Business Innovators Radio - Interview with Andrew Hanson Vice President of Generations Wealth Management Discussing Overcoming Financial Fears and Challenges

Episode Date: December 18, 2024

Two generations of trusted Hanson financial professionals serve multiple generations of clients concerned with financial goals, wealth management, safety, security, and estate planning. Richard Hanson, President of Generations Financial & Insurance Services, began his career in 1983. He is currently an educational speaker on retirement and money management. Mr. Hanson is Designated as a Certified Senior Advisor (CSA). He Currently Holds a membership with the National Association of Life Underwriters. 2011 Insurmark Hall of Fame Inductee. Andrew Hanson, Vice President of Generations Financial began his career in January 2016. He is the Head of Case Design Team & Digital Outreach. He hosts numerous Seminars educating our community on such subjects as; Social Security, RMD’s, Asset Protection, Legacy Protection, College Funding and IRA / 401(k) Analysis.Learn more: https://www.generationswealthmgt.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-andrew-hanson-vice-president-of-generations-wealth-management-discussing-overcoming-financial-fears-and-challenges

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us, Andrew Hanson, who's the vice president of Generation's wealth management, and we'll be talking about overcoming financial fears and challenges. Andrew, welcome back to the program. Hi there, Mike. Thanks for having me on again.

You know, I think a lot of times people don't even want to talk about fears or financial fears, but unfortunately, they exist. And if we're going to put together that solid retirement financial plan, we have to at least address here's some things that could happen. And if you prepare for them, then at least you don't get caught by surprise. So where do you start the conversation with clients when you start bringing up the concept of, financial fears and challenges. Well, I think, you know, you talk about the ostrich with their head in the sand. Ignorance is bliss, you know? Yeah. There's no fears when you're not addressing them.

So I know, first and foremost, that's always the hardest part is looking in the mirror, looking at the future and going, what really scares me. And that's really what it comes down to is that first step and that first getting over that vulnerability hurdle. That's always going to be the toughest step. and you want to really kind of come at it with an optimistic approach and just talk to the client and go, hey, you know, what are the goals? What are something that we want to achieve?

And then we got to talk to them and realistically explain to them. Okay, here are some of the things that are going to affect that goal. So here's our monster. How are we going to slay this monster? Well, here, we're going to put this in the plan. We're going to, you know, reduce our subject, reduce our exposure to the market. So here's our monster. How do we slain it?

We provide the tools and we provide the game plan for the client. I think when you address those fears and you put in a succinct and long financial plan that prepares for the future, it's, I can go, why did I, why was I so afraid of that? If I just stick to this plan, I stay on top of it, it's a lot easier than I thought. So let's articulate a few of these financial fears and challenges. What could some of those be that you help your clients identify? Well, I think first and foremost, and it's always a major concern, is market volatility. And I think just, you know, losing your money, simply put is being in a position to where you are exposed to the market, and if the market goes down, there goes all that

hard work that you put in. And I think, you know, you're talking about different phases in life. If somebody's younger, they might be a little bit concerned about the market, but they don't necessarily need to be. Time is their best friend. They're going to make up those losses. They have plenty of time to rile back and recover. But when you talk about somebody who's getting closer to retirement or sees retirement

in the very near future, that is a very, very, very real fear. And it should vary because it can really determine how happy of a retirement you want to have. So it's one of the main things that we address and confront is. say, hey, we need to reposition ourselves into something that's much less volatile because at the end of the day, you're at the top of the mountain. You know, why keep, we're playing a game. We're playing the slot machines.

We got our jackpots. Why do we need to keep playing? Let's just take our money and walk away from the table and let's preserve this and let's plan for the future. Let's dictate where we want to put this and how long we want it to carry us. Yeah, that's a really good point because I think that on one hand, And volatility, like you said, could be a fear or a challenge. On the other hand, if you've got a lot of runway before retirement, then you can work with

that and kind of ride that volatility and take some of those benefits there. But it all gets down to how far ahead that you are. So when you're starting to work with some people at different ages, talk a little bit about some of the allocations that you are recommending. you know, what percentage of a portfolio would you recommend being in the market versus other more safer investments? Yeah, I think pretty standard. You know, people talk about, you know, conservative versus aggressive.

