We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (21,155)
  • Industry Conferences (2)
  • Industry Job Openings (35)
  • Moore on the Market (414)
  • Negative Media (144)
  • Positive Media (73)
  • Sheryl's Articles (800)
  • Wink's Articles (353)
  • Wink's Inside Story (274)
  • Wink's Press Releases (123)
  • Blog Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • September 2008
  • May 2008
  • February 2008
  • August 2006
  • The insanity in indexed annuity sales growth

    August 28, 2014 by Kevin Startt

    If the definition of insanity is continuing to do the same thing over and over and expecting different results, then Einstein would have to challenge the hypothesis today of many indexed annuity (FIA) and indexed life sales (IUL) agents. After $39 billion of FIA sales this past year and much of the $100 billion in sales the last five years linked to the performance of the Standard and Poor’s 500, according to [Wink’s Sales & Market Report], it appears that many agents are either selling past performance, don’t care or believe in diversification, or don’t understand current U.S. equity valuations.

    Sure, the consumer understands the Dow and S&P 500 better than many other indices, but let’s face it, the agent who allocates the client’s entire indexed annuity premium to the S&P 500 or Dow is ignoring the scoreboard in a big way. Right now agents who are linking their clients to the major indices are similar to clients who shop at Nordstrom’s or Macy’s for a $60 shirt that could be bought at TJ Maxx or Ross for $30.

    According to Zacks Investment Research and Robert Shiller, the author of “Irrational Exuberance” and the predictor of the 2001 tech wreck, the markets’ valuation on an inflation-adjusted basis for the last 10 years predicts the possibility of a -1.4 percent return for the next 10 years. Shiller’s analysis, which dates back to 1881 market data, shows the market overvalued, even after the recent decline, by 54 percent. After subtracting 2 percent margins from indexed annuity gross margins, there are a lot of zero percent returns for the next decade. If zero is the hero for savers who salivate at .50 percent CD returns, then all is well.

    Even Sacks, which utilizes non-inflation-adjusted earnings multiples, shows the potential for a measly 5 percent gross return for the next 10 years. Both of these should provide relief for a client who is concerned with a market crash, but they also suggest that index returns could be on the low end of the historical 2 percent to 6 percent returns of indexed annuities and indexed universal life insurance that [Wink’s Sales & Market Report] publishes.The conservation of principal and the potential for increasing lifetime income means that indexed annuities and indexed life as a fixed income alternative still make sense. These primary benefits are still reasons to own FIAs as an alternative asset class. The potential and probability for lower returns than the last five years, however, are siren calls to agents to look elsewhere for indices and crediting strategies that consider alternative crediting methods and indices. Consider options from the many companies that offer blended indices or crediting indices that include the Hang Seng, Gold or International like the MSCI Index. These markets are all selling far below the United States in terms of valuations and therefore offer the potential for greater crediting gains going forward.

    For instance, the Hang Seng (China) sells at a valuation roughly 50 percent of the United States and is the cheapest it has been in 10 years, offering a compelling allocation for some of your indexed annuity/life money. In addition, consider that volatility in the U.S. has been more tepid than any time over the last five years, and as volatility increases (as measured by the VIX), monthly crediting strategies should outperform annual point to point or term crediting methods.

    A market downturn always presents a great time to reflect and reconsider. Now is the time agents should review these options. These two minor changes can make a big difference going forward, so I urge you to review your clients’ index annuity and indexed life crediting options periodically. Don’t be like the little old lady I knew selling pretzels year after year at 25 cents on the street corner. I consistently would drop 25 cents in her can and make eye contact without taking a pretzel. After five years, the lady stopped me and said, “Sir, I appreciate your business and you are one of my best customers, but you need to know something. Our pretzel price has increased to 35 cents.”

    The U.S. markets have gone up more than 140 percent for the last five years, yet indexed annuity and life agents, in many cases, are still allocating clients’ index crediting based on 2009 prices. It is time to take notice and perform an annual review before inflation erodes the price of your clients’ cash surrender values by 33 percent on a string of potential zero returns.

     

     

    Originally Posted at ProducersWeb on August 28, 2014 by Kevin Startt.

    Categories: Wink's Articles
    currency