Growing Your Annuity Practice
The techniques outlined in this article make selling annuities to your clients a much easier and a more positive experience for all parties involved. If you have educated your clients thoroughly, and an annuity is a natural fit to solve a problem within their portfolio, annuities will sell themselves.
Growing Your Annuity Practice By Kyle Atkins
A key step is education, which helps clients understand how annuities fit into their portfolio and will make them feel more confident about buying them.
As an agent, you spend a great deal of time persuading prospects to buy annuities. The most effective way of doing this is to educate them thoroughly.
Although a secret formula for the perfect way to sell annuities doesn’t exist, there are some methods that yield more favorable results than others. On the whole, the annuity sales process should be about simplifying the complex to highlight how annuities could be a natural fit for your clients, and helping them to feel confident about their choices.
One of the most essential parts of the annuity sales process is to ensure that clients have a comprehensive understanding of annuities. The best place to start is an overview of the terminology and process of an annuity before you determine the specifics of whether or not annuities are suitable for the client’s portfolio. This includes education on how they will pay for the annuity, the existence and purpose of certain fees, and the pros and cons of the annuity in question.
Once the client has a comprehensive grasp of what an annuity is, highlight the area of their portfolio where annuities may be the right fit. Then ultimately, help them review which company and product are best suited for their needs. Education will help clients understand how annuities fit into their portfolio, and in turn, will allow them to feel more confident about purchasing an annuity from you.
Annuities are shrouded in misconceptions, which creates an interesting challenge for us to sell them. Lack of adequate financial education is one of the biggest causes of these misconceptions, since on many occasions, the only exposure investors have with annuities is through radio or television talk shows.
Because of this, clients have often formed strong opinions about annuities being inherently good or bad without gaining any knowledge of the whole picture. In reality, annuities are only "good" or "bad" based on whether or not they are the right fit for a particular client. Like any other tool, the best choice for a client’s portfolio is the option that best fits a client’s particular needs. This guidance and education can help overcome common misconceptions.
In annuity sales discussions with your clients, avoid being a product pusher; instead, be a problem solver. As a comprehensive financial advisor for your clients, you should work to identify the best possible solution in each unique scenario rather than pushing a particular product based on the size of the commission. Whether or not the Department of Labor’s Fiduciary Rule progresses, we should always do what’s in the best interest of the client.
The techniques I have outlined in this article make selling annuities to your clients a much easier and more positive experience for all parties involved. If you have educated your clients thoroughly, and an annuity is a natural fit to solve a problem within their portfolio, annuities will sell themselves.
Kyle Atkins, CFP, CLU, ChFC, is founder and president of Kyle Atkins Financial Group, Inc. He has more than 30 years of experience in the financial-services industry and is a frequent speaker at educational workshops. Atkins is a 20-year MDRT member with six Court of the Table qualifications and five Top of the Table qualifications.
This article appeared in Advisor Today.