What To Do If Your Clients’ Index Annuities Are Earning Low Returns
Click here for a short video about this month's issue
It’s no secret that I strongly believe in doing annual reviews for every annuity that our clients own. First, because those conversations strengthen my relationship with my clients. Second, because those conversations tend to discuss how their other assets and strategies are performing, which can lead to selling more annuities. Third, because those conversations can lead to referrals to friends or family members who could benefit from my services as a financial retirement advisor…and that leads to more sales. But there is one more CRUCIAL reason to talk with every client about their index annuity policy anniversaries…
Return On Investment!
Making money is the primary reason our clients purchase index annuities. So, it is crucial to our success to do everything in our power as advisors to make sure every annuity generates as much profit as possible. If an annuity is under-performing, we need to find out why…and then make a plan to fix it. Here are two examples from my own clients.
1. We picked the wrong horse to bet on.
A year ago, a childhood friend of mine retired and we moved some money into an index annuity with a large selection of crediting methods—from a variety of indexes. I used the IndexAlyzer software and found which two crediting methods had the best statistical probability of generating the most profit—so we split the funds 50/50 between the two methods. We recently met at the first anniversary meeting and discussed how the chosen crediting methods had only returned 2% growth. And I showed him there were other crediting methods that would have returned MUCH better growth—even though, statistically, they do not back test as well as the ones we initially selected. So, I recommend that we move the funds to two crediting methods that would have returned 13% over the past policy year. He agreed and thanked me for keeping a close eye on his money for him.
2. New Sale Opportunity Discovered
was referred to a new client from an advisor who retired. I met with them to review a policy anniversary statement and showed them that they were allocated in the weakest crediting method their index annuity offered, so we moved the funds into the two crediting methods with the strongest growth potential. They were so pleased that they asked me to take a look at their 5 other annuities, which I was happy to do. I discovered one annuity that had not earned any interest in several years and had only terrible crediting methods to choose from. When I showed this to them and then showed them how strong the crediting potential is if we moved to a brand-new index annuity, they jumped at the chance. So, we will be moving those funds in 3 months when their current annuity comes out of the surrender period.
Just give us a call or email, and we can run analytical comparisons of the existing crediting method options in their current annuity. Or we can recommend the best new annuity to move to, if that is a better option.
Reach out to us—we’re here to support your success : 800-200-9194.
info@twhagency.com
~ Greg Skogsberg
Click here for a short video about this month's issue
We now have annuity contracts with FORTY-ONE carriers. More than any other FMO! And this is just one of the reasons we are The #1 Concierge FMO in America!
Gregory B. Skogsberg
Greg is the President of TWH Agency with 20+ years of professional experience. Greg is a seasoned management consultant who has worked for organizations of all sizes in locations all across the country.
