Different Marketing Idea-Annuity’s for Newborns!

[0b1kanobee]

Here is a chart showing 24 contributions per year at 6%. This makes it easier for the prospect/client to see and understand. Perhaps an agent as well. As you can see, it is much easier to get the prospect/client to do something, even a little. Then you bump it up every year. If they are putting in more than they can afford you won't have them as a client for very long. Even if you don't earn a huge amount of money of this, your book of clients is worth money, especially active ones. Another words, you can sell it to someone who is a pro at making it worth more to them than it is to you.

 

[Franz Kafka]

What is a matter with you people!!! 10.19% is the projection I give with a VA!!!!!!!!!!

Kyrie eleison (Lord, have mercy) ...

 

[Ned]

"So what if you can illustrate 10.19%, will the client actually see it? That is the question."


To help answer your question I would like to propose some of my own.
Does history repeat itself? Yes.
Is this an extremely Long term investment? Yes.
Did these projections in our marketing materials pass compliance? Yes.
Do I believe my clients that we place in an age based asset allocation model in a VA for 60+ years can achieve 10.19%, which is ONLY 80% of the historical returns of the market? The answer is YES!
But again that's not the point. If you are uncomfortable with that projection use something else—that's fine. Then ask your clients. Do you think Social Security in its current form will be around in 60 or 70 years?

 

[Norwayguy]

"So what if you can illustrate 10.19%, will the client actually see it? That is the question."


To help answer your question I would like to propose some of my own.
Does history repeat itself? Yes.
Is this an extremely Long term investment? Yes.
Did these projections in our marketing materials pass compliance? Yes.
Do I believe my clients that we place in an age based asset allocation model in a VA for 60+ years can achieve 10.19%, which is ONLY 80% of the historical returns of the market? The answer is YES!
But again that's not the point. If you are uncomfortable with that projection use something else—that's fine. Then ask your clients. Do you think Social Security in its current form will be around in 60 or 70 years?

You do realise the difference between a fund having an average annual return of 10.19 and a clients real world results once you have years with a loss.


100+ 50- 25- equals an 8.33333 percent avg annual return
16+ 0+ 9+ also equals an 8.3333 percent avg annual return
8.333+ 8.333+ 8.333+ also equals 8.333 average annual return

However your clients real life return on 1500 is :

1125 in example 1
1896.60 in example 2
1907.10 in example 3

The attached distorted averages chart shows the DJIA but it makes my point...The average of the years is significantly different than the compounded return once you have negative years.

I still like your idea because its a little out of the box and once you get the clients thinking outside the box its possible to get them to think beyond the conventional financial wisdom.

 

[0b1kanobee]

Ned back in the day if you would of told people that the DOW would one day reach 10,000 you might have got put in a nut house. Today we have a tendency to look at things and say it isn't possible but history will tell one that they get proven wrong over and over.

I understand where you are going with this idea of yours. Maybe it is an old idea but regardless still a good one IMO. If others find fault with it so be it. It wouldn't stop or discourage me.

 

[VolAgent]

"So what if you can illustrate 10.19%, will the client actually see it? That is the question."


To help answer your question I would like to propose some of my own.
Does history repeat itself? Yes.
Is this an extremely Long term investment? Yes.
Did these projections in our marketing materials pass compliance? Yes.
Do I believe my clients that we place in an age based asset allocation model in a VA for 60+ years can achieve 10.19%, which is ONLY 80% of the historical returns of the market? The answer is YES!
But again that's not the point. If you are uncomfortable with that projection use something else—that's fine. Then ask your clients. Do you think Social Security in its current form will be around in 60 or 70 years?

Sure history may repeat itself, but how long will it take to repeat, and will it repeat in a way to benefit your clients?

 

[Bobrobb]

What's silly about quoting real returns of the S&P and the Dow is that the returns always are about being FULLY invested in the market. How many investors are in their fourth quarter of their lives and have 100% in stocks or should be. All of a sudden those returns get watered down with bonds, cds, and T-bills.

 

[Norwayguy]

What's silly about quoting real returns of the S&P and the Dow is that the returns always are about being FULLY invested in the market. How many investors are in their fourth quarter of their lives and have 100% in stocks or should be. All of a sudden those returns get watered down with bonds, cds, and T-bills.

That shouldn't be an issue with this concept because its based on a new borns lifetime... My issue with qouting the 10 percent is the difference between average annual returns and compounded returns, I don't think the OP's VA or an FIA has a chance in heck of meeting the numbers he is proposing. That said I think its a great idea to bring up just to get parents thinking in a different view point.

 

[0b1kanobee]

That shouldn't be an issue with this concept because its based on a new borns lifetime... My issue with qouting the 10 percent is the difference between average annual returns and compounded returns, I don't think the OP's VA or an FIA has a chance in heck of meeting the numbers he is proposing. That said I think its a great idea to bring up just to get parents thinking in a different view point.

I'll go one step further. Even if it was guaranteed to grow 10%, I don't think you would find a whole lot of people to stick with the plan for that many years. The parents have to die at some point in time. Along the way some guy is gonna come along and tell the now adult child that he can do much better than 10% and the stupid guy would probably move the money and lose it all anyway.

This is a way and a concept to get people thinking and doing something vs. nothing. It then allows you to get a grip on perhaps whatever else you can get your hands on. Find the money. You have to be able to see the forest through the trees here. Don't focus so much on what the growth number is. I'll use my 6% return chart I posted above with yearly increases and show 1.5 million on a 100 bucks a month start.

6%, 8%, 10% none of it matters. All look like small numbers to me. People who go for this concept just want to see a big number at the end. They aren't gonna follow the plan anyway.

 

[Norwayguy]

I'll go one step further. Even if it was guaranteed to grow 10%, I don't think you would find a whole lot of people to stick with the plan for that many years. The parents have to die at some point in time. Along the way some guy is gonna come along and tell the now adult child that he can do much better than 10% and the stupid guy would probably move the money and lose it all anyway.

This is a way and a concept to get people thinking and doing something vs. nothing. It then allows you to get a grip on perhaps whatever else you can get your hands on. Find the money. You have to be able to see the forest through the trees here. Don't focus so much on what the growth number is. I'll use my 6% return chart I posted above with yearly increases and show 1.5 million on a 100 bucks a month start.

6%, 8%, 10% none of it matters. All look like small numbers to me. People who go for this concept just want to see a big number at the end. They aren't gonna follow the plan anyway.

I was thinking the same thing...Even if his numbers are totally wacked 60 years from now NO ONE will remember the conversation anyway...Like I've said I have problems with the numbers but not with the concept.