Latest / The Perfect RIA / The Annuity Conversation with Guest Tracy Lownsberry [Episode 265]

Transcript

The Annuity Conversation with Guest Tracy Lownsberry [Episode 265] · The Perfect RIA

• 0:22
  Amber Kuhn: TPR nation, are you looking to learn more about
• 0:25
  Jarvis's Guardrail strategy and how to communicate this to
• 0:28
  clients? Visit theperfectria.com/guardrails to
• 0:32
  get exclusive access to Matt's video example on presenting
• 0:37
  guardrails to clients, you'll learn how to address those
• 0:40
  critical questions about how much income can you safely take
• 0:43
  into retirement and what adjustments need to be made when
• 0:46
  the markets perform poorly. Visit
• 0:49
  theperfectria.com/guardrails to get your access today.
• 0:53
  Tracy: Hey, thanks for having me. Super excited to be here.
• 0:53
  Matthew Jarvis: Hello everyone, and welcome to another episode
• 0:55
  of The Perfect RIA podcast. I am your co host, Matthew Jarvis,
• 0:58
  and with me today's special guest, Tracy Lownsberry , who
• 0:59
  Matthew Jarvis: Well. So for listeners who don't follow you
• 1:01
  you might recognize, Tracy, if you're one of the the
• 1:04
  unfortunate souls that follow me on LinkedIn, you know that I
• 1:06
  on LinkedIn, which everyone definitely should tell us a
• 1:07
  love to, like, just kind of poke at things. And I have to admit,
• 1:10
  I love other people who also poke at things, who are willing
• 1:13
  to be like, Hey, listen, I'm passionate about certain things,
• 1:16
  but I'm not afraid to poke at sacred cows. I'm not even afraid
• 1:19
  to call out things that I hold sacred. And so I was really
• 1:22
  excited when Tracy agreed to be on the show today. Tracy's
• 1:25
  obviously very passionate about annuities, passionate about that
• 1:28
  side of the industry, but is also not slow to say, like, wait
• 1:32
  a second, that's not actually what's going on here. So Tracy
• 1:35
  with that hopefully positive introduction, man, welcome to
• 1:37
  the show.
• 1:44
  little bit about yourself, the work that you do inside of the
• 1:48
  annuity space, the work history, etc.
• 1:50
  Sure, yeah. So I tell people I'm super niched out, you know,
• 1:54
  super niched out annuity side. Love everything else as well,
• 1:57
  but annuities are my jam. So mostly what I do now is I focus
• 2:01
  on, obviously, bringing on the consumer side and helping on
• 2:03
  that way, the right way, but then also making sure that
• 2:06
  agents and advisors alike, they're trained the right way.
• 2:10
  So we have a training platform and they're educated and how
• 2:12
  they solve problems. If you're not solving a problem normally,
• 2:15
  you're creating one, is what we tell people, so be careful
• 2:17
  there. So just really big in that space. And obviously, like
• 2:20
  you had said, you know, LinkedIn is a phenomenal platform to be
• 2:22
  able to get out as much information as possible to a big
• 2:25
  agent advisor base. So we're just really focusing on, like,
• 2:28
  let's just, like, call a spade a spade and peel the veil, and
• 2:32
  let's just talk about the things that make other people
• 2:33
  uncomfortable.
• 2:35
  I love it. I love it. I would call it real quick for our
• 2:39
  listeners, if you're a listener and you're like, wait a second,
• 2:40
  I don't do annuities. I'm fee only. I'm whatever you're
• 2:44
  telling yourself. It's easy for that side of the industry is
• 2:46
  dismissive of what I'm just generally called the insurance
• 2:49
  side of the industry. Like, well, those guys and gals,
• 2:52
  that's the old school. They don't really know, but we need
• 2:54
  to remember, and I grew up tracing the insurance side of
• 2:56
  the world as well. This is the oldest part of financial
• 2:59
  planning. Like, insurance is, like, one of the oldest
• 3:01
  financial products that exist like we're not talking about,
• 3:03
  like Roths or IRAs or 401 case, we're talking about, like,
• 3:06
  hundreds of years, by some account, 1000s of years of
• 3:10
  annuities and insurance being a thing, and so it is really the
• 3:14
  foundation of all financial services. Now that doesn't give
• 3:17
  it like a free pass that can do new ill, everyone can. But I
• 3:20
  think as advisors, are so much that we can learn from the
• 3:23
  insurance space, even if that's not a piece that you're focused
• 3:26
  in. But Tracy, to your point, you're you're super niche in
• 3:28
  there. You're like, Hey, this is, this is where I specialize.
