Annuities

Why You Must Prepare to Win in 2018


Annuities

It’s hard to believe we are already in the fourth quarter of 2017. It may seem like you’re still trying to wrap your arms around this year, but it’s already time to look at your plans for 2018. Your first step should be to create goals and direction for your practice. We have a full 90 days to prepare for 2018, so there’s no excuse for not having a great year. 

 

Being around Coach Bob Knight for four years taught me a lot about planning for success. Many said that if you gave Coach Knight a week to prepare for a team, he would likely win the game. I encourage you to consider the things that he did to plan, and apply them to your business. 

 

Set reasonable but high goals for the season. As an owner of your financial services business, you need to have overarching goals for the year. Where do you want your business to be at the end of 2018, and how does that fit into your long-term strategy? 

 

At Indiana University, we had three goals for the season: 

  • Go undefeated in the pre-conference season
  • Win the conference, 
  • Go as far as we could in the NCAA tournament

 

Each step built on the next. No goal was unreasonable. And, if successful, the year added to the history of Indiana basketball and gave our fans great enjoyment. Notice that our goals were to win every game. Conference season is difficult, but it is not unreasonable to think that we can win the conference. And, we didn’t set out to win the NCAA tournament every year. However, we wanted to survive and advance as far as our team possibly could. 

 

Assess your strengths and weaknesses – honestly. Coach would consult with many of his mentors to ask how to use certain players. Some players were not good handling the ball; others were lightning quick. Using the players to their strengths was critical to game day and the season’s goal attainment. 

 

You need to take a hard look at your personnel and the strengths and weaknesses, even if you are a sole practitioner. My business coach helps me conduct a 360-degree review of both my direct reports and direct superiors. It’s uncomfortable to hear confidential and anonymous feedback, but it helps me adjust my leadership to the team – where I need to improve or what they like from me. 

 

You might ask yourself some questions like: 

  • What do I need to improve on in order to hit my 2018 goal? 
  • How do I need to re-shape my products or services in order to grow my business to my goal? 
  • Do the same for your support and sales staff – are they the right people and skill sets to take you to the next level? 
  • How do you need to reinvest in your people to ensure that you reach your goals in 2018 and beyond? 

 

Take serious stock in yourself, your people, and what they need from you to grow. 

 

Plan with discipline. After taking stock of what players could do well and not so well, we would play to our strengths and avoid our weakness. For each game, Coach determined the other team’s strengths and how our players could best neutralize those strengths. We then worked for the entire week on those plays and rules that gave us the best chance to win. 

 

Sometimes, players were put in uncomfortable positions, but not out of their skill level. Learning how to play a slightly new role requires repetition. So, we repeated those key factors to winning throughout the week in many different scenarios. Practice was intended to be harder than the actual game. 

 

Similarly, you need to plan your client marketing and interactions with the same discipline. Too often, we think placing products and talking with clients is “selling or marketing.” I argue that we have to set aside time and dedicate resources to disciplined marketing to our intended audience. You have to schedule time to network, work on scripts for advertisements, complete video shoots, rehearse radio shows, and plan for client events on a regular basis. 

 

Once engaged with a specific client, we have to utilize a disciplined, repeatable, and consistent review process to make the best interest recommendations. Just like planning for a new team the next weekend, you have to plan the same way for the next client. Solutions and how make recommendations will be specific to the client, just like playing against a different team requires different tactics. 

 

Prepare to Win. Winning 30 games during the 1987 season requires a lot more detail than this blog allows. However, I think that Coach followed a similar process every year. I’ve tried to follow a similar process in business as well. I set high and realistic goals, know my strengths and weaknesses for those goals and where I have to improve, and execute a consistent game plan that works toward my goals, knowing each situation is different. 

 

Winning Strategy

My favorite quote is sports is, “Everyone has a will to win; few have a will to prepare to win.” I always took this lesson to heart from my time with Coach Knight. Apply it to business to have success in 2018. 

 

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.”

Financial Planning Business Planning Fiduciary

We’ve Already Passed the Finish Line: A DOL Comment


Annuities

Today (Aug. 10), the U.S. Department of Labor’s request to delay the Fiduciary Rule’s full implementation was revealed. As with most regulation, there are technical aspects to the delay that will likely be argued by supporters and opponents. I want to make one thing clear: We’ve already passed the finish line for fiduciary status. 

