MASTERCLASS: Shaping the Future of Protection in Retirement

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  • 55 mins 38 secs
As the retirement landscape continues to evolve, many investors are so focused on saving that they don't have a roadmap for spending in retirement. This panel covers how retirees can better protect their financial futures, the many ways to include annuity options in portfolios, how products are responding to the current market environment and distribution opportunities and resources for financial professionals.
  • Mike Harris, CFP, CLU, ChFC, Senior Education Advisor, Alliance for Lifetime Income
  • Suzanne Norman, CIMA®, CPCC, Executive Coach, Mentor, Financial Educator
  • Tim Seifert, Senior Vice President, Head of Retirement Solutions Distribution, Lincoln Financial Group
  • Tamiko Toland, Director, Retirement Markets, Cannex Financial Exchanges
Channel: MASTERCLASS

Jenna Dagenhart: Hello, and welcome to this exclusive Alliance for Lifetime Income Masterclass. As the retirement landscape continues to evolve, many investors are so focused on saving that they don't always have a roadmap for spending in retirement. Today we'll cover how retirees can better protect the financial futures in many ways to include annuity options in portfolios, how products are responding to the current market environment and distribution opportunities and resources for financial professionals. It's an honor now to introduce our panelists. Suzanne Norman, Senior Education Advisor with the Alliance for Lifetime Income. Tamilko Toland, Director Retirement Markets at CANNEX. Mike Harris, Senior Education Advisor, Alliance for Lifetime Income. And Tim Seifert, Senior Vice President, Head of Retirement Solutions Distribution at Lincoln Financial Group. Well, everyone, thank you so much for being here with us today. Before we dive in, Tim, what is the Alliance for Lifetime Income and why should financial professionals be interested in the work that they're doing?

Tim Seifert: Jenna, so excited about the work that the Alliance is doing and I'll brag a little bit is that it was created in part by our CEO, Dennis Glass. And he saw that there was a major challenge or opportunity in the marketplace today for clear education around consumers and protection and providing protected lifetime income and to be able to funnel all of those great education directly to the financial professional. And so we're so excited about the work the Alliance is doing. They are reaching millions of Americans and what the message is, is go see a financial professional. They can help you with not only guaranteed lifetime income, but they can help you solve a lot of your long term retirement problems. So just an exciting organization that's doing really great work in America today.

Jenna Dagenhart: The perspectives of consumers are of great importance to CANNEX and the Alliance for Lifetime Income. When we look at how they're approaching savings and spending, what are you finding, Tamiko, and where are Americans turning to ensure that they're protected?

Tamiko Toland: Really, it shouldn't come as much of a surprise that investors and consumers in general find the concept of protection to be very valuable. In fact, we found that 90% of them thought that protection was important when thinking about retirement income. Now, when it comes to specifically talking about annuities, it's also very important to them, or I guess I should say they find it a very valuable prospect. So 42% are extremely interested in annuities as a solution. What's very interesting here though, is that financial professionals don't necessarily recognize this and only 18% think that their clients are going to be so interested. This recognition gap is a huge opportunity to really meet a very genuine need and to find that client interest that professionals may not even realize exists.

Jenna Dagenhart:  It sounds like more of a recognition gap there, and consumers have a fairly strong perspective on what they're looking for. Mike, is the retirement marketplace adequately meeting this demand as baby boomers approach the traditional retirement age?

Mike Harris: Well, I think you really have to break that down into two slices, what is the opportunity? And then how's the financial services' industry meeting that? And are they doing a good job at getting people what they're looking for? And I think if you look at, you mentioned, baby boomers, and we've been talking about baby boomers for 20 years, and they're finally here and they've been here for a while. And the rate of about,I think, it was the numbers 10,000 a day are retiring, turning 65, at least turning 65, not necessarily retiring, but that's growing. And by 2024, that's going to be around 12,000 a day. And that's going to continue now till about 2030. There's still a lot of people entering that market place or that age bracket.

And eventually, there's going to be about a fifth of the country is going to be 65 or older. I mean, there's a lot of people out there that need help. And I think the question though is, how are we as the financial services' industry, how good of a job are we doing to access these people and give them what they're demanding and their demands are always changing as well? And we're doing a good job, but they can always do better. I mean, we've done a great job over the last 20, 25 years of focusing on asset accumulation. Now people grow their assets and teaching them how to invest 401(k)s, IRAs, and just in general, just non-qualified assets. But we have to do more than that. We have to change that. The consumer is asking now for. I'm turning 65, how am I going to get income out of this? How am I going to make it last for as long as I live? And things of that nature. So now we need to make a shift a little bit towards distribution or decumulation, if that's what you want to call it.

