Help Your Clients Stop The Bleeding

By Lloyd Lofton

A CNBC article on Wall Street and the market says, “Investors have been dumping stocks at a rapid pace amid growing anxiety over COVID-19 virus.”

In discussing some fiscal stimulus, Tobias Levkovich, Citi’s chief U.S. equity strategist observed, “Most economists agree that now is not the time to quibble over how big the  deficit gets, but different ideologies and plans will have to converge so as to find a program that is significant enough and quickly made available.”

Oil prices slid more than 8% Monday as the COVID-19 virus cases bring travel and business to a standstill.

Simmons Energy analyst Pearce Hammond noted, “The demand drop unfolding is like nothing anyone has ever witnessed.” He observed that oil is coming off a “horrific week” for the energy market.

Rystad Energy head of oil markets Bjoernar Tonhaugen said, “Oil prices have reached extremely negatively and we believe … that we have not seen the bottom of the oil price just yet.”

The “R” word is starting to be spoken out loud in the news. If we have two quarters without economic growth, it’s considered a recession.

With the first quarter closing at what’s expected to be low or no growth due to the COVID-19 concern,  how does a potential recession affect retirees?

Retirement savers with a significant 401(k) balance are at risk as the stock market crashes.

By having their 401(k) invested in the stock market, they’re vulnerable to market changes and could lose money if the investments they select decline in value, as we’re seeing happen right now.

As seniors read the news and contemplate how to stop the bleeding of their hard-earned savings and wonder what to start doing to preserve what they have left while ensuing their ability to capture opportunities after the market recovers (and it will), what are seniors being told to do?

Here are some of the tips found online by Forbes and others:

1. Don’t stop contributing.
2. Resist the urge to sell.
3. Never try to time the markets.
4. Remain diversified.
5. Don’t look at your account balance.
6. Stick with your plan.
7. Get help if you need it.
8. Don’t panic – volatile markets don’t last forever.

Now, some of these seem reasonable. Remain diversified is reasonable to me. You know, don’t put all your eggs in one basket?

I get it.

As for the rest, here’s the thing.

Are you kidding me?

Resist the urge to sell. You mean wait for more losses?

Don’t look at your account balance. In what world is this practical? Who isn’t going to watch their savings evaporate and not feel desperate?

Stick with your plan. You mean stick with the stockbroker’s plan.

My plan is to not lose money, at least not at this rate. And not pay for trades while the broker moves my money.

I agree with the never try to time the market - good advice. But when the timing is obviously off, time your exit as much as you time your entrance.

Don’t panic – volatile markets don’t last forever.

While that’s true in principle, I don’t have to continue being a victim of a volatile market.

And the last one, the one that makes sense – get help if you need it.

Go help your clients – today!

Ask your prospects and clients this simple question, this is a question that will immediately hit on exactly what they are “feeling” and thinking about, right now.

This is a question no one else is asking. Why? Because most advisors are concerned about how they think they will be viewed.

Now’s the time to be a sales hero, the time to swoop in and take the steps your prospects and clients need, the steps they expect a professional to give them, and be proactive in helping them protect what they have left.

You need to help them prepare to be able to invest another day, a day when things are getting better, when the market is more likely to go up instead of treading water in place while it goes down.

OK now, what is the question?

I’m going to give it to you now, but here’s the thing, it doesn’t work.

You have to work it, you have to believe you are serving a higher purpose, that your role is to disturb, to disrupt and to define the choices your clients have to protect what they don’t have the time or resources to replace.

So, here’s the question. “Of the money you have left, how much do you not want to risk anymore so you can invest with more confidence the money you do feel comfortable risking in the market?”

It’s a simple question. It’s what clients are thinking about anyway.

Whatever amount they identify, that’s what you move into an annuity.

Annuities are designed to make income payments to the annuitant at a time chosen or make those payments to the beneficiary, in the event of the annuitant’s death.

This is what you can help them do, preserve their hard-earned funds.

With an annuity, unlike other types of investments, 100% of the premium earns tax deferred, compounded interest, immediately.

Deferred annuities usually have a withdrawal provision after the first year which allows the owner to make penalty free withdrawals of up to 10% (in some products, 15%) of the principal or, in many cases, the account value.

Wink reported that traditional fixed annuity sales in the second quarter of 2019 were $932 million – up 21.2% from the second quarter of 2018.

Imagine what they will be the second quarter of this year!

Imagine how you will feel when your clients tell you around Christmas “you saved my retirement, thank you.”

Go help your clients today!

Lloyd Lofton is the founder of Power Behind the Sales. He is the author of The Saleshero’s Guide To Handling Objections, voted 1 of the 11 Best New Presentation Books To Read in 2020 by BookAuthority. Lloyd may be contacted at [email protected].

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