InsuranceNewsNet Magazine - May 2019 by InsuranceNewsNet

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The rise of Lax & Co from local life firm to concierge insurer for New England’s most affluent PAGE 14

s e c i v r e S e c n a r u s n I f o l e v e L A ED

T S I X E W E N K R E V E N YOU If you’re a producer looking to enter the high-net-worth market, flip to page 14 There, you’ll learn how one special insurance firm, Lax & Co, has successfully implemented concierge-level service to the insurance and financial industry, catering specifically to the wealthier citizens’ needs. You’ll also discover that this level of service is now possible for elite firms around the country, thanks to Lion Street’s unparalleled "firm-behind-the-firm" support.

Check out the article now. Then visit LaxandCoLion.com to enter a world of service you never knew existed.

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IN THIS ISSUE

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MAY 2019 » VOLUME 12, NUMBER 5

FEATURE

Even Superheroes Grow Old By Steven A. Morelli

8 I s Another Indexed Universal Life Illustration Fight Pending? By John Hilton Regulators are taking another look at IUL illustrations three years after Actuarial Guideline 49 hit the scene.

INTERVIEW

10 What To Say When Clients Die Life insurance agents talk about death as part of their business. But they often don’t know what to say to someone experiencing a loved one’s death. Amy Florian explains why our best efforts to comfort the grieving often come up short.

INSIGHTS

54 NAIFA: How To Be Your Client’s Financial Fitness Coach 55 M DRT: It’s Never Too Early To Begin Estate Planning 56 LIMRA: The Factors That Put Women At A Disadvantage In Retirement

HEALTH/BENEFITS

40 ‘Emerging Benefits’ Is The Next Workplace Trend By Susan Rupe Nontraditional benefits go beyond the more common medical, dental and vision insurance.

How longevity is changing the role of insurance agents and financial advisors.

INFRONT

online

www.insurancenewsnetmagazine.com

ADVISORNEWS

44 Getting With The Plan: Why It’s More Than Just Investments

IN THE FIELD

By Aurora Tancock Advisors should encourage goal-based financial planning to prepare clients for a successful retirement and any other financial matters along the way.

26 Banking On Herself

By Susan Rupe Vanessa Bucklin used her experience as a small-town banker to stir things up among her town’s established insurance agencies.

INBALANCE

48 Office Greenery Can Help Stave Off The Workplace Blues

LIFE

By Susan Rupe Plants can give life to your workspace and provide some surprising health benefits.

32 Life Insurance As The Bedrock Of Financial Discipline By Ben McFie Why protection is more important than saving or investing.

50 How To Get The Royal Treatment From Flight Attendants By Bryce Sanders Radiate a good image, be a giver instead of a taker, and treat people as equals and professionals.

ANNUITY

36 H ow To Match An Annuity To A Retirement Need

BUSINESS

52 Sitting On A Gold Mine: How To Open 20 Cases This Month

By Bryan Pinsky Three basic questions to start the retirement income discussion.

By Chris Jarvis Where will you get your next 20 sales? From your existing clients.

INSURANCENEWSNET.COM, INC.

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InsuranceNewsNet Magazine » May 2019

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WELCOME LETTER FROM THE EDITOR

