23 minute read
‘Start Your Engine’ And Rev Up To Hit Your Goals
Getting off to a strong start at the beginning of each day, each week, each month and each quarter will help you reach the finish line.
By Sarano Kelley
Picture this: You’re sitting in your NASCAR Gen-6 car nervously listening as the crowd cheers wildly with anticipation. As you and the other drivers slowly follow the pace car around the track, you’re ready! The pace car pulls over, the green flag waves, and with a thunderous roar, the race begins. Unfortunately, your foot slips off the gas pedal, and as you frantically try to regain your footing, the other cars are leaving you in their dust.
Even though you may not be a race car driver, the analogy still applies whether you’re an agent or advisor. Your ability to succeed in business or in life depends on whether you achieve stable footing or stumble awkwardly toward your goals.
We all set goals, often at the first of the year or the beginning of the quarter, month or week. Some of these goals might include increasing your prospecting efforts, getting in better physical shape or increasing the number of contracts written.
In the beginning, we’re energized by the desire to reach our goals. However, as life happens, distractions occur: phone calls from friends and family, emails or a golf date with a colleague. As our resolution diminishes, goals fall to the wayside, and again we find ourselves in a slump. The goal to start dieting or increase your prospecting efforts on Monday is no longer a priority by Tuesday or Wednesday.
So how can you strengthen your resolve? How can you ensure you keep your foot on the gas pedal in order to win the race?
The following are a few small steps you can take to help you “start your engine” each day and lead you on a path toward achieving your business development goals.
An Energized Beginning
How do you begin your day? Do you jump out of bed with your engine revved? Do you enthusiastically embrace the demands of the day? Or instead, do you feel you never get enough sleep, and today is just another one of “those” days?
There are two hormones that affect our sleep cycle — cortisol and melatonin. While cortisol raises our blood pressure in preparation for physical activity, melatonin helps us sleep. A balance of these two hormones is required for a good night’s sleep and to help us feel energized when waking.
In my earlier years, I found myself getting up late in the morning already feeling behind and unfocused. Apparently, my hormones were out of sync. Trying to reach peak performance, I drank a lot of coffee to clear my mind — it didn’t work. Then a friend told me about an exercise
program created by a doctor who recommended doing 100 pushups immediately upon waking to reduce the melatonin in the body.
I thought it was crazy until I learned that exercise also delivers oxygen and nutrients to your tissues and helps your cardiovascular system work more efficiently. Additionally, it pumps up the endorphins, giving you more energy while reducing feelings of anxiety and depression.
I gave it a try. Just like the doctor said it would, this intense early-morning exercise session made me feel better prepared
to attack the day. I became more engaged in business development, and my gloomy mood became brighter. I’m now a lifelong advocate of this approach.
While 100 pushups might be pushing it for some of you, to “start your engine” I recommend you do at least 10 minutes of rigorous exercise first thing in the morning. Pushups can be done against the bathroom counter, on your knees or by any method that is doable for you. By doing this, you’ll find your desire to exercise later in the day is elevated and you have more control over the tasks at hand and your behaviors.
The Green Flag — Go!
Once your engine is revved, it’s time to start the day with both feet firmly planted. So what do you do first? Prospecting, phone calls, paperwork?
To begin, I recommend you create a task list. This list should be a “living document” that you’ll add to and modify throughout the day. At the end of the day, separate the tasks into chronological order as to which ones need to be completed tomorrow, next week or next month. This will provide you with a to-do list for the next day.
As you look at tomorrow’s checklist, categorize the items according to where they fall on your priority list. Is it a task that must be completed first thing in the morning? Put it at the top of your list. Is it a client call that doesn’t require immediate attention? Place it accordingly.
Many successful advisors put prospecting at the top of their daily to-do list. Whether it’s for 15 minutes or four hours, prospecting when your engine is revved can have a huge impact on the growth of your business.
Once your activity calendar is created, you can start the day with a bang! As you check off the items you’ve completed during the day, you’ll find your spirits are elevated, and at the end of the day, you’ll
go home feeling a greater sense of accomplishment.
Accountability
You now have a formula for getting the most from every day, but adhering to it still can be difficult.
