Annuities

How Flexibility Will Help You Win the Game


Annuities

During mega sporting events like the Super Bowl, you hear the word resiliency quite often. But, I think few people really know what it takes to be resilient. 

Too often, people think you reach success by “pounding away” like the Carolina Panthers in the road to Super Bowl 50. Without a doubt, the franchise made a great run in the 2015-16 season by continuing to pound, but they were defeated by a team that showed flexibility.   

When you look up the definition of resiliency, it mentions “having elasticity.” Not surprisingly, the Denver Broncos, who defeated the Panthers in Super Bowl, displayed elasticity throughout the season. Specifically, quarterback Peyton Manning became more flexible and elastic in his management of the game. 

 

The Struggle

Starting the season, the Broncos were a favorite to win the Super Bowl. But, as many football seasons do, the next 17 weeks were filled with promise, disappointment, concern and eventually, frustration. Many teams would have allowed those circumstances to define their season. Peyton was injured and sat on the bench for several weeks. He watched how the backup succeeded and learned the true strength of their team was their defense. He didn’t have to win every game; he just didn’t have to lose.
 

The Opportunity

In the playoffs, Peyton’s performance was clearly not the same it had been in the previous two decades of his career. However, he managed the game to the best of his ability and recognized what he could do and couldn’t do. 

The Payoff

During the Super Bowl, he didn’t seem to force anything. Instead, he paid attention to what the defense provided him, and he capitalized on it. I’m sure he would have liked to have thrown a bunch of touchdowns and set records, but it wasn’t good for the team. He was resilient in his game plan because he was able to change and adapt in a high pressure situation. 

My point? Resiliency isn’t about “keeping your nose to the grind stone.” Flexibility allows you to recognize opportunity, which is just as important as reaching a previously set goal. Sometimes you have to give up aspects of your original vision in order to reach a higher level in your game. 
 

Winning Strategy

True resiliency in business is the ability to adapt to change and maneuver around disruption. Be flexible instead of rock hard in your determination to succeed.  

 

About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets. 

 

How to Position Yourself for Opportunity


Annuities

At Indiana University, Coach Bob Knight’s rules of defense were mostly based on being able to recognize the situation. Players had to always be aware of what was happening on the court – just like we must always be aware of what’s happening in our businesses. 

The Ball-You-Man rule means you stay between the ball and the player you’re guarding. You may think it would be easy to stay close to your man, but that isn’t effective – you’ll just do a lot of extra running around to chase him down. Instead, you want to stay closer to the ball so you can help support your teammates. 

If the ball is on the opposite side of the court from your man, you want to stay on the same side as the ball, keeping your man in peripheral vision. If the ball swings over to the top of the court or to your man’s side, you can immediately try to deny the pass. Everyone on defense must be constantly moving and adjusting their position, looking for any opportunity to get the ball back.   

 

Defense for Your Business

In financial services, each client represents a new possession. We must react to their unique needs and objectives. More importantly, we must move to different positions as their goals change throughout their life’s journey.  

Looking at the bigger picture, we have to recognize any opportunities the new fiduciary rules will provide us. Yes, the rules will force us to change our practices, but those of us who can recognize and react before the ball arrives will succeed in making the transition. 

You can defend your business by taking some basic steps:  

  • Create written policies and procedures – this will provide protection against possible litigation by showing you follow a documented process that leads to agnostic solutions and client-centered recommendations

  • Have a partner with providers that remain independent of conflict, allowing you to find financial recommendations that are in the best interests of your clients without regard to carrier-specific incentives

  • Do what you’re likely already doing: Delivering education and advice that’s built on trust and expertise – if you do that, the compensation won’t matter 

These things might be adjustments to what you’re doing in your financial practice today. But, moving before the ball moves will place you in a better position to win. The pending rules will open the door to many opportunities that our industry can capitalize on … as long as we’re in the right position.  

 

Winning Strategy

Good defense requires you to recognize the situation on the court and place yourself in the right position. Make sure your business is in the right position for the fiduciary standards of the future.  

About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets. 

 

Winning the Same Way Every Time


Annuities

As a student manager for the men’s basketball team at Indiana University, I was fortunate to sit at the end of the bench for the 1987 NCAA National Championship. Many people ask me how Coach Bob Knight prepared the team for the final game against Syracuse in the day and half after we beat UNLV in the national semifinals. Well, we did the exact same thing we had done all year. 

You see, success follows process and procedure, which eventually allows a team (or business owner) to use their talents effectively. That Final Four run proved that when you follow the successful process you’ve established, you can relax and play the game freely and confidently. 

As we approach a fiduciary standard later in 2016, it’s important to set up wining processes now. Following an established process every time will allow you to focus in on the client while acting in their best interest. Pay attention to how you interact with your clients in the following ways:

Engagement

Make sure you have a set routine for each client to explain your services, set expectations and sign a standard engagement letter. The engagement letter (contract) should provide flexibility in how you provide solutions and receive compensation. It’s too early in the financial planning process to determine which solutions you’ll use or if/how you will receive commissions. 

Discovery Process

In order to act in the client’s best interest, it’s critical to uncover all the necessary information through an established discovery process. Create a written fact finder to document the answers, and be sure they aren’t completely quantitative. It’s just as important to understand how a client feels and prioritizes their goals is as it is to know their net worth, disposable income and assets.  

Analysis

You should leverage a consistent software or set of software tools in your analysis of each case. Having a process that provides dependable output gives you, and the client, assurance they are receiving the best advice. 

