your meaning could be misconstrued, leaving you in an uncomfortable situation!  Fortunately, there are a few conclusions you can draw from the basic information your client provides as part of the initial consultation.  For example:

• How old is your annuity prospect?

The age of your client should be one of the key factors in determining how you market annuities to him or her.  Elderly clients have different concerns than young couples or families. For instance, they may not respond as strongly to the idea of their investment growing over time compared to the benefit of a guaranteed regular payout.  So if you stress the right benefit to the right age group, your annuity selling is more successful.

• Is he or she married, and if so, are there children in the family?

Parents typically have a vested interest in providing for their children’s future, whether through savings for college education or a sizable nest egg that will be their legacy once they’ve passed.  You can use this desire for stability and security to your advantage in the annuity sales process, with projections of future annuity value.  Such projections would have little impact on someone single and age 80.

In addition to this basic information, you need to pick up on the subtle clues that your annuity prospect is dropping throughout your meetings.  One great place to start is with the question, “Tell me about your financial history.”  Of course, all agents use this question to get a feel for the size of their clients’ wallets, but we’re going to extend it further to uncover some of the more hidden motivations.  Instead of just breezing through their responses, ask them to reflect on the financial decisions they’ve made. 

If, for example, your prospect lost $50,000 on a failed small business start-up, ask how they felt afterwards.  If your client exhibits fear at the thought of losing so much money, try to market annuities that feature guaranteed returns over time.  On the other hand, if your prospect expresses frustration over what that money could have been doing over time, he or she may be more susceptible to pitches that revolve around long-term gains or tax-deferred benefits.

Pay special attention to any specific statements – either yours or the prospects – that cause your client to become uncomfortable or emotional.  These statements are the key to discovering the hot-button issues that you can use to tailor your sales presentation and increase your annuity sales success.  Don’t think you can get away with repeating the same tired message over and over again – by learning to understand your annuity prospect and implementing a customized sales message, you’ll dramatically increase your annuity sales and make customers for life.

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You already know that one of the most challenging aspects of selling annuities is finding qualified leads to pitch your products to.  Cheap lists of leads rarely pan out to actual clients, but prospecting individual leads can take so much time that it cuts into your profits.  One relatively unexploited avenue is using mortgage protection leads to sell annuities.

With the current economic recession, people are worried that they may lose their jobs.  They want to make sure that the mortgage is paid and they aren’t left homeless in this situation, so they purchase a mortgage protection plan – another form of insurance – to make sure their bills are paid in case of job loss, disability or death.  In recent years, many annuity agents have found that mortgage protection leads have resulted in some of their best clients to sell annuities.  But what makes these leads stand out among others?

• Someone who purchases mortgage protection wants to make sure their family is taken care of if something happens to them.  These types of people are often very receptive to hearing about other financial products that guarantee specific returns.

• Homeowners usually have the financial ability to invest in annuities or other retirement plans – more so than renters, who may be living paycheck to paycheck.
 
• Purchasing a home and taking out a mortgage protection policy indicates a certain level of financial responsibility.  Therefore, these leads are more likely to be interested in planning for retirement or for dire circumstances.

However, the real trick is that once you get the lead, you have to convert a person who indicated an interest in mortgage protection insurance into an annuity buyer.  During your initial consultation with one of these leads, there are several questions you can ask to encourage this change in thinking, such as:

• Do you feel that you are fully prepared if you become disabled, laid off or unable to work?

Mortgage protection only pays the mortgage, so how will you handle other bills?  The guaranteed returns of an annuity can be a great way to assist with these expenses if you aren’t able to work for any reason.

• Do you currently have a life insurance policy, and, if so, is it earning you the biggest possible benefit?

People who are concerned about their homes are likely also concerned about their families and spouses.  If they have purchased a life insurance policy, they may be able to earn a higher rate of return on the investment producing an annuity sale.

• Do you have additional income or savings that you’d like to grow tax-deferred?

Homeowners and professionals and who have already maxed out their 401K and IRA contributions may be sitting on substantial savings that could benefit from the tax-deferred aspect of an annuity.  If they’re interested in protecting their homes, they should also be interested in protecting their savings.

But where can you find these leads?  There are many companies that offer mortgage protection leads.  If you’re part of a big financial firm, you may be able to get leads from another division of the same company.  If you’re an independent annuity agent, consider forming a partnership with a mortgage protection agent to share business and leads for your mutual benefit.  If you aren’t able to set up a partnership or share leads within your company, try searching online for lists of these leads for additional annuity sales.

