First Quarter Challenges for Annuity Agents | 7 Figure Annuity Sales Podcast | Ep. 241

Foreign.

This is Caleb. Oh, excuse me.

Hi.

This is Caleb North. I'm boy wonder. And we're going to be talking about.

That's pretty funny.

That's pretty funny.

I didn't know you even had those. I should have brought my knife in here and gone.

Okay, let's get real. Oh. Voice and testosterone increases and voice lowers when the glasses come off.

I'm pretty sure when people get to your age, that starts dwindle.

Okay, that's not funny. That actually hit a little too close to home.

That's all right.

Okay. Okay.

Yeah, yeah. First quarter challenges.

Okay, on this week's episode, we're going to talk about first quarter challenges.

Hello, everyone. This is Chad Owen, the host with the most. Well, sometimes a little less, but. And then we got Caleb north over here. Boy Wonder.

I'm the most that you are with, if that makes sense.

That doesn't make any sense.

Well, you said you're the host with the most. I'm the most.

No, my wife's the most.

She's not here.

She's always here in my heart. Okay, so what are we.

First quarter challenge.

What we're talking about.

I mean, they've hit you pretty good.

I've lived it. I'm crying. Yeah, it's been tough.

I. I was asking Chad some things we could talk about on the podcast today. Asked him about first quarter challenges, what all he feels like he's been facing. He said, we're going to see a grown man cry.

Yes. It's going to hold you to that, man. It's been a tough one. And now when I say tough, I mean what do I have on for the year?

Well, six and a half almost.

Was it more like 6.8?

Sure.

Give me credit.

I think it's like.

Well, actually, actually with last week, I think I just passed over seven.

Okay.

But, you know, so don't cry for me. But the reality is last year I was already at.

You were north of 13.

North of 13 million. So I got some catching up to do. Now, I do know I have taken more time off this year, but, man, we've hit just some unique situations which we're going to talk about. So you've listed some of them that we talked about.

Yeah, well, the first one that really, I guess is you feel like you've impact has impacted you the most. Excuse me. Was lead flow.

Lead flow has been tough. There's a couple situations that's happened is my. As you guys know, I do some radio and the radio just has dwindled about 50 not even 50% of the normal call in rate. Right. And that's been a tough situation. We think we might be getting that turned around. And there is no, I have no speculation on why this is happening other than, you know, we talked about this a little bit. You know, high interest rates for CDs, you got people taking six months, CDs at four and a half percent. You have I. Bonds, you know, those have been paying pretty well. You have people that are, you know, there's, there's three. They always say there's a fight or the flight. And I say no, there's actually three. There's fight, flight or free. And I see a lot of people freezing right now.

Interesting.

Not really moving. And you'll notice this, I mean if you ever see any sort of traumatic type event. And I mean I trained for years and in particular crisis situations. And one of the things you see if you watch the videos, you'll see people that want to fight or they want to run or they want to actually just sit and they're stuck and they're not moving. And boy, when you see markets going through what they're going through right now and you see the different types of situations that are going on, you're absolutely seeing the freeze.

Well, I think it is tough. You were talking about one of the first times in history where cash has actually beaten some pretty commonplace investment vehicles.

Yep. Stocks, bonds, mutual funds, commodities and real estate have been beat by cash in 2022. And that is, that's, that just proves the fact that diversification does not work. I mean that just the biggest bunch of malarkey. Well, I was going to say bull, but I would prefer not to. But it is malarkey. And you know what is malarkey anyway?

I think it's just the same thing.

It's got to be one of those weird southern sayings that everybody comes up with. Beats me. You know, there's got to be. We got a chat, we got a chat. GPT that one. We'll see what that is. That's, that's a whole nother thing. But you know, when you look at that diversification, you know, stocks and mutual funds are supposed to go up, bonds, commodities go down. Well, why is everything kind of moving at the same pace right now? They follow the same pattern. Because diversification does not work. And if you think about it, diversification in general, when you're talking market. And let me, let me express that first. Go back to that. Diversification in risk accounts generally does not work.

Right.

Because diversification in income streams. I am a big fan of that. But when you're talking about stocks and mutual funds going up and bonds, commodities going down and then bonds and commodities going up and stocks and mutual funds going down, that's like a teeter totter.

Right.

So they're supposed to level off. So what, are you supposed to be flat the entire time? Because then they say things like, well, we can time the market. Well, we all know nobody can time the market right now. It goes back to those two questions I talk about all the time is the two questions nobody can answer is how long are you going to live for? And where's the stock market going to be tomorrow, let alone five or ten years from now?

Right.

Nobody can answer that. So I.

The diversification thing is something I'm pretty passionate about because I agree it's designed to be a risk mitigation tool. Okay. So it's designed to reduce the risk that you have by putting you in multiple things that move typically inverse of each other. Right. So if investment A increases by five points, if you were fully diversified, then maybe investment B would decrease by five points. Well, that's a net zero. So it's a risk mitigation tool, but it's simultaneously a limitation on gains.

For sure.

