Annuities

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

The 3 Traits You Need to be a Leader


Annuities

In a recent post, I mentioned I had the pleasure of listening to Robbie Bach, the former president of entertainment and devices at Microsoft, speak at a meeting. As an accomplished leader, he provided several key points that translate to any business, including financial services. In addition to his thoughts on innovation, he describe three key traits to being an effective leader.

 

1. Self-awareness.

In order to be successful, you not only need to have high self-awareness of your own strengths and weaknesses, but also the strengths and weaknesses of your team. For example, during my freshman year at Indiana University, the basketball team had a 7’2” center. Being so tall, he was not good at dribbling the ball to the basket. His best move was a hook shot or a short turn-around jumper. So, we scored quicker and easier when we gave him the ball in the right location on the floor. He was self-aware of his limitations, and his teammates also knew where he could help them win.  

2.Humility.

I think most financial professionals work with a great deal of humility. In a service industry, you have to be thinking of your clients, knowing that without their trust, you wouldn’t have a business. In a lot of cases, we reinvest in our own communities through volunteer work or monetary investments. We know we can’t be successful without keeping others in the front our mind. 

3.Grit.

Grit isn’t easy to define. You might classify it as mental toughness, competitiveness, a willingness to improve or something else along those lines. Essentially, at some point we all must dig deep and believe that all the things we are doing will get us past the difficult times in business. Some people have financial issues, while others might have mental roadblocks. Whatever your obstacle, you must determine the path that will correct the problem and work toward the goal, knowing you will reach it – maybe not as quickly as you’d like, but eventually if you have enough grit. 

 

Leveraging your strengths and making your clients feel important are both critical to long-term success.  And, you’ll need determination to stick to it and get through the rough times. I hope you remain self-aware and humble, and develop grit along the way. 

 

Bottom Line:

Having self-awareness, humility and grit are critical factors to being an effective, successful leader.    


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. 

leadership

Are You Asking the Right Question?


Annuities

Have you seen the TV commercial where a client asks her financial advisor some questions? The advertisement focuses on consumers asking better questions. To that point, advisors need to ask better questions, too.

I often hear advisors ask our sales people, “What’s the highest or best income rider you have?” But, maybe the better question is: 

“What’s the highest income I can get my client over their entire lifetime?”

Longevity remains the largest retirement risk – and the greatest multiplier of other risks. It should be every advisor’s goal to make sure Americans have a portion of their income (beyond the income provided by government entitlement programs) guaranteed for the remainder of their lives. 

With longevity comes retirees’ second largest risk, inflation. We have to help clients keep pace with rising costs. Because the longer they live, the more expensive it will be to maintain their standard of living. Without precautions, inflation may eventually erode their ability to buy things 20 years from now that they could easily afford when they first retired. 

So, instead of looking at which income rider provides the highest guarantee, we should be focusing on the overall income received throughout retirement. It’s easy to get sucked into looking at illustrations and competitor comparisons. However, we need to have a deeper conversation with our clients about their true risks in retirement.  

Few Americans really think about how they’ll manage their finances 20 years from now – it’s our duty to think about that for them. Just like the TV commercial makes consumers rethink their questions, we have to ask better questions, too. We need to think about retirement in its entirety, not just the first year or two. 

Bottom Line

Don’t ask about the highest retirement income possible; ask about how you can help clients achieve the highest income over their lifetime. They’ll appreciate a longer term focus.    

 

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.