SecurePlus VIP: A Fixed Indexed Annuity
(FIA) Exclusively for 401(k) Plans
Phase 2 Training
Presented by: Shelby J. Smith, Ph.D.
Training/Service/Support by: 401k Marketing
FOR AGENT USE ONLY
For Agent Use Only
OVERVIEW
Features & benefits of FIA designed exclusively for 401(k) plans
•Level Compensation based on Accumulation Value: maximum available 0.80% annually*
•‘Transfers plus flexible premium accepted from payroll deductions – minimum requirement
•Early surrender period for all premiums based on initial premium date
•10% free withdrawals after year 1 – IRS penalty may apply if less that 59½
•Additional withdrawal flexibility available but GLIR may be reduced
•Roll-up interest rate period is 30 years – current rate is 6% guaranteed for 10 years
•Guaranteed Lifetime Income Rider (“GLIR”) is available and fee taken from accumulation account
• 0.70% for first 20 years
• 0.80% for all years beyond 20
• Fees continues at “then charged” amount once GLIR is activated
•Nursing Home Rider approved in some states& pays enhanced GLIR income if 2 of 6 ADLs lost
•GLIR can be stopped and restarted at a later date – additional withdrawal flexibility
•Daily valuation, electronic administration & on-line management functionality
*No compensation paid on amounts over $1 million for single annuitant
FOR AGENT USE ONLY
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Fixed Indexed Annuity offered by…
• Life Insurance Company of the Southwest
(Rating current as of 12/21/2012)
A.M. Best: A (Excellent)
S&P: A (Strong)
Moody’s: A2 (Good)
• About National Life:
•A Fortune 1000 company serving 840,000 customers
•Founded in 1848
•FIAs since 1996 (first to issue flex FIA)
•LIMRA* recognized: #1 provider of FIAs for employer plans
Source: www.nationallifegroup.com
*LIMRA, U.S. Individual Annuities Executive Summary – Second Quarter 2011
FOR AGENT USE ONLY
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Record Keeping & Administration
• Ideal arrangement:
• ExpertPlan is the record keeper & third party administrator (“TPA”)
• You will have advisor’s website to track all your 401(k) plans
• Employer/employees will have website access & on-line management
• Private label LSW website will brand the relationship
• Only ExpertPlan can record keep FIA electronically
• Next best arrangement
• ExpertPlan will be the record keeper but not the TPA
• ExpertPlan and TPA must agree to work together
• Other advantages above still available
• Worst arrangement
• ExpertPlan is not involved
• Major disadvantages
• Managed brokerage account & higher fees likely
FOR AGENT USE ONLY
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Designing Your Marketing Strategy
• Define your market boundaries
• Geography
• Size of Plan
• Business specialty or group
• Gathering the data on 401(k) sponsors in your market
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Larkspur data base available from 401k Marketing
www.freeerisa.com is a great free resource
www.brightscope.com is a useful resource
Become familiar with: www.expertplan.com
• Identifying your target prospects
• Size matters
• New or existing
FOR AGENT USE ONLY
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Finding Prospects
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Clients that are owners/executives/employees with 401(k)
Businesses you patronize & know owner/executive
Agents/agency providing businesses group health benefits
P&C agency with commercial accounts
Network with life agents serving business clients
CPAs, audit firms, TPAs & consultants servicing 401(k) market
Human resource director at local businesses
Trade organizations, unions & associations
Solo 401(k): 1099 or sole proprietor business w/ high income
What about starting a “Solo 401(k)” for yourself?
FOR AGENT USE ONLY
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Attracting Prospects
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Larkspur 401(k) data: call 401k Marketing
401(k) data free: www.freeerisa.com & www.brightscope.com
Direct mail campaign targeting 401(k) sponsoring businesses
401k Marketing has sample letters: talk to your marketer
Seminars & workshops for local businesses
• Volunteer to conduct workshop for Chamber of Commerce members
• Luncheon seminar for 401(k) sponsoring businesses
• Guest speaker at “businessmen luncheon” or trade group
• Advertise on radio, TV, local publications & direct mail
• Affiliate with local bank for free 401(k) business seminars
• Affiliate with P&C or work site benefits agency
FOR AGENT USE ONLY
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Developing Prospects
• Getting the appointment
• A new development for 401(k) to save money & offer better employee benefits
• A short meeting to introduce yourself to owner and/or others at business
• You can help take their 401(k) from good to outstanding
• Appointment 1: outline shortcomings of most small business 401(k) plan
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All investments in the 401(k) are market driven – too risky for some employees
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Employees rarely get professional guidance even though they pay for it
Costs are mostly hidden from 401(k) sponsors & participants
Many employees want “defined benefits” but they have “defined contributions”
Biggest fear of retirees is “running out of money before retirement ends”
If offered now the lifetime income option is inflexible & too expensive
• Are any of these problems of concern to you and your employees?
• If so, second meeting to go into more detail
FOR AGENT USE ONLY
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Meeting 2: Developing Prospects
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Your strategy
• Make good impression, build rapport & establish credibility
• Gather information and qualify
• Close the sale
• Present your solutions
• Finding the pain by asking questions
• Pick at the pain, but do not offer solutions
• Find out what they like and don’t like about their current 401(k)
• For a list of questions, call 401k Marketing marketer
FOR AGENT USE ONLY
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Closing: Ask 401k Marketing for Instructions
• Review the pains you found
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No service & investment guidance for employees from current broker
Unknown and/or hidden fees that can be lowered
No guaranteed lifetime income option, or current one is not flexible
Single source investment choices & bundled plan
Market risks unavoidable for those approaching retirement & risk averse
• Get a commitment to go the next step if you can solve problems
• Presenting
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Service you’ll provide as active broker of record
Same or lower fees for administration
Flexible guaranteed lifetime income for those that want
Same or better investment choices – including EFT if RIA
Managing market risks to match risk profile and suitability
Ask for the date when a proposal can be presented
• Contact 401k Marketing for written instructions
FOR AGENT USE ONLY
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Closing the Loop
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If owner/decision maker reluctant, continue to pick at pain
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If needed offer to make a presentation to select employees
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www.ExpertPlan.com to register as financial partner
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Older ages that have the most to lose if markets decline
Show FIA video and discuss with them the features & benefits
Stress the flexibility
Highlight that choosing the FIA is voluntarily and GLIR is optional
Thoroughly familiarize yourself with SecurePlus VIP FIA
Know in detail the ExpertPlan story and website
VIP FIA demo site @ https://www.expertplan.com/secureplusvip.jsp
Case Sensitive Advisor Username/Password: Secureadvisor/Password1
Case Sensitive Sponsor and Employee: Securesponsor/Password1
Work with your 401k Marketing marketer to prepare the ExpertPlan Proposal
If not using ExpertPlan as the record keeper and TPA
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Confirm that TPA will accept FIA as managed account
Follow instructions of TPA to add FIA to 401(k) menu
FOR AGENT USE ONLY
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Questions?
Call Help Desk at 401k Marketing at 877.319.2078 for
details. Talk to your 401k Marketing marketer: Andy
Alvis, Celeste duPreez or Rebecca Brundage
To do list:
1. Start prospecting for 401(k) plans to add FIA
2. Training session #3: enrollment process
3. Training session #4: follow up & servicing
FOR AGENT USE ONLY
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