3 Hidden Benefits of an Income Alpha Strategy to Grow Your Business


Change, even good change, can be daunting. And change usually comes with reservations. After all, if you are accustomed to doing things a certain way, and that way has worked all right, it’s hard to be enthusiastic. If it isn’t broke… right?

Today I want to talk about a new strategy to implement with your clients – The Income Alpha Strategy. If you give it a chance, you might just find that your old strategy might actually need some fixing.

It’s natural to have reservations about trying a new strategy. You’re probably wondering:

  • Will it work?
  • How does it benefit my clients?
  • What will it mean for my overall business?

And, if you follow my blog, you might also be wondering why it’s worth making a change. Let’s walk through the Income Alpha strategy and discover how it produces more income with fewer assets while creating a legacy account for the family’s beneficiary.  And those are just the obvious benefits.

Less obvious is the totality of the strategy. It enhances your client’s retirement income and builds your business. Are you ready? Let’s take a closer look at those less obvious benefits. Stick with me – it’s going to get a little technical so you can really understand the nuances of what makes this strategy so effective.

1. Increased Tax Efficiency

The Income Alpha Strategy uses guaranteed income which allows a planner to be more aggressive with the other assets. Guaranteed income allows for higher equity allocation which in turn creates embedded tax efficiencies due to the long-term capital gain structure. Since the entire portfolio is not dedicated to income generation, the allocation allows for income distributions from mid-cap and small-cap investments after longer holds. The capital gain taxation versus short-term gains in distributions reduces the tax load for the income portion later in life.

In addition, the overall wealth creation of Income Alpha means that this bucket of funds does not need to be distributed until the death of the income recipient. It’s worth noting that if it is needed before the death of the clients, this too will likely have long-term capital gain treatment. If held to death, the beneficiaries will receive a step up in basis to the fair market value of the stock portfolio on the date of death. Because these funds are not held and positioned for the systematic withdrawal for income, the portfolio can be more tax-efficient to the heirs.

2. Ability to Address Other Risks

Since we have developed income with fewer assets, this allows the client to do one of two things. They could place funds in a long-term account to grow as discussed above. Or, we can change the conversation and address some of the other risks that might negatively affect the retirement income stream. Namely, the potential risk of long-term care can be mitigated. Using an asset-based long-term care solution, the client places some of those non-income producing assets into a tax-deferred vehicle with additional benefits for a long-term care event. The care benefits are received income tax-free, even when it is distributed from the tax-deferred accumulation. That changes the growth in the account from tax-deferred to tax-free in the event of a qualifying event.

3. Minimize Both Investment AND Longevity Risk

In a recent article, Professor William Sharpe, economist and Noble Prize winner, discussed the two major risks for retirees – investment and longevity. With Income Alpha, the equity holding account is not subject to the sequence of return risks. This allows the lump sum to be more aggressive without the fear of sequence of returns.

In addition, the placement of guaranteed income increases the level of income that will not stop during the clients’ lifetime. While not completely eliminating both, you are addressing and minimizing both. Conventional portfolio indicates that you typically can only address one or the other. (Source: Barrons)

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What’s in it for me?

Using an Income Alpha strategy benefits your client in many ways. And even if that’s all it did, it would put you, as the planner, in a great position. There are, however, benefits to the practice as well. Let’s look at a few:

  • Income Alpha can increase referrals. Your clients are not likely to see this type of innovative income planning strategy (i.e. one that generates income and uses fewer assets) from the competition. This will win you the business and give your clients a great story to share with their friends. And, since they are coming from your existing base of target clients, they will be the right referrals for your emerging High Performing Practice.

  • Client persistency. By successfully changing the conversation and addressing other retirement income planning needs, you have increased the chances of client persistency. Every product or additional service you offer strengthens your relationship with your clients. The additional brand recognition will pay dividends for your firm.

  • Growth of AUM. Taking pressure off the income assets and creating a wealth account will likely lead to long-term growth of assets under management. And, with increased long-term assets under management, you are likely making your business more valuable to a potential buyer in a planned succession plan. While most planners are using systematic withdrawal that creates a discounted multiple because assets are scheduled to diminish, you create a negotiating point for more value.

  • Client Peace of Mind. With more guaranteed income, there is typically greater peace of mind for the client. Your service requests and annual reviews will be less volatile and there is less chance for frustration, confusion, and missed expectations. Instead, you’ll be able to replace those negative reactions with a positive experience.


Transformational Tactic

Think different; look deeper; plan better.

Learn more about Income Alpha strategies by registering a free demo of the JourneyGuide software. For more ways to learn about how to transform your business, sign up for our free course.

retirement high performing practice alpha income strategy

Key Element of Growth: Asking Why


As we move to a new year, it’s important to think about how our business has changed. Consider your business. Think about the successes, and the areas that need improvement. But more than that, think about why you succeeded in some areas but not in others.

