Summer’s gone, but annuity opportunities remain: Blog
October 1, 2014 by Mike McGlothlin
Throughout the summer, I’ve shared information and ideas on the complacency bubble, opportunity cost (otherwise referred to as cost of waiting), clients in transition, income generation and a plethora of other topics to encourage you to change your behavior, along with your clients’ behavior. I think I’ve presented some compelling ideas and data that have the potential to enhance your financial practice and help you manage client expectations.
Throughout our dialogue, the market has continued to march upward, unabated by domestic and global issues that have developed. It seems almost unstoppable, but we know it can’t continue this trend indefinitely. Many advisors continue to choose the path of least resistance, and we see huge amounts of inflows continuing into mutual funds, equities and bonds. I encourage you to keep positioning annuities for some of your clients where appropriate.
Though there are many client scenarios for which you should consider using annuities, here are four prevailing ones that you’ll likely encounter:
- Clients in your book of business over the age of 59½ and still working: Discuss in-service withdrawals.
- Clients within five years of retirement who are still fully invested in the market: Think about starting to lock in those returns with an indexed annuity.
- Clients who have part of the $10 trillion sitting on the sidelines, waiting for advice: Consider alternatives such as single-premium deferred annuities or fixed index annuities.
Clients who have portfolios in need of risk reduction: Possibly reduce exposure to interest rate risk with a fixed index annuity.
As we ramp back up from summer mode into what is, in my opinion, the best third of the year, what type of advisor do you want to be? Are you the one who makes it happen, the one who lets it happen, or the one who says, “What happened?”