The Psychology of Choice in Annuity Sales | 7 Figure Annuity Sales Podcast | Ep. 306

Welcome back to the Seven Figure Annuity Sales Podcast. Caleb north and Chad Owen here. And this week we're talking about the psychology of choice. This is kind of a. It's an interesting topic, Chad, that I've. We've never really talked about this, in my opinion or that any. Anything that I can recall us ever talking about this.

But is that because you've chosen not to?

Well, I've. I've never really thought about it. And today, as I was thinking through content for us to. To give a podcast on, golly, almost said webinar lecture. I don't know why that was what came to mind. We need another coffee. But this was a topic that just kept coming up. And it's this idea that so often agents will take an array of product choices to their clients and let their client choose. And yet you look at some of the top producers in the industry yourself, Jesse, and it's consistently, hey, we take a single product and we sell it as the best solution. Now, what's interesting is that this concept of you have this option, this is what I'm presenting to you as the best option, is actually counterintuitive to some, like child raising psychology. So this is why I wanted to talk through it because it's really interesting. There are.

Voluminous studies about giving children choices, and the impact has on. Voluminous. Lots of volume.

You just use the word voluminous.

It's a real word. Look it up. They don't say it much on Hawaii, but.

You know, abroad. No, make fun. Gonna beat you down, boy. No, I'm gonna beat you down, brah.

I'm telling you, man, you don't want me.

But there are. And it talks about the psychology, what goes on in a kid's mind when they're given choices. So, for example, if I were. If I were raising Chad, for example, okay. And I said, hey, Chad, you could never handle that.

Hey, you want a snack? Okay, you can have an apple or an orange. Which one do you want?

And now the child thinks they have the power to choose. You say, okay, it's time to get ready for bed. Do you want to shower first? You want to brush your teeth first? They think they're the ones that are controlling what's happening, so their autonomy is increased psychologically. That gives them the feeling of power and value and control and worth. What's really interesting is that when you do that in a sales environment, you might create the same mentality in your clients, but you've got to consider the downside of doing it. And the downside of doing it is a reduction in their confidence in your expertise because you're just serving up an option to you. And they also perceive less value in you if you're presenting multiple options. Because the thought process is, well, I could have gotten this from anybody. Couldn't anybody give me multiple options for me to make my own joints on?

I agree with that to a certain point. But there's also a disagree too. Okay, what's that? When you're talking A, A or B option? I totally agree with that. Because you literally sit there. In most agents, it's not. It's abc. They usually come up with three different products, three different choices, and then the client picks, which I destroy that. I have never lost a deal ever, to someone who had three other options from an agent. I said, literally, that's lazy. It's irresponsible. They're trying to make you decide so they don't have to commit because they don't feel confident enough in their decision. And that's exactly how I say it. But choices are made during the fact finding. You're literally having them. Yeah, you're having them choose what they want during the fact finder.

And.

And then you pick the number one product, and they made the choice based off of the answers they gave you on the fact finder. Obviously, I clearly hit exactly what you were trying to go towards. Now, Caleb, and I do not rehearse these ahead of time because I can only make fun of them so much and that we just can't rehearse. But that's. That's what I hit, wasn't it?

So I literally have a note here. I'll read it verbatim on my screen. How do you have all of the benefits of choice without the downsides? Fact find. You fact find. Because in the fact finder, it's exactly what you're saying. You are asking them the questions. They are giving you the parameters of what they're looking for, what their needs are. And now you are essentially operating as the filtering mechanism to shake out of the end of the whole thing. Chad spits out the thing that best suits those needs and desires. And so they have chosen it. But simultaneously with them choosing it through their answers on the fact finder, they now have the confidence that a professional is also recommending this as the best option to them. And so they. They have the autonomy of choice, of confidence in the professional.

I'm sorry, but it's still there. It's still their choice, right? 100%, because they're the ones that are still deciding what they want, but they did it based off the questions I asked. So if they say. If they say, or if I ask them question, do you want to plan for living or you want to plan for dying? Oh, plan for dying right away. Well, then the income. As long as. As I'm going through the fact finder, I don't find some income gaps, then they made the decision of what they want. I just pick the best product.

