Annuities

5 Ways to Earn More Referrals


Annuities

Without a doubt, if you want to grow your client base, referrals are the most effective method. The trust you have built with your existing clients and centers of influence provides an opportunity to attract new clients to your planning firm.

 

As you look toward the next year and growing your business, you need a referral strategy that separates you from the competition. Providing value is the best way to consistently do so.

 

From the book “The Go Giver” by Bob Burg and John David Mann, there are five essential qualities that constantly deliver value to your clients. In turn, your clients can easily refer people to you in the future.

 

  1. Excellence: In my new book, “Free Throws for Financial Professionals,” I write about how Coach Knight would prepare. He asked the student managers to take copious statistics and pair those numbers with video of each practice. He not only knew the numbers, but he would ask why the numbers looked the way they did. He could match behavior with results by comparing the statistics with the actual video. From there, he sought to increase the performance of the team.

 

  1. Consistency: During my four years as a student manager, we prepared for games in a similar fashion. Specifically, game days looked exactly the same. We ate our pre-game meal at the same time, relative to the tip-off time. We ate the same meal. The team completed a final walk-through of out-of-bounds plays that were to be used and defended against that game. And, we typically had a short presentation by Coach to review the game’s goals. This consistency provided a calmness for the student-athletes before critical games. It’s the same calmness your clients need prior to making a major life decision about their retirement.

 

  1. Attention: One of my favorite encounters as a student manager was with Duke basketball Coach Mike Krzyzewski (better known as Coach K) during the 1984 Olympic Trials. I drove him from Indianapolis to Bloomington for the week of basketball trials with amateur players. During the week, he saw me in a hallway and not only remembered my name but remembered to ask me about a test I had taken that very morning. He paid special attention to me as a person because he listened actively the weekend prior. We can all afford to know more about our clients and their dreams through questions and active listening.

 

  1. Empathy: One of the greatest examples of empathy in our industry is displayed when we deliver a death claim. One of our advisors takes the extra chair out of the office prior to meeting with a recently widowed client. Understanding how a client feels and showing that you care can separate you from the rest of the competition.

 

  1. Appreciation: This doesn’t have to be elaborate or over the top. In fact, I suggest that the simplest gestures that are meaningful are the most memorable. In today’s electronic world, a hand-written note goes a long way. Make the gesture personal and unique to that individual. You want to make a memory not just say “thank you.”

 

If you can incorporate these five activities into your daily routine, you make yourself more referable than ever before. Your competition will become irrelevant because you have delivered more value to your clients and centers of influence.

 

Winning Strategy

Think about how you can provide value next year. When you give value, referrals and business will likely follow. Make plans to institute the elements of value into your practice.

Winning Strategies

Craving More?

Face it. These days, your phone changes faster than you do. Continuous improvement is the name of the game. If you’re standing still, you might as well be walking backward.

Special guest Scott Fergusson joins us to talk all things innovation and how you can easily upgrade your business. Not just to keep up with the industry, but to get ahead of your competition.

Catch the Replay

 

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 at www.freethrowsforpros.com.

Retirement Referrals Practice Enhancement

Want to Win? Practice Your Free Throws


Annuities

Just when you thought I couldn’t write anymore basketball-related financial planning tips … I’m releasing my third book, “Free Throws for Financial Professionals.” Kidding aside, this book really gets to the heart of everything I believe in. It centers around 10 principles I learned as a student manager at Indiana University under legendary Coach Bob Knight – principles I still apply to my work and life today.

 

While Coach Knight is considered a controversial public figure, I always thought of him as my best professor at IU. (That’s saying a lot as the Kelley School of Business was constantly ranked in the top 10 of undergraduate business schools.)

 

Free throws are in the title because they’re a vital part of a basketball game. Championships are won and lost at the free throw line. At the end of the game, when every second and every point matters, you have to be able to execute. It requires repetition, attention to detail and technique.

 

I like free throws because you don’t have to be athletic to be a good free throw shooter. It helps, but it’s not a requirement. Instead, hard work, concentration and calmness will help you sink the shot.

 

Practice and Preparation

One of the greatest strengths Coach Knight possessed was his ability to plan for an opponent. I’ve always said that Coach wasn’t as much of a basketball genius as he was just extremely prepared for games. He knew his team better than anyone else – their strengths and weaknesses. He also understood how to use those strengths against the other team.

 

You should do the exact same thing. Now, don’t misunderstand me – your clients are not your opponents. You should always be working on the same side of the table. However, you need to plan for every meeting. Every interaction. You have to know the game inside and out.

 

In order to succeed, you need to know the numbers that drive your success – so you can adjust and make changes along the way. You have to understand the activities that drive your sales. Here are some things every financial professional should know:

 

  • What are the key performance indicators for you and your staff – sales and administrative?
  • How can you duplicate those activities more often next year?
  • Which activities need to be delegated to another person so you can focus on the key performance indicators for your business?
  • Can you become more effective at your key activities?

 

Winning Strategy

Practice and plan for success. Read my new book, “Free Throws for Financial Professionals,” to learn how I measured success and set activity goals that nearly assured my sales. You can order or download a copy of the book at www.freethrowsforpros.com.