A lot of people want to grow their business. And if you’re interested in transforming your business to a High Performing Practice, you’re one of them. You no doubt have countless consultants and vendors lined up and ready to take your money to help you grow. These are people who claim to have new ideas, technology and data to help accelerate your revenue, make you more profitable and gain more clients.

But the answer to growth is not how. It’s why, and beyond.

Why is a powerful question, and one that we should be asking ourselves this time of year. As we review our successes and learning from 2019, we also need to be asking why they occurred. Too often we focus on what made us money or how we grew the business, but we fail to ask why we were able to achieve that growth.

Asking why can help us focus on the key elements of growth in 2020.

The other 50% comes from using that what you know, and what you’ve tracked to understand why — and then to understand your clients and your business. Think about a particularly successful post on your website — one that drove more traffic than the others. And now think about why. What was the subject? Which clients were looking? How did the viewers get to the post? Analyzing these aspects can help you understand why that content was successful and know more about what appeals to your audience. And how to offer them what they need to build a stronger relationship.

Unfortunately, even if we make it this far, and understand the need to ask why, this is about as far as we go.  To find the why, though, requires more effort. If we are truly interested in growing our business and remaining relevant we need to identify the empowering questions that lead to thought, plans, execution and those specific actions that move us toward our own why – the why that will help us meet our goals.  And that’s the challenge. Looking inward and soul searching is painful and emotional (especially for a numbers guy like me). But it’s not impossible.

Over the past few weeks, we’ve talked about gaining more exposure through marketing. How it’s difficult to commit the time, energy and effort needed to do all the right things. And how important it is to create content that adds value for your clients.

Here are a few examples of empowering questions that can help identify your why:

  • How can my revenues grow by 15%?
  • What will I need to do to increase my profits by 20% over the next 12 months?
  • Who needs my expertise the most?
  • What do my clients need me to do to make the experience exceptional?
  • Where do I invest my dollars to create more revenue without expending cash flow too much?

To grow, you don’t need a new database, email subscription service or a website that doesn’t attract quality prospects. Really, all you need is you … just you. You have everything you need to reach the level of success you have imagined for yourself. And that success all circles around you. You just need to find your why to unleash it.



Transformational Tactic

Don’t be afraid to ask empowering questions that move you toward your why.

retirement high performing practice why

How to Use Automation to Build Relationships



It’s one of the main things that separates a High Performing Practice. Yes, it’s really that simple.

But, you should focus on where you put that effort. Ultimately it should be on practices that create unique, personal connections with your clients. Marketing can either be the way you make that happen, or for some, the very reason you’re spinning your wheels.

Over the past few weeks, we’ve talked about gaining more exposure through marketing. How it’s difficult to commit the time, energy and effort needed to do all the right things. And how important it is to create content that adds value for your clients.

But we’ve also provided solutions to make it easier to hit your marketing goals. Today, I want to offer you another solution: automation.

By adding automation to your marketing plan, you can spend your time building relationships and really getting to know your audience instead of sending emails and chasing leads.

You’ve created content that is valuable to your clients. They are willing to exchange their email address for it. Now, what are you going to do with their information? How do you proactively follow up with customized content for each individual client? In other words, how do you automate?

The good news is, compared to writing an effective email and creating content that matters, automation can be the easy part. There are several different vendors out there that can create automated emails for each different type of client. I’ve broken it down into three easy steps:

  1. Create valuable content that requires an email address to download
  2. Use a vendor to build an automated nurture campaign
  3. Chose topics that can be easily translated into different forms

Let’s look at an example. You created a downloadable pdf about asset management and you want it to be the first step in a compelling five- to six-step automated email campaign. To get the pdf, clients offer their email address, which can automatically be entered into a proactive email nurturing campaign. Once it’s turned on by your vendor, you are using automation to talk to your target audience!

Many vendors can do this easily, and for a low cost. You decide when to turn on the campaign whenever the time is right.  Maybe you want to wait a few months and use the campaign to remind people that you’re still here and that you still offer that item that interested them in the first place.

Think about ways to automate your campaigns — and, to some extent, your content. Using video, for example, can allow you to create multiple pieces of content from one source. Inexpensive translation software can turn video into a written blog.  It’s an easy way to accumulate content for your website. Try it with a few different subjects, and then track which ones are the most popular. Requiring an email address to download makes this easy to track — and, of course, adds them to your nurture campaign. Automatically.

One word of caution: Automation isn’t a golden ticket. It’s a tool. You’ll still need to create good content that attracts clients and offers value. The key here is to value your time. Look for a partner who can help with tasks that don’t demand your individual attention, so you can spend more time focused on your clients.



Transformational Tactic

Automate as much as you can.

