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SIG Spotlight on Summit Edge · The Tyler Show

• 0:07
  SPEAKER_01: Welcome to the Tyler Show.
• 0:09
  SPEAKER_01: I'm your host, Tyler Dahan, and we have with us in studio the vice president for Midland Retirement Distributors, Justin Rafferty.
• 0:17
  SPEAKER_01: Thanks for being with us.
• 0:17
  SPEAKER_01: Thanks for having me.
• 0:18
  SPEAKER_01: Happy to be here.
• 0:19
  SPEAKER_01: Yeah, and for our audience, you've you've been you've been on the Tyler Show quite a bit here.
• 0:24
  SPEAKER_01: So a lot of people know a lot about you, but there's one thing I think a lot of our audience may not know about is that your daughter is a Division I swimmer.
• 0:34
  SPEAKER_01: So I guess so.
• 0:35
  SPEAKER_01: I got two questions for you.
• 0:36
  SPEAKER_01: I got the first question is going to be what races does she swim?
• 0:40
  SPEAKER_01: And then I'm kind of interested.
• 0:42
  SPEAKER_01: You've been to a lot of swimming facilities.
• 0:47
  SPEAKER_01: What are the ones that particularly stand out to you?
• 0:50
  SPEAKER_00: Yeah.
• 0:50
  SPEAKER_00: So in terms of races, um, and I'm a super proud dad, as you might might imagine.
• 0:55
  SPEAKER_00: Um her races, she's a backstroker.
• 0:57
  SPEAKER_00: So 100 backstroke, 200 backstroke, and then she's freestyle sprint.
• 1:01
  SPEAKER_00: So in the relay, she'll do a 50 free.
• 1:04
  SPEAKER_00: So those are her best races.
• 1:06
  SPEAKER_00: Uh, she's had a great career at Arizona State so far going into her junior season uh here in the the next couple of weeks.
• 1:14
  SPEAKER_00: Kind of fun.
• 1:15
  SPEAKER_00: She's home for three weeks, which is not something we get a lot of because she's always training.
• 1:20
  SPEAKER_00: Um, but it it's nice to see her and then she'll get that get back there for her junior year.
• 1:24
  SPEAKER_00: In terms of facilities, Arizona State's facility is awesome.
• 1:28
  SPEAKER_00: It's an outdoor pool.
• 1:29
  SPEAKER_01: That's what I've heard.
• 1:30
  SPEAKER_01: Yeah.
• 1:30
  SPEAKER_00: So for a backstroker, that can be a challenge coming from Iowa where there's not a lot of outdoor swimming.
• 1:36
  SPEAKER_00: Um not during the winter.
• 1:37
  SPEAKER_00: No, nothing to look at when you're when you're back there, nothing but blue skies.
• 1:41
  SPEAKER_00: Um, but some of the best facilities, I would say the University of Texas has a has a great facility.
• 1:46
  SPEAKER_00: We've been to a couple of meets there.
• 1:48
  SPEAKER_00: Uh, when we visited the University of Arizona, it's a beautiful facility, their pool, also outdoor.
• 1:53
  SPEAKER_00: Um, but Arizona States is pretty special.
• 1:56
  SPEAKER_01: So, follow-up to that, because it kind of piqued my interest, having an outdoor swimming facility, does that affect the times at all?
• 2:05
  SPEAKER_00: It doesn't.
• 2:05
  SPEAKER_00: It affects their ability to stay straight in the lane.
• 2:08
  SPEAKER_01: Okay.
• 2:08
  SPEAKER_00: So when you're indoor, there's usually roof and and something above you that you can focus on and stay straight in the lane.
• 2:15
  SPEAKER_00: Um, you know, she told me once during practice she was just hoping a plane would fly over.
• 2:20
  SPEAKER_00: You know, the airport's not far from Arizona State, so there was something in the sky she could focus on.
• 2:25
  SPEAKER_01: Oh, that's interesting.
• 2:26
  SPEAKER_01: That's interesting.
• 2:26
  SPEAKER_01: Coming from somebody that, you know, I've never competed, you know, for swimming.
• 2:30
  SPEAKER_01: I mean, I did swimming lessons when I was growing up, but uh, that's pretty cool.
• 2:35
  SPEAKER_00: Myself and my wife are not swimmers either.
• 2:36
  SPEAKER_00: This is just something she fell into and loves.
• 2:38
  SPEAKER_01: That's awesome.
