Eliminating Squirrel Mentality


It’s pretty common to be distracted by the next big thing – that shiny new object that everyone’s talking about. For me, it’s technology. If it’s newer, faster, more exciting, it’s for me. Sometimes the next big thing is worth our time and attention. And sometimes it’s just smoke and mirrors. The trick is to distinguish between them and focus on the industry changes that really can impact your clients and your business. And right now, the big topic for discussion — today’s shiny new object — is The SECURE Act.

So, is The SECURE Act worth your attention? The answer is an emphatic yes. We wouldn’t be able to advise our clients if we were not up to speed on the current legislation affecting qualified funds. And every columnist and professional in our industry agree that this is the most significant piece of legislation since the Pension Protection Act of 2006 (PPA).

Of course, there is still room to be distracted within The SECURE Act, especially if you look at each change separately instead of as a big picture. We don’t want to be the dog that spots the new squirrel in the neighborhood and chases after it until he gets tired. Or until he sees another squirrel.

We need to take each new piece of retirement legislation and stack it on top of the last, building on what we know and increasing our total understanding with each new piece. Think of it like building the ultimate Lego tower. It’s only possible with a good base – and a good amount of patience.

And while The SECURE Act builds on the Pension Protection Act, it also made significant changes to the way we help our clients plan. We have a lot of resources to help you wade through the important aspects of retirement income planning, arguably the single most complex problem you will face with your clients.

Focusing on both the Pension Protection Act and The SECURE Act as a cohesive pair is one of the most important things you can do to give your clients a higher probability of success in retirement.



Missing Variables

Part of what makes retirement planning so tricky is the unknown. Think about the details you are missing:

  • How long the client will live
  • Future tax rates
  • Future rates of returns
  • Sequence of returns
  • When a long-term care event might strike


A lot of those variables are out of our control. But even though we can’t control them, we can teach our clients the behaviors needed to mitigate some of these risks, including:

  • Proper diversification
  • Asset location over allocation
  • Placing guaranteed income in the appropriate percentage of the portfolio
  • Maximizing Social Security for at least the primary wage earner


Building a Cohesive Plan

By focusing on the big picture, we can stack the valuable benefits of the Pension Protection Act as a foundation for long-term care and income planning. There is a high probability of one spouse having a care event during retirement, but the need gets pushed aside for more exciting conversations about managing money and creating income. Today, more than $1 trillion rest on insurance carriers’ books inside non-qualified annuities1. Given the recent continued bull market, many of those annuities dependent upon equity investments and/or indices have seen considerable growth.

In its current format, the distribution of non-qualified annuities is interest first, or taxable until you reach your basis. This creates more taxable problems under Modified Adjusted Gross Income (MAGI) calculations when it comes to other means-tested benefits.

Under the Pension Protection Act, clients can take those embedded gains from the old contracts and move them to a PPA compliant product. If used for qualifying long-term care expenses, the distribution is tax-free – not tax-deferred. Tax-free. You have moved the buildup of the tax-deferred growth from tax-deferred in the deferred annuity to tax-free under the Pension Protection Act.

This strategy mitigates a significant cash flow crunch to many families when they need it the most. By eliminating the tax on long-term care distributions, it is as if you have increased the distribution by the assumed tax rate. And, you have provided relief from the increased distributions on an already pressured assets-under-management systematic withdrawal strategy.

It takes planning. It takes having the conversation. It means that you understand the needs of your clients. And, by protecting the family’s wealth, you become valuable to the next generation.


1LIMRA 2019 Fact Book

Transformational Tactic: Don’t chase the shiny new legislation. Coordinate the benefit of all the pieces of legislation to create the most holistic and comprehensive plans possible.

retirement high performing practice the SECURE Act SECURE Act pension protection act

Generational Planning, Creativity and The SECURE Act


In every industry, professionals look to thought leaders and seasoned veterans to help them understand how to succeed. It’s human nature to emulate and learn from others for our own growth. Finding a mentor that is fully invested in your success can help build your reputation, your business and your knowledge base.

As times change, though, it’s important to identify which ideas are still relevant, and which ones have served their purpose. Practices that were revolutionary only 10 years ago might be considered antiquated today.

As the SECURE Act was put into effect, it drastically changed the way we help our clients plan for a secure retirement. Since that time, the ramifications seem to keep cropping up. The message, though, remains the same. We need to rethink how to best transfer wealth from one generation to the next. And, for our clients, the best way is most likely an option that minimizes taxes.  

Specifically, the SECURE Act is causing us to pay more attention to beneficiary designations, as some recent trends may not be as appropriate as they were before the Act. As I travel around the country and meet with different advisors, I see how easy it is to name a trust as the beneficiary and just allow the document to dictate the beneficiaries and their payouts.