 

Winning Strategies

Craving More?

Face it. These days, your phone changes faster than you do. Continuous improvement is the name of the game. If you’re standing still, you might as well be walking backward.

Special guest Scott Fergusson joins us to talk all things innovation and how you can easily upgrade your business. Not just to keep up with the industry, but to get ahead of your competition

Watch Now

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 at www.freethrowsforpros.com.

Retirement Practice Enhancement Financial Planning

Strategies to Grow Your Client Base in 2019


Annuities

It’s hard to believe it’s time to plan for next year already. You might think it’s early, but completing the planning process now, at the start of the fourth quarter, gives you an advantage in a couple of ways. First, you can start changing your habits so you hit the ground running on Jan. 1. And, when you have more time to think about your business instead of work in your business, you tend to make better decisions.

 

One decision you should consider in 2019 is how you will grow your client base. Gaining clients is always a challenge for planners. It was a challenge at the start of this industry. It’s a challenge today. And it will be a challenge in the future. Why? Here are three reasons:

 

  1. Your competition is only growing. When prospective clients search Google for financial planning, they will find millions of wealth managers and online tools to help them make more informed decisions. Many of those resources are very inexpensive and easily accessible via technology.

 

  1. Consumers don’t wake up needing financial planning services. They have their sights on other tangible purchases and plan for retirement less than they plan for vacations.

 

  1. Our industry works on the most complex problems for our clients: retirement and longevity. There are so many potential solutions and changes during a 20 to 30-year retirement that clients become frustrated with the planning process. It doesn’t help that it’s very hard to do business in the insurance industry as a whole, due to regulations and paperwork.

 

No matter the challenge, acquiring new clients is the single most costly activity in your business. Which is why you should focus on ways to make it better.  

 

One of the more efficient ways to attract clients is to look deeper within their family – they have a higher trust factor because they know someone working with you. Marketing to family members might provide a better return than investing in mail campaigns, seminars or referral materials. Remember, billions of dollars will transfer from one generation to next over the next two decades, so you’ll want to follow those assets.

 

In order to connect with the next generation and start your relationship on a positive note, here are some ideas you should consider implementing as part of your marketing strategy next year:

 

  • Beneficiary reviews on all life insurance, annuities and Individual Retirement Accounts (IRAs). There are so many horror stories around the lack of a proper beneficiary designation that causes family strife, unintended tax consequences and funds going where they are not supposed to go.   

 

  • Harvest the cost basis on nonqualified annuities. While the tax law reduced the tax brackets, passing an annuity with embedded gains to the next generation forces the beneficiary to pay higher taxes at time of receipt. There are mechanisms to obtain the cost basis first and the gain second, which is completely opposite of most death claims in annuities.

 

  • Pass along family values with family wealth. Establish an income stream for the life of grandchildren that includes handwritten notes from the grandparents at special birthdays or events. You can gain a deeper understanding of the family dynamics by having this conversation.

 

So, if you want to increase your clients next year – and everybody does – consider looking within your existing base. Develop a specific marketing strategy to consistently and thematically talk with your clients about adding value for their family.

 

When you deliver value, relationships tend to follow – like lightning and thunder.

 

Winning Strategy

Look inward first. Your existing clients can provide the key to future growth through their children and grandchildren. Develop specific marketing strategies around the value you can bring to their entire family.

 

Winning Strategies

Craving More?

Face it. These days, your phone changes faster than you do. Continuous improvement is the name of the game. If you’re standing still, you might as well be walking backward.

Special guest Scott Fergusson joins us to talk all things innovation and how you can easily upgrade your business. Not just to keep up with the industry, but to get ahead of your competition

Catch the Replay

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,” will be available in October.

Practice Enhancement Retirement Annuities

4 Reasons You Should Focus on Retirement Income Planning


Annuities

Over the next several decades, retirement income planning will only grow. Planners have so much opportunity to concentrate on income planning as a core competency. I spend a lot of time talking about Americans’ behavior over the last 20 years and why income planning will be paramount for the next 20. Here are four reasons:

 

  • Our savings rate continues to decline. In December 2017, our savings rate dropped to 2.4 percent.1 If you look at the past 20-year trend, you will see a steady decline in savings, with the exception of high inflation periods or around the dot-com bubble and financial crisis. This has left most people ill-equipped for their retirement. Therefore, we will be asked to create more income from fewer assets than ever before in our careers. We have to get our clients to think differently, and the planning community will have to act differently to accomplish this. 

 

  • We continue to misuse social programs. As I travel around the country, I always talk to clients who want to get their hands on their Social Security as soon as possible. They fear that the program will be bankrupt in the 2030s. There are some fixes to Social Security that will likely be addressed in future Congresses. For now, the bigger problem is the fact that we completely misuse the system. More than 50 percent of Americans take Social Security retirement early.2 That makes your benefit smaller, and you lose the valuable 8 percent growth of your income between full retirement age and age 70. For some people, that equates to a 76 percent reduction in income. Only 2 percent of men and 4 percent of women take Social Security at age 70, so there is a lot of education that needs to happen in order to secure more guaranteed income.2 With just a 20-year time frame, the difference could be as much as $122,000 in additional income. That makes a big difference for the typical retiree. 

