How Can Retirees Outpace Inflation?

How Retirees Can Outpace Inflation

Sam-deleo

By Sam Deleo
Tucker Advisors Senior Content Specialist/Editor

As October drew to a close, our national rate of inflation rose to a whopping 5.4%. The Federal Reserve also announced they would not raise interest rates, but would gradually begin decreasing the bond-buying program they had enacted in order keep credit rates low. While the market remains strong, how does this news affect the savings of retirees or those about to retire? 

One major consequence is that many retirees, who in the past have relied on bonds as secure instruments, may need to rethink this strategy. As Brett Arends wrote in MarketWatch on October 26th, “Last week the U.S. bond market’s prediction of U.S. inflation for the next five years leapt to 2.91% a year—the highest figure this millennium. That tops the inflation fears that surged in 2008, just before the financial crisis, and a previous peak in early 2005, when the housing market was out of control.” 

Many retirees remember the double-digit inflation of the 1970s, along with fuel rationing and long lines at the gas pumps. Arends points out how today’s inflation is much lower, but also much different in context. 

“Back in the 1960s and 1970s, bonds paid high rates of interest. So even though consumer prices were rising by 4% or 5% or 6% for most of the decade, the interest rate on bonds was still higher. So you had a cushion,” Arends writes. “In 1973, when inflation surged to 6.2%, 10-year U.S. Treasury bonds were paying 6.6% and BAA investment grade corporate bonds about 8%… In 1978, when inflation hit 7.6%, Treasuries were paying north of 8% and BAA corporates north of 9%. Bondholders still (eventually) got hurt: Soaring inflation caused bond prices to tumble. And at the peaks, in 1974-75 and 1979-80, the inflation rate overtook their interest rates. But overall the bonds helped compensate them for higher prices. Not today.” 

As of October 26th, the interest on a 10-year government bond was posting around 1.62%, while 30-year bonds hovered around 2%. So, bondholders stand to lose money even if interest and inflation rates don’t rise, and they stand to lose substantially if the latter continues to rise or remain at a high level. Additionally, CD and money market rates are well below 1%, and the average interest for a savings account in the U.S. now tops out around .06%. 

A story in the New York Times last week pointed out that the bond market’s expectations for inflation over the next five years had reached a new high of just over 3%. But whether 2.91%, as Arends wrote, or just over 3%, it’s not great news, and it contradicts the messaging that has been coming from the Federal Reserve about plus-2% inflation lasting only a year or two at most.   

So, how do people who are retired or about to retire combat this inflation? How can they ensure that their savings don’t lose money? Let’s look at a few of the more common options people choose for their portfolios. 

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FIAs Outperform Bonds Guide

1. All Equities

Equities should be a part of any portfolio, and some people go so far as fill their portfolios exclusively with equities. In a largely bull market like the one we’ve seen over the last 18 months or so, an all-equities strategy would have greatly exceeded the rate of inflation. For people 10 or more years away from their retirement, this strategy could work very well, provided they have the time and expertise to study stock options every day and/or can rely on a financial advisor to help them with their choices. In the worst-case scenario of a market crash, these individuals would still have time for the years a portfolio recovery would necessitate. But for someone retired or nearing retirement, this strategy could be fatal to their portfolio. 

Market crashes can take five years or more for people’s financial portfolios to be made whole again. If people looking to retire or already retired are relying exclusively on equities for income, a crash, or even a steep correction, could effectively either end or greatly delay their retirements. In all likelihood, they would need to continue working for many more years or reenter the work force they left. An all-equities approach is much too aggressive to safely fund a retirement, and it carries risks that could be devastating to a retiree’s portfolio.

2. Stocks and Bonds Blend

A stocks and bonds mix is one of the most common strategies people choose for their financial portfolios, and many of us have traditionally believed in it as an approach that strikes a healthy balance between risk and security. But maybe we haven’t been accurate in that belief. 

Economist Roger Ibbotson and his team at Zebra Capital Management ran hypothetical return simulations from the years 1927 to 2016, which included both rising and falling yields. Their research showed that, net of fees, fixed indexed annuities had an annualized return of 5.81%, compared to 5.32% for long-term government bonds. The return for large-cap stocks over that period was 9.92%, again proving that an all-equities portfolio is a strong choice for those not yet retired or preparing to enter retirement. 

Ibbotson’s study also showed that during below-median bond return periods from 1927 to 2016, a 60/40 stocks and bonds portfolio returned 7.6%, on average. For a 60/20/20 stocks, bonds, and fixed indexed annuities portfolio, the return for that same time was 8.12%. And, a 60/40 stocks and fixed indexed annuities portfolio produced 8.63%. Individually during the below-median periods, fixed indexed annuities (FIAs) produced a 4.42% return, while bonds returned only 1.87%.  

In above-median bond return periods, FIAs reduced returns, with long-term government bonds returning 9% and FIAs only 7.55%. Ibbotson explained that, in falling yield environments, a large portion of the bond return is capital gains, enabling them to outperform FIAs. 

“I’m not necessarily advocating you go all in,” Ibbotson said about FIAs in the paper. “I think combinations of stocks and bonds and fixed indexed annuities are good.”

3. All Annuities

But what if someone did go “all in” on fixed indexed annuities in a portfolio, as Ibbotson mentioned. How would that play out against inflation? Not very well, actually. 

Even strategically chosen annuities—and let’s be clear, annuities should not be purchased any other way—will likely not be able to hedge against a sustained inflation rate of say, 5% or thereabouts. An annuity that pays someone $800 per month in 2025 will still only be paying $800 a month in 2035 or later. Also, the interest offered by annuities does not compound in the same way as the rate of inflation. If the participation rate of an annuity is 87%, for instance, and the interest is at 4%, it is easy to conclude that the purchasing power of this money would actually decrease in years of high inflation, much in the same way annuities cannot capture all of the gains in a high-growth market. 

There are inflation-adjusted annuities, known as Treasury Inflation-Protected Securities (TIPS), but the rate of return reported on Oct. 21, 2021, for a five-year TIPS was -1.685%, a record low. This means a policy holder is earning 1.685% below the inflation rate, or, according to TIPSwatch.com, investors are paying about $109.51 for $100.14 of value.

4. Annuities and Stocks

The stock market is not going to outpace inflation every single year. But as an average, it has definitely beat inflation throughout the history of the market. 

As Ibbotson pointed out, during a below-median bond market period like the one we find ourselves in, a 60/40 stocks and fixed indexed annuities portfolio produced an 8.63% return over the near 90-year period of his study. In this blend, the annuity portion of the portfolio is not expected to compete with inflation, because it can’t, and that’s not what it is designed to do, anyways. The equities take care of that, as an average over time, while the annuities anchor future income for retirement. 

Those retirees who still feel inclined to add stocks to their portfolio can do so, but they should read Ibbotson’s study first. His research shows that there is no historical market evidence to choose bonds over annuities for the “safe money” portion of one’s portfolio—especially in high-inflation environments like the present.  

