The boomer population is large, and retiring at a rate of 10,000 each day. With the vast density of the demographic, comes a deep need for financial advice and retirement planning.
But what are some market factors and industry sales trends
to take note of when advising boomers?
Are there any new technology applications that may help
advisors better plan for their boomer clients?
To get an industry executive’s take on the matter, I inter-
viewed Mark Fitzgerald, national sales manager for Saybrus
Look for steady sales and few drastic moves, but get ready
for a wild ride in 2017.
Emily Holbrook: What are some market trends that present
challenges for baby boomers planning for retirement today?
Mark Fitzgerald: The changing retirement landscape
continues to present challenges for baby boomers as well
as for those already in or nearing retirement. For the long-underserved middle-income market, which encompasses
the majority of Americans, these obstacles are particularly
formidable. These are the individuals for whom Social
Security income and a pension — if they’re fortunate enough
to have one — will not be enough to cover all of their
expenses during retirement.
The shortfalls mean they’ll need to maximize the income
they can get from their IRAs, 401(k)s or other savings.
Although this may seem daunting, the challenges facing the
middle market represent significant opportunities for agents
and advisors to help offer attainable solutions.
Individuals in this market are often less inclined to initiate
the retirement planning process simply because they don’t
think they have the money to do so. However, this group is at
a much greater risk of running out of resources in retirement,
and therefore has the greatest need for financial advice.
Advisors should consider employing the
following strategies to reach the boomer
and middle market audience.
From an industry executive’s point of view
EH: How can advisors help middle-market retirees
achieve their goals?
MF: Since middle-income Americans often don’t actively seek
professional advice, it falls to agents and advisors to help these
prospects and educate them on what they need to be thinking
about, especially as they get closer to the retirement age.
Advisors should consider employing the following strategies
to reach this audience:
Expand your marketing message:
Despite the fact that these prospects don’t actively ask for
advice, they are still very concerned about securing predictable
retirement income as well as some level of protection regarding
health or long-term care costs. Many times they may not realize
that annuities and life insurance strategies are not exclusively
designed for the wealthy.
Take a multifaceted approach to education:
Agents can partner with employers or networking groups to
provide educational workshops and/or one-on-one sessions
that offer a 101-type of approach to retirement planning and
annuities. They can also reach this demographic by providing
planning information through social media, a blog and other
EH: Are there any new sales trends you’re anticipating for the
year ahead that will benefit this market?
MF: Even with the Fed’s recent rate hike, there is still a very
low interest rate environment, and we expect this to continue
impacting sales to middle-market baby boomers in 2016.
Advisors will continue to offer fixed indexed annuities (FIAs) as
an attractive alternative to typical offerings such as CDs, fixed
income investments, money market accounts and variable
In addition, if rates continue to rise, we should expect to see
more enhancements to product pricing. The overall market
volatility and economic uncertainty also plays a strong role in
consumer behavior, highlighting clients’ needs for guarantees
EH: What are the latest technology innovations that are
impacting sales? Are there any new ones that may become
available in 2016?
MF: We expect to see much better illustrative capabilities in
three particular areas. First, the technology will allow consumers to see how the caps on performance and guarantees work
together. Second, the technology will be able to show how a
systematic withdrawal strategy will impact guaranteed benefits
and cash value.
And, finally, consumers will have a clearer view of how the
various benefits in combination products work together to
provide comprehensive solutions. All together, these improvements will provide a much better view of how the product will
perform in real life.
FIAs can seem complex – and some of the features require
careful explanation. Any technology that offers a clearer line of
sight to how the benefits and features work and how they are
performing will benefit consumers, advisors and manufacturers
alike. It’s important to understand the value of the benefits and
solutions, not just the features of the products. RA
By Emily Holbrook