Improving Solution Efficiency and Client Confidence with Added Protection

Author: Paul Cahill, Steve Gresham and Mike Harris

Date: 16/2/2024

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That Portfolio is Not Enough

Todd Z. has been busy acquiring new clients. “All I have to ask a prospective client working with a traditional investment advisor is whether they have any guarantees in their investment portfolio – and would they like to add a personal pension “bucket” with a guaranteed income stream for the rest of their lives”.

“Protection is gaining more and more traction in our uncertain world,” say Todd, a 35 year veteran, and part of a 125 advisor team brokering with one of the leading national IBD firms, reports that many of his competitors are making his life easy. “A new client found me after asking the advisor (from a national firm) about guaranteed income. And the advisor said he didn’t believe in annuities”.

Heads in the Sand Can’t See Changes

Our collective history working with advisors across all national firms, RIAs and IBDs has spanned the move from stockbrokers to managed account consultants and from life insurance agents to advanced planning financial professionals. Our common observation: clients lead us forward into the areas important to them, and advisors who listen take market share away from competition fighting the trend.

Paul and Steve worked to introduce managed accounts to skeptical advisors – “Why would I refer my clients assets to a third party?! What’s my added value?”. That perspective seems silly now – especially with $11 trillion in managed accounts. For Mike, an advanced planning leader, he found opposition to solutions-based sales of life and annuity products – even among advisors already using them but only for simple sales. “One and done”, Mike recalls, “They had the tools but not the patience”. Oy.

Peak65® is Here – To Stay

The shift from investing for retirement to actually funding that retirement is on, and more Americans will turn 65 this year than ever before. Peak65® is here, according to the Alliance for Lifetime Income, and Peak65® author, Jason Fichtner says that more than 11,000 people are rolling into retirement every day. We know the data, but we also see the results every day with advisors like Todd. And we are frankly baffled that many advisors are not embracing “protection”.

Are You Listening? Data Says “No”

The 2023 Protected Retirement Income and Planning Study – also from the Alliance – reveals a communication gap between retiring clients and their advisors. 77% of financial professionals say they raise the topic of protection with their clients, yet only 33% of clients surveyed say their FP has done so. This is pure communication skill – but also can be the result of advisors talking to some clients but not others. This inconsistency of solutions delivery has bedeviled the advice industry for years. Some clients get planning, most don’t. Some clients have investments and protection solutions, most don’t. With an average book of 150 households, most advisors are time challenged to keep up with the retirement needs of clients – clients that were a lot easier to care for when they were simply mailing in checks.

Use Normal Human Language, Not Financial Jargon

When investment-focused advisors interact with clients, we see semantic differences that keep clients guessing. Three risks feared by clients work against advisors devoted to portfolio management and not leveraging the power of protection:

  1. “Sequence of returns” risk, aka the potential for their nest egg to crash at any point in retirement makes many clients lose sleep. Why not offer a percentage of the portfolio “hedged” against a market decline by providing protected income?
  2. “Who will manage our retirement income” risk – a common fear for clients facing their own mortality – or cognitive ability. “I don’t want to worry my children”, said Jackie, a client. Other annuitants, like Steve’s dad, loved the idea of naming Steve’s mom as a second life on the annuity. Mom has outlived Dad by eight years – so far.
  3. “Longevity” risk – speaks directly to clients’ well documented fear of outliving their money. Todd highlights the concept of a “personal pension” with income guaranteed for life. “Pure peace of mind” he says.

Get Support for Your Protection Move

Mike quotes Linda, a longtime advisor colleague now with Raymond James, who joins Todd in underscoring the importance of firm infrastructure in support of protection solutions. After ignoring annuities for the first several years, a colleague showed her some basic strategies that were also soothing for clients. Her recommendations for the investment advisor transitioning to at protection:

  1. Start with trust – Linda cites the level of trust her clients placed in her that made the conversation about annuities an easy transition from other products.
  2. Explain the benefits – slowly – once clients understand the protection aspect that annuities provide through secured income, that perspective acts to solidify their trust.
  3. Address anxiety – using annuities with clients that seem to be a little anxious – roughly half her clients – really helps them get past their concerns.
  4. Set the stage ahead of time – Linda includes annuities in the retirement solution set she talks about with all clients to help smooth the path to the annuity conversation when it’s time for that discussion.

Don’t Speed

Top advisor, Rick gets the parting shot. “The markets have been good to us – again! Pretty much every client knows that trees don’t grow to the sky, so taking some profits off the table and ‘banking’ them for life in a lifetime income product just makes sense”.

Paul Cahill has led distribution teams across mutual funds, ETF’s, and Separately Managed accounts for the past 25 years, including most recently as National Sales Director-Independent & RIA Division for Virtus Investment Partners. He is currently serving as a executive-in-residence at NextChapter.

Steve Gresham is managing principal of NextChapter, an industry leadership community dedicated to improving retirement outcomes – for everyone. He is also Senior Education Advisor to the Alliance for Lifetime Income. See more at:

Mike Harris, CFP, CLU, ChFC, led planning and protection teams for more than 30 years, most recently with Lincoln Financial Group. He is also Senior Education Advisor to the Alliance for Lifetime Income.

For more information about Peak65® – please see:

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