“Because of issues like inflation, longevity, and income insecurity, to name just a few, the first step for any person preparing for retirement is to meet with a financial planner who specializes in retirement planning,” said Tucker Financial President Darren Petty. “This way, people can better identify the assets they need to take risks with in order to outpace inflation. Many folks are being forced out of low-risk investments now, and it’s been happening for a long time, actually. So, people move from fixed income, like bonds, into equities. Make your income-producing assets produce income and let your growth assets grow. That’s the foundation of any retirement plan: Identify the portion of your portfolio that needs to pay you in retirement, and therefore, isn’t exposed to catastrophic losses. And then, place the remainder of the portfolio in equities.”

“Especially given the fear of inflation, it’s easy for us to fall into the myth that all of our income always has to be increasing,” said Petty. “But that is usually not the best way to secure income for the future. Also, it ignores the fact that some annuities are paying 5.5% to 6% in interest.”

The No. 1 way for retirees to worry less about inflation is to get their asset allocation right. A balanced retirement portfolio should have growth assets and income-producing assets.

How those asset allotments figure into a sound retirement plan is different for everyone. But, with the help of a retirement planner, it’s the key to a portfolio unlocking the threat of high inflation.

Notes

For more information about retirement strategies to outpace inflation, email Jason.Demers@TuckerAdvisors.com or Kyle.Savner@TuckerAdvisors.com. 

Sources: 

  1. MarketWatch 
  2. The New York Times 
  3. Fixed Indexed Annuities: Consider the Alternative,” Ibbotson
  4. TIPSwatch.com 

– For Financial Professional Use Only. Insurance-only agents are not licensed to offer investment advice.

How Can Retirees Outpace Inflation?

How Retirees Can Outpace Inflation By Sam DeleoTucker Advisors Senior Content Specialist/EditorfacebooklinkedintwitterAs October drew to a close, our national rate of inflation rose to a whopping 5.4%. The Federal Reserve also announced they would not raise interest...

How to Get Qualified Leads from Facebook

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Are Insurance Companies Safe?

Are Insurance Companies Safe? By Sam DeleoTucker Advisors Senior Content Specialist/EditorfacebooklinkedintwitterThey have been called the debt managers of the world. But just how solvent and safe are insurance companies? Shortly after The Great Recession began...

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Call 720-702-8811 or email COO Jason Lechuga at Jason.Lechuga@TuckerAdvisors.com

How to Get Qualified Leads from Facebook

How to Get Qualified Leads from Facebook

jordan-collins-digital-marketing

By Jordan Collins
Tucker Advisors Senior Digital Marketing Specialist

Table of Contents 

Click the links below to jump to a client appreciation event page section specific to your needs.

As a financial advisor, you are likely always hearing about how you need a presence on social media. But what is necessary and what is fluff? Is it better to have a Facebook page or should you setup all of your socia media sites at the same time? The answer to both of these questions is unique to the advisor and what is working to elevate their business online. At the core of these questions is a conversation about making quantifiable, long-last gains in the race for business attention online.

To start, we will take a look at the largest social media platform, Facebook. Facebook has roughly 2.89 billion monthly active users as of the 2nd quarter of 2021.

statista-facebook-users

The next biggest social media site is YouTube, but if you take a look at the top nine social media platforms, it is clear that Facebook has a large investment in the social media landscape with multiple properties in the top 10 (AP Style is numerals for 10 and above). It’s also worth noting that some of these other platforms are included in where you can place your Facebook ads. For example, you can have your Facebook ads delivered on Instagram.

Wiki-social-media-users-by-site

Now that we’ve chosen a platform with enough users to advertise and segment, it’s time to talk about data. When a user fills out their Facebook profile, they are voluntarily giving information that will shape the ads they are served. We will talk more about how ad set targeting later in this post, but it is important to note that Facebook’s ads are effective because they’ve taken out a lot of the guesswork. Individuals volunteer their age, what they do for work, and other information when they make their profile.

Instead of going to a third party for information that will decay with time, you are going straight to the source—the individual. While your interactions with previous ads on the site may shape what you are shown in the future, your age, location, and profile information set the stage for them to show you things you’re more likely to interact with.

For your financial advisory practice to advertise, you will need to fill out a profile referred to as a business page. Let’s dive into why you should create a profile, step by step instructions, and how you can create some ads.

Setup Your Facebook Business Page

By creating a Facebook page, you can invite customers to follow your posts, run ads, and provide customer service through an easy to find webpage. Additionally, you can promote events, share an offer, or post an open job. There are a lot of reasons to get a Facebook page but its relative value will remain just that, specific to you and your marketing needs.

Your Facebook page can also show up in Google search results, giving users another place to find you online. Creating a page is not a silver bullet for generating more traffic to your business, but it will give you useful tools that will take more time and effort to incorporate into your website.

Now that we’ve decided to create a Facebook page, it’s time to look at step-by-step instructions to complete this task.

To create a Page:

  1. Go to facebook.com/pages/create.
  2. Click to choose a Category.
  3. Fill out the required information.
  4. Click Create Page.
  5. Add an optional profile or cover photo, then click Save.

We could write an entire blog entry about filling out and optimizing your page. With that in mind, we suggest following this checklist from Hootsuite. As a general rule of thumb, we would also suggest having the following information on hand when completing your Facebook page’s information:

  1. Physical Address
  2. Email Address for contacts
  3. Business Hours
  4. Website URL
  5. Company or Advisor Bio
  6. Media or Content (Professional Headshot and/or Professional Logo)

Once your page is completed, you’ll be encouraged to make a post. Making a post is a great way to get the word out about your business, but who sees those posts? Your followers. What if you don’t have any followers yet? Next to nobody will see the post. For your posts to reach a person’s Facebook feed, they’ll need to like or follow your page.

In a lot of ways, this is how social media can become such a time-consuming project. While Facebook does offer ways of getting people on your page, most of them require either your time or your money. One should also note that when you make a Facebook post, not everyone who follows you will see it. This metric is called organic reach.

facebook-page-organic-reach-neil-patel

This is why we aren’t talking about social media strategy and content. We want to spend our time and money on tools that will give us the maximum return on investment in a more short-term timeline.

If you are looking to build followers and organic reach, it would fall into the category of social media management. Right now, we are just getting our page set up because it is required for us to run ads.

Facebook Ads Manager

From your Facebook page, you can “Boost” a post. This means that you can take one of your Facebook posts and create an ad from it. This is the simplest way to advertise on Facebook, but it lacks a lot of the tools that are provided through Facebook Ads Manager.

In Ads Manager, you can A/B test different ad copy, create custom audiences, and really nail down your process, whereas boosting a post cannot. Being able to choose different ad placements, choosing cost-per-click or cost-per-impression, or using advanced targeting capabilities are vital steps in creating a campaign that works. Giving $10 to Facebook to show your ad to more people in a geographic area just won’t cut it. Facebook Ads Manager doesn’t have a cost to set up but it will take time to get your campaigns the way you want them.

