Annuities

The Legacy Strategy that Passes Greater Values


Annuities

Many times, your clients will say they wish to leave a legacy or inheritance to their children or grandchildren. Usually, they think of this as a lump sum of cash or certain personal items. But what about a steady income? You could help them create a longer, and potentially more fulfilling legacy with a joint income annuity.

 

We’ve had successful results with this concept. Usually, clients want to leave a certain amount of money to their beneficiaries. However, before they pass and give away their remaining assets, they’re going to need a certain amount of income. This strategy solves both challenges.

 

In this situation, the older client elects to purchase a single-premium immediate annuity and make a child or grandchild a joint annuitant. There are a few advantages to purchasing an annuity in this manner:

 

  1. The older client enjoys an income guaranteed for life
  2. Income is received with an exclusion ratio, so most of the income is received tax-free
  3. When the older client passes away, the joint annuitant continues to receive the income for the rest of their life
  4. If a cost-of-living rider is attached, the joint annuitant enjoys potentially guaranteed step-ups in income for the rest of their life

 

Greater Values

This is already a unique strategy to legacy planning, but I encourage clients to take this one step further. I ask them to write letters to their child or grandchild, passing along memories, advice and family values. Along with the funds from the annuity, these letters can be sent at certain life milestones:

  • 16th birthday
  • High school graduation
  • Wedding day
  • Birth of first child 

In these letters, the parent or grandparent can share their wisdom – struggles as a teen, joy in marriage, the challenges of raising a family, etc. These letters are what will make a difference to beneficiaries. The transaction is more than an economic benefit. It becomes an inheritance of a legacy.

 

Winning Strategy

When it comes to wealth transfer, we tend to think about life insurance or beneficiary designations. Think outside the box to transfer wealth that includes value – family values.

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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. You can get his latest book, “Winning Strategies: The New Rules of Retirement Planning,”  on Amazon.

Wealth Transfer Annuities Family Values Legacy Planning

The Secret to Increasing Your Compensation


Annuities

Many of you may be uncomfortable talking about your compensation with clients. That’s fair. Up until now, you haven’t had to do that. But the market is shifting toward more transparency and commoditization. Consumers want more for less. 

 

If you want to simply remain relevant in this business, you have to add value. Beyond that, if you want to increase your compensation, you have to increase the number of people you serve. That’s the secret. 

 

Law of Compensation

In Bob Burg’s book, “The Go-Giver,” the Five Laws of Stratospheric Success are laid out through a story about a sales person who is focused on taking instead of giving. He expects people to buy from him because of his quota.

 

Too often, we think of driving our compensation through earning more from every client or transaction. That’s another way of taking vs. giving. Instead, you need to focus on how many people you can serve. The Law of Compensation states that your income is determined by how many people you serve and how well you serve them. So, let’s concentrate on increasing the number of people we serve. 

 

Access to More Clients

One way to uncover more prospective clients is to meet people in a larger group setting. You might immediately think of hosting seminars. However, seminars are expensive and time-consuming, and they don’t necessarily create influence or interest. 

 

We’ve been helping advisors find groups of prospective clients another way – through pension risk transfers. In these situations, you can not only provide assistance to a business, but you could also gain access to all the employees. Wouldn’t we all like to be introduced to hundreds of people at the request of their employer? You’re using the business’s influence to serve more people.

 

A typical transfer includes a period where employees may elect to take a lump sum and roll over their retirement savings. You can provide valuable information to help them make those decisions and win them as clients. By doing so, you have successfully followed the Law of Compensation: Your income is determined by how many people you serve and how well you serve them. 

 

Winning Strategy

Don’t concentrate on how much you earn by each transaction. Focus on how you can help more people. Increase your value proposition and the number of people you serve, and I’m confident you’ll see results.

 

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. You can get his latest book, “Winning Strategies: The New Rules of Retirement Planning,” on Amazon.

Retirement Planning Compensation The Go-Giver Client Value Pension Risk Transfer

Bringing Annuities to Light


Annuities

I recently attended a sales conference hosted by Allego, a training software company. The conference displayed best use cases for training but did so in light of the changing way people learn. As we attempt to bring more awareness to annuities in the financial planning process, I think it is really important to understand how our clients learn. 

