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The View From The Field

David F. Royer, National Sales Director

Guaranty Income Life Insurance Company, Baton Rouge, La.

Every day, 10,000 baby boomers hit retirement age. In less than 10 years, they will control quite a bit of money with a significant impact on the economy. Producers need to position their practice with the necessary training to help direct that money. It is important for clients to contribute to their 401(k)s and 403(b)s in order to take advantage of any matching funds; but when the match stops, the money should be rolled over into a flexible IRA. Also, producers selling variable annuities need to stop selling them to seniors because the products are expensive and seniors could lose that money. Rather, those producers should focus on the 40s-to-50s age group. The future will be challenging for traditional producers. They should get at least a Series 65 because of the growing source of funds issue, which makes it difficult to transfer funds to an annuity. And, of course managing those funds is also an opportunity.


Douglas Hamm, Vice President of Sales

LifeSecure, Brighton, Mich.

Agents think long-term care insurance is expensive and that its underwriting is difficult, so we are taking a different approach. It focuses first on what clients can afford and then on shaping the coverage-such as asking clients if they can afford a dollar-a-day for longterm care coverage.

For those frustrated with LTCi sales, shoot "small." For example, small employers represent a huge opportunity, such as with a small business simplified LTC plan. Agents can also take advantage of a voice authorization online that immediately triggers underwriting.

Combination products for LTC are becoming popular, but money can be used from an annuity and fed into longterm care. So, combination products might be easier to sell but they might not be the right solution for clients. It is more challenging for advisors to understand how to fund the LTC, but it would ultimately be better for advisors and their clients.

Where will LTC be in the next five years? Nobody knows, but you can be sure people will not be able to rely on the government


Tom Bradley, Regional Vice President

Josh Karasow, Regional Vice President

First Annuity & Insurance Marketing, Wheat Ridge, Colo.

Uncertainty brought on by stock market volatility is the key concern among clients. Outliving their money is a close second.

The best producers are generating business by providing a guaranteed lifetime income that clients can't outlive. The split annuity is the most used concept to successfully convert clients by addressing their fears. It gets them out of the stock market and into an indexed annuity.

Expect more suitability requirements in the future. The business is not what it used to be five or 10 years ago. The application is 20 pages now, and that has to do with suitability. Agents will have to get used to doing business like this, although some are having problems with it. The best agents can actually get good will from the requirements because they let their clients know that suitability doesn't allow bad producers to take advantage of them. A key piece of advice: Don't focus on the numbers-focus on the activity.


Charlotte Bewersdorff, Assistant VP of Annuities

Lynn St. Pierre, National Sales Director

M&O Marketing, Southfield, Mich.

Annuities have not been branded well for consumers to the point that the word itself has a negative connotation to it. Because life insurance is viewed as a positive, it's an opportunity for annuity agents to broaden their practice and add life insurance as part of holistic planning, if it is the right thing for the client. The biggest surprise over the past year is the lack of new products coming out.


Richard Gless, CCO/CMO

Royal Metals Group, Bettendorf, Iowa

As advisors look to diversify their offerings, they should be looking to one of the best performers out there-gold. Gold has true value-it represents wealth.

Clients who understand how the monetary system really works are afraid of dollars that are based on debt. If clients don't understand how the system works-and many people don't-advisors owe it to their clients to help them understand. Gold is a hedge against all risks we know of. But you need to act fast because there will be an even bigger grab for hard assets over the next few years.


Brian K. Williams, Chief Operating Officer

Phil Graham, Chief Sales Officer

Financial Independence Group, Cornelius, N.C.

Producers would do well to look at annuities in comparison with other vehicles and set the context for clients. Focus on the client, not the product features. It doesn't make sense to promote products much anymore because everyone offers the same thing.

People are willing to lose money in order to not lose more money-so set the context. Caps are low-so sell a product without a cap. Agents focus too much on the roll-up rate; if someone is selling solely based on roll-up rate, they could be running the risk of issues with the beneficiaries-the total benefits-what's the income, total benefit.

To be "that better advisor" means getting away from the products and prospect more. Regulations are not going to go away-so seek the solutions for the changing environment- and, "If you are not going to incorporate managed money into your practice, then don't do it."

Jim Stewart, Director of Recruitment

Asset Marketing Systems, San Diego, Calif.

Sustainable life time income-advisors are now seeing the need to plan for that.

Advisors should rededicate themselves to bringing excellent services and products to clients, transitioning into relationship people. The object is to find products that meet their clients' needs without focusing on commissions.

In this low-interest rate environment, the challenge is to offer product mixes that allow clients to achieve their lifetime goals in a leveraged way, without relying solely on yields. Carriers are helping by coming out with additional features. Seeing the securities industry finally understand that sustainable income means survival for the senior market was a surprise. Securities diversification is the only industry. Producers need to have a vision, and be committed to it.


Michael J. Buckner, Senior Vice President, Advanced Markets

GamePlan Financial Marketing, Woodstock, Ga.

A lot of agents are selling product instead of concept even though it should be a conceptual type of sale. There are trillions of dollars in qualified assets-baby boomers are getting older; we need to talk to them about legacy planning.

Many agents are working with clients that have trusts, showing them how to minimize income taxes, but in 2013 taxes will go up. A lot of wealthy clients will find themselves in higher tax brackets. I see a sweeping tax reform coming: tax brackets, losses in mortgage interest deductions, lowering savings in a 401(k) program, alternative savings vehicles-annuities, however, bridge the gap with social security between ages 62 and 66.

And then there's the Medicare surtax-the total tax rate for a trust is 33.4 percent-that's a hit, but an annuity can help. Agents don't really understand estate planning. They need to call their FMO firm to talk about it- it might take 10 times, but they should understand it. We need to better educate our clients on retirement planning. Products are secondary-clients need to buy a retirement planning process.


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