Money Places: Investing 'Safe' or Placing 'At Risk'

March 07, 2012

By Ray Ohlson

In his Safe Money Places™ presentation, Jack Marrion basically says that the only way you will lose money in a “safe money place” is if you “choose to lose.” That’s right . . . if you break the rules.

For example, consider the rule “… penalty for early withdrawal in a CD.” Violate this “rule,” and you will experience surrender charges in an annuity – and you won’t get your next interest credit if you redeem your savings bond early. Let’s examine the potential loss versus an “at risk” place in this scenario.

Now I am not saying that a “safe money place” is better than an “at risk money place.” Nor am I saying that an “at risk place” is better than a safe money place. Both concepts have their (excuse the pun) “place” in the list of investment choices. I have safe money places AND at risk money places. The big difference is that with “at risk money places” you can lose money due to circumstances outside of your control.

Such circumstances include events such as natural disasters (Katrina), wars (Iraq), inflation (high oil prices) — or unnerving world events (Iran with the threat of nuclear weapons) and the Gulf coastal oil spill. Do you think circumstances such as these might concern our clients? Of course they do.

As financial professionals, we have both a great opportunity and a tremendous responsibility when dealing with our clients. They have many concerns, some of which are unique to their own lives; some are universal. Are you inviting their conversations? Are you listening? If you are, then you are picking up tremendous buying signals and you are probably very successful. Perhaps they are telling you that they are concerned about long-term care (LTC) and want a solution. (Have you noticed the introduction of annuities and life policies with LTC and chronic illness riders hitting the marketplace?)

You may also be hearing that “big time” increases in their accumulation accounts are not their number one concern. It’s the income. Allow me to repeat. It’s the INCOME! (Have you noticed all of the new income planning software and seminar programs hitting the market?)

The next 10 years will be very “sorry” years for financial services advisors who are not listening and approaching their clients in the same old unilateral way – all talk; no listening. However, the next 10 years will be the most successful for those professionals who are taking their responsibility seriously and are operating in an ethical and credible manner.

We also have a potential liability. Consider this idea for a moment: are you offering long term care insurance (LTCi) or annuity/life/LTC hybrid plans to your clients? If they decline, are you having them sign a “hold harmless” statement? You should. Are you conducting audits on their life policies and re-pricing their term insurance and reviewing their universal life policies to see if they are in danger of imploding? Are you discussing the “lost social security check” with your senior clients? Whew; it can make your head spin!  

The solution to these and other ideas? Become a “go-to person” in the Safe Money world and know your stuff. You can always lose due to circumstances outside of your control. But, as Jack Marrion has said so eloquently, there is simply no reason to “choose to lose.” Listen to your clients, give them solid advice and cover your tail if they choose to not follow your advice.

Raymond J. Ohlson, CLU, is president & CEO of The Ohlson Group,

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