Giving Back from the Heart


We all have causes we’re passionate about. From church groups to local community arts programs, to research for the cure of a disease that has affected a loved one, and all kinds of things in between. The choice of which charity to align with is personal. It comes from the heart.

Personally, I’m passionate about basketball. I was a student manager for our boys’ basketball team during both high school and college. I was fortunate to work with one of my heroes, Bobby Knight, at Indiana University and was proud to be part of the team that won the national championship my senior year. Because I love basketball and am at a place where I can help my community, the proceeds from my most recent book, Free Throws for Financial Professionals (featuring 10 principles I learned from Bobby) go to help students at my high school. Each year, one student manager is awarded a partial scholarship to help cover tuition and books. It’s something that I care deeply about, and something I am proud to support.

Find out which causes are near and dear to your clients. It will help create deeper relationships with your target clients. And the time might come when you’re asked to donate to their favorite cause. Before that happens, it’s wise to have a process in place to handle those requests.

Creating a process requires just a few simple steps.

  1. Define your charities. I’ve found that it’s essential to determine the types of charities that matter. Generally, you can determine two or three categories of charities that you care about. For example, you could have children’s needs as one cause. A heart association might be another. Or maybe you’re interested specifically in helping your community. Take a minute to think about what causes you want to dedicate your time and money to.

  2. Only donate to charities that fit and matter to you. Of course, you never want to risk alienating a potential client. But it’s just not possible to say yes to everyone who asks for a donation. When a client or vendor asks you to donate to a charity, let them know what types of causes you are currently supporting. If their charity doesn’t fit one of your categories, politely decline. Instead, talk about other ways you might be able to assist with their community.

  3. Before deciding, find out more. If a client supports a charity you’ve never heard of, or don’t know much about, find out more. Where does the money go? What is the charity’s mission statement? Who does it benefit? You might be surprised by what you learn.

So, when a client asks you to donate, the answer is a resounding “maybe.” It all depends on how your philanthropic tendencies line up with theirs. And, as you build your business to a High Performing Practice, you’ll be able to support more of the causes you love. Just remember to give from the heart.  


Transformational Tactic

Stay true to the causes you love and give accordingly.

retirement high performing practice charity

Creating Content That Connects


Everyone wants to stand out.

To stand out, you need to carefully consider what you want to say.

We’ve discussed strategies to take advantage of free marketing, and how important it is to get your brand amplified through radio and newspaper articles. But even more important is carefully considering the value your content is delivering to your audience. If your message is the same as everyone else’s, how can you stand out?

It is challenging to come up with content regularly — and especially high-quality content. It takes time, effort and energy to commit to consistently writing a blog or creating something unique enough to catch the attention of a television station or a newspaper.

It can be tempting to subscribe to an online newsletter for content — it’s reliable and simple. It’s also the same content that every other financial advisor is using. You don’t want to be just another of the endless financial planners who appear in a Google search. 

If you want to commit to creating high-performing content, it’s a tall order. The key is to start somewhere. Here are two strategies to help you get there.

  1. What does my target market want to hear?
    Here’s your challenge: Don’t think about investments or insurance. Instead, think about what your target market really wants to hear. And why do they want to hear it from you? What unique perspective do you bring?

    Is it something focused around retirement? Great. That’s clearly going to help your business.

    But maybe your local community is going through a recession. In that case, maybe you talk instead about controlling debt. Or how to sell a home at a higher price. If your target market is business owners, maybe your message is concentrated on corporate America.

    The point is to think about what your audience wants to hear, not just about what you want to tell them. Your sweet spot for content will come when you connect your passion with subjects your audience wants to hear about.

  2. Is the content worthy?

Today, especially in a prospecting call to action, you need to make sure that that content is worthy enough to give up the new currency of digital marketing – personal data.

In other words, is your content worth exchanging their email for? Are they willing to give up contact information to secure the information you are offering? If not, you lose access to your market. You have no way to contact them, add them to a nurturing campaign, or let them know about changes to your website.

It’s critical to hit your target market with meaningful, value-added information, even if it’s not necessarily about financial planning. Whether or not you ask for an email address to read your content, ask yourself before you start: Is this meaningful enough that my audience would share their email address?

Hitting both of those every time should bring greater success with your content.

I heard a great line at a conference last summer: Content does not need to be cringe-worthy, but it has to be binge-worthy.

For example, if your target market is younger, think of what they are exposed to every day. Topics like:

  • Five steps to becoming a millionaire by age 30
  • Five ways to illuminate student loan debt
  • Five ways to purchase a new home

These types of stories are meaningful. Even though they may not apply to your practice, they add value and draw attention. Meet your audience where they are.



Transformational Tactic

Don’t just create content as a touchpoint. Keep your target market in mind and develop meaningful content that improves your relationship with your audience.

retirement high performing practice content