How to sell fixed, indexed and variable annuities despite all the bad publicity
By Lew Nason
Insurance Pro Shop
Every day, I have hundreds of financial advisors visiting my Web sites or calling me in an effort to find tips on how to sell annuities -- especially with all of the headlines telling people that annuities are an unsuitable investment for retirees. They want to know how to convince people who don't trust annuities to embrace them as a way to ensure they won't outlive their money.
Unfortunately, when we lay it all out for them, they don't want to hear it. They still want to believe there's a quicker solution that doesn't involve taking the time to read and study. They want a simple idea that will magically attract hundreds of people to them who already want an annuity. These are the same people who will spend thousands of dollars each year on Internet leads or on an annuity sales system that makes outrageous claims like promising overnight success while selling from home in your underwear. I hope you are not one of those people.
I guess what I'm asking you is, are you ready to learn the real insider secret to selling annuities? Yes? Then, let's begin.
First, learn what's not working and why
To learn how to be successful selling annuities, you first need to understand what most agents are doing, and why it isn't working.
The vast majority of financial advisors out there are using Internet leads, preset appointments, free reports and dinner seminars trying to identify and attract people who would benefit by investing in an annuity. Once these advisors find a prospect that has lost money in the stock and bond markets, or has a low interest rate CD, they'll jump right in and try to convince the prospect why they should consider purchasing an annuity.
If they are selling a fixed annuity, they'll tell the prospect that the primary advantages of a fixed annuity over a CD are that fixed annuities have historically provided a higher rate of return. Plus, a fixed annuity has better guarantees; the interest isn't taxed until it's used, so your money grows faster; it can provide a guaranteed income you can't outlive; and it's generally not attachable by creditors.
If they are selling an indexed annuity, they'll tell the prospect that the primary advantages of an indexed annuity over equity investments, managed accounts and mutual funds are that the prospect has the potential to reap the upside of the stock market, without the downside risk to their investment principal. Plus, an indexed annuity has a minimum guaranteed interest rate; the returns aren't taxed until the money is withdrawn, so your money grows faster; it can provide a guaranteed income you can't outlive; and it's generally not attachable by creditors.
If they are selling a variable annuity, they'll tell the prospect that the primary advantages of a variable annuity over equity investments, managed accounts and mutual funds are you can diversify your money by choosing stocks, bonds, and money market options to protect your retirement goals from market volatility and make transfers between those accounts tax free. Plus, variable annuities can even offer guaranteed annual increases; lock in any market gains; the returns aren't taxed until the money is withdrawn, so your money grows faster; it can provide a guaranteed income; and they are generally not attachable by creditors.
All of the things these advisors are telling their prospects are very true and logical reasons to use an annuity; however, in the majority of cases, the advisor is indeed lucky if they are able to walk out with a small annuity sale. Why?
The reason advisors are struggling with selling annuities is they are telling the prospect how great the product is, and logically explaining why they should buy it.
- They are selling a product, instead of a solution to the prospect's problems.
- They are selling features, instead of presenting benefits.
- Most advisors are not making a connection with their prospects.
- They are not building trust and rapport.
- They are making things too complicated.
- They are using technical jargon.
- They are in front of the wrong prospects.
Here are nine simple tips that will help you to immediately sell more annuities, despite all the bad publicity:
1. You must make sure you are in front of the right prospects for you. Most advisors are focused on attracting high-net-worth prospects, which puts them in direct competition with every other advisor. Then, they wonder why these prospects want to talk to their attorney, CPA, stock broker, etc. before they make a decision. There are many niches within the annuity market. You have the low, middle and high net worth people. Within those markets you have pre-retirees and retirees. There are CD owners, mutual fund investors, stock owners, widowed women, annuity owners, tax-free bond owners, IRA owners and the list goes on and on. Each of these niches has a different concern, problem, attitude, likes and dislikes. You have to decide which of these niche markets is right for your expertise, experience, knowledge and products.
2. You must write and speak at a sixth grade level. Then, even the college professors can understand you. You must stop using technical jargon. Most advisors are confusing their prospects by being too technical and going into too much detail. If your prospects are even the slightest bit confused, then why would they want to set an appointment with you, or buy from you?
