Annuities

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

Compensation Shifts


Annuities

The “Law of Compensation” states that your income is directly related to number of people you serve and how well you serve them.1 Notice that the law does not claim one business model is better than the next. In fact, business model, e.g., fee-based, commission, etc., is irrelevant to how much compensation you earn. 

 

The key to your success or failure isn’t your compensation. The key is focus. It’s about your focus on your clients, and prospective clients. 

 

No matter your business model, you will dramatically increase your compensation by focusing on the number of people you serve and how well you serve them.

 

Let’s look at the first part: the number of people you serve. Common practice will tell you that less is more. You need to work with a smaller number of clients with high net worths. That’s a business model. That model can be scaled to new heights through the investment of para-planners, support staff, and additional planners (which makes a great succession plan for the firm). By reinvesting in your business, you can serve more and increase your compensation. 

 

The next part is about maintaining value in your service. As you increase your number of clients, it’s important not to lose sight of their individual needs, desires and planning objectives. Again, investments in technology, people, and infrastructure can make a huge difference. 

 

A Focused Mindset

Your clients hire you to look them in the eye and solve their most complex issues – retirement and longevity. The level of service you provide is more important than the model you use. In fact, rarely do clients ask about your business model. They care about your expertise, how well they will be served, and how much they feel their goals and objectives are a priority. 

 

It’s inappropriate to choose a solution for a client based on your business model. You have to change your mindset to focus on your clients and what risks concern them the most. If their concerns are longevity and income, you owe it to them to look at guaranteed income options, even if that is against your business model. 

 

Winning Strategy

Maximize your compensation and revenue by looking at how you can help more people and increase the level of service you provide. Both will elevate your business. 

 

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/

Compensation Practice Management The Go-Giver Retirement

How to Create Value Beyond Fees or Returns


Annuities

If you’re like most of the people that I’ve talked to over the past 18 months, you’ve felt revenue compression. As our industry gravitates toward more transparency, it’s fair to expect continued reductions on commissions and fees. So part of becoming a more successful financial planner involves defining your value in a whole new way. 

 

It’s no longer enough to have the lowest fees or the best returns – anyone can have the best returns in any given year. According to research from S&P Dow Jones, only 5 percent of active money managers continued beating the index after a three-year run of beating the S&P 500.1 

 

Any advisor can lower their fees until they are unprofitable and unsustainable. Go ahead and Google “online financial planning software,” and you’ll see how low your fees will have to be if you want to compete – free. As Bob Burg and John David Mann explain in “The Go-Giver,” you must think about your value in terms of how much you are giving your client in excess of the payments you receive.2

 

Customize Your Value to Your Clients

Return and fees might be a part of your overall value, but they are longer the determining factor for clients to select advisors and to stay with them. You need to provide additional value to every client on their own terms. Customization will be critical. Know what is motivating each and every client interaction. Examples might include online access to information, bill paying ability, concierge or complimentary professional services, or family office services. 

 

Understanding what is important to your client is the key to success – it’s not a specific investment theory that can ultimately be duplicated. Providing service and expertise that’s personalized to their situation adds value. Focusing on the client and delivering what they want adds value. Every. Single. Time. 

 

Your Client-Focused Business Model

The fiduciary standard forces you to walk away from your own interests and place them on your clients. That includes your business model. You new business model should be “the client model.” You should be asking yourself:

  • What is the ultimate goal for this client/prospective client?
  • What can I do to put the client in a better position financially?
  • If my client sat down a year from now and said, “Thank for making my life better!” what would have happened and what would I have done with this client?
  • How can I help this client the most?

 

That is a client-focused model. No concern about your upfront or ongoing revenue streams. Did you provide value to the client on their terms? That’s the ultimate question you have to answer. 

 

Winning Strategy

Focus on growing your business through a client-focused model. Your true worth in a client relationship is determined by how much you give in value, not what you take in payment. 

 

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.”

  

1 S&P Dow Jones Indices, “Fleeting Alpha: Evidence From the SPIVA and Persistence Scorecards,” February 2017: http://us.spindices.com/documents/research/research-fleeting-alpha-evidence-from-the-spiva-and-persistence-scorecards.pdf

 

2Bob Burg and John David Mann, “The Go-Giver: A Little Story About a Powerful Business Idea”: https://thegogiver.com/

Value Practice Management The Go-Giver Retirement

Why You Should Transfer Risk to Transform Your Business


Annuities

A successful 2018 can come in the form of multiple opportunities. Some will happen fast, while others will require an investment of your time, money and energy. But, the latter are the opportunities that tend to transform your business and provide exponential growth. You need to be thinking about both – creating quick results while making strides for long-term growth. 

 

If you are going to make 2018 your best year ever, think about changing the way you talk with clients. We tend to think about performance, rates of return and fees. Those are important items, but the transfer of risk can be more important on several levels. 

 

Why would you want to retain risk without any larger return for doing so?

 

Help Clients Keep an Income

The answer is usually the cost of the insurance. So, many times, our clients choose to self-insure their retirement income through systematic withdrawals of assets under management. You need to help them understand the risks of longevity and the costs of not transferring their risks. 

 

Our research shows that most people, regardless of income and net worth, benefit from having 15 percent of their portfolio from guaranteed income sources. Those sources are Social Security, defined benefit plans, and privately purchased annuities. The ability to pool your life expectancy with other people creates a transfer of risk that is not available in any investment vehicle besides guaranteed income sources.  

 

Help Companies Keep Promises

As you meet with business owners, many will want to shift the risks of their aging pension plans to another source. There are trillions of dollars in pension plans across the United States that are no longer serving their corporations. The plans are not properly rewarding the people for extended service. The plans don’t help recruit better talent. And, they aren’t accruing additional benefits. It’s simply a liability for many CEOs today. 

 

Transferring a pension plan allows a company to free up resources that would normally be used for administrative work on an outdated plan. Due to tax reform, some companies spend idle dollars to sure up their plan. So, many are in a great position to transfer to an insurance carrier. While there is a one-year premium to shift this risk, the cost savings of administrating the plan typically outweigh the initial premium. 

 

Winning Strategy

Change your presentation to clients to shifting risks. They are surrounded by risks in today’s retirement planning market. Be different. Returns won’t matter if you can shift some of the income risk to an insurance carrier. 

 

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.”