 That's a challenge because it's not just simply take three or 4% distribution out of the assets you've saved and you'll be fine. That's a rule of thumb, but it doesn't also always necessarily meet the client's need because markets drop, your income drops if you stay in sync there. That's not always good. People don't always want to give things up. So we have to look at it from our total financial wellness situation of answering questions like, when I get older, will I be able to drive? And if I can't drive, what's going to happen? Or if I get sick and I want to stay at my house, how am I going to handle that? And that a lot of times doesn't mean cutting your income. I think we really have to do a better job of really taking more of a holistic financial wellness look at consumers as we build solution sets for the future.

Jenna Dagenhart: I see. A lot of heads nodding right now. Tim, is there anything you wanted to add?

Tim Seifert: I think, Mike, just nailed it. I mean, forever we've talked about this peak 65 and how we're moving there, but it is the everyday consumer. And what we're starting to see is this idea that protection is truly a growth business, not only for the consumer, but also for the financial professional. And so we're starting to see the protection need go down through the generations, just not at that person that's close to 65, but really taking a look at a much younger client. And we are seeing in the industry that annuities and protection like vehicles are being used by the millennials and the Gen X, because it's lifestyle. And it's saying, we've accumulated such a great amount of wealth here in a short period of time. Jenna, the last three years, as we've talked together, it's been wonderful but now it's protect and grow the asset. And then, Mike, talked about income. So it's protect and grow your income. And then, ultimately, we'll also talk about legacy, it's protect and grow your legacy. We're seeing consumers across the board really being favorable to the protection story.

Jenna Dagenhart: And I know it's easy to paint the consumer in a broad brush, but Suzanne, what are we seeing when we think about women approaching retirement? Of course, a sub segment representing more than 50% of the population.

Suzanne Norman: That's a great question. It's something that I spend a lot of time on. I'm very passionate about empowering women in general, but certainly financially. And a couple of things that, Mike, and Tamiko, said really resonated with me. And one was, Mike, used the term wellness, and the Alliance asked me to write a paper last year on women's financial wellness. I would certainly point people to that paper with a lot more detail than I'll share right now. But I think of three things and one is longevity and life expectancy. And I know most of our audience will probably know this, but women are expected to live longer by three to four years. And when you think about that planning and having enough money to sustain you when some women will live beyond that average expectancy of 87, about a quarter of them will live to age 93.

And do you have enough money to sustain you in that period of time? And we do ask the question a lot of times, well, do you know how long you live? And no one really does know that. So having that plan and the savings for women becomes critical. Another thing that, Tim, mentioned was that sort of age group when you're thinking about younger people attracted to this protected income and certainly wanting to grow their money because they have a long time ahead of them. But one thing I did in a paper with some former colleagues is scope about women's cost of healthcare. And I think both men and women are beginning to be much more cognizant of what that cost is. And just, for example, we looked at projection of a 45 year old woman who expected to retire at 65 and she can expect beyond Medicare coverage to spend about $265,000 out of pocket. That's something to really, really consider.

And I guess the last point I would make with the women's market is that money confidence is critical. And I talked about empowerment before, and there's a dearth of financial literacy in this country for men and women. But one of the things that we do see as a byproduct for women, especially is perhaps not having as much confidence. They end up in investments that may not serve them well for longer life span. So we do see study after study telling us that cash is elected much higher as an allocation with women. Those are some things that I think are important for people to consider with that market.

Jenna Dagenhart: And sometimes if they outlive their spouse, too, and the spouse has the relationship with the advisor that brings its own set of challenges as well.

Suzanne Norman: It does. And I wrote about this in the paper, and I think most people have seen these stats before. But I think about who can serve the female client, both men and women. And I'm on record of saying, you don't have to be a woman to serve a female client, but you should listen to her and engage with her because we have seen studies that show the amount of widows that leave a financial professional that may not have engaged her in the process. I would certainly give a shout out to any advisor for making sure that everyone is heard and you meet them where they are. Back to financial literacy, some people may not be comfortable asking questions. So making sure you engage with them and draw them out, I think is important.

Tim Seifert: And Jenna, I can add a little bit to that. Suzanne, and I have done a lot of work there, and I know she's done great work on just that meeting, is the great thing about the Alliance for Lifetime Income is changing the conversation, what they've been able to do through all their studies of around on the language of the financial service provider. And just I know, Suzanne, we talked about the beneficiary, is the one thing that we spend a lot of time on is that who is that beneficiary? And do you have a relationship with that beneficiary? And from a practice management standpoint of view as the Alliance and the words that we use is having those great conversations with the beneficiary.

 And that can not only be the spouse, do you have the relationship? But what about the children? And there are so many times that not only do you lose it from the spouses perspective, but Suzanne, some of the work you've done with education of the next generation. So there are so many things we can do from our practice of not only the Alliance for Lifetime Income and the protection, the need for protected lifetime income, but it's also helping our financial professionals with their practice. And so you're just so spot on there, Suzanne, on that.

Jenna Dagenhart:  That's an excellent point, too, about the future generations and engaging them as well. Now, Tim, you represent a company that's providing products to the American public. How are you seeing these shifts play out in terms of who's buying the products and what products?