And they're always going to say like 80, 20, 70, 30. And there's, but, you know, you can say 70 stocks, 30 bonds. But there's so many different things that can be put into that 70% or into that 30%. And that's where financial planning really comes into play. is you want to make sure that whatever you're putting in that 70% bucket is truly going to not only address the client's concerns on a on a personal level, but it's going to achieve the goals that they want further on down the road. And you talk about clients that are older and they have their stock positions, but, you know, they're concerned with market volatility, but they don't necessarily

need to be protected because they have other assets that are in a safe bucket. So I tell my clients, anytime that I have client that's coming in closer to retirement and they have a large, large stock portfolio that they don't necessarily need or they can keep it. They don't need or they can reposition it. It's really up to them on a personal level. You know, I ask them, hey, do you enjoy doing this? Do you enjoy waking up in the morning, grabbing your coffee, looking at the newspaper and seeing how, or newspaper, looking at your stocks and seeing how they're doing? or is this something that you don't necessarily want to touch? You're annoyed by this having to have this market volatility.

It's all dependence on them. Again, when you do this financial planning, there's no one-size-fits-all. But when you talk about getting a little bit older and closer to retirement, you always want to have safe buckets. Because what I've experienced a lot and what we talk about in our workshops with our clients is negative compound interest. So you built up this. this money and if it's subject to loss and we're also taking out that asset for retirement to

use for income, it's a double negative. So you're not only losing money, but now you're taking out that money that can't have the ability to basically rebound. So and you talk about negative compound interest. If just say for instance, you have $10,000 and the market goes down 10%, you're left with 9,000. the next year you go up 10% with that 9,000 are you left up are you back to your original 10,000? No, you're at 9,900 because that's how the negative compound interest you're losing money.

Now you have to overperform to even get back to your original principle. I went by that pretty fast. I usually do it. I'm a visual learner, so I usually do it in my presentations and workshops. But you're always having to when you deal with volatility, you're always having to out. perform yourself and then you throw income into the mix that's just it's just more chaotic chaos so anytime you're using any asset for income we we coach that we need stability we need to avoid volatility um and some people might think well i'll just put it in a checking the savings account

great how was inflation the last couple of years you're not near now losing to inflation you're now not able to basically that money is not what it what it's worth today is not doing what it's supposed to do, you know, three years ago. So it's, you're losing to inflation. So there is such a thing as going broke safely. And we want to be in a position to where we eliminate volatility, but we get to participate in the market growth. You know, you mentioned about when you're taking money out while the market is going down. You got to feel like you catch up. The problem with that, I would suspect, is you tend to then take some risks that are a little bit more risky because you feel like you want to catch up. And then it's almost like

a gambling aspect. So you don't ever want to put yourself in that situation. You just want to make nice, solid decisions so that growth happens consistently with less of that volatility. Yeah. And it's like you don't want to put yourself through that. Nobody should. Yes.

I mean, you're, you've, if you have the assets and you're able to retire comfortably, why do you want to subject to yourself that, to that kind of, you know, lifestyle? I know, it's just an accountant. It's just, you know, a 401k or an IRA or a Roth or a music. fund or stock position, but, you know, that's your baby. That's, that's your, that's your golden nest egg. You know, why do we want to subject it to the ups and downs of the market? It's, it comes down to personal sort of relationship with the client and the relationship they have with the finance and the accounts. Do they want to keep doing this? Or is there something else that maybe they can

not only eliminate that volatility, but that can outperform oftentimes keeping pace. with a volatile account. Yes, 100%. Just it's all about getting down to that planning, knowing what you want, putting right things into place. So once you've identified these fears and challenges that every client has because they're different for everyone,

what are some of the strategies that you're suggesting to manage that fear and then making their investment opportunities perform the way they need to? Well, I think just, you know, with any financial planning, you want to make sure that you're projecting, you know, years and years down the line. So we can see how these play out. So we can see the income, the social security, the expenses we're seeing inflation.

