What Does it Mean When Your Clients Go Quiet


It’s a weird time.

With all the recent market volatility and social distancing, it’s hard to know how to reassure your clients. And every client is different. You’re probably hearing from your more vocal clients. And they are most likely demanding your attention first. The squeaky wheel…you know the rest.

But what about those wheels that aren’t squeaking? You also have clients with concerns that aren’t reaching out. At least, they aren’t reaching out to you.

Be careful of the quiet people. Have you ever heard that phrase? In today’s climate, that’s good advice. With market volatility, it’s easy to focus in on the people who are calling us to calm them down. We take the necessary time to talk them through the market’s ups and downs and focus in on the long-term. And that’s an important part of our job. But we also need to talk with the people who are not calling us. Often, these clients are introverts.

Introverts tend to rely on their own research. And because they’ve taken the time to research, they tend to be more confident. But, even though they’ve done the research, they will seek out other people’s opinions to shape their own. That's significant for us as financial planners. They may very well be seeking out other financial professionals for ideas during these rocky times.

So regardless of your client base, whether they're calling you or not, you need to systematically reach out to all your clients.

The ones who are calling you, and, most importantly, the ones who are not.


Transformational Tactic

Develop a consistent, scalable message. And use it to reach out to all your clients. Especially those who may be calling somebody else.

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A Healthy Dose of Perspective


Fear around the Coronavirus is deeper than a run on hand sanitizer. It’s also driving a lot of recent market volatility. Considering all the information floating about, I remembered an article by Dr. David Katz that I read a few weeks ago. Dr. Katz is a leader of the Yale Prevention Center, and his article put things in perspective for me.

He begins by pointing out that, in America, the chances of being affected by the Coronavirus – at the time of his writing – was one in 100,000. That has likely changed by now, and probably continued to change from the time I wrote this to the time you’re reading it. Still, for most Americans, if you follow recommendations such as proper handwashing and social distancing, there’s a good chance of never being infected.

Now, the perspective. The chance of an American being struck by lightning is one in 3,000. It’s a significantly greater risk, and yet it’s one that, as a society, we’re apathetic about. Why? As Dr. Katz points out, there’s a larger apathy when no one’s talking about it. After all, when’s the last time you read a major news story about being struck by lightning?

In his article, Dr. Katz also brings up the continued misuse of food and diet, and its link to obesity—another topic we are apathetic about. Here in the United States, more than half a million people will die this year because of a poor diet.

Right about now, you might be wondering how this relates to you and your financial services practice. It’s a fair question. Let’s start with the market volatility I mentioned earlier. So far, it’s been about 10 days of an unsettled market. Your clients feel this uncertainty. And the uncertainty feeds the volatility.

What we should be worried about, though, is not just the last 10 days, or the immediate future. We need to be considering a larger epidemic. And we need to be talking about it and countering the apathy that comes when we ignore it. Are you ready?

People have not saved enough for retirement.

In addition, they continue to misuse Social Security. They are losing guaranteed defined benefits. Add that to the fact that we’re living longer than ever before. In fact, in today’s world, if you take a couple aged 45, there’s a 50% chance that one of them will live to age 95.

So, what do we need to take from this? Basically, it’s vital that we address the larger epidemic as opposed to talking about short-term blips in the market. If they aren’t addressing it with you, they’re probably talking to someone else. And that’s definitely not something to be apathetic about.


Transformational Tactic: Make sure you’re talking with your clients about the end goal. The biggest fear you have should be about the client who’s not calling.

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How to Duplicate Your Best Clients


Websites. Commercials. Advertising. Mailing lists. All of these are tools used to chase the elusive goal of having exactly the right amount of exactly the right type of client. It’s a challenge every advisor faces.

Few of us have enough clients to feel satisfied with our business. And even if we get the number right, we then shift our focus to duplicating the top 20% while delegating the bottom 20% to a successor. Every business feels this pressure to add new sources of revenue in the form of new clients.

So, what do we do about it? In the past, the answer has been to throw tens of thousands of dollars into anything that sounds like it would work. But there are limits to what we can do with traditional types of advertising, namely:

  • Finding the right compliance partner
  • Describing complex services without sounding vague
  • Developing an effective marketing strategy quickly
  • Spending too much money for mediocre results


But it doesn’t have to be like that.

Success in marketing starts with a focus on the prospective client and their problem, not with our solution.

Think about the story you want to tell. Is the hero you, or your client? If the answer is you, it’s time to adjust the marketing message.  We aren’t marketing our process — it doesn’t attract people. The message needs to be how we improve their lives and make their family situation better. Knowing your audience is important. You want your message to match their definition of success. It may seem difficult. We think we must be innovative, different and unique to attract clients. We don’t.

