Tailoring Annuities to the Needs and Wants of Your Clients

The first step is to conduct a thorough fact-finding mission.

By Chris Conklin

hen I first started my career, a mentor told me that the key to success in selling is figuring out what my clients want. In a nutshell, he said, “Figure out what they want; then give it to them!” When you understand their financial goals and position the right products, their resistance to buying often melts away.

Since every client wants something different, in order to have any success in selling, you need to have a great fact-finding method to help determine the client’s true wants and needs. This is more important than ever due to the Department of Labor’s fiduciary standard rule. To serve each client’s best interests, you need to have a reliable way of uncovering what that client wants.

When we asked clients what they are ultimately trying to achieve with their financial planning, we discovered that a fixed annuity is a good way to meet their objectives. This is because a fixed annuity offers what most clients want: safety and growth potential.

The following three steps can help you position an annuity to a client who wants to protect, grow and ultimately use his or her hard-earned dollars for retirement.

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1. Determine what assets a client currently has. The first step of tailoring your recommendation includes determining what type of retirement savings plan a client currently has. Your client may have his or her retirement savings mostly in stock mutual funds, or in bank accounts and money market mutual funds, which are paying essentially no interest today.

While this option may not be serving them as well as it could, clients are often happy with the choices they’ve made and may not want to hear about alternatives. However, it’s important to help them understand that their current strategy may not be in line with their long-term goals.

2. Understand the client’s long-term goals. To help understand what your clients’ priorities are, ask them the following three critical questions to better understand what they are want to accomplish with their retirement savings:

1. Are you trying to create a steady, reliable income stream in retirement?

2. Do you want your income to be guaranteed to continue for the rest of your life?

3. Do you want to know right now what income you will be able to rely upon, without any guesswork?

These answers can help uncover a client’s post-retirement goals. I have found that clients typically answer yes to all of these questions, which helps transition the conversation to whether their current financial strategy actually accomplishes each of those goals.

If a client is relying on some of the most common places where people typically put their retirement savings, such as mutual funds or bank CDs, these products don’t enable them to answer “yes” to these questions. This exercise can help your clients see that their current financial strategy doesn’t deliver the results they are looking for.

3. Discuss how an annuity meets their needs. A fixed annuity can be a great financial vehicle to help clients meet their financial goals. A fixed annuity provides minimum guarantees, which can offer clients peace of mind because they know that they will never earn less than the stated minimum. Also, fixed annuities have numerous income options a client can choose to help turn a nest egg into an income stream at any time. This safety, protection and liquidity can help a client in retirement.

Remember that fact-finding is a winning proposition for all parties involved. Your clients win because they end up with products that better meet their financial wants and needs. And of course, you win because it helps you make more sales and gain satisfied customers.

Chris Conklin is vice president of individual annuities at The Standard, where he has full P&L responsibility for the individual annuities line of business. Conklin is a Fellow of the Society of Actuaries, has sold insurance and annuities, and co-owned a national marketing organization.