That's the essence of a fixed indexed annuity. Except it wipes out all the risk of the downside due to market and yeah, exactly, due to market volatility, but still lets you participate in the upside side. So it's like people that feel the need to diversify. It is, it's designed to be risk mitigation, but it doesn't always do that. And even if it does that perfectly, it nets you nothing.

Well, and it's funny because you slowly start to see the indexed annuity world gaining more and more market share. And I think it's going to continue to build. Honestly. We do need to get these 10 year treasuries back up. That will help with some of our interest rates. But we're still beating bank rates for the most part, especially in the three and the five year. Our six month. That's not, we don't even. I don't even think there is a six month. I know there's a one year annuity.

Yeah, you can get one year.

Yeah, but it's just. Man, that's, that's a tough one. Actually. I might start looking some of those.

Well, there's.

I don't even know what the interest rate is on a one year myga right now.

Yeah, it's. It's you're going to be somewhere between two and a half and three and.

A half, which the bank can be.

Yeah, I bonds, CDs, high yield savings. These are all. I mean, I was looking at I bonds and you've got I Bond rated like 6.89%.

When's the last one you saw that?

That was the middle of March.

Yeah. Because they've dropped considerably.

That was really.

Double check that. Because what happens with I bonds is more people start to go into them. And those rates. Whoa. November of 2022, composite rate for I.

Bonds issued November 20, 2022 through April 2023 is 6.8 right now.

Yeah, yeah, because I heard and I haven't looked at it like in the past week or so, but I don't know what is the current one right now. We'll find that out for you.

Yeah, I'll look into that as we keep going.

It's important to kind of know the numbers in that scenario, knowing what we're up against all the time. But I think it's around 3.9 to 4.2 and we'll find that out for you. But, you know, when you have the people that get in that free situation, it's so easy for the broker to say, you know what? I agree. The market's kind of going a little crazy right now. Why don't we just put you all in I bonds or why don't we put you in, you know, a CD or whatever it is. And in all honesty, when you're kind of in that little bit of a panic mode, it's better than put you into a money market that's not earning you hardly anything. You have some really good bank rates right now as well for some of these High Yield savings accounts. And I myself have went into some of these High Yield Money marketing, or, excuse me, high Yield Savings, because the liquidity's there. It's doing something better than just sitting in one of these accounts. I had literally last year, I got a bunch of money in one of these accounts and it earned 0.01%. And that's of course, my emergency money and everything like that. But I think as we start to see volatility and it doesn't help that the government backstops these banks. I mean, I don't get that literally what you're telling banks by, you can mess up and don't worry, we're still going to cover all the depositors. And then you got the bank institutions saying, well, what is it? The FDIC said they're saying, you know, it's the, it's the client's responsibility to know the financial stability of the bank. And the bank is saying it's a client's responsibility to know the financial stability of the bank. But then you sit there and go, if the own government can't figure out and the FDIC can't figure out and all these regulators can't figure out, figure out the banks and they're letting all these same stupid issues happen over and over again, how is the average person supposed to check the stability of a bank? How are they supposed to know the risk mitigators in there and what their job is and what they're doing or not doing? I mean, the same thing happened with the Silicon Valley bank is there was, there was some missed information and their regulators were not doing their job. So what are you supposed to do? Going to every bank and go into their back office and whenever they have these people asking the questions, you can't do that.

Right.

So now that the bank starts to have issues, then the government says, oh, we're going to backstop this. And then the government comes out and says, oh, don't worry, it's not going to cost the taxpayers any money. The government doesn't make any money other than from taxpayers. So it's going to cost taxpayers the money. So when we look at what our industry does, why would you ever take risks that like people do with banks and mutual funds and stocks. Now, banks I will never talk bad about because the reality is the bank is covered up to 250,000 or 10 million, depending on what the government decides. But up to 250,000 by a federally federal deposit insurance company, so it's covered. So if you start to talk about why, I don't know if you should have your money in the bank up to 250,000, then you're literally talking bad about an insurance company. So you can't be doing that. You got to be smart.

Well, it doesn't. Yeah, it doesn't afford. And we're going to actually talk about the bank stuff in particularly, we're going to talk about banks and index strategies in indexes that banks manage and report in light of some of these bank failures and acquisitions that have taken place recently because some of them have index strategies and we're going to talk about that next week. But absolutely, I mean, you've got the I bonds, which by the way, I couldn't find anything other than that 6.89 in a quick search. That's, that's what Everybody's reporting right now, that's the composite rate. You've got CDs six months to a year paying 4.75 to 5.05. You've got high yield savings three and a half to four and three quarters. It's wild out there what people are able to get and maintain some semblance of liquidity, especially in those high yield savings. It's not that far off of what Mygas are doing. So.

But you have to remember it still does not address the question of how long am I going to live for and how long is that interest rate going to happen.

Right.

Because we know those interest rates, those high yield savings accounts can change monthly. And so when you look at that and it drops and then you say, okay, now it's time for me to get something. I don't know, I honestly can tell you I don't know where the annuity rates are going to be in a month or two months or three months. I don't.

Right.

