Beware annuity sellers hosting Social Security seminars
Social Security seminars are popping up around the country as boomers try to figure out the best way to access this benefit, and the person most likely giving out this important advice is an annuity salesperson.
Annuity sales and prospecting trends go in cycles, and there certainly is a herd mentality from agents to follow the newest and most effective way to attract potential annuity buyers. A growing trend sweeping across the annuity sales plains is to lead with Social Security as the main topic of conversation. This strategy definitely gets most people’s attention because every single person has it and wants to make the right decision on how to correctly access the lifetime payments.
Eat, learn, buy
For most baby boomers, the allure of a free meal is almost impossible to turn down. Most have been through hard times in their lives, and have probably been pretty frugal to even get to the retirement finish line. So the combination of free food and information on a topic of interest is almost impossible to say no to. Just to let you in on a little secret, the annuity sales industry has figured this out.
The annuity sales industry has developed Social Security software and prepackaged presentations for the agent that are promoted to fill up your local restaurant with eager boomer “buying units.” I get numerous calls and emails from the industry on a weekly basis telling me how Agent X sold a ton of annuities using this foolproof Social Security lead in method. All of these annuity agents giving advice on a such an important topic like Social Security is disheartening and disturbing to say the least. I always ask what qualifies an annuity agent to give Social Security advice? I’m still waiting for a good answer.
Surprise! You already own an annuity
I continually tell people that they already own the best lifetime income annuity on the planet that also adjusts for inflation, and that annuity is called Social Security. The knowledge that there is an actual annuity strategy in your portfolio might surprise you, but facts are facts.
Annuities were originally developed to create a series of payments that you can never outlive, and they are the only product on the planet that provides that longevity transfer of risk regardless of how long you live. As a direct correlation, Social Security also provides payments for life, and even increases with inflation when our friends in Washington decide to be so kind.
The world of annuity sales knows this story, and is eager to point out these similarities with the hope that you will buy their annuity of the day after you listen to their Social Security (i.e. annuity) presentation.
Mechanics aren’t doctors
I’m sure that some of the Social Security information provided at these bad chicken dinner seminars can be very useful and might actually help with how you access and use this benefit. Education is always a good thing, but you need to be aware of the “endgame,” which is for the agent to set a follow-up appointment with you to discuss annuities.
I’m sure that most people are smart enough to know the real intention of the seminar and the agent giving it, but the question I have is the true qualifications of that person providing Social Security advice. I sell annuities for a living, and I never have and never will provide Social Security recommendations. That’s a whole different world of expertise, in my opinion, and the vast majority of annuity agents shouldn’t be involved with providing these important life decisions.
Would you take medical advice from your local car mechanic? Of course not. I know that there are probably a handful of agents that have the educational foundation and certifications to give Social Security advice, but I bet I can count them on one hand and I’m pretty sure they are probably not offering informational food seminars.
The continual bait and switch
Annuities can be great transfer of risk additions to your financial plan, and only if fully understood and owned for their contractual guarantees. I’m proud to say that I only focus on and recommend annuities, and enjoy delivering that guaranteed part of a portfolio.
With that being said, I am completely and constantly dumbfounded on why the annuity world continues to try to find a better bait and switch marketing mousetrap. Annuity products and strategies should stand on their own merit and contractual guarantees, and there shouldn’t be a need to lure in the buyer with some veiled message or enticement.
The problem primarily starts with the antiquated sales and marketing organizations that distribute the majority of annuity products to the vast army of independent agents. There are thousands of these middleman organizations that are constantly trying to come up with the newest marketing holy grail to attract the agent that is thirsting for how to create more prospects and sales.
So my advice is to be aware of the coming onslaught of Social Security seminars, webinars, online videos, and pop-up ads that seem like harmless invitations to learn more. At the end of the day and the end of the seminar, my prediction is that you are probably going to be pitched some type of annuity. In most cases, it will probably be an overly hyped one-size-fits-all indexed annuity.
If you decide to attend one of these Social Security seminars, it’s probably a good idea to listen to the information provided and to just swallow the food — not the eventual annuity sales pitch.
Originally published 1.14.2014 by MarketWatch.com – http://www.marketwatch.com/story/beware-annuity-sellers-hosting-social-security-seminars-2014-01-14