Tim Seifert: Yeah. I can say there's a lot of times we've had a lot of fun with millennials, particularly when I'm old, and Gen Xers in saying, how are we ever going to appeal to them? We know what they're doing, Jenna, the products that we offer. Now with Lincoln, what Dennis Glass, our CEO, who's also very influential in the Alliance for Lifetime Income, and one of the founding fathers is, our purpose is to help everyday Americans really retire with dignity or help everyday Americans acquire that financial peace of mind. And Jenna, it's every day Americans, regardless of the age. And what we're seeing is that it's getting younger and younger.

Whereas as, Mike said, peak 65, we have more 65 year olds in the next several years, more Americans turn 65. But what we're finding is the Gen X and the millennials, they like the idea of protected income for life, even though they're years away from it. We're starting to see through product development, younger and younger people. It's just not, hey, I'm 60 or I'm 55, you're starting to see it younger and younger. And what they're doing is they're seeking protection and growth for what we call safe growth. Is something that myself and all of my great colleagues of the industry are really starting to pay a lot of attention to.

Mike Harris:  And one thing I may add is at the Alliance, we've had a lot of advisors, financial professionals say, when do I start that conversation of income planning for retirement? And the answer is, it's never too early to start getting people's mindset to the fact that, eventually, they're going to have to spend it. Like you said Tim, even the millennials, the younger people, they're very open to the idea and very interested.

Tamiko Toland: I want to mention that we've actually looked at that in the research that we've done with the Alliance. And there's a direct correlation between the access to pensions and interest and guaranteed income, which should really come as no surprise. Again, much like a lot of our findings are really confirming what we already intuitively know to be true. And it makes sense that Gen X feels like they have to. And as a member of Gen X, I can confirm this. They agree. We feel hat it's incumbent on ourselves to make sure that we build that security and we're not relying upon outside sources entirely. It's great to have social purity, but I don't think I'll ever have a pension, for example. And it's even more true for the younger generations.

And really to Tim's point, this isn't simply about providing that guaranteed income when somebody is in their 30s or 40s, but really building towards that as a goal. And the industry has done a really great job in innovating lots of different methods to build protection that incorporates income, or at least leans in that direction for the time when retirement comes. But is really based upon the basic concept of making sure that people can safely grow their money and that they don't have to worry about a lot of those financial risks as they approach their real retirement age.

Jenna Dagenhart: Yeah. And to Mike's point about, it's never too soon to start. I think some younger generations might have even more questions if they grew up in a household, for example, where their parents had a pension, but now, because it's becoming more rare, they don't have one themselves, even if they would like one.

Tamiko Toland: Yeah. For sure. I mean, who doesn't want a pension? And that wasn't the case in my own family, but it's like the fairytale story, to be honest with you, for somebody like me. And gosh! I would love it, but I don't have it. So I very much empathize with others who are in a similar boat and really feel like they've got to take care of themselves. As well as a lot of generational experiences where, for example, I graduated from college into a recession. And for anybody who's had a similar experience, it tends to make you a lot more financially conservative in that regard. And say, gosh! Really bad things can happen, because I've seen it myself. Now after going through a long period of everything going pretty well for a lot of folks, there are a lot of financial professionals who don't have that visceral built in history. But I think now, especially with the COVID recession and so forth, and a lot of financial uncertainty, people are now starting to feel that much more personally as an experience.

Jenna Dagenhart: And what would be some simple tips that at groups like the Alliance for Lifetime Income or telling consumers or other tips to note, Suzanne, do you want to kick us off there?

Suzanne Norman: Sure. Yeah. And I love being a financial literacy educator. So I encourage everybody who hasn't gotten involved as a financial service professional to do that. And I think the Alliance for Lifetime Income does an amazing job with consumer education. If anyone hasn't visited protectedincome.org, there is just a wealth of information there. Financial professionals also have their own website with resources, but the education that's happened is needed. And I mentioned before this dearth of financial literacy, only 21 states require that someone graduating from high school has a personal finance class. We see a lot of bad behaviors, I think, coming from this information gap and education gap. Some of it's leading into the fact that when we look at studies, only two out of 10 people actually plan for their retirement. And there's an old saying that many of us have probably heard throughout the years, which is, what did you spend more time on? Planning your last vacation or your retirement?

These things that we see out there, I think the Alliance is providing an amazing resource, both to the consumer and the financial professional. And Mike mentioned it earlier because I think we're all living through it, and yes, Tamiko, I'm a Gen Xer, too. But the fact is, we're witnessing an amazing transformation in the financial service industry, because it really has been all about investments, and Tim mentioned it, growing wealth. And there's a retirement saying, which is, has advisor's been helping you get to retirement? Are they helping you get through retirement?

