Latest / The Tyler Show / The Tyler Show SIG Spotlight - Laddering

Transcript

The Tyler Show SIG Spotlight - Laddering · The Tyler Show

• 0:10
  SPEAKER_02: Welcome to the Tyler Show.
• 0:11
  SPEAKER_02: And today we are going to be talking about laddering.
• 0:15
  SPEAKER_02: And I'm not talking about the laddering that you do at the beginning of the Christmas season, which, by the way, Justin, I am not a fan of.
• 0:23
  SPEAKER_02: I kind of have a I'm kind of scared of heights.
• 0:27
  SPEAKER_02: So the only reason I'm doing that is because my wife makes me do it.
• 0:32
  SPEAKER_02: And uh, but we're not gonna hear to talk about laddering today.
• 0:35
  SPEAKER_02: We're talking about laddering strategies, which is kind of interesting, right?
• 0:38
  SPEAKER_02: Because what's kind of it's it's it's it's an old, kind of an old strategy that we've seen, but now it's coming back more in vogue now.
• 0:46
  SPEAKER_02: And what's old is new, and it's new is old.
• 0:49
  SPEAKER_02: And we're gonna talk a little bit about that here today.
• 0:51
  SPEAKER_02: But before we do that, I want to introduce Justin Raffer here, one of one of the best here at Midland Retirement Distributors.
• 0:58
  SPEAKER_02: And Justin, tell us a little bit about us about yourself.
• 1:01
  SPEAKER_02: Tell us a little bit about your family, your interests, your favorite flavor of ice cream.
• 1:05
  SPEAKER_02: Are you a dog person, cat person?
• 1:08
  SPEAKER_02: Like let the audience know a little bit about what makes Justin Justin.
• 1:12
  SPEAKER_00: Sure.
• 1:12
  SPEAKER_00: Thanks, Tyler.
• 1:13
  SPEAKER_00: First, appreciate you having me here today.
• 1:15
  SPEAKER_00: This is uh a fantastic opportunity.
• 1:17
  SPEAKER_00: So uh been in the industry since 1998, seen a lot of things from you know the dot-com bubble burst back in the early 2000s to the to the great recession in in 2008.
• 1:29
  SPEAKER_00: Um, and it it's it's a fantastic injury.
• 1:32
  SPEAKER_00: I I I love this industry.
• 1:34
  SPEAKER_00: Um, I have a wife.
• 1:36
  SPEAKER_00: My my wife's name is Donis, which is pretty unique.
• 1:38
  SPEAKER_00: We get asked a lot a lot about that, where that came from.
• 1:42
  SPEAKER_00: Um, she's in the pharmaceutical industry and uh works on studies for drugs.
• 1:47
  SPEAKER_00: Right now, she's not working on a on a drug for multiple sclerosis.
• 1:50
  SPEAKER_00: Oh, wow.
• 1:51
  SPEAKER_00: And uh yeah, it's really cool.
• 1:53
  SPEAKER_00: We don't talk shop a whole lot at home because I have no idea what she does, and she has no idea what I do.
• 1:58
  SPEAKER_00: Uh, I have a son, Ryan, who is uh 23 years old, graduated from University of Iowa, and actually works here at Midland with us, which is awesome.
• 2:07
  SPEAKER_00: Um, and and I think there's a little bit of there's there's many advisors I've I've come across in my career that have family in the business.
• 2:16
  SPEAKER_00: And that's how you know you love what you do, right?
• 2:19
  SPEAKER_00: And and you love helping people is when you have the family in the business.
• 2:23
  SPEAKER_00: And then I have a daughter who's 20 years old and she is a swimmer at Arizona State University.
• 2:28
  SPEAKER_02: Very nice.
• 2:28
  SPEAKER_00: And uh yeah, we we get down there as often as we can to to try and uh see as many swim meets as we can.
• 2:34
  SPEAKER_00: So what's her event?
• 2:35
  SPEAKER_00: She's a backstroker.
• 2:36
  SPEAKER_00: Okay, yeah, yeah.
