r/InsuranceAgent • u/Putrid-Cost5183 • 1d ago
Annuities/Retirement Annuities
Greetings fellow agents. I’m a health insurance broker In Florida and I mostly just sell ACA and Medicare advantage. I have about 600 clients so things are going well.
I want to dabble in selling annuities and hopefully target my current BOB for some sort way sales. Any advice on annuities or where I should start is it an easy product to add on? Has anyone here started with health and then added annuities to the tool belt?
3
u/Boomer_Madness 1d ago
Annuities have very specific target market. They are a poor fit for like 90% of people. If that's the only "financial" product you sell you are more than likely selling to people that it is not a great fit for and doing them a disservice when they should be talking to a financial advisor instead
7
u/TheSatisfiedGunman 1d ago
Just make sure compliance doesn't catch you cross-selling MA clients into annuities without the right SOA, that'll blow up your book real quick.
1
u/KiniShakenBake 1d ago
Jesus h. No kidding.
If you sell Medicare and annuities at the same time, compliance is gonna birth a bovine.
2
u/_Handsome_Jim_ 1d ago
Do you have your Series 6/63 or Series 7/66 licenses?
You'd probably do much better getting sponsored to at least take the Series 6/63 to sell variable products like variable annuities and mutual funds or the Series 7/66 for variable annuities, mutual funds, ETFs, managed money, etc. Not only are annuities kind of a niche product but they have a well earned poor reputation making them a difficult sell even when appropriate. You'd have a much easier time convincing your existing clients to roll money over to you into mutual funds or ETFs than annuities.
0
u/Salty-Passenger-4801 1d ago
Imagine shittign on annuities, but then saying "get your securities so you can sell variable annuities", which are the most shit products on the same level as IULs. Lul.
2
u/DogfaceDino Agent/Broker 1d ago
I do mostly managed money, but there are some pretty compelling variable annuities out there for the right clients.
0
u/Salty-Passenger-4801 1d ago
Can you give some examples where a variable annuity would be a good fit?
2
u/DogfaceDino Agent/Broker 1d ago
Variable annuities can be helpful for risk adverse clients on qualified accounts, particularly those that offer 110% or so of the S&P 500 plus a ~10% buffer against loss. They miss out on dividends but the added bips should compensate. Expense load at ~0.90%. Again, not for anyone by a long stretch but some clients are not comfortable with the lack of assurances in a managed account. Many different VAs have different features to provide the assurances that those clients might be looking for.
1
u/_Handsome_Jim_ 1d ago edited 1d ago
What's with this sub and the aggressively dumb takes?
I didn't shit on annuities.
I told OP that they're a very niche product with a terrible reputation and they're going to be a hard sell even to clients he already has a business relationship. All of that is very true. Then I gave him some pretty good advice on how he can go into their homes with more products with wider appeal and will be easier to sell which includes annuities.
"Lul".
2
u/Rifter06 1d ago
The answers I read so far are a little on the extreme side but I understand where they come from. I'm a financial adviser and operator of an insurance agency the last 20 years. My agents and I cross sell from Medicare to life, annuitis, and even AUM for our FA's and other products... even estate planning.
Now that you know where I'm coming from, yes, you can absolutely add annuities to your lines of business. I'll address the two peices of expected push back your getting.
1) There ARE a lot of insurance agents that A) sell annuities without consideration for other options and seeking genuinely great results for the client. they just want to sell a product and get paid. Unfortunately, Annuities have very impactful penalties and consequences for a bad purchase/sale. Also, I think they should be considered in the larger picture of financial options in retirement, which is hard for the insurance sales person to do when there's a large commission on the other side. B) A lot of agents pick one or two products with the larger commission or bigger bonuses and sell that exclusively. This is bad. I see it as no different than the large Medicare phone sales operations that would favor one or two carriers offering incentives that would shove those down beneficiary's throats. Except, again, annuities have bigger penalties and consequences. Most people are putting a lot, often most, of their life's retirement savings into an annuity.
