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Ned Ryerson is Just as Cool as Gordon Gekko

Publish Date: February 7, 2021

There is a lot that can be learned from little kids.  They are unfiltered and say what is on their minds because they have not yet been “polluted” by political correctness.  For example, as my family was on our boat a year ago and I was dawning my swimming suit gear, my 10-year-old son Matthew thought he would verbally express a profound observation.  After a curious stare at me for about 10 seconds, he said “Daddy, you need to start eating at Subway instead of McDonalds.”  I will say, when a 10-year-old tells you that you are fat, YOU ARE FAT. 

Anyway, in addition to running my own marketing organization I also have my own wealth management practice and of course THE RETIREMENT ACADEMY! Within my wealth management practice, I am a Registered Rep, an Investment Advisor, and of course an insurance agent.  In general, I have built my career around the insurance business and not so much the securities business. More on that in a bit. 

I have done about 100 or so speeches a year for over 10 years to financial professionals and consumers educating on annuities and life insurance.  So, one would think that when my son Matthew tells his friends what his dad does for a living, wouldn’t you think he would tell them I am in insurance?  Wrong.  HIS FRIENDS ONLY KNOW ME AS AN “INVESTMENT ADVISOR.”  Clearly, even a 10-year-old thinks that an “Investment Advisor” is cooler than an “Insurance Agent.”  Apparently, my kids don’t go to school and brag about how their dad sells indexed annuities.  Stocks and bonds are clearly more glamourous.  I wonder if my kids have watched too many Ken Fisher commercials?

Although I believe Matthew favoring “investment advisors” over insurance agents is purely coincidental – because he is only 10 years old and doesn’t know the difference – that example is a microcosm of the perceptions of the general public.  Everybody, including my farmer cousin, wants to pretend to be a Wall Street Quant instead of Ned Ryerson in “Groundhog Day.”  OK, bad comparison.  (Note:  If you don’t know who the cheesy insurance salesman – Ned Ryerson – is, google him.)

To many of my friends, they know me as an industrywide annuity and life “guru”, which may not make me the coolest guy in my group of friends.  Needless to say, they don’t choose to discuss annuities and life insurance with me very often.  However, for those friends that also know that I work with securities, they ALWAYS want to discuss stocks, bonds, funds, the economy etc. with me.  Interesting dynamic huh? 

So, as I work with my friends’ financial portfolios, I am very cognizant of this “anti-annuity” dynamic and the standoffishness around these products.  Therefore, I approach the annuity conversation with caution with my friends.  Although my friends trust me very much, I do not want my friends to think that I am trying to push annuities and life insurance.

Anyway, recently a 50-year-old friend of mine sold a piece of his business. The total amount of funds was more than $500,000. This friend I would consider to be very savvy with stocks, bonds, interest rates, etc.   He wanted to speak with me about his options.  When we talked, he had expressed what many other clients feel today: that we are 11 years into a bull market that on average only lasts 48 months.  He also believed the bond market and yield curve were signaling big trouble in our economy within the next couple of years.  This made him uncomfortable with his normal choice, the stock market.  He also understood that bonds may not be a great choice because if interest rates rise, bonds are not so “safe.”  In short, he felt what many investors feel – nowhere feels safe today! 

Well, after giving him many securities and non-securities options while keeping the notion of annuities silent, he said something that broke my silence.  Verbatim, he asked me, “is there anything out there that if the stock and bond market tank I am protected but yet if the market rises, I am able to get more than the 1.6% the bank is giving me?”  I could no longer stay silent!

I went on to explain what an indexed annuity does, WITHOUT EVER MENTIONING THE “A” WORD.  After hearing the story of what these products do, without ever mentioning the “A” word, he said “that is exactly what I am looking for.”  I then explained that it was an annuity.  I proposed that for a small portion of his portfolio – the fixed income part – this would give him what he is looking for, a little more upside potential than fixed alternatives but with the downside protection of 0% in negative environments.  He said, “why have I never heard of this before?”  

For those reading this article that have sold these products, you are probably nodding your head in agreement as you have experienced a situation very similar to this.  Many consumers like what annuities do but do not like the “A” word!  Public awareness around annuities seriously lags the marketing heft of the multi-trillion-dollar securities business (which I love as well).  That along with the fact that you have “money managers” with large budgets bashing annuities and calling them “scumbag products” (verbatim), annuities are not perceived as “cool” in the mindsets of consumers.