A friend shared with me how she was having trouble sticking to her goal of a daily workout at the gym. I suggested she get a workout partner who could meet her at the gym each day. Having a partner to hold her accountable for being there worked. Now she arrives at the gym each day on schedule to avoid disappointing her partner. In addition, spending time with her exercise partner made the workout an even more enjoyable experience.
Similarly, when I coach financial professionals, I encourage them to find a fellow agent or advisor to be their accountability partner. They are required to have a 5- to 10-minute conversation each day with each other to review their progress and talk about the successes or challenges they faced the previous day as they work toward their goals.
Most agents and advisors who have done this have found that being held to task by an accountability partner helped them work harder and smarter. Plus they’ve had the added advantage of developing a strong bond that, in some cases, has lasted for years.
I suggest you find yourself an accountability partner. This should be someone who is committed to improving some aspect of their life — professional or personal. If one of your top goals this year is business development, you’ll find that having an accountability partner who is in the same line of work is beneficial. Not only can you share ideas for business development, but you can also discuss solutions to the hurdles you experience along the way. Set a time to talk or meet each day and then follow through.
Also share the goals you have set with the significant people in your life, and ask them to check with you regularly to see how you are progressing. It’s amazing how much more motivated you can feel knowing that someone else is aware of the goals you’ve set for yourself. Once you reach your goals, give a big “shout-out” to the people who have helped make it possible.
Remember the 80/20 rule — 80% of your outcomes are the results of 20% of your efforts. Applying this rule to your business, 80% of your daily accomplishments are produced during 20% of your workday. Surprisingly, that means only 1.6 hours of your eight-hour workday are spent on activities that produce most of your outcomes.
I am confident your productivity will be increased substantially you implement these three strategies:
1. Start the day early and engage in 10 minutes or more of exercise.
2. Organize and prioritize tasks, and consider making business development a top to-do each day. 3. Align yourself with a fellow financial professional who will hold you accountable.
Not only will you win the race against your competition, you’ll also be on the way to creating the life you’ve always envisioned.
Enjoy the journey!
Sarano Kelley, the co-founder of The Kelley Group, is a business coach, philanthropist and coauthor of The Game: Win Your Life in 90 Days. He may be contacted at sarano.kelley@innfeedback.com.
To Work With Next Generation, Retain Their Mom As A Client
Female clients demonstrate more loyalty to their financial advisors compared with male clients, keeping their advisors when they feel valued and heard.
By Michael S. Ross
While our goal is to lead all our clients toward prosperous financial futures, it’s important to recognize that not all individuals — including women — have always benefited equally from these services. Despite our best intentions, female clients frequently have been ignored or excluded from the financial planning process for a variety of reasons. It’s on us as advisors to do our part to ensure they are actively included going forward.
Benefits Of Empowering Female Clients
In many cases, female partners of male clients have taken a back seat when it comes to financial planning. And while there are obvious reasons as to why this is problematic, it also poses a threat to financial advisors. Research from Transamerica shows that, after their spouses die, 70% of widowed female clients replace the family’s financial advisor with a more female-friendly advisor or turn to fellow widows for recommendations. This statistic highlights the need for advisors to actively engage with their female clients to ensure retention and protect their business in the event of a passing.
On the other hand, female clients have demonstrated more loyalty to their financial advisors compared with male clients, with a Penn Mutual survey finding 72% of female clients never change advisors when they feel valued and heard. Women also tend to bring in more referrals — bringing in an average of 26 referrals over the course of their lifetime compared with an average of 11 referrals coming from men, according to CNBC writer Andrew Osterland.
It’s also important to recognize that women, who typically outlive men, serve as the gateway to the next generation. So if you want to work with the children, you need to retain their mother as a client.
Encourage questions and let her know you’re happy to follow up or talk again if she has more questions later.
Men And Women Have Different Financial Needs
Advisors must understand the unique challenges their female clients face and how these challenges impact their financial needs. Because women traditionally act as the primary caretakers, they tend to put in fewer years in the workforce. On average, men spend 40 years in the workforce, whereas women spend 27 years, according to SmartMoney. Financial advisors should be aware of this trend and recognize that female clients may have a deficit when it comes to saving for retirement.
This disparity, along with the wage gap and the tendency for women to live longer than men, presents unique challenges for female clients. Financial professionals should be equipped to advise their female clients on how they can financially account for these variables.