What To Make Of Grief

scanned the roomful of strangers as my wife and I entered. Up front was the familiar face of my neighbor, George, looking down at his wife in the open casket. Immediately, attending the wake seemed like a mistake. We were only neighbors in a room of family members and friends who had known them longer than I had been alive. Should we sit? Should we go up front? What would we say? Shouldn’t we just leave? These are typical questions that come to mind at these moments, especially those involving someone you know, but not well. What is appropriate in those situations? Most of us do not know what to say or do at any spot on the spectrum spanning from loved one to acquaintance. “Sorry for you loss,” is what we say, even though it sounds lame. The phrase is as ineffectual as it feels, according to Amy Florian, who has made a career of understanding grief after experiencing it profoundly as a young adult. Her husband died in a car accident, leaving her a widow with a baby. She learned not only how to deal with that grief but she also went on to get a master’s degree in pastoral studies and now practices thanatology, which focuses on issues around death. Amy was this month’s interview with Publisher Paul Feldman. During the interview, Amy discussed better things to say than the ubiquitous “sorry for your loss.” She pointed out how much of a difference advisors can make when they show up authentically for clients. It helps ease discomfort and can be a factor in whether an advisor keeps the family’s business. And grief is not reserved just for those closest to the departed. It radiates all the way through anyone who even heard about the death. Grief is not always rising from just death, either. It shows up whenever there is a loss, even associated with a positive change. Someone could have accepted a great new job, but misses the commute through the countryside to their former job. We help ourselves and others when we acknowledge and make space for that grief, however insignificant it seems. 6

InsuranceNewsNet Magazine » May 2019

Looking In From Outside

Lisa and I did not know George Brigham’s wife, Laura, very well. We knew George from the yard. It was our first house and we were struggling to learn all the things we should do. Our modest houses sat on adjoining city lots, with no fence in between. George was the kind of neighbor you would rip down a fence for, rather than put one up. We didn’t know Laura, but we knew George loved her like crazy even though they were in their 80s. During the first Gulf War, he and I sat on his back steps with cheap cigars and beer after a long day of working in our yards and talked about his war. He was a Marine in the Pacific Campaign during World War II. Until then, I knew little about the gruesome work it took to claim island after bloody island. I don’t have the space or the desire to go into those details here. But George put it best when he said, “People who love war have never been in one.”

Healing Through Helping

Laura died of injuries from a fall down their basement steps. The loss felt senseless, but any death is not supposed to make sense. It is just what we make of it. We attended the wake even though it was uncomfortable because we felt like it was the right thing to do. We crept around the room’s periphery to George’s proximity to at least acknowledge that we were there for him and perhaps mumble a “Sorry about Laura.” George spotted us and walked right over, smiling like we had just stopped over his house. I started to extend my hand but he just stepped in between us, putting one arm across my shoulders and the other over Lisa’s. “Thanks for coming,” he said, still smiling. “Laura really liked you two.” That was a surprise. And it helped us to hear that. “Come see Laura,” he said, walking us over to the casket as he cradled our shoulders. “Isn’t she beautiful?” I scanned down to see Laura looking as if she were sleeping and could awaken any moment. I marveled at how they were able to make her look in perfect health. And, actually, I hadn’t really looked at her intently before — but, yes, she was beautiful. Turning to George, I saw him gazing

down, just glowing, like the first time he saw her. Maybe he always saw her like the first time, every time. I looked to Lisa, who was also watching George. We caught each other’s eye, probably with the same questions: “Will this be us? Do we have this?” George led us to the side of the room, where he thanked us for coming and told us he would see us back at the house. I don’t remember what we had said — or even if we said anything. We did not have to. He helped us through our grief. He helped us get through one of the worst days of his life. After a few weeks, George resumed working in the yard. The following spring, he started to drive down to Florida just as he and Laura did every year, but had to turn back because of a throbbing pain in his hip that turned out to be a tumor wrapped around the bone. Soon, a hospital bed replaced his. George’s daughters, Lisa and I took turns sitting with him as he withered in pain and morphine. I relished his stories as I sat with him. One night, the stories were silenced by thrush, an infection of the lining of his mouth, apparently a sign of imminent death. As I sat with him, he looked past me to the door and motioned for someone to come in. I turned to see no one there. I turned back to see George watching someone walk the perimeter of the room and sit in the chair on the other side of the bed. I assumed it was an effect of the pain and the morphine. But I didn’t wonder long who he was seeing. I had seen that gaze at the wake. The next morning I learned he had died during the night, leaving me feeling guilty that no one was with him. Then I scanned the garden and the house next door, glowing on that perfect spring day and remembered the night before. No, I didn’t need to worry. He had been with the girl of his dreams. Steven A. Morelli Editor-in-Chief

