Episode Transcript
[00:00:00] Speaker A: Hello and welcome to the Annuity Straight Talk podcast, episode number 159. I'm your host, Brian Anderson, founder and creator of Annuitiestraighttalk.com Been doing this for a long time. Lots of information, lots of pressure, a little bit of critique. Makes me better. Go ahead and take your shots. I like to be patted on the back with, hey, good job. This was great. But also, you got a bun to pick. Just tell me, I'll clear the air. Maybe we'll get a guest that wants to go toe to toe with me on something. That'd be fun. Anyway, please, like subscribe or comment on any of your favorite podcast platforms or on YouTube. I'm here wearing my beautiful new shirt that I got for this season that just passed to celebrate Lebowski 2024. This aggression will not stand, man. Celebrate the end of spam political calls. Woohoo. We're there. But what I wanted to talk to you guys about today is something that I see as a trend that happens just about every year. We like to talk about trends. Share my screen. Here's the newsletter. Maybe I'll add some stuff to it before it's published, but it's good enough and I'm going to give you a little bit more commentary here. So year end annuity sales pressure. I wonder what that's all about. Think about last week's podcast where I talked about Midland national and how great it is to work with a company. All that stuff. It's just about a company I like. I tell you why. I also said they got about a third of my business. It's. I don't have the luxury of saying, oh, I'm just doing business with this company. There's a reason why I did it, why I'm following up with this. So as the year ends, sales pressure ramps up, hit targets in every area of financial services. I don't care who it is. Everybody's trying to aggregate assets. Hey, we're almost at our goal. Or we're at our goal, but we can do more. I'm going to talk with talk about it with respect to annuities. It is not the only place that it happens. Name a business where it doesn't. So I'm just going to be honest about this because a major partner. The point of this website, when we're talking about sales pressure and all that stuff, I want to. I want you to know what to expect.
So if you can understand an advisor's motivation for pitching a certain product, then you could more easily determine whether it lines up with your goals, or if there's a conflict of interest. And what we're trying to do is get you educated to a point where you can understand whether you get it from me or somebody else that you know for a fact that exactly lines up with your goals. If we do that, then no matter what anybody else says, they cannot argue with the solutions we provide. So one of the things I like about Midland, they're an agent direct company. I go straight to the company to deal with everything I need. There's a couple other companies. That's the biggest one. Jackson national is a company. They don't have products that. A wide variety of products that I really use. It's a lot of variable annuities and stuff like that. So there. Most other companies, almost every other company uses insurance marketing organizations, I'm going to call it an imo, to handle sales and distribution for annuity products. So to my knowledge, most agents, including myself, are kind of trying to relax toward the end of the year.
It's not a tremendously busy time because holidays distract everybody. A lot of other stuff. And so a lot of people are just kind of toning down. You want to go see family. Thanksgiving coming up, then Christmas. It's always busy. But there's always a few serious consumers and obviously bigger producers more serious about the business. Find it a good time to be productive because certain other things slow down. That's kind of what I do. Like this time of year, I'm looking at additions to the website updates, different things we can do. Got a team working on some new ideas, and I usually have a little bit more time to take care of that stuff. So I keep pushing to the end of the year, but in a very different way. So I've talked about the IMO stuff on the podcast in the newsletter several times. Ashoka and I did one very early sales and distribution of annuities.
There's a newsletter, how commissions affect annuity sales, all that stuff. It's not a bad thing. And it's no different really than the IMO who. The IMO who's distributing insurance products for certain companies. They're going to have their favorites. They're going to like their stuff. It's like Edward Jones has Edward Jones funds. Edward Jones now has a couple of. It's not anything about Edward Jones really, but they now sell a couple of annuities.
But you talk to Edward Jones, they're going to have those two companies I got a contract with. They're going to be incentivized to push that it's for you to decide, hey, is it really worth this? So the IMO is a third party organization. They influence the products you see and the options you have. So I'd say well in excess of 90% of advisors who sell annuities use only the IMO channel for products. 90% of include to be like broker dealers or bank channel. It's like limited distribution through guys that work at banks, guys that work through broker dealers like Merrill Lynch, Edward Jones and those kind of places. So whether independent or not, the IMO may have more to do with an annuity recommendation than you think. So it becomes more obvious toward the end of the year when they're really trying to meet sales targets and hit bonus levels. And you have to remember these are people that you never see or meet that have. And a lot of people don't even know that they're there. But they have a personal stake in what you buy. But they hold no liability or responsibility for service or any fallout in the future. They just take their money, they move on to the next one. So IMOs operate at different levels with insurance companies. They've got to even to get in. They might have minimum requirements for annual production. So you got to sell 100 million of this to get here. And then when they get close to those targets or even go beyond, they might have retroactive bonuses that are available for certain amounts of total production. The more companies an IMO can get, if an IMO got a contract with 20 different companies, they're going to appeal to more agents that will be willing to contract with them. That brings production up, puts them in the highest compensation tier, if possible. With each company, sell a little bit, here's what you get paid. You sell a lot, you get paid quite a bit more. So at any time of year, this is a motivating factor. But it's more obvious toward the end because trends change to fit that assumption. With less than two months ago, it's all hands on deck at the imo.
