Stability With Financial Tums

Volatility is everywhere. 
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Back in the 90s, I was fortunate to be involved in purchasing some life insurance companies and to function as their president. There was a brand-new product being launched in America—an "index annuity," built on a standard deferred annuity chassis. It had a small guarantee on the principal but had interest credits linked to the S&P 500. WOW… did this ever transform the annuity business. So, we developed and launched a product and started selling hundreds of millions per year. Think of it—a product that touts: when the market increases, you share in the winnings. When the market goes down, you won't lose a penny. Plus, all principal and previous gains are locked in for the client. Wouldn't it be nice to have something like that now? Well, we do, and it’s even better.

Many FIAs also provide income that your client can't outlive. And, in the majority of cases, they can withdraw more than the "standard 4% rule" of withdrawals. So, as you've heard, a reasonable rate of return, principal is guaranteed along with previous gains and now an income that you can't outlive. We just need to find out if they have "the appropriate amount of money at risk." If not, maybe it's time to introduce them to a Safe Money Product.

Now, I have a suggestion. There's no need to "over-promise"; what we have is tremendous. Personally, I don’t like to offer an index that is based on hypothetical backtesting. Why do it when there are so many great indices, some new to FIAs, that have 10-year histories?

In summary, maybe you need to be branded as "the Safe Advisor." And, after your next client appointment, if they reject the Safe Money concept, simply give them your parting gift, a nice roll of Tums.

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Until next time… good selling!
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Raymond J. Ohlson
Founder & Retired CEO
Ohlson Group
​1-877-844-0900