• 2:38
  SPEAKER_00: So 100 back, 200 back, and then on the relays, she'll do the 50 frees as well.
• 2:42
  SPEAKER_00: Very nice.
• 2:43
  SPEAKER_01: Yeah, yeah.
• 2:43
  SPEAKER_00: It's a lot of fun to watch her.
• 2:45
  SPEAKER_00: It's it's a lot of work.
• 2:46
  SPEAKER_00: Oh, I bet.
• 2:47
  SPEAKER_00: They're they're in the pool at 5 30 in the morning.
• 2:49
  SPEAKER_00: Every day is two a days except for Sundays.
• 2:52
  SPEAKER_00: So yeah, it's it's tough.
• 2:53
  SPEAKER_01: Yeah.
• 2:54
  SPEAKER_02: Well, she'll she'll learn, I mean, she'll get a lot of valuable lessons out of doing that for four years.
• 2:59
  SPEAKER_00: Oh, absolutely.
• 3:00
  SPEAKER_00: Right.
• 3:00
  SPEAKER_00: Uh it I tell her right now, she has a full-time job.
• 3:03
  SPEAKER_00: Yeah.
• 3:04
  SPEAKER_00: You graduate college, it's gonna be easier when she graduates.
• 3:08
  SPEAKER_02: It sounds kind of weird, right?
• 3:09
  SPEAKER_02: But that's that's the way it works.
• 3:11
  SPEAKER_02: That's the way it works.
• 3:12
  SPEAKER_02: So tell us I I know that you like golf.
• 3:15
  SPEAKER_02: Like you like golf.
• 3:17
  SPEAKER_02: So I wanted to ask you a question.
• 3:19
  SPEAKER_02: Number one, what's your handicap?
• 3:22
  SPEAKER_00: I'm embarrassed to say it's up to a 12.
• 3:25
  SPEAKER_00: That's pretty the lowest I've ever gotten it is a seven.
• 3:28
  SPEAKER_00: Okay.
• 3:28
  SPEAKER_00: But it's up to a 12.
• 3:29
  SPEAKER_00: And and Tyler, to be perfectly honest, I don't have the time or the desire to practice.
• 3:35
  SPEAKER_00: I'd much rather be on the course and play.
• 3:37
  SPEAKER_02: Yeah, I think I think a lot of people are that now with talking about courses, okay.
• 3:41
  SPEAKER_02: So I want a lot of our viewers, I'm sure, here are also avid golf fans.
• 3:46
  SPEAKER_02: Uh, and so if you could talk to them and tell them, all right, number one, what is the best course, regardless of like money or location or anything like that?
• 3:57
  SPEAKER_02: What is the best course that you've ever played at?
• 4:00
  SPEAKER_02: And number two, for the money, what is the best course you ever played at?
• 4:05
  SPEAKER_00: I would say the best course.
• 4:07
  SPEAKER_00: And and for me, the best course is it's my favorite course.
• 4:10
  SPEAKER_00: It's it's week-paw, and it's um in Arizona, uh, shockingly.
• 4:15
  SPEAKER_01: Yeah.
• 4:16
  SPEAKER_00: Uh and it it has two 18s, it's just a great desert course.
• 4:21
  SPEAKER_00: I I really enjoy Weekabah.
• 4:22
  SPEAKER_01: Yeah.
• 4:23
  SPEAKER_00: Uh, for the money, the best course.
• 4:26
  SPEAKER_00: I would say Waveland's pretty good here in Iowa for the money, right?
• 4:29
  SPEAKER_00: I mean, it's challenging.
• 4:30
  SPEAKER_00: You have the big hills.
• 4:32
  SPEAKER_00: Yeah.
• 4:32
  SPEAKER_00: Yeah.
• 4:32
  SPEAKER_02: I would that's the one thing I think for a lot of a lot of times people don't realize is the the the weird lays that you get there at Waveland, where you're you're above the ball, you're below the ball.
• 4:43
  SPEAKER_02: It it makes it makes the shots the shot selection a little bit more difficult.
