What do advisers want from insurers that sell variable annuities? Competent wholesalers and a simplified breakdown of the product.
That was the takeaway from a panel discussion featuring eleven advisers at the Insured Retirement Institute's annual conference in Boston yesterday. The participants agreed that wholesalers are the most valuable source of information on variable annuities, particularly when advisers are looking for information that goes beyond the basics of how the product works.
“I get a lot of calls from wholesalers, but the ones I take calls from are the ones who give me actionable ideas that I can use with clients right now — ideas that I can use to help my clients and build my practice,” one adviser said.
Others preferred to hear an honest perspective on the pros and cons of new VAs.
“I enjoy a conversation where we can get beyond the features of the product and what's sellable [and talk about] the weaknesses of the product or the costs someone's going to pay,” another adviser said. “That's what people are waiting to hear: the price to pay, the [surrender charges] and that this isn't a magical guarantee you can just ride off into the sunset with.”
Panelists griped about the complexities of selling the products, however. They lamented that the sales process has become extremely paper-heavy and that as contracts change, it hasn't been easy to catch up on a VA's new attributes.
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“When I started selling annuities in the 1970s, it took three or four page to write the contract, but now between the [insurance] company's forms, the state forms, my company's forms and internal legal and compliance, it's 14 to 15 pages of documents,” an adviser complained. “What took 15 minutes to complete now takes three hours.”
As a result, carriers that can simplify where possible get the thumbs-up.
“I was surprised to find one company do an excellent job on the marketing of their variable annuity in that they made it plain and simple, like a menu approach,” said one adviser. This insurer, which she wouldn't name, provided an easy-to-read breakdown of fees and features.
“In the past it was more about having glossy brochures and not pulling out that information for you to see,” she added.