So I think there are two people that are very involved in this conversation because the Alliance does a great job of a course encouraging consumers to work with a trained professional. This is not amateur hour, and Tamiko talked about it before. A pension kind of autopilot, right? You have the ability to get a check in the mail every day. And Tim, I know you'll talk more about what Lincoln does of getting a check in the mail every day. But I think that this industry shift to wealth management really requires a lot of thought. And the Alliance is providing so much education for the consumer and the financial professional.

Mike Harris: And I would add here since everybody's outing themselves, I'm not a Gen Xer. I'm a baby boomer who is retired. And thanks to about 28, 29 years with Lincoln in my career, I do have a pension of which my daughters don't. It is nice. And it really is a peace of mind when you think about somebody like myself, who has new number of financial certifications that have done this business, that now I'm retired. But I have two financial professionals that I deal with myself. I mean, I don't try to do it myself because I don't know what I don't know. And that's the biggest thing though. One of the biggest things that at the Alliance we do is encourage people to seek out the help of financial professionals, for whatever reason, maybe they're just starting, or maybe they're already retired and need help even after they've retired.

And the education that goes with that about what the opportunities are. And at our website, letting people learn about themselves like our psychological profiles, what kind of a saver and investor are you? People can learn a lot about themselves, which helps them then take the right path and get what I call, the unconscious objections out of the way so that when they are dealing with a financial professional, they already know, or at least have a feeling about themselves. The tools that are on our website that we put out our professional resource website, there is free and it's huge. So we always encourage advisors, take a look at it and see what's on it that you can use that can help you grow your practice.

Suzanne Norman: May I mentioned my favorite one that I think is really the one that gets the conversation started and has so many great links and tips? But it's the 12 annual steps for retirement security. If people haven't seen that before, it's my go-to because it links to so many different aspects of your financial life. Do you have will? What's your credit score? We know from a planning standpoint that if you do a plan, you're 42 times more likely to accomplish that goal. And talking about accountability partners, I'm executive coach and always having an accountability partner. I know Tim, this is your area of expertise as well, practice management. But anyway, I just want to give a shout out to that piece because I do think it's a great way to help engage consumers, investors and financial professionals.

Jenna Dagenhart: Yeah. A lot of great resources with the Alliance. And while we're also outing ourselves, Mike, we've got that in common. I'm not a Gen Xer either and I do not have a pension unlike my father, who's a teacher. But we've talked about the evolving needs to the consumer, particularly around protection. Tim, what's the response of financial professionals and how are companies like Lincoln supporting and driving that response?

Tim Seifert: Yeah. I have to be honest with you, Jenna, is that, Mike, might just talk to us about retirement and pensions. And there was a sad day and a happy day. The sad day was when he told us he was retiring after just a wonderful career at Lincoln. And we so appreciate it. The happy day was he said, I'm going to work with the Alliance for Lifetime Income. But we're all excited about that because we all just love the education of this marketplace today. Jenna, with regards to the financial professional, I'd say, this, is that it is growing. Is the use of these type of products are growing substantially. Is that more and more financial professionals are extraordinarily curious, because what we just talked about with the consumer is more and more consumers are coming in and asking these sort of questions with the help of the Alliance for Lifetime Income.

And so I would say this, is it's this of when you know and you know, you know is confidence replaces fear or uncertainty. And there's a lot of uncertainty in the marketplace, but there's a lot of uncertainty with regards to financial professionals around exactly where and when do we position these sort of products? And so the marketplace is growing substantially financial professionals and companies like Lincoln. And some of our great peers are constantly providing educational resources. They're constantly evolving around the practice management conversation starters. And so we do a lot of work around that. And that we know that every day when a financial professional wakes up, they're thinking about three things. They're thinking about client retention. How do I keep my most trusted clients happy and satisfied? And they retain them. Number two is client acquisition. What do I doing to acquire more? And then lastly, is how do I build efficiencies into my practice so I can have more time back in my day?

And so at Lincoln, we've created a bunch of tools around that in our center for of practice management, which we call at Lincoln, our Center for Financial Professional Excellence. In the past, we called it from crisis to confidence. And then we went into the COVID world and we started saying, it's challenge accepted. What are all your challenges and how we at Lincoln can help? And so that there's a bunch of practice management pieces that we can put in there. Our most popular right now is the three habits of highly effective financial professionals. And we know that they build trust. We know that they build efficiencies into their practice while elevating the client experience. And then lastly, is they built simplicity into the language. And so there's just so many resources that we have that you can access.

Jenna Dagenhart: And Tamiko, does any of your recent research offer insights on how financial professionals are shifting to meet consumer demands?

Tamiko Toland: I have to say that one of the most exciting things about the new study that we did, it's not as much about actual practice, it can inform, I think, financial professionals on ways in which they really can help clients that you may not have been as obvious. And particularly, this is around emotional bias. And some behavioral finance questions that we asked. And the fact is, on all of the behavioral finance questions we asked, and we asked both the consumers and financial professionals, what they thought. This is all about the consumer behaviors, right? And they all felt that they had, like over 50% in all cases said, yeah, this is something that they do. But what was particularly interesting was areas where the financial professional actually felt that their clients had exhibited these behaviors much more than the consumers were even aware.

