The Importance of Tracking Your Numbers and Roth Conversions | 7FAS | Ep. 325

Welcome back to the Seven Figure Annuity Sales Podcast. It's Caleb north here and I actually happen to be running solo today. Chad and our president, Josh, they are both out of state, they're actually out in California and they're doing a bunch of business meetings with some very, very well accomplished, high achieving businessmen that they've been in a, in a course with. And so yes, even we pay for training and learn from people who are, who have been where we're trying to get to. And so that's kind of a shameless plug for you agents to get plugged into Retirement Realized Agents Academy and join the Annuity Architects training program. But point is, I'm going to be running solo today and I'm talking today about a few things that have come up in conversation very recently with agents. I think it's a, it's a little bit top of mind for a lot of agents right now, but it's also been a bit of a coaching point and they're very unrelated. So I'm going to talk a little bit about tracking your numbers and why you should be tracking your numbers and what that actually looks like and some strategies to do it well. And then I'm also going to talk a little bit about Roth conversions because that's been one, for some reason that has been particularly common lately, coming up with agents asking me about, you know, my thoughts on Roth conversion. So we'll start with tracking and guys, really the heartbeat and the reason behind why you should be tracking your numbers is because without it, you can't make very good educated decisions for your business. Sometimes it seems like agents, it's just easier to buy the leads, buy the marketing program, whatever it is that you're using and then you write some business and you get paid and you hope that what you make on it is 2, 3, 4, 5, 10 times more than what you paid. But you don't really know any of the in between. You know, if I, if I were to, you know, call 100 agents and say, hey, what's your, what's your appointment rate? What's your close rate? What's your average case size? Most agents would not be able to tell me what that is. So then when that agent needs to go and make a business decision about an area of their process that they need to improve, they don't really know where to improve or what to try and get better at because they don't know the weak spot. So I tell agents all the time there are five metrics you have to track and there are two that you can track on top of those five if you want to. But the five that you have to track if you're going to make good business decisions are number one, the leads that have come inbound. So the leads you've received, number two, your appointment rate. Okay, so of those leads, how many appointments have you set? Number three is your sit rate. So of the appointments you set, how many actually showed up to the appointment, Whether that be zoom or face to face, doesn't matter. Number four is your average case size or I'm sorry, your close rate. Excuse me. So of the people that show up, how many end up getting closed in deals? And then the fifth one is average case size. And here's the trick with that, guys, is you're not going to just track that across all of your leads combined. You want to track each of those things for each lead system or program or marketing program individually. Okay? So if you have, you know, two different lead sources and a marketing program that you're using, you're going to track the leads for each individual source and the marketing program separate and you're going to track your appointments with each one separate. And your sit separate and your closes separate, and your average case size separate. Why? Because you want to gain the data and the insights into what source are you most efficient with. Now I can look at chad's numbers from 2025 this year and tell you exactly what lead system he's been most effective with.

And so we have the data. So now we can say, well, we're not quite at the production level that we want to be at. Maybe so now we're going to put more marketing dollars into the one that is giving us the best results. So it gives you better optics into your business. It gives you better insights into the areas that you should be doubling down. And that's the thing that I tell agents all the time. If you're trying to scale production, you do not want to try and do it blind.

Because there could be two things that can help you scale production. When you track your numbers, you can see the lead sources, the lead vendors, the marketing systems, whatever you want to call it that you should be putting more marketing dollars toward. If you see one that is extremely underperforming and another that is extremely overperforming, you want to probably move some of that budget from the low performing to lead system, marketing system to the one that's a high performing lead system or marketing system, whatever it is, right? The other thing is you're gonna be able to see the drop off points along the way. So, for example, if you get 10 leads from lead source A and you book one appointment.