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Now, more than ever before, people are looking for security when they may financial decisions.  For some people, this involves seeking out the advice of a qualified financial advisor to assist in making the tough decisions about how their money is invested.  Obviously, you want to be this person that customers flock to with their assets, but how can you position yourself as a trusted advisor in the financial field?  How can you sell annuities and also serve people well? The key is in building a relationship with your clients.

Think about it – would you rather do business with a slick person who swoops in with glossy brochures and polished sales messages, or with someone who sits down with you to discuss your financial options and genuinely seems to care about your financial well being?  This distinction becomes especially apparent when dealing with senior citizens, who may be especially wary of dealing with anyone who comes off as too professional and impersonal.  There are several steps you can take to build this relationship with your existing clients and in the process sell annuities to them and their referrals:

• Try to get a full understanding of their financial situations

It isn’t enough to find out how much money a client has sitting in bank accounts and retirement investments.  Take the time to sit down with a client to understand the whole picture.  Where do they owe money and in what amounts?  What are their biggest fears about money?  When do they plan to retire and what type of lifestyle would they like to lead at this time?  When a client feels that you truly care about finding the best solution for them – whether or not it’s your product – they’ll be much more likely to work with you resulting in more annuity sales.

• Explain the terms of your annuities fully

A lot of annuity agents get a bad rap for glossing over the terms of annuity surrender periods and the fees associated with early withdrawals, leaving participants unaware of the risks associated with the investments.  And although these tactics may have helped them to make sales, the deception eventually catches up – many of these brokers are now being investigated by the SEC and may be subject to harsh fines and criminal sentences.  Instead, take the time to make sure your clients understand both the benefits and risks of annuities fully.  You don’t need to define every technical term in the fine print, just be sure that your clients are clear on what’s involved in the annuity. You’re likely to make more annuity sales to referrals when your clients feel they are fully informed.

• It’s the little things that matter

Sure, it may sound cheesy, but send that birthday card or Christmas card to clients that have purchased annuities with you.  They’ll appreciate your thoughtfulness and keep you in mind if they’re thinking about making further investments.  Also, take the time to make a follow-up phone call or two once a client has purchased an annuity to make sure that everything’s going according to plan and to see if they have any further questions.  Your clients will see you going the extra mile and feel more confident in the annuities they’ve purchased from you.  This is what leads to repeat annuity sales and referral annuity sales.

The real payoff from building a relationship with your client comes in the form of referrals and additional business.  People talk, and if they’ve had a positive experience with you, they’ll be much more likely to recommend you to other people they know that are looking for financial assistance and investment opportunities.

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Annuity companies offer a wide range of products for investors in different age groups and taking into consideration various other parameters. Selling an annuity product to an investor takes a great deal of effort on part of the company and the representative. Companies use various kinds of strategies to sell their annuity products. While some use the concept of hard selling to sell their products, others use marketing strategies to create a pull. Let us see some of the strategies that are adopted by companies to package an annuity product, sell annuities to the investor and how they service the product once it is sold.

It is important to remember that like any other product an annuity also has a sales cycle. It starts with marketing and ends with servicing the product.

As we all know there are various annuity products offered by different companies. The annuity products are categorized under two broad headings of immediate annuities and deferred annuities. Advertising products in the print and media plays a large part is the brand and product visibility. Internet marketing is also catching up in a big way. Nowadays, customers have also become much more educated about the annuity products that they buy. With information available at their fingertips, they have the option to compare a wide range of products offered by different companies. Customers use annuity tables to calculate the return that they can expect from a particular product. As a result the sales representative of the companies are also bracing themselves up to face the new generation of knowledgeable customers. 

Under the two broad categories of immediate annuities and deferred annuities, there are specialized annuity products which are sold by the Insurance companies. A proper segmentation of customer base is done before the customers are targeted. The profiling of customer base is very important before a product is targeted at the customers.  A person with a high disposable income and age on the lower side of the 40’s may be interested in a variable deferred annuity in prepration for retirement. Age, income and financial factors are taken into consideration before a product is pitched. The software applications used by various insurance companies are able to do this detailing to a great extent.

To keep their cost of selling low, insurance companies prefer to do cross selling and up-selling of various products. It is not surprising to hear a reverse mortgage agent pitching an annuity product to an existing customer.  The market for annuities has become much more competitive than what it was a decade back. Companies are offering a new range of annuity products almost everyday to keep up pace with investor’s changing financial requirements.  This trend is going to continue and more sophisticated financial products are in the offing for potential annuity buyers.

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