Are Annuities Diet Cola?

The ingredients list for Diet Coke® is carbonated water, caramel color, aspartame, phosphoric acid, potassium benzoate, natural flavors, citric acid, and caffeine. The ingredients list for Coke Zero® contains these same things. It seems blind taste tests find the majority of people can’t tell the difference. So why did Coke give essentially the same product two different names?

One possible reason is the word “diet” resonates with women and not men. Men consider anything called diet to be weak and do not want to associate with weakness. On the other hand “zero” has manly connotations, as in “zero tolerance.” And it worked; Coke Zero® has 20 percent more men drinking it than drank Diet Coke®. Soft drinks aren’t the only place where language gender has a huge impact.

Did the last financial article you read talk about knitting together a stock portfolio that you then tended and watched grow? Probably not, it is more likely to have talked about building a portfolio to beat the market so that you could make a killing. The reason for the language is that investing was largely a man’s domain for many years and the imagery and metaphors came from activities in that male world such as construction (building), competition (beat) and war (killing). So when a financial pundit urges caution he will tell readers to “keep your powder dry” (battle) because in tough times…as no financial pundit ever said…Cash is Queen!

A study* looked at the language used on financial websites and financial articles and found it overwhelmingly to be masculine. Two-thirds of the investing metaphors referred to war, competitive sports or extreme physical activity, all of which test as masculine. However, when neutral words are used in investment studies women have the same risk tolerance as men, yet fewer women invest in equities. The researchers wonder whether frequent usage of overly masculine imagery is keeping more women from investing.

Are Annuities Diet Cola?
Let’s look at the imagery associated with a fixed annuity. A fixed annuity will protect you from the harm of market downturns (nurture), grow (passive), and provide a lifetime income that you can count on (dependable) for a healthy retirement (wellbeing). A glance at a half dozen fixed annuity customer brochures shows consistent talk about peace of mind, providing for children/heirs, cannot be taken away, protect your savings, steady growth and predictable. The imagery generated by these words is perceived to be feminine. Feminine metaphors refer to health, caring, protection, understanding and are often passive. This imagery may be why multiple studies find women are more attracted to the concept of annuities than men.

This is not to suggest that fixed annuity companies start writing brochure prose suggesting that “our fixed annuity gives you the weapons to kill and gut any stock market bear,” but it might be a good idea to attempt to also create materials with more gender neutral language. Imagery from nature is gender neutral—“the financial tides move your annuity forward at all times”; “a steady stream of retirement income”; “removes the chill from a stock market winter” and so on.

Language creates perceptions and people respond to those perceptions. The investment world might gain more women investors if after the next market dip the pundits said the market bounced back (neutral) instead of fought its way back (masculine). The fixed annuity world might gain if it mentioned that the annuity gave your financial ship safe harbor during storms and still mentioned that your money was protected.

*Prast, H., Sanders, J. & Leonhard, O. (2018). Can Words Breed or Kill Investment? Metaphors, Imagery, Affect and Investor Behaviour. (DP; Vol. 2018-014). CentER, Center for Economic Research.

Jack Marrion provides research and consulting services to insurance companies and financial firms in a variety of annuity areas. He also serves as director of research for the National Association for Fixed Annuities and as a research fellow for Webster University.

In 1994 he wrote a book to help banks market investment and insurance solutions to their small business clients. In 1996 he produced the first independent hypothetical return monthly publication comparing all index annuities on the market, and in 1997 created the first comprehensive report of index annuity sales, products and trends, “Advantage Index Product Sales & Market Report” (quarterly).

His insights on the annuity and retirement income world have appeared in hundreds of publications. In 2006 the National Association of Insurance Commissioners asked him to address their annual meeting and teach regulators the realities of index annuities. He was invited back in 2009 to talk to the NAIC about the effects of aging on senior decision-making. He is a frequent speaker at industry functions.

Prior to forming Advantage Com­pen­dium, Marrion was president and owner of an NASD broker/dealer with offices in nine states. Previous to that he was vice president of a life insurance company and vice president of an NYSE investment banking firm. He has a BBA from the University of Iowa, an MBA from the University of Missouri, and a doctorate from Webster University.

Marrion can be reached at Ad­van­­tage Compendium. Telephone: 314-255-6531. Email: ­