• 4:48
  SPEAKER_00: You definitely have to be on your game.
• 4:49
  SPEAKER_00: Yes.
• 4:50
  SPEAKER_00: Absolutely.
• 4:51
  SPEAKER_02: So um, last thing, dog or cat person.
• 4:54
  SPEAKER_02: I am a dog person.
• 4:55
  SPEAKER_02: Very nice.
• 4:56
  SPEAKER_02: I am a dog person as well.
• 4:57
  SPEAKER_00: No offense to cat people.
• 4:59
  SPEAKER_00: Don't take offense, but I am a dog person.
• 5:02
  SPEAKER_02: Yeah, I I I'm a dog person as well.
• 5:04
  SPEAKER_02: But you know, we're not here to talk about uh dogs and cats, but we're here to talk about a laddering strategy, right?
• 5:10
  SPEAKER_02: So I, you know, I I remember the laddering strategy.
• 5:13
  SPEAKER_02: The first thing that I ever remember of laddering strategy, I think of my grandfather because he used to ladder CDs.
• 5:17
  SPEAKER_02: That was kind of his retirement plan.
• 5:20
  SPEAKER_02: And I remember my dad telling me that my grandfather actually left a vacation because he had a CD coming due and he had to get back and and and renew that CD.
• 5:30
  SPEAKER_02: So that that's when I think of laddering strategy, I always think of my grandfather, but we just launched a a new summit laddering product.
• 5:41
  SPEAKER_02: So tell us a little bit, 30,000 foot view.
• 5:44
  SPEAKER_02: Um, you know, what is it?
• 5:46
  SPEAKER_02: Uh, and what makes this product stand out?
• 5:51
  SPEAKER_00: Yeah.
• 5:51
  SPEAKER_00: So first and foremost, it's a fixed index annuity, right?
• 5:54
  SPEAKER_00: So we're we've got all the same features of every fixed index annuity, 100% principal guaranteed.
• 6:01
  SPEAKER_00: We're just trying to find ways to to give clients an opportunity to have upside.
• 6:06
  SPEAKER_01: Yeah.
• 6:06
  SPEAKER_00: And the most upside that that they can get with something that is guaranteed, right?
• 6:10
  SPEAKER_00: And most financial professionals will, you know, understand laddering.
• 6:15
  SPEAKER_00: They've heard about it, they've seen it.
• 6:16
  SPEAKER_00: Uh, many of them are still using it.
• 6:19
  SPEAKER_00: So we decided to build a product and put the laddering inside of the FIA.
• 6:24
  SPEAKER_00: So what this product does is basically take whatever deposit comes in from the client, splits it into four buckets, 25% each, and we buy long-term point-to-point participation rate uh index crediting strategies for them.
• 6:40
  SPEAKER_00: One year, a two-year, a three-year, and a four-year, 25% split into each.
• 6:46
  SPEAKER_00: Uh, that gives them the benefit of having long-term point-to-point on some of that, but it also gives the client something that every advisor financial professional will will need and see is something credited each year or the potential to have something credited each year.
• 7:02
  SPEAKER_02: Yeah.
• 7:02
  SPEAKER_00: Year one, year two, year three, year four.
• 7:04
  SPEAKER_00: Uh, it's a five or seven year, so all of those come due at the end, and there's this zero risk upside uh potential on the index annuity.
• 7:15
  SPEAKER_02: Yeah, yeah.
• 7:15
  SPEAKER_02: So, you know, the one thing with with laddering strategies, I mean, I know again, it's it's it's being done a lot.
• 7:21
  SPEAKER_02: It's been been done uh in retirement with CDs, uh, with bonds.
• 7:26
  SPEAKER_02: I think the one thing just, you know, I'm not a product expert by any stretch of the imagination, but one of the things that I noticed that was just made it stand out to me a little bit more was the fact that we were utilizing different indexes, right?
