Month: August 2022

Bear Market Rally or New Bull Market?

August 30, 2022

The S&P 500 index was up 9.11% in July, which has some market pundits suggesting that the bear market is over.  Conversely, it seems like an equal number of market prognosticators are warning that the July returns were simply a bear market rally, and a lower bottom is yet to come.  Was the rally in July a precursor for more positive near-term performance or merely a bear market rally?  Have we seen the market bottom?  How should clients invest given the uncertainty?  Let’s examine some historical data as a reference.

The average length of a bear market is 9.6 months, 289 days.1  The S&P 500 Index crossed into bear market territory on June 13, 2022.  If the current bear market follows historical averages, we may be in the early innings.  However, if we consider some recent bear markets, the length of the bear market can vary dramatically.2

Bear Market StartsEnd (Ultimate Low)Days to Low% to Lows from High
3/24/200010/10/2002930-51%
10/11/20073/6/2009512-58%
2/19/20203/23/202033-35%
 Average492 days 

Current market low for S&P 500 in 2022 was on 6/16/22 at 3666.77. 

Was the recent rally in July an indication of broader, continued gains or merely a bear market rally?  It’s yet to be determined.  However, there are strategies to help investors get invested and stay invested to take advantage of potential gains. 

  • Dollar cost averaging.  While making periodic investments over time does not guarantee performance, it does provide the opportunity to make investments at different price levels – with the goal of acquiring investments at a more favorable average cost.
  • Stay committed to long-term investing goals.  As evidenced from the most recent bear markets, while they can be painful, they do not last forever.  History has also shown that bull market returns following bear markets can be significant.
Bull Market StartsBull Market Ends% From Start to End: S&P 500
10/9/200210/9/2007101%
03/9/200902/18/2020398%
03/24/202001/03/202296%
  • Avoid trying to time the market. Calling the true market bottom is nearly impossible.  According to Crestmont Research, from 2016 -2021, the percentage of up days for the S&P 500 index was 56% – leaving 44% as down days.  Through 8/22/2022, the percentage of up and down days for 2022 is effectively equal at 50%.
  • Avoid decisions purely based on emotion as they can cloud investor behavior.  During periods of extreme market volatility, it may be helpful to consider the advice of successful investors.  Peter Lynch, legendary manager of the Fidelity Magellan fund: “Long term, the stock market’s a very good place to be. But I could toss a coin now. Is it going to be lower 2 years from now? Higher? I don’t know.  The stock market’s been the best place to be over the last 10 years, 30 years, 100 years. But if you need the money in 1 or 2 years, you shouldn’t be buying stocks.  In the stock market, the most important organ is the stomach. It’s not the brain.”3

Whether we have seen the market bottom, just experienced a bear market rally or we are only in the early stages of a prolonged bear market, ESI partners with quality sponsors that make a variety of resources available to help clients manage periods of volatility and uncertainty.  Whether it’s social medial posts, client educational materials or scheduling calls with asset managers, ESI is happy to assist reps and your clients.  Please contact ESI Business Development at 800-344-7437 to discuss investing resources. 

Dan Randall, CFP®, CLU, ChFC
Vice President – Product Management, Equity Services Inc

1 10 Things You Should Know About Bear Markets, The Hartford, 12/21/21

2 Bear Market Rallies, Forbes, 6/23/2022

3 Lessons from an investing legend, 8/11/2021 Fidelity

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Investigo Enhancement – Signature Reports NOW Available on Nationwide Accounts

August 30, 2022

We are excited to announce a change in the reporting functionality with Investigo. Previously you were unable to include or run signature reports of certain Nationwide 401(k) accounts.

On Sept 2nd those Nationwide 401(K) accounts will be included on most signature reports within Investigo. The signature reports that show performance will still be restricted as Nationwide does not provide transactions, a prerequisite for the performance signature reports.

If you have any questions regarding the enhancement or running signature reports, please reach out to Investigo Support at 866-209-2440 or contact Matthew Crowley at 802-229-3025.

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Congratulations to Our 2023 EES Qualifiers!

August 30, 2022

In 2022 ESI qualifiers enjoyed the beautiful Utah mountains in Park City. In 2023 we’ll head further west and enjoy the surf and sand of the Ritz-Carlton Bacara, Santa Barbara from July 24-28, 2023. Boasting two natural beaches and Mediterranean-inspired architecture, the Ritz-Carlton Bacara, Santa Barbara offers luxury resort amenities, scenic ocean views and easy access to the region’s vineyards, restaurants, shops and attractions.

Congratulations to those that have already qualified!

