By Mike Walters
AnnuityNews.com
Almost all (but only the elite minority of advisors) go about harvesting assets in an unproductive, bass-ackwards fashion.
As the old saying goes, “Your first step in the right direction is to head the opposite way of the masses.” This couldn’t be any more truthful than in the financial business.
Regardless of the professional’s starting point (stockbroker, insurance agent, etc.) most have been trained in this business to be a hard-charging closer, a gun-slinging salesperson, if you will. Most of us began our careers under a training system designed specifically to “get the deal inked” at all costs. Well, in today’s post-crisis environment that adds up to your being positioned as little more than a salespest.
You must be positioned as the community authority and expert trusted advisor.
People must fully trust you to handle their money. They must find you likeable, approachable, respectable, professional, caring and even loving in an authoritative sort of way. None of which is how anyone would describe a salespest, insurance agent or stockbroker.
Therein lies the rub. The acquired skill set of 80 percent of the industry is entirely outmoded and out of synch with societal needs and desire. Translation: Dead man walking.
Attempting to fix the personality and emotional issues of an entire industry is too lengthy a discussion to address in just one writing, so instead I’ll zero in on fixing the structural process of harvesting assets.
1. The product and carrier are no longer what is for sale. YOU are what is for sale! Your traditional sales skills need to be refocused and realigned in order to sell you and your practice, versus selling a carrier’s ratings and/or product features. The product is akin to the prescription. The carrier is akin to the pharmaceutical company. You are akin to the doctor. (By the way, this philosophy will also serve you well in the future regulatory environment given the high likelihood of a blanket fiduciary responsibility.)
2. Quit leading your process with greed-based products (accumulation annuities) and begin with fear and stability based products (immediate and income annuities).
3. Understand the difference between “live-on-money” and “leave-on-money”.
4. Protect income during retirement first and foremost. Establish a peace of mind period of time that guarantees future income for both today and tomorrow. Then and only then, will the opportunity arise to address accumulation assets.
5. Utilize the new-found time you have created from securing their future income to now expand the investment horizon and benefit from longer term accumulation products (fixed index annuities, investments, AUM, etc.)
6. Use single premium life insurance to recoup investment losses against their “leave-on-money”. Make them “whole again” with life insurance death benefits for their estate and heirs.
7. Similarly use traditional continuing pay life insurance to offset (increasing) estate taxes.
8. Consider asset-based LTCi and/or traditional LTCi to protect the estate from likely and significant erosion due to elderly health issues.
9. Explore and seek out financial planning software that is specifically designed to assist you in harvesting assets via this exact process.
Furthermore, while some IMOs and even RIAs are preaching that abandoning regulatory licensure somehow insulates you from exposure, I contend such actions result in the exact opposite. Think about it. You make money with your licenses. And dropping any of them will only lead to less access (and success) in harvesting assets and working with future clients. The only thing dropping licenses will accomplish is insulating you against the opportunity for growth.
Clients fully expect their financial doctor to be well versed and licensed to practice accordingly.
If you shy away from dealing with a certain asset category (product category) because of lack of licensure, it only looks as though you are ill prepared, uneducated, short-sighted and ineffective as an advisor. Suddenly, and unexpectedly, you end up pegged as a salespest again!
Many economists have been coining the phrase, “the New Normal.” It’s their way of summarizing the future of our economy and market conditions. They might not be marketing gurus, but they definitely hit the nail on the head regarding the new emotional state of consumers. People are feeling and looking at their money and portfolios very differently today.
This represents the “New Normal” of your financial practice.
Positioning yourself for this “New Normal” is exactly what will lead to success or failure over the next five years.
Mike Walters is CEO of USA Financial, “the world’s only IMO, BD, double RIA, and Cross-Platform Marketing Firm.” For professional level access to legendary FREE Reports, Audiocast, Videocast and Commentary visit www.usafinancial.net.
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