Exactly.

So I mean, that's. If, if I want a car that goes from 0 to 60 and 2 seconds, there's a handful of cars that can do that. So I. You're only. You're going to be very limited on which car you can pick. But do you want leather interior? Do you. What color do you want? You know, and that's kind of what I'm doing. I need to find out what do they want and then they get to pick the accessories.

Exactly.

And so I'll tell them what car you need to be able to fulfill that. I mean, I just went up camping and I have a tent that goes in the back of my truck and I was able to get back in places that others wouldn't because it's a lifted truck. It's up higher. I could not take a Corvette up there. You know, I'm not able to put a tent on the top of that. I'm not able to get that back in those places where it's remote. So that's what I do. They tell me what they want, I tell them the vehicle they need, and then they can accessorize if they want. They. Yeah.

I had a conversation today with an agent who is an agent at.

A huge IMO. Okay. One of the biggest IMO's in the industry. And they have started this new program with this IMO that is all based on Roth conversions. And he's explaining to me this process and he said, caleb, I don't know what's going on here. He said, I'm not writing nearly as much business as I was. And the business that I am writing, it's coming after five, six, seven appointments. So I'm spending way more time than it's worth. And I said, you know what your problem is? And he said, what? I said, you're trying to sell them on your solution rather than hearing what their problem is and then finding the best solution for it. I said, imagine this. If I'm in the market for a car, I'm trying to find, you know, a new car, and I get called by the dealership and they're trying to tell me why their dealership is the best and why this brand is the best brand. And they don't take the time to ask me what I'm looking for and then tailor their answer and their product to what I'm trying to find. I don't give a rip what they have to say about how great their dealership or car brand is because it's, it's. They're just trying to sell me on that thing.

Yeah. And I'm going to take a minute to hit that Roth IRA conversion thing. I am not convinced that's the best for everybody, especially if you're over the age of 55 years old, you know, because if you have a higher IRA with bonuses, roll up rates, payout percentages versus lower than. Yes, the net is, you know, the Roth is not taxable. But think about this. It is so rare I have clients making more money during retirement than they did working and therefore their taxable bracket is lowered. But here's the thing. I actually am really concerned about all these people that have converted IRAs to Roth IRAs. What happens, for example, Trump talks about raising tariffs and eliminating federal sales are federal income tax. Now think about that. If you eliminate federal income tax, what good is the Roth? Or if we go to a flat federal sales tax and we have no more income if you have, it doesn't matter Roth IRA or IRA money, you are still paying taxes on that money. And I've had people debate me on this and that's never going to happen. And taxes will for sure be higher. Well then remember what happened during the Carter and the Reagan years when we had tax brackets go way higher than what they are right now. So if that's the case, tell me, tell me the logic behind that. Now I'm obviously not saying it doesn't work for any situation, but having entire lead source slash marketing system for IRA to Roth, it's kind of like infinite banking. Bank on yourself. Right. Most of those agents will tell you everybody will benefit from this. But how many Iuls are we seeing now that are 5, 10, 15 years old that are truly working the infinite banking way they were designed?

Not very many.

I have not ran into one and I see more clients than most people I know I have not ran into one of those yet that has done what they said they were going to do. But those agents will say everybody needs to be infinite banking. Bank on yourself. And so I think the Roth, that's a slippery slope, man.

It is. I just, I don't Well, I agree 100%. And the challenge that I have with it as well is if you do a lump sum Roth conversion rather than a systematic Roth conversion, you're almost certainly going to pay multiple points, percentage points in taxes greater than you would if you were to do a systematic conversion. But then even with a systematic conversion where you're converting, you know, chunks over time, you could make an argument that based on what tax brackets do in the future, you could still potentially pay more taxes even in that strategy and converting to Roth long term than you would if you maintained the tax deferral. The way that I like to think about it is somebody's going to pay taxes on those qualified funds and you can pay them in smaller chunks as you withdraw in your income in retirement and then potentially usually means you're in.

