Why advisors need to present annuities to their clientsBlog added by Mike McGlothlin CFP®, CLU, ChFC, LUTCF on June 24, 2014
Mike McGlothlin

Mike McGlothlin CFP®, CLU, ChFC, LUTCF

Fort Wayne, IN

Joined: March 06, 2014

Too many advisors follow the herd to manage assets without focusing on the client need. This behavior leads us to overlook solutions that clients desire and that will add value to the client/advisor relationship. If we look at products in a different light, we might see new avenues to enhance our clients' portfolios and solve one of their biggest uncertainties — retirement.

Advisors continually tell me that they don't want to lock up their clients' assets with annuities, and advisors tell me their clients don't like all the fees. In a recent survey, 91 percent of annuity owners had positive or neutral impressions of them. When you dig deeper into the survey, you find that 70 percent of annuity owners say the annuity's expenses are worth the benefits they are receiving from it.

Financial professionals need to present annuities to their clients. Nearly 40 percent of the people surveyed who did not own an annuity indicated they would consider buying one but have not been presented the opportunity to do so by their financial professional. This opens a large opportunity to have a meaningful discussion with pre-retirees and prospects about the benefits of re-positioning a portion of their assets into annuities.

Liquidity remains a hurdle for many advisors. It's important to position the correct amount of assets into an annuity when working with clients. However, the same study found 78 percent of people who own annuities are satisfied with the access to their money. More importantly, many new immediate annuities provide liquidity features that allow as much as 90 percent of the period certain to be provided in a lump sum to the annuitant. These features provide ample opportunity for the advisor and client to be flexible in retirement planning.

Regardless of your view on annuities, it's time to have a quality conversation with your distributor on the new generation of annuities. You don't know what you don't know until look at things differently.
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