There's so many different variables and, you know, things that we have to take account for when it comes to financial planning. So we want to make sure that we're always prepared for that first and foremost. So then from there, like I've said this probably a thousand times, it's not a one-size-fits-all approach. There's so many different variables and so many different techniques and strategies that we use. one of the main ones that we use, and this is all kind of tied into one specific client, is, you know, one of our clients had a large, or one of our newer clients coming in from a workshop had a large portfolio of stock.

I want to say 9010. And it was doing good. You know, he had great returns and a couple, you know, down years. But, you know, overall it was a great, great return. And, you know, you get down, you sit down with him and explain to him that we could have this product or this asset gains zero percent for the rest of our lives and we'll be fine. So kind of keep that in mind, like zero is your hero. If we see in this market and it goes down 10 years or goes or goes down 10 percent or

even 20 percent in a given year, this will greatly, greatly reduce the lifetime of this asset, this stock position. So that's the kind of planning is we want to prepare not only to eliminate volatility, but be able to prepare 30, 40 years from down the line because we always talk about uncertainty in the market and uncertainty in government and uncertainty in the country. So you always want to be prepared for that. And the best way to do that is eliminating volatility.

Because you talk about it. When you're taking out money or when we're taking out these assets for income, when you eliminate volatility, you're not doing a double negative. Because now you're taking out of something that, hey, If the market goes down, we get 0%. If the market goes up, we get to participate in that growth. So that's one of the key, key things is you really want, I know stocks are cool and you like looking at them. And if you're in a great position, you don't necessarily need to protect yourself from volatility.

Great. But I would highly, highly, highly encourage people to look at repositioning themselves away from volatility. Yep. So then if you want to reposition yourself, up away from volatility, what does that look like? So, for instance, what kind of options are there? Because when you think of the market, pretty much everything is potential for volatile. So what are some of those extra options they can look at? Well, there are probably three that come to mind right now. You want to talk about, you know, like I said, check and savings account,

you're not going to get in volatility in that. CD's CD and inflation, they're never always going to be consistent. But one of our third and final pieces that we utilize the most is fixed indexed annuities. And those are the best product and the best investment vehicle for anybody looking to not only protect themselves from the market, the ups and downs and the crazies of the market, but have the ability to grow. And there's so many different variables when it comes to fixed index annuities, specifically, you know, the participation rates, the cap,

rates, the benefits that come with it, the fees is there. So we always want to make sure that we're transparent with our clients because I've had people coming to my office and they present to me, they're fixed index annuity. And I'm like, cool, great, fixed index annuity. We love fixed index annuities. But I'm looking at the statements. I'm looking at the company. I'm looking at the benefits.

I'm looking at the fees and it's just not suitable for them. So I'll say this again, not one size fits all. You always want to make sure depending on your client. where they are in life, is this fixed index annuity a good position for them? It's not as simple as just going Googling. Oh, I heard this. Let me go Google it. Set it up.

I'm done. It might be the complete long way to be structured. Might be an annuity. It would be a great idea, but setting it up the right way. So let's talk a little bit more about how those kind of solutions, annuities, can help overcome those financial fears and challenges by providing peace of mind. You mentioned the word guarantee. That piques everyone's interest.

Yeah. I mean, you just said it. If you Google fixed index annuities, 50% are going to say it's the worst thing in the world. 50% are going to say it's a great thing in the world. Guess what? Both those pundits are correct. There are some fixed index annuities

where it's the worst thing in the world. There are some annuities where it's a greatest thing in the world. And so you want to make sure that, A, you're being transparent or your financial advisors being transparent with you and you understand how it works because that's how we plan is we plan through knowledge and understanding. If you're able to understand the basic and grasp the basic concept of the fixed index annuity and how it works and how it can protect your principle, then that's, we're doing our job correctly because that provides peace of mind for the client.

They know exactly how it works. They know they can sell their friends and say, hey, this is how I'm protected from the market. You know, you guys might be worried about the S&P 500, the NASDAQ, you know, Tesla stock positions or Facebook positions. I'm protected in my fixed index annuity. It works like this, this, this, and this. And the main overall concept of fixed index annuity is, you know, we're taking an asset and we're tying it to an index. And that index can go up.