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equipped with an executive consultant known as a “firm builder,” who acts as a mentor and offers all manner of back-office support, allowing producers to help valuable clients at unprecedented levels. Further empowering the ownerfirms, several times a year the owners gather to discuss and develop new and exciting ways to stay ahead of their clients’ evolving needs, as well as share powerful ideas that ensure members remain at the pinnacle of the entire industry. Thanks to this exclusive product access and support, Lax & Company can achieve virtually any goal a client has, turning every policy into one that is truly customized.

Kristin Anastasiades, Vice President, and Ryan Alan Lax speak at Indaba, an event for Lion Street owners.

exceptional attention to detail.” This powerful blend of Lax & Company’s commitment to service and Lion Street’s unparalleled level of support allows them to turn an otherwise arduous process into a simple and enjoyable experience with clients feeling heard, understood and valued. It’s built a reputation that now has more wealthy clients than ever turning to them for help and advice. Anyone contacting them knows the experience and concierge processes they can expect are second to none. They also know Lax & Company makes an oft-complex application process easy and understandable. Today, in addition to becoming a preRyan Alan Lax with Dan A. Murphy, Senior Vice President, Lion Street mier insurance destination for affluent As Lax puts it, “Higher net worth clients and an esteemed member of individuals are a different type of the Forbes Boston Business Council, client. Yes, the basic principles of Lax & Company is also a community customer service are the same for leader, known for hosting meaningful everyone. But these individuals, events that bring together clients and families and business owners come business leaders alike. with some subtle differences and some intensifiers. They have higher service expectations that require an

These educational events often feature speakers from different industries touching on topics unrelated to the insurance industry. And for Lax & Company, it is a privilege to play a role in bringing some of the best, brightest and most respected leaders in New England into the same room, fostering an exceptional networking opportunity for all in attendance, time and again. But despite their monumental business success, Lax has never forgotten the basic principles forged in the family business more than 40 years strong that have made Lax & Company the success it is today: client relationships. “Our clients expect the best. And that is what Lax & Company delivers. Our concierge underwriting process, concierge handholding throughout the process and overall experience set us apart. Plain and simple.” •

For more information on how Lax & Company can help you accomplish your insurance and financial goals, or to discover more about how Lion Street elevates independent insurance agencies, visit www.LaxAndCoLion.com.

Disclosure: Securities and Advisory Services offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC. Lax and Co. and Cadaret, Grant & Co., Inc. are separate entities.

NEWSWIRES

ACA Battle Resumes Things were a bit quiet on the Affordable

Care Act front. But the issue has flared up again. First, the Trump administration told a federal appeals court it thinks the entire ACA is unconstitutional. A day later, House Democrats, led by Speaker Nancy Pelosi, D-Calif., announced their plan to shore up the ACA. The plan would expand the health care law's tax credits that help people pay for coverage, reduce premiums by helping insurance companies pay the claims of highcost patients and prevent insurers from selling non-compliant coverage that is less expensive but has fewer benefits. In addition, the Democrats want to block the Trump administration from approving requests from states looking to water down protections for people with pre-existing conditions as well as the ACA's requirements for covering essential health benefits. Two days later, a federal judge struck down the administration’s rule allowing the sale of association health plans, stating that such plans were "clearly an end-run" around consumer protections required by the ACA.

WELLS FARGO CEO STEPS DOWN J.P. MORGAN KNOCKS GREEN NEW DEAL

Progressive Democrats in Congress have proposed a Green New Deal and some people in the financial sector aren’t happy about it. Michael Cembalest Rep. Ocasio-Cortez of J.P. Morgan Asset Management recently slammed the proposal. The bill, jointly introduced by Rep. Alexandria Ocasio-Cortez, D-N.Y., and Sen. Ed Markey, D-Mass., is a nonbinding resolution that commits the U.S. to massive investments in renewable energy, among other ambitious goals. In a report, Cembalest Sen. Markey said, “At best, the Green New Deal is a slogan to galvanize support for change; at worst, it’s a sign of how little work its proponents have done.”