How To Better Engage With Female Clients
1. Be a patient listener. Do the opposite of what previous generations of male financial professionals may have done. Listen more than you talk and don’t jump in with a solution.
2. Establish a trusted relation-
ship. Look for common values, interests and acquaintances. Let her know about you and your family and share how you’ve helped others in similar situations — but keep the focus on her.
3. Be a patient educator. Use straightforward language and less jargon. Understand that women tend to ask more questions than men do and may want details. Encourage questions and let her know you’re happy to follow up or talk again if she has more questions later.
4. Take things off her plate. She may be juggling her own work schedule, kids’ schedules, in-laws’ visits and 50 other things. If you can make the process of having a financial plan or buying insurance easier for her, she may appreciate that.
Although some male advisors may fear that women prefer to work with a female advisor, research shows that’s not the case. According to the book The $14 Trillion Woman, 85% of women are gender neutral when it comes to choosing an advisor, with half of the remaining 15% preferring a male advisor.
Like all clients, female clients want to be heard, understood and recognized for who they are. It’s on us to be better listeners and educators while being cognizant of the challenges women may have had when it comes to working with advisors. We must provide women with reliable and relevant information so they can make informed decisions about their financial planning.
Michael S. Ross is a 17year MDRT member specializing in retirement, estate planning and financial planning for women. He is the owner of Cornerstone Financial Group in Lexington, Mass. Contact him at michael.ross@innfeedback.com.
Political Advocacy: Equally Important Locally As It Is In DC
If we are truly working in our clients’ best interests, we need to share this knowledge with our elected officials and other policymakers — on both the state and federal levels — so they make better-informed decisions.
By Dennis Cuccinelli
Every insurance and financial services professional must be politically engaged and active. We should recognize it as part of our job description. We work with individuals, families and businesses in every community across the U.S., and we understand, better than anyone else, the financial needs and problems faced by our clients and how laws and regulations affect them.
If we are truly working in our clients’ best interests, we need to share this knowledge with our elected officials and other policymakers so they can make better-informed decisions. Political advocacy is not just a way to promote our businesses; it is crucial for protecting our clients and ensuring that all Americans have access to needed financial products, services and advice. Misguided public policy can derail a financial plan as surely as a lack of proper guidance.
Every advisor knows that state laws and regulations have huge impacts on their businesses and their success in serving clients. To make a real difference, effective politically involved insurance and financial professionals must be as in tune with what’s going on at the statehouse as they are with policies coming out of Washington.
In my home state of New Jersey, for example, the New Jersey Bureau of Securities announced that it would not move forward earlier this year with a proposal that would have placed a uniform fiduciary duty on securities broker-dealers and investment advisors. This decision provides consumers in my state greater access to financial professionals and more choices when it comes to how they want to be served and how they want to pay for those services. It ensures that options remain available for New Jersey residents who might not have $250,000 or $500,000 or more in assets that fee-based advisors often require, or for many who are simply better served by the existing broker-dealer relationship.
The bureau’s decision also helps to avoid a confusing and potentially contradictory patchwork of rules and laws by the different states and the federal government.
But this result wasn’t created in a vacuum. NAIFA and NAIFA’s New Jersey chapter, along with the support of our industry partners, wrote and lobbied policymakers that the proposed regulation would have unintended consequences for the clients we serve.
State laws and regulations have huge impacts on their businesses and their success in serving clients
Testifying On The State Level
I testified on behalf of NAIFA-New Jersey at a public hearing before the bureau that the U.S. Securities and Exchange Commission’s Regulation Best Interest enhances consumer protections without disrupting relationships between financial professionals and their clients. It also makes rules like the New Jersey proposal unnecessary.
“We have always supported reasonable efforts to protect our clients from unethical behavior and predatory financial practices,” I testified. “A few years ago, it was NAIFA-New Jersey’s efforts that supported the new law, one that granted the New Jersey Department of Banking and Insurance additional authority to discipline insurance or financial advisors.” But I made it clear that the current proposal would not have the intended effect for many New Jersey consumers. The bureau acknowledged these arguments by NAIFA and our industry partners in its press release announcing that the proposed rule will not be adopted. Our industry and the consumers we serve are better off because of it.
