The Challenges of Selling Annuities
Annuities are insurance products sold to provide supplemental income during retirement years. More than 320,000 licensed insurance agents compete for the commissions of annuity sales based on figures from the Bureau of Labor Statistic's 2008 census. Competition is only one challenge agents face when selling annuities.
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Regulatory Issues
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Annuities are regulated by state insurance commissioners. Additionally, the Financial Industry Regulatory Authority reviews variable annuity sales. Stricter compliance has been implemented over the past few decades to protect consumer rights. Annuities had become the financial product of choice for many advisers seeking the higher commissions for annuity sales. As a result, regulatory agencies keep closer eyes on annuity transactions, particularly when they involve senior citizens or the use of variable annuities with Individual Retirement Account assets. The challenge for a financial advisers when it comes to increased regulatory regulations is to justify transactions, often creating more paperwork and taking time away from being able to prospect or sell.
Consumer Challenges
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When popular media outlets and regulatory agencies are offering warnings to consumers against annuity sales, just mentioning an annuity product may send prospects running for the door. The challenge for the financial adviser is to turn fears into understanding of the benefits of annuities. These products have existing for several hundred years because they serve a purpose in certain financial situations. Consumers also become confused over the various types of annuities, the fees associated with them and how money can be taken out. Convincing a prospect to get beyond negative emotional views of annuities may be difficult regardless of how many facts a sales representative presents to justify the product's benefits.
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Personal Weaknesses
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Annuity sales representatives are human. To be successful, representatives need to use sales strengths and improve upon weaknesses. A representative who doesn't like to make cold calls may limit prospecting abilities unless he can find a different way to find new clients. Perhaps someone who doesn't like to make cold calls is better off sponsoring a seminar that reviews financial planning strategies to establish expertise and gain prospective interest. Sales representatives should speak with sales managers to assess strengths and weaknesses and develop a plan around them.
Maintaining Game Plan
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Once an annuity sales representative knows what his strengths and weaknesses are and develops strategies to find prospects, he must develop a plan that divides each day into sales, prospecting, client reviews and paperwork. It takes discipline to maintain prospecting when sales are high. It also takes extra effort to find more sales presentations when the market is volatile and consumers are weary of putting money in long-term investments like annuities. Annuity sales representative must differentiate themselves from the competition, finding a way to penetrate new markets. Overcoming this challenge separates top producers from the rest.
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