With financial markets in a funk that could be here for quite some time, many savers are looking for a good place to park their savings – someplace where they will be safe and earn higher interest than what they earn in a money market, or someplace where it can provide them with income to cover regular expenses like gas, groceries, utilities, and prescriptions. Annuity marketing materials give savvy financial planners the opportunity to turn fear into security. With the phobia associated with complicated financial instruments and derivatives ingrained daily by the US media, annuities are a proverbial comfort food. Yet advancements in the way that they are structured and leveraged give them as much as flexibility and as much growth potential as other financial products, and usually do so with much less volatility.

Buyers of annuities share a few things in common that are worth noting. These characteristics will remind professional brokers and homebodies alike of many of the people they work with or know.

First, annuity buyers tend to be risk-averse. Annuities offer stability because the principle is usually protected. Also, exposure to market downside is often hedged. In addition, a preference toward annuitized payments suggests fear about either outliving money or about not being able to earn an equal rate of return in a regularly-invested portfolio.

Second, annuity buyers have often sold a valuable asset or have an asset like a business or rental property that generates cash that can be put toward growing principle or can be financed on a discounted basis to augment the initial principle in the case that current interest rates are perceived to be more favorable than future ones. Recent sellers of homes or businesses, or doctors and lawyers whose businesses are valued entirely through accounts receivable are often good candidates because they look for ways to leverage their access to capital and yield.

Lastly, anyone interested in annuity marketing should be mindful that the best annuity customers are often ones seeking stellar returns. A variety of new annuity strategies have been implemented recently that allow investors to place principle into alternative investment vehicles that provide a vehicle for outsized returns – and the risk for this investment can often be hedged for a small premium as well. Moreover, as previously mentioned, customers are now able to leverage their principle, allowing them to magnify their returns on even bonds, as the spread between the cost of borrowing and the yield earned can generate tremendous returns when compounded over the long run.