And these are instances where I think as a professional, you're able to really help your client avoid problems that they didn't even realize are getting themselves into. Now, in particular, one of the questions was about, "I feel that I've made regrettable investment decisions based on gut feelings." And it was about half of consumers thought that was the case. And 85% of financial professionals thought their clients had done that. Let's say that's a pretty significant gap. Herd mentality, that was another area. Following what other folks are doing. We didn't label cryptocurrency, but you could say that or specs, or what have you. And again, there was a good gap, 60% of consumers versus 78% of financial professionals thought that their clients were doing that. And I think that this is an area where we sometimes don't think enough about the emotional component of what the financial professional's actually doing for the client.

And it is providing, as Tim mentioned, that confidence. And really helping to counteract some of those places where the client may actually say, well, should I be doing this? How do I feel about doing this? And that's why you have to have this kind of neutral third party coming in and saying, you know what? I'm sorry, but that is a terrible idea. You should know, not jump into this decision at this moment. Let's take a step back, this is what I know based upon all the information that I have. And then we can come up with a solid plan together.

And I will say that the clients that are the most satisfied with their annuities are ones where the annuities are part of a plan. And I think this really, again, speaks to a lot of what Tim's been referring to that it's not simply a matter of a single product that serves a need, which annuities do serve needs, but they serve that need within the larger context of an overall goal and multiple components. Nobody's ever saying, just throw all your money into this one product and it's going to fix everything for you. If somebody is selling you that, that is an absolute lie. That is not how these products, how this industry function.

Tim Seifert: Jenna, if I could add to that, is we also have a Lincoln survey. Tamiko, just really hit it, is that emotional intelligence. There is definitely a correlation between protected lifetime income and client satisfaction. And that the more products through plan, because we know the financial planners, is the more products that we put into the portfolio and the more plans that you have a wealth protection plan, you have an income plan, you have a tax reduction strategy plan, which is part of the annuity, you have the estate plan. The more we're in incorporating the protection type of products in there, client satisfaction absolutely goes up. And from a financial professional standpoint of view, we know that highly satisfied clients never run out of two things. They never run out of assets held away. So the more that client satisfaction, the more they bring and they ever run out of the opportunity to introduce them to associates, friends or relatives. I 100% agree what, Tamiko, just said around emotional intelligence and the emotion of it. And that correlation of client satisfaction. We have studies on it.

Suzanne Norman: I felt something there related to something that always makes me laugh because people find out that I have a degree in psychology and they say, "You're in this industry?" And I'll always say that the best financial advisors that I have met over the years self-identify as financial therapists. And Tamiko said it, Tim said it, getting someone out of a mode of high emotion of fear or greed becomes really the advisor's alpha and how they deliver performance. And it's not what you make, it's what you keep. In many of the, let's say, older investors that may be in that mode of wanting to be more conservative, but maybe they do need to take a little bit of a stretch into equities. And so that may be where a variable annuity or something like that might actually be the fit. But anyway, I was laughing that we're hearing a lot of this emotion and that's really a key role of a lot of advisors now.

Jenna Dagenhart: Yeah. I think that's an excellent degree to have in this industry, Suzanne. And Tamiko, going back to your points, I couldn't help but think to myself, some of those problems that people don't realize they're getting into can be the most dangerous ones, especially when they have those false confirmations. You mentioned herd mentality, almost making them think they're doing the right thing. Anyhow, Mike, do you care to hop in on what some of the benefits are that financial professionals are seeing as a result of meeting client needs around protection?

Mike Harris: Well, I think you've got a number of issues there that when you're somebody that's retired and you know that there's not an employer that you're  not going to get that paycheck every other Friday. I mean, I did that when I retired, you feel like first you're on vacation and then you feel like it's an extended vacation. And then after you miss about three or four pay days, you actually become a certified retiree because now it's all on you and you recognize that and you start thinking about little things like, gee whiz! If I fall and I get hurt or I have surgery, who's going to be able to do this? Who's going to be able to clean the gutters? Or if it's my wife, who's going to be able to do this?

So you start thinking about and looking at things  a little differently because you're looking for someone that can help you get by all those things, talk about them, at least be a sounding board for. And if you're doing something right for me as a financial professional, helping me get by those, what you get is referrals. I am never afraid to send people to my advisors because I tell them, I say, "They may not be the smartest person ever was, but I trust them." That's the issue. If you can find a financial professional that you can trust and that you have confidence in, and that you can discuss anything with that you is appropriate, now you're at least started down the right path. And I think the benefits there, and as Tim mentioned, and everybody chipped into, is the next generation.