But post-SECURE Act, it’s the government who’s going to dictate those accelerated payouts. Now more than ever before, it’s important to keep an open mind to techniques and strategies we didn’t consider previously.

The SECURE Act forces us to look at alternatives that our mentors and parents never had to contend with when transferring assets to the next generation through our spouses.

The simplest and most common beneficiary designation is to name the spouse. No surprise there. Almost every client wants to protect their spouse when they pass away. And I’m not suggesting that we sway clients away from naming their loved one as a beneficiary of our qualified accounts. But I do believe this new legislation offers us the chance to have better, more thoughtful conversations around income planning – and to begin those conversations earlier in the lives of our clients.

If the ultimate goal is to protect the spouse and then pass the remainder of the wealth to the next generation, creative planning is necessary to minimize the tax impact. The SECURE Act changed the rules when it comes to non-spouse beneficiaries, which requires them to take the money in 10 years or less.

Typically, children receive this inheritance at their peak earning years. If we stick to traditional planning, the amount of tax to be paid is accelerated and increased. But there are ways to help further stretch the income to the next generation and not affect the spouse’s income probabilities. How? It starts with some creative planning and an income discussion before the death of the spouse.


Putting Creative Problem Solving into Play

First, think about naming two beneficiaries as the primary. One is the spouse. The other is the child/children. If sufficient income distributions are coming to the surviving spouse, the spouse can defer the tax and distribution until their required minimum distributions. The children can immediately defer the tax over 10 years with the new distribution rules. At the death of the surviving spouse, the children will have another 10 years of deferral. Therefore, you have essentially doubled the distributions for the children on the first parent’s death. When you think of the massive tax acceleration and increased tax rates that are in effect, this small tactic can make a world of difference to the next generation.

In addition to providing a much-needed service to our clients and their children, we also make ourselves more valuable to the next generation. They are less likely to move to another advisor after their parents are gone if we’ve proven our ability to meet, and exceed, their expectations.

Securing generational assets may be the most valuable asset-gathering strategy a financial professional can deploy over the next 25 years. During that time, $30 trillion of assets will likely transition from one generation to the next.

If we want to grow our business and revenue, it’s essential to think about how to protect it during generational transitions.


Transformational Tactic:

Focusing on the next generation and guiding them through the impact of The SECURE Act is vital when it comes to retaining clients and keeping assets with your practice.

retirement financial planning secure act the secure act high performing practice

Success After The Secure Act is Possible (You Just Need to Know the Right Questions to Ask)


It’s ironic, isn’t it, that as individuals, most planners hate change, yet we work in an industry notorious for it. And make no mistake—the Secure Act has changed the game. But, despite the changes it’s brought, success is still possible. We just need to be more purposeful in our planning, and more diligent in our conversations with our clients.

While the new legislation brings guaranteed income to the front of mind, there are several pitfalls that are harmful to our clients. These can’t be ignored and must be addressed for our clients to have success in retirement and legacy planning. Several questions need to be asked during each and every client interaction – regardless of whether it’s a new client or someone you’ve been working with for years.

By always asking these three important questions, you’ll make sure to steer your clients clear of the hidden traps within the Secure Act.


  1. Where do you want your qualified funds to go at your death?


The answer to this question probable hasn’t changed with the passage of the Secure Act.  The path travelled to pass assets to heirs, however, probably should. With the modifications to the stretch provisions, there are reasons to name additional beneficiaries in certain situations. Naming a trust as beneficiary to complete your clients’ legacy wishes needs to be reviewed, especially for those trusts requiring required minimum distributions to be disbursed to spendthrift individuals.


Understanding the “why” behind these beneficiaries is helpful when advising clients on the proper path. The more your clients understand, the more confidence they’ll have in you and in their financial plan. Too often, we just add a person on the beneficiary line without explaining the rationale behind the decision.


  1. How do you want the assets distributed?


When discussing changes brought about by The Secure Act, this is a big one. If the goal was to just let the client’s family receive a lump sum, there is probably no need to change. But many people have specific income plans to either distribute or inherit family wealth, and a lump sum isn’t going to meet their needs.


The Secure Act provides a new angle to the sandwich generation. How you receive an inheritance and pass your assets to your heirs is affected by the new legislation.

Your clients are stuck in the middle of $30 trillion of wealth transfer over the next quarter century. The assets they receive and give away are greatly affected.


Your clients need to understand the ramifications of the new qualified plan payout rules from every perspective – control of the asset, taxation and family wealth transfer. As their advisor, you have an opportunity to provide them with the information they need to retire securely. You’ll be strengthening your relationship at the same time.