• 2:39
  SPEAKER_01: That's awesome.
• 2:40
  SPEAKER_01: So, Justin, you've you've been in the industry for quite some time here.
• 2:43
  SPEAKER_01: I I've I've been in the industry for two decades.
• 2:45
  SPEAKER_01: I think you've probably been in the the industry about two decades as well.
• 2:49
  SPEAKER_01: So, you know, as as I look back at my career, you know, markets have evolved.
• 2:54
  SPEAKER_01: They've they've been cyclical.
• 2:55
  SPEAKER_01: You've had down markets, up markets, uh sideways markets, and we've had a lot of uh changes.
• 3:02
  SPEAKER_01: I mean, I remember, you know, Excel spreadsheets, and now we're doing AI, right?
• 3:08
  SPEAKER_01: And so a lot of changes have occurred there.
• 3:11
  SPEAKER_01: So one of the things I wanted to ask you is what stood out most to you about, well, and then the other thing too is that we've had these demographic shifts.
• 3:20
  SPEAKER_01: So you have the baby boomers who, when I got into the in into the industry or were going getting into the workforce, you know, they were at the peak of their earning careers, most of them, and now they're starting to age into retirement.
• 3:33
  SPEAKER_01: So, with all of these dynamics occurring, what has stood out to you the most about how you see people addressing these these needs and these concerns that advisors and clients are having?
• 3:47
  SPEAKER_00: Yeah, so I was lucky enough to join the industry in 1998.
• 3:50
  SPEAKER_00: So came in and uh immediately went through the dot-com bubble burst.
• 3:55
  SPEAKER_01: Lived through that.
• 3:56
  SPEAKER_00: I remember that um but barely lived through that.
• 3:58
  SPEAKER_00: And then uh obviously I was I was in the industry through 08 and and everything in between.
• 4:04
  SPEAKER_00: Um, so I've seen a lot.
• 4:05
  SPEAKER_00: And and what's probably changed the biggest thing, in my opinion, is the noise that clients are surrounded with, right?
• 4:13
  SPEAKER_00: In in our pockets, we have all the information we need, and and it's just noise.
• 4:18
  SPEAKER_00: And and to be perfectly honest, it's not always positive noise, right?
• 4:22
  SPEAKER_00: So the need to have uh financial professionals helping clients has never been more.
• 4:29
  SPEAKER_00: And and you mentioned AI, and I think a fear for a lot of people is that financial professionals will be eliminated.
• 4:36
  SPEAKER_00: I don't think so.
• 4:36
  SPEAKER_00: I think they'll become more efficient and and just more valuable.
• 4:40
  SPEAKER_00: Um, even if people are doing their own research using AI.
• 4:44
  SPEAKER_00: I was in a meeting yesterday and and one of the uh the financial professionals said he had a client who is an engineering uh background, yeah, actually used AI to build his own plan, but he still brought that plan to the financial advisor.
• 4:56
  SPEAKER_00: Yeah.
• 4:56
  SPEAKER_00: Right.
• 4:57
  SPEAKER_00: So um I think the need for financial professionals is is going to continue and be great.
• 5:04
  SPEAKER_00: Uh some of the other things, um, obviously with the pensions going away, a lot of clients are looking for ways to take these assets that they've gathered in their 401ks, their IRAs, their different retirement funds.
• 5:16
  SPEAKER_00: They don't know what to do to turn that into some kind of income in retirement, right?
• 5:21
  SPEAKER_00: So you mentioned the baby boomers and how they're starting to age into that retirement age.
• 5:26
  SPEAKER_00: I use my mom as an example quite a bit.
• 5:28
  SPEAKER_01: Yeah.
• 5:28
  SPEAKER_00: She retired a few years ago.
• 5:30
  SPEAKER_00: Luckily, she had a pretty good pension.
• 5:32
  SPEAKER_00: Social Security kind of took care of everything, um, but still needed some help with what do I do with this 401k?
• 5:37
  SPEAKER_00: And and now RMDs are are a part of that, right?
• 5:41
  SPEAKER_00: So um they still need that help, they still need those solutions.
• 5:45
  SPEAKER_00: So uh I I think the the products and the different solutions that people have to generate that income have just they're as good as they've been in my 25-year career.
• 5:57
  SPEAKER_01: Yeah, I I totally agree with that.
• 5:59
  SPEAKER_01: And and one of the things when we talk about income that that I always kind of go back to is I was fortunate enough to be part of a a research study.