In order to advertise with Ads Manager, you’ll need to have a Facebook page or have a role on someone’s page. Any page you create will have an associated ad account and ad account id created by default. Go to https://www.facebook.com/business and click create an ad to get started.

 Create a Facebook Ad Campaign

We’ve created a Facebook page, started our Facebook Business account, and now it’s time to get acquainted with Ads Manager. We want to create a new campaign. The next dialogue you will see includes different campaign objectives. See below:

facebook-campaign-objectives

You will be tempted to skip awareness for consideration and conversions but there are very valuable insights to be gained from the awareness stage. Facebook’s tools include being able to show ads to people who have interacted with your ads in the past. When we talk about qualifying interest, what better way than to tap into people you’ve reached in the past?

As consumers, we consistently interact with the same brands because we see value in the outcomes we receive from choosing them. If we haven’t heard of a brand or service, it will take greater upside potential for us to take the risk of trying something new. How can you make that decision without knowing about the product or service? We need to make people familiar with your brand in order for them to trust they are making the right decision.

All this to say, don’t skip to lead generation or conversions prior to creating audiences that are ready for this step. You will see that finding a financial advisor is a personal process. It’s not the same as seeing a $10 product ad and taking a chance. You wouldn’t choose a financial advisor based on a Facebook ad, but you would read an article on retirement readiness on their website.

Ads manager is a great place to customize who sees what, the order in which they see it, and when is the right time to make them an offer they can’t refuse with an expert (hint: you’re the expert). Here’s an example of this process in action from the user’s point of view.

I’m a 59-year old male in the geographic location of the advisor serving ads. This is information that Facebook has on me because I filled out my profile. Scrolling through my feed, I see an article on the “5 Things to Do Before Retiring” on your website. It is a well-written, compliant article and I’m now aware of this advisor’s practice because the information is valuable, his office is locally listed in the post, and I want to know more about how I can retire.

A week or so later, I see another ad saying that this advisor is hosting a live event but spaces are limited. I think back to the article I read and realize I have more specific questions about my own financial situation, so I click the ad and fill out a form giving my name and email address.

This scene shows a simplified version of the customer journey that is more realistic and personal than putting up a form on Facebook that people can fill out. The process appealed to our user’s age, location, and interests. It didn’t ask him for his information right away and it allowed him to see that the advisor in question was an expert.

For the advisor, his brand awareness ad gained interest with his key, local demographics; it showed him to be an expert in his industry; and because his ad campaign is set up with a custom audience, he can now give a more personalized message to the user based on what he or she clicked.

One more thing to note on campaign types is how they are billed. For some campaigns, they are billed per impression (views). Some campaigns are billed by clicks, meaning you won’t be charged unless someone specifically clicks on it. The Facebook bidding process can get dense when you get down to how cost-per-click and cost-per-impression are billed, so we would suggest using cost-per-impression for brand awareness and top-of-the-funnel ads to qualify interest, and cost-per-click ads for consideration and conversion-based ads.

Choosing a campaign type is important, but we really need to key in on how we can target the right people for the campaign. With that in mind, it’s time to talk about ad sets.

Ad Sets, A/B Testing, Audiences

Ad Sets

Campaigns can hold multiple assets. This way, you can keep all of your different audiences within the same campaign. You may be asking yourself why you would have multiple ad sets in one campaign. If you were doing a campaign, you might have one ad set aimed at people that are in your key demographics and locations. You may also have an ad set of people who had previously clicked on your ad. So set one is for people to qualify their interest and set two is for people who have already interacted with your brand, are in your demographics, and in your location.

This puts in perspective how you can qualify your audience as you go. As more people interact with your first ad set, you have more people to advertise to in your second ad set. This is how you can qualify traffic using Facebook’s tools.

A/B Testing

An added bonus is that ad sets contain multiple ads, so you can test different messages at different stages to see which perform best for cost and click-through-rates.

Without structure, this can get very confusing, very quickly. As a starting point, we would suggest A/B testing your images, your ad copy (text), and your ad content. In reality, you can A/B test just about anything with enough time and organization.

As an example, you have three articles on three retirement topics that you are using to qualify interest. For each article, you should create three images (nine total) and three sets of copy for the ads you intend to send. In total, your ad set will have three articles but will have nine ads.

You might be asking yourself, why make all these duplicates? What purpose is this serving?

What this does is, it shows you each variable independent of the others. This way, you can look at the data and decide what works best based on cost, clicks, and click-through-rate. After a few weeks of running the ads, you’ll quickly see your winners and losers with more detail than just running one ad for each article and evaluating what’s wrong in broad strokes.

If you see that you have three ads with the same article but different photos, you can deduce that you shouldn’t use a type of photo and shift your spend to the ad version that is getting better results. This way, you will see better results in the proceeding weeks using the data Facebook was able to gather.

Audiences

Facebook is very good at gathering data; one could argue they’re too good at gathering data and that’s what gets them in trouble. The true power of Facebook ads is in their custom audiences. Targeting users based on their location and age is great but there are much more powerful tools at your disposal.

Custom Audience is an ad targeting option that lets you find your existing audiences among people who are on Facebook. You can use customer lists, website traffic, or engagement on Facebook to create audiences of people who already know your business.

For example, you could have a list of your current clients. If you wanted to upload to Facebook and advertise to them, you can. If you’d like to upload this list and create a “lookalike audience” of people with similar ages, interests, and locations, you could do this. Keep in mind that the number of people that Facebook can pull in is dependent on how extensive your list is.

Another example of a custom audience is a website visitors’ audience. If someone has visited your website in the past either through their own searching or through a Facebook ad, you can advertise to these people. Keep in mind that having the Facebook Pixel installed on your website to signal who has and hasn’t been to your site will be required.

Lastly, audiences come with projections of how big or small they are. Depending on all the segments you add to your audience, you’ll need to have enough people in that pool so that you are not serving the same people the same ads. Whatever audience you choose, be sure not to narrow that audience to a point where you cannot gather data. The audience features can do a great job in qualifying interest, but your content should help you determine interest from users.

Using Facebook Ads for Qualified Leads

Now that we’ve created a Facebook page, setup Ads Manager, and learned about what is capable without ad targeting, it’s time to think through how you can qualify leads.

All the bells and whistles in the world won’t help you if you’re not using them properly. To start, you need something of value that your target demographic will want to click. We suggest articles and downloads that will allow them to educate themselves on a topic specific to them and your business. This could be an article about how to maximize retirement readiness or a checklist of information on how to retire tax-free. These pieces should introduce you as an advisor who can help them, include a way to get a hold of you, and appeal to their curiosity about the process.

From a wider view, you are trying to take someone from a place where they see pictures of grandkids to where they’re thinking about their retirement. Skipping this step will not help the success of your campaign.

Creating an audience of people who have interacted with your ads or brand, then serving them a download that requires their email address or giving them an asset they can use will always work better than offering nothing. In the short term, it is more work on the front end, but in the long term they are showing you that they fit who you are looking for and signaling back to you what they are ready for.

