Matt Sawyer interviews Aaron Freeman regarding his financial advisory practice and a key fixed-index annuity case.
Matt Sawyer: Hello everyone and thank you for visiting wealthvest.com. My name is Matt Sawyer, and I’m the Vice President of Sales here at WealthVest Marketing.
The purpose of these postings is to recognize our top-producing advisors and share their insights on practice management and product positioning in these turbulent markets.
Today, I’m very fortunate to be joined by one of our top advisors, and a friend of mine, Mr. Aaron Freeman.
Aaron Freeman is the President and CEO of Oak River Financial Group based in Woodlands, Texas.
Aaron Freeman: Thank you, Matt.
Matt Sawyer: How are you doing today?
Aaron Freeman: I’m doing great. I’m glad to be here.
Matt Sawyer: Thanks for taking time.
Hey, let’s get right to it, Aaron. The first thing that really struck me, as I got to know your practice and learn a little bit about you is you’ve got a really unique business model as an advisor.
Do you mind just sharing a couple of your secrets, how you run your practice, and how you’re set up down there?
Aaron Freeman: Sure. Oak River is a registered investment advisory firm and we provide services that range from just young professionals all the way up to full financial planning, including full retirement planning and full wealth management designs.
Matt Sawyer: So you are an RIA, a Registered Investment Advisor, as well as offering some other products?
Aaron Freeman: That is correct, and that’s one of the things that I attribute to the amount of annuity production that we do have, is we were able to offer our clients a full range of financial services.
Matt Sawyer: So I would imagine, in a market like this where there is certainly not one solution that fixes everything, that broad offering and the ability to manage money sets you apart from some of the other competitors who don’t necessarily provide such a large variety of investments. You can do it all in-house, in other words.
Aaron Freeman: That is correct. The saying goes, “There is no perfect investment,” so it takes some time to do some proper planning and it really is an advantage to offer that full service to our clients.
Matt Sawyer: Awesome. You’ve obviously done a tremendous job with us.
Now let me ask you something. Your unique approach lead to a seven-figure annuity recently to be written with Allianz. If you don’t mind, tell me a little bit about the client and what their situation was?
Aaron Freeman: Well, that particular client has been with us now for five years. It started off kind of small, and we had done a very good job of managing her money and then her full retirement plan. That particular client is now 60 years old; we went to her and showed her that there was a need to protect some of the money that she came to us with, and then what we had made on top of that.
We were seeing a real need, especially in a low interest rate environment, like we’re in today, and especially with the volatility that’s in the market, to place a portion of that client’s assets in something that we would refer to as a principal protected account, where we know the value can’t go down. We actually attached an income rider to that particular product so we can have her manage the account.
We know that there are going to be some fluctuations in the account value, but we have a portion of her assets in that annuity, so she has her safe money. She has money where she knows she’s going to get guaranteed lifetime income off of, and then we have that other account set up for some capital appreciation.
Matt Sawyer: Nice. So you’re obviously using an annuity contract as sort of a self-funded tension, but you’ve also got some other assets that you’ve exposed to equity markets.
Aaron Freeman: That’s exactly right. Like I said, in today’s market environment, you can’t have all that money at risk; there has to be some of that money that’s set aside as a safe area, and it will generate guaranteed income for life.
Matt Sawyer: Nice. I like that.
So let me ask you another question. You chose the Allianz MasterDex X contract; any specific reason for choosing that contract?
Aaron Freeman: Well, whenever we select an annuity product, first of all, we’re going to see what the client’s needs, goals, and concerns are. That particular product and that particular carrier; whenever we select one of those products, we want to make sure that the carrier itself is financially sound. To us, it does no good to be able to promise the moon and the stars if they’re not around in the next 10, 15, 20, or 100 years to provide those guarantees so Allianz is a very strong company. They’re well capitalized, and the product itself just offers the client a lot of features that gives some flexibility.
There are multiple crediting options in there that we like. At certain times we’re going to use the various crediting methods, depending on what we see as the market environment going forward, so it gives us a lot of flexibility. The income rider is very competitive, and at that end of the day, it’s just a matter of Allianz being a very strong company.
Matt Sawyer: Alright, thanks.
Now let me ask you one question. You may have already answered this, but I’ll ask it again, sort of taking a macro look at the market environment that we’re in right now and sort of looking forward as to how you’ll be using these products in the future.
You obviously employ a very comprehensive financial planning practice, so annuities play a specific role and not necessarily a one size fits all roles. So in your mind, Aaron, as you think through the clients that you’ve worked with, what pool of money is appropriate? Not everybody has a very large 401k that they’re rolling over. What types of pools of money do you look at in employing something like a fixed indexed annuity?
Aaron Freeman: Well, when we sit down with the client we first assess their goals and concerns and their age determines what percentage of their total portfolio that we would be looking to put into the annuity. Once we look at their needs and concerns, then we’re going to look at their risk tolerance.
The right amount of money, in our particular practice; it could be anywhere from say, 35% to as much as 60%. Now we do have a handful of clients that the percentage of their assets that they have allocated to annuity is a little bit higher, and it’s for various reasons, but I can tell you this, when it comes to what the proper amount is and what the best product fit is, I really rely on you guys and WealthVest, as a whole, to point me in the right direction as to what product is going to best fit because in my practice, we’re meeting with clients day in and day out and we’re building these comprehensive plans.
It’s very hard for me to keep up with exactly what product designs or product features there are so you guys have really been an asset to me in my practice.
Matt Sawyer: Well, that’s awesome and I really appreciate you saying that, Aaron. I certainly have enjoyed working with you up until now and I look forward to working with you much more in the future.
So let’s end it there, Aaron, but I would like to two say things. Number one, thank you so much for your time today, and as always, thank you so much for your business; we do very much appreciate it.
Aaron Freeman: No problem at all. I look forward to many years of continued production and growth with you guys.
Matt Sawyer: Take care, Aaron.
Aaron Freeman: Alright, bye.