Annuities

A Winning Perspective on Losing


Annuities

I was watching the Super Bowl on a business trip in 2017 when the New England Patriots made their famous comeback from 28-3. The people sitting around me were saying, “This game isn’t over” and “Brady is going to win.” I was struck by their incredible confidence, even as the Patriots fell behind by 25 points. In part, confidence comes from having a plan and the experience to execute it.

Recently, some of my favorite teams have been giving me the opposite feeling. We’ve all been there: that sinking feeling when our team is behind, with little confidence in the firepower on the bench to bring your team back. The team lacks the talent to compete. The coaching staff is not equipped to make the necessary calls. You look for anything to hold on to hope – if the team could just work that much harder or the coaches could lead that much better.

But as the game progresses, the pit in your stomach grows. The seconds tick down, but the team never catches up. Once the clock finally runs out, it’s almost more relief than a disappointment – at least the anxiety you felt as the seconds ticked away is finally over.

The final countdown makes a great metaphor for retirement planning. You begin your retirement game when you transition out of the workplace. The score is 0-0. By the time you reach the first 10 years of retirement, you begin to realize that you can’t buy the same things that you could when you first retired. By the time you get to your late 70s, it’s clear your assets won’t catch up to your total income needs. That same hopeless feeling hits the pit of your stomach. Your assets can’t work any harder because you can’t take the volatility.

As those assets diminish, it’s like the clock ticking down in the final minutes of the game, knowing the inevitable is about to happen – a loss. The anxiety leading up to the loss is just as strong. You are trying everything to stop the inevitable, but you know it is going to come. But it doesn’t have to be that way. Unlike sports, every American should be able to enjoy a successful retirement.

How do you do that?

You must understand the risk of longevity with your clients and address it. If you don’t, you put your client in a position of a potential loss. They are relying on your expertise to create a plan and execute. Make sure there’s a source of guaranteed income so your clients have confidence that they won’t have to stage a comeback – they’re already set up for the win.

Winning Strategy

Learn about how to transfer the risk of longevity to vehicles and implement those strategies. Give your client confidence they can win the retirement game.

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.

Confidence Longevity Retirement

Longevity: The New Three-Legged Stool


Annuities

Many people talk about financial security as a stool that has three legs. All three must be present in order to achieve financial success – protection, accumulation and income.

However, longevity presents its own three-legged stool. I didn’t think about it until I read the 2012 International Monetary Fund (IMG) Global Financial Stability Report. The report dedicated an entire chapter to longevity at three levels – individuals, government and corporate.


Impact on Individuals

I’ve written a lot about longevity in the past, but let’s recap. Life expectancies continue to increase – even as more and more studies show a decrease for the first time in several decades. It’s causing a looming retirement crisis in the United States, largely due to individuals understating their own life expectancy. More people will rely on Social Security as their sole source of income than ever before. Scary. But even more alarming is the impact longevity has on government and corporate plans.


Impact on Government

The government’s ability to provide minimal guaranteed income will be pressed by increasing life expectancies. In this study, just a three-year increase in life expectancy will equate to a 50 percent increase in the costs of aging for advanced economies. These new assumptions might prove devastating. In the United States, the Social Security Trust Fund is already close to expected payouts exceeding revenue. As this line is crossed, mitigating longevity risk at the government level might be more challenging than at an individual level.


Impact on Corporations

For corporations, balancing mortality risk in their pensions seems straightforward. Billions of dollars are transferred from corporate pension funds to insurance carriers using Pension Risk Transfer techniques. But with an aging worker population, the report indicated businesses could see as much as a nine percent increase in costs due to longevity. Investors will eventually see these additional costs reflected in stock valuations. And, there is a potential negative impact on valuations due to the unfunded, increasing liabilities associated with longevity and guaranteed incomes.


The New Three-Legged Stool

The three-legged stool holds true for longevity at the government, corporate, and individual levels. You must address the risks of lower Social Security, unfunded pension liabilities and individual shortfalls with your clients. Understanding these risks is necessary to have a complete and meaningful conversation with your clients.


Winning Strategy

Make sure your client is aware of the choice in government benefits and corporate pension options. These contingencies play an important role in the individual planning process.



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.

longevity individual corporations government

Why You Must Be Willing to Receive in Order to Give


Annuities

The title might seem a little confusing. The concept of being willing to receive is confusing, at best. 

 

All this month, we have talked about the Go-Giver Laws of Stratospheric Success.1 All of the Go Giver laws are within our control. The “Law of Receptivity” is no different. Staying open to opportunities might seem easy on the surface, but it might be the most difficult. 

 

Take Notice

When I was a child, my parents bought it the Volkswagen Beetle fad of the early ’70s. The little cars were fun to drive and got great gas mileage. I loved the rumble seat in the back of the car where my brother and I rode to kindergarten and grade school. The trunk was in the front of the car while the engine was in the back. So the rumble seat truly rumbled! 

 

The McGlothlin family Volkswagen was a bright orange Beetle. You could see us coming for miles. When dad brought “Herbie” home from the dealership, we thought we had the only orange VW in Indianapolis. But, as we drove around the highway and even around our smaller community in central Indiana, we noticed a lot of orange VW Beetles. I’m sure you can say the same thing for your car. You never really noticed another until you bought one. Then, all of a sudden, they’re everywhere. 