• 3:30
  Tracy: Yeah, absolutely. And you make a really good point.
• 3:32
  There's a lot of advisors out there that are that are anti and
• 3:35
  what I've found is just, it normally comes from just a
• 3:38
  little bit of bias. Maybe it's just a circle you're in,
• 3:40
  whatever, it's hard to argue. Maybe it's just a bad
• 3:43
  experience, right? It's hard to argue with math, in my opinion,
• 3:47
  and annuities are surround around math. But also, what I
• 3:50
  tell people is 95% of annuities suck, and 99% of the people
• 3:55
  selling them suck. So you know, you just gotta, you gotta do it
• 3:57
  the right way, and that there's no short way to get there, other
• 4:01
  than being obsessed with it and understanding that you have to
• 4:04
  just pursue knowledge and education around every turn. And
• 4:07
  that's a problem in this industry, that's for sure.
• 4:10
  Matthew Jarvis: I love that lie you use. I mean, I've used it
• 4:12
  oftentimes with clients some similar version of like, Hey,
• 4:14
  listen, 90% of the annuities, or 95% annuities out there are
• 4:17
  really bad news, like, you should definitely stay away from
• 4:20
  and we can say a similar thing about reverse mortgages, or
• 4:23
  about a lot of invest like, there's a lot of really bad fill
• 4:26
  in the blank. My job is to help you avoid all those bad ones,
• 4:29
  because, in fact, there's some good ones. And I think I maybe I
• 4:32
  got this one from from you tracer or not. But, you know,
• 4:34
  there's this old cliche in the industry, like, hey, if all you
• 4:36
  have is a hammer, everything looks like a nail, which is kind
• 4:38
  of like a line used against, you know, insurance, whatever
• 4:41
  specialty, yeah. But the converse is also true. Like,
• 4:44
  hey, if you're seeing there's this tool into a toolbox, and I
• 4:46
  refuse, I refuse to ever pick up. I will never pick up. You're
• 4:50
  doing an equally bad disservice, right? If you're saying, like,
• 4:52
  no matter what, no matter how bad someone needs a hammer, I
• 4:55
  will not grab the hammer, that's an equally big problem in
• 4:57
  financial services. So I love trace. You're like, listen,
• 4:59
  dude, I'm just gonna own this thing. Like, they're so good,
• 5:01
  the bad, the bad, the ugly kind of zero, the good. So, so tell
• 5:03
  us, you not only are working with consumers, you're also like
• 5:07
  work with advisors who better understand this stuff.
• 5:09
  Tracy: Yeah. So I found a while ago, you know, I was sitting in
• 5:13
  a conference, and I was listening to this guy as as a
• 5:15
  solo producer, and he was an advisor who's licensed on that
• 5:19
  side too. You know, he was, he was, he was bringing in 50 plus
• 5:21
  million a year, you know, which is not easy to do, you know,
• 5:26
  that's, you know, you're putting yourself near the top there. As
• 5:28
  far as you know, a solo producer,
• 5:30
  Matthew Jarvis: He's bringing in 50 million of, like, annuity
• 5:32
  assets a year?
• 5:33
  Tracy: AUM, and annuities together, yeah, per year, yeah.
• 5:36
  As a solo producer, that's a, that's impressive clip, massive.
• 5:39
  So I'm sitting there an audience. I'm list this guy, and
• 5:41
  he's got some good nuggets. But then he starts talking, nuggets,
• 5:43
  but then he starts talking about some intricacies. And I'm like,
• 5:45
  what he's talking about? Like, he's doing a massive amount
• 5:49
  here, and he doesn't even understand the basis behind what
• 5:54
  makes an annuity good or bad. And it was like, this big alarm
• 5:58
  that, like, triggered in me. And it was like, how often does this
• 6:00
  happen? So I started to kind of put my feelers out and reach out
• 6:04
  to people and connect with people, and what I found is
• 6:06
  like, Oh, this happens everywhere. You know, all these
• 6:09
  details that are missed foundationally, that advisors
• 6:13
  just don't understand and agents don't understand. So I started
• 6:16
  to community, and I started a program, and it was, it was
• 6:19
  really built upon. I'm already doing this for agents and
• 6:22
  advisors that work with me. Why not open it up to the public? In
• 6:26
  a sense, it just has grown massively. So it's, I tell
• 6:30
  people this, it's a loss leader for me, but it's almost like a
• 6:32
  charity. But it's addicting. It's addicting to be able to sit
• 6:37
  down with an agent or advisor and just watch those gears start
• 6:40
  to turn and watch start to think, like, Oh my gosh. Like,
• 6:43
  you're making a difference in my thought process that nobody's
• 6:46
  ever really explained to me before. And it's, it's like, I
• 6:49
  said it is addicting. I think it gives me juice.
