Annuity. Ask many investors — or advisors, for that matter — what an annuity is and you’ll typically get the list of limitations these products have. This is, in my humble opinion, due to the fact that annuities remain largely unknown and unfamiliar. Still, they are one of the best retirement income planning vehicles available today, taking in billions of dollars in annual inflows. And despite the annuity’s unfair reputation as being illiquid, expensive, tax-disadvantaged, etc., advisors who have a deep understanding of how these complex vehicles work have a distinct advantage over those who don’t. I’m going to share with you some of the resources I think you’ll find helpful in learning more about these ever-evolving products.
We are all aware of the amazing opportunity to capture retirement assets right now, to surf that “silver tsunami.” Annuities are a great way to achieve this. Good advisors understand economics, finance, taxation, estate planning, investing, retirement income planning, etc. Yet the great advisor has honed these basic fundamentals — in addition to mastering the best tools available for solving a client’s most difficult challenges. When it comes to retirement income planning, one of the best tools that I know of is the variable annuity. No other tool can accumulate and distribute wealth like a variable annuity.
So how do you go from “good to great,” as Jim Collins might say? How can you develop a solid foundation or build upon your current knowledge of annuities? I can sum it up in three words: people, places or publications.
The first step is to look to those advisors in your own circles who are building great retirement income planning businesses and use annuities in their practice. Most advisors are more than happy to share their expertise over a cup of coffee. I’ve kept my local Starbucks in business thanks to meetings over a cup of with professionals whom I admire and respect. My return on investment has been incalculable as I continue to expand my network of professional experts to rely on and vice versa. Next, who are your local annuity wholesalers? The wholesaler is an invaluable resource for learning about the annuity world. Good annuity wholesalers will help you understand how their annuity works as well as the features and benefits of that product or line of products. The great annuity wholesalers will go beyond the basics and share how industry trends are shaping new products and how their annuity line compares and contrasts with a competitor. These annuity wholesalers can be tremendously valuable “partners” to your practice if treated as such. If it’s just a “free lunch” you’re looking for, you’ll probably get what you pay for, but a partner can help you grow your business to new levels.
The next place to look is the industry itself. You may already belong to an industry group. These industry groups host numerous meetings throughout the year, at the national or local levels, and every meeting I’ve ever been to has either a main stage or breakout sessions on annuities. If your local chapter has not offered a training session on the use of annuities in planning for retirement income, ask that they work that into the next schedule. If you don’t have a local meeting, start one! My partner and I started a book club years ago that has grown considerably just on the simple premise of sharing great books and great ideas every other Friday over coffee. Start somewhere!
If you can’t wait for the next meeting to provide that immediate surge of knowledge, publications and industry magazines (like this one) offer tremendous insight if you are open and looking for it. There are some great magazines out there, so finding a copy in a colleague’s office shouldn’t be that challenging. Finally, the Internet: Google or Bing is one of the fastest ways to find that specific thing you’re after.