Brokers push to put annuities into planning framework

In an attempt to pull further away from the transactional nature of annuity sales, brokerage executives are using tools to help their financial advisers fit product sales into a planning context. “It's a process — retirement income — and more-detailed conversation is needed,” Ed O'Connor, managing director of UBS Financial Services Inc., said during a panel discussion “Retirement income — Service or Product?” last Monday at the Insured Retirement Institute's annual marketing conference in New York. Asking clients about their fears — of both the markets and of running out of income during retirement — can help advisers plan for their clients' needs, particularly when discussions goes hand in hand with planning tools, distribution executives said. “There's skepticism, fear and an element of distrust,” said Michael Stern, a panelist and national sales manager at Morgan Stanley Smith Barney LLC. “It's very apparent that advisers want this integrated with their overall wealth management plan.” Since last year's merger of Morgan Stanley and Smith Barney, the combined firm has kicked off an initiative called the Retirement Standard. “It's really centered around building competencies and awareness,” Mr. Stern said. The initiative involves a checklist to ensure that advisers are weighing factors such as Medicaid elections, pension elections and health care awareness. Distancing itself from the transactional annuity sale, Edward Jones is transitioning its advisers to weigh other retirement income factors, including longer life expectancies and waning pensions. In order to help advisers get into that mindset, the firm recently launched a financial-assessment tool, according to panelist Jeffrey Panchot, a principal for insurance marketing at Edward Jones. Newer advisers are more likely to use the tool, while their veteran counterparts already embrace the planning concept but are more resistant to change their methods. “You have those yellow-legal-pad advisers who just don't embrace the planning tools,” Mr. Panchot said. E-mail Darla Mercado at [email protected].