It can go down. If after a year, that index goes down, guess what, you're getting 0%. If after a year, that index goes up 10%. Guess what? you're locking in that 10% because with fixed index annuities they have what they call term or lock in dates. So if you start in day one and a year later, they assess how that index does. And if it's up 10%, they're going to lock in that 10%.

And now your account value gets credited 10% and it locks into that new value. So it's almost like a step up. So you want to talk about volatility a lot. fixed index annuity, not only does it guarantee your principle, but you're locking in. You're always locking in and creating a new principle. With a stock position, you could start with 100,000 and it could go down to zero. There's nothing stopping. Yeah.

You know, you mentioned the index, and I know that you can index that annuity to, let's say, the S&P 500. Well, if you invested into an S&P 500 fund and it went down 10%, you have 10% less money. versus if you're in the fixed index annuity index to the S&P 500 and it went down 10%. You just didn't get any rate of return, but you didn't lose a dime. That's a big revelation to people. Yeah. I mean, I've had clients come in and the markets were just awful, losing 20, losing 13%.

I always get a call from them and say, hey, thank you. You know, I never thought I would get a call for 0% return, but thank you. But just zero is your hero, especially depending on. And that person that called you and thanked you, they probably had 10 friends that were calling them up or going to the pickleball court complaining about their portfolio and dropping and going, oh, my word, how much did you lose? And they're like, zero. Yep. That's exactly it. That's exactly what happened.

They talk to their friends and they're just like, you know, I had Tesla stocks down 10 percent or, you know, all my stock positions are down. That's, it's word of mouth. And that's what we preach to our clients is they're able to. to take that information to, you know, friends and family and explain to them, hey, you know, I've eliminated volatility and I have a much happier life. You wouldn't think that, but getting zero is a lot happier than getting minus 20. So we're talking about financial fears and challenges. Fears would be volatility. We've talked about some of the ways to overcome that. Challenges, I would think, are some of these things that come up that you didn't really expect. Like, oops, we had a health

issue or we might need to go into some long-term care type facility. Are there any solutions and opportunities within an annuity that would help there? Yeah. So annuities not only are they able to participate in market growth and gain these returns and lock in your values and create new principle, but they're also, you know, it's like a catalog. You know, you go on the airplanes, it's like the sharper image catalog. There's so many different things that you can pick from. are like this one you know this this flashlight comes in white fixed index annuities are the the marketplace is like a catalog if you have a concern there's a fixed index annuity for you i promise you your concern is long-term care there's a

fixed index annuity product that will allow for um your ability to take um the account value and use it strictly for long-term care there are some benefits that increase your account value if you're using it for just strictly long-term care. So there's a you always want to, anytime you speak with a financial advisor, that's why we talk about fears and concerns. Because if you're not concerned with long-term care or if you're not concerned with market volatility, I'm not going to bring up certain investment strategies. It wouldn't make any sense. So we always want to make sure that these are personalized to a client. And if you have an annuity, you want to make sure that it's personalized to you.

You know, this isn't the North American or the Athene or the Allianos or the nationwide annuity. This is, you know, Mike's annuity. This is Mike's family annuity. This is your annuity. This is your investment vehicles. It's one of the most personalized investment vehicles ever. It really is because there's a solution to any fear or concern you may have.

You know, and you mentioned the opportunity for the long-term. care aspect of it. I would venture to say that that gives that peace of mind, A, because you're not going to lose money and it's guaranteed and all of that. But if you never needed the long-term care aspect of the annuity, the money just still sits there. It's not like it's lost on premiums paid externally. So I think that's another feature that gives people some of that peace of mind, right? Yeah, exactly. And if somebody comes into my office and they say, I have a concern with long-term care, I wouldn't venture, I wouldn't bring up just strict long-term care. I mean, it's so, especially depending on their age, it could be so much more expensive. And then if you're paying all