That's huge. I mean, I've been very, very fortunate in my life that I've done fairly well. And I've got four daughters, two of which work for the same company, work for Lincoln, which I used to work for. And I'm very happy about that because they're doing fine as well. But my mission is to live the life that I want, live a full life and then pass as much assets onto my children and my grandchildren as possibly can so that they will have an opportunity to have a better life as well. That's what all grandparents want. And most of the people you're dealing with as a retiree, our grandparents, or a good portion of them. And there's a lot of difference between grandparents and parents. I mean, parents love their kids, grandparents are in love with our grandchildren.

It becomes a different emotional kind of a play here, but you got to be able to discuss that with the consumer. So next generation, if you can keep those people, then you keep the assets and you help your business and you help people. And I don't know any financial professional that doesn't really take enjoyment out of helping their clients. That's the biggest thing to me. And I think getting ready for that and just making sure that your customers or your clients are taken care of, that they don't have to worry, that's all that comes with everything we are trying to do at the Alliance. What Tim, and Lincoln are trying to do is help people set up to lead that full life and be financially secure in retirement. That's what it's all about, to me, at least.

Tim Seifert: And Mike, really did a great job on that, Jenna, with just that single world of trust, are you the trusted financial professional of choice? And what all the research is showing across the board is when you're doing these planning topics, when you're incorporating guaranteed protectable lifetime income, when you're providing protection for the next generation, when you're building portfolio construction that adds protection, that client satisfaction score goes up in a big way, which is basically what everybody is saying, is that trust. And that's what the research is telling us is that you are my trusted advisor because we talk about all these topics. And Mike, the brag on the Alliance for Lifetime Income and all the work that you all are doing is, there's not only great consumer research there, but there's also great financial professional research, not only on our websites, but right on the Alliance. A lot of times we work it together. So just double click on that word trust, that's a biggie. Real big.

Mike Harris: It's huge. It really is. And from the Alliance, as Tim mentioned, not only consumer pieces or point of sale pieces that are all fin reviewed, but it's pieces out there in research that we've done that the financial professional can access just from an education like our institute, where we've got some of the top, I call them brainiacs, out there in the financial industry that really do a great job of digging into what's important and what people are looking for. And now you got to sift through it and take the time. But that's the education that financial professionals need. And little things, I mean, just thumbnail things to think about. Jason Fichtner, who runs our institute, was an associate director, I think, of social security for a while.

And even sometimes you got to remember that the government for a long time was playing against us because they were always telling people, you can retire as early as 62. Well, who wants to retire late? So what are they telling you? Retire at 62. But $3.4 trillion of assets of income will be lost by people retiring too early. So they're changing their spiel as well to 62 is your minimum payout age. How do you incorporate those kind of vernaculars and words and terminologies into the daily talk? Don't tell people you can retire as early as 62. You're not helping them necessarily unless they have no other choice. It's the little thing as that research, like Tim mentioned, that's out there and available to the financial professional that you're not going to see anywhere else. And it's not about product, it's about education. And that's huge in this business.

Suzanne Norman: Mike, one of the things you made me think about with Jason in managing the economists and the academics and were the Alliance is calling out for papers every quarter from these people. But Jason will always say that he wants everything to be pracademic. So back to this kind of ivory tower academic, and this is great because he says, I forget the term you use Mike, but these are big minds that are thinking about this retirement crisis and how to solve it, but it has to be practical. And so that's one of the things that the Alliance is really working on, is translating these things for member firms like Lincoln, so that there can be something very useful and practical so that, not only consumers can access it, but financial professionals in the space of generating retirement income strategies have something to back them up versus just, I think it's a good idea. They actually have some real academic research to back them up.

Tim Seifert: Yeah. Jenna, I would also say on that is that I heard from a financial professional in our center for practice management and some of the work on the Alliance is, "Tim, to really think about what Suzanne just said is, it's we got to make it easy. We got to make it easy to implement into our planning process, and we got to make it understandable because it's not just the academics, it's the pracademics." In other words, it's not what that counts, it's what we do with what we know that counts. It's applying it into our practices and making it really easy for us to implement these into our planning process. And so just a lot of great work there. I agree every we're saying there.

Suzanne Norman: And Jenna, if I can give a shout out since I think your question was talking about opportunities. And one thing that, again, from a female perspective that I think financial professionals in this space should be aware of if they're not already, which is that intergenerational transfer of wealth. And obviously, it's a massive number, but connecting back to the concept of being focused on the female challenges around living longer and needing protected income. There's about $30 trillion that's expected to transfer in the next three to five years to women. So there's a great opportunity out there, certainly to engage them on some of the things that are meaningful to them, which is longer lifespans, how to fund it and what will my healthcare costs look like? And how can you help me?

Jenna Dagenhart: That's a great point. Yeah. Thank you for that. And Tim, are you seeing the industry and Lincoln in particular supporting financial professionals to meet client protection needs?