The best part of this is that you can decide how fast or slow you’d like this to happen. Campaigns can be marked with start and end dates, limiting the amount you are spending and giving you complete control of your budget. If you’d like to spend $5 or $500 per day, you can make that decision and Facebook will follow your lead.

When this process is carried out properly, you can review your data and clearly see what ads work, what audiences are yielding good prospects, and find logical improvements to your process. From here, you’ll be able to position yourself as an expert building brand awareness around your practice and attract new clients through social media without needing followers.

If you have more questions on how to use social media for your business, be sure to visit www.tuckeradvisors.com/blog.

Sources:

Statista

Wikipedia

Facebook

Hootsuite

Hubspot

Neil Patel

Washington Post

If you are looking for more ways to market your financial advisory practice, see this presentation from Tucker Advisors CMO Justin Woodbury.

If you would like more information on digital marketing strategy, visit here.

For Financial Professional Use Only. NOT INTENDED FOR VIEWING OR DISTRIBUTION TO THE PUBLIC. Insurance-only agents are not licensed to offer investment advice.

Are Insurance Companies Safe?

Are Insurance Companies Safe?

Sam-deleo

By Sam Deleo
Tucker Advisors Senior Content Specialist/Editor

They have been called the debt managers of the world. But just how solvent and safe are insurance companies?

Shortly after The Great Recession began unraveling in 2008, many people feared insurance companies would suffer the same fate as investment banks like Lehman Brothers, Bear Sterns, Wachovia and Washington Mutual. After all, no one could have predicted those banks would fail, either. Apart from those old enough to remember The Great Depression, people had never experienced such a far-reaching financial downturn.

As Time Magazine pointed out with a story in October of that year, insurance companies operate differently than banks. For one, they are tightly regulated and they are regularly audited. The National Association of Insurance Commissioners assists state insurance regulators in, according to the agency’s website, protecting consumers and ensuring “fair, competitive, and healthy insurance markets.” The agency began in 1871, and for the last 150 years, has assisted the public interest by providing oversight of the insurance industry.

Regulations require insurance companies to contribute to state funds that protect policy holders, as well as to maintain large sums of cash and short-term investments at all times. With longer-term investments, insurance companies cannot take the same kind of risks that banks can. As Time reported in 2008, insurance companies on the whole placed only about 10 percent of their investments in real estate and mortgages, risk categories that inflicted significant losses to banks that were more heavily invested in them. The one insurance company that required a bailout, AIG, suffered its heaviest losses from its financial services division, a business segment that most insurance companies do not have. Its insurance division remained solvent and protected.

While the AIG case was an outlier, it still raised legitimate red flags among the general public. And the truth is that there have been many instances of smaller insurance companies fading into oblivion. What would happen if a large insurance institution like AIG failed?

As Time wrote in 2008 about such a possibility, “Even if a company were to fail outright, consumers are protected much in the way that routine bank deposits are guaranteed by the FDIC.”

Safeguarding against a potential failure is the Insurance Guarantee Fund, which every insurance company is legally required to pay into, and which is also managed by state-sanctioned insurance guaranty associations. These associations are charged with protecting policyholders and claimants in the event of solvency issues with insurance companies, and can even step in to take over servicing the policyholders of companies that fail. They are legal entities backed by the insurance commissioner in every U.S. state.

Unlike banks, insurance companies can’t reward executives from reserve revenue or apply it toward the nebulous category of operating expenses. That “excess” money must be legally dedicated to the claims of policyholders. As an added protection for policyholders, a failing insurance company cannot access federal bankruptcy laws to escape liability for its debts.

Of course, no company or individual is immune from financial setbacks or crashes. But then, if that is the reality of the situation, why not use the relative comparative solvency of insurance companies to one’s benefit?

That is exactly what some of the largest corporations in the world have done in recent years. Below are 10 stories that present a trend of corporations transferring the liabilities of their pension plans into the safety of indexed annuities with insurance companies.

Free Guide: High Profile Use of Annuities

Corporations Move Pensions into Annuities with Insurance Firms

1. “GM Unloads $26 Billion in White-Collar Pensions; Could Union Workers Be Next?”
Forbes; June 1, 2012
https://www.forbes.com/sites/joannmuller/2012/06/01/gm-unloads-26-billion-in-white-collar-pensions-could-union-workers-be-next/?sh=20357ddd3213

2. “Kimberley-Clark buys annuities to cover pension risks”
Business Insurance; Feb. 23, 2015
https://www.businessinsurance.com/article/20150223/NEWS03/150229961

3. “Molson Coors transfers $900 million in pension liabilities”
Pensions & Investments; Dec. 4, 2017
https://www.pionline.com/article/20171204/ONLINE/171209946/molson-coors-transfers-900-million-in-pension-liabilities

4. “DuPont to pump $30 million into pension plans in 2019”
Pensions & Investments; Feb. 12, 2019
https://www.pionline.com/article/20190212/ONLINE/190219954/dowdupont-to-pump-430-million-into-pension-plans-in-2019

5. “Eastman Chemical buys annuity to transfer $110 million in pension liabilities”
Pensions & Investments; Feb. 23, 2021
https://www.pionline.com/pension-risk-transfer/eastman-chemical-buys-annuity-transfer-110-million-pension-liabilities

6. “Centrus Energy kindles annuity deal for $30 million in pension liabilities”
Pensions & Investments; March 19, 2021
https://www.pionline.com/pension-risk-transfer/centrus-energy-kindles-annuity-deal-30-million-pension-liabilities

7. “FedEx to ship $500 million to pension plans”
Pensions & Investments; July 20, 2021
https://www.pionline.com/pension-funds/fedex-ship-500-million-pension-plans

8. “Lockheed Martin offloads $4.9 billion in pension liabilities”
Pensions & Investments; Aug. 3, 2021
https://www.pionline.com/pension-risk-transfer/lockheed-martin-offloads-49-billion-pension-liabilities

9. “CTS unloads pension liabilities with annuity purchase”
Pensions & Investments; Aug. 4, 2021
https://www.pionline.com/pension-risk-transfer/cts-unloads-pension-liabilities-annuity-purchase

10. “Macy’s purchases annuity to transfer $256 million in pension assets”
Pensions & Investments; Sept. 7, 2021
https://www.pionline.com/pension-risk-transfer/macys-purchases-annuity-transfer-256-million-pension-assets

Why would these corporations have taken these actions with billions of their pension dollars, which they’re liable for, if they didn’t believe in the solvency of insurance companies? They have made the determination that, while risk can never be ruled non-existent, it can absolutely be minimized.

This trend is causing ripple effects in the general public, especially among those who are getting closer to retirement age and want to protect their savings from market volatility. The same financial instruments that these corporations are using to shield their pensions from risk with insurance companies—indexed annuities—are sought after by retirees for the protection of their “private pensions,” or retirement savings.

As is the case with the public pensions of corporations, individuals can use indexed annuities to create their own pensions and receive a predetermined monthly income throughout their retirements. It’s the same basic income stream that pensioners receive from corporations who moved pension funds into indexed annuities. Private policyholders of indexed annuities enjoy the same protection from risk as these giant corporations.