And then you have 10 leads from lead source B, and you book one appointment, and lead source C, you book one appointment and all of a sudden you've got like a 10% appointment rate. Well, the odds of all three of those having such a low appointment rate, if it were a lead problem, is pretty low. I would be willing to bet that there's something you as the agent are doing or not doing that is causing the appointment rate to be so low. And so what you would want to be figuring out is, well, what can I do to increase my appointment rate? Maybe I need to not just only call these leads and leave voicemails. Maybe I should also start texting these leads. Maybe I should also start emailing these leads, trying to have multiple touch points, trying to have multiple areas that I'm actually connecting with them. So. But then that multiplies out into your appointments. Same, same sort of deal, man, I'm, I'm booking great appointments with these leads, but my gosh, I can't get them to show up. Well, maybe there's something wrong with the communication as to what, what the expectation is on the show up. Maybe there's something wrong in the communication about how to actually show up if it's not face to face, if it's virtual, maybe the directions are not communicated clearly. You need to rework your, your comms. Maybe you're having a lot of sits, but man, your closes are really low. You know, you meet with five people, you, you close one maybe out of the five, say, well, there's probably something in the appointment process that isn't going well. It's not the right thing. So it shows you areas in your own process that you need to improve. Now here's the deal. When you track the numbers and you can see the lead systems that are working well and the ones that are not, and you can see the areas of your process that are working well and the areas that are not. It allows you to try and grow production from two angles. It allows you to put more into the lead systems that are working effectively, and it allows you to find the areas of improvement that you need to make. So now you're not spinning your wheels trying to figure out what's wrong. You actually know, oh, there's something on my calls that's not right. There's something in my communications that's not right. There's something in my appointment that's not right, or my closing that's not right. I guarantee you if your average case size is low, it's probably because your fact finding is not right. So it shows you areas you can improve, but it probably isolates one area. As opposed to you thinking something's wrong with these leads. It's like, well, no, what if there's just one thing in your process that you need to shore up, make it better, improve it to actually then start having the success you want to have with the leads. So that's, that's kind of my take on, on tracking. You want to track your leads in your appointments booked, your sits that you actually have, your closes that you make, and then your average case size. And if you want to add two other points of tracking, you can, you can track your, your calls, your, like you, the attempts to contact your calls, your texts, your emails. And then you can also track your contact rate because not everybody that you talk to is going to end up becoming a lead. And so you might have a lead system that, you know, you're talking to a lot of people, but you're not, you're not maybe converting those into, into appointments, and that's probably a U issue. Or you have a very, very low contact rate and a very high appointment rate on the contacts you make. So, you know, you get 20 leads, you talk to two of them, and both of them become appointments. It's like, well, dang, if I could talk with more people, I bet you I could get more appointments on these. That's a 100% conversion of the people I've talked to. So now I got to figure out ways to get more people on the phone. And maybe again, that's, that's expanding the ways you're attempting to contact them and talk with them. So bottom line, track your numbers. Now the other thing that I've found come up pretty frequently lately is this idea of Roth conversions and when should we do Roth conversions and when should we not and all of those things. And it's a pretty hot topic, right? Because the idea here is clients don't want to pay taxes. I mean, who does? Clients, they see the idea of a Roth conversion and sometimes agents will bring it up, is like, that's what they need to do. And they like the idea of getting to tax free. The question becomes, what are the odds of them paying the taxes now and then what happens in that account after it's tax free actually equate to more net benefit to the client than if they had left it taxable? Well, we don't know what the market's going to do. We don't know how long they're going to live. So it makes it really hard to try and know exactly what would be the better option. Like, when it comes to a Roth conversion, we will always know in hindsight what was the best choice, doing it or not doing it. But we will never know for sure until we get down the road. So being able to look back and see what happened, you know, what kind of market performance did we have and what kind of longevity did we have that will play a massive role as to whether or not a Roth conversion is the most advantageous for a client. So all that to say there's not a hard and fast rule. I think sometimes agents can approach the conversation as if it is only Roth conversion. You have to do a Roth conversion. It's the best thing you can do and you make it out to be like the blanket statement for all people. And then other times this agent's probably saying, well, no, Roths are never the solution. Well, here's my personal take on the matter, and then we'll wrap up the episode today. But my personal take is that the older you get and the more you make, the less advantageous a Roth conversion is. Which is to say that a Roth conversion or having a Roth count is always most advantageous. The younger you are and the lower your income is, the lower your tax threshold. Okay, so really we should be talking with, you know, high school and college students, you know, seniors and high school college students, young professionals that can fund it about Roth conversions. That's where we're going to have the maximum impact. Why? Because theoretically they should be at a lower tax bracket than they will be in the future. And they have the most time for those tax free dollars to accumulate interest and compound interest over the years. So they're basically double dipping in the benefits from a tax perspective and from an interest perspective, over time.