Wells Fargo CEO is leaving his post in the wake of a years-long scandal over some of its consumer practices. Tim Sloan is exiting after 31 years with the company. He served as Wells Fargo’s CEO since 2016. Sloan spent more than two years on a nationwide apology Tim Sloan tour. This came after Wells Fargo acknowledged a pattern of consumer abuses that included opening millions of fake accounts on behalf of its customers without their consent to mistakenly foreclosing on hundreds of clients and repossessing the cars of thousands of others.

Donald Trump nominated KNOW President Stephen Moore as a governor of the Federal Reserve. Source: Associated Press DID YOU

InsuranceNewsNet Magazine » May 2019

QUOTABLE Presidential candidates want to eliminate Obamacare, take a wrecking ball to insurance people get from work … and go to a government-run program. — Sen. John Barrasso, R-Wyo.

Earlier this year, he spent he spent four hours before a House committee being scolded by lawmakers who said he had not done enough to address the bank's years of misdeeds.

TRUMP TARIFFS COSTING $1.4B MONTHLY

The Trump administration’s trade policies and tariffs are coming with a hefty price tag. They reduced U.S. income at a rate of $1.4 billion per month by the end of last November, according to research from the Federal Reserve Bank of New York, Princeton University and Columbia University.

The study found that businesses and consumers saw “substantial increases” in the price of goods throughout last year, including a “complete pass-through” of U.S.-imposed tariffs onto imported items. The researchers also said Americans suffered by a lack of import variety and disruptions to supply chains. The Trump administration imposed a variety of tariffs on goods imported from U.S. trading partners in 2018.

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InsuranceNewsNet Magazine » May 2019

hey seemed invulnerable in their prime. Stan Lee, a moviestar-handsome creator of superheroes who seemed to just keep living and living. And Burt Reynolds, an actual movie star who lived like he could laugh off anything, maybe even death. They turned into pioneers in a sense, venturing into the realm of the ultraelderly, living far later than they might have even imagined. Lee died last year at age 95 of complications of pneumonia, the end of a career that spanned the history and transformation of comic books. Reynolds had a fatal heart attack at 82 — not ultra-elderly by today’s standards, but outliving expectations set by the high life he led. The elderly were once rare. In 1910, less than 5 percent of the population was over 65, according to the U.S. Census. By 2010, more than 12 percent were over 65 — and that was before baby boomers started crossing the golden line in 2011. Boomers then expanded that age group to about 15 percent of the population in 2015. By 2035, America will be home to more people over 65 than under 18, according to the Census Bureau. One in 10 elderly Americans are victims of abuse, according to the National Council on Aging. But that is considered a significant undercount for many reasons, including the victims’ reluctance to report. The very people who are closest to the victims, family members in many cases, are often the ones abusing them. That was the case with Stan Lee. Lee created Marvel’s universe of characters who bear supernatural ability, yet carry very human flaws. Lee’s superpower might have been longevity but human frailty was his undoing. Not just his, but of those around him. A significant factor was his daughter, J.C., in her mid-60s. The Hollywood Reporter covered issues with Lee’s estate extensively and reported on allegations of J.C.’s physical and financial abuse of her father and mother. An estate document showed that J.C. typically ran up $20,000 to $30,000 in credit card charges monthly. After Lee’s wife died in 2017, Lee was “picked apart by vultures,” according to The Daily Beast. Along with people associated with his daughter, others Lee trusted also took advantage of him, taking

EVEN SUPERHEROES GROW OLD COVER STORY REUTERS/Kevork Djansezian/File Photo

Stan Lee

DIED: Nov. 12, 2018; 95; Los Angeles CAUSE: Complications of pneumonia MISTAKE: Needed a superhero for a trustee millions of dollars, according to some reports. These were literally bloodsuckers. TMZ reported that a former business associate stole some of Lee’s blood and used it to sign Black Panther comic books, which then sold for a premium.