There are even ratings agencies that help consumers navigate which insurance firms are generally thought to be the most solvent. As detailed in a story from Forbes last year, “Insurance companies are rated on their financial strength by independent agencies that each have their own rating scale and standards. The five rating agencies are:

1. A.M. Best, which rates companies on a scale of A++ to D-

  1. Fitch, which rates companies on a scale of AAA to D
    3. Kroll Bond Rating Agency, which rates companies on a scale of AAA to D
    4. Moody’s, which rates companies on a scale of AAA to C
    5. Standard & Poor’s, which rates companies on a scale of AAA to D


    The highest ratings are given to companies that the ratings companies believe are in the best positions to meet their financial obligations.”

    The Insurance Information Institute is another source of consumer-centric information about the insurance industry. The institute recommends that people reference more than one rating agency in their searches, since ratings can fluctuate from agency to agency. Some insurers will also list their ratings on their websites, though they may not be the most current rating.

    Policyholders also have the ability to change insurance companies if they wish, so it’s important to keep updated on any downgraded rating reports. Middle-of-the-pack ratings should not be a cause for concern, but policyholders may want to take proactive steps if their insurance company receives a low-end rating.

Regulators and auditors monitor the insurance industry more than almost any other industry in the world. That’s important. But how does it assist a financial advisor’s practice? For starters, it provides advisors with concrete evidence to explain to their prospects and clients that all risk is not the same. Surprisingly, many people who are invested in the market do not grasp this basic truth.

The stock market is a fantastic tool for investors to realize growth. To think that insurance tools like indexed annuities carry a comparable risk as stocks, as some people errantly believe, is insanity. They are not even remotely equal in risk. In fact, the indexed annuity is a comprehensive risk slayer.

Advisors do themselves a disservice by not letting their prospects and clients know that insurance companies have long been trusted as the most solvent firms in the financial industry; that some of the wealthiest corporations in the world trust their money with these insurance companies.

These corporations understand that, as the world’s risk managers, insurance firms are better-equipped to manage long-term pension liabilities. The tools most of these businesses use to protect billions of pension dollars is the indexed annuity. Why wouldn’t a client want their life savings to enjoy the same protection? The financial advisors who can best inform people about financial risk, and the most effective ways to minimize it, will enjoy a lasting edge over their competitors. 

For more information on indexed annuities and an exclusive interview with Tucker Financial’s Darren Petty, click here.

References

Notes:
For more information about the insurance industry or to receive a downloadable white paper on addressing indexed annuity concerns, email Kyle.Savner@TuckerAdvisors.com or Jason.Demers@TuckerAdvisors.com.

Sources:
1. Time Magazine (http://content.time.com/time/business/article/0,8599,1849023,00.html)
2. NAIC.org (https://content.naic.org/)
3. Investopedia.com (https://www.investopedia.com/terms/i/insurance-guaranty-association.asp)
4. Forbes (https://www.forbes.com/advisor/life-insurance/company-out-of-business/)
5. Insurance Information Institute (https://www.iii.org/)

– For Financial Professional Use Only. Insurance-only agents are not licensed to offer investment advice.

Join Tucker Advisors

Call 720-702-8811 or email COO Jason Lechuga at Jason.Lechuga@TuckerAdvisors.com

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5 Financial Advisor Branding Tips You Can Implement Today

5 Financial Advisor Branding Tips You Can Implement Today

jordan-collins-digital-marketing

By Jordan Collins
Tucker Advisors Senior Digital Marketing Specialist

Table of Contents 

Click the links below to jump to a client appreciation event page section specific to your needs.

Everyday there are new online tools created and marketed to businesses claiming to drive more leads and grow your prospects. With such a crowded marketplace it is hard to know what tools are necessary and what tools just aren’t the right fit.

For financial advisors, it is important to use mechanisms that allow you more time to meet with clients and write business. At Tucker Advisors, we believe in marginal gains. It’s not about finding a silver bullet that doesn’t exist. It’s about making daily improvements that will make an impact over time to provide consistent value to you and your clients. That’s why we’ve put together 5 ideas for you to implement today!

Create a Professional Email Signature

What is an email signature?

An email signature is a content section at the end of your emails that will be added to each email you send. Below is an example of an email signature:

Many people will use email signatures to include contact information, links, images, and text. With each email that you send, you are also sending your contact info and web properties. It’s up to you to decide what information you’d like people to access in your signature, including your social media sites, phone number, and website address.

email-signature-example

The Importance of the signature

Signatures can create extra traffic to your calendar invites, website, and touchpoints in a convenient environment for contacts to access you and your information. If your email is forwarded, those emails will also include your contact information if someone is providing a referral. This is another opportunity to show prospects that you are a polished advisor who is ready to help.

WriteThat.name looked at 700 million emails processed through their contact management solution and found that only 52% of users had email signatures. Here’s the infographic for the study:

What to include in your signature

As you can see, there is a lot you can do with your signature but not all of it will fit what you do for your audience. 

Take a minute to think through what pieces would be good for your emails and what wouldn’t. We would highly suggest not making your entire signature an image, as it may be turned to an attachment by some email providers. This will create display issues and not show the information you’d like. It is okay to have text links in your signature, as these will not be changed by email service providers. Convenience is the primary concern of your signature before optics and layout.

Good email signatures provide pertinent information that will always be easy to display. For starters, including your email address, website, your calendar invite, and a professional photo of yourself should do it.

Lastly, if you are going to include time-sensitive information in your signature, be sure to set a reminder to change your signature when the time is right. You don’t want all of your communications going out with an old date or event attached to an unrelated message. For the most part, you’ll want to stick to evergreen content.

How to Change Your Signature

There are countless email service providers and email clients that people use on a daily basis. To try and simplify this process, we will walk you through a high-level version of the process, then provide links to how you do this process using different services. 

  1. Go to your account settings and find where your signature can be edited
  2. Input any information, images, and/or links you’d like to share
  3. Save your signature
  4. Activate your signature from the options in your account settings

This simplified version of the steps isn’t explicit or platform-specific but it’s enough to get you started. For more information on how to change your signature, see the links below for specifics.

Gmail

Yahoo

Outlook

Hotmail 

Comcast Xfinity

AOL

iCloud

If written instructions aren’t your preference, see YouTube for extensive, step-by-step instructions.

Connect Your Offline Materials to Your Online Presence

Business cards date all the way back to the 17th century in Europe. Even our forefathers knew that leaving your information with someone would be a helpful communication tool.  The business card has gone through a great number of iterations since then but the conventional wisdom remains. If you want someone to get in contact with you, make it easy!

Whether you have a stack of business cards or a full print package, your materials should take your prospect to where you want them, your point of sale. For many advisors, getting someone from your business card to your appointment calendar is crucial. This is where your marketing spend can make your life easier. 

When you create your print materials, be sure to include your website, your email address, and any other important online information that will help your prospects. 