Crafting the Right Message

It’s actually easier than you think. We know what our prospective clients want. But we aren’t giving them specifics on why they should want to work with us. Here are some examples of general statements about potential pitfalls:

  • You might run out of money during retirement
  • Healthcare might be too expensive and drain your resources
  • Inflation can rob you of being able to buy things during retirement

Experience has shown that these types of statements don’t motivate people to meet with us. In fact, I’d argue that they scare people away. Be honest. Would they motivate you?

Instead, we need to think about the emotional and deeper meaning of why clients choose to invest, and what factors contribute to picking a firm. To figure that out, we need to look to the past.


Past Success Leads to Future Success

Consider your five favorite clients. Make a list. What makes them your favorite clients? I’m sure the money they bring to your firm is a factor. But more than that, there is probably positive engagement – you enjoy working with them. And they trust your judgment when it comes to their finances. It’s a perfect situation. These are the people you want to duplicate.

There’s no big mystery to why these clients do business with us. It’s simple. We transformed their lives. We provided solutions to their problems and helped create a secure future.

Let’s conduct a little experiment. Pull your files for these five clients. Then take out a piece of paper and draw a line down the middle. On the left side, write down all the adjectives that described the client when you were still trying to earn their business. (This is where the files come in.) Most likely, your adjectives include words like worried, uninformed, lost, lacking confidence or fearful.

On the right side of the paper, list adjectives that describe how the client feels about their finances today. Words like safe, secure, confident, comfortable, aware, in control and satisfied should be on this list.

This transformation is your marketing message. Taking clients from worried to secure. From uninformed to in control. From fearful to confident. Think about a marketing message that focuses on changing their lives. In short, the type of messaging that resonates with people. A message that provides hope. And enables the prospective client to make a significant change – one that affects every member of their family, including the next generation — without using scare tactics.


Transformational Tactic: Look more closely at why your top clients chose you. Those reasons are the key to a marketing message that attracts the right prospects.

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Eliminating Squirrel Mentality


It’s pretty common to be distracted by the next big thing – that shiny new object that everyone’s talking about. For me, it’s technology. If it’s newer, faster, more exciting, it’s for me. Sometimes the next big thing is worth our time and attention. And sometimes it’s just smoke and mirrors. The trick is to distinguish between them and focus on the industry changes that really can impact your clients and your business. And right now, the big topic for discussion — today’s shiny new object — is The SECURE Act.

So, is The SECURE Act worth your attention? The answer is an emphatic yes. We wouldn’t be able to advise our clients if we were not up to speed on the current legislation affecting qualified funds. And every columnist and professional in our industry agree that this is the most significant piece of legislation since the Pension Protection Act of 2006 (PPA).

Of course, there is still room to be distracted within The SECURE Act, especially if you look at each change separately instead of as a big picture. We don’t want to be the dog that spots the new squirrel in the neighborhood and chases after it until he gets tired. Or until he sees another squirrel.

We need to take each new piece of retirement legislation and stack it on top of the last, building on what we know and increasing our total understanding with each new piece. Think of it like building the ultimate Lego tower. It’s only possible with a good base – and a good amount of patience.

And while The SECURE Act builds on the Pension Protection Act, it also made significant changes to the way we help our clients plan. We have a lot of resources to help you wade through the important aspects of retirement income planning, arguably the single most complex problem you will face with your clients.

Focusing on both the Pension Protection Act and The SECURE Act as a cohesive pair is one of the most important things you can do to give your clients a higher probability of success in retirement.



Missing Variables

Part of what makes retirement planning so tricky is the unknown. Think about the details you are missing:

  • How long the client will live
  • Future tax rates
  • Future rates of returns
  • Sequence of returns
  • When a long-term care event might strike


A lot of those variables are out of our control. But even though we can’t control them, we can teach our clients the behaviors needed to mitigate some of these risks, including:

  • Proper diversification
  • Asset location over allocation
  • Placing guaranteed income in the appropriate percentage of the portfolio
  • Maximizing Social Security for at least the primary wage earner


Building a Cohesive Plan

By focusing on the big picture, we can stack the valuable benefits of the Pension Protection Act as a foundation for long-term care and income planning. There is a high probability of one spouse having a care event during retirement, but the need gets pushed aside for more exciting conversations about managing money and creating income. Today, more than $1 trillion rest on insurance carriers’ books inside non-qualified annuities1. Given the recent continued bull market, many of those annuities dependent upon equity investments and/or indices have seen considerable growth.

