The secret to increasing sales of variable annuities at broker-dealers and wirehouses has everything to do with insurers' speeding up the sales process and making information easier for brokers to find.
That was the conclusion reached by a panel of broker-dealer and wirehouse executives at the Insured Retirement Institute's annual conference in Boston today.
The executives noted that in many cases, the same top five carriers have dominated their top variable annuity sellers list, accounting for about 68% of sales at
Raymond James Financial Inc. and 75% to 80% of market share at Morgan Stanley Smith Barney. That number is too high, noted Todd Shriber, managing director and head of insurance and annuities at Morgan Stanley Smith Barney.
Insurers topping the sales list were Jackson National Life Insurance Co.,
Prudential Financial Inc.,
MetLife Inc., Lincoln National Life Insurance Co. and Allianz Life Insurance Co. of North America.
“Fundamentally, this comes down to the wholesaling and distribution aspect of the equation,” Mr. Shriber said. “We talk with carriers who say they'd like to expand their market share: How are you willing to do that? How many wholesalers do you have, and how many broker-dealers are you servicing?”
At the distributor level, broker-dealers have tackled the issue of exposing reps to other insurers by instituting a variety of annuity tools and programs. At
Raymond James, the Annuity Wizard program helps advisers pick out living benefits, which Scott Stoltz, president of
Raymond James Insurance Group, says can help bring lesser-known carriers to the fore if they offer good products.
Meanwhile,
LPL Financial LLC has familiarized its advisers with smaller carriers by creating video presentations around product feature themes, highlighting a handful of insurers and giving advisers the opportunity to call companies if they'd like more information.
“Those smaller companies have been able to get into doors they normally wouldn't get into,” said Rob Pettman, LPL's vice president of annuity marketing. “It's great to start with marketing activity and connect ourselves down to the sale in an efficient way for advisers rather than having a lot of wholesaler appointments.”
But insurers can do a lot on their own to help drive interest and volume from representatives, namely by cutting down on the amount of time it takes to process a sale and service it in the years ahead.
“I think advisers do a calculation in their head: revenue divided by time spent,” Mr. Stolz said. “In this environment, raising revenue — commissions — won't happen, so you have to reduce the amount of time spent.”
Activities that consume advisers' time include getting familiar with an annuity, presenting it to a client, going through the paperwork, going over that paperwork with the compliance department and servicing the annuity after it's been issued, he said. Searching for contract terms on a 10-year-old annuity could take days.
“Advisers know going in with an annuity, they'll have to deal with it time and time again; we as an industry don't make that easier for them,” Mr. Stolz said.
John Mulhall, managing director at Merrill Lynch Global Wealth Management, noted that if carriers placed product data in easy-to-digest bites online, advisers would be able to save a little more time.
“We need insurers to provide us data the way advisers want to see it; they want it populated on statements,” he said. “Enable advisers to make simple changes to the contracts, such as an auto-withdrawal online or a change of beneficiary. Invest some money in that to find the producers.”