• 6:07
  SPEAKER_01: This was probably about 10 years ago.
• 6:09
  SPEAKER_01: And what we were doing is like, what makes people feel comfortable, probably is a good word, comfortable in retirement.
• 6:17
  SPEAKER_01: And what we found is a consistent stream of income was was was what people were talking about.
• 6:23
  SPEAKER_01: And so I always think back to that and and and think to you know that people talking about how much they they're they're concerned about, hey, how do I how do I take social security?
• 6:32
  SPEAKER_01: Because I want to make sure I maximize my income, right?
• 6:34
  SPEAKER_01: Yep.
• 6:34
  SPEAKER_01: So it comes back to being able to be be comfortable with what with your plan.
• 6:39
  SPEAKER_01: And ultimately, I think that comes back to people saying, hey, going to a financial professional, hey, is does even even if they're doing it through AI, does this look correct?
• 6:48
  SPEAKER_01: Right, right.
• 6:49
  SPEAKER_01: Right.
• 6:49
  SPEAKER_01: Yeah.
• 6:49
  SPEAKER_01: Would you do anything different?
• 6:51
  SPEAKER_01: Yeah, yeah.
• 6:52
  SPEAKER_01: So one of the things that I hear, you know, I'm not a wholesaler, I'm not in sales, but I I I listen and observe quite a bit.
• 7:00
  SPEAKER_01: And one of the things that I I hear quite a bit is centered around the product uh uh summit edge.
• 7:07
  SPEAKER_01: And a lot of a lot of times it's in the conversation around what we just talked about uh uh for income.
• 7:14
  SPEAKER_01: And it's also talked about in terms of accumulation.
• 7:19
  SPEAKER_01: And I know that's something that a lot of the wholesalers have talked about, and I just want to kind of ask you a little bit about from a 500-foot view, what makes Summit Edge stand out in both of those spaces?
• 7:36
  SPEAKER_01: Why are why are we seeing advisors and wholesalers talk about the income and the accumulation phase uh at this time and why is Summit Edge being discussed?
• 7:49
  SPEAKER_00: Yeah.
• 7:49
  SPEAKER_00: So the the reason you're hearing so much about Summit Edge is because it is our number one selling product.
• 7:54
  SPEAKER_00: And and the main reason is it's flexibility, right?
• 7:57
  SPEAKER_00: You mentioned it can be accumulation, it can be income.
• 8:00
  SPEAKER_00: Um, I'll start with the income side and then kind of move to the accumulation.
• 8:04
  SPEAKER_00: When you think about the income side, many of our uh competitors out in the marketplace, they'll build an imp income product and it's really driven towards maximizing income.
• 8:14
  SPEAKER_00: And of course, we have some products on the shelf like that as well.
• 8:18
  SPEAKER_00: So the the return on the underlying investment, the the account balance, doesn't necessarily come into play as much because it's really built to maximize that income.
• 8:28
  SPEAKER_00: Summit Edge is unique in that it's an accumulation product where you can optionally get an income writer on it.
• 8:35
  SPEAKER_00: So you're gonna see better rates, better caps, better accumulation um aspects to it along with the income.
• 8:42
  SPEAKER_00: And the income is is fantastic.
• 8:44
  SPEAKER_00: It's an 8% compounded roll-up for up to 10 years.
• 8:47
  SPEAKER_00: The payout factors, as I mentioned earlier, are as as good as they've been in my 25-year career.
• 8:53
  SPEAKER_00: Uh, so it's a great time to look at at the income side.
• 8:56
  SPEAKER_00: But from an accumulation side, the what makes it really unique is its flexibility.
• 9:02
  SPEAKER_00: So it can be short term, five, seven, or 10 year.
• 9:05
  SPEAKER_00: So you choose as a client, as an advisor, which uh which duration you want to use.
• 9:10
  SPEAKER_00: It's got uh four different indexes to choose from, 15 different crediting strategies.
• 9:16
  SPEAKER_00: Wow.
• 9:17
  SPEAKER_00: Uh it's flexible premium.
• 9:19
  SPEAKER_00: So uh without an extending the surrender charge period, so you can add premiums to it in the fifth year of a five-year contract, and that'll be fully liquid one year later.
• 9:29
  SPEAKER_00: So the flexibility of the product is huge, along with the diversification with the different indexes and the different crediting strategies.
• 9:36
  SPEAKER_00: So that makes it a great accumulation product, but the combination of an accumulation product with an optional rider, it's going to give you the best upside on the accumulation side with an income rider.
