Dissecting the Annuity Market
How did your business fare in the annuity market in 2014 compared with other annuity management providers?
According to the Financial Planning Association, 29 percent of financial planners either advised their new clients to choose fixed annuities, or have current clients in fixed annuity vehicles. Four years ago, that number was a high of 49 percent.
Seemingly, this might have been an adjustment made to offset runaway inflation and a slumbering economy.
Now that the economy appears to be recovering, at least from the perspective of the cash-rich corporations, more providers may be viewed as being comfortable with variable annuities.
What Can Your Business Do to Encourage Annuity Investment?
Annuities have traditionally been seen as complex investments that are only for financially savvy movers and shakers.
Though it is true that your clients need to enter the annuity market with their eyes wide open, it's equally true that you could woo even more suitable annuity clients if you use the right approach.
Here are some ideas for marketing your company's annuity packages:
Accentuate the Positive
Often, accentuating the positive is as easy as comparing something with another thing that is less attractive. As the following article shows, why not develop some historical financial charts that highlight the returns based on annuity rates versus the returns on other vehicles such as mutual funds, stocks or even certificates of deposit. You'll be able to shine a light on the positive aspects of annuities without compromising your ethic to offer a choice of investment options that are appropriate for your client's financial planning needs.
Related: Financial Planning 101
Emphasize the Flexibility
One of the reasons that some clients may shy away from annuities is due to their multitude of choices. But you can turn that perceived negative into a positive by emphasizing the flexibility that those choices can bring. Depending on their age and retirement needs, your clients can choose from premium protection plans, term annuities or lifetime annuities. These can be attractive options for older seniors who might be worried about not recouping their original investment. With hybrid annuities coming on the market in recent years, there are even more ways for you, as an annuity plan provider to prepare an annuity package that is especially suited to your clients' needs.
Don't Discourage Diversity
Remember, in trying to sell annuities to your clients, don't discourage diversity. Having a wide variety of investments in a financial portfolio has always been the smartest way to reach financial goals in the short term and the long term. Remind your clients that they don't have to be "all in" with an annuity. An annuity can be just one piece of an overall healthy financial portfolio. Once you explain that you're not trying to get them to put all their eggs in one basket, you'll be more likely to win over those clients who are still on the fence about annuities.
Finally, make sure you have all the recent facts and figures related to annuity investments.
Remember, your professional expertise is the best selling tool you have.
About the Author: Kate Supino writes extensively about best business practices.
Dell to sell cloud-based iPaaS Boomi in US$4bn deal
Global investment firm Francisco Partners and private equity platform TPG Capital have entered into an agreement with Dell Technologies to acquire cloud-based integration platform as a service provider Boomi in a cash deal valued at US$4bn. The deal is expected to complete this year.
“Boomi has flourished as part of Dell Technologies, growing exponentially since we acquired them in 2010. This proposed transaction positions Boomi for its next phase of growth and is the right move for both companies, our shared customers and partners,” said Jeff Clarke, vice chairman and chief operating officer of Dell Technologies.
“For us, we're focused on fuelling growth by continuing to modernise our core infrastructure and PC businesses and expanding in high-priority areas including hybrid and private cloud, edge, telecom and APEX. All designed to help organisations thrive in the do-from-anywhere economy.”
Dell’s Boomi sell-off follows VMware spin-off
This announcement comes just two weeks after Dell said it would spin-off its 81% equity ownership of VMware to form two standalone companies. This would result in an expected US$9.3bn cash dividend payment to Dell, which says it will use those funds to pay down debt.
When Dell acquired Boomi in 2010 for an undisclosed fee, Boomi offered the industry’s only pure SaaS application integration platform, powered by its revolutionary AtomSphere technology. Dell saw Boomi as addressing one of the top barriers to cloud adoption at that time, which was managing and integrating cloud-based applications with existing applications and databases.
Now, Boomi has more than 15,000 customers globally and is still seen as a leader when it comes to organisations connecting applications, processes and people across a range of locations and devices – a process that can take weeks rather than months.
“I am incredibly proud that through innovation, passion and relentless execution, the Boomi team has created a unified platform for the modern-day hybrid IT landscape that thousands of customers worldwide depend on to digitally transform their business,” said Chris McNabb, chief executive officer of Boomi.
“By partnering with two tier-one investment firms like Francisco Partners and TPG, we can accelerate our ability for our customers to use data to drive competitive advantage. In this next phase of growth, Boomi will be in a position of strength to further advance our innovation and market trajectory while delivering even more value to our customers.”
Francisco Partners has invested in more than 300 technology companies since its launch 20 years ago and has more than US$25bn in assets under management.
“The ability to integrate and connect data and workflows across any combination of applications or domains is a critical business capability, and we strongly believe that Boomi is well positioned to help companies of all sizes turn data into their most valuable asset,” said Dipanjan Deb, co-founder and chief executive officer, and Brian Decker, partner, at Francisco Partners
Nehal Raj, partner, and Art Heidrich, principal, at TPG Capital added: “The need for automation and data integration across applications has never been greater. Boomi's cloud-native platform enables enterprises to streamline business processes and is essential for driving digital transformation.”