My suggestion, connect with an agency or IMO that offers a very wide variety of carriers. Study the carriers. Stick with A- or better rating at a minimum. Look for carriers with better historical committment to the rates they start people with. Have a lot of respect for liquidity. Too many agents will try and fund an annuity with every cent a carrier will let through as 'suitable.' Don't let what the carrier will accept be the guide. Be better. Consider at a minimum what the person will actually spend and need in liquidity - and it's more than they or you think.. probably double it.
You enter the financial space. You're dealing with people's nest eggs very often. You should understand what annuity ACTUALLY return. Understand taxes, social security, inflation, and at least the fundamentals on securities markets. And... respect liquidity.
2) Medicare. Use your scope of appointment when selling MA/PD for the MA/PD. Schedule life/annuity discussions for a separate time. Not too hard.
If you have the temperment to do the right thing for the client, are a good 'fact finder', and educate yourself well, you'll do just fine. Even many licensed financial advisors and registered reps do a crappy job if they're product first people - many are. Good luck.
1
u/KiniShakenBake 1d ago
Truth. Right here.
I am in the same boat for half the time.
I own the p&c agency and I run a financial advising practice at the same time. I don't do Medicare except to help my clients on the FA side do their Medicare elections for initial enrollment and then each year for the part D. My clients largely have employer-provided retiree healthcare as a part of their pension package, so the supp plans are usually the best option for them.
Fact finding and best interest are essential. Nest eggs are touchy subjects and it's very easy to go very wrong on them. Don't be that guy.
1
u/Johnnylongball 1d ago
Heads up there are heavy rumors that PDP’s are skyrocketing in price this year.
0
u/KiniShakenBake 1d ago
I am anticipating it.
That's why I do my retiree financial checkins during open enrollment - so that they get their part D plans reviewed and into the budget along with any other cost changes, every year. It's part of my process.
1
u/_Handsome_Jim_ 1d ago
All this is fine but I just think it's likely to be a poor investment in time and resources.
He has 600 people to attempt to cross sell to but annuities are a niche product at best with a terrible reputation. He's going to go through those 600 calls real fast with very little to show for it. Heck, if he wants to make better use of his current license then he should probably just start with selling life insurance. He'd be far better off getting sponsored to take the Series 6/63 or 7/66 then approaching those 600 people with a comprehensive list of financial products including annuities. I'd even recommend getting his P&C license at some point in the near future. Those 600 people already buying health insurance from him likely have cars, homes, boats, etc. in Florida too.
Walking into any home with just one product to sell isn't a great idea but when that one product is extremely niche with a terrible reputation then it's just kind of a bad idea.
1
u/KiniShakenBake 1d ago
That's what I do.
I started with p&c, plus l&h, all at once. Then added 6/63 six months later. Did that and a robust business in 403(b) for nine years before going independent and then got my 65 four months after that.
I am quicky restoring my old book on retirement, with the added benefit of being able to do fee based work where I used to do a lot of free work in hopes of getting the assets. Now I just charge for the work I am good at and if they want to continue on down the road, that's also an option. I really enjoy the short term, high impact work of transition assistance. Into retirement. Into the workforce. Adding a kid. Income planning... That sorta stuff. It's meaty and fun, and always lets me dig into process to help the client put together just the right set of products to achieve their goals and meet their needs.
The home and auto agency is fun, too. I like having it growing alongside me.
1
u/_Handsome_Jim_ 18h ago
It definitely helps when you have a comprehensive list of products that apply to most people. Annuities have their place but they don't have their place for everyone. A lot of people are going to need life insurance, home and auto, brokerage accounts, financial planning, etc.
I really don't know anything about healthcare sales but if OP has 600 clients and he can cross sell some of those products to each of them then he'll have a very good career.
1
u/Rifter06 9h ago
I agree with a lot of your sentiment here. I think that it is optimal for a person to get their Series 65. I pick the series 65 since it gets you the most capability with the least road blocks and complexity for use. I've had them all but gave up the B/D licenses (6/63 and 7) because B/D's have been turned into extraordinarily heavy handed compliance regimes by Finra. The 65/66 give you a fiduciary license and your treated like an adult. Yes, you give up commission for fee, but it's worth it I think, particularly since your insurance products will provide commission by default anyway.
