403b Market.....Anyone Here Working It?

[0b1kanobee]

I was curious as to whether anyone hear besides me works this market. So anyone?

Did you used to work it and quit/dismissed or gave up? If so, why?

Feel free to PM me if you want as I know this market can be sorta touchy and not well known (kept on the DL). I'm interested in feedback along with ideas. Would like to know what has and hasn't worked for you. Maybe what company/companies you represent. That sorta stuff.

 

[Norwayguy]

I worked the 403(b) market almost exclusivly for 8 years but have scaled way back on it due to the regulation changes as I forsee a major shift to the one employer one provider option that entails a lot more politicking than I like and it can be tough to win those cases when your an independent and can't speak for the provider...Having said that I still have about 1400 403(b) clients and am actively working rolling those than can to other options.

One of my big complaints is I sold these plans with the idea of Hardship & Loan provisions and then under the new regs the schools decided it was much easier to not allow loans and hardships in the plan document than it would be to track and approve all the requests.

Case in point I wrote up a roll over for 2 clients on 12/23/2010 it requires employer approval and since its coming from Mutual Funds requires signature guarantee (no Problem) but that means I can no longer fax the withdrawal form to the TPA who is in Florida and the School and employee are in Maine. So I've been sitting on the app since 12/24 awaiting the returned form from the TPA, finally got through on the phone today and they processed the request 12/31....So the question is where the frig is it. Might have to redo the form and send it again if it doesn't come back because you can't accept a faxed signature guarantee.

 

[sman]

I've done many rollovers from the 403b market, but haven't worked it. I have two friends who work it exclusively. One is with Valic and the other is independent. The friend with Valic lost a hospital last year. He was exclusive there for 19 years and had well over 1,000 clients in this one hospital. Due to the politics involved (as Norway eluded to) he had no control. The hospital was bought by a larger hospital who uses Fidelity and watched millions under management walk out the door.

The friend who is independent markets exclusively for ValuTeachers. He's done fairly well, but is having to spend 3 nights away from home each week due to where the school system is located.

Neither of those situations is appealing to me. I like the idea of potentially having an exclusive audience, but when you could lose 1,000 clients with the stroke of a pen, that can make it tough. One of the counties my Valic buddy is in, they don't allow him into the school during school hours. Makes it a little tough to meet with everyone.

It definitely is a different animal than just meeting with individual clients or small business clients as I do. I know there is some good money to be made if you can get a pay slot in multiple counties and not have it taken away because the school system decides to go with a different vendor.

Good luck to any of you who work this market.

 

[0b1kanobee]

I currently have a pay slot. The problem as mentioned is the politics. The good thing is I can write two companies no problem if one gets kicked out. I'm just having a hard time seeing the money in it. I know it gives me a good amount of credibility when I meet with people outside of the school system. Like you both have said though, it is a different market for sure.

 

[Norwayguy]

I currently have a pay slot. The problem as mentioned is the politics. The good thing is I can write two companies no problem if one gets kicked out. I'm just having a hard time seeing the money in it. I know it gives me a good amount of credibility when I meet with people outside of the school system. Like you both have said though, it is a different market for sure.

The money comes over time....Think about it the most anyone can put away into the 403(b) is 16,500 or 20,500 depending on age but most people I would meet would not come close to that the average is closer to 2000 to 2600 a year so back when my client could get a loan from the 403(b) it could make sense but for these dollar amounts I'm more likely to recommend a Roth IRA now and not have the headaches and for those that still want payroll deduction I will do the extra work to setup a new savings account have the Roth money direct deposited to the savings account wait a couple of weeks and then start an autodraft from the savings account it isn't exactly the same but feels that way to them the market really has changed when I started working it I was told of agents that would go and sit in the teachers rooms for hours and just talk to teachers or after an appointment at the school would casually walk down the halls and introduce themselves to employees they met in the halls...That is definatly not the case anymore as has been mentioned some schools do not let you in during school hours (I don't really have that problem) but now you have to be buzzed into the school no walking the halls without being escorted etc...On the positive since its a benefit of the job its an appointment you can do with just one spouse and not have to wait on an answer, I can still do daytime appointments, in some schools I can still put stuffers in the teachers mailboxes (most I now have to mail which does not make it a good option)

 

[baggins415]

The money comes over time....Think about it the most anyone can put away into the 403(b) is 16,500 or 20,500 depending on age but most people I would meet would not come close to that the average is closer to 2000 to 2600 a year so back when my client could get a loan from the 403(b) it could make sense but for these dollar amounts I'm more likely to recommend a Roth IRA now and not have the headaches and for those that still want payroll deduction I will do the extra work to setup a new savings account have the Roth money direct deposited to the savings account wait a couple of weeks and then start an autodraft from the savings account it isn't exactly the same but feels that way to them the market really has changed when I started working it I was told of agents that would go and sit in the teachers rooms for hours and just talk to teachers or after an appointment at the school would casually walk down the halls and introduce themselves to employees they met in the halls...That is definatly not the case anymore as has been mentioned some schools do not let you in during school hours (I don't really have that problem) but now you have to be buzzed into the school no walking the halls without being escorted etc...On the positive since its a benefit of the job its an appointment you can do with just one spouse and not have to wait on an answer, I can still do daytime appointments, in some schools I can still put stuffers in the teachers mailboxes (most I now have to mail which does not make it a good option)

As many of you know I've worked the 403b market hard for years. But what I've found is that most agents have NO CLUE how to sell life insurance in this market. It just blows my mind. I'll admit here in California though, the 403b flow sales alone you can make a good living off of. Probably about a $500-$600 monthly average of flow alone. Many of the teachers are married to business owners or silicon valley types so many like to max out their 403b's - this is of course the easiest annuity sale ever that just keeps giving every year.

But again, I've noticed that virtually NO agents are selling life insurance (aside from the normal family need for a term or perm policy here and there).

The fact is this market is phenomenal for life sales! I've never made easier life sales than in this market. It has to do with understanding exactly their pensions work. You can certainly sell IUL's / UL's as an annuity alternative too. This is easy if you know what you are doing. It also helps to have a good software illustration system. One of the companies I deal with provides this and it makes life extremely easy and puts it in a visual for the client to see.

Many times I have a client already doing let's say $800.00 per month into an annuity...and when I'm done with them I've gotten them to reduce their annuity to $450 and give me a check for $350 for a life policy. Again if you know what you're doing it will make complete sense to the client. Do the math on those commissions!

The best part about this market is that you often don't have to ask for anything!! Many either will just throw money at you because they are desperate to save - or, they are already saving - so you just have to show them a better use for those saving they are already putting away. You don't have to effect their net take home pay at all. Just redirect the funds and reap the big rewards. Nothing could be easier!

If I sit down with any agent in this market for 2 hours I would literally explode his/her commissions by incorporating life sales into their 403b business.. There are so many clear opportunities to sell TONS of life insurance in this niche but it blows me away how few agents do it.

--If you need help in this I am available for consult.

 

[arnguy]

I did work it some years ago in the Philadelphia School District, but it was a PIA!!

 

[Cary]

Is your friend still with Valu Teachers. I am with a firm now and have dabbled in education market as well as realtors but intrigued by ValuTeachers and not really afraid of slight travel if there is good systems in place. If they are a good company I am considering joining them for this coming school year, any thoughts???