• 7:43
  SPEAKER_02: Yeah, and so a lot of times when you hear laddering, your mind thinks CDs, your mind might think, hey, you know, bonds, but when you're looking at the overall portfolio, the nice thing is that these are equity indexes.
• 7:55
  SPEAKER_02: And so not only do we get some of the downside limiting the downside capture, but we're also getting that equity like return in our portfolio.
• 8:06
  SPEAKER_02: So um, if there is one feature of the product that stands out to you, what would you say that is?
• 8:15
  SPEAKER_00: I would say the biggest thing is the the indexes are great.
• 8:19
  SPEAKER_00: We have the SP 500, we've got our dynamic index, we've also got our Nasdaq index.
• 8:24
  SPEAKER_00: But the most um upside potential for a client or client-friendly aspect of any index annuity is long-term point-to-point.
• 8:32
  SPEAKER_02: Yeah.
• 8:33
  SPEAKER_00: And and right, that that's the way we're able to get them the best upside that they have.
• 8:37
  SPEAKER_00: The difficulty of long-term point-to-point strategies is nothing is crediting every year.
• 8:42
  SPEAKER_00: Yeah.
• 8:43
  SPEAKER_00: And it's hard for a client to stay interested as their financial professional is meeting with them annually and not seeing anything.
• 8:50
  SPEAKER_00: Here with this, because we're taking 25% in a one year, 25% in a two, a three, a four, et cetera, you have that opportunity to see some credit during that year.
• 9:00
  SPEAKER_00: So when when that advisor is having that client um review, they can see something on the statement.
• 9:07
  SPEAKER_00: Yeah.
• 9:07
  SPEAKER_00: So I love the indexes.
• 9:09
  SPEAKER_00: It's it's great.
• 9:10
  SPEAKER_00: You can allocate to them any way you like.
• 9:12
  SPEAKER_00: Uh, it also has a very strong fixed account uh that is good for the clients as well.
• 9:17
  SPEAKER_00: If you want to guarantee something is going to be seen every year, you can allocate to the to the fixed account.
• 9:22
  SPEAKER_00: And that fixed account is guaranteed for the term.
• 9:24
  SPEAKER_00: So five or seven years, whatever that is, the day you buy it, that's what it's gonna be uh the day it matures.
• 9:31
  SPEAKER_02: So let's let's let's play this out a little bit.
• 9:35
  SPEAKER_02: So let's say that you have a client that's going into a financial professional's office, and they talk to the financial professional a little bit about their situation.
• 9:49
  SPEAKER_02: As a financial professional, where do you see this product fitting into an overall financial plan?
• 9:57
  SPEAKER_02: Like, where is that sweet spot for that, that, that, that client that's coming in?
• 10:02
  SPEAKER_02: Where do you see that sweet spot being for this product inside of a financial plan?
• 10:06
  SPEAKER_00: Well, first and foremost, it's a fixed index annuity.
• 10:08
  SPEAKER_00: So it's that client that doesn't want to lose money.
• 10:10
  SPEAKER_00: Yeah, right.
• 10:11
  SPEAKER_00: So that that's where it starts.
• 10:13
  SPEAKER_00: Uh, then I would I would kind of take it from there, those clients like your your grandfather that you mentioned, that's already laddering CDs, or that client that has some laddered bonds, uh, they understand laddering, they understand the the strategy and and the power behind it.
• 10:27
  SPEAKER_00: I think that's a great place to look.
• 10:29
  SPEAKER_00: And then right now, if if you think about where we are in the marketplace and what we've seen uh in the markets over the last few years, yeah, there's been quite a bit of profit in the markets, right?
• 10:40
  SPEAKER_00: There's there's a lot of folks that have uh that have seen growth in their accounts, peeling a portion of those that growth off and giving them that guarantee.
• 10:49
  SPEAKER_00: So you lock that growth in.
• 10:51
  SPEAKER_00: Those are really the three areas that we we see this using most.
• 10:54
  SPEAKER_00: But again, it's a fixed index annuity, it eliminates risk.
• 10:59
  SPEAKER_00: Yeah.