When you get to somebody that's 50, 55, 60, 65 years old, sometimes, golly, I see people talking about in their 70s or 80s about doing a Roth cycle. There's not really a whole lot of time left to enjoy the benefits of that. You get to somebody there and the benefits are not necessarily the same. If they're still working, the odds are very good that they're earning more then than they've ever earned before. So arguably they're at a higher tax bracket and a higher tax threshold than they'll ever be. Okay, so what they do choose to convert is already going to be points. Tax points higher than what it would have been a long time ago. Okay. The other thing is the time that they have to make back what they pay on taxes and then some tax free. And the time is more limited because they're not 30 years old, they're 60 years old. Well, that's 30 years of interest that you don't get on a tax free account that you would have gotten at 30 that you're not getting at 60. So the time that they have left for the Roth to have its maximum impact is less. Okay, now here's just a general thought that I have about it.

I don't fully understand unless there is a mathematical way to prove that it is financially advantageous to Roth convert. I don't understand the logic behind the idea that I don't want to pay taxes on my money, so I'm going to choose to pay all the taxes on my money.

Think about that for a second. You understand that to convert to Roth you are having to do the very thing that you are not wanting to do.

And also, if you choose to lump some convert, you are choosing to take on effectively the highest amount of tax that you can on that money because it's going to, you're going to have portions of that money that move up through the brackets depending on how much you're converting. And so I say all that to say it's not going to be the majority of the time that a senior is most benefited by a Roth conversion. I say generally speaking that, hey, if you really don't want to pay taxes, then defer taxes as long as you can on as much of the money as you can and let your beneficiaries pay the taxes on inheritance. They're already going to get all the rest of it anyway. So they can pay the taxes on a little, you know, a little bit of that money not being all theirs. They can pay the taxes. So most of the time if they don't want to pay taxes and they're thinking, oh, Roth, so I don't pay taxes, they're going to pay taxes to get to Roth. I would say, hey, if you don't want to pay taxes, don't just defer. When you're paying those, you get to 73, you have your RMDs, you're going to take out small portions of that, and then small portions of that small portion will go as, as a tax bill. But that's pretty, pretty small. There's. It equates to effectively about as low a tax bill as you can pay on that money. And then the Other beauty of that is that the money you would have paid in taxes is now continuing to earn you interest because it's tax deferred.

So that would be the main argument. But if somebody is absolutely hung up on this idea of Roth converting, I want to Roth convert. I'm going to Roth convert. I just need to figure out how to do it the best way. There's a strategy called a systematic Roth conversion that you can do inside of fixed indexed annuity products that I think is the best way to try and do it. And basically the idea is you take the whole qualified account, you roll it into an fia, a fixed indexed annuity that allows systematic Roth conversions. And then each year you systematically convert a small portion of that total account. So let's say you have $300,000 in the qualified annuity, it's IRA annuity. You're going to convert maybe 30 grand or whatever it is that you choose to convert. You're going to convert that a small portion of it each year. So each year you'll have a little bit that's still qualified and you'll have a growing Roth account. And the reason you do that is so that you try and stay in a lower tax bracket. You try and keep a lower tax percentage of the money that's being converted. If you were to pay the taxes on 30 grand versus the taxes on 300,000 all up front, there are going to be large portions of that 300,000 that end up in a maximum tax bracket. So you might save yourself 1, 2, 5, 8 points in taxes, depending on how it's structured by doing a systematic Roth conversion. So that's like drinking from a fire hose today, I'm pretty sure. And we are at the time for today, so I hope that that helps you. Oh, I know it's kind of a hodgepodge of content today, but I do hope that that encourages you to track your numbers if you're not already. You got to track your numbers. You, you will reap the benefits tomorrow and next year and two years from now if you'll track your numbers today. And for those of you that are, you know, dealing with Roth questions, there's some thoughts for you to ponder as well. And as always, if you have any other questions, don't hesitate to reach out to me. Caleb north with retirement realized. And this is the Seven Figure Annuity Sales podcast. And as always, happy selling.

Sam.