Year End Annuity Sales Pressure
If you look at last week’s podcast, there’s a lot more to it than me simply telling you about a company I like to work with. As the year ends, sales pressure ramps up to hit targets in every area of financial services. It’s not as apparent to me and other independent advisors but the majority will feel it, depending on the type of upline institution they have to deal with. I’m just being honest because a major point of my website is to show people what to expect. If you can understand an advisor’s motivation for pitching a certain product then you might more easily see if there’s a conflict of interest.
One of the things I like about Midland National is they are an agent-direct company. I go straight to the company to deal with anything I need. All but a couple other companies use insurance marketing organizations (IMO) to handle sales and distribution for annuity products. To my knowledge, most agents, including myself, are trying to relax a little before the end of the year. It’s not a tremendously busy time as the holidays distract most everyone. Some serious consumers and advisors find this a good time to be productive while everyone else is focused on other things. This is the time of year when I start working on updates and changes to the website so there never really is a time to slow down.
I’ve talked plenty about IMOs on the podcast and in the newsletter. It’s essentially a third party organization that influences the products you see and options you have. Well in excess of 90% of advisors who sell annuities use only the IMO channel for products. Whether independent or not, the IMO may have more to do with an annuity recommendation than you think. It’s very evident nearing the end of the year when they are really trying to meet sales targets and hit bonus levels. Remember, these are people you never meet or see that have a personal stake in what you buy but hold no liability or responsibility for the service of that product moving forward.
IMOs operate at different levels with insurance companies. They may have minimum requirements for annual production or even retroactive bonuses that are available for certain amounts of total production. The more companies an IMO can use the more agents they can contract which brings production up and puts them in the highest compensation tier with each company. At any time of year this is a motivating factor but it’s more obvious toward the end because trends change to fit my assumption. With less than two months to go, it’s all hands on deck at the IMO.
I’m not directly pointing to any issues with this and I don’t have anyone to pick on this week. It is very clear to me that running this service for several years has allowed me to see the trends in business and I’m just saying that the marketing changes now and will change again at the beginning of the year. Not all IMOs are aggressive but after receiving several calls from different IMOs in the past couple of weeks I can assure you that they are significantly increasing what they offer in the closing months.
The reason I’m saying this is because I kind of did it myself last week. I’m calling myself out. It’s not for any additional personal gain on my part but only because you may see it elsewhere and I want you to keep an open mind. If options seem limited or someone shows you a product saying that it is unequivocally the best without showing you something else then it’s likely because a third party is pushing hard to meet year end sales goals. There is no need to be in a hurry just for someone else’s gain, including mine. Be sure to do some research and become absolutely confident in any commitment you make.
No matter what anyone else says…
MYGA rates are down a little and may go up in the next month or so
Fixed indexed annuities are holding steady as a great value
Income annuities, whether immediate or deferred are as good as they have ever been
Take your time and do it the right way. Contact me if you need a second opinion or if you just want to do it right without having to talk to a dozen people.
Enjoy your weekend…
Bryan
Watch Episode 159: Year End Annuity Sales Pressure
Download Episode 159: Year End Annuity Sales Pressure on Apple Podcast
Last Updated on November 8, 2024 by Bryan Anderson