A lower income bracket, right?

And then potentially you've got a bunch, big chunk of that left and you pass away. And that's going to go on to your heirs and beneficiaries and, and how they have the opportunity to pay the taxes on that rather than you having paid the taxes on. And a lot of people go, whoa, I don't want them to have to pay the taxes on that. Well, that's understandable. But think about it. If you've got 200,000 in qualified funds and you die and they're going to pay maybe call it $50,000 in taxes on that, they still get $150,000, not to mention all the other assets and property and equity in the home and all these other different things. They will be fine. But that saved the client $50,000 in taxes by them not having to pay that over the course of their retirement. So I agree there are instances where Roth conversions are worthwhile, but this banner statement of, hey, we're going to try and sell this to everybody is problematic. And then simultaneously, to bring it back to the psychology of choice is this idea of you're just trying to tell them what they need and why they should do this, regardless of whether or not they think they should or not. And that's what I told this agent. I said that's why he's going six, seven appointments. It's because you're not meeting the need that they perceive they have. You're trying to sell them on your concept. I think that's, that's definitely going to take more time than meeting their needs.

Exactly.

So you do.

If you, if you guys hear, go ahead. If you hear background noise, it's, I have a little puppy and he's pretty psycho. So I'm trying to keep him calm. You can get. Okay, good. Because that, I mean, something happened upstairs and that dog flew across the floor.

It's like, I want to go up there and see how many pieces is my dog. But it's. But there he's a little tiny German shepherd playing with a lab. And labs generally are not psycho.

So we'll see.

There's. There's. There's some that are. But yeah, if you can't hear it, then they probably can't. I just, I don't want people think, you know, my house is falling apart as I'm in it. So. No, my new house I'm actually building is. I have. I have basically the main house and I have the garage and then I have a big office that I'll be in and it will be complete separation. So that's pretty exciting. Yeah. But, yeah, I. I think the psychology of sales is so important. I talk about it all the time. You know, a lot of the psychology of sales. And this is so important to understand. It is not about manipulation. It is not about trying to get into their psyche and get them to do something they don't want to do. The psychology to me is helping them understand what. Why what they're doing is important. And even at the point where they may not. Well, I don't need income. Okay, so tell me what happens if your spouse passes away in the lower of the two. Social Security goes away. Well, I didn't know that. Well, then there could be an income issue. So when you look at that, you know, you have to. The psychology is getting to understand the importance of what you are talking about.

Right.

And you know, in number one by far is I want my clients to truly feel like they were the ones making the decision and what happens to their money, not me trying to force something down their throat that they're going. Well, I never wanted that in the first place. I don't know. I would say in 20 years, I maybe had two or three clients. Why? Never went that the first place. For example, I just had one. Tell me I got one annuity with an income rider and another annuity without an income rider. And I told him, I said, you should be doing both annuities with income riders based off of your circumstance. Well, you know, I always wanted the income, right? No, you didn't. You specifically said you did not want an income rider on both of them. I convinced you on one. Guess what he's doing with annuity that does not have an income rider.

Now replacing it.

He's putting an income. He's replacing it. And I can count on one hand the number of times I've replaced one of my own annuities, you know, that I sold to client. And I just told him, I said I told you to get an income rider on that. And he goes, I know, I know you did. And so you know, it's better for you to help a client know from the beginning why it's important to do what's best for them. And it's through product knowledge, taking your time to explain and answer questions, but most importantly, getting the answer answers you need through proper fact finding.

That's so key. You get. I know you have.

Yep.

No, you get all the benefits of the psychology of choice and none of the downside back find.

Yes, for sure. And I have another thing, I have another thing to add, you know, fact find. So. Okay, I finally. It just kills you to not get the last word in. So I hope this helps you guys. You have a great day and of course, happy selling.

Jam.