 

Undoubtedly, the rule’s documentation could be less onerous. But, we shouldn’t ignore the fact that fiduciary status is here – and, it’s here to stay. We must adapt to it. We must innovate toward it. We must improve our client experience. We must keep our clients’ interest before our own. And, we must move the retirement income community forward … now. 

 

Many people will use this announcement to recommend that we go back to the old ways of doing business. It’s too late. Clients are beginning to ask their financial advisor if they are a fiduciary. Working with the clients’ interests has always been a priority, and the way that we operate our business. Today, really since the release of the proposal in 2016, fiduciary status is a table stake, a requirement and, most importantly, an expectation. In order to be successful in business, you have to meet or exceed the clients’ expectations. The value you bring is determined by how much you bring to the client above what they paid. The client expects maximum value, so you have to look at your marketplace beyond the regulation. 

 

The market has already begun to shift toward working in fiduciary status for all client relationships. Transparency continues to grow as an integral part of pricing fees and commissions. Disclosure has become a part of the product fulfillment process. Greater client awareness and education about solutions have become part of more sales presentations. In many ways, our industry has improved more in the last 12 months than it has in the last decade. 

 

I encourage those in the retirement income space to continue the move forward toward the fiduciary world. That doesn’t mean some of the DOL’s unintended consequences don’t need to be dealt with over the next 18 months. And, moving toward a fiduciary world doesn’t mean the elimination of commissions. However, we can’t go back on our commitment to serve our clients. With the complexity of retirement, there has never been a more important time to engage with Americans and help them solve their most difficult problems – longevity and income. 

 

Please stay connected with us to learn more ideas on how to best serve your clients in an uncertain regulatory and economic environment. Ash Brokerage has been active in the comment periods, and we look forward to answering our industry challenges through innovation, education and practice enhancement. 

 

Winning Strategy

When you run a race, you never look back. As you change your retirement income practice toward a fiduciary status, don’t look back. Keep your focus forward on improving your clients’ position, their experience with your firm, and how to best serve them. 

 

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.”

 

DOL Fiduciary Rule Retirement

Vision for What Your Effort Will Deliver


Annuities

A couple of weeks ago, I was talking with my business coach, CJ McClanahan, and he said something that struck me: “People don’t have a vision for what the effort is going to deliver.”  If you think about that statement, it applies to several parts of our lives as financial planners.  

 

Vision for Your Practice

In today’s increasing regulatory environment, we tend to focus our attention on fighting the U.S. Department of Labor rule. In practice, the rule has already taken effect as clients are already asking planners if they are fiduciaries. For the last nine months, banks and wire houses have been converting their clients, for better or worse, to fee-based accounts. And, as I travel around the country, I hear too many people talking about what they are going to do to fight the rule, rather than what they are going to do to implement the rule in their practice.  

 

The rule will undoubtedly require a lot of effort to fully implement. However, our clients are likely to benefit from the changes that the rule suggests. Putting our clients’ best interests first has always been a part of our ethical makeup. However, the documentation needed to prove this status will require changing how we process our client files, complete our paperwork, and follow our sales process. 

 

That said, we tend to lack the vision of what our businesses may be like when we implement the rule. Your clients will likely have more trust in you. They will likely discuss more concerns with you. And, they will be more likely to refer you to other like-minded prospects. Those items can make your business more profitable and more efficient. 

 

Vision for Your Clients

At the same time, our clients lack vision in the financial planning process. Most clients spend more time planning this year’s vacation than they do planning their retirement. We have to do a better job of providing that vision, through education that motivates them to complete the planning process.  

 

Without a doubt, the planning process can be onerous if done properly. Planning should consider the risks of retirement, including longevity, legacy and charitable desires, taxes, and health care, to mention a few. Each of those risks needs special consideration, evaluation, and analysis to prepare a proper recommendation for each client’s concerns, goals, and objectives. 

 

Few people rarely want to think about those risks, let alone plan for them or act upon them. It’s our job as financial professionals to create a positive vision of the outcomes for our clients: sustainable retirement income, better lifestyle management, and more time with children and grandchildren.  

 

Eyes on the Prize

In the end, vision becomes an important part of the planning process and of our business models. We must keep the vision of all the changes in perspective, but we must also envision the benefits of change. In doing so, we can easily put forth the efforts needed today for a better business and happier client relationships. 

 

Winning Strategy

Few people maintain the vision of all the effort that change requires in order to improve. That applies to clients and planners. Take time to think about where your clients need to be in the future and where your business needs to be in three to five years. Keep that vision in the front of your mind for proper motivation to change.  