The Advisor’s Insider View

Because the elderly tend to be isolated physically and financially, only a few people have a view of what is actually going on. If that is true of wealthy celebrities such as Lee, it is many times worse for the rest of us. That is why the celebrity stories come in handy for advisors. It is a way to open conversation about these issues, said Megan Gorman, who is an advisor in San Francisco and writes about celebrity cases for Forbes. “Let's be honest — they're juicy, they're fun and they're interesting,” Gorman said of the stories’ impact on clients. “It's, ‘Oh my God, this person had everything and they still didn't get it right?’” Longevity is adding to the urgency for advisors and society as a whole. “You are going to see more issues pop up, where older people get in more

precarious situations,” Gorman said. “As a society, we all have to embrace estate planning more and embrace a lot of the safeguards that are in place. In taking the Stan Lee case: He is a beloved figure in American pop culture and a very affable guy. In his case, what is disturbing is you have a couple of different elements at once. You’ve got a daughter who did not have strong financial skills, who per the press reports came across as entitled in wanting some of the assets from her father. And then on the other side, he was also surrounded by unscrupulous individuals who were trying to take advantage of him. And if you distill that case, it really goes down to some of the basics of estate planning.” And that invariably means trusts, every estate-planner’s best friend — as it is for Gorman, whose firm, Chequers Financial Management, serves clients worth $5 million to $70 million, along with a family office that serves even wealthier clients. So, these lessons hit home for many of her clients. Although Lee had set up a trust for his daughter, she kept trying to change the conditions to withdraw more. Then Lee had advisors and others in his orbit who

were a little grabby with his money. For celebrities, trusts keep the information out of probate court. Wills are public record — trusts are not. Wills also take time and expense to travel through the probate system. Trusts pay out quicker and are cheaper. The hole in the armor can be the trustee. While they are alive, clients are their own trustee. “But what happens if you are alive and still enjoying life but you are unable to manage your financial affairs?” Gorman said, adding that revocable trusts allow backup trustees. “This is someone who could come in and help you manage your financial affairs. And it works in tandem with the power of attorney.” The second lesson there is to choose trustees wisely. In Lee’s case, a business associate had talked him into signing over power of attorney to him. The associate was later accused of transferring $300,000 to a sham charity he established, buying a condo for himself and stealing Lee’s blood (by deceiving Lee’s nurse). Obviously, all the right legal instruments and intentions did not work in Lee’s case, so is there another step? Yes, and it even has a superhero name — The Trust Protector. “I find this a very fascinating role,” said Gorman, who also has a law degree. “Twenty years ago, you didn’t see trust protectors much in U.S. documents. It was a British concept that made its way across the ocean. Trust protectors are there to direct or restrain the trustee in relation to the administration of the trust.” Such a person would have been handy in the Lee case (assuming, by the look of things, the estate did not have one). “Let’s take a fact pattern where you have a trust set up for a child and the child is abusing the trust and having undue influence on a trustee. Not an uncommon issue,” Gorman said. “The trust protector is sitting out there as this neutral third party who can intervene and protect the trustee when they are being pressured with undue influence from a beneficiary. They can seek to remove the trustee; they can direct the trustee.” The protector can re-establish May 2019 » InsuranceNewsNet Magazine

COVER STORY EVEN SUPERHEROES GROW OLD MICHAEL BUSH/UPI/Newscom

Aretha Franklin

DIED: Aug. 16, 2018; 76; Detroit CAUSE: Pancreatic cancer MISTAKE: No will boundaries when they are trampled. Anybody associated with the client can call upon the protector, who is typically an attorney or CPA who declines compensation to avoid conflict of interest. “This is the type of nuance on an estate plan that could make a difference, because when you are an advisor — whether you are selling insurance, whether you are the investment advisor, whether you are the attorney or the CPA — if you see this behavior, it is your duty to note it,” Gorman said. “The ability to bring this to the surface and let the attorney get in there and look what’s in the documents and use the trust protector to help, that’s incredibly valuable.”