3. You must build trust and rapport. Whether you are conducting dinner seminars, free educational workshops or just talking to people on the phone, you must be able to demonstrate to your prospects that you truly understand their concerns and their problems. For example, the vast majority of advisors are only getting a 30 percent appointment rate from their educational workshops and dinner seminars. Then, only 30 percent of those people are actually keeping their appointments. The main reason for the low appointment rate and the cancellation of appointments is the advisor is not helping the prospect to see how what they are presenting relates to the prospects situation. Most advisors tend to lecture to the prospect. Or, they are trying to educate the prospect. They are not getting the prospect emotionally involved in the sales process. The advisor is coming across as a sales person instead of an advisor. There is no trust or rapport being created.
4. You must help prospects to identify their biggest concerns for themselves. You can't assume anything. You can't assume they understand their real problems. You must get them to really talk about their situation and tell you how they feel about what's happening. You must do a complete, thorough fact-finding interview to help your prospects to truly understand their problems. For example, initially many retirees will tell you that their biggest concern is outliving their money. Yet, when you do a complete, thorough fact-find you might find that they have plenty of money, based on their current lifestyle. Their real problem is they are afraid to take the income they want each year. So, they aren't able to do the things they really want to do. Or, maybe they are afraid they'll need long term care and they won't have enough money to make sure they have choices as to their care. Or, they are afraid their spouse won't have enough money when they die, because their spouse will lose their pension and social security. Or, they want to make sure they have money to pass onto their children, or a charity.
5. You must really listen to what your prospect is saying. When you're really listening to someone's words, you become connected with that person. And, isn't that the kind of connection that we all want? You can't sell unless you truly understand your prospect's problems and what they really want. You must sincerely listen to the prospect, so you can ask the right questions to clarify the prospects current situation and feelings. However, listening is less important than how you listen. By listening in a way that demonstrates understanding and respect, you build rapport with prospects, and that is the true foundation from which you can sell your prospects.
6. You must stay in constant contact with your prospects and your current clients. It's a simple rule of marketing: The more you stay in front of people who can do business with you, the more opportunities you have to earn their business. If you don't stay in touch, you'll be forgotten. And, if your clients, prospects, and business associates forget you, then they certainly won't do business with you (or refer people they know to you). Staying in touch is not about hounding your prospects and clients until they buy from you. It's about keeping in constant contact with them in positive, non-threatening ways. It's letting them know what's going on, showing them you care, sending them reminders and providing information that's of value to them.
7. Telling is not selling. If you tell the prospect something, they may or may not believe you. Remember, initially in their eyes, you are just another salesperson trying to make a sale. If you want to sell most people you meet with, then you have to get your prospects to "tell themselves" why this works, why it's important, and why they should take action -- now. And, that's about asking who, what, where, when, why and how questions.
8. People buy based on emotion, and then they justify their decision based on logic.
If you want people to buy from you, then you must get them emotionally involved. People buy for many reasons, but they all boil down to avoiding pain and to gaining pleasure, which are emotions. To get people emotionally involved, you much ask questions so they will see and understand the problems they have. The more emotionally involved they are in solving their problems and eliminating their pain, the more likely they are to take action.
9. You must keep the closing presentation simple and logical. Remember, people buy based on emotion, and then they justify their decision based on logic. If you confuse the prospect at all -- give them too much technical information, ask them to make too many decisions, or try to solve all of their problems at once -- you'll have trouble closing the sale. If you use a 25- to 50-page report, you'll generally lose more sales than you'll close. It makes it too complicated and too confusing. People want to know what the bottom line is. If you want to sell more annuities, then use a two-page summary to highlight the end result of the program you are recommending compared to what they're currently doing.
Every top producer knows that selling annuities isn't about you, your credentials, your products, or even the amount of money or income they'll ultimately have. It's about helping people to see and truly understand their financial problems. It's helping them to avoid pain. It's getting them emotionally involved in the sales process and answering their biggest question: "What's in it for me and my family?"
It's why the top producers are consistently able to attract more prospects, set more appointments, get more referrals, and close nine out of 10 sales calls. It's why they are consistently earning $250,000, $500,000 and more per year selling annuities in spite of all the bad publicity.
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