In its current format, the distribution of non-qualified annuities is interest first, or taxable until you reach your basis. This creates more taxable problems under Modified Adjusted Gross Income (MAGI) calculations when it comes to other means-tested benefits.

Under the Pension Protection Act, clients can take those embedded gains from the old contracts and move them to a PPA compliant product. If used for qualifying long-term care expenses, the distribution is tax-free – not tax-deferred. Tax-free. You have moved the buildup of the tax-deferred growth from tax-deferred in the deferred annuity to tax-free under the Pension Protection Act.

This strategy mitigates a significant cash flow crunch to many families when they need it the most. By eliminating the tax on long-term care distributions, it is as if you have increased the distribution by the assumed tax rate. And, you have provided relief from the increased distributions on an already pressured assets-under-management systematic withdrawal strategy.

It takes planning. It takes having the conversation. It means that you understand the needs of your clients. And, by protecting the family’s wealth, you become valuable to the next generation.


1LIMRA 2019 Fact Book

Transformational Tactic: Don’t chase the shiny new legislation. Coordinate the benefit of all the pieces of legislation to create the most holistic and comprehensive plans possible.

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Generational Planning, Creativity and The SECURE Act


In every industry, professionals look to thought leaders and seasoned veterans to help them understand how to succeed. It’s human nature to emulate and learn from others for our own growth. Finding a mentor that is fully invested in your success can help build your reputation, your business and your knowledge base.

As times change, though, it’s important to identify which ideas are still relevant, and which ones have served their purpose. Practices that were revolutionary only 10 years ago might be considered antiquated today.

As the SECURE Act was put into effect, it drastically changed the way we help our clients plan for a secure retirement. Since that time, the ramifications seem to keep cropping up. The message, though, remains the same. We need to rethink how to best transfer wealth from one generation to the next. And, for our clients, the best way is most likely an option that minimizes taxes.  

Specifically, the SECURE Act is causing us to pay more attention to beneficiary designations, as some recent trends may not be as appropriate as they were before the Act. As I travel around the country and meet with different advisors, I see how easy it is to name a trust as the beneficiary and just allow the document to dictate the beneficiaries and their payouts.

But post-SECURE Act, it’s the government who’s going to dictate those accelerated payouts. Now more than ever before, it’s important to keep an open mind to techniques and strategies we didn’t consider previously.

The SECURE Act forces us to look at alternatives that our mentors and parents never had to contend with when transferring assets to the next generation through our spouses.

The simplest and most common beneficiary designation is to name the spouse. No surprise there. Almost every client wants to protect their spouse when they pass away. And I’m not suggesting that we sway clients away from naming their loved one as a beneficiary of our qualified accounts. But I do believe this new legislation offers us the chance to have better, more thoughtful conversations around income planning – and to begin those conversations earlier in the lives of our clients.

If the ultimate goal is to protect the spouse and then pass the remainder of the wealth to the next generation, creative planning is necessary to minimize the tax impact. The SECURE Act changed the rules when it comes to non-spouse beneficiaries, which requires them to take the money in 10 years or less.

Typically, children receive this inheritance at their peak earning years. If we stick to traditional planning, the amount of tax to be paid is accelerated and increased. But there are ways to help further stretch the income to the next generation and not affect the spouse’s income probabilities. How? It starts with some creative planning and an income discussion before the death of the spouse.


Putting Creative Problem Solving into Play

First, think about naming two beneficiaries as the primary. One is the spouse. The other is the child/children. If sufficient income distributions are coming to the surviving spouse, the spouse can defer the tax and distribution until their required minimum distributions. The children can immediately defer the tax over 10 years with the new distribution rules. At the death of the surviving spouse, the children will have another 10 years of deferral. Therefore, you have essentially doubled the distributions for the children on the first parent’s death. When you think of the massive tax acceleration and increased tax rates that are in effect, this small tactic can make a world of difference to the next generation.

In addition to providing a much-needed service to our clients and their children, we also make ourselves more valuable to the next generation. They are less likely to move to another advisor after their parents are gone if we’ve proven our ability to meet, and exceed, their expectations.

Securing generational assets may be the most valuable asset-gathering strategy a financial professional can deploy over the next 25 years. During that time, $30 trillion of assets will likely transition from one generation to the next.

If we want to grow our business and revenue, it’s essential to think about how to protect it during generational transitions.


Transformational Tactic:

Focusing on the next generation and guiding them through the impact of The SECURE Act is vital when it comes to retaining clients and keeping assets with your practice.

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