Pro Tip: Use evergreen content! Don’t use an email address or calendar link that won’t be the same in 6 months. If you don’t want it going directly to your inbox, create an inbox like “admin@yourretirementspecialist.com.”

When you create new materials or print something, you should always think about who your audience is and what contact information should be included. If it is a current client, linking to your website and including contact information is a must. If you’re talking with a prospect you’ll definitely want to include a way for them to make an appointment and your contact information.

Another way that you can take people directly to a webpage is to include a QR code. A QR code will take a user from their phones’ camera directly to the webpage the QR code is associated with. This is something you can easily print on a paper, guide, or other physical material that can take people to your online presence.

All in all, you want a prospect or client’s offline and online experience to be seamless and easy to use. This will encourage them to refer others and access information with ease.

Professionalize Your Email Address with Your Domain

Why you should customize your email address

At one point or another, you’ve probably sent professional email through a personal email account. There’s nothing wrong with this but there are drawbacks. Email scams and automation have made it difficult to find out what information is important and what isn’t. Email service providers have become more and more astute about filtering these messages, but they don’t always get it right. One way to stick out from the crowd is to professionalize your email address with your domain. Instead of your email address being @gmail.com or @yahoo.com, it would come from your website. 

Example: financialadvisors@TGIFinancial.com

Seeing a custom domain in an email address provides context for where the email is coming from and why they are reaching out. The email address lets you know that the person reaching out is from TGI Financial and they are a business before you open the message. When you receive an email from fred9382@gmail.com, there’s no telling whether it is spam, a scam, or an old buddy from high school. 

Skip the guessing game and inspire trust in your messages by using a professional email address. You are more likely to get professional responses and signal to users that you are open for business.

How to get a custom email address

If you don’t already own a domain name for your business, you’ll need to start here. Choosing the right domain name for your business is important for a number of reasons but this article should give you a brief overview on how to do it. Once you have your domain name, your domain host will have options for you to create mailing addresses. This process differs depending on who you choose as your domain host, so we will list the processes with links below:

GoDaddy

HostGator

BlueHost

There are more domain hosts out there but most of these processes will have the same steps with slightly different steps. If your personal email address has a lot of business inquiries coming in, we would suggest forwarding those messages to your new address and updating your online presence to reflect this email address for users. This way, your mail is still all in one place.

Once you have an administrator or staff members, be sure to add them to your custom domain email addresses. Be sure to create at least one email account that is not dedicated to a specific person’s name, as this will be a good email address for your website’s contact forms and general inquiries.

Once you have created custom email addresses with your host, test that each email address is working by sending test messages. If you run into issues, follow up with your domain host support for more information.

Create a Website Contact Form

It’s great to have prospects visit your website but it’s better for them to leave you a message. In the modern era, the answering machine has been replaced by the website contact form. The best way for you to capture leads and prospects using your website is by capturing contact information. If your website doesn’t have a place for visitors to give you this information, it’s not going to happen.

To start, add a contact form to your website’s contact or homepage. Your homepage will receive the most traffic of any pages, so this is an important place to include a contact form near the bottom of the page. You can also link buttons on the homepage to take people to the contact form. The contact form doesn’t need to be front and center on your homepage, but it should be available should your visitor choose to get in touch. 

Once you’ve edited the page to add a contact form, you’ll want to fill out all of the details of what is mandatory and optional for your form. 

Pro Tip: Don’t require a phone number on your form. Studies have found that this one field can impact conversions by up to 47% and many people will not give their real number if you do.

The next step is to test your form. Depending on the contact form or plugin you choose, you’ll need to configure and test that if someone fills out the form, it does show up in your inbox. For this reason, some will use a plugin while others will only need to fill out the contact box in your page builder. 

Contact forms are crucial to your online success because they are a window for prospects to turn into a lead. Your website could have the best presentation of your business possible, but without a simple way for them to reach out, it can only produce brand awareness. With a contact form, you have the opportunity to create new leads.

Create a Prospect List with Online Tools

Finding viable prospects is one of the hardest jobs for a financial advisor. Companies know this and have entire business models built around selling contact information.

Pro Tip: Most bought lists are not compliant with mass email providers’ terms of service agreements. Sending out messages to a bought list that hasn’t opted-in to receive messages from you can get your Mailchimp, Constant Contact, or other ESP account blacklisted.

With all of these hoops to jump through, you may be thinking “how can I contact new prospects?”

One strategy is to get your library card. Yes, we meant that last line, your library card.

Many libraries have free access to tools outside of just checking out books. Reference Solutions by Data Axle (formerly ReferenceUSA) is the leading source for business and residential data in the United States. Libraries across the United States provide access to information within Reference Solutions at no extra cost if you are a local card holder. 

See your local library’s website for information on what data they have access to. This way you are saving on your budget and still have the ability to get reliable data from a quality source.

There you have our 5 financial advisor branding tips you can implement today. We hope that these suggestions are helpful in your prospecting and will continue to build your financial advisory practice for the future. For more information on digital marketing, check out our article on how to track direct mail campaigns.

Sources: 

www.codetwo.com

www.writethat.name 

https://ahrefs.com/blog/

www.designerdaily.com

www.dreamhost.com

www.vtldesign.com

www.Blog.gimm.io

www.wisestamp.com

www.smallbusiness.chron.com

 

If you are looking for more ways to market your financial advisory practice, see this presentation from Tucker Advisors CMO Justin Woodbury.

If you would like more information on digital marketing strategy, visit here.

For Financial Professional Use Only. NOT INTENDED FOR VIEWING OR DISTRIBUTION TO THE PUBLIC. Insurance-only agents are not licensed to offer investment advice.

Join Tucker Advisors

Call 720-702-8811 or email COO Jason Lechuga at Jason.Lechuga@TuckerAdvisors.com

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Indexed Annuities: The New Retirement Pensions?

Indexed Annuities: The New Retirement Pensions?

Sam-deleo

 

 

By Sam Deleo
Tucker Advisors Senior Content Specialist/Editor

Defined-benefit plans. Those of us who are older might remember them better as “pensions,” but in 2021 they seem about as common as a rotary phone. (Sorry, but we don’t have time to explain what that is.)

Investopedia.com reported in a story last year that only 17% of U.S. private-sector workers still have access to pension plans. With many of the plans still in existence, employers have placed a freeze on funding them, which is often the beginning of the process to eliminate the plans altogether. In other words, the large majority of us can no longer rely on our employers to fund our retirement plans. We are on our own.

The Pros and Cons of the 401(k)

The most common replacement of the defined-benefit plan has been the defined-contribution plan, or, the 401(k). The 401(k) often offers a traditional pre-taxed account and a post-taxed Roth account, with both sourced in a blend of stock and bond options the employee must choose and maintain with the appropriate risk tolerance until retirement.

Some of us are lucky enough to work for employers that match a percentage of 401(k) contributions. However, in recent years, that benefit has also become rarer. Ultimately, it is up to the employee to secure their future income from the 401(k) choices they make. And as James McWhinney at Investopedia writes, that’s far from a certain outcome:

“After the money hits the account, it’s up to the employee to choose how it’s invested—typically from a menu of mutual funds—and the vagaries of the stock market to determine the ultimate outcome. Maybe the markets will go up, and maybe they won’t.”

