Thank You, Very Superstitious, PARIS, 5% Rules, Clients Want More, Avoiding Risk, Q3 Webinars, and Bolstering the Team

In the third quarter of 2022 these advisors began working with us: Cheryl Krueger, Aaron Simpson, Garrett Harper, Adam Stanley, Paul Hansen, Zachary Knable, Scott Garrigus, Brian Click, Scott Hitchcock, Steven Boorstein, Andrew Band, James Hanley, Alan Yakuboff, Brian Brush, Jack White, Eric Johnson, David Morton, Kevin Hamel and Michael Munson.

Thank you for choosing RetireOne and welcome to the platform!

It’s spooky season. Time to grab a pumpkin spice latte (even if it tastes different), pick out a costume, screw up your courage and read our latest News and Notes. It’s loaded with vampires. Or a vampire. Maybe not a vampire? You’ll see.

Very Superstitious

In late August of this year, an archaeological research team in Poland found the skeletal remains of a presumed vampire. Even so, sanguivoriphobia isn’t the reason the Polish leg of Roger Waters’ 2022 tour was cancelled in September…In any event, the vampire woman had been buried with one foot padlocked and a farming sickle lain across her neck, presumably to decapitate her in case she decided to, you know, get up and quench her thirst for blood.

This kind of thing used to be pretty common; people believed vampires were real and had all kinds of methods to protect themselves by preventing the dead from rising from their graves. Nowadays, we classify these practices as “superstitions,” and we believe we’ve evolved past them.

But modern people still lean on all kinds of superstitions, and there are plenty in the financial services industry. Superstition, according to Miriam-Webster, is “a notion maintained despite evidence to the contrary.” Maybe believing you can time the market fits that bill, or that if you withdraw 4% of your retirement savings every year, adjusted for inflation, it’ll support your lifestyle in retirement for the rest of your life.

PARIS (not France)

Financial advisors also have a lot of superstitious beliefs about annuities… this was pretty evident in the results of the joint Protected Accumulation + Retirement Income Survey (PARIS) we conducted with Midland National Life Insurance Company.

For example, there’s still a contingent of advisors who won’t refer annuities under any circumstances. Most responded that they would refer annuities, or were neutral on them, but 22% (the same percentage as last year) said no to annuities. Their most frequently cited reasons? Fees, liquidity, and opacity.

5% Rules

Our PARI Survey also reveals that, in spite of paltry rates, 41% of respondents recommend CDs (certificates of deposit) for clients in need of principal protection. Ok. I get it. Five-year CD rates have risen, but they don’t approach multi-year guaranteed annuity (MYGA) rates.

The vast majority of CDs in America are in the 6-month duration, and the two most popular months for CDs to renew are April and October. Right now is a great time to ask your clients if they’re satisfied with the return they’re getting on their CD, because:

  • They could be earning half of what is available (scary)
  • Insurance carriers are now offering fixed, guaranteed rates that are higher than they’ve been in over 15 years
  • Rates of 5% or better guaranteed for 5 years are available.

For clients looking for a stable return on their investment in this volatile environment, call (877) 575-2742 or contact the RetireOne sales team for help identifying the right solution to meet their needs.

This persistent belief that all annuities are expensive, lack value, and are illiquid, and opaque is irrational enough that I would categorize it as a superstition, given how much annuities have changed since those objections were valid. Heck, close to 67% of the annuity naysayers in our survey said they wouldn’t recommend an annuity even if they could design it themselves. There’s just no way to justify that kind of response with logic.

Clients Want More from Advisors

Clients are scared right now, and fear can lead to all kinds of poor decision-making. I wrote an article about how fear affects financial decisions not long ago, and in that article I made the point that, while it’s normal to be afraid during uncertain times, it’s the advisor’s job to think clearly and give good advice.

A growing number of articles are being published every month about what clients want from advisors, and these articles echo a sentiment we’ve been expressing for a while now. Simply put, advising on a client’s portfolio isn’t enough. Those are table stakes. What clients want is to be listened to, to have their financial health viewed holistically, and to work with an advisor who’s focused on their goals rather than just their portfolio.

One of those goals should be providing a reliable income stream in retirement. 82% of advisors in our survey indicated that retirement income planning was “very important” to their clients. And yet 61% of advisors don’t use any kind of income planning software, and most still seem to prefer unprotected decumulation methods, like systematic withdrawals or a bucket approach.

Talk about superstitious.

Avoiding Risk Isn’t the Answer

Ultimately, superstitions are all about avoiding risk. You avoid walking under the ladder so you won’t get bad luck. You knock on wood to avoid jinxing something. You bury your relative with a sickle on her neck to avoid having her come back from the dead and dining on your friends and neighbors.

But certain kinds of risk aren’t always the enemy. There’s a famous Helen Keller quote about risk that I like a lot: “Avoiding danger is no safer in the long run than outright exposure. The fearful are caught as often as the bold.”

Given that, doesn’t it make more sense to approach risk with awareness and an eye for opportunity?

That’s one of the reasons we created Constance, and why we continue to improve it. It’s why experts like Michelle Richter write about CDAs becoming a $100B industry. And it’s why we keep adding new solutions to our platform, solutions with fixed rates that continue to remain stable or even improve in the face of rampant market volatility.

A rabbit’s foot, penny in your shoe, or a sickle placed strategically to behead an undead woman…These function as little insurance policies. I’m not going to get into how effective they are. But in the case of the Polish vampire lady, I’d bet the folks who buried her slept well at night knowing that they’d done all they could to prevent her from showing up at an inopportune time.

As my colleague, Tom McNeela might say, the Polish villagers who buried this poor woman placed a sickle across her neck NOT necessarily because the probability that she would reanimate was high, but because the consequences of her wandering the streets and biting the necks of villagers would be devastating.

On-Demand Webinars from Q3

  1. The Evolution of Risk Culture for Financial Advisors
    Our friends at Fabric provide advisors with insight into market risk that deepens the advisor/client relationship. Fabric’s Co-Founders, Rick Bookstaber and Govinda Quish joined me on this webinar to explore the evolution of risk culture for financial advisors.
  2. Insuring Client Spending in Retirement with Portfolio Income Insurance
    As part of Advisor Perspectives’ 2022 Thought Leader Summit, I was joined by Michelle Richter of Fiduciary Insurance Solutions, and George Webb of Pension & Wealth Management Advisors. We discussed how a CDA may protect clients from a poor sequence of returns in “the fragile decade,” help RIAs Create an income stream that clients can’t outlive, and preserve the possible gain from taking risk while eliminating the downside consequence of low returns on retirement spending.
  3. Perception vs. Reality – The Vital Role of Insurance in a Thriving Advisory Practice
    Mark Colaço from Dimensional joined Jackson’s James Pryor and RetireOne’s Mark Forman to explain how top quartile advisory firms are embracing insurance to provide higher levels of client satisfaction and increase growth.

Bolstering the Advisor Solutions Team

In Q3 we added more talent to our Advisor Solutions team. Alan Miller joins as regional vice president (RVP) of the Mountain region, Conor Miller as RVP of the Mid Atlantic, and Duane Flynn takes over as RVP of the Southeast where he’s joined by regional director (RD) Matt Robinson. Matt Schober is our RVP of the Great Lakes, Jun Kim is our latest sales associate addition, and annuity back office receptionist Elizabeth Yates joins our service and operations team.

Welcome aboard, everyone!

As always, if you like this content, be sure to follow RetireOne on LinkedIn, and Twitter for more.

Best Wishes,

Stone Signature

David Stone
Founder and CEO