 

Traditional brick and mortar business are rapidly declining, and our digital footprint is coming front and center. How we interact with prospective clients and clients is changing right before our eyes. Consider these stats from Forrester Research: 1

  • 68 percent of buyers want to research an idea online before they buy
  • 60 percent of buyers would rather get their initial information online instead of talking with a person
  • 62 percent of buyers say they decide on a vendor based on their digital image alone

 

Your prospective clients are more educated, have more resources and information at their fingertips, and have more choices of vendors than ever before. To remain relevant, you have to provide value upfront and more frequently than you did just 10 years ago. 

 

The learning curve in our industry is not steep; it’s more like a ramp. But, the longer a prospective client takes to engulf themselves in a topic, the longer the retention. That makes your sales cycle extremely long. But, education is positive for our industry. It’s always been a bedrock. It just needs to be delivered in a different medium. 

 

What’s Your Story?

Every financial planner can benefit from stepping back and thinking about how you deliver information to your clients. Before you dive into the digital world, take some time to clarify your message and your story.

 

The way your clients interpret your message can either be like holding several eight-pound bowling balls, or striking a cord that addresses their internal emotions. It’s not about us anymore. It’s about what we can deliver to them emotionally and philosophically. That’s what clients want to know. When you communicate in that perspective, you touch the hearts of many people, which can lead to new level of engagement. 

 

A new level of engagement is what will bring products to a new light. The change in perspective will allow the product to fit into the overall purpose of the financial plan, which is totally focused on the client. Take a few minutes to think about how you communicate. Are you talking the same way you did just a couple of years ago, or are you ahead of the curve in how prospective clients want to interact? If you want to learn more, check out my site, https://www.clarifyyourmessage.com/Michael-McGlothlin, and to see how I could help you market and grow your business.

 

Winning Strategy

Think about how your target market communicates and researches information. Match that behavior and you have a better chance of being the go-to financial planner for that group. 

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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. You can get his latest book, “Winning Strategies: The New Rules of Retirement Planning,” on Amazon. 

 

1Forrester, “B2B Buyers Mandate A New Charter For Marketing And Sales,” Jan. 10, 2017: https://www.forrester.com/report/B2B+Buyers+Mandate+A+New+Charter+For+Marketing+And+Sales/-/E-RES132705

Retirement Financial Planning Education Client Value

Why June Should Be Client Value Month


Annuities

OK, so June is officially Annuity Awareness Month. If you’re anything like me, you get excited about the opportunity to spotlight our business and how annuities fit into the planning process. However, I’m not sure Annuity Awareness Month is the appropriate title. Instead, I think it should be Client Value Month. 

 

Let’s talk about the meaning of value in retirement income planning. 

 

  • Value goes beyond products. Anyone can find products through a variety of online resources. In many cases, those products are less expensive. What separates you from an online financial grocery store? Advice, wisdom and client engagement. 

 

  • Value is defined by the client, not you. Too often, I see websites and marketing material focused on the advisor’s credentials, experience or area of expertise. The focus needs to be on what you do for your clients. 

 

 

  • Value is understanding the client’s vision. Everyone has a different vision of retirement – start early, travel, leave a legacy, maintain a healthy lifestyle. That’s the vision that you have to meet. It’s the future the client wants to attain. You can deliver that future efficiently and effectively.

 

  • Value is creating confidence. In many cases, annuities make the overall retirement portfolio more predictable. In doing so, you increase the probability of your client having a certain level of income to meet their vision of a great retirement. 

 

Winning Strategy

Focus your attention on your client’s goals and their vision of a great retirement. That will lead you to the placement of safety and guaranteed income where annuities fit. But, start with the value and not the product. 

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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. You can get his latest book, “Winning Strategies: The New Rules of Retirement Planning,” on Amazon. 

 

1Nationwide Retirement Institute, Social Security 4th Annual Consumer Survey, September 2017: https://nationwidefinancial.com/media/pdf/NFM-16735AO.pdf

Retirement Annuities Client Value

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