these premiums and you don't go into long-term care, guess what? That's gone. You know, more often than not, there are some cases where there's otherwise, but why don't we put ourselves in a fixed index annuity that has a long-term care benefit attached to it? So should we need long-term care is there. But if it's not, and we don't need long-term care, guess what? We have these assets that we can use for retirement or that we can pass on to our errors as well. So it's a lot of flexibility to where other single component or single goal long-term care, you know, term life, they have their one goal. We're fixed index annuities. There's multiple different goals and there's a lot of flexibility that we can utilize given this ever-changing market and this ever-changing world,

really. You know, when you're thinking about overcoming financial fears, one of the fears that I'm sure a lot of people have is, am I going to have enough money to live, you know, past retirement, through retirement, all of that. So I'm sure you sit down with clients and go, okay, at what age you want to retire? You know, we need to make sure your money lasts until X age, you know, down the road. What if there's a gap? So all of a sudden it's like, oh, you think you're going to need this much money every month, but you only have this much that we're projecting.

There is a gap. Would annuities help close that gap somehow? Yeah. A lot of fixed index annuities will allow to close like that. What we're talking about just the main overall principle is not being subject to volatility. But there's, you know, like any other fixed index annuity long-term care benefit, there's a guaranteed income benefit. So if we're doing our projections 30 years down the line and we're, We have, and we're short, how can we subsidize that or make up for that red line, basically saying, I'm, I'm out at age and I do.

So how do we stretch it out? Guaranteed income will help stretch out that line. But there's just like any fixed index annuities, there are bad income riders, and then they're good income riders. So you always want to make sure that you are in a position of where you're getting the best, not only company ratings, but also the best income writer. Because there are income riders where if you just start that income. income rider, guess what? You're getting a, let's just say the income writer's $20,000 will pay you annually for the rest of your life.

Okay, perfect, 20,000. That $20,000, when you started day one, is not going to be worth $20,000, five years from now because you're talking about inflation. So what we, what I think people overall, when they talk about income writer, in a fixed index annuity, and you plan on utilizing that income writer. I've seen plenty of, plenty of times where people have these. fixed index annuities and they don't need an income right. They're just paying fees to an income right.

They don't envision ever using. So like any other fixed index annuity, you want to make sure that you plan. This is in your plan. You're going to utilize this. But the income riders and the income benefits that we work with that pay out guaranteed annually is we have the ability to once we start that income, once you start that income with any fixed index annuity,

that's it. You're getting that for the rest of your life. You don't get more. You don't get less. what separates a good income benefit versus a bad is we're going to have a lot of flexibility when we start that annuitization, when we start getting those lifetime payments. So there's so many different components, but I'll just speak to one that I just did recently. If the market goes up 5% after you've started that income, your value that you're receiving will go up subsequently with that growth.

So you don't see it a lot. And when I have clients come in with an income rider, I rarely ever see it. But I think if you can find a product like that or a vehicle like that that can provide a flexible and ever-growing income benefit, that I think it's one of the ways that you can close that gap. So if the index it's tied to drops, you're still guaranteed that certain number, whatever that is. But if that index it's tied to improves really well at that particular year, then maybe you get a little bit of that. upside movement as well. So that really protects you on the downside and gives you a little bit of a boost on the upside. Yeah. And just like the fixed index annuities internally, you're always locking in

after a year. So you, you know, let's just say you're in year five of your income benefit and it's grown over time. But let's just say year six, it's down 20%. Guess what? You don't go all the way back five years ago to that first original income payment. You just go back to your previous. So you're just locking in at 0%. And I think just any sort of component to where you can lock in your growth, that's, I mean, it's the perfect strategy for anybody A utilizing income and anybody who's concerned with possibility. Well, this has been really eye-opening.

We just want to make sure that we identify fears and challenges. We overcome them by having a plan and putting some of these things into place. Like we've said many times, there's never one plan for everybody. It all depends on what you need. So sit down with someone that can ask the right questions and provide the best options to consider. So, Andrew, if someone is interested in reaching out and connecting with you, what's the best way they can do that? Absolutely. They can visit us at www.

www.Gentrategor.mgt.com. From there, you have our contact information or you can visit our social media as well. Excellent. Well, thank you so much for coming back on. It's been a real pleasure talking with you. Thank you, Mike. I appreciate it. Hey, anytime. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes,

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