The Control Of Non-Control

Then there are always the celebrities who don’t want to do the very basics of planning — even a will. Despite all the publicity around those cases, some still aren’t moved to do it. 20

InsuranceNewsNet Magazine » May 2019

One of the latest big cases was Aretha Franklin, who did not have a will or do any planning, even though she was worth about $80 million. Sometimes, it is actually a control issue. In Franklin’s case, it might have been a desire for some R-ES-P-E-C-T. “You have to look at their lives because their estate plans are a reflection of their life,” Gorman said. “In Aretha's case, she had a tough life, an amazing voice and an amazing life – but a tough life. And I think with some of the family dynamics she had, not having an estate plan allowed her to retain control in a way that she might have liked.” Franklin had children from different relationships and many people within her orbit. And an iron will along with a significant need for privacy. “By all accounts, she was the matriarch of the family and the sun rose and set on her,” Gorman said. “I can't tell you what her personality was like but she wanted people around her doing what she wanted. And if you think about that type of personality, we all know people like that. I do sometimes wonder when I read the Aretha Franklin story, if it would just be too much for her emotionally to put it on paper, to make a decision that this was going to be how it worked.” But not choosing is still choosing. “That was her estate plan,” Gorman said. “Making a decision not to make a decision is a decision.” An attorney or advisor can point out to clients that a revocable trust allows them to remain in control because they can change it at any time. “What Aretha Franklin missed out on is that estate planning is a living,

breathing thing,” Gorman said. Without planning and protectors in place, she was vulnerable to wrongdoing, which apparently happened shortly before her death. Reportedly, hundreds of thousands of dollars in assets were stolen by someone close to her. The case was still being investigated as of press time. And her estate will be in the probate system for some time. Franklin did not construct an estate plan, but she did build a significant fortune, which was more than could be said for Burt Reynolds. Reynolds was a larger-than-life character who lived large as well. That and a couple of divorces left him scrambling for cash late in his life. “From an advisor standpoint, you've got to think about how the client is personality-wise.” Gorman said. “He's the guy who always likes to do it his way and, if you think about it, he was an impulsive individual. So, when you have a client who is impulsive, one of the things to always keep in mind is the way they are when they're in their 50s and 60s, they're going to continue like that. And I think in his case, he was always a big spender.” So, advisors can run cash flow and Monte Carlo analyses, but it is always going to come out the same — excessive spending has to stop. “He was his own worst enemy,” Gorman said. “His is actually a very American story. We now live three lives versus the one that our great-grandparents lived.” In his prime, it is likely that a guy like Reynolds thought he would always be able to work. It is common of entrepreneurs as well. “I think that one of the things that advisors have to say to clients is, ‘Look, when you make the decision to stop working, you have to remember, it's a bit of an irrevocable decision,’” Gorman said. “Because you don't know how long you're going to live and you can't go back to work at 90.” Reynolds is a good case to bring up for self-employed people who seem to think they can work forever. “A lot of these guys who are self-employed — there isn't a true retirement path. I think it's harder for them,” Gorman said. “So, you’ve got to ask them, ‘What does the life cycle of retirement look like for someone like you?’ Because what Burt Reynolds might have thought,

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May 2019 » InsuranceNewsNet Magazine

