It's been a great run in the equity markets. If you manage money, business has been good. Your assets under management are likely at an all-time high. You’re starting the year with a nice recurring revenue stream. Life is good – or is it?
Well, life insurance isn’t all good. It’s somewhat of a pun, but in all seriousness, risk management products have taken a back seat to AUM. Who wants to talk about death, getting sick or running out of income in this market? Not many people.
Let’s face it, most of your time is spent on asset allocation, rebalancing, tax management, seeking alpha, low-cost, etc., etc., etc. By the time you’re done with all that, the risk management strategy can wait for the next meeting. You can get to it another time … your clients are fine, right?!
For now. Unless you know something I don't, everyone has a 100 percent chance of not being fine forever.
What if you put the risk management conversation at the forefront of your conversations this year? Actually have a heart-to-heart discussion about the risks in life. I’m not talking about death insurance conversations, I’m talking about living insurance conversations.
You need to plan for WHEN something will happen, not if. You need to talk about risk – extended health care, chronic illness, disability, outliving income and, yes, death – at every client meeting.
To put it bluntly: You cannot call yourself a financial advisor, wealth manager or any other term that implies “holistic” planner unless you have a strategy around risk management.
No more excuses. Make 2018 the year you become a "When it happens" advisor. To clarify, I don't think your clients must buy or own insurance coverage. But I do think you need to help them set a plan for action for WHEN one of life’s risks happens to them.
Take the pressure off yourself and just have a conversation with the clients you serve. This isn't about product, or features or price. Tell them that you simply care enough to make a plan. When you do this, I bet your business will grow, your clients will be happier and you will know more about them than you do now.
And yes, I imagine a few folks will want to transfer some of that risk away from their own balance sheet. If they want to know what that looks like, that's when you call us. And we’ll answer.
Imagine you’re me. And you have to stand up in front of a room of financial advisors and talk about the tax efficiencies of a certain investment vehicle. At first, everyone is alert and attentive. No one likes taxes, so everyone is ready to learn.
But then? I say the magic word: insurance. People slump in their chairs, check their phones … some even roll their eyes. Maybe just reading this, you’ve already lost some of your excitement. The objections are already flying through your mind:
Put your prejudices aside. What if, instead of mentioning the word insurance, I asked a simple question:
Is there a better way to own the S&P 500?
Would all those planners in the room want to listen? You bet. Do I have your attention again? Good.
No matter your prior experience with insurance planning, I’m willing to bet you’ve never heard the cash value life insurance story the way I tell it. I want you – and your clients – to understand the largely-unused and underestimated impact of IRC 7702, which is the tax code that makes life insurance an incredibly efficient vehicle for saving.
Tim Ash is known as a visionary in the financial services community. He is an industry leader who envisions a future where insurance is easy, affordable and an essential part of a sound financial plan. As CEO of Ash Brokerage, Tim has fostered an environment of success with team-focused empowerment and client-centered service. He has built a culture where people not only believe in what they do, but more importantly, they understand the reason behind their efforts.
© 2018 Ash Brokerage LLC.