Annuities

How to Put Old Annuities to Work


Annuities

I’ve said it before, and I’ll say it again: One of the easiest ways to secure your clients’ retirement success is by addressing long-term care.

The cost of extended care continues to escalate. And it will continue to climb as Americans live longer and the demand for care increases. If you’re not protecting against this risk, you’re doing you and your clients a huge disservice.

Today, there are more than $471 billion of annuities on the books of insurers.1 Rarely do our clients annuitize these older annuities, and the utilization rate for income riders remains low. Both of these facts make me think that many people purchased these fixed and indexed annuities for a future need or emergency. If that is the case, why not apply the annuity for the specific purpose of covering emergencies?

Under current tax law, annuity owners are allowed a tax-free exchange between annuities under certain circumstances. The contract being exchange and purchased must have the same owner and annuitant and considered like-for-like. If the exchange meets that criteria, the embedded gains (deferred interest) may continue to be deferred in the new contract being purchased.

With the Pension Protection Act, there is a new level of tax-free status with nonqualified annuities. When the client has a qualifying long-term care event, proceeds from the annuity are received tax-free. That includes the carrier’s funds as part of the long-term care insurance, the original principal (cost basis), and all the deferred gains in the contract. Older contracts like variable annuities, fixed annuities, and fixed indexed annuities qualify for this exchange treatment and potential for tax-free distributions due to long-term care.

Your clients’ needs change over time. You routinely adjust their asset allocation with market conditions and changes in risk tolerance as they age. You can also change the purpose of their existing annuities to match their current purpose.

Take a look at your existing book of business. Or, ask about a prospective client’s annuity holdings. It’s likely to make a lot of sense to your clients to re-purpose some of their assets in order to create leverage and tax efficiency.

 

Winning Strategy

Turn old assets with tax-deferred gains into tax-free distributions for long-term care event. The transaction is easy to complete and benefits many who are holding older annuities for an emergency.  

Winning Strategies

Craving More?

Across the country, advisors are telling us they’d love to find a steady stream of clients. Well, more than $3 trillion in pension assets are ready to move to either insurance carriers or employees in the next two decades. So, with the right approach, pension risk transfer can provide sustainable growth for any financial services firm.

Join us for a powerful webinar featuring Pension Risk Transfers in today’s financial world.

Register Today!

 

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.

 

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1Insured Retirement Institute Fact Book 2018, 17th edition: https://www.myirionline.org/research/research-detail-view/iri-fact-book-2018-17th-edition-(single-license-download)

Retirement Mike McGlothlin tax-deferred gains tax-free distributions LTC Annuities

Get Me Within Two Baskets


Annuities

It was the 1987 NCAA Regional Finals. We were playing Louisiana State University, and with less than 8 minutes to go, we were down by 8 points. For the first time in Indiana’s run to the National Championship, you could feel a little doubt that we would dig ourselves out of this particular hole.

During a timeout, Coach Bob Knight didn’t make any major adjustments. He reminded the team to do what we had been working on since the beginning of the season. We just had to do it with more accuracy and precision during the final minutes at the game.

Before they left the huddle, Coach looked the players in the eye and said, “Get me within two baskets with two minutes to go, and I will win this game for us.

Now, you may think that’s an arrogant statement. I don’t. I find it confident. Spoiler alert: As you’ll read in my book, “Free Throws for Financial Professionals,” Coach delivered on his promise. You can deliver on your promises, too.

Coach Knight’s statement demonstrates the leadership that all of our clients want from us. That statement is exactly what every prospective client wants to hear from their planning: Get me to the finish line and show me how to win.

Professor William F. Sharpe indicated that retirement income planning was the hardest problem he ever worked on during his career. I would argue that it’s the most complex problem that your clients will ask you to solve for them. That’s why you need to look at it differently.

Just like Coach Knight said in that timeout, you don’t have to do a bunch of new or different things. You just have to perform with accuracy and precision. You have products and tools available to shift a multitude of risks in retirement. You just have to do the fundamentals better. And, no matter what happens, you have to look your clients in the eyes and help them win.

Winning Strategies

Craving More?