• 6:51
  Matthew Jarvis: Yeah, no, no, I get I get that. I mean, that's a
• 6:53
  lot of what this podcast is about, right? A lot of the work
• 6:55
  that you and I do on LinkedIn, it's just like, hey, let's,
• 6:57
  let's create some artists. Tracy, can you think of some
• 6:59
  specific examples of that, where you're meeting with an advisor
• 7:02
  or agent and what like, what's definitely you're able to help
• 7:06
  people see in this area.
• 7:08
  Tracy: So there's, there's a definitely lot recently, and
• 7:10
  some of them, I would say, are a little controversial. But the
• 7:12
  big, the big one I see, is carriers with the company,
• 7:16
  right? Your guarantee is only as good as the company that's
• 7:20
  guaranteeing it, right? You know, to go back to, like,
• 7:23
  private placements, right? So, like, there's a lot of private
• 7:25
  companies that will say, yeah, we'll guarantee you this, but
• 7:27
  it's, you know, like, I wouldn't trust you with my money. There's
• 7:30
  no way. So I like to kind of look at the carrier first in the
• 7:35
  amount of premiums that are coming through. Some of the
• 7:38
  carriers not touch with 100 foot pole blows my mind. You know, no
• 7:44
  problem telling my LinkedIn. You'll see me call carriers all
• 7:47
  the time. Yeah. You know, we look at like solvency ratings of
• 7:49
  carriers, like, if a solvency rating is bad, don't touch that
• 7:53
  carrier, right? You can have a great rate of care with a really
• 7:55
  bad solvency, and people have no idea. So, you know, that's a big
• 7:59
  one. And anything that's kind of performance driven, you know,
• 8:03
  looking in the annuity space, and you start looking at
• 8:05
  performance driven, like income, right? Or performance driven,
• 8:09
  you know, buffered, or whatever, just really start to second
• 8:13
  guess what were some best case scenarios for your clients?
• 8:15
  Because best case scenario, it's not doing 8% on average or 9% on
• 8:19
  average a year. Okay, that's just not what they do. I've
• 8:22
  seen, I can count on one hand how many times I've seen 7%
• 8:27
  average over a 10 year period, let alone above that. So
• 8:31
  expectations I feel that advisors and agents have are
• 8:35
  clouded, and it's clouded by, I think it starts at the carrier,
• 8:38
  and it goes to the internal killer, and then it goes down to
• 8:41
  whatever, IMO, FMO you're a part of, I think it's clouded,
• 8:43
  because they're trying to push sales through, and it's a big
• 8:45
  problem.
• 8:46
  Paul Saganey: Yeah, for sure, it is. And again, I want to draw
• 8:48
  our advisors who are saying, Hey, I'm not an insurance
• 8:50
  license or I'm not interested in going down the space. This
• 8:53
  something you need to understand, because Tracy, as
• 8:55
  you point out, there's a lot of bad not product is bad, but
• 8:58
  there's a lot of bad product. As advisors, hey, listen, you can
• 9:03
  put all this index annuity, and it's going to get 11% a year,
• 9:05
  the upside and none of the downside, and it's guaranteed.
• 9:08
  Like as an advisor, you need to understand how these products
• 9:11
  work and also how they don't. We cannot turn up a blind eye to
• 9:15
  this. Tracy, are you doing much in a speed of space these days,
• 9:18
  like I see a little bit more of this comment around because
• 9:20
  rates are so much higher. What insights can you give us there?
• 9:24
  Tracy: Yeah, so to be honest, no, but it's not that I
• 9:27
  wouldn't. It's not that I wouldn't. I love Spiers. Love to
• 9:29
  use They're awesome. But I like the AI space, and I like the
• 9:33
  guaranteed lifetime withdrawal benefits, and they just seem to
• 9:36
  kind of be higher payouts right now, which is very interesting.
