Traditional FIAs were not designed for qualified plans, but all that is changing. There are currently six reasons your clients are not moving IRA money into an annuity:
1. You don't practice your craft. Even the most talented people in the world practice what they do to maintain a level of excellence. Get good at what you do and don't just make a living, make a difference. If you're not closing 100 percent of the cases you're in front of and you don't have more cases set up in front of you than you can possibly work, then there's room for improvement.
2. You don't have the right support team behind you. Does the marketer connected to your main product give you marketing ideas and sales tips that help you close deals, or do they just read brochures to you?
3. Clients want interest crediting methods they can understand. Ever try to explain a modifier in an annuity (such as monthly averaging) to a senior along with how it affects the interest credited to their account, and leave that prospect (notice I did not say "client") 100 percent unsure of how it works? Keep it simple. Do your homework. Products do exist that are easier to understand. Why would a client who is required to take a distribution put money into a product that will not credit interest on that distribution if it is not on the proper date?
4. Clients have already seen an annuity just like the one you're trying to sell them. Until recently, the only way you got a chance to sell an annuity to a client was to start out by impressing them with your knowledge of taxes, IRAs, Social Security, probate, your competition, how long you've been in the business, how many people you've helped, and generally how smart you are; only then, when you got a glimpse of credibility in their eye, could you pitch the annuity. The technology has changed and there are products available to give you the credibility and differentiate yourself from your competition.
5. The risk/reward ratio has changed for your clients. Since the difference between "safe money" CDs and guaranteed rates of annuities are not that far apart, your clients must now be compelled to venture into the unknown with the product you're proposing. You have three choices: decrease the risk, increase the reward, or the best case scenario -- do both. Technology has changed and there are products that fit this best case scenario. Do yourself, and more importantly your client, a favor and seek them out.
6. Your client doesn't want to choose their financial advisor by their ability to predict the future and would like to maintain their premium while taking their RMDs. If you give your client an illustration showing any kind of a return (historical, hypothetical, average, etc.), you'd better be prepared for the question "What if I don't make that much?" The second question that always follows is, "What if I don't want to take my RMDs; I'd prefer to leave the money to my heirs." Think about it from your client's perspective. Have you ever met a senior who consider themselves rich, or is it more likely they think of themselves as hard workers who maybe got lucky a few times, but overall made some good decisions? Since you likely answered the latter, every financial person throughout their lives who promised to make them rich, failed! Why put yourself in that same category?
Help your client plan for the worst and hope the best happens, rather than planning for the best and hoping the worst never happens. You will be seen in a much more favorable light. Show them guarantees and if you do better, they'll love you for it.
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