In today's insurance industry, people are either trying to prove that fixed index annuities are, in fact, insurance products rather than securities or they're scrambling to accommodate the sale of FIAs through broker-dealers.
There is another choice, however. We all know what an opportunity the baby boomer market represents. After all, members of that market tend to have more money than those in other demographics. But within the boomer demographic, a dramatic change is under way.
Consider that there are an enormous number of boomers rapidly approaching retirement age. They have new needs. This group will not only live longer than members of earlier generations did, but they will have different lifestyles from those who preceded them.
These new needs call for insurance products that guarantee a lifetime of continued income, inflation increases, and catastrophic illness benefits.
Not only is there a need for new income products, but agents' sales techniques will have to change, as well.
An opportunity
It's fair to say that the focus on the accumulation market over the past two decades has allowed many aging boomers to position themselves with enough assets to retire with. The big question, though, is what do they do with these assets? Most are uncomfortable simply trying to manage a large sum of money. After all, do they have the proper pedigree to do this, especially if they received a paycheck twice a month for 40-plus years? Further, many simply are not comfortable turning all of their assets over to a planner to manage.
Therein lies opportunity to provide income products. Not only do people want peace of mind, but they want and need to know they can have a happy and enjoyable retirement.
Income needs to cover a broad landscape. There are necessities, for one, such as groceries, utility bills, and home maintenance. But while many readily understand using income to cover basic living expenses, few have considered how additional income can actually enhance one's lifestyle.
Honing your pitch
Many financial planners and agents develop specific sales methods to educate their prospects and close sales. More than likely, they have good methods to help them determine what their prospects' actual day-to-day expenses are.
Consider designing a sales track that actually helps your prospect create an income plan that will enable them to fund something they've always wanted to do. Because people are inherently more comfortable with income than payments, you could help them realize that they can afford to do something out of the ordinary. It's relatively simple, too.
Start by asking if there is something they've always wanted to do. Then, after determining what it is and how much it will cost, you're ready to position some of their assets into an income product. For instance, perhaps they've always wanted a BMW or to purchase a new piece of art each month or to join that certain country club but they didn't think they could afford it. Just think how happy you could make them by showing them how to fund a dream with additional income.
In essence, agents and financial planners will have new opportunities to help their clients achieve better lifestyles. As a consequence, albeit a good one, they will have to consider rebranding themselves as income experts. Income is a concept and a notion that most people can identify with. However, most planners are still preoccupied with the notion of accumulation.
There is an enormous opportunity to position the value provided by a financial planner around the emerging need of income, and no better time to begin this pursuit than now.
John Amann is chief operating officer of Allianz Income Management Services, a Minneapolis-based company organized to serve the boomer generation with income-driving products and services. He can be reached at johnamann@allianzincome.com. For more information, visit www.allianzincome.com.