The 401(k) plan does offer advantages over pensions for employees. For one, it can be a better instrument for growing retirement savings. Also, workers no longer need to worry about whether their employer can fund the pension or will declare bankruptcy to escape liability for it. But, without pensions, employees also can’t predict an exact monthly income for their retirement. In a 401(k), the income they plan on for retirement rises and dips with the market, and they must hope that none of the “dips” turn into downturns or crashes while they’re preparing to retire.

Free Guide: High Profile Use of Annuities

What Does an Indexed Annuity Do?

Even if market risk isn’t your thing, playing it safe has its own problems. With interest rates for bank accounts, CDs, money markets and even bonds lower than the current rate of inflation, workers will actually lose money year to year by investing in those savings instruments.

So, what is the most efficient tool for creating your own retirement pension? While there are more elaborate and hands-on approaches, more and more retirees are finding the solution is to fund an annuity with a portion of their 401(k).

“One user-friendly version of self-funded pensions is the indexed annuity,” said Tucker Financial President and CFP, Darren Petty. “It functions much like a ‘cash-balance pension plan,’ a defined benefit plan created by the Employee Retirement Income Security Act (ERISA) of 1974, except the annuity version is funded by the employee at or near retirement, usually with a portion of their 401(k) balance.”

An indexed annuity is an insurance vehicle that can guarantee a reliable monthly income over the lifetime of the policy holder, with the remaining balance payable to owner’s beneficiary(ies). The cash balance can grow at a stated interest rate, much like a bank CD, or it can have greater growth opportunity if the owner chooses an indexed option. This “links” the annuity cash value to a stock index like the S&P 500. When the market grows, the annuity cash value grows. When the market declines, the annuity doesn’t lose value because it isn’t directly invested into equities. To be fair, these annuities aren’t to be compared to a stock portfolio in terms of overall growth opportunity, but they can earn a respectable rate, all without market risk.

Why Are Corporations Moving Pensions into Annuities?

When you consider that indexed annuities de-risk principal and can guarantee a reliable monthly paycheck, it’s easy to understand why retirees are finding them to be attractive pension replacements. Even major corporations, such as GM, FedEx, DowDuPont, Lockheed, Molson Coors, Kimberley-Clark and others, have transferred their pension funds into annuities. These corporations understand that insurance firms act as the world’s risk managers and are better-equipped to manage long-term pension liabilities.

Critics of annuities claim they carry high fees, and this is particularly true of variable annuities, which have fees ranging from 2% to 5%. The lower-cost indexed annuity typically comes with a 1% or less annual fee, depending on the retiree’s deferral period (years until retirement). Others say you can make more money by investing in stocks. It is true that you might grow money faster in stocks or mutual funds, but creating your pension income at retirement is still the goal of this growth. Another common critique is that indexed annuities “tie up your money,” but in fact, most offer between 10% and 20% liquidity each year. “This (liquidity) is far more than you should ever access,” said Petty, “when you consider that all distributions are fully taxable if the annuity has been funded by 401(k) dollars.”

Indexed annuities are not for everyone, and they may not be for you. If you’re still well within your accumulation years, you can take greater amounts of risk in the market. For those who are, say, less than 40 years old and have the time to recover any potential loss from riskier market investments, it may be wise to wait before investing in an indexed annuity. And, if you are a very high-net-worth investor who does not require secure monthly income for retirement, an indexed annuity is likely superfluous.

But the recent trend toward indexed annuities as an alternative to other retirement income solutions is not an accident. People want the security of the old pension plan. They’re finding they can come very close to recreating that financial period of history with a carefully selected indexed annuity.

We spoke with Darren Petty a bit more in depth about what he sees as the similarities and differences between the old pension plan and today’s indexed annuity, as well as other possible methods of creating this kind of income.

Q: How can retirees most efficiently receive pension-like income throughout their retirement?

A: There are several options within just the categories that are appropriate for retirement income. You have dividend-paying stock portfolios, laddered-bond portfolios, rental income or annuities. Within these categories, we look at four main things: income, growth, liquidity and tax efficiency. So, within those four categories, the most efficient for those who don’t want to be tied to managing their investment constantly during their retirement is the self-funded annuity. It provides reliable income, respectable growth, sufficient liquidity and tax efficiency. The fifth, bonus aspect is that it requires no monitoring or maintenance. Q: What are the advantages and disadvantages of dividend-paying stocks for retirement income? A: The advantage is that you can get stock growth and receive a monthly income when the sun is shining, so to speak, and the tide is high and all boats are floating. So, in an expansionary economy, they’re great. In a recessionary economy, the stock value goes down and its dividend often disappears. As Warren Buffet said, “Only when the tide goes out do you discover who’s been swimming naked.”

Q: What are the pros and cons of annuities for retirement income?

A: Some of the cons are that they can’t compare to your stock portfolio. The growth potential can be disappointing if compared to a high-flying stock. They are also not 100% liquid. The advantages contrast the disadvantages. While your annuity will not experience outsized growth, the vehicle has no downside risk, which makes it appropriate for an income-producing asset where moderate gains that never experience a market loss are sufficient. Also, 100% liquidity is an insane request on a 100% tax-deferred vehicle.

Q: Can you talk about the key differences between employer pensions and self-funded annuities?

A: If you have an employer pension, the advantages are that you don’t have to allocate or manage the investment. Your retirement income is easy to calculate, and it’s a clear trajectory. In a 401(k), as we’ve discussed, it will be a bumpier ride but you’ll be able create your own pension that you own and control. And an indexed annuity will likely be a large part of that creation.

Q: How much of a retiree’s income should be “guaranteed,” i.e., how much of the 401(k) should be used to fund an annuity?

A: I think that is a very practical question for people. So, this should be a reverse-engineered calculation where you subtract Social Security benefits from your required annual retirement income, and fund an annuity to cover the difference. For example, if your goal is $100,000 in annual income, and $50,000 of that is in Social Security benefits, you would fund an annuity for the other $50,000. That may require anywhere from 40% to 70% of your 401(k), but that’s the purpose of 401(k)s, to fund retirements. Our approach is that we’re trying to leave as much outside the annuity as possible but still make sure that the client has zero lifestyle risk. That’s our goal, to keep as much of your investible assets out of the annuity while still securing your monthly retirement needs.

For decades now, the financial industry has presented indexed annuities as products. Some financial advisors used them in ways that did not maximize their advantages for the client. So, advisors themselves are somewhat to blame for indexed annuities only now receiving their due as powerful financial instruments when used the right way to fund retirements.

Determining the correct amount for your “annuity pension” is something a good financial advisor will help you with by providing a context for a comprehensive financial plan. The indexed annuity can play a crucial part in any financial portfolio that seeks a balance of growth and security. Even more exciting, when used the right way, indexed annuities can serve as a worthy substitute to the pension era that retirees once enjoyed.

