We're hearing and reading a lot these days about the annuity market and how 2011 sales were a big improvement over 2010. We're also hearing a lot about how annuities seem almost perfectly designed for today's economic environment, especially in a society full of people who are living longer and growing concerned about outliving their savings.
In this roundtable, we look beyond the statistics and talk to the top producers who are generating those numbers.
To get the producer's perspective on today's annuity trends and how to capitalize on them, we turned to the following panel of top producers for their viewpoints: Ryan Pinney, Alan Schuh, and Kirk Wilkerson.
Participant Bios
- Ryan Pinney serves as the vice president of brokerage sales for Pinney Insurance Center, a national brokerage general agency that provides insurance, investment and financial planning advice combined with proprietary tools to assist agents and financial advisors. Ryan is a three-time MDRT Top of the Table qualifier. He currently serves as the local president of NAIFA Northern California, as a member of the MDRT Member Communications Committee and as a member of NAIFA California's Social Media Task Force.
- Alan Schuh of Alan Schuh & Associates LLC, in Weston, Fla., has been helping individuals and business owners preserve their assets, increase their income and reduce income taxes for more than 23 years. As host of Safe Money Radio, he helps people protect their retirement money. His firm's mission is to teach clients safe-money strategies, with a focus on IRA/401(k) rollovers, retirement/income planning and capital transfer strategies.
- Kirk Wilkerson of Forest City, N.C., is a registered representative and investment advisor representative who offers securities and investment advisory services through AXA Advisors LLC. Kirk is a nine-year Million Dollar Round Table member with six Court of the Table and one Top of the Table distinctions. His practice is dedicated to helping individuals and businesses build their financial futures.
Last week, the panel predicted even higher sales of annuities in 2012 and discussed variable annuities. This week, they look at indexed annuities and why guarantees are so popular.
Indexed annuities: A worthwhile product?
Charles Hirsch: A discussion of variable annuities always brings to mind indexed annuities. What are your thoughts on indexed annuity products? Can you talk a bit about where you see the best opportunities for indexed annuities, and what kinds of prospects typically benefit most from them?
Kirk Wilkerson: Equity indexed annuities have been plagued by controversy, and we don't offer them to our clients. There are a number of differences between EIAs and VAs, including features, limitations and fees, as well as how the products are regulated and the licensing requirements of those who sell them.
VAs are securities governed by the SEC and sold by prospectus. The individuals who sell them must hold certain registrations from the Financial Industry Regulatory Authority (FINRA). We have chosen not to use EIAs because of these differences. We think we can achieve the same goals and protections for our clients by educating them about other choices they have. It's the client's money; they should know exactly how a product works and is regulated. Transparency is the key.
Ryan Pinney: I like indexed products and see a lot of potential for them when they fit. Indexed products will be used extensively with clients in their late 50s all the way into their early and mid-80s.The indexed marketplace is very diverse, and different products allow for a wide range of uses, from 401(k) alternatives to creating a guaranteed future income stream. The goal with indexed products, or any annuity for that matter, is to ensure you fully understand the client's financial objectives. Suitability has become a major focus in the annuity industry and for good reason. Advisors who sell without the proper understanding of product features, surrender changes and rider fees can do a lot of damage.
