Monthly Average Vs Point-to-Point Cap

[scagnt83]

I will have to check out the american national triggered annuity with ROP, thanks.
Yes, the inverse relationship of the indices and eia rates in interesting. Personaly I believe that eia rates are a bit low at the moment, considering future market potential. But I know all about having to hedge an investment. And the insurance companies crunch a lot more numbers, and pay a lot more attention to market conditions than I do, so who am I to argue...lol.

But back to my original question:
Has anyone experimented with reallocating funds in the different accounts of eia clients on a yearly, bi-yearly, or quarterly basis. To see if they can get above average eia returns.
I have run some projections before and agree that yearly point to point or triggered is the way to go for the long term. But some years...or half years....would have much higher returns with the monthly cap or average.
I realize that the nice thing about annuities, especially eias, is that they are pretty turn key. But if you had a knowledable wealth manager in your office to give a quarterly outlook on the indices, and have your assistant do the reallocation paperwork appropriately. You might be able to generate higher returns than most.
Has anyone experimented with this at all???

 

[Franz Kafka]

But back to my original question:
Has anyone experimented with reallocating funds in the different accounts of eia clients on a yearly, bi-yearly, or quarterly basis. To see if they can get above average eia returns.
I have run some projections before and agree that yearly point to point or triggered is the way to go for the long term. But some years...or half years....would have much higher returns with the monthly cap or average.
I realize that the nice thing about annuities, especially eias, is that they are pretty turn key. But if you had a knowledable wealth manager in your office to give a quarterly outlook on the indices, and have your assistant do the reallocation paperwork appropriately. You might be able to generate higher returns than most.
Has anyone experimented with this at all???

Well if you ever get good at that let me know. I can find you a nine figure income job trading options future (because that's what you're trying to do).

In my experience there are 3 things that can happen when you try to time the market for your client.

1. You can time the market perfectly and your client will wonder why she's only getting x% when you're such a genius.

2. You can miss the market by small margin and your client will wonder how long you've been in the business because he thinks you're still learning the ropes .

3. You can miss the market by big margin and your client will think you have just fxxxed him.

On the other hand, if you PROMISE/GUARANTEE him 0% on his money, he will hug you and thank you when the market tanks, sidelines or jumps. AJIMO

 

[scagnt83]

Well if you ever get good at that let me know. I can find you a nine figure income job trading options future (because that's what you're trying to do).

In my experience there are 3 things that can happen when you try to time the market for your client.

1. You can time the market perfectly and your client will wonder why she's only getting x% when you're such a genius.

2. You can miss the market by small margin and your client will wonder how long you've been in the business because he thinks you're still learning the ropes .

3. You can miss the market by big margin and your client will think you have just fxxxed him.

On the other hand, if you PROMISE/GUARANTEE him 0% on his money, he will hug you and thank you when the market tanks, sidelines or jumps. AJIMO

lol. How do you know im not already making 9 figures a year? .....lol (just for the record, unfortunately im not...yet)

But you are right, I am talking about trying to time the market. I think this would be easiest with the S&P and Dow, for obvious reasons. But there are a lot of outfits out there who have fulltime traders or wealth managers on staff, and could very easily do this. I dont think that you would be getting 12% or anything, and im not proposing telling the client that you will make more money in this product than the other guy.....without some pre-established track record that would be beyond stupid! But just as an added service factor, review the current market conditions compared to your clients allocation, just as you would (or should) with a VA or stock/mutual fund portfolio.
Im suprised that nobody has tried it yet. But on the other hand im not. Customer service from the agent is one of the biggest problems this industry has. So I guess its not that suprising that no one with the ability has taken their customer service to this level.

Most of my clients who are in an EIA are 55+. So the gurantee/safety aspect is a huge issue. So I am totally with you on the no promises of huge returns part! And guranteed principle is a very powerfull thing!

 

[dgoldenz]

But back to my original question:
Has anyone experimented with reallocating funds in the different accounts of eia clients on a yearly, bi-yearly, or quarterly basis. To see if they can get above average eia returns.
I have run some projections before and agree that yearly point to point or triggered is the way to go for the long term. But some years...or half years....would have much higher returns with the monthly cap or average.
I realize that the nice thing about annuities, especially eias, is that they are pretty turn key. But if you had a knowledable wealth manager in your office to give a quarterly outlook on the indices, and have your assistant do the reallocation paperwork appropriately. You might be able to generate higher returns than most.
Has anyone experimented with this at all???

