12 tactics to convert annuity leads

A pipeline full of strong annuity sales leads means nothing unless you know how to convert them. Here are 12 battle-tested tactics that, according to the experts, work particularly well with senior prospects–even those who bring lots of baggage to the table.

1. Start with a non-salesy informational meeting, where you introduce the prospect, in simple terms, to various annuity products, how they work and their distinct features, without pushing them in the direction of a specific product. That opens them up to be educated about how these tools work in specific applications.
2. During the initial meeting, ask questions to uncover the issues that are most pressing for the client, such as, "I don't want to outlive my money" or "I want my money protected from a market decline like the one in 2008." Ultimately, the sale will come down to the advisor's ability to provide the right solution to address those hot-button issues.
3. When it comes down to specific product applications, successful annuity salespeople have a knack for boiling down the complexities of products into terms laypeople can easily understand. "You need to be able to clearly articulate the details about these products without putting people to sleep," McCarthy says. Objective, consumer-oriented, third-party resources that explain how various kinds of annuities and features work and that provide side-by-side product comparisons, such as his company's Annuity Intelligence Report, can help, he adds, as long those resources don't come with an obvious sales agenda.
4. Use illustrations to help make the complex simple, and to keep your audience engaged. Sometimes a graphic on a whiteboard or a projection screen can hammer home a point when words cannot. Also, illustrations keep people actively engaged in the conversation.
5. Ground the prospect's expectations by being up-front about the limitations and shortcomings associated with the products you're discussing. Don't dance around issues such as liquidity limitations, surrender charges, fees for guarantees, etc. "You're getting them to a level where they have reasonable expectations and feel comfortable with the product and what it can and can't do," McCarthy explains.
6. Do a "what-if" walk-through using real-life illustrations tailored to the prospect's specific situation to show, for example, how an indexed annuity's annual lock-in feature works when the market index to which the contract is linked does X, Y or Z in a given year.
7. Put guarantees on the table. Prospects are willing to pay extra for the comfort that comes with a guarantee. Nowadays, close to 90 percent of new variable annuity contracts are purchased with some type of living benefit guarantee, whether it's to address longevity risk, market volatility or income needs. Similar living benefits are also gaining traction with index annuity buyers. "The advisor who can explain how a guarantee on a GMWB (guaranteed minimum withdrawal benefit) works is going be very well positioned" to close more prospects, McCarthy asserts. "In some situations, you need to position the product more as a distribution tool than an accumulation tool."
8. Be exchange-conscious. Existing clients with older annuity contracts are good candidates to convert those dated contracts into new, more robust ones. Indeed, according to McCarthy, some 60-65 percent of variable annuity sales nowadays involve the exchange of one contract for another. When it's clear such an exchange is suitable, it's a matter of getting the client to see the wisdom of the move, he says. "Do a side-by-side comparison and run the numbers so you can show the client, 'Here's what you have now, here's what you can get into and here's what it's going to cost.'"
9. Connect the dots. After everything's on the table, it's time to circle back to the prospects' most pressing issue(s) and show them the annuity solution you're recommending to address that issue. You're reiterating to them what you interpreted their priorities to be, and what you think the best solution is, based on what they've told you. "Show them why you think it's the best solution versus all the other investment options out there," Loffredi echoes.
10. Package your recommendation(s) in a succinct, polished proposal. Spell out all the details about the product you're recommending, why you're recommending it and what your team will do to service the client and the contract. Putting it in writing makes the client more comfortable that they have what they need to make an educated decision.
11. Be passionate throughout the process. From the first educational steps right through the presentation of your annuity recommendation, "your belief in the product [as the right solution] has to be obvious" to the prospect, Loffredi says. "You have to be passionate about it."
12. Above all, that passion must be underpinned by a commitment to transparency every step of the way. Indeed, from a sales, ethics and compliance standpoint, transparency is the only policy, according to the annuity sales experts. "People are more skeptical of things they don't understand," Loffredi observes, "and more apt to commit to something they do understand."
    With that in mind, advisors need to make a point of always providing annuity prospects with the behind-the-scenes view–how the product is designed to work, how the insurance company makes its money, where we get paid out of it and how the client makes their money as well.