Taking the Drag out of the Annuity Conversation

Mike McGlothlin, CHFC®, CLU®, CFP®, LUTCF®

I read a great article by Brian Kight this past week called What Real Leaders Understand About Resistance. In the article, Brian talks about the value of drag as an airplane takes off. He specifically points out that, “Thrust must exceed drag to create forward movement and the speed necessary for flight.” This concept of thrust exceeding drag applies to more than just an airplane.

 For an airplane to gain speed down a runway, the pilot must push the throttle to create the thrust. The plane is immediately met with the resistance of the air around it—the drag. Brian’s point is simple: we must anticipate the drag if we want to get any lift. We must generate enough thrust to overcome the drag. 

For many advisors, annuities can feel like that resistance—they are the drag keeping us from earning more assets under management. After all, if the money is tied up in annuities it isn’t available for other investments. But just like drag is necessary to get a plane off the ground, annuities are a vital component when it comes to giving your client’s retirement plan enough thrust to meet their goals.

Yes, when you place an annuity for your client you are taking those assets out of assets under management. But you are adding the ability to provide protected income. You are effectively taking longevity off the table. And you are securing that risk, which gives you the lift necessary to grow your client’s assets. And one of the best ways to add an annuity to a financial plan, without sacrificing assets under management is with our Income Alpha strategy.

For advisors using this strategy, we are seeing anywhere between a 23-36% increase in the lifetime client value of our assets under management. We’re also increasing the probability of success by as much as 25-30% in many cases. That’s because, by leveraging annuities properly, you can provide the needed income without giving up investments.

 Find out more about how Income Alpha works by reaching out to our retirement income consultants at (800) 589-3000. They can show you how the strategy takes annuities from adding drag to providing thrust — and therefore success — with your client’s portfolios.

Transformational Tactic

Don’t think of annuities as drag. Discover why they are a necessary component of giving your clients—and your business—a financial lift.

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