Jackson National has a brochure they send out to agents showing the hypothetical performance of the different allocation options in the most recent 20-year period (point-to-point, monthly averaging, monthly sum). 16 out of the 20 years, the monthly sum option came out on top for returns. Of course, this will change depending on the cap levels, but there's a comparison for you.

 

[Franz Kafka]

But there are a lot of outfits out there who have fulltime traders or wealth managers on staff, and could very easily do this.

I have to disagree on this. It's one thing to analyze company going concerns etc but quite another thing to predict the market move in one year periods. Reward potential is tremendous in options market because of this difficulty.

I guess what I'm trying to say is that it's not the "numbers" that make happy clients - but rather the right "perception". And that's what we are all really selling - a perception.
If I were you, I wouldn't try to make my job any harder than necessary.

 

[scagnt83]

I have to disagree on this. It's one thing to analyze company going concerns etc but quite another thing to predict the market move in one year periods. Reward potential is tremendous in options market because of this difficulty.

I guess what I'm trying to say is that it's not the "numbers" that make happy clients - but rather the right "perception". And that's what we are all really selling - a perception.
If I were you, I wouldn't try to make my job any harder than necessary.

I hear ya. Thanks for your input. We do however agree on the fact that the perception and purpose of the product is what we are really selling when it comes to EIAs. Gains should not be the primary need being met with an EIA.

I just thought it was an interesting client servicing idea. My shop isnt set up for something at that level, nor do we have the market expertise inhouse....but I know there are outfits out there that could.... oh well

 

[0b1kanobee]

I know LSW provides there previous crediting rates going so many years back on a few of the annuities so they have already done the research for you based on their products.

There are some factors that come into play here which has been discussed already (crediting methods, length of annuity, caps, participation rates, ect.) so you just can't compare company to company with a broad stroke.

Best thing I have found so far is to learn about a few companies and a handful of products that you know very well. With all of them out there, you can't know the ins and outs to them all although there are a few exceptions for some folks on here who seem to know about many companies.

I prefer myself to know a handful very well because I just couldn't keep up with all of them. Plus if I spend too much time researching for the client I lose them while their interest is peeked.

Had a guy who wanted to invest 500k a few weeks ago and spent too much time formulating a plan with different products that would kick in for him over the years and even though I stayed in touch over 10 days (working other clients as well), I lost him. He decided to invest in properties and become a landlord at 60. Go figure!

I'll call him back in a few months and stay in contact because I see troubles for this man and property going down in value here in Florida. Maybe he will decide he made the wrong decision.

 

[insuranceexec]

I have always found that a 3-4 call sales close worked the best for me.


1st appointment (Referral) General introduction and fact finding. Typically an hour or so in length, and I would schedule another meeting with them while in the home.

2nd appointment: I would go back over the fact finder, uncovering the problems, and would tell them I would "TRY" to find them a solution.

I would say something to the effect of: "Let me see what, if anything, I can do to help improve your current situation."

I would then schedule the 3rd appointment.

3rd appointment: Re-develop the problem; present the solution, and clse the deal. 82% of my sales came on the 3rd appointment. If I could not get them closed here I would set one final appointment.

4th appointment: Just a regurgitation of the 3rd. If I failed to close them on this appointment; it was generally a lost cause. I only sold 2% of appointment after the 4th call.

I would never get mad and would always ask them if I could keep in touch with them in case their situation changed.

I would then make it a point to have either myself, or my secretary call them at least once a month to check in. This I found worked extremely well.

Follow up, follow up, and follow up is what makes people successful in this business long term. I hope this helps.....

 

[scagnt83]

I agree. Follow ups are key. I recently gained half of a high networth individuals assets, and did a comprehensive financial plan that included estate planning with some very high life premiums! This was a casual aquantance who a year ago told me to call him back in a year. He was so suprised that I actually called him after a year like he requested, that he said he was sold on me and my services.

From him I recieved a referal to his boss, who is one of the wealthiest business owners in town. Im now looking at a corporate benefits package for his multi million dollar company!

All because I bothered to write something down in my calander and pick up the phone for 2 minutes a year later!!

 

[InsureGuy5]

With the recent market volatility, the one and two year point to point accounts have been doing very well. I prefer to have the lions share of the funds in those annuity baskets.