Bringing Innovations To Boomers

"Don't assume an innovation can be sold in the same manner as an existing product," suggests Fenton. "You need to talk to the consumer about it." A true innovative product will need more than one session, he says, so be patient.

If the product is a lot different from existing products–such as the first living benefit feature–the advisor needs to allow time to digest it too. Study it carefully, look at the pros and cons, see the illustrations, read all the pertinent materials, and talk to more than one person, Fenton suggests.

Some innovations don't fall into traditional categories, and that raises questions about how to market and sell them, Newcomb points out.

He cites index annuities as an example. They have been around for over 10 years, he says, but debate still continues over whether they should be marketed as insurance or securities. Similar debates could erupt over other innovative products, he indicates.

The lesson? If marketing materials say an innovation is a fixed insurance product but it walks and talks like something else, such as a security, be careful about how to present it and recommend it, Newcomb says.

When making the presentation, he adds, be sure not to offer incidental advice related to the innovation (or any product) that is outside the parameters of one's license. "There are all sorts of subtle landmines in the regulations that can go off," he explains.

What about product performance? Some boomers want to review a product's history and are uncomfortable when it is not there, say advisors.

Gott's advice is to check around for the information that is available. "It may be that the product is new in your state but not in another state," she says, "so you could get some information elsewhere. Or, maybe there is information from a pilot test on the product that the carrier ran. See if you can get that."

Alternatively, look at the performance of the institution offering the product, says Streiff. "You won't have history about how the innovation did 3 years ago, but you can certainly talk about the company, the service, the ratings and related details."

And remember, "any product can be looked at in relation to what's already in the market," says Noel Abkemeier, a consulting actuary and principal at Milliman, Inc., Williamsburg, Va.

"The potential is that the advisor will understand 90% of it already, and so too the customer. In that case, focus on explaining the 10% that is new."

It can help to point to advertising or media coverage, if available on the innovation and if it's understandable, says Streiff. But such information can also cause confusion, he cautions, particularly if the product is complex and requires deep understanding or has significant differences from what is more widely known.

Should the advisor try to leverage the early-adopter phenomenon as part of the product presentation? Early-adopters are those who prefer to be first to have a new product or service. "Some boomers do like to be first," says Streiff, "but this is not as powerful a selling point in financial products as it is with technology products." With financial products, he says, "boomers need to see the advantage of owning the innovation."

His suggestion is for the advisor to focus on clearly understanding the product–its true differences from other products the client sees, the significance of those differences, and how to educate the client on those differences.

Then, when there's a fit with a client need, make a clear and convincing presentation, he says. Be sure to factor in how the client is likely to relate to the differences, he adds. Perhaps draw parallels to other products the client has, ask questions or anticipate doubts.

Advisors shouldn't have to go solo on this education, say sources. It's in the best interests of insurers and distributors to address what is different or has changed, explains Abkemeier. "Actually, it's in their double interest to do this. They need to provide enough information 1) to enable the product to be sold, and 2) to avoid being involved in a class action lawsuit concerning the product later on."

But advisors definitely should take responsibility for offering an innovation if it really is a better mousetrap and if it really does carry things forward for the client, Abkemeier says. "Those who don't will eventually fall behind the competition."

The competitive advantages do need to be assessed, agrees Newcomb. But "when I see an innovative product, what I really want to know is: What is the worst case possible scenario with this product, and what could cause it to occur?" If he doesn't get a suitable answer from the provider or wholesaler, he says that tells him all he needs to know.