Rich KellyJay Maffe
Steve SimonW.M. Nzambi
Chuck CreightonChirag Savalia
Mark VoskNico Riverso
Dominick CiteraMichael Castillo
Paul SortinoHillory Burkett Jr.
Travis RamsdellJeffrey Friedrich
Tyler DegeneffeDonald Reutemann
Justin PaineAlan Fishman
Daniel StreeterJohn Stephens
Daniel WolodkiewiczScott Maitland

ESI’s Elite Symposium is our annual educational conference that provides the opportunity to network and share ideas with your peers, hear from world class speakers and meet with ESI’s Strategic & Technology Partners.

Business sessions include a variety of formats and topics, such as:

  • Rep Panels
  • Keynote sessions from world class speakers
  • Sales and practice management ideas
  • Updates and breaking news from the ESI Home Office
  • Time with ESI’s Strategic and Technology partners

During the afternoons, qualifiers enjoy free time to explore the resort and local sights. Evenings feature dinner events.

How to Qualify:

Rep Qualifications:         $425,000* of GDC
Agency Qualifications:   $4,250,000* of GDC
Qualification Period:       01/01/2022 – 12/31/2022

* Credits may be adjusted if needed to comply with the Massachusetts Fiduciary Rule. All Fixed Indexed Annuity Sales are excluded from this amount.

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ESI’s 2022 Sentiment Survey is Launching September 19th

August 30, 2022

Feedback is key for us to learn where our strengths are, where there is room for improvement, and how best to move forward with achieving our goals.  Please help us by filling out our Annual Sentiment Survey.

Last year ESI sent it’s first Annual Sentiment Survey to registered representatives and administrative staff in the field to get a baseline on how we are doing at a very high level.  The survey was designed to assess your experience in working with ESI holistically.  Are we meeting your needs?  Are we helping grow your business? And most importantly ae we helping you, help your clients achieve their financial goals?

Over the past year we have spent time analyzing your responses and implementing changes that we felt would be most impactful.  An example of this was the creation of the Partner Experience Group to overhaul our onboarding process and facilitate trainings for experienced producers.

The feedback we received was overwhelmingly positive, but we only heard back from 13% of you.

Be on the lookout for an email with an invitation to complete the survey on Monday September 19th. 

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Brighthouse Shield Level Pay Plus Variable Annuity Now Available!

August 23, 2022

ESI is happy to announce that the Brighthouse Shield Level Pay Plus variable annuity is now available. This is a registered index linked annuity, RILA, similar to the Shield Level Select 6 VA, but also includes an income benefit. There is an additional fee for the income benefit.

Brighthouse Shield Level Pay Plus Annuities are index-linked annuities that offer market growth opportunities coupled with a level of downside protection and, when elected by the client, guaranteed income that lasts for life.  An index-linked annuity is a long-term financial product designed to help clients save for retirement.  Shield Level Pay Plus annuities feature the added benefit of providing guaranteed lifetime income through the choice of two versions of our built-in income rider: Market Growth and Market Growth with Rollup. 

If you have additional questions, please contact Brighthouse at 800-848-3854.

**Having trouble viewing the link? Try logging into the agent portal first!**

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Incorporate Beneficiary Reviews into Your Practice

August 23, 2022

Below is a list of common financial products, accounts, and items to keep in mind when doing a beneficiary review as well as client messaging to go with each item. You can also provide your clients with our Beneficiary Information Workbook (catalog #103450) or our Emergency Contact Information (catalog #103451) document, now both available in a digital format.

Wills and Trusts

  • Client message: If you already have a will and/or trust in place, you’re doing great! But don’t forget that you’ll need to update both as your life changes. If you don’t have a will, make it a goal to put one in place. The best way to take care of your loved ones after your gone, to leave behind an organized inheritance.  

The Usual Suspects
Individual and Company Sponsored Retirement Plans

  • Client message: If you have an individual retirement plan, such as a traditional or Roth IRA, or a company-sponsored retirement plan, such as a 401k, chances are that you were asked to name a beneficiary when you established the plan. That being said, it’s important to confirm that you actually completed that part of the process and that the beneficiary you named is still accurate – think of common accidental oversights like “Did I skip that part because I didn’t have a social security number for that person at the time?”
    Also, keep in mind that if your 401k carrier changes, or you move your Roth IRA to a different company, your beneficiaries will not migrate with that change. A retirement wellness best practice is to review your beneficiaries annually!

Insurance

  • Client message: Insurance is another important area of beneficiary planning, especially life insurance. For many families, life insurance proceeds after the death of a loved one are what determines whether a family can maintain their current lifestyle. For instance, a death benefit can help a family stay in their home, ensure a child is able to attend college, or keep a retirement goal for a surviving spouse on track. Reviewing both the ownership and beneficiaries of insurance policies annually will help ensure that your insurance benefits and those your trying to protect evolve to continue to meet the needs of your every changing  life.