The political advocacy role of insurance and financial professionals — especially at the state level — shows why active membership in associations like NAIFA-New Jersey and NAIFA’s other state chapters is so important. Our associations help us speak with clarity and authority as a single voice. A strong and growing association membership helps amplify our advocacy message and protect the best interests of the consumers we serve.
Our work in New Jersey is just one illustration of how political advocacy by insurance and financial professionals can make a real difference on behalf of our industry, our clients, and consumers. Insurance and financial professionals are serving their clients’ interests by working with policymakers in state capitals nationwide, from Sacramento to Albany, from Austin to Boise, and everywhere in between. I truly believe it’s a vital part of our calling as professionals and servant leaders.
Dennis Cuccinelli, LACP, of Paramus, N.J., is a member of the NAIFA National Board of Trustees. He is also a past president of NAIFA-New Jersey. He may be contacted at dennis.cuccinelli@innfeedback.com.
Insurers Face Challenges With Acquiring Talent In 2022
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Nearly a half-million workers in the finance and insurance sectors left their jobs during the pandemic. How can the industry compete in the war for talent?
By David Levenson
COVID-19 upended much of our lives over the past two years. The pandemic has prompted people to reexamine their priorities and needs at home and at work. One of the consequences has been the “Great Resignation,” with more than 20 million Americans quitting their jobs last year between June and October, according to the Bureau of Labor Statistics. This number includes nearly a half-million workers in the finance and insurance sectors. Along with other changes brought on by the pandemic, this trend has made it much more challenging to not only entice employees to an organization but also keep them once they join.
Hybrid Is Here To Stay
One of the most significant changes brought on by COVID-19 is the shift to remote and hybrid work. This is not likely to change as the pandemic fades. According to a recent study by LIMRA and EY, six in 10 U.S. employers say a substantial proportion of their company’s workers will continue to work remotely at least some of the time in an effort to attract and retain skilled employees. This is also true in the life insurance industry. A separate LIMRA survey finds half of life insurers say at least 20% of their workforce will remain full-time remote following the pandemic. And, most companies have implemented hybrid work schedules for the majority of employees.
Beyond the logistical and technological challenges of a hybrid workforce, our research also uncovered that this transformation will impact company culture and how companies get work done. Companies will need to train their leaders on new and different ways to support employees and leverage technologies in order to create the greatest efficiencies and engagement.
As Talent Needs Shift, Talent Strategies Must Change
Pre-pandemic, the life insurance industry was already grappling with a need to innovate digitally. Two-thirds of life insurance executives surveyed said embracing digital innovation would be most important to the future of work in the industry. To accomplish this, insurers will need to get new types of workers — including data analysts, actuaries and technology professionals. Insurers also will need to up-skill and re-skill current employees to capitalize on the capacity made available by the elimination of manual processes.
This year, as companies compete for employees, it will be critical that they leverage the new freedom remote work allows to source the very best and most diverse talent, regardless of geographic location. Even for local employees, flexibility will be more important as there is greater demand to work from home. If your company doesn’t offer flexible work schedules, many workers will seek employment with companies that do.
Beyond flexibility, employees are demanding more. Compensation is clearly rising, but workplace benefits — especially nonmedical benefits — also will play a key factor in attracting and retaining talent. A recent LIMRA study finds three-quarters of employers (76%) believe their workers will demand a wider variety of benefits options in the future, and seven in 10 midsize and large companies expect to offer a greater number of benefits over the next five years.
Planning For The Future
The team at LIMRA and LOMA understands that our member companies’ success is highly dependent on the capabilities of their talent. In 2022, we will launch an industrywide initiative to examine the many factors contributing to the talent disruption affecting our industry; identify the strategies that have been most successful in recruiting and retaining key talent; and provide actionable insights that will empower companies to lure the talent needed to be successful. We look forward to sharing the results with all of you.
David Levenson is president and CEO, LIMRA, LOMA and LL Global. He may be contacted at david.levenson@innfeedback.com.
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Consider Series I Savings Bonds
The rise of inflation has made government-backed savings bonds an attractive investment.
By Colin Slabach
Over the past 20 years, a 60/40 portfolio has yielded a nominal rate of return of roughly 8%. In the past 10 years, the rate of return was 11%, and one year it was around 18%. However, times may be changing.