• 9:39
  So a lot of our clients, what we find is that we don't, we don't
• 9:42
  have a lot of clients that want income today. They want to make
• 9:44
  sure in two years, four years, six years. And when you start to
• 9:47
  compare, like an FIA with a deferred lifetime, with relevant
• 9:50
  versus a DIA or even a spea, they take the cake. It's funny,
• 9:56
  they lower payout. And so net was lower payouts. You're just
• 10:00
  selling that for a commission in an honesty, I would say that was
• 10:03
  probably true, you know, but now that they, they have these
• 10:06
  payout rates that are better, we like it. And the other side of
• 10:10
  that too is that when you look at a spear idea, you're making a
• 10:13
  lifetime commitment in that, right? You are like that is a
• 10:15
  big commitment, at least, you kind of know, if you go the FIA
• 10:20
  with the guaranteed lifetime withdrawal benefit that if your
• 10:23
  life does change, right? Something happens. And we don't
• 10:26
  want to go into this with that mindset of, oh, I'm going to get
• 10:29
  out, because it'll be the worst investment you ever made,
• 10:30
  because they don't grow for your app, right? But if you look at
• 10:33
  it that way, like, Oh, if something changes, I could
• 10:35
  potentially, you know, just take my money and run after my
• 10:38
  surrender period's up. There's benefits to that right for the
• 10:40
  right person. So that's kind of what we look at.
• 10:42
  Matthew Jarvis: That's interesting, interesting, I
• 10:44
  think about sometimes we run into clients, right? They have
• 10:46
  big cash piles, or they're just incredibly risk adverse, right?
• 10:50
  Yeah. And, you know, we can say, Well, hey, we need to compare
• 10:53
  the equity markets to, you know, FIA, but that's not really a
• 10:55
  comparison, like, it's really like comparing cash to an FIA,
• 10:58
  right? Because that's really what the client's doing.
• 11:00
  Instead, no clients like, Hey, should I invest in the s, p, or
• 11:03
  put it all in an FIA? It's like, should I write in cash or but
• 11:06
  for those clients, like as advisors, I think we need a way
• 11:08
  of like, what are the options on the table now, Tracy, the
• 11:11
  version that I have when I look at my RIA practice, I'm again,
• 11:14
  I'd love to do some FIA stuff some of these writers, but it's
• 11:17
  sort of like a pain. Like, what we if you're talking about RIA
• 11:20
  guy like myself, like, what do you recommend? I don't
• 11:21
  necessarily want to go back down the path of back down the path
• 11:23
  of getting an insurance license. Doesn't park on the ends. Well,
• 11:26
  it doesn't necessarily report well, like, how do I add that
• 11:29
  tool to my toolbox without going down this, this entire path?
• 11:32
  Tracy: Yeah. So we come across that quite a bit with advisors.
• 11:35
  We do normally see an advisor that would partner with
• 11:38
  somebody, right? So it's like, okay, maybe, maybe I don't want
• 11:41
  to learn this, so I'll give you a great example. So recently, we
• 11:44
  were taking a pretty big account from a guy. It was replacing
• 11:47
  some annuities as well as some AUM stuff. And yeah, and this
• 11:50
  doesn't happen often, but I always, always make sure that I
• 11:55
  am reaching out to that advisor and saying, Hey, listen, this is
• 11:59
  what we're doing. Okay, if you want to have a conversation,
• 12:02
  let's have a conversation. Like, I'm not trying to pull one over
• 12:05
  on you, right? Like, that's just not my that's not my style. So
• 12:08
  this guy, actually, we set up a call, and he had $160 million
• 12:12
  practice, five years away from retirement. Really liked
• 12:15
  annuities. And what he did was he just said, Tracy, you seem
• 12:19
  like a really good dude and, you know, annuities more than I do.
• 12:22
  And he said, Well, why don't we just do this? Why don't I refer
• 12:25
  you anybody that needs an annuity, or I think maybe would
• 12:28
  be a good fit. Why don't I just refer them to right? And, by the
• 12:30
  way, we don't do referral partnerships anymore, like very
• 12:33
  rarely we had a lot of other things going on. It just it can
• 12:35
  be hassle. So this one, I decided to take it on. And so
• 12:38
  with this guy, you know, he saw the benefit of not having to
• 12:41
  learn it and then referring it out to that kind of niche
• 12:44
  expert, and we just kind of split it. Now, he's also
• 12:48
  licensed there. So if you're somebody who's not licensed
• 12:50
  there, then there's, there's, obviously you could, you could
• 12:52
  charge a flat fee, or you could charge a fee based on, you know,
• 12:55
  just asset total. I mean, you could do that. That's fine, just
• 12:59
  knowing that I'm going to get a commission from it, right? So
• 13:01
  there's, there's ways to go about it, just make sure you're
• 13:03
  talking with your BD or whomever to make sure following
• 13:06
  compliance.
