Leveraging CD Replacement Month

April and October are traditionally known as CD replacement months, a designation that traces back to the October 19, 1987 “Black Monday” stock market crash. Scrambling to protect their assets from the collapsing market, investors found safe harbor in Certificates of Deposit. The story behind CD replacement month (covered in the presentation above) highlights how major economic events can leave an impact still felt nearly 32 years later.

As a financial professional, you’re probably already familiar with this history lesson. The question is, are you putting it to use? CD replacement month is a good occasion to sit down with clients to discuss how CD alternatives might be a better way to achieve their retirement goals. Or maybe you have a client whose situation is more conducive to using CDs as a savings vehicle. Or, an even more likely scenario, you have clients who aren’t fully aware of their options.

The history behind CD replacement month is an opportunity to dig deeper into the client’s needs, goals, and unique situation. Rather than limit the conversation to CDs and CD alternatives, use your probing skills to gain a sense of the client’s financial know-how and educate accordingly.

If the client owns or is interested in a low-interest rate product like CDs, they:

A) are gun shy about putting their money into anything tied to the market; or

B) don’t know that other, more valuable, options out there.

Either way, they’re in your office and ready to talk.

Of course, it’s highly unlikely that they’re going to look at the calendar and think, “Hey, it’s April! I should call my advisor about these CDs.” That would almost be too easy. If you need help planting the seed, we have a wealth of marketing materials designed specifically for that reason.

Our 2019 CD Replacement Kit includes:

  • Taxable Equivalent Yield Chart
  • CD vs. Annuity Comparison Chart
  • Split Annuity CD Beater Strategy
  • CD vs. FIA Sales Strategy
  • CD Prospecting Letter
  • Customizable Fact Finder
  • Retirement Pitfalls Presentation
  • Going Broke Safely Presentation

Did we mention the kit is free? Fill out the form to request yours today.

2019 CD Renewal Kit

Marketing Corner – March 24th, 2016

CD Replacement Month April 2016

A Short History of CD Replacement Months

You might know that April and October are CD replacement months. But do you know why? The history that lead to these sales opportunities is actually rather interesting and shows how economic events can ripple far ahead in time.

Nearly thirty years ago, on October 19, 1987, the Dow Jones Industrial Average dropped a whopping negative 22.61%–the index’s largest percentage drop. This event would become known as Black Monday and many thought this was the precursor to another Great Crash. While markets rebounded, there remained a great amount of volatility, with after-shocks and mini-crashes like the drop that happened on October 13, 1989.

Even though the economy has been beaten and torn since 1987 (Great Recession of 2008) the effects of Black Monday are still felt today. As markets tanked in 1987, consumers pulled out of exposed investments and transferred their money into Certificates of Deposits.

Hence October and April are now CD replacement months, with six-month and twelve-month CDs up for renewal. For some consumers, CDs can seem like a great option for their money—certainly they did in 1987. With guaranteed interest rates and FDIC backing, CDs seem like a relatively sturdy ship to navigate the sometimes choppy waters of the market.

However, because of their low interest rates, CDs do not hedge against inflation well, when compared to other products, like certain annuities. This is especially true with long-range CDs that many consumers automatically renew out of habit. This means that some consumers may be losing real-world value that could be parlayed into another solution that works better against inflation and could provide lifetime income.

Obviously every consumer presents a different situation. For some, CDs may track well with their needs. Others may not even be aware that there are other options. However, what this means is that April and October are good opportunities for review, discussion, and product sales.

To help agents and advisors take advantage of these CD replacement opportunities, Legacy Financial Partners is offering our CD replacement kits. Fill out the form the to claim your free CD replacement kit.

Don’t forget out about our complimentary 1040 Overlay Kits as well.

Complimentary 2016
CD Replacement Kit

Fill out the form below to receive
your complimentary copy.