John Hess is a fee-based financial professional who has worked with Avantax since 2004. He recently spoke to FIDx about his experience as a financial professional selling annuities and how the FIDx platform has changed his business.
Can you give us a little background on your business?
John Hess: When I started with Avantax as a commission-based advisor, I sold directed funds and some annuities. At that time, the only option was to write annuities on paper. Several years in, I attended a seminar that focused on the fee-based planning process for clients and advisory services. It was eye-opening. Many of my clients were concerned about fees and confused about how much they were paying. It was then that I started focusing on fee-based planning.
I currently have about $83.4 million under management, the vast majority of which are fee-based accounts that include annuities.
What made you begin to use fee-based annuities in your practice?
Selling annuities used to mean choosing a platform, an annuity carrier, a payout, and anything else we're working on with the client. With a fee-based business, we tried to choose commission options that worked with what we were doing in the client’s fee-based accounts, so it was easier for the client to understand.
In December, I learned that Avantax was working with FIDx. Learning about the FIDx platform was a lightbulb moment for me. Conversations with the client are now simpler because I can tell the client what their fees are upfront.
You mentioned that the old process for writing annuities was complex and involved a lot of pen and paper. Can you highlight some of the issues you ran into? Yes. With paper applications, there were frequent problems. After filling out the application, getting signatures, and sending it in, it was NIGO [not in good order] more often than not. Either we picked a rider that didn’t match the product, used the wrong M&E, or had missing signatures. We got NIGOs on missing or wrong information that just wasn't easy to find. The process was lengthy and required a lot of reworks.
And now? I’ve now written several dozen annuities through FIDx and I have not gotten a single NIGO. In one 30-minute sitting, I can present the client with a proposal containing correct and complete information. I can get signatures electronically or manually and all fees listed are current and accurate. The platform only allows you to choose a rider that is available with the annuity. And instead of writing and rewriting names, addresses, and other basic information, you only enter it one time.
Tell us about the learning curve you experienced with the FIDx platform. There is almost no learning curve. I introduced the FIDx platform to one of my assistants and it took building one annuity for her to get the process down. Compliance checks are built into the process as well. FIDx has made the entire process of selling annuities easier.
Source: Interview with Financial Advisor, John Hess from Avantax and Relationship Manager, Ian Strain from FIDx.
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