 

  • Employers remained focus on shifting defined benefit plans to defined contribution plans. That’s good for many employees – low cost investing, multiple subaccounts to choose, tax deferral and matching employer contributions. But, the loss of guaranteed income creates a gap that needs to be filled. When I sit in a plan sponsor’s office, I see a litany of risk-tolerance tests, return sheets and asset allocation brochures. But, when I ask the sponsor to tell me how their participants are going to turn these assets into income, their faces turn blank. Turning assets into dependable income is a priority and makes a baseline for many Americans to be able to buy the things they are accustomed to buying. 

 

  • In many minds, longevity grows as the most troubling risk for retirees. The uncertainty around how long you will need income remains a fear for many Americans. Providing a plan to address this allows the client piece of mind and, if done properly, enhances the systematic withdrawal strategy. We are living longer at times at the expense of our quality of life. Clients need to plan to make sure they have not only lifetime income but also a plan if a long-term care emergency happens. The odds continue to increase that we will have a care event as we age. Shifting longevity risks for lifetime income and long-term care make sense in many cases. And, the shift of those risks is generally done for pennies on the dollar. 

 

Income planning should be thought of as a great spot to be in as a financial planner. There are large numbers of people retiring and needing planning for many decades to come. Our past behaviors create a reason to change our clients’ perspectives and create value for them. I’m looking forward to the challenge and the growth opportunities in this space. 

 

Winning Strategy

Income is the ultimate outcome for many retirees. You can’t spend assets but you can spend income. Add retirement income planning to your discussions, and you’ll add value to the client experience. 

 

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.”

 

1Bureau of Economic Analysis, “Personal Income and Outlays, December 2017”: https://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

 

2The Motley Fool, “When Does the Average American Start Collecting Social Security?” April 19, 2016: https://www.fool.com/retirement/general/2016/04/19/when-does-the-average-american-start-collecting-so.aspx

 

 

Retirement Income Financial Planning Practice Enhancement

Digging Deeper: 3 Ways to Generate Revenue from your Existing Book of Business


Annuities

As I travel around the country on business, I enjoy talking with advisors from different channels – banks, broker-dealers, independent agents, registered investment advisors. Regardless of business model or channel, one consistent topic always comes up: 

 

“I need to find more clients. Can you help me with a seminar or dinner so I can find new clients?”

 

But, I like to think of the question in a different way and ask: 

 

“Are you interested in finding more clients? Or more revenue for your practice?”

 

Usually, the answer is revenue. But advisors tend to think that new clients are the source of new sales and revenue. Which is partly true. However, there’s a goldmine of existing opportunities with your existing clients. 

 

Mine Your Book

According to LIMRA’s 2016 Fact Book (its most recent edition), there are $486 billion of assets in nonqualified annuities – both variable and fixed – on carriers’ books right now. Some facts to consider: 

  • These contracts are NOT being annuitized and the owners are NOT electing to receive income from the rider
  • Approximately 33 percent of those owners are older than 75. Of those owners, 65 percent are classified as affluent, high-net-worth or mega-millionaires – those are all the clients that you either have in your book of business or are already recruiting to the firm. 

 

To make a difference with the people you’re already working with, I suggest that you dig deeper. Look at those older contracts and find a better use than just tax-deferred accumulation. Here are three suggestions:

  • Talk to your clients about putting the IRS in the back of the line, and your clients and their beneficiaries in front. Products today offer an exclusion ratio with the ability to access the cost basis first, without incurring the ordinary income tax immediately at time of death. Then, the beneficiary can spread out the tax consequences for a longer period. 
  • Turn tax-deferred assets into tax-free benefits for long-term care purposes. Only 7 percent of Americans have shifted their risk to an insurer. Asset-based long-term care products allow you to transact an exchange without current taxes and continue the tax-deferred growth. If the client uses the funds for qualified long-term care expenses, the cost basis and gains are returned to the client tax-free. You’ve taken a future tax consequence and turned it into useful and timely tax-free capital. 
  • Lock in the gains. We’ve seen an unprecedented bull market since the financial crisis. Many clients may do not want to take as much investment risk as they did 10 years ago. And, when asked about it, they probably don’t want to feel the same pain they felt in 2009. Sweep the variable contracts with no downside protection to a more secure vehicle that qualifies for a tax-free exchange, either fixed or fixed indexed. You might want to look at an income rider to provide options for the client if the market does correct and they wish to take income from another source besides their systematic withdrawal from equities and bonds. 

 

I think if you were to talk to your prospective clients about these ideas, they would find more benefit to working with you. You might even speed up the sales process. More importantly, you provide a valuable benefit for those clients. 

 

Winning Strategy

Dig deep into your client base. Ask more questions about assets held outside of your firm. Provide solutions that defer taxes and put your clients and their beneficiaries first. 

 

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.”

Retirement Practice Enhancement Revenue