• 10:59
  SPEAKER_00: And that is truly where it fits all around.
• 11:01
  SPEAKER_00: We're just twisting how the engine works a little bit.
• 11:05
  SPEAKER_00: The car's the same, we're just changing the engine to have that that laddered aspect.
• 11:09
  SPEAKER_02: I I kind of think of I was having a conversation with a gentleman at a conference just recently in San Diego, and he happened to be just turning 60.
• 11:20
  SPEAKER_02: And I always kind of look at 60 to 65 as that range where I I I call it this, this is what I call, I call it the retirement freakout zone.
• 11:29
  SPEAKER_02: This is where you have clients that are coming in that are are becoming way more sensitive to market volatility.
• 11:37
  SPEAKER_02: And I could see I could see this product fitting really, really well with that because as you're to your point, hey, you know, markets up.
• 11:46
  SPEAKER_02: Do I take some of this, do I take some of this off and limit my down and potentially limit that upside?
• 11:54
  SPEAKER_02: But the beauty of the FIA and beauty with this strategy is that it's long-term in nature, right?
• 11:59
  SPEAKER_02: You're gonna get those credits so that you can see that that that's being entrusted, that's being credited, but you also have you're limiting that downside protection, right?
• 12:07
  SPEAKER_02: Right.
• 12:07
  SPEAKER_00: So years ago when I started in this business, I had a a president of organization stand up and say, you know, a financial advisor's job is difficult, but it's really boiled down to just two things.
• 12:18
  SPEAKER_00: And that is minimizing risk, maximizing returns.
• 12:23
  SPEAKER_00: And if you can do that as a financial professional, you're doing what's best for your client.
• 12:29
  SPEAKER_00: And that's really what we tried to do here with the ladder, right?
• 12:32
  SPEAKER_00: We're eliminating the risk on the ladder, but we're trying to get them as much upside as possible inside of that chassis.
• 12:38
  SPEAKER_00: Yeah.
• 12:38
  SPEAKER_02: So, yeah, obviously a lot of benefits for for a client here uh uh on this product.
• 12:44
  SPEAKER_02: And there's also benefits to the financial professional.
• 12:49
  SPEAKER_02: And a lot of times, I you know, I I remember when I first got in the industry, and so I got in the industry in 2004, you would have situations where advisors and some advisors are still doing this right now, where they are they're buying individual bonds and they're laddering those bonds, or a client's going into the banks and they're buying individual CDs.
• 13:11
  SPEAKER_02: And this I use this story a lot when I'm out in conferences.
• 13:14
  SPEAKER_02: So, my dad, for the longest time, my dad's idea of a diversified portfolio was going around to all the banks in Storm Lake, Iowa to finding out what the what the interest was.
• 13:27
  SPEAKER_02: Sure.
• 13:27
  SPEAKER_02: So diversifying it out, you know, make sure we're under that FDIC limit and all that stuff.
• 13:32
  SPEAKER_02: So um, but end of the day, this product also can help scale a financial professional's practice.
• 13:44
  SPEAKER_02: So tell tell us a little bit about how how that would work.
• 13:48
  SPEAKER_00: So uh most, if not all, of the professionals or financial professionals that that we work with will spend some time every year reallocating.
• 13:56
  SPEAKER_00: And and sometimes that depends on what the market's doing on the the underlying indexes, even in an FIA.
• 14:03
  SPEAKER_00: And and an FIA is usually a smaller portion of a portfolio.
• 14:07
  SPEAKER_00: It's certainly not an entirely, you know, they're the entire portfolio.
• 14:10
  SPEAKER_00: Yep.
• 14:11
  SPEAKER_00: So they're spending time on this FIA trying to figure out how to reallocate that.
• 14:17
  SPEAKER_00: We take that off the table, it's automatic, right?
• 14:20
  SPEAKER_00: After year one, we're gonna buy a four-year participation rate automatically.
• 14:25
  SPEAKER_00: After year two, we're gonna buy a three-year participation rate.