This is an unfortunate mindset that has been created by some of these “pundits” and their negative marketing.  However, I believe this will change as the largest age cohort in the US is more risk averse than their parents were at their age.  And no, I am not referring to baby boomers!  I am referring to the 82 million millennials.  This group is more conservative than their parents were at their age, which I believe will help with annuities becoming mainstream products.  This group has come of investing age over the last 20 years where they saw the stock market lose 49% from 2000 to 2002 then another 57% from 2007 to 2009.  This volatile period was different than the bullish 80’s and 90’s that their parents experienced and is tattooed in the minds of these millennials.

Furthermore, even the baby boomers who experienced the bullish 80s and 90s are beginning to realize that annuities can do things that the securities companies cannot.  That is, guaranteed lifetime income that CANNOT be outlived.  And, the level of lifetime income GUARANTEED to them many times is higher than the securities rules of thumb, like the 4% withdrawal rule (Now 2.8% according to Morningstar).  As a matter of fact, the most popular indexed annuity my agents are offering to retiring clients today guarantees that when that 63 year-old client (for example) retires in two years that he/she will be guaranteed a lifetime income that increases to over 7.2% of their premium per year for the rest of his/her life.  How can a stock/bond rep argue against this unless they are suggesting dangerously high withdrawal rates? 

It’s not profound when I say to make annuities become “cool”, we as an industry need to explain the wonderful things these products do in an effective manner.  Explaining and selling these products is harder than selling stocks was in 1999.  This requires powerful marketing, storyselling, communication skills and subject matter expertise.  Carriers and IMOs (like my company) need to help financial professionals with this process.  The adage of “customers want a hole, not the drill bit” rings true with annuities.  For instance, my friend hated (past tense) the “A” word, at least until I made him aware of what annuities do.  If I had mentioned annuities at the outset, the conversation would have been over!  Furthermore, baby boomers, once educated on what annuities can do (like my 7.2% example) will also realize that these products can be just as cool as the Wall Street type stuff.  But again, we need to be able to educate and communicate the value in an effective manner because there are biases against these products brought about by certain marketing campaigns.

I will end with a story that I share a lot with agents and clients.  This is in response to the prospect that says, “that level of guaranteed income seems too good to be true!”  This story should be credited to national retirement expert, Moshe Milevsky, and explains how life insurance and annuity companies are able to provide the unique benefit of guaranteed lifetime income that can be higher than the securities “rules of thumb.”

There were five 95-year-old ladies sitting around the table playing bingo. One of the 95-year-old ladies looked up and said “This is very boring! We have been doing this for 30 years and it’s time to try something new. Let’s all put $100 on the table right now and whoever is still alive a year from now will be able to split the entire $500 pool.” They all agreed it sounded like fun so they each threw $100 on the table. One year goes by and, as the mortality tables showed, there were only four of those 96-year-olds still alive. One of them unfortunately passed away. What does this mean? This means that each of those four 96-year-olds gets $125 at that point in time, which is $500 divided up four different ways. It wasn’t even invested in anything over that year but they each got their money back PLUS an additional $25, by merely living an additional year!  Isn’t that magical?                 

  – Moshe Milevsky

To be clear: the point is not that anybody is going to get 25% on their money.  The point is, that like mortality credits with life insurance, longevity credits with annuities cannot be replicated by Gordon Gekko and the Wall Streeters. 

Maybe Phil (Bill Murray) should slow down and listen to what Ned Ryerson has to say.  Of course, Ned Ryerson also needs to approach the conversation in a more effective manner!

Written By:  Charlie Gipple, CLU, ChFC

Written By: Charlie Gipple, CLU, ChFC

Charlie is recognized throughout the industry as one of the foremost thought leaders and subject matter experts on annuities, life insurance, leadership, storyselling and behavioral finance.  He is also an industry keynote speaker conducting 100-150 speeches per year. He has spoken at the MDRT Top of the Table as well as other large forums and has also appeared on TheStreet.com and AM Best TV.  Charlie is also the Founder and CEO of CG Financial Group, one of the fastest growing IMOs in the industry that serves independent financial professionals and broker dealers in growing their annuities, life and long-term care business. Gipple has vast leadership experience in the insurance industry as he has been an executive of various insurance companies and large Independent Marketing Organizations.  Charlie is unique in his broad knowledge across the life insurance, annuities and securities businesses.  He holds a bachelor’s degree in Finance from the University of Northern Iowa, is FINRA Series 7 and Series 66 licensed and also holds the CLU® and ChFC® designations. And now Charlie has taken his lifetime of learnings and incorporated those learnings into “The Retirement Academy”, a premier education system for insurance agents, registered reps, and broker dealers.

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