Research conducted by Bank of America and EPFR Global found investors poured almost $900 billion into exchange-traded and long-only funds in 2021, which exceeds the previous 19 years combined! The Federal Reserve has also changed its stance on inflation, claiming it may not be as transitory as initially anticipated. Whether permanent or transitory, the rise of inflation has made government-backed Series I Savings Bonds an attractive alternative to riskier corporate bonds and low-yielding certificates of deposit.
Series I Savings Bonds (7.12%)
An I Bond is an interest-bearing, non-marketable U.S. government savings bond offered directly through the Treasury. Until the end of April, they are offering a whopping 7.12% annualized rate of return for the next six months. A reasonable question is how and why the federal government is offering a risk-free interest rate of 7.12%. The interest rate has more to do with the Consumer Price Index for all Urban Consumers (CPI-U) for all items. The Treasury determines the interest or composite rate based on two factors: inflation (CPI-U) and a fixed rate. Currently, the fixed rate sits at 0%; however, the semiannual inflation rate is 3.56% (7.12% annualized).
The 3.56% semiannual interest on government-backed securities is unheard of in today’s environment. For comparison, six-month FDIC-insured bank CDs’ annual percentage yields are roughly between 0.50% and 0.80%. However, the bonds must be purchased before May 2022, which is when the new composite rate is determined. Fortunately for Series I bonds and unfortunately for almost all other assets, inflation will probably remain high for the duration of 2022.
Annual Contribution Limit ($10,000)
A major limitation to I Bonds makes them less attractive to wealthier individuals. There is a $10,000 limit per person per calendar year. Those who were fortunate enough to buy I Bonds in December are again able to buy another $10,000 in January, locking in $20,000 at the current rate for the next six months. The limit is per person, which puts large families at an advantage, as accounts for minors are available.
Another way to extend the $10,000 limit is by directing up to $5,000 of one’s income tax refund toward purchasing what are called paper I Bonds. It can be more complicated, but it does increase a family’s contribution slightly. The $5,000 limit is per tax return and not per person.
Taxation
An I Bond’s interest payments are subject to federal income taxes but not state and local taxes. They are also subject to federal estate, gift and excise taxes, as well as state estate or inheritance taxes. The Series I Bond owner can choose when they would like to report interest. The options include reporting interest every year or when one of the three triggering events occurs: 1. The owner redeems the I Bond and receives both principal and interest. 2. The individual gives up ownership of the I Bond, and the I Bond is reissued. 3. The I Bond stops earning interest because it has reached final maturity (30 years).
Redemption Rules
The redemption rules are as follows: » Must hold the I Bond for at least 12 months unless there is a federally declared disaster.
» After 12 months, any bond redeemed before five years loses the last three months of interest. » After five years, interest and principal are redeemable at face value.
The illiquidity for 12 months, combined with the unknown preceding six months of interest, could make some individuals uneasy about I Bonds — especially those who prefer guaranteed FDIC-insured investments. However, even if the CPI-U turns negative for the May 2022 adjustment, the composite rate for the next six months won’t drop below 0%. Therefore, the redemption after 12 months will still provide a 3.56% annualized rate of return (3.56% for the first six months and 0% for the next six). The loss of the three months of interest after the initial 12 months of illiquidity becomes a moot point if the CPI-U turns negative and I Bonds’ six-month interest rate is 0%. Giving up three months of 0% interest is still zero!
The non-seasonally adjusted CPI-U has led to a much higher composite rate for I Bonds. However, the inflation rate, specifically for energy and used cars and trucks, may stabilize, suggesting the composite rate determined May 1, 2022, will be lower. Even if the composite rate is lower in the second half of 2022, a couple still should consider contributing $10,000 each to I Bonds’ as they will outperform CDs over the next 12 months even if the rate drops to 0%. The $10,000 limit is low; however, it is per person per calendar year. Minor accounts can be set up through the Treasury Direct website for children, allowing parents to contribute on their behalf, leading to a much larger family contribution.
The tax deferral, the pure inflation hedge and the backing by the full faith and credit of the U.S. government make it an excellent investment vehicle for individuals who want to maintain their purchasing power over time. I bonds can be purchased through the Treasury Department website, www.treasurydirect.gov.
Colin Slabach, MS, ABD, is assistant professor of retirement and assistant director of the Retirement Income Center at The American College of Financial Services. He may be contacted at colin.slabach@ innfeedback.com.