And Don’t Forget…
Investment Accounts and Bank Accounts

  • Client message: If you were unable, is there anyone who can pay bills on your behalf? Keep the household running? Reviewing ownership/beneficiary options for these types of accounts is important.

Annuities

  • Client message: If you own an annuity, it’s likely that you purchased it for the guaranteed income it can provide. Most annuities include beneficiary options – make sure you made a sound choice for you and your family. And, as life changes, make sure the beneficiary you have designated still makes the most sense for your and your family’s needs. 

Stocks, Bonds, and Other Investments

  • Client message: It’s important to understand how these financial products can be passed on to your beneficiaries, so let’s talk about your options.  

Personal Property

  • Client message: You may want to leave your home to your kids, but are they ready for it, and do they want it? Inheriting property comes with responsibilities and expenses that your beneficiary may not be equipped to handle. Let’s talk about your concerns and options for you and your family to discuss and consider.

Client message: Do you want your great grandmother’s locket to go to your daughter? Did you realize that you can include specific items in your will? It’s a great way to ensure that your wishes are carried out – talk to your attorney today about adding that level of detail to your will.

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Factors Perform As Expected in Q2, Except for Quality

August 23, 2022

Rewarded risk factors are recognized as a fundamental component of equity returns. Envestnet | PMC believes that the most robust among the studied risk factors are value, momentum, quality, low volatility, and size. Like all return components, factors are cyclical in nature. Click here for a look at the performance of these factors in the current market environment.

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Lead Generation Services Reminder

August 23, 2022

Field Notice 2022-19
Lead services may be as simple as purchasing a list of leads. However, some may be more elaborate. For example, there are vendors that charge RRs a fee in exchange for being provided a potential customer’s name and contact information. Some vendors will even set up appointments for potential customers. The purpose of this field notice is to provide reminders and guidance around leads and lead generation services.

Lead Lists
RRs may purchase lists of leads for prospecting from firm-approved lead vendors. No prior approval is required to obtain these lists. However, the lists received must be scrubbed against the national and the Firm do-not-contact lists before use. Please refer to the Telemarketing and Email Solicitation Guidelines on the Agent Portal under Training à Compliance à Telemarketing and Email Marketing for more information on scrubbing the lists and using the lists for email marketing.

Lead Generation Services
Before considering a lead generating service, determine first if it has been approved by the Advertising Guidance Team (“AGT”). In order to use a lead service that may set up appointments, provide a biography on behalf of the RR, find the leads through advertising created by the third party, or is in any way interacting with prospects that may become clients, the lead service must be approved by the AGT prior to being used.

Additionally, if you are an investment adviser representative, these services fall under the definition of a “promoter” under the new SEC Marketing Rule, which goes into effect in November 2022.  As such, any agreement with a lead generation service is subject to prior review by ESI Compliance to ensure compliance with the various disclosure provisions of the Rule.

Approved
The following lead services have been approved for use. Please keep in mind that even if the lead service is approved, if you are providing any type of advertising or biographical information to the lead service for use with the public, including clients or prospects, this material requires prior approval from the AGT before engaging with the lead service or using/posting the advertising or biological information.

  • AgentInsider
  • Dave Ramsey Endorsed Local Provider Network (marketing materials require prior review and approval by the AGT)
  • Discovery Data (recruiting)
  • Financial Planning Association PlannerSearch
  • SmartAsset/SmartAdvisor Match – (must be an IAR and biographical information requires prior review and approval by the AGT)
  • White Glove (seminar leads)

Unapproved
The following have been reviewed by the AGT and are not approved and will not be approved for use.

  • Lead Generating Systems, LLC – may also be known as Unlimited Fulfillment Services, Inc., Smart Leads, UFS Marketing Services, Annuity Leads and Annuity Leads Today
  • Leadstoclose
  • Netquotes

Additional Information
If you are interested in using a lead generation system, you are encouraged to select one that is currently approved.  To have a different lead service approved for use, you will need to obtain approval from your BOS and RDO and it will need to be sent to the AGT for consideration prior to use. Please note that such reviews may take some time because:

  • The Firm must conduct thorough due diligence on the proposed service, which may include contacting the vendor for a demonstration, fully understanding how it is being used, and determining if there could be any advertising or biographical information for the RR for use with the public.  
  • To be approved for use for IARs, the service must also be approved by EFA to ensure it meets the requirements of the SEC Marketing Rule, which includes specific disclosure delivery requirements regarding compensation and conflicts of interest.

Questions
If you have any questions, please contact your supervisor or ESI Compliance at 800-344-7437.

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