COVER STORY EVEN SUPERHEROES GROW OLD Werner Roelen/LFI/Photoshot/Newscom

“He had nightclub there and he had a theater there,” Archer said. “He really was putting Jupiter on the map but I think the whole thing was the divorce.” It was a famously ugly divorce that took 22 years to resolve the five-year marriage. It cost him $2 million and $47,000 a month in payments. That was just one of his splits. He had an earlier divorce and a later relationship that ended in dueling lawsuits. Archer is a life insurance agent and financial advisor to the ultra-wealthy. His agency, Archer Financial Group, serves 26 billionaires and more than 500 clients worth at least $500 million. He said he executed the largest life insurance case at $300 million and was working DIED: Sept. 6, 2018; 82; Jupiter, Fla. on a $1.8 billion deal. CAUSE: Heart attack These are complicatMISTAKE: Being Burt Reynolds ed cases that require more than a dozen insurers to cover. if you asked him in his 50s was, ‘Well, I'll He is just around the corner from the just keep at it. There isn't an expiration nation’s wealthiest and most famous, with date. I'm not a guy who works on the on a offices on Manhattan’s Park Avenue, and factory line. I can always work.’” in Beverly Hills and Boca Raton, Fla. He could not work or at least he could It was a different world for a kid from not find the work that could sustain his the South Bronx to navigate. But he lifestyle, along with his divorces and liti- learned the names and the ways of the 1 gious lovers. percent. He recalled his introduction to In the end, it helped that he bought that echelon when he visited a client who well. He sold his estate in Jupiter, Fla., for had started a national bank. $3 million and lived comfortably on the “I was only in my 20s but he would inproceeds. vite us to his home and it was one of those things where you go to someone’s home When The Fun Runs Out and you have to change like four times Tom Archer had a front-row seat for during the day,” Archer said. “Because Reynolds’ antics. Archer lived in Jupiter, you're going to have tea and then you're Fla., when Reynolds was tooling around going to ride a horse and stuff. I'm from town in his Bentley or Mercedes with his the South Bronx, I'm from poverty, so all then-wife, Loni Anderson. these things were new to me. You have to

Burt Reynolds

InsuranceNewsNet Magazine » May 2019

wear an ascot and you have to dress for dinner.” Archer absorbed everything he could. “You learn from these families about wine and you learn about art and you learn about collectibles. You learn about antique cars and all that stuff,” Archer said. “This guy had all of those hobbies, including going shooting at the range and duck hunting and all those things that I guess wealthy people do. The thing was he really didn't get along with his children at all. When he passed away, he left all the money to a foundation for charity. The money just sat in the foundation and some guys ran it and then they would dole out the money. I'm sure the children weren't happy about that.” It was a $750 million estate, but that was the ’80s, when three-quarters of a billion dollars meant something. Archer was reminded about that example because of the case of Peter Knoll, heir to the Knoll furniture company, which pioneered modern design with designers such as Charles and Ray Eames. Knoll lived the privileged life, never having worked a day in his 75 years, according to accounts. Knoll cut off his family — and the gas to his five-story brownstone mansion on the Upper East Side, just uptown from Archer’s office. Knoll froze to death in the $10 million house last year, as he suffered from melanoma and other illnesses. His son would soon discover that his father left the bulk of his estate to his prep boarding school in Vermont. Archer knew of Knoll through his work with other furniture company owners. He knows that sometimes people do weird things with their estates as they get older. In Knoll’s case, apparently someone had talked him into the bequest to The Putney School as Knoll was isolating himself, steeped in his dark palace. Knoll’s son was at a loss to help his reclusive father and angry with Knoll’s financial advisor and the school for the recent change to his father’s will. “They appear to have capitalized on my father’s frail physical and mental state in literally the last months of his life,” Aaron Knoll said in court papers. Although trickery is alleged in this case, Archer said sometimes clients make those choices quite willingly. It is up to the advisor to make certain clients are

EVEN SUPERHEROES GROW OLD COVER STORY

Peter Knoll

DIED: Jan. 8, 2018; 75; New York City CAUSE: Hypothermia MISTAKE: Not locking plans in a trust earlier good story to protect them from having to say no to their friends. They can say ‘Listen, I don’t even control the money. It’s in the trust. I got to go through my trustee.’ We have it set up for certain things and ascertainable standards, which are health, maintenance and education.”