Across the country, advisors are telling us they’d love to find a steady stream of clients. Well, more than $3 trillion in pension assets are ready to move to either insurance carriers or employees in the next two decades. So, with the right approach, pension risk transfer can provide sustainable growth for any financial services firm.

Join us for a powerful webinar featuring Pension Risk Transfers in today’s financial world.

Register Today!

 

Winning Strategy

Get your client in a position to win with tools and products that have been around for decades. Think about using them differently to maximize success.

 

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.

Retirement Free Throws for Pros Mike McGlothlin Annuities Business Success Positioning

5 Ways to Earn More Referrals


Annuities

Without a doubt, if you want to grow your client base, referrals are the most effective method. The trust you have built with your existing clients and centers of influence provides an opportunity to attract new clients to your planning firm.

 

As you look toward the next year and growing your business, you need a referral strategy that separates you from the competition. Providing value is the best way to consistently do so.

 

From the book “The Go Giver” by Bob Burg and John David Mann, there are five essential qualities that constantly deliver value to your clients. In turn, your clients can easily refer people to you in the future.

 

  1. Excellence: In my new book, “Free Throws for Financial Professionals,” I write about how Coach Knight would prepare. He asked the student managers to take copious statistics and pair those numbers with video of each practice. He not only knew the numbers, but he would ask why the numbers looked the way they did. He could match behavior with results by comparing the statistics with the actual video. From there, he sought to increase the performance of the team.

 

  1. Consistency: During my four years as a student manager, we prepared for games in a similar fashion. Specifically, game days looked exactly the same. We ate our pre-game meal at the same time, relative to the tip-off time. We ate the same meal. The team completed a final walk-through of out-of-bounds plays that were to be used and defended against that game. And, we typically had a short presentation by Coach to review the game’s goals. This consistency provided a calmness for the student-athletes before critical games. It’s the same calmness your clients need prior to making a major life decision about their retirement.

 

  1. Attention: One of my favorite encounters as a student manager was with Duke basketball Coach Mike Krzyzewski (better known as Coach K) during the 1984 Olympic Trials. I drove him from Indianapolis to Bloomington for the week of basketball trials with amateur players. During the week, he saw me in a hallway and not only remembered my name but remembered to ask me about a test I had taken that very morning. He paid special attention to me as a person because he listened actively the weekend prior. We can all afford to know more about our clients and their dreams through questions and active listening.

 

  1. Empathy: One of the greatest examples of empathy in our industry is displayed when we deliver a death claim. One of our advisors takes the extra chair out of the office prior to meeting with a recently widowed client. Understanding how a client feels and showing that you care can separate you from the rest of the competition.

 

  1. Appreciation: This doesn’t have to be elaborate or over the top. In fact, I suggest that the simplest gestures that are meaningful are the most memorable. In today’s electronic world, a hand-written note goes a long way. Make the gesture personal and unique to that individual. You want to make a memory not just say “thank you.”

 

If you can incorporate these five activities into your daily routine, you make yourself more referable than ever before. Your competition will become irrelevant because you have delivered more value to your clients and centers of influence.

 

Winning Strategy

Think about how you can provide value next year. When you give value, referrals and business will likely follow. Make plans to institute the elements of value into your practice.

Winning Strategies

Craving More?

Face it. These days, your phone changes faster than you do. Continuous improvement is the name of the game. If you’re standing still, you might as well be walking backward.

Special guest Scott Fergusson joins us to talk all things innovation and how you can easily upgrade your business. Not just to keep up with the industry, but to get ahead of your competition.

Catch the Replay

 

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now at www.freethrowsforpros.com.

Retirement Referrals Practice Enhancement

Skating to Where Your Clients are Heading


Annuities

As you continue to explore ideas for growth in your business next year and beyond, I think it’s critically important to look at where your clients are headed. You need to understand the future of your business and the demographics that drive it.

 

While many planners want to focus on wealth management and accumulation, the majority of Americans today are below the high-net-worth classification. More fall into the categories of middle-America, affluent or mass-affluent. These Americans need to consider how guaranteed income will make a significant difference in their retirement income and plans for longevity.