 

Being open to receiving is similar. You’re always looking out for others, solving their dilemmas, and adding value to the relationship. Adding value will always be followed by someone giving to you. You don’t recognize it until after it is happening, just like you don’t see the orange Beetle until you’ve bought it. 

 

Breathe Through It

The natural flow of business is an exchange of value. This is usually done in dollars for service or a product. But, receiving is much more than that. Receiving can be a simple “thank you” for doing something special. It can be a mutually beneficial business relationship. It can come in many shapes and sizes, but you’ll know it when you receive it. And, you must be willing to receive it in order to continue giving properly. In “The Go-Giver,” breathing is used as an analogy for giving and receiving. You must exhale in order to inhale and vice versa. 

 

It’s important to always remember that receiving isn’t a scoreboard – nothing about the Laws of Stratospheric Success is a scoreboard. You can never count your chips by how much time, energy and value you have provided. You can’t think that you are “owed” something in return. Instead, it will flow naturally, maybe even you least expect it. 

 

Winning Strategy

Be open to success. Don’t expect it. Earn it. But always be open to it. 

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

 

1Bob Burg and John David Mann, “The Go-Giver: A Little Story About a Powerful Business Idea”: https://thegogiver.com/

Receiving Practice Management The Go-Giver Retirement

Now is the Best Time to Be … YOU


Annuities

This is the most incredible time in our industry to be a human … any human … well, actually, you! While there is a preponderance of online software, no one can deliver the value of real, authentic human beings. 

 

Technology competes largely on price. Software can calculate retirement income for less money, or help people manage their own finances for half the cost. But, when you compete on price, you roll the dice. While technology might do some things well, it can’t compete with everything you can do. 

 

  • You can look people in the eye and talk to them about the harsh realities of longevity
  • You can help others overcome the emotional roadblocks to improving their savings and income planning
  • You can explain how everything will be OK if a spouse dies unexpectedly
  • You can protect an entire family and discuss options to transfer business ownerships, retirement plans, and long-held family assets
  • You can ask insightful questions to find the real reasons a person is investing 

 

Our industry’s true value is all of us – the unique individuals who take time to fully understand the needs and desires of our clients and prospective clients. As Bob Burg and John David Mann explain in “The Go-Giver,” authenticity is your best asset.1 Each of us brings a unique talent to the table. You can ill-afford to be another robo-advisor focused on pure numbers, beating the benchmarks by a couple basis points, or having slightly lower fees. 

 

Your clients want more. They want you. They want someone who will look them in the eye and say, “You are going to be fine. We are going to take care of you.” Don’t try to compete against a custodian or a large financial institution – just be yourself and you will find people who want that interaction.

 

Winning Strategy

You are your best asset. Don’t try to be something you’re not. Surround yourself people who complete your financial practice. But, most importantly, be yourself within your network and in your client interactions. It’s your best differentiation.  

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

 

1Bob Burg and John David Mann, “The Go-Giver: A Little Story About a Powerful Business Idea”: https://thegogiver.com/

Authenticity Practice Management The Go-Giver Retirement

The 2 Keys to Growing Your Influence (and Business)


Annuities

Q: Who do you consider a part of your network? 

A: If it’s just your clients and vendors, you’re short selling yourself. 

 

Q: How do you gain influence in your network? 

A: By focusing on their needs and wants – not your goals. 

 

Influence – in your industry, in your community, with your clients, or within your wider network – requires the same focus that lifts your compensation.  Let’s break this discussion into two key parts: The focus and your network. 

 

Focus

First, in order to earn influence, you must understand other people’s goals and objectives. This understanding isn’t just limited to your business. You have to dig deeper in your relationships to have understanding and empathy for whatever is happening in the lives of others. The last part is something I think is a lost art. Our lives are so complex and busy that so many people affect the way people see the world. Our color of lens changes rapidly.

 

You can really help a lot of people by taking time to understand where they are right now, what’s keeping them up at night, and what would truly be beneficial to them at that point in time. It’s likely to change frequently. All of this goes back to the “law of value,” which states that your worth is determined by how much you give over what you receive. 

 

Network

Second, just like compensation, you need to think of your network as more than the obvious. Think outside of your clients and colleagues – think of people who will become your “brand ambassadors” – people who know you, like you, and trust you.1 How do you build that trust? You guessed it … by bringing value to the relationship and helping others meet their goals. 

 

Your network is endless. You never know the source of referral or an opportunity. So, treat everyone as a part of your network. Focus the conversation on them and learn how you might help them. In doing so, you quickly build rapport and trust.

 

Influence Your Future

By doing these two simple steps, you will grow your network abundantly over time, probably quicker than you think. Growing your network is the most efficient way to grow your practice. Stay focused on others and treat every contact as part of your network. Some will be better ambassadors than others. But, don’t risk the lost opportunity. Take time to get to know other people and how you can help first. Your value will prevail. 

 

Winning Strategy

In every encounter, concentrate on understanding the other person. Look to make everyone an ambassador for your planning services by focusing on them, not you. This leads to quicker rapport and trust, which both are essential to referrals. 

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of retirement at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

 

1Bob Burg and John David Mann, “The Go-Giver: A Little Story About a Powerful Business Idea”: https://thegogiver.com/ 

Influence Practice Management The Go-Giver Retirement