Notes

For more information about indexed annuities or to receive a downloadable white paper on addressing annuity concerns, email Kyle.Savner@TuckerAdvisors.com or Jason.Demers@TuckerAdvisors.com.

Sources:
1. Investopedia.com
2. MedicareWallet.com

– For Financial Professional Use Only. Insurance-only agents are not licensed to offer investment advice.

Join Tucker Advisors

Call 720-702-8811 or email COO Jason Lechuga at Jason.Lechuga@TuckerAdvisors.com

How Can Retirees Outpace Inflation?

How Retirees Can Outpace Inflation By Sam DeleoTucker Advisors Senior Content Specialist/EditorfacebooklinkedintwitterAs October drew to a close, our national rate of inflation rose to a whopping 5.4%. The Federal Reserve also announced they would not raise interest...

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Client Appreciation Events

Client Appreciation Events: A Guide For Every Financial Advisor

jordan-collins-digital-marketing

By Jordan Collins
Tucker Advisors Senior Digital Marketing Specialist

Table of Contents 

Click the links below to jump to a client appreciation event page section specific to your needs.

Why Throw a Client Appreciation Event?

As a financial advisor, you have a lot of business to take care of. Between meeting with prospects, building your business, and finding the right solutions for clients, the calendar is incredibly full.

Why throw a client appreciation event if there are so many more important things to be done?

If this is something that’s crossed your mind, we have some important information for you. Throwing a client appreciation event can create trust with current clients, lead to referrals, and give you common ground with your local community. These values can’t be understated when you are looking to build your business.

Not only will an event put you on the top of their mind, it will also show that you are offering value that is supplementary to your advice. In the digital age that we live in, it is crucial to humanize yourself and connect with clients. If you are looking for a guide to throw an event, you’re in the right place. We will arm you with tips for your event and a robust guide download.

 

What Makes a Good Client Event?

The first step to a great event is choosing dates that people are able to attend. Planning for a date where there aren’t major holidays, poor weather conditions, or a large local event is important to increase participation from clients. We don’t just want our clientele showing up, we want their family and friends to attend! When scheduling an event, you also need to take lead time into account. If you send out invitations with only 2 weeks notice, you’re unlikely to have a lot of attendees. If you send out invitations with 8 weeks notice, you are much more likely to find that people are free for the night. 

Inviting friends and family is a great way to put attendees at ease socializing and mingling with others. For many adults and kids, going to an event alone can be a large source of anxiety and will detract from your attendees’ interest in coming. Another reason you want additional guests is this is a great opportunity to introduce yourself to potential referrals. You never know who could be joining your event! Put your best foot forward as your event could be an olive branch to provide value for them.

If you have a staff, bring them in on your plans early. Planning, inviting, attending, and following up are all important steps to ensure a seamless experience. Many events involve eating, drinking, and activities and you’ll need all the help you can get to pull it off. With that in mind, be sure that you account for the number of people attending. This is where your staff’s invitations and follow up can help you anticipate how big or intimate your event will be.

If you are a smaller office, we’d suggest playing to your strengths and doing something small like a round of golf or hiring a chef for an intimate home-cooked meal. There are times where less is more and the right environment will be more effective.

Lastly, you can go as big or as small with your event as you’d like but one thing you don’t want to do is plan poorly. Your value to clients relies on the idea that you are able to strategize and plan for their future. If you can’t plan a party, it will not reflect positively on your ability to plan their finances. 

Defining Your Event Objectives

You may be asking yourself “why am I defining objectives if this is just a client event?” The answer is because your event represents you to your attendees. If you want to build trust, you’ll have to know what you’re trying to accomplish.

In our research, we’ve seen two sets of objectives. You have your soft-skill objectives and your hard-cost objectives. An example of a soft skill objective is to meet five people that you didn’t know at the beginning of the night. An example of a hard cost objective is to receive referrals from current clients.

As you can probably tell, finding a balance of the two is crucial. You aren’t throwing this event to go table by table and review balance sheets, but you are a financial advisor whose clients are getting together for a night of fun; at some point, a financial question will surface.

This is an opportunity for you to show your expertise and how you’re a grounded community member just like everyone else. You shouldn’t sell or pitch at this event, as it is not the right time or place. If you’d like to say a few words thanking everyone for coming or giving out business cards to have someone contact you, this is far more appropriate. You want to build excitement and get more people to attend your next event! Don’t make your valued guests feel like they’re being sold.

Measuring Success

Measuring the success of your event is rooted in how you defined your pre-event objectives. If you set the objective of having more than 10 attendees, you have a very clear idea of whether you reached your goal. The big idea is that without setting goals, you won’t know if you were successful.

You will want to sit down with your staff and define what success looks like so each member knows and understands their role. If the only goal you set is to delight your guests, you’re on the right track. Remember that this is not a one and done event in the same way that you are not a one and done advisor. Be a great host, show the value of your work, and your clients will talk positively of you. 

Client Event Examples

This is not an exhaustive list of every possible client event but we hope this will give you ideas for what your community will enjoy. Remember that you want to choose an event activity that will fit your goals. If you want people to be socializing and talking, don’t choose an event where they’re encouraged to be quiet or not speak.

You will also want to think about what your attendees have in common. If there’s a common thread between them, there may be a unique opportunity to personalize the event. As a host, you want to create an atmosphere that will lend itself to open conversation, making memories, and having your guests inviting friends to the next event. Choose wisely! There are more event ideas in the PDF download.

  • Cooking Class
  • Professional Magic Act
  • Family Bowling Night
  • Boat Cruise
  • Backyard Barbecue
  • Scavenger Hunt
  • Circus
  • Day at the Zoo
  • Dinner & Dancing
  • Golf Excursion
  • Hawaiian Luau
  • A Day at the Races

Client Event Follow Up

Before the end of your event, be sure to thank your attendees for coming. Once your event has concluded, handwrite a personal thank-you note to each couple who attended. If you are writing to a referral, be sure to mention the name of the friend who brought them and thank them for attending.

Do not procrastinate and wait until weeks have passed to send out your thank-you notes. You want the event to still be at the top of their mind. If that means writing some of them in advance, take the time to do it. If you are following up with a phone call, be authentic and personal. Track how your communications go and benchmark them against your other events.

Once you’ve completed a number of events, you will have an idea of how to test and tweak your event planning to reach more people and position yourself positively with your clients and prospects. For a more thorough guide to client appreciation events, be sure to download the Tucker Advisors Client Appreciation guide shown below. 

If you are looking for more ways to market your financial advisory practice, see this presentation from Tucker Advisors CMO Justin Woodbury.

If you would like more information on digital marketing strategy, visit here.

For Financial Professional Use Only. NOT INTENDED FOR VIEWING OR DISTRIBUTION TO THE PUBLIC. Insurance-only agents are not licensed to offer investment advice.

Join Tucker Advisors

Call 720-702-8811 or email COO Jason Lechuga at Jason.Lechuga@TuckerAdvisors.com

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