 

We are finding that most retirement portfolios increase their probability for success by adding guaranteed income. Please keep in mind that guaranteed income is not exclusive to annuity sales. Guaranteed income includes Social Security, defined benefit pension payments, and commercial annuities. If you would like to see how your average client’s retirement income can be positively affected by guaranteed income, I encourage you to try a demo of JourneyGuide, an innovative tool designed to help advisors and clients change they way they think and act in retirement.

 

When you think about 2019 and beyond, take a few minutes to think about your business in the next three to five years – even the next 10 years. The shifts in the American population will create opportunities for the next 20 years. The future lies in income, not accumulation. That’s not to say you don’t need to accumulate enough assets to provide income. However, the planners who can address the complex needs of most Americans through tax-efficient, inflation-adjusted income will separate themselves from the rest of the wealth managers in America.

 

Differentiation doesn’t happen by chance. People don’t wake up and start thinking that they need to call their financial advisor to talk about guaranteed income – they probably don’t know the sources of guaranteed income, let alone how it can benefit them. We have to change the way we market and discuss guaranteed income options with our clients and prospective clients. It has to be planned. So, take the time to clarify your message on income planning. Make sure you are the trusted source to have this important discussion with your clients.

 

Winning Strategy

Wayne Gretzky was quoted as saying he skated to where the puck was going. The American demographics are changing before our eyes. You need to adjust your services and clarify your message to meet them where they’re heading.

Winning Strategies

Craving More?

Face it. These days, your phone changes faster than you do. Continuous improvement is the name of the game. If you’re standing still, you might as well be walking backward.

Special guest Scott Fergusson joins us to talk all things innovation and how you can easily upgrade your business. Not just to keep up with the industry, but to get ahead of your competition.

Watch the Replay

 

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now at www.freethrowsforpros.com.

 

Retirement Financial Planning JourneyGuide

Want to Win? Practice Your Free Throws


Annuities

Just when you thought I couldn’t write anymore basketball-related financial planning tips … I’m releasing my third book, “Free Throws for Financial Professionals.” Kidding aside, this book really gets to the heart of everything I believe in. It centers around 10 principles I learned as a student manager at Indiana University under legendary Coach Bob Knight – principles I still apply to my work and life today.

 

While Coach Knight is considered a controversial public figure, I always thought of him as my best professor at IU. (That’s saying a lot as the Kelley School of Business was constantly ranked in the top 10 of undergraduate business schools.)

 

Free throws are in the title because they’re a vital part of a basketball game. Championships are won and lost at the free throw line. At the end of the game, when every second and every point matters, you have to be able to execute. It requires repetition, attention to detail and technique.

 

I like free throws because you don’t have to be athletic to be a good free throw shooter. It helps, but it’s not a requirement. Instead, hard work, concentration and calmness will help you sink the shot.

 

Practice and Preparation

One of the greatest strengths Coach Knight possessed was his ability to plan for an opponent. I’ve always said that Coach wasn’t as much of a basketball genius as he was just extremely prepared for games. He knew his team better than anyone else – their strengths and weaknesses. He also understood how to use those strengths against the other team.

 

You should do the exact same thing. Now, don’t misunderstand me – your clients are not your opponents. You should always be working on the same side of the table. However, you need to plan for every meeting. Every interaction. You have to know the game inside and out.

 

In order to succeed, you need to know the numbers that drive your success – so you can adjust and make changes along the way. You have to understand the activities that drive your sales. Here are some things every financial professional should know:

 

  • What are the key performance indicators for you and your staff – sales and administrative?
  • How can you duplicate those activities more often next year?
  • Which activities need to be delegated to another person so you can focus on the key performance indicators for your business?
  • Can you become more effective at your key activities?

 

Winning Strategy

Practice and plan for success. Read my new book, “Free Throws for Financial Professionals,” to learn how I measured success and set activity goals that nearly assured my sales. You can order or download a copy of the book at www.freethrowsforpros.com.

 

Winning Strategies

Craving More?

Face it. These days, your phone changes faster than you do. Continuous improvement is the name of the game. If you’re standing still, you might as well be walking backward.

Special guest Scott Fergusson joins us to talk all things innovation and how you can easily upgrade your business. Not just to keep up with the industry, but to get ahead of your competition

Watch Now

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now at www.freethrowsforpros.com.

Retirement Practice Enhancement Financial Planning