If there were one word to describe the annuities market in Q2, according to Kirk Sarff, it would be steady.
While that may not sound exciting, Kirk points out that in the annuity world, stability is often exactly what clients are looking for, especially retirees seeking safety, predictable growth, and peace of mind.
Fixed Rates Continue to Impress
For several quarters in a row we have seen fixed annuity rates remain unprecedentedly strong. Q2 was no exception as rates maintained their above 5% trend.
Multi-Year Guaranteed Annuities (MYGAs) continued to offer attractive returns, with some five-year products now exceeding 6% interest.
"It wasn't too long ago that if you got 4%, you were ecstatic,” Kirk recalled. “For years, 2.75% was probably the norm. At 6%, it's just hard to beat when you're looking for safe places to put your money."
For clients looking for guaranteed growth without market risk, today's MYGA environment presents a compelling opportunity.
Understanding MYGAs
One reason MYGAs are often a great starting point for conversations is because many clients already understand CDs.
Like a CD, a MYGA offers a fixed interest rate for a defined period of time. However, there is one major advantage. Clients can leave the accrued interest inside the annuity and allow it to compound, tax deferred.
Instead of paying taxes on interest each year, as they often would with a CD, clients can continue growing their principal until withdrawals begin.
Kirk notes that this makes MYGAs an excellent tool for agents who are just beginning conversations about retirement assets.
"If I can speak to somebody about 6% interest, safety, and guarantees, that's a pretty good conversation," Kirk commented.
Fixed Index Annuities Continue Performing Well
Beyond MYGAs, Fixed Index Annuities (FIAs) have continued to perform well during Q2.
Kirk highlighted several carriers, including SILAC, that have delivered strong annual statement results for clients. Equally important has been the consistency of renewal terms.
What is a renewal term, you ask? With FIAs, insurance companies can adjust participation rates and caps at policy anniversaries. While those adjustments are common across the industry, Kirk says carriers that maintain their terms help build confidence among both agents and clients.
"We've been very pleased with the integrity of the renewals. It gives agents confidence to keep using the product."
In some cases, renewal rates have seen only minor changes, while others have remained unchanged. Occasionally, they have even improved.
Suitability Still Matters
One common misconception is that clients must "qualify" for an annuity the same way they might qualify for insurance coverage. Kirk explained that's generally not the case.
While an annuity is considered an insurance product, there are no health requirements for most annuity products. Instead, carriers focus on suitability, ensuring the product is appropriate for the client's financial situation and goals.
The purpose of a suitability assessment is to protect clients from placing too much of their available assets into products that may have surrender charges or limited liquidity.
"It's really about making sure it's in the best interest of the client," remarked Kirk.
Every Recommendation Starts with the Client's Goal
One of Kirk's recurring themes throughout the conversation was that product selection should always begin with understanding what the client is trying to accomplish.
Whether the goal is
- Guaranteed growth,
- Lifetime income,
- Legacy planning,
- Asset protection, or
- Tax-deferred accumulation,
the strategy should follow the objective of the client.
"I don't want to just throw products out there. We have enough products and companies to do the shopping for the best fit, when we know what the client wants," Kirk said.
This client-first approach continues to guide the New Horizons annuity team and forms the foundation of the Annuity Mentorship Program.
Grow Your Business with the Annuity Mentorship Program
Many agents have clients who could benefit from annuities, but they may not feel confident discussing retirement assets or navigating annuity sales. That's exactly why New Horizons created the Annuity Mentorship Program. The program is designed for a licensed annuities agent to teach other agents to serve clients more confidently and generate annuity sales.
Participating agents identify an opportunity, such as a client with a maturing CD, a retirement account rollover, or concerns about market volatility. Then, they partner with an annuities agent at New Horizons who helps lead the conversation, evaluate the client's needs, recommend appropriate solutions, and assist with the application process. Agents remain involved throughout the experience, learning with real cases while maintaining their client relationships.
Commission is split during the mentorship process, allowing participating agents to generate income as they learn. As confidence grows and agents gain experience through real cases, they can transition to writing annuity business independently and retain 100% of their commissions.
As Kirk emphasized during our Q2 discussion, there has never been a better time for agents to start asking clients about their retirement assets.
Book time with Kirk to learn more.
Case Study: Large Cases Show the Value of Diversification
Kirk described a recent case involving a client with more than $2 million in retirement assets.
Rather than placing all assets with a single carrier, the strategy involved diversifying between multiple companies to address different objectives, including growth opportunities and future income needs.
Diversifying carriers can help provide flexibility while allowing advisors to leverage the strengths of multiple products.
"Being independent, we can pull the best of the best to meet the client's needs," said Kirk.
Case Study: Not Every Client Wants the Same Outcome
Another recent case involved an 82-year-old client seeking quarterly income payments from a $1 million investment.
The discussion included a Single Premium Immediate Annuity (SPIA), which converts a lump sum into a stream of guaranteed payments, as well as alternatives that could potentially provide income while preserving principal for beneficiaries.
As you can see, every situation is unique. For some clients, maximizing income is the priority. For others, preserving assets for the next generation matters most.
Understanding those goals drives the recommendation.
Looking Ahead to Q3
As Q3 begins, Kirk expects more of the same, but notes that none of us have a crystal ball to see the future.
Demand for MYGAs remains strong, fixed rates remain attractive, and market uncertainty continues to make annuity solutions appealing for those entering or in retirement.
While no one can predict exactly what markets will do next, Kirk believes annuities will continue to be an important part of retirement planning conversations.
"Our products may not get all of the market upside, but they also don't experience the losses. For seniors relying on retirement income, that's a powerful benefit," Kirk pointed out.
An Opportunity for Agents
Kirk also emphasized there has never been a better time for agents to start asking clients about their retirement assets.
"If you aren't comfortable or don't want to spend the time, use the mentorship program. Turn it over to us, learn alongside us, and everybody wins," Kirk encouraged as he described the program.
Many agents already have strong relationships with clients and naturally uncover conversations about retirement concerns and financial security. For agents who do not feel comfortable discussing annuities or simply do not want to manage the process alone, the Annuity Mentorship Program offers a solution.
Conclusion
Q2 delivered what retirees and advisors generally appreciate most: stability.
With MYGA rates exceeding 6% in some cases, strong FIA performance, and continued demand for protected growth and income solutions, annuities remain a valuable option for many clients seeking financial confidence in retirement.
As Kirk reminds us, the goal is never to sell a product. The goal is to find the solution that best serves the client.
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