  1. Do you want to the wealth to be transferred before or after tax?


Granted, for the most part, tax still needs to be paid. The Secure Act accelerates the taxation on qualified dollars to pay for some of the other benefits of the act. Many clients have set a target amount, after tax, that they hope to be able to transfer to the next generation.


Many tax levers create a complicated system. Due to the acceleration of the payout, it’s easy to pull a lever that triggers unexpected taxation if you’re not careful. Business owners taking advantage of the Qualified Business Income, for example, might forfeit that benefit due to an inappropriately planned inheritance. Means testing and other taxes tied to income thresholds like Modified Adjusted Gross Income (MAGI) will be pierced, causing additional taxation on inheritance.


Given the massive amount of wealth scheduled to transfer in the next 25 years, this simple acceleration of the payout will likely increase overall tax revenue. Clients don’t need the surprise of additional taxes, especially those high-wage earners that are using the Tax Cut and Jobs Act to control taxation.


How to Help Your Clients Navigate the Changes

Once you have answers to these important questions, you have what you need to start creating solutions. There are many ways to simulate the previous stretch provisions and control taxation of the inheritance.

Some things to discuss with clients after understanding the above three questions:

  1. Charitable giving or naming a charity as a beneficiary
  2. The increased use of life insurance in irrevocable life insurance trusts funded by IRA payouts.
  3. Splitting beneficiaries to multiple generations with varied dollar amounts
  4. Strategically converting traditional IRAs to Roth IRAs.
  5. Continuing to use qualified charitable deductions to reduce income after 70 ½


Transformational Tactic


Sit down with every client and review these three important questions. Then help them understand the solutions that will help them achieve their goals.  

retirement high performing practice The Secure Act

3 Key Considerations When Buying a Book of Business


Nobody likes to get burned by a decision.

But if you’re reading this, you want to grow your business. As we transition to a new generation of financial planners, one increasingly popular way to find growth is through mergers and acquisitions.

Buying a book of business is certainly an option when you are looking to grow exponentially. But just as it’s important to select the right clients to work with, you need to select the right business to purchase.

When looking to acquire another business, there are three main points to consider.


  1. Don’t Overlook Past Market Valuations

Recently, I was reviewing some financial planning firms that were sale and some valuations were extremely high.

If you’re the seller, you want your business valuation to be as high as possible. But as the buyer, you are looking for a valuation that reflects not just current conditions, but what to realistically expect in the future. Although it sounds counter-productive, a good way to do that is to look at past valuations.

Start by asking yourself what the current valuation is based on. Is it strictly market performance, an effective money manager, or outstanding customer service? And then compare that valuation to one from the past. The year 2010, for example. 

Following the financial crisis, we have seen a sustained bull market like none other in recent memory. If the valuation is based on is market performance, the value of the practice is questionable, as anyone could grow the business in the backdrop of the bull market post-financial crisis. What did the valuation look like in 2010, before the sustained bull market?

In some cases, the money manager might have outpaced the market and is driving the valuation. In this scenario, you need to determine the longevity of that manager. How much it will take to keep that person incentivized in the future, especially if that person is in the office?

Finally, you want to understand the service models and if they are aligned with your current thinking.

Growing the business organically, without respect to market performance, is an ideal situation.


  1. Understand the Metrics and the Opportunity

It’s important to look beyond surface metrics when considering buying a business. That is, don’t base your decision on the obvious factors:

  • Revenue
  • Gross product
  • Net profit


Although those factors need to be considered, it’s important to look past them. Many times, the increase in value to the purchasing firm is to trim costs through economies of scale which typically leads to loss of jobs and morale issues.

Instead, you should be looking at the metrics of the client base and the opportunities that might exist.

In a recent advertisement for several financial firms being sold, the average age was 59. That block of business might complement your existing business, but it might also create new opportunities for guaranteed income, estate planning, beneficiary reviews and next-generation planning. Are you willing to expand your practice to include services those clients will need in the near future? If yes, great. If not, you will be doing your clients a disservice and potentially hurting your existing reputation. Think about the changes you need to implement to grow the business exponentially.


  1. Review the Income Strategy

Many financial planners are looking at succession planning for their clients. Those clients are in their mid to late 50s. Our research has shown time and again that traditional systematic withdrawal provides a level of risk in income planning. A less risky option is the Income Alpha strategy. It allows clients to set aside a certain amount of assets for pure growth which will enhance the assets under management growth in the long term. Without similar income strategies, the assets in the book of business are likely to deteriorate over the next several years.

