Annuity Sales v. Advice
Two years ago I walked onto a car lot to take a look at new trucks just to see what was available. My truck is old but in good shape so I have no expectation of needing a new model for several years. That didn’t keep the salesman from telling me how much better a new truck would be as he shoved his card in my face when I tried to turn away. Nothing down and 0% interest for 72 months… Such is life for a cutthroat salesman.
When you are in retirement or coming toward it, there are several issues and questions that need to be dealt with. Income planning, health and long-term care, taxes, social security or estate planning etc. are all single issues that have priority for some but not others. And you need to understand that each of those put you square in the wheelhouse of someone who is selling something. Whether it be financial or legal services, it all takes time and often money to figure it all out.
Annuities can be seen as just one piece of the puzzle. In order to place them correctly it takes careful consideration of both objective and subjective variables. No single solution or approach is correct for every person so all retirement issues have to be factored into a recommendation. The need for comprehensive planning runs head-on into the wall of a hard sales pitch.
Just this week I had my fourth conversation with a guy who has been reading this newsletter for almost two years. He is in no real need of doing anything so has spent the past two years talking to just about everyone who hangs a shingle out to sell annuities. The result is plenty of education but even more frustration over the lack of clarity in this industry.
I had to remind him that not once during our prior conversations did I recommend a specific annuity. Everyone else tried to show him a favorite product and he knew right away they were just trying to sell him something that he didn’t really need. At one point he actually said, “If I get pitched another 10 year annuity with an income rider without being asked what I am looking for I’m going to scream.”
He really went through hell to get back to where he started. I commend him for his resilience and fortitude. His name was sold to advisors that bought leads and he was called consistently by Ken Fisher and JD Mellberg but he was smart enough not to bite. The sales pitch never offered what he needed or wanted. No one actually asked what he was looking for.
Sales are ridiculous and focus on one of the key areas of income, volatility, inflation, control or legacy to highlight the weak spot or whatever is most concerning to you. It’s called fear-based selling and it is usually the beginning of uncomfortable conversations.
You should be worried about living so long that you run out of money!
The market is going to drop and you’ll be broke!
The government is spending so much money that a dollar will be worthless in 20 years!
Insurance companies just want to steal your money!
Your family will be left with nothing!
Every single retirement concern relates to one of the above examples that attempt to instill fear in retirees and no specific product can solve more than one. Calm down and approach it rationally. Solutions require a strategy and to find that takes good advice, not a sales pitch for a fancy product. We are not all like the guys who buy airtime for local TV on Saturday mornings. I can do the very same thing but I prefer to help whether you buy something from me or not.
Seek advice that helps you sleep at night but don’t fall for a sales pitch in the meantime.
Have a nice Labor Day weekend!