DO NOT Let Your Clients ‘Wait and See’ What Happens with the Market

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Everyday we are hearing from advisers talking about people who are completely sold on the concept of index annuities, but are hesitant to pull the trigger because they “want to wait and see what is going to happen”. They are scared and in unfamiliar territory with this worldwide pandemic.  They have no experience to guide them, and too many “experts” giving contradictory predictions about what the economy will do in the near and long terms.

While this ‘wait & see’ attitude is understandable, it can also be dangerous for the client if they wait too long, or haven’t taken sufficient precautions.

Here is the quick version of what we are telling clients that are stuck on the fence…

Volatility is up and equities are down.

There might be opportunity with stocks to “buy low” right now, but what if we aren’t at the bottom yet…and “low” gets lower, and lower, and lower?  During the last two crashes we watched securities drop for 3 years in a row before beginning to climb back out of the hole.  This time is likely to be worse than the last two.  And, safe assets like bonds, t-bills, and CDs are all paying such low returns that they are now actually liabilities instead of safety hedge investments.  But wait…there is some good news…

The corporate bond market, options market, and government purchased bonds are all extremely strong (comparatively) right now.  This ties directly to index and fixed annuities, because their underlying interest returns originate primarily from these asset classes.  This is why index annuity rates have remained strong even though EVERY other investment is falling.  Now is not the time to be wondering IF you should be investing in index annuities…you need to be deciding HOW MUCH of your retirement assets need to be moved to the safety from market risk found in index annuities.  No market risk, and returns that have been out performing the DOW and the S&P consistently for the last 3 years!


Although the crediting rates with index annuities have held amidst the financial world panic caused by COVID-19, they may not hold forever.  Eventually the carriers will reach capacity for the year, and be forced to reduce rates to slow sales.  And, the bond and options markets will eventually be over saturated as well and will also pull back in response.  All of which just means that the people who didn’t hesitate too long will be enjoying higher growth than those who sat on the fence for too long.

Never Play Defense, and You Will Keep the Sale Moving Forward

Every year, the process through which annuities and other safe investments are sold becomes more and more cumbersome.  More forms. New suitability rules. Tighter restrictions. Increased Continuing Education requirements.  All of this can result in something going wrong, or some need to go back and meet with the client again. A missed signature, client initials needed, incorrect tax status selected, additional form required, signature guaranty needed—the list is very long.  But, here’s how to handle it when things go sideways…

Never Play Defense!  

Don’t apologize and over explain what went wrong.  Don’t use excuses or blame anyone—including yourself.  Just play it off as if this sort of thing happens all the time, and it is just part of the process.  Just confidently, and calmly, make arrangements to get the situation back on track, and move on.  We can help.


~ Greg Skogsberg



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