• 14:28
  SPEAKER_00: After year three, it's a two-year, and after year four, it's a one year.
• 14:31
  SPEAKER_00: That reallocation aspect of that yearly review that the financial professional is doing uh is taken off the table.
• 14:40
  SPEAKER_00: It's automatic.
• 14:41
  SPEAKER_00: Yeah.
• 14:42
  SPEAKER_00: I mean that's it.
• 14:43
  SPEAKER_00: And one of the things I do want to point out that the nice thing about that is that also lends itself uh in the underlying indexes to kind of dollar cost averaging.
• 14:52
  SPEAKER_00: Sure.
• 14:52
  SPEAKER_00: You're getting more entry points than on automatically, so you don't have to go and determine the new entry points on that index.
• 15:01
  SPEAKER_02: And I I think that's that's huge for financial professionals because you know I'll use my dad as an example where he would be physically walking to each one of the banks.
• 15:11
  SPEAKER_02: And and going back to when I first got in the industry, where you'd have to go and you have to do all the due diligence on all the bonds and try to make sure, hey, you know, are we are we in where we need to be in?
• 15:22
  SPEAKER_02: That that can that just creates a lot of time.
• 15:25
  SPEAKER_02: And so being able to scale this up, give the client that laddering, laddering strategy, and be able to spend the time more on the holistic aspect of the client and not specifically on, hey, what what's the next move we're gonna do here, and then just continually have to do that?
• 15:43
  SPEAKER_02: I think that's that's that's huge for financial professionals.
• 15:47
  SPEAKER_02: So uh Justin, you know, this is the I I know there's a lot of excitement here uh uh with this product here at the home office.
• 15:55
  SPEAKER_02: And I, you know, one before we end the show here and close it all up, what would you say um if you if you were talking to a financial professional or a client, what are the two main things that you would want them to leave with when they think of the summit laddering product?
• 16:14
  SPEAKER_00: I think the first one is simplicity.
• 16:16
  SPEAKER_00: Simplicity, right?
• 16:17
  SPEAKER_00: It's it's a simple product.
• 16:18
  SPEAKER_00: You you have to make three decisions as a client.
• 16:22
  SPEAKER_00: How much do you want to put in it?
• 16:24
  SPEAKER_00: Which index do you want to choose, and five or seven years?
• 16:27
  SPEAKER_00: That's it.
• 16:28
  SPEAKER_00: That's the simplicity of the product.
• 16:30
  SPEAKER_00: Everything else we're taking off the advisor and the client's table, right?
• 16:36
  SPEAKER_00: So we're doing all of that uh behind the scenes.
• 16:39
  SPEAKER_00: So that's the first one is simplicity.
• 16:41
  SPEAKER_00: And the second one is you know, the client-friendly aspect of it because we're able to leverage those long-term participation rates, the long-term point-to-points.
• 16:51
  SPEAKER_00: Getting a four-year participation rate is more client advantageous than just your traditional one year.
• 16:59
  SPEAKER_02: So that's that's the simplicity of it and being client-friendly.
• 17:04
  SPEAKER_02: I think that's that's something that you know most everybody is looking for when it comes to to a product.
• 17:10
  SPEAKER_02: And so I I can tell you that Justin, I appreciate your time here.
• 17:13
  SPEAKER_02: I know this is a this is a great product, and I hope to have you back here in the studio here again shortly.
• 17:18
  SPEAKER_02: But I I I I hope you just keep working on that golf game and get that get that handicap down to seven.
• 17:24
  SPEAKER_02: It's got to be practice.
• 17:26
  SPEAKER_02: It's all about practice.
• 17:28
  SPEAKER_02: I think most people would probably agree that the practice is the key.
• 17:31
  SPEAKER_02: But thanks again for joining us here on another rendition of the Tyler Show.
• 17:35
  SPEAKER_02: And we look forward to you being on another one of those Tyler shows here very short, very, very shortly there, Justin.
• 17:40
  SPEAKER_02: So thanks again.
• 17:41
  SPEAKER_02: And until next time, happy selling.