5 reasons every advisor should consider Social Security marketingArticle added by Jonathan Musgrave on June 17, 2013
Ranked: #52 (938 pts)
Navigating the complex Social Security system to claim the maximum benefit is a complex process. There are 567 different ways married couples can claim their benefits and the difference in timing and strategies used can equal more than a 75 percent difference in lifetime payments. The majority of financial professionals are not talking to clients about maximizing Social Security benefits simply because they admittedly do not understand the complex program fully themselves.
Today, nearly every marketing organization and direct mail company is heralding their Social Security marketing programs as the best thing since sliced bread — but what’s all the fuss about?
If you are new to Social Security marketing or simply confused by the sudden hype, this article is for you. I’ll share five reasons why Social Security optimization is perhaps the biggest marketing opportunity you will encounter in your career as an advisor.
1. There is no competition
Industry research has shown that 75 percent of financial professionals do not fully understand Social Security, and are not helping their clients maximize the amount they will receive from the program. Think about what that means for a moment. The clients who are usually unapproachable, the ones in love with their current advisor, the ones who are not attending your current seminars — there is a 75 percent chance that no one will talk to them about maximizing their Social Security benefits.
By positioning yourself as a resource for Social Security planning, you are able to completely bypass the existing relationship your prospects have with other financial pros and engage them on a topic no one has ever talked to them about. To make matters worse for our clients, the Social Security Administration actually prohibits their employees from giving claiming advice to claimants. Check out this page directly from the administration’s Program Operations Manual System.
Social Security is an unprecedented opportunity to talk to clients about a pertinent topic no one else is helping them with.
2. Target the perfect annuity buyer
According to LIMRA research, the average age of an annuity buyer is creeping down. In 2012, the average age was 60, with some annuity segments as young as 59. We all know which Americans this age range represents — the boomers.
A surge in birth rates between 1946 and 1964 brought more than 76 million babies into the world who would become the largest and richest generation in American history. Today, they represent 28 percent of the United States’ population and are retiring at the alarming rate of 10,000 every day.
Boomers are currently receiving mixed messages about retirement and Social Security. Some fear-mongering advisors preach that because Social Security is running a deficit, you should claim benefits immediately to ensure you get something from the program. Others are being pitched target date mutual funds, the “sure fire way” to remain in the market and have enough income in retirement. One thing is certain, boomers agree that their number one fear is outliving income in retirement.
As a marketer, I really cannot imagine a more perfect sales environment: baby boomers are being ignored when it comes to Social Security income planning; they are the most affluent people in America; their primary concern is generating lifetime income; and we are in the business of offering guaranteed lifetime income strategies to these very people. As we seek to help clients make wise decisions about Social Security, we’re targeting those people aged 55-63 — the heart of the baby boomers, and the exact age of today’s prime annuity buyer. Social Security marketing opens the door to our best clients in a way other programs cannot.
3. Higher-than-average response rates
We all remember the golden age of seminars, that special time in annuity marketing history when a stamp and a free meal would gather crowds of prospects ready to hear about our innovative new products. But as competition increased and our once obscure products became commodities, the draw of these events began to decline.
In the aftermath, annuity marketers are left to dream of the good ol’ days. What if there was resurgence in seminar response rates? What if you could engage your market with a topic as innovative as FIAs were during the golden age? What if the cost to hold these events was substantially less than traditional seminars?
With Social Security marketing these pipe dreams are closer to reality than you know. Because we are able to address an issue at the foremost of our clients minds and one that is being ignored by the majority of other advisors, response rates are nearly double what they are with traditional seminars. This increase in response also applies to direct response mail marketing. The demand for this information is so high that you can have a successful event without even offering free meals. Venues like libraries, community centers and even hotels are acceptable locations for Social Security workshops. A combination of higher response rates and the elimination of meal costs make Social Security marketing a cost effective marketing method.
4. You have a tangible tool your prospects want
Even though Social Security benefits are highly complex, you can offer real value to your prospects without spending months becoming an egg-head number cruncher. Of course, thorough study and research is necessary, but multiple third-parties have developed software programs that do the heavy lifting for you. Armed with the client’s Social Security statements and one of several reputable software programs, you are ready to begin addressing Social Security benefits with your prospects.
The value of this report goes beyond its analysis; with the ability to generate a comprehensive report for clients that shows them the exact time and way to file for benefits, you possess a tangible tool that your prospects desperately want. This eliminates the loophole that so many prospects jump through between your first and second appointments, because they have to come visit with you again in order to receive this valuable tool. Not only does this increase the response rate to your marketing, it also drastically helps the persistence of appointments throughout the sales process.
5. Seamless transition from Social Security income to overall retirement income
We’ve all worked crappy leads before. You know, the ones that offer one thing but necessitate a tricky left-hand turn to actually begin the income conversation. We use them because they get a response, but we hate them because we’re backing into our process so awkwardly.
Here lies the truest benefit of Social Security maximization marketing: The transition from maximizing Social Security income to maximizing all retirement income is seamless. But the maximization process is not without its own set of challenges. Perhaps the client needs to wait longer to claim benefits than he anticipated, or maybe their benefits start at one level and increase several years down the road. We begin to identify “gaps” of income.
Once you’ve built the foundation for the income presentation, your clients will be salivating at the solutions you provide for guaranteed income that lasts as long as their Social Security benefits and keep pace with inflation.
It’s important to keep things in perspective, so let’s take a step back. There really is no silver bullet in marketing. But what we do have are tools, and as tools go, Social Security marketing is functioning at a very high level today. For advisors looking to offer real value to their clients who are targeting the baby boomer market and are addressing lifetime income with them, Social Security marketing is definitely one approach today’s advisor should consider implementing in their practice.
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