• 13:06
  Matthew Jarvis: That's what I've done with my practice. I've got
• 13:09
  a couple of my practices episode Northwest, and when we run into
• 13:11
  those cases, like one of my top clients, they're very concerned
• 13:14
  about long term care, very, very, very concerned, I would
• 13:17
  say, irrationally so. But we've had that discussion a lot of
• 13:19
  times. There's just no way you're there's just no way
• 13:21
  you're gonna ever spend that much money. And they said, No,
• 13:24
  we just want to absolutely know. Because they said they're quite
• 13:27
  well. They said, Jarvis, can you guarantee us that we will not
• 13:29
  run out of money during long term care? No, I can't. Like, we
• 13:32
  could imagine scenarios where you could any number of millions
• 13:35
  of dollars could be blown through. They said, Fine, we
• 13:37
  want to have a policy that guarantees us lifetime coverage.
• 13:40
  And I said, okay, cool. Like, here's the pros and cons. It's
• 13:42
  gonna be really expensive. Let's find you a guy or a gal who can
• 13:45
  help you that, because, again, I don't want to go down that path.
• 13:48
  And so yeah, we found somebody introduced them. Yes, that guy's
• 13:51
  gonna get a really healthy coach, but that's okay. That's
• 13:53
  just how that industry works. The case the client had a need,
• 13:56
  which was, I have to be absolutely guaranteed I can
• 13:58
  never run out of money during long term care. And that was the
• 14:01
  only solution to for that. It just was it, right? So as an
• 14:03
  advisor, I put my head in the sand and I say, well, Tracy gets
• 14:06
  commissions, therefore he's an evil guy, therefore I can't talk
• 14:09
  to him. Only the client has lost here, like Tracy's still up in
• 14:11
  northern Michigan, having a great time in life, and only the
• 14:14
  client has lost here, right?
• 14:16
  Tracy: Yeah, you can't, you can't be against commissions,
• 14:18
  but I understand why. Oh, yeah, certainly been abused. Yeah, for
• 14:22
  sure. You know I would say more often than not. Actually, I
• 14:24
  don't even say way more often than not, unfortunately. But
• 14:28
  like you said, it doesn't make you a bad person, just because
• 14:29
  that's how you get paid. It's just you can still follow. You
• 14:33
  can't you can't regulate morality. You can't regulate
• 14:36
  ethics, right? It's just it's almost impossible. So you're
• 14:39
  going to do the right thing or the wrong thing, whether you get
• 14:41
  paid commission. Aum, flatbed doesn't matter, right? Yep, so
• 14:44
  people need to understand that, yeah.
• 14:45
  Matthew Jarvis: And I think then you have an obligation as an
• 14:47
  advisor, however you're compensated that when there are
• 14:50
  needs that you cannot meet for your clients that you have Tracy
• 14:52
  to your point, you found somebody who has the ethics and
• 14:54
  the morals that align with yours. Because, again, the
• 14:57
  regulation is not going to get it, and that could be everything
• 14:59
  from an annuity, to a long term care policy, to two even a
• 15:02
  mortgage, right? Like, someone's gonna get a commission on that
• 15:05
  mortgage. Rather, it be someone that, I say, like, this person's
• 15:07
  gonna work for you, versus Tracy, to your point, this
• 15:09
  person's just looking for another and then the client be
• 15:12
  damned. Tracy. Other thoughts you you see a lot in this
• 15:15
  industry, again, primarily from the annuity side, but other
• 15:18
  things that we all should be aware of when it comes to the
• 15:20
  annuity space, or just, you just practice. And in general, I know
• 15:23
  you've got a lot going on, not just annuities. Give us some
• 15:26
  more insights here. Man, yeah.
• 15:27
  Tracy: So, you know, annuities, it seemed, when you start
• 15:30
  talking about the FIA space, specifically, which, which is a
• 15:32
  space that I do most my business, and that that index
• 15:35
  side tends to kind of go hand in hand and start conversations on
• 15:38
  the IUL side, right? Sure. And so, you know, we get a lot of
• 15:42
  people that ask us, and about them. You know, they see the
• 15:44
  tiktoks, they see the Facebook reels, they see the YouTube
• 15:47
  shorts, whatever. Again, I'm not anti but I am definitely a big
• 15:51
  skeptic. And I think perception and expectation are very
• 15:55
  important to understand here, right? So, like, as long as
• 15:57
  you're setting the right expectation and you're not
• 15:59
  blowing it up into something, it's not then any product out
• 16:02
  there can be a good fit for certain people, right? The
• 16:05
  problem, again, is that ignorance is not a defense
• 16:08
  against events doing something wrong, and that's what we see a
• 16:11
  lot people. They don't know what they don't know. But I'm sorry,
• 16:15
  but that's that's not a that's not a defense like you. You have
• 16:19
  to look at this as, this is somebody's hard earned money.