And not all of them are like this. Some of them are comfortably in their production levels. They just can keep doing it. But when I have a number of phone calls that come with one specific product, I realize there are a lot of these IMOs that are saying, all right, end of the year, we're going to this company right now. And it's because they got to hit some level. So not directly pointing to anyone, I again, it's part of the business. That's how it works. I wish it didn't exist, but it does and that's how insurance companies have decided to do it. And it's not going to be up to me to get that changed. So, because I've been doing this, a lot of what I see is trends in the business.
If 20 phone calls in a row come in talking about some specific bonus, the pressure to put that on comes from somewhere else, or the incentive to do that comes from somewhere else. Most of these guys are not independent thinkers that are selling the products. They're just, hey, they told us to do this. That sounds good. Here's the talking points. This is what we're selling. And I've had several phone calls with IMOs. They call me all the time, hey, bring your business here. We get, we're going to give you this, we're going to give you that.
And they kind of sweeten the pot. And I'm not changing no matter what. They're wasting their time. They know they are. Or they should know. I guess they don't. Don't take no. Right.
But they're offering a little bit more, right? Oh, hey, we're going to give you marketing expenses. We're going to give you extra compensation. We're going to give you this. I don't bite. Because that's just a conflict of interest. Again, I don't have the luxury of doing anything but being competitive in every situation. Now, I say this because I kind of did it last week. I'll call myself out. It's not for any personal gain on my part, but the point was, if you see it elsewhere, I want you to keep an open mind. And realize a lot of times, I mean, like, I can say 90% of the time, someone makes an appointment, they've seen another product pitch, whatever, 85, 90% of the time, it is not the best thing. It's driven by something else. Not. And it's not necessarily shady. It's just the guy didn't do work or he's taken someone else's word. Hey, this is the best deal. I like to tell that story that happened to me a long time ago. I got involved with an IMO when I started this website. And we were doing these GLWB contracts and trying to sell them. And I call the imo. Hey, what's the best product?
And it was always this one company. And I hadn't been. I hadn't figured out where to get the databases, where to verify it. But after a few months of never getting one of these sales, I found another outlet or another database where I could verify what they were saying and I realized that they were giving me like the fourth or fifth option on the list. So people were kicking my tail. I missed out on sales because this, this and this, imo, who was owned by the insurance company that they were promoting was not giving me the best option. They were giving me what put the most money in their pocket and it cost me money. That's something that bitter pill to swallow. It's like, man, I missed out on this stuff. I mean I was call that back in 2008, 2009. I mean I was broke at the time, Geez. But yeah, I show you there's another company. And like I said, most people don't see Midland. It's got very competitive products. If options seem limited or what you're going to see or you'll run into, a lot of times this guy will say this is the best product. Unequivocally, this is the one. Anything else? Nope, this is it. If they say that, then, you know, I might say I think this is the best. But here's a couple things you can compare it to and see and that is probably because a third party is pushing hard to meet sales goals, year end or otherwise.
So this is just a reminder to you that there's no need to be in a hurry just for someone else's gain, including mine. Do it because it changes your life, not mine or anyone else's. Be sure to do some research, educate yourself and become absolutely confident in any commitment you make.
So no matter what anyone else says, do not be in a hurry. MYGA rates are down a little right now. We've seen an uptick in treasury rates and bond yields. We might see those go up in the next month or so. So I'm telling people to keep an eye out for that. I wouldn't be in a hurry to jump on it at this point in time. There are a couple that are over 5%, credit rating AA or something. Not a shiny company. If that's good enough for you, I'd say that's a pretty good deal. Fixed index annuities, I talked about that back when I the leverage of the fixed index annuities. They're holding steady as a great value if you like to protect the downside with the upside. I'm not an all or nothing index annuity proponent. It's just some people like them and a lot of people are selling them. So we got to talk about them a lot. And income annuities are based on longer term treasury yields, bond yields. Those rates have stayed stable and that's why I think no matter what happens to short term rates, I believe that if consistency returns or the bond curve or the yield curve normalizes, which means short term rates are low, long term rates are high. Turn it around so they go like this yield curve. So two years to 30 years. I think income annuities are going to continue to be a really good value no matter what happens to short term rates. So people that like the short term CDs and cash and all that stuff are most likely to see reduced yields for doing that. And that's fine. It depends on how liquidity is for you. But all in all, everything's fine. The only thing I'd like to see go up a little bit is the migrates. But I mean they're fine now. Just depends on what your goals are. So no matter what, take your time and do it the right way. If you need a second opinion, contact me. Or if you want to just do. If you just want to do it right without having to go meet a half a dozen people. What did I say in there? Then I can do that because I'll show you all the options. Anyhow, this has been episode 159 Year End Annuity Sales Pressure Again. My name is Brian Anderson. Please like subscribe or comment on your favorite podcast platforms or on YouTube. Schedule a call with me, top right corner of any page on annuitystraighttalk.com appreciate you guys joining me. This has been a good year. It's a beautiful fall day. I'm going to get out there and enjoy. I will see you guys next week for episode 160.
Okay, goodbye.
[00:11:59] Speaker B: You have been listening to Annuity Straight Talk.
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