What I do—I primarily work with secondary market annuities. I was 23 when I started. Fortunately, people took the leap with me and I’ve been able to stay with it. I’ve been at it for 11 years now. I started an online forum five years ago that took a conservative view about investing. I wanted to cast a broad net so I put everything I know about annuities online and it boosted my presence with current clients. Now we exclusively work with leads generated online. I feel very fortunate. The guys I learned from years ago would be amazed that I don’t make a cold call. The secondary market is quite often the best deal we find for people. Operating as we do online in a competitive nature, we can’t come out with the second best plans. The secondary market allows us to do that. It’s been extremely appealing to people, because the [primary market annuity payout] rates are really low.
Who my clients are—Most of my clients are people who are five years away from retirement. If they are further than a few years away, we give them information about the different annuities available. Many of them get back to us when they are ready to buy. By providing education, we allow them to become comfortable with us. My approach is: ‘I’ll teach you how annuities work and then we can pick one.’ It resonates well.
Why people hire me—The people that work with me or buy from me are the people who spend time with me. I try to put them on the same side of the table as me. Everyone has his or her niche. I’m an avid fisherman and for me it’s not uncommon to be on the water with people in their 50s and 60s. It’s very natural for me to talk to people of that age about fishing and the relationship extends to my business. Also, I feel like in the secondary market we don’t have the problems other [annuity brokers] do. Our clients get nice rates and we get them where they want to go. When all is said and done, an annuity is the safer type of investment. The transfer process isn’t quite as simple as filling out a form. It does takes a bit of time to explain the product and at the end of the process some say, ‘No thanks.’ But there’s certainly a part of the secondary market that works out.
How I get paid—I’m on commission for sales and I also have a life insurance business that is steady. Annual revenues will be close to $1 million this year. My commissions range from 2% to 6%. This process has been a commitment. I worked for myself from the beginning and I went long periods of time without making money. The value we add is the safety of the transaction. We utilize a separate agreement with each factoring company, so we dictate how the purchase process works, which ensures that our clients’ best interests are protected throughout. Legal review and oversight of each case allows us to guarantee that all contingencies have been covered and no encumbrances to the future payment stream will arise. Since potential issues with these contract transfers have been well documented in the press, we are able to address each of those issues on a case-by-case basis. As [my business partner] likes to say, you can buy a box of nuts and bolts and sheet metal and maybe make a car out of it. Or, you can buy a finished car. We sell the car. Other [secondary-market annuity] factoring companies and brokers sell nuts and bolts.
Where I came from: I didn’t want to get a marketing or management degree. I wanted something interesting and challenging, so I got a finance degree. My uncle was a very successful self-made businessman and I always wanted to pursue a finance career. I always asked him ‘How do you do this?’ When I got out of college, he introduced me to a financial advisor and he hired me. I found good fortune and learned excellent personal financial planning strategies from a first-class group of advisors at Northern Rockies Financial Group in Missoula, Montana. My aversion to risk blended well with people who disliked the unpredictable nature of the equities market.
My retirement philosophy—Leave nothing to chance. People rely on a paycheck when they’re working, which allows them not to worry much about their investments. But when you’re not working, up and down market movements will change your lifestyle. You could perhaps earn 12% on a riskier bet, but you definitely can achieve 5% or 6% with safer investments.
(Above: Anderson fishing in Alaska.)
© 2013 RIJ Publishing LLC. All rights reserved.