• 16:23
  This is, this is somebody's entire, you know, retirement,
• 16:26
  right? You could really screw it up, you know, which, going back
• 16:30
  to, should you be securities license to do this? I am not
• 16:33
  anti securities license to sell annuities. I'm not. I think
• 16:36
  education, and that's what it brings, is education, right?
• 16:39
  You'll get a securities license, whether it's a 6563 go get your
• 16:42
  CFP, CFA, whatever you go get any license out there. It's just
• 16:46
  education, and then it allows you to do what you want to do
• 16:49
  better. So full disclosure, I'm not. People ask me all the time,
• 16:53
  hey, trace area security license. No, I'm not. We work a
• 16:55
  lot hand in hand with securities license, because you can't
• 16:58
  understand annuities and you can't position them
• 17:01
  appropriately without seeing the big picture, right? And if the
• 17:04
  battle I am never going to fight against, because I love
• 17:07
  securities. I love equities. I love, you know, I love that side
• 17:09
  of it's amazing, but it doesn't I'm not proactively seeking it,
• 17:13
  just because I'm not right. I'm not securities licensed, but I'm
• 17:16
  constantly trying to figure out, like, you know, last year, I
• 17:18
  spent a good part of the year. Really understands options and
• 17:22
  trading. So I wanted to see how insurance companies were
• 17:24
  trading, you know, within the index thing, right? Yeah, I
• 17:26
  really wanted to understand that. I wanted to understand,
• 17:28
  you know, bond yield to maturity rates and how that affects and,
• 17:31
  you know, understand the Barclays bond aggregate, and
• 17:33
  really just understanding a lot of these things that affect
• 17:37
  annuity companies portfolios, but also understanding, like,
• 17:41
  Okay, how do I know how an annuity fits if I don't
• 17:43
  understand all the other tools, right? Like, I gotta know the
• 17:46
  other tools. So let's put all them side by side and then
• 17:49
  compare them. And so I can lay it out to a client. Say, Hey,
• 17:51
  you wanted this safe alternative? Here's a bunch of
• 17:54
  options, here's the positives and negatives. Whichever one you
• 17:56
  want to go with, you can go with that. And we'll bring in our
• 17:59
  securities guide, and he'll build out a treasury ladder for
• 18:01
  you, or whatever more you can do it yourself. And I try to stay
• 18:05
  agnostic as possible. And I just had a couple leave my office. I
• 18:08
  threw, not threw away, but, you know, I could have probably made
• 18:11
  about 10 grand from them, you know, some things that they want
• 18:13
  to do. And I just told them, no. I was like, No, this is probably
• 18:16
  not a good fit for you. Just keep your money where it's at.
• 18:18
  And then here's some advice on where I would, what I would do
• 18:20
  with as far as far as withdrawals, you just don't see
• 18:22
  it. You don't see it often, right?
• 18:23
  Matthew Jarvis: Yeah, I want to pull on a thread that you
• 18:25
  mentioned, Tracy, which is understanding the pros and cons,
• 18:28
  right? Whether we're talking about index products or
• 18:31
  securities or money markets or anything like that. You know,
• 18:34
  one of our most important jobs as an advisor, whatever,
• 18:36
  whatever licenses or hats you have, is help clients understand
• 18:39
  the pros and cons as it relates to what they're trying to
• 18:42
  accomplish, right? And I think where I'm going to speak kind of
• 18:44
  just to the RAS, where a lot of RAS go wrong is they just say,
• 18:47
  Listen, all insurance products are bad. Well, that doesn't help
• 18:51
  the client, right? So if a client comes in and they watch
• 18:53
  the 1000 tiktoks on how it indexed, annuities, gonna give
• 18:56
  them all the upside and none of the downside, and if you just
• 18:58
  your responses, well, that stuff is crap. That's not helping the
• 19:01
  client is not positioning you as an expert. But if I could sit
• 19:04
  down and I can say, Hey, listen, like, let's talk a little bit
• 19:07
  about how this works. Like, how is the insurance company able to
• 19:11
  give you so much of the upside, and how I've I have no idea.
• 19:16
  Well, neither does anybody else actually, you know, like, or cap
• 19:19
  rates is another one, right? So this is, I think Tracy would
• 19:21
  probably kill the same bandwidth. You know, hey, year
• 19:23
  one, this cap rate's phenomenal, right? It's a 12% cap rate, it's
• 19:26
  a 15% cap rate, it's 120% participation. Year two, it goes
• 19:30
  to nothing, right? And so that's something I've always held.
