We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • Deciphering the Inequitable, Biased Coverage on Financial Services Products in the Media

    September 30, 2011 by Sheryl J. Moore

    By Sheryl Moore

    Published September 29, 2011

    The U.S. insurance industry is fighting to get equitable news coverage  in a market where securities are king. Here’s what you need to know about the  media, so that we can change it:

    Sensational, attention-grabbing headlines are the lifeblood of the newsmedia  industry. If they don’t get their readers’ attention in the first three seconds,  they are likely to lose your interest. This phenomenon has unfortunately  contributed to a grave problem in our nation’s financial services industry, as  it relates to informing the public on retirement income products. Americans  today are hard-pressed to find reliable, credible information on financial  services; particularly on life insurance products such as annuities. In the wake  of our nation’s economic collapse, this lack of factual information has the  potential to translate to devastating problems for our future retirements and  the legacies we’ll leave for our loved ones.

    Past Problems

    Initially, the problems began with the media reporting on negative issues  affecting the annuity industry. Deferred annuities, retirement accumulation  vehicles that provide tax-deferral benefits and guaranteed life-long income for  the purchaser, were getting a “bad rap” from the press, and rightfully so.

    Just before the turn of the century, distribution changes in the annuity  sales process were resulting in market conduct and suitability problems. At that  time, annuity penalties often exceeded twenty years and 25% of the annuity’s  value; commissions paid to the agents selling the products often reached as high  as 18%. Seniors were being taken advantage of by unscrupulous salespeople.  Regulators stepped-in and made sweeping changes in the name of protecting  consumers. Their actions included developing rigorous suitability processes and  implementing legislation which prevented the immoral salesperson from using  annuities as the tools of their bad behavior.

    Sixteen years later, these regulatory changes have dramatically transformed  both the products being offered, and the commissions being paid to the  salespeople that offer annuities. Unfortunately, the general press is still  under the impression that annuities are still beleaguered by the woes that  plagued the product a decade ago.

    Improper Sourcing

    One of the primary reasons for the perpetuation of inaccurate and slanted  information on annuities is how the newsmedia obtains their information. Today,  most outlets reach-out to Wall Street firms for information on financial  services products. Sadly, these firms do not sell insurance products, such as  annuities; they sell investments. For this reason, the credibility of any  information given on annuities from such a firm should be immediately called  into question.

    In addition to using Wall Street investment firms, the internet has become a  popular source for reporters looking to provide an account on annuities. The  internet obviously has a wealth of information at just the tip of your fingers.  As a result, it is not irregular for a reporter to source previously-published  articles written by their “reputable” peers in the media industry. (This is akin  to using Wikipedia as the source for your doctoral thesis.) Reporters need to  forgo the ease of using the internet, and remember that doing their own original  source work is the only way that they can maintain integrity in their reporting.  Too often, these previously-published articles are inaccurate and have used  improper sources for their data. Ultimately using such tactics can result in an  unwitting publication of outdated and inaccurate information; this is especially  so with annuities.

    Consider the Source

    It bears noting that Wall Street investment firms, who so often are the  source of information published on annuities, specialize in selling investments. Investments do not compete directly against insurance  products (such as annuities). However, the salespeople that sell investments  compete against those that sell annuities, as both parties have a desire to  control 100% of their clients’ assets. Sadly, this often translates to these  sources on Wall Street providing inaccurate and sometimes even defamatory  information on annuities to unsuspecting media outlets, who are simply looking  to inform their impressionable readers.

    At other times, the newsmagazine publishing the negative, inaccurate  information is not so “unsuspecting.” If the media outlet in question has its  pages filled with advertisements for investment products (i.e. mutual funds,  stocks, etc.), you can be certain they are not going to sing the praises of  annuities. No matter how compelling the annuity story, if the advertisers aren’t  happy, the advertisers will take their money elsewhere. Hence, the perpetuation  of negative blasts against annuities in general, as the media outlets struggle  to conserve their advertisers.

    Misunderstanding

    Ultimately, the root of the vast majority of inequitable reporting on  annuities is due to simple product misunderstanding. For so long, immediate  annuities were the retirement product under the spotlight, whenever journalists  wrote on “annuities.” These retirement products provide a guaranteed paycheck  for life within a year from purchase. However, this guaranteed paycheck has the  ability to turn readers off when discussing the high payouts on “straight life” immediate annuities.

    In exchange for a relatively high guaranteed paycheck for life, the straight  life immediate annuity purchaser runs the risk of ‘losing their annuity purchase  payment to the life insurer, should they die the day after the contract is  purchased.’ Although not the only choice for an immediate annuity payout, the “straight life” option tends to be object of intense focus during periods of low  credited rates, as consumers try to squeeze out the greatest value possible in  their retirement.

    Fortunately, the 1980s redirected insurance product development to the  deferred variety of annuity. Deferred annuities give the purchaser the ability  to continue accumulating interest on their principal, prior to receiving their ‘paycheck for life.’ Sadly, however, Wall Street has not communicated this  clarification to those reporting on annuities.

    Lack of Glamour

    Lastly, a lack of glamour has contributed to the inequitable coverage of  annuity products in the mainstream media. Can you recall the last time that you  read about the widow that was able to maintain her standard of living after  retirement, thanks to the guarantees in her indexed annuity? Would you read such  a story, if given the chance? The scenario may not be sexy, but it happens every  day.

    Let’s face it- sensationalism sells. So, providing coverage on the widow that  was bilked out of her nest egg by an unprincipled annuity salesman will likely  receive attention that the warm and fuzzy story won’t. It doesn’t matter that  the happy widows that are provided for outnumber the bilked, destitute widows by  more than ten to one. As a result, the annuity remains “unloved” today.

    Consumers can demand integrity in the press, however, and demand their right  to accurate and fair reporting on financial services products. If you find  yourself in a such a need, I urge you to do your due diligence on the party  reporting on annuities. If all else fails, seek the aid of a third-party  resource. In the end, only YOU can ensure your financial future. Make sure you  surround yourself with the tools to do it.

    Sheryl Moore is President and CEO of AnnuitySpecs.com and LifeSpecs.com,  indexed product resources in Des Moines, Iowa. She has over a decade of  experience working with indexed products and provides competitive  intelligence, market research, product development, consulting services and  insight to select financial services companies. She may be reached at sheryl.moore@annuityspecs.com.

    You can read more from Sheryl Moore at www.annuityspecs.com

     

    Originally Posted on September 29, 2011 by Sheryl J. Moore.

    Categories: Sheryl's Articles
    currency