The income strategy should be considered in the purchase price. With current valuations nearing three times the gross revenue, the wrong income strategy is a recipe for disaster for the purchaser. Having a strong income strategy for older clients makes sense for the clients and the value of the business. With the appropriate strategy in place, there should be a multiplier effect on the value of a business as assets grow. Additionally, passing those additional assets to the next generation will help grow and retain the beneficiaries’ assets in the future.


Educate Yourself Before You Buy

We all want to grow our business exponentially. Buying and merging with businesses is sometimes viewed as the easiest way to do it. And, with the current age of many planners, there will be ample opportunity to buy books of business. But, just like any other big business decision, acquiring a business requires you to do your homework.

Make sure you understand the direction of the firm when considering a book of business with clients nearing retirement age. The negative flow of assets may represent a unique look at the value of the seller’s book of business.


Transformational Tactic: Don’t get burned by high valuations. Think before you buy. Seek to understand what is behind the numbers. Don’t buy a business that doesn’t fit your goals for growth.




How to Reach an Audience of Message Scanners


Transforming your business requires a marketing strategy that works. Over the past few months, I’ve talked about the importance of clear and concise messaging, the advantages of automating where you can, and how to earn free marketing reach from news sources.

I believe in the value of marketing. It’s a great way to open the door and start building a strong, lasting relationship. If you’ve started implementing some of these suggestions, but haven’t noticed a change yet, it’s important to examine why.

When I talk to advisors about their marketing and client acquisition plans for 2020, I hear more discouragement and frustration than anything else. Do any of these answers sound familiar?

  • My website is not creating enough qualified leads for me.
  • Buying lists are too expensive today.
  • I can’t get enough people to my seminars.
  • The response to my mailers remains low.
  • It’s too expensive to engage in digital advertising.


Marketing and prospecting have always been a challenge in our industry. For everyone. But instead of letting it discourage you, let’s step back and examine pieces that might make a difference. It’s not necessarily new information, but it is extremely relevant to your plans for 2020.


  1. Simplify and Clarify Your Message


People are distracted. This isn’t the first time you’ve heard that, and it surely won’t be the last. To be heard above the noise, you must make your message extremely clear. Most likely, you are catering to prospects, not to clients. Your message needs to be so simple, so thematic and so compelling that the prospect wants to engage with your personal brand.

Think about how you use the internet. Today’s audience likes to scan, not read. Your business has seconds to get a point across – not minutes. As consumers, we stay on a webpage for fewer and fewer seconds every year, less with every added distraction.

Your brand must speak to the emotional transformation that your prospect wants to create in their financial life.

You know what they are looking for. Confidence. Knowledge. Security. Organization. Peace of mind. You need to be writing the story with your prospect as the main character — the hero. Too often, we make ourselves the hero and lose the prospect during the initial interactions.

So, how do you do that? How do you make your client the hero and guide them to their goals? Most clients are looking for someone to guide them through the complexities of their financial decisions with a simple and clear path.


Think about avoiding analysis paralysis. If the information is too much, the person will simply not do anything and save embarrassment, fees and time. And they won’t find out how bad their situation might be. That’s extremely frustrating for everyone when a professional (YOU!) can help rectify the problem.


Clients are seeking advice. Specifically, they want to engage with a professional in a low-risk manner. One of the best ways to do this is to get a feel for the advisor before agreeing to meet. Many would prefer to see their prospective planner in action during a seminar. For them to do this, your website needs to clearly show them how to register, call or reserve a seat. They need a simple call to action to focus on, without a lot of other distractions. We’re scanners, after all. No one’s going to hunt and peck.


Simplifying and clarifying your message can keep prospects on the path, speed up your sales process, and save you thousands of dollars.


  1. Understand the Algorithms

Unless you live and breathe data and consider yourself to be one of the tech-savvy, the mention of algorithms probably takes you outside of your comfort zone. But stay with me for a minute. You can have the best site in the world — one that speaks to the heart of the problems your target market — and still not get results. Why? The rules of the internet search game change frequently.

In October 2019, Google changed its algorithm for searches. Their BERT algorithm is an expansion of their 2011 PANDA algorithm that scores clarity and quality higher than quantity.

This matters because it’s now more important than ever to be crystal clear. Understanding how searches value a site is critical to marketing. 93% of online relationships begin with an online search and Google controls 65%-70% of the searches.

Chances are, your site is not getting the exposure it deserves in a world of noise.

You must understand the rules of the game to succeed. It means staying on top of changes and making sure you have the right messaging to drive prospects to your site. Although it requires some hard work and diligence, it could be exactly what you need to distinguish yourself and attract clients.


Transformational Tactic: Take time to create a simple, clear brand message that resonates with your target audience and maximizes current algorithm searches.