• 19:32
  Instead of me arguing and saying, Hey, this insurance
• 19:35
  Tiktok experts really try to rip you off and say, Hey, what
• 19:38
  happens in year two, when the cap goes from 12% to 2% and
• 19:42
  we're still stuck in this thing for 11 years, like, what happens
• 19:44
  there? Right? Then I've gone from saying this is a bad thing
• 19:46
  to asking questions. So Tracy, I'd be curious, what are some of
• 19:49
  the questions that you help clients ask, or help advisors
• 19:52
  help their clients ask in this space?
• 19:55
  Tracy: So we can kind of talk about my process, and it's a
• 19:57
  lengthy one, so I don't want to go down that rabbit hole, sure,
• 19:59
  but what I will say is, if you get to the point where you're
• 20:02
  having the annuity conversation or or maybe your clients wanted
• 20:06
  conversation, what I would tell them is, maybe it's another
• 20:09
  advisor talking to them, maybe it's an agent talking to them,
• 20:11
  whatever. Yeah, I would say, right. What are the contractual
• 20:16
  guarantees for me? Right? So if the contractual guarantees are
• 20:20
  so far apart from what that person's expectation or maybe
• 20:25
  what they're trying to pull me in on what the expectation is,
• 20:28
  that's a problem, right? So I personally, I like to take the
• 20:32
  philosophy that you should look at annuity as you know, if
• 20:36
  you're not going to purchase it based on the guarantee, you
• 20:38
  shouldn't purchase it, right? So whether that's the guaranteed
• 20:41
  income rider or it's a guaranteed death benefit rider
• 20:44
  or guaranteed long term care rider, if there's a performance
• 20:47
  element to it, and that is what looks sexy to you, and the
• 20:50
  reason why you don't purchase it, you should probably walk
• 20:52
  away. And it's the same thing with an advisor, really, right?
• 20:54
  Brilliant. So if you're an advisor and you're working with
• 20:57
  a doesn't matter, an RIA, you're working with an IMO, or FMO,
• 21:00
  whatever, and they're showing you these numbers that look
• 21:04
  really good, but then you get to that guaranteed, contractual,
• 21:07
  obligated illustration, and it's like, wow, that looks really
• 21:10
  terrible. Then you need to start asking questions, right? Like,
• 21:13
  why is that so far apart there? And it all comes back to that
• 21:18
  performance element. If the performance element is the
• 21:20
  driving force behind that product, you should probably run
• 21:22
  away, because annuity. Away, because annuities are not meant
• 21:23
  to be performers in that way, right? They're meant to give you
• 21:28
  safety, maybe bond alternative, savings account alternative and,
• 21:31
  well, in some cases, they're designed to give you an internal
• 21:36
  rate of return, right? That's kind of how they're designed. So
• 21:40
  if you can't sell it on the IRR and you can't sell it on the
• 21:43
  guarantee and you can't sell it on what's problem it's solving,
• 21:47
  like I said to you before, it's creating a problem.
• 21:49
  Matthew Jarvis: Tracy, what you've just highlighted here is
• 21:51
  just like, the absolute brilliance of why like talking
• 21:53
  to insurance guys, just to use broad generalization, because
• 21:56
  you were just able to take this incredibly complex topic, right?
• 21:59
  I mean, second ago, we were talking about option strategies
• 22:01
  and how this works on solvency rates, and you just boiled it
• 22:04
  down to, like, if we wouldn't buy this strictly on the
• 22:07
  guaranteed value, we probably need to stop the discussion
• 22:09
  there. Like, and again, I'm not trying to smoke your direction.
• 22:12
  Like, I love these things are just so simple. Instead of, I'm
• 22:16
  not arguing cap rates. I'm not arguing what index they're
• 22:18
  tracking. I'm not arguing this time. All right, this is what
• 22:21
  the insurance company is guaranteeing is going to happen.
• 22:24
  Annuities, insurance products are primarily about guarantees.
• 22:26
  If we don't like the guarantee, we probably don't want this
• 22:29
  product, like, the whole disk. I don't have to watch 100 Tiktok
• 22:32
  videos to realize that she's like, all right, if we don't
• 22:34
  show me the guarantees, right? Like, have them send me the
• 22:36
  illustration, show me the guarantees. And if we don't like
• 22:38
  the guarantees, that's just kind of the end of the discussion,
• 22:41
  because if we're going to go on non guarantees, then it's, it's
• 22:42
  not the right product. Tracy, it's brilliant, man, I think
• 22:45
  that was right there. Like, I could just mic drop this thing
• 22:47
  and be like, Tracy, I'm good. Like, this was, this was a
• 22:49
  perfect podcast. Thank you for sharing that. Yeah, absolutely.