• 9:48
  SPEAKER_01: Wow, that's that's amazing.
• 9:49
  SPEAKER_01: And we've also seen here in the last you know couple of months, we've we've we've created some enhancements also to Summit Edge.
• 9:58
  SPEAKER_01: And I've heard the wholesalers talking a little bit about that.
• 10:01
  SPEAKER_01: So walk us through what are some of these enhancements to Summit Edge uh and how are you seeing those being resp uh received in the marketplace?
• 10:10
  SPEAKER_00: Well, it hasn't officially launched yet, but um we're excited about the the enhancements for sure.
• 10:15
  SPEAKER_00: Uh, probably the biggest one right out of the gate is I I mentioned Summit Edge is great for accumulation, it's great for income.
• 10:22
  SPEAKER_00: And and oftentimes the question is okay, what about legacy?
• 10:25
  SPEAKER_00: So we're adding an optional death benefit rider to the product uh that you can leave for for legacy.
• 10:31
  SPEAKER_00: Yeah.
• 10:32
  SPEAKER_00: So it'll be a 7% compounded roll-up up to a 200% maximum.
• 10:36
  SPEAKER_00: So 100,000 can grow to 200,000 in about 11 years.
• 10:40
  SPEAKER_01: Yeah.
• 10:41
  SPEAKER_00: And it's a cost of 45 basis points.
• 10:44
  SPEAKER_00: So real excited about that for those folks that are looking for those assets that they just want to pass on to the next generation.
• 10:51
  SPEAKER_00: Uh, we have this enhanced death benefit.
• 10:54
  SPEAKER_00: Along with that, we're we're I would say beefing up our index strategies uh by offering triggers.
• 11:00
  SPEAKER_00: Uh, those have become very popular recently.
• 11:03
  SPEAKER_00: Yeah, yeah.
• 11:03
  SPEAKER_00: Uh our our triggers will be based on our SP dynamic intraday uh index, which is um a high volatility target uh SP-based uh index.
• 11:14
  SPEAKER_00: Uh average volatility of the SP has been 15% over the last few decades.
• 11:19
  SPEAKER_00: It's a volatility target of 15%.
• 11:22
  SPEAKER_00: So it's going to try and mirror the SP 500.
• 11:24
  SPEAKER_00: What makes it more powerful though is the ability to leverage up.
• 11:28
  SPEAKER_00: So if volatility is less than 15%, they can go up to an exposure in the SP 500 as high as 250%.
• 11:35
  SPEAKER_00: Wow.
• 11:36
  SPEAKER_00: So it's a very unique index.
• 11:38
  SPEAKER_00: And with the trigger, you don't really care about what the return of the index is.
• 11:42
  SPEAKER_00: If it's zero or positive, you're gonna get that stated rate of interest.
• 11:45
  SPEAKER_01: Yeah.
• 11:46
  SPEAKER_00: So not only are we introducing triggers to our lineup, we also are gonna offer a guaranteed trigger.
• 11:52
  SPEAKER_00: So the difference between a regular trigger is you may have some renewal rates at some point in the future.
• 11:57
  SPEAKER_00: Sure.
• 11:58
  SPEAKER_00: Yeah, as markets change, you might might see renewal rates, or the client could choose a guaranteed trigger, and you'll know that will never change over the life of the contract on the five or the seven year.
• 12:08
  SPEAKER_00: Not available on the 10, but on the five or seven year.
• 12:11
  SPEAKER_00: Um, in addition to that, we're also uh introducing guaranteed caps to our SP dynamic index.
• 12:18
  SPEAKER_00: So really excited about these changes.
• 12:20
  SPEAKER_00: I think it'll make it an easier story for financial professionals to use with their clients and give give them a great uh option of upside.
• 12:28
  SPEAKER_00: And if they want income or a death benefit.
• 12:32
  SPEAKER_01: So if I'm a financial advisor or I'm their client and uh all all the the enhancements that have occurred to Summit Edge, where do you see them being able to unlock some opportunities, whether it's from an advisor standpoint or it's from a client standpoint?
• 12:51
  SPEAKER_00: Yeah.
• 12:51
  SPEAKER_00: So I would say from a client standpoint, what you're looking for is uh I like to say banks, bonds, and profits is a great place to start.
• 13:00
  SPEAKER_00: Uh clients that have money in the banks, right?
• 13:02
  SPEAKER_00: There's money in CDs for a reason.