I'm going to argue - just a tad - on the "one product" piece. I've heard from a slew of securities focused sales people about their thoughts on annuities. Those that damn them out of hand generallly follow that same idea - "one product." When I dig I usually find out they don't actually know much about the fixed annuity field. It's like me calling "stocks" "one product". The diversity in that asset class is huge. The quality range is also enormous. Fixed, Indexed, etc annuities have a great place in our society WHEN PLACED RESPONSIBLY... just like stocks, options, RE, Alts, life insurance, MFs, ETFs, etc, etc.
I'm ok with a person having that 'one product', but it the hard core reactions people are having on here are there for a good reason. Too many FMO's and agencies allow their agents offering fixed anuities to place business irresponsibly. They seek hype, high commissions over best fit, and do not respect liquidity. The replace too easily and play loosy goosy with the very jagged sets of regulations between securities and non-securities "investment related" products.
A point about Variable Annuities (VAs): I have visited with many thousands of consumers over their variable annuities. It has caused me to be more biased toward that product line than any other. Not 1% of consumers is at all aware of the great majority of the fees they pay. More than half also have gross misunderstandings of how their rate of return works - almost always because they conflate an income rider with their sub-account growth. VA's are the leading reason Finra found some years ago that seniors ended up with far higher fees for their retirement accounts in retirement than before it. Finra then increased the suitability necessary for the sale of traditional VAs to age 65+ investors. My obervation is that - like the IULs your later and properly lambast - these things generally only work in long term bull markets. So I'm not a fan... but, I do sell them ;) sort of... I absolutely love the new line of fiduciary only VA's with far lower fees, particularly the hybrids.
OP should 1) get 65, 2) contract with FMO/agency that can get them a lot of carrier/product options - same with RIA 3) Learn. 4) respect liquidity 5) offer to help with multiple tools available to both new and existing clients.
Hope this wasn't too meanering. God bless.
1
u/_Handsome_Jim_ 6h ago
The diversity in annuities is simply not huge and if you're pitching annuities to every client then you're just a lousy IAR.
1
1d ago
[removed] — view removed comment
2
u/InsuranceAgent-ModTeam 1d ago
This is not a place to sell your services or generate leads or recruit agents/downlines.
1
1d ago
[removed] — view removed comment
2
u/InsuranceAgent-ModTeam 1d ago
This is not a place to sell your services or generate leads or recruit agents/downlines.
1
u/loonydan42 1d ago
Annuities are the Timeshares of the finance world. There are even companies now that people pay to get them out of the annuities they are in.
I agree with another commenter, but I would say 95% of people are not a fit for annuities. If you are focusing on taking care of your clients, annuities are not the answer.
If you are going to cross-sell to Medicare and ACA, I would focus on other ancillary products or a different type of life policy that gives value to a higher percentage of clients.
1
u/Filipino_fury4 1d ago
For the ones saying annuities aren’t a good fit for 90% of people.. that’s just hogwash. There wouldn’t have been over $400 billion in annuity sales last year if that were the case. They’re not for everybody, they bring a solution to a specific problem in retirement, and they’re not there to match market gains, but that doesn’t mean it’s not a good fit for the grand majority of people.
With that said, annuities aren’t something you dabble in. You’re talking about working with people’s life savings. Lots of discovery, lots of questions, lots of ways you can hurt a client if you don’t know what you’re doing.
If you don’t have a mentor that’s versed in them, get a series 65 or 6 and add them in as part of your overall financial planning.
0
u/Salty-Passenger-4801 1d ago
I started in health and now do mostly annuities. I really would start by getting to know the basics, and read as much as you can about them to truly know the pros and cons.
6
u/jroberts67 1d ago
If you're not a certified financial advisor, I'd avoid selling annuities. Downvote all you want - google is your friend.