• 22:52
  I feel like we could riff for hours on this thing, Tracy, but
• 22:54
  give us just, just couple other pearls of wisdom. What are some
• 22:57
  action items? So for our listeners, like, what are things
• 22:59
  that I could be doing that are that all of our 1000s of
• 23:02
  listeners could be doing based on this, this episode, of
• 23:05
  course, and how do they learn more about you?
• 23:06
  Tracy: Yeah, so I will give two right off again. So I'm a big
• 23:10
  fan of communication and I'm a big fan of mindset. So there are
• 23:13
  two books that I recommend. So the first one is Mindset by Dr
• 23:18
  Carol Dweck. Read that one. A phenomenal book, one of my
• 23:21
  favorites, yeah, one of my favorites kind of completely
• 23:24
  changed, yeah. And what I love about it is like, it's not, it's
• 23:28
  not a negative based on your mindset. It's more about like,
• 23:30
  the perception and perspective of mindset and understanding it.
• 23:32
  So I really like it. And it's an easy, pretty easy read. Yeah, it
• 23:35
  is. And then the other one is positive words, powerful
• 23:37
  results, by Hal urban, okay, not familiar with this one. More
• 23:40
  time, positive words, powerful results by Hal urban, he might
• 23:44
  be a doctor too. So that one just changed the way that I
• 23:46
  communicated with people positively. And I can be
• 23:49
  somebody and I sometimes ever revert back to my old ways, but
• 23:51
  I can be somebody who can be kind of a negative Nancy in the
• 23:53
  way that I talk to people, sure. So that book opened my eyes, and
• 23:56
  maybe it's a time for me to reread it now, it opened my eyes
• 23:59
  on how to communicate with people from a positive light,
• 24:02
  and just watching people change that the way that they
• 24:04
  communicate is a pretty cool thing to see. So definitely read
• 24:08
  that one.
• 24:08
  Matthew Jarvis: I appreciate the recommendation. That's
• 24:10
  definitely a place where I could do some work as well. And then,
• 24:13
  of course, Tracy, how do advisors learn more about you
• 24:15
  and your LinkedIn?
• 24:17
  Tracy: Yeah, LinkedIn is a big one. So LinkedIn obviously
• 24:21
  follow me on there. Messages me if you have any questions. I'm
• 24:23
  on the mission to train and help advisors. But you know, we have
• 24:26
  a training platform too. If you want to look us up, it's just
• 24:28
  the annuity giants.com we host a platform that has a very, very
• 24:32
  low barrier of entry, so that anybody can kind of come in and
• 24:35
  learn. And it comes with a community as well. It's actually
• 24:37
  a Facebook group. Comes with a community as well as an entire
• 24:40
  dedicated platform, weekly training, all sorts of stuff.
• 24:42
  Matthew Jarvis: Yeah, and I would ask for action. I would
• 25:29
  second that, right? Whether you do Tracy's platform or some
• 26:35
  other wherever you are on insurance, I feel it's been kind
• 27:40
  of the theme of this podcast, whatever your license that you
• 28:47
  need. This is such a common topic, such a major piece of
• 29:50
  client's life, you need to really understand this stuff.
• 30:53
  You can't stick your head in the sand and say, Hey, I'm a fee
• 32:01
  only RIA, therefore I'm not going to worry about these
• 33:02
  things. No, no. This is part of comprehensive financial
• 34:03
  planning. One of the most people reads words there is, you've got
• 35:16
  to understand this stuff. And just like this episode, I mean,
• 36:24
  that was a legitimate like gold mine that you gave me. As far as
• 37:36
  this, the guarantees thing, there is so much that they are
• 38:41
  earned from the insurance side of the business. Don't, don't
• 39:48
  pass up that opportunity so Tracy, hey man, thank you so
• 40:51
  much. I look forward to another episode. Thank you for the book
• 42:01
  recommendations all of our listeners until next time. Happy
• 43:07
  planning. Hey, before you leave a quick word from our sponsors.
• 44:18
  Hey everybody, I want you to take a quick look around your
• 45:23
  office and on your desk there should be the Retirement Tax
• 46:28
  Services, Desktop Tax Guide, and if it's not there, or if it's
• 47:37
  not current, meaning you didn't download it in the last month,
• 48:47
  go to retirementtaxservice.com and download the desktop tax
• 49:53
  guide. This is a must have resource for every financial
• 50:55
  advisor committed to tax planning.