Why Would I....?

Apr 18, 2008

  1. TonyC
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    TonyC Guru

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    Forgive the question from a Newby....

    I was reading an Annuities book and they were stating that a person can purchase annuities and forgo the commission by buying directly from the company. Companies like Vanguard, etc sell their annuitiy products directly to the public.

    How do you compete with this?

    HOW DO YOU OVERCOME THIS OBJECTION...."why should i buy from you...i can purchase an annuity directly from Vanguard?"


    ~your constructive input is greatly appreciated...
     
    TonyC, Apr 18, 2008
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  2. slushhhpuppie
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    slushhhpuppie Super Genius

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    ...because no one at Vanguard is going to come out to your house, sit at your kitchen table and explain the product to you like I am doing now.

    ...because in three years when you have a question about your contract, you can call me instead of talking to a machine.

    ...because it doesn't cost you a cent to get personalized service from a local professional.
     
  3. Charpress
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    Charpress Guru

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    Well put.
     
  4. Frank Stastny
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    Frank Stastny Guru

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    Excellent post!

    Those are basically the same arguments I use when people tell me that they "have been looking at AARP" for their supplement insurance.
     
  5. SportsNut
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    SportsNut Guru

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    People don't know what they don't know... meaning that most folks don't even know what an annuity is, let alone how to contact Vanguard, et al about buying one. They simply do not know if an annuity is for them or another product. In short, the financial IQ of the American public is quite low. You are the educator, and in the process of that education, your compensation for such is when they decide that the annuity, (or substitute whatever product you wish in place of annuity), is the right fit for them.

    I remember back in the early 80's and I was selling ins and mf's (where I come from mf still stands for mutual fund). I would come in contact with people that never even heard of a mf, and low and behold they would become investors of same by the shear education about the product and its existence. Many of those people have become wealthy as a result of that education. Who knows, if that class hadn't taken place, some of those same folks might never had invested the first dollar in mf and would have missed out on all the upside.

    Sure today folks can google and learn about many things that they otherwise couldn't have in the past. Some folks may choose to go with a Vanguarg or other no-load product, but that is going to be the exception rather than the rule. Most folks NEED and WANT the hand-holding offered by an advisor. You simply need to let folks know that what you offer is a value added service, and wth the sturcture of annuity contracts, the cost of your annuity over a no-load annuity is negligible. Just assumptively acknowledge that following your lead is the right decision for them, (providing that you truely believe the thought), and people will follow you in most cases.

    Cheers. SN
     
  6. Guest
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    Guest Guest

    Hello,

    I am neither in insurance or sales. But if I, as a consummer, or one of my relatives asked that question, this is the answer I would like to hear:

    "You most definitely can do it yourself! This process is no different than someone that takes their car to a mechanic to have work done. Anyone could change an alternator. All they have to do is remove some nuts, remove a belt, replace the alternator, put the nuts back on with the belt, and adjust the tenssion on the belt.

    The reason most people do not do that is that it requires a certain amount of training, experience, and tools. The mechanic has all those.

    No difference with a variable annuity. Anyone could buy and read some books on indexing, fund selection, stocks, bonds, asset allocation and do it themselves. It is a matter of being willing to learn, study, and research.

    Anyone can do that.

    If they are not inclined to do that, I can provide that service."

    AND, I believe and know this in my heart to be true. Yes, anyone could do it. Do they have the self-confidence, interest in learning, ability to digest all this? With investments, I do. with my car, I do not.
     
    Guest, Apr 18, 2008
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  7. URDRWHO
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    Well you can replace the belt as you say and in 10 months you'll need a new water alternator. There is a mathematical method to place the belts under tension, too much and you put too much pressure on the alternator bearings. I work on my car, have the $150 shop manual and an Alldata account. I torque the bolts to spec. But I am not going to try and rebuild my transmission. There is a time when you pay people for what they know. Yes you can do things but can you do them well. You may be doing things and you won't even be aware you are doing something wrong. It's my personal choice. I try to find people that are doing well in life, are busy at their job and don't care to or have the time to spend learning on their own. These are the people who value their time and have no emotional problem paying someone that already knows about the subject.
     
    URDRWHO, Apr 18, 2008
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  8. Winter_123
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    Is their goal to avoid paying a commission or to get good returns? If the best or better performing funds have a sales charge but the superior performance compensates for that and provides a far, far greater return over time then what has been gained by avoiding the sales charge, except as a short term blip?

    If on the other hand, the consumer knows how to do that type of analysis, and has done it, and the no-load outperforms the fund with a load, then go for it. If a knowledgeable investor is highly focused and educated then they can often do as well or better than their advisor. Just be sure to not overlook the knowledgeable, focused, and educated factors that I mentioned. There are more people who think that they are in those categories than actually are.
    :cool:

    Winter
     
  9. Guest
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    Guest Guest

    I ask you re-read my reply.

    I agree that an agent adds value, just as a mechanic provides a service if one does not know what they are doing.

    I thought I said that. If I did not, I wrote it very poorly.
     
    Guest, Apr 18, 2008
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  10. Guest
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    Guest Guest

    Hello,

    Here is a thread from a Vanguard forum on Morningstar that a very prominent poster on the site stated why he bought something other than Vanguard.

    The reply you are looking for is the first reply, it is made by Taylor Larimore: Vanguard liletime income annuity experience
     
    Guest, Apr 18, 2008
    #10