Presentation

Because you are familiar with the software output, your client presentation should be methodical and factual while emphasizing the key areas of concern. Obviously, this is where you begin to recommend and offer solutions. If you have followed your standard process up to this point and have established their needs, how you receive compensation will likely be irrelevant to the client. 

Implementation and Review

One of the most frustrating things clients tell us is that their financial professional failed to follow up on the plan. It’s really important to make sure all your recommendations were executed – either by you or another financial professional – and that you take the initiative to make sure all those recommendations are performing properly and still meet the client’s goals.

Many financial professionals remain concerned about the pending fiduciary standards. However, I argue the vast majority of our sales professionals are following some sort of established process already. 

Instead of worrying about changing your financial planning practice on a dime, look to review and refine your established processes. Make sure they are agnostic to companies and compensation. Most importantly, write those processes down so that you have documentation in the event you are challenged by a client in the future. Following the same processes over and over will give you the same confidence the Hoosiers had playing in the national championship game. 

Bottom Line

Establish and follow your selling process for success. Having set standards allows you to focus on the client and meet or exceed their expectations.

 

Learn More

1897 NCAA Tournament: http://www.cbssports.com/collegebasketball/ncaa-tournament/history/yearbyyear/1987

 

About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets.

 

Developing Grit


Annuities

In my previous blog, I described the three traits of leadership, one of which is grit. As I said, grit is always difficult to define. Some consider it perseverance, faith, mental toughness, competitiveness, etc. Personally, I think you develop grit by not only having faith in the outcome, but also by doing the work necessary – repeatedly and consistently. 

 

Grit for the Game

In 1987, I witnessed the development – and fantastic outcome – of grit as a student manager on the Indiana University men’s basketball team. Our season ended in a national championship, and the words “Teamwork” and “Toughness” rest on each side of our rings. But, perhaps grit is another word that should be there. 

I don’t believe our grit was formed in the NCAA tournament, when we came from behind in five of our six games – I think it came from an entire season of preparation. 

The day and a half leading up to the national championship was the same as we had prepared for every other game. The team saw successful offensive and defensive possessions from Syracuse. There were summaries of each player’s tendencies in the locker room. We went to the shoot-around and pre-game meal at exactly the same time and in exactly the same fashion. At tipoff, there was no nervousness. Even though it was the biggest game we’d ever played, we had replicated everything we’d done to be successful before.  

We won the championship on our final possession. The most successful aspect of that play was that we ran our normal offense. We didn’t get the ball to our All-American shooter like we’d hoped, but that wasn’t a problem – our team had run this offense thousands of times before, and someone else got the shot. It was preparation, plain and simple, but people saw resolve and grit to come back and win. 

Looking back, I see winning did take grit. However, that grit came from hours of repetition and preparation. 

 

Grit for Your Business

We know 2016 will be a year of transition for many us financial services professionals, due to the U.S. Department of Labor (DOL) fiduciary standards and conflict of interest rules. We MUST start preparing now so we can develop the grit we need to deal with the post-DOL world of financial services.  

Preparing means you need to document your processes and align yourself with organizations that can provide you the best opportunity for success. Those organizations will remain agnostic in their solutions, provide ease of business for you and your clients, and develop the necessary tools to meet the changing needs for our profession. 

 

Bottom Line:

Grit is developed through a high probability of outcomes because you have prepared and done the work you needed to do – repeatedly and consistently. In order to grow your business in 2016 and beyond, you need organizations with the same philosophy around you.    

 

About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets. 

Initial Thoughts on the DOL Ruling


Annuities

First of all, I want to applaud the efforts of U.S. Secretary of Labor Tom Perez and the entire staff at the U.S. Department of Labor (DOL), as well as countless industry advocates for today’s announcement. I hope our industry does not view the DOL’s Fiduciary Rule and Conflicts of Interest as a finish line, but rather a starting point for improving the distribution of our products and services. 

Improvements were clearly made through the comment and discovery phase of this rule. I commend the DOL for following such an encompassing due-diligence process. However, concerns remain about how the rule will be interpreted and put into practice throughout our financial services system. Its vague language will create avenues for conflicts among firms, not just advisors. Advocates for our industry need to continue working to educate our congressional leaders on this rule’s impact and direction of our financial distribution system. 

Without a doubt, our distribution methodologies have become outdated and flawed.

Today’s rule should be seen as an awakening to our industry that technology, innovation and client experiences have to improve. We must define our own future distribution rather than allow someone else to level the playing field.

Our products provide a great benefit to consumers who already seem lost in a myriad of products. Expert advice should, and will, prevail over product commoditization and cost-cutting fundamentals. Those skill sets are not level; instead, they require investment and should be rewarded for the expertise that is delivered.  

During today’s announcement, Secretary Perez spoke of giving our clients the “best chance to win.” I agree. We owe it to our clients, our firms, our industry and ourselves to make sure we put our clients in the best position to win. I have written numerous times about the importance of following a structured sales process that is repeatable and measurable, creating an environment where we can complete a thorough and exhaustive discovery process, make recommendations that improve the probability of client success, and provide routine and consistent reviews.  

Our value proposition is simple and does not need to be complicated with regulation. However, quality advisors are separated from the masses by providing clients with quality education and ideas. If we do, everyone wins. 

Winning Strategy

Look at today’s DOL announcement as an opportunity to evaluate your business.  Focus on the client experience and how you can improve your financial planning process.  

More Information

Watch this webinar replay from April 11, 2016.

DOL Annuities