Tim Seifert: There's no doubt we are me. And we continue to innovate with product and it's just not all about income. What we're really starting to see is... And Jenna, on Asset TV, we've had some great discussion around this fixed income, the 60, 40 portfolio. And is it dead? And just great debate. And so we're seeing some of our products, like our investment only variable annuity, the industry's growing with what we call the indexed variable annuity. And that's really geared around just portfolio construction and we call it the fixed income dilemma. So instead of having the old 60, 40 portfolio, a lot of our financial professionals are saying, I can get some greater alpha while protecting the downside by doing a 60, 20, 20. A lot of work just on portfolio construction. It's not just about income, it's all around that safe growth, that portfolio construction. So yes, we continue to innovate and provide more and more products.

Jenna Dagenhart: And we've discussed consumers and we've discussed financial professionals throughout this discussion today, but they're also outside factors impacting all of the above. What impacts are you seeing from the current market environment and how is it impacting financial professionals' ability to deliver on consumer demands? Tim, why don't you start us off there?

Tim Seifert: Yeah. I would say that the impacts, and we just mentioned it actually, is there's a lot of uncertainty out there. And so we continue to really provide not only the educational tools, the practice management tools, but it's through use of technology, it's through use of how do we get to the end consumer more effectively? We're continuing to innovate, we're continue to listen to the marketplace and provide more and more products and more and more solutions that help our financial professionals do what they do best, and that's work with their clients.

Jenna Dagenhart: Suzanne, anything you would add on the market environment?

Suzanne Norman: Well, again, not a news flash, but the interest rate environment has not been very rewarding for investors that think that they're going to draw just a steady, nice income from fixed income. And so it's really been a challenge beyond the headline inflation, which obviously is very damaging. Hopefully, not for the long term this environment. But the interest rate environment has really been a challenge for investors. So I think that there has been, and Mike, I think it was you that mentioned, but we've been looking at the market go this way. And I think most of us know why there have not been a lot of other options. But this is, I think, a time for advisors, particularly financial professionals to be talking to their clients about the benefits of having some of these protected type investment strategies where they can actually have some growth potential, but also downside management. But I do think that the interest rate environment inflation has been very challenging for consumers and the financial professionals.

Jenna Dagenhart: Yeah. We've been using the word unprecedented a little bit too much in the past few years. And to your point, I mean, it's just been really challenging with interest rates so low. Mike, anything that you would add about protected income and the current environment?

Mike Harris: Well, just a couple things. When we think about the financial professionals out there, about 30% of the financial professionals that are in the marketplace working today have come in the business since 2008 later than 2008, 2009. So a lot of them have really never experienced a really big pop in the market where you would consider almost devastating to some individuals. And that's where the asset accumulation, the asset growth is really they've been focused on. And we're trying to help them move away from that, not really move away from, but little get a better understanding of what that can mean to them and still let them do the allocations. And like Tim mentioned, instead of putting somebody in or trying to get them in a 60, 40 or 70, 30 equity allocation, especially when there's someone like me or older, they don't have time to make a back up. It still allows me to do that, but put less pressure on my non-protected assets. So now I could still get into that 60, 70, 30, something like that, but still not have be writing that wild ride in the future.

And I think it's just a matter of education and for the advisor, the financial professional out there, and there are places you can go, not just the Alliance, but Lincoln, a lot of our other members have some very extensive distribution, their wholesalers are out there. And these are trained individuals that can help you. So if you're looking for help on figuring out how the different products work, where they fit, what can they do for a consumer? It's not coming to the Alliance, it's going out to our members like Lincoln and some of our other members to find out more about these products. Because if you don't, you'll never know what they can do, and they can do a lot and a lot more than a lot of people think they can do. Annuities are fantastic products, just like every other product. They all have a place. And I'm a believer in what I position for years and own a number of annuity. And it helps me. It gives me the ability to plan. That's what it's all about, to me.

Suzanne Norman: And I would add that there was some data last year from DALBAR. And when we look at performance and we've talked a lot about the behaviors and then kind of the emotions around investing that having that sleep well at night, understanding that I am not having to worry every month, every day, every quarter, that I have some confidence built into an investment that actually might even some ways, let me outperform because I'm not selling low. And buying high is actually where some of these investments are appropriate. But selling low becomes a very dangerous cycle. And so I think that there's that element that we don't talk about maybe enough, that it helps people stay the course.

Tim Seifert: Suzanne, I think it was 148 basis points. So to your point, the DALBAR study said that the variable annuity sub-accounts actually outperformed by 148 basis points because of that behavioral risk. Right? Is that because I had that element of protection, I was able to stay the long term course. And because of that, even net of fees I outperformed. And so that gets back to this behavioral finance of putting the plan in place and keeping in place, regardless of some of the volatility that we've seen in this unprecedented, right? Jenna, talk about this unprecedented. So it's really working well.