But I can tell you if you start to drop the bank rates, then you go and you want to get into an annuity that has new rates based off of, let's say the 10 year treasury drops more then you missed an opportunity of what it could have been. And then you also miss opportunity of some of these products that have really good income bonuses and income roll up rates. And I talk to people all the time. We have that proprietary product that is phenomenal and it's a true proprietary product. There's only 15 organizations that I' access to this and it cannot be beat right now for most situations. And you know when we have that advantage. And this is why I tell people, hey, you don't need to switch your contracts over to us, all your contracts. But if you want access to this particular product, reach out to Caleb because we can do that. We don't expect somebody to sit there and switch. I mean, I remember I am very loyal to my upline and have been for almost two decades. But the reality is if I find a product that is better that they can't get even. It's, if it's temporary, I'm gonna do it. Because often, you know, people can get into these. But there's some, I remember one about, oh, 12, 13 years ago, nobody could get it except for one organization. It went through the entire, every single smaller fmo, imo, whatever had to go through this giant and man, they almost doubled. Actually they more than doubled in volume because of this one product. Now it's funny and I'm not going to say the name, but now that product, that company is having issues. But that's a whole nother scenario.

Well, it is, yeah. I will tell you, if you're trying to position Mygas in contrast to I bonds and CDs and high yield savings, you're going to be in a bigger fight for that business, I think than if you're income planning a hundred percent.

That's a really good point. Yeah. Because if you're going for income planning, which I'll argue all day long, 90% of my clients, there's an income issue of some sort.

Right. And it may not be now. And I think this, that's where some agents get off is they look at it as in do they need income right now? Don't just look at now, look at in two years, five years, 10 years.

What, at what point, whether it's inflation, whether pension goes down, whether lower to Social Security goes away. There's all sorts of reasons why. Exactly. Income's an issue. And that's the thing. People just look at the one, the two, the three years and they go, oh, I make plenty of money right now. Plan for the future. Right. And it gives your clients such a peace of mind when you do true, accurate, detailed income planning.

Yeah. And I'll tell you too that there isn't any kind of guaranteed rate of return that you can find that can beat some of the roll up rates that insurance companies have on income riders right now. So even if we know that it's not an income need tomorrow or next month or next year, they're going to have to do something with that money at some point to create income. If that money, if the purpose of that money is income, eventually. So compare it to some of those riders in those roles.

Be careful too not to get pulled into a high bonus, a high income roll up rate with the sacrificing of the death benefit. You know, there's some that. And once again, it's. Every situation's different. So I'm not making a blanket state statement. I just said be careful.

So yeah, yeah, that's good.

I think I nailed that one pretty hard.

Yeah. I want to hit two more things that I've noticed just in working with agents. We've had a couple of issues with carrier challenges just in processing times. I'll just tell you, generally if a carrier's got a high MYGA or real competitive income payout right now, they're going to be slower. And when I say real competitive income payout, I'm talking about guaranteed income because there's a lot of really great products out there that pay a little bit lower, guaranteed, but have way more upside potential. That it's kind of. They fly under the radar so you can get things pushed through and issued a lot faster.

That's a good point. Carrier ish. There's been some.

There's been some major things.

That's another thing. Excuses. I'm just being real, man. I mean, it's been. It's been a tough first quarter, and.

I think transfer companies are trembling with how much funds they've had to relinquish over the last year and a half. They've been. I've noticed there's some. Some slowness there. There's some. I've even noticed, adjustment to policy on handling transfers of funds. They've adjusted their policies to try and.

Make it more difficult business days, but right now, because of the volume, we're taking two to three months.

It's wild. Yeah, it's wild. And because carriers have had a higher influx of new business, some carrier new business departments aren't fully following up on pending business. So they're leaning on agents to actually get with their clients. Call the transfer company and get that money transferred.

Yeah. See, I see a lot of my pending reports. You'll see something that says wait time for customer service is beyond X number of minutes. So they don't even bother to wait. Yep. So, hey, but here's the good news. You know, everything in our season, I look at this way. If I've already done 7 million so far this quarter, and I've had to deal with these issues this year, it's just going to get better. Yeah. And I'm still shooting for my 50 million for the year. And we'll see. I mean, that's a goal. But I never put a lot of weight on the goal. Because the reality is every single appointment, every single client I meet with, I'm going to put 100% effort into.

Yeah. And I want to add one more thing because we're talking about challenges.

So you can add two now you're out of one more.

I'm gonna add one more. That's three. Yeah, one more thing because we're talking about challenges, but I don't want you to hear the challenges of the different products and other things that clients could be buying into and, and look at that and think, oh, man. Well, I might as well just take a break. I might as well, you know, throw in the towel or whatever. It's like. No, continue to do good fact finding. Find out what the client's needs are and then find the best solution. And if you truly have the best solution for that client, articulate to them how and why it's the best solution for them. And if they alternative options that you know about, that you recognize is not the best solution, explain why it's not the best solution. This is in this type of season is where being an expert is absolutely crucial.

100%.

So.

Okay. I hope this helps you guys. You have a great day. And as always, happy selling.

Sam.