• 13:05
  SPEAKER_00: They don't want to lose money.
• 13:06
  SPEAKER_01: Yep.
• 13:06
  SPEAKER_00: Good news is Summit Edge is a fixed index annuity.
• 13:09
  SPEAKER_00: You can't lose money, but you have the opportunity to participate um with the gains of of the underlying indexes.
• 13:15
  SPEAKER_00: So start with folks in the banks, getting them to move money from that CD, getting them the ability to quite honestly keep pace with inflation.
• 13:23
  SPEAKER_00: Yeah.
• 13:24
  SPEAKER_00: Because CDs are not going to do it, right?
• 13:26
  SPEAKER_00: Yep.
• 13:26
  SPEAKER_00: Yep.
• 13:27
  SPEAKER_00: Uh bonds, many of our advisors use Summit Edge as a bond alternative inside a portfolio.
• 13:32
  SPEAKER_00: If you look back to 2022, it was one of the worst stock markets in history, down 18%.
• 13:38
  SPEAKER_00: It was the worst bond market in history.
• 13:40
  SPEAKER_00: So, you know, we all grew up on modern portfolio theory and asset allocation is key.
• 13:45
  SPEAKER_00: Yep.
• 13:46
  SPEAKER_00: Unfortunately, it didn't work.
• 13:48
  SPEAKER_00: And many clients lost money in bonds.
• 13:49
  SPEAKER_00: So a lot of advisors uh will actually use uh Summit Edge and Index annuities as that bond alternative to make sure you can't lose in that portion of their fixed income portfolio.
• 14:01
  SPEAKER_00: And then profits.
• 14:03
  SPEAKER_00: We've seen a great run up in the markets over the last decade, decade and a half.
• 14:08
  SPEAKER_00: Um, so there's a lot of profits out there.
• 14:09
  SPEAKER_00: Yeah.
• 14:10
  SPEAKER_00: As people get more and more and more nervous, uh, it's it's a great time to peel some of those profits off, protect them with a zero floor, but still give them that accumulation options that that we talked about and the diversification inside the FIA with the different indexes.
• 14:24
  SPEAKER_01: It's interesting you talked about taking the profits off the table because I had that conversation literally last week with my with my uncle.
• 14:32
  SPEAKER_01: He was talking about, you know, my uncle is in retirement, he's been in retirement for a long time, but they had talked about some of their portfolios had just seen a run up in in their their accumulation.
• 14:43
  SPEAKER_01: And and the question came up is do you think this is a good time to maybe protect that?
• 14:47
  SPEAKER_01: And I said, Well, I I can't predict where the market's gonna go.
• 14:51
  SPEAKER_01: Like I can't do that, but if you feel like you need to protect something or a portion of that, this might be an opportunity to to look at some of that.
• 14:59
  SPEAKER_01: So it's funny that you mentioned that because I literally had that question or that that conversation last week with my family member.
• 15:05
  SPEAKER_00: And the beauty of Summit Edge or or any other FIA for that matter is right, you you protect it, but you're still getting to participate.
• 15:12
  SPEAKER_00: Yeah.
• 15:12
  SPEAKER_00: So if it does continue to run for the next five, seven, 10 years, you're still participating in that.
• 15:17
  SPEAKER_00: So you're not really losing out on all of it, you're losing out on some of it to make sure you protect those games for the future.
• 15:24
  SPEAKER_01: Yeah, yeah.
• 15:25
  SPEAKER_01: So uh, Justin, I mean, a lot of exciting things happening here at Midland.
• 15:30
  SPEAKER_01: And so is there anything else that you would like to share with the audience here today around Summit Edge?
• 15:37
  SPEAKER_00: Well, I know we're focused on Summit Edge, and that's what this is about.
• 15:40
  SPEAKER_00: But um, I I definitely would just ask everyone to reach out to their wholesaling partners, their regional vice presidents out in the field or their their internal wholesalers uh and learn about our vast array of products because we do have something uh on the protection side of uh the investments or income side.
• 15:59
  SPEAKER_00: Now with the death benefit, we do have something that that'll help with most of your clients' needs.
• 16:04
  SPEAKER_01: All right.
• 16:05
  SPEAKER_01: So again, we just thank you for all of your support here for Midland Retirement Distributors.
• 16:10
  SPEAKER_01: And for the Tyler show, I'm Tyler Dahan.
• 16:14
  SPEAKER_01: Until next time.