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities 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.

Annuities DOL Fiduciary Rule

Be Ready for the Questions Your Clients Will Be Asking


Annuities

As I was traveling around the country attending conferences, The New York Times published an article that caught the attention of many people in our industry. “The 21 Questions You’re Going To Need To Ask About Investment Fees,” points out questions we all need to get comfortable answering.* Better yet, we should prepare to discuss them upfront with our clients  

 

The article is a perfect example of the market effects taking place in the financial services industry. While the U.S. Department of Labor Fiduciary Rule has been delayed, our industry has already started a transition that is unlikely to be reversed. Our clients have been exposed to many of the perceived conflicts that exist in our business, and they have the right to ask appropriate questions. 

 

At the same time, I believe it is entirely appropriate to continue selling commission-based products, especially in long-term income planning and tax-deferral situations. Simple math indicates that commission-based products, when used properly, enhance the client position in many cases (as with any product solution).

 

The article asks questions about compensation, incentives, trips and fees. All of these are important to disclose to our clients in the future. If incentives are involved, I would argue we need to be upfront about those in the new fiduciary world. In fact, we need to figure a way to not be incentivized by these and focus on vendors making our business more efficient and effective. In the end, we must be prepared to answer all our clients’ questions about our compensation, the fees of the product, and why the particular product is the proper solution.  

 

As an industry, we need to take this type of article to heart. The news media should not be educating our clients about fiduciary status. Instead, we need to show them how valuable financial service professionals can be in building a long-term retirement and wealth management plan. If we commit to that, everyone wins.  

 

Winning Strategy:

Whom do you want educating your clients – you and your staff or the news media? Stay ahead of any hype. Be ready to answer questions about fees and compensation. 

 

About the Author

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities 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.”

*New York Times, “The 21 Questions You’re Going to Need to Ask About Investment Fees,” Feb. 10, 2017: https://www.nytimes.com/2017/02/10/your-money/the-21-questions-youre-going-to-need-to-ask-about-investment-fees.html?_r=0

Annuities DOL Fiduciary

Resting on the Red Sweater


Annuities

March Madness is the most exciting time of the year for me – even more exciting than Christmas. You see, this time of year always brings back memories of Indiana’s run to the national championship in 1987.

 

As a student manager, I can remember preparing the bench for the national championship game at the Superdome in New Orleans, Louisiana. I was extremely anxious – everyone was. And, as I walked back into our locker room for the last time before warm-ups, what I saw made me even more anxious. 

 

Coach Bob Knight was laying on the training table. He’d folded his famous red sweater into a nice, neat pillow … I couldn’t believe he seemed to be resting peacefully just minutes before our biggest game of the year.  

 

Looking back now, however, I think he was at peace because he knew our team was prepared. During the season, we had several days to prepare for games, but for the national championship, we had just 48 hours. However, we followed the exact same process: 

  • The team reviewed the players from Syracuse right after the national semi-final 
  • The coaches watched film Saturday night and presented the game plan to the players the following morning
  • On game day, we went through the exact same preparations as we did for every other game in the  season
  • We continued to use our model of basketball – man-to-man defense and motion offense 

 

Preparing for Your Own Big Game

When it comes to preparing for the fiduciary rule, you can use the same formula for success. As planners, most of us already act and make recommendations in the best interest of our clients. However, we need to document our sales process and make it repeatable.

 

Though the outcome was different for each game, the Hoosiers’ process remained consistent through the 1987 season. We evaluated each team’s strengths and weaknesses from top to bottom – we just didn’t look at the team’s starting five or star players.

 

Similarly, as planners, we have to focus on all the risks associated with financial planning. Too often, we look at asset management as the solution to wealth management. But, we also have to consider longevity needs (so our clients don’t run out of money), long-term care, taxes, the death of a spouse, and transferring their legacy to the next generation. These concerns need to be evaluated as a regular part of our client process.

 

I encourage everyone to evaluate their sales and business practices during the time remaining before the fiduciary rule takes effect. You could say it’s already in effect due to many broker-dealers implementing new strategies and FINRA assessing fines based on conflicts of interest. To reduce your risk of litigation, you should prepare to win, and prepare consistently.

 

Winning Strategy: Establish a sales process that is repeatable and can easily be documented. Consistency will allow you to focus on your clients’ needs, and force you to consider all the risks.

 

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities 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.”

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