Suzanne Norman: I wanted to add something to Tim's point, which is, obviously, we get into our jargon a lot of times and I'm thinking more from the consumer translation. But I did some simple math in the financial wellness paper for women, for the Alliance for Lifetime Income and looked at DALBAR over 30 years and 148 basis points. Sometimes we say those numbers and it doesn't always connect to a client. And I looked at the 30 year numbers for DALBAR and the outperformance, and this was more behavioral meaning not selling low. And when we looked at the difference between the S&P 500 and the average investor's return because DALBAR is tracking mutual fund flows and performance.You saw a difference between over, I think, it was 600, 15,000, over 30 years with the investor performance versus the S&P actually having 2.1 million. And so when you extrapolate that 148 basis points to someone, like Tim was talking about earlier, who is looking to some of these investment products for growth, that can be really meaningful, that outperformance compounded over a number of years. To highlight how that really translates for someone who's saving for retirement, I think it's important

Jenna Dagenhart: Going back to the three habits and the simplicity there.

Tim Seifert: That's right.

Jenna Dagenhart: Well, we've been fortunate to cover so much great information today. Now let's move on to where the rubber really meets the road. What are companies like Lincoln Financial as well as groups like the Alliance for Lifetime Income and CANNEX doing to help financial professionals access the resources needed to educate themselves and inform consumers about the need for protected income in their retirement portfolio? Tim, we'll start with you.

Tim Seifert: Yeah. I would say that we hit some of it, Jenna. We hit the idea around our Center for Financial Professional Excellence, where you've got not only the tools, the education, but you have the practice new management. And it's hearing from some of the top asset gatherers in the business of specifically, what are they doing in their practice to incorporate some of these vehicles that we talked about? There is a ton of information out there. That would be number one, is please go to the websites. The other one is working with our wholesalers, is our wholesalers that are out there. And although that a lot of us are in the virtual environment and we actually have a great piece, we call the virtual, to help financial professionals and their practice become that virtual superstar to their clients because everyone's now doing a lot of it virtual. But our wholesalers are out there and they can help in just some of the problems that they're faced with. And so I would simply pick up the phone and say, here's the situation, like Mike said, every situation's a little bit different, but here's the situation. These are the challenges that my client or prospect have, what do you think? What sort of product should it be positioning to help them meet their long term needs? That's what I would do. I would do the website and contact your Lincoln wholesaler.

Jenna Dagenhart: And Mike, or Suzanne, either of you feel free to jump in here. I know Tamiko, is working on research at CANNEX, how is the Alliance supporting financial professionals? And I know there's so many any answers to that question. So it's probably hard to narrow it down.

Mike Harris: Well, I would say that, again, our resource center for financial professionals, the tools that are out there, like our RISE tool, which is our Retirement Income Security Evaluation like a FICO Score. These are there for clients to help them under understand where they are at and how do they move forward from that our personality profiles and things of that nature, our financial wellness scores? Plus all the collateral material. It's there. It's available. It's to help the financial professional and help the client at the same time. So a lot of those tools they're there. There's no cost to them. Why not get involved? We have a monthly newsletter that can go out, just keep them abreast of what's going on. From the Alliance perspective, it's all informational. And even more than that, it's the tools and the resources they can help. As Tim talked about, growing that practice, taking your practice to the next level. It's there. It's available. Why not use it?

Suzanne Norman:  I love that it's agnostic. I think a lot of times it can get very noisy and people can get confused. And the Alliance is really trying to stand very tall in this space with members like Lincoln to really just approach it, and we said it a number of times, just keep it simple. There's a new glossary that's on this website to help people really translate, not what it is, but what it does. And we talked about it earlier, but this retirement institute where we have the academic chops to go in and really help advisors that may be still in this transition phase of being investment managers to being wealth managers and helping people navigate what is really...I'm a history buff and I always think about, what was it like to set sail when everyone thought the earth was flat? And I almost think of retirement as being sort of like that. I mean, people really need to be armed with resources and financial professionals do as well. We're really proud of the fact that we've built up a lot of material, but also we've been very thoughtful about it from an academic standpoint and making it practical.

Jenna Dagenhart: Well, everyone, thank you so much for joining us. Great to have you.

Mike Harris: Thank you for allowing us the time.

Suzanne Norman: Thank you.

Tim Seifert: Thank you very much. Good day.

Jenna Dagenhart: And thank you to all of our viewers for watching. For more information, you can visit protectedincome.org or visit the link in this video. Once again, I was joined by, Suzanne Norman, Senior Education Advisor with the Alliance for Lifetime Income. Tamilko Toland, Director Retirement Markets at CANNEX.  Mike Harris, Senior Education Advisor, Alliance for Lifetime Income. And Tim Seifert, a Senior Vice President, Head of Retirement Solutions Distribution at Lincoln Financial Group. I'm Jenna Dagenhart, with Asset TV.

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