Where Broken Hearts Go

Longevity is leading to other consequences, such as broken heart syndrome. Ed Bailey / DoD via CNP

making clear choices. Archer uses irrevocable, asset protection and living trusts to encase those plans. An important step is being certain to choose the right trustee to carry out the final wishes. It is especially true in tying money to behavior. “Picking good trustees and having good terms and trustees are important because people will say, ‘Here's what I want to happen. I don't want anybody to get anything until they’re gainfully employed’ or ‘I want to make sure that they finish their college education’ or whatever it may be,” Archer said. “The trust is something that you can rule from the grave.” It is a way for clients to avoid creating trust fund babies overdosing on fun and Ferraris. “Like Warren Buffett always says: ‘I want to leave enough money to my children that they can do anything, but not enough that they can do nothing.’” Usually, those choices are best made earlier and locked in a trust. Not only does it help facilitate a healthy transfer but it also protects from predators late in life. Or anytime in life — if they are their own worst enemy. Archer advises more than 200 professional athletes, young people who come into truckloads of money early in life. It is a lot to handle. “I’ll set up a trust to protect them from themselves,” said Archer, adding that an asset-protected trust helps athletes from overspending on friends. “I give them a

That is the sudden stress placed on the heart and body when experiencing grief. Doctors are recognizing it more and more. The syndrome can happen at any point in a person’s life. But when people are old, they are more susceptible to health conditions when stress suppresses the immune system, along with damaging the heart. In fact, heart function is impeded for at least four months after the acute stress, according to recent research. It’s something for advisors to recognize for planning purposes, but also for the well-being of the survivor. George H.W. and Barbara Bush had as close to an American storybook life as there is. Born early in the 20th century, they grew up with and helped shape modern America. He became one of the youngest aviators in the American forces in World War II, graduated from Yale University, made his own way in the oil business, got involved in public life and became senator and then president. Barbara was with him every step of the way and helped raise successful children — a president and a governor among them. Archer recalled sitting at a table and chatting with Barbara Bush at an event. “They were married for so long and they loved each other so much. They were oldschool,” he said. “You'll find a lot of people that are like that they really don't want to

Barbara and George H.W. Bush

DIED: April 17, 2018; 92; Nov. 30, 2018; 94; Houston CAUSE: Various illnesses; Parkinson’s and broken heart MISTAKE: Too much love?

May 2019 » InsuranceNewsNet Magazine

COVER STORY EVEN SUPERHEROES GROW OLD JOHN ANGELILLO/UPI/Newscom

pass the way she wanted. “She called the treatment on herself. She understood. She did not want to go further,” Gorman said. “She was very clear with family members. She clearly had the documents in place and she was able to go home and pass away. And that's a really important thing. Because when you think about it, we live in a day and age where medical treatments and the Hippocratic Oath are all about sustaining life. And as Americans, we are not good with that. It's not our strong suit.”

Kate Spade

Troubled Times

The deaths of Anthony Bo u rd a in a nd Kate Spade caug ht ma ny p e ople by s u r pr i s e . Bourdain’s passing was particularly difficult for viewers of his televised culinary travel adventures. People felt the loss more acutely because it was a suicide, as was Spade’s, whose accessible, fashionable handbag line endeared her to many women. Along with longevity issues, suicide is becoming a bigger problem, especially among the middle-aged. The suicide rate, already rising at an alarming rate, has only accelerated since 2010.

DIED: June 5, 2018; 55; New York City CAUSE: Suicide by hanging MISTAKE: Not accounting for marriage separation go on without the other one. Once one leaves, I think it takes away all their will to want to be around.” Barbara died at 92 last April after a series of illnesses. George H.W. carried on with a brave front but died at 94 that November. Gorman took away a planning lesson from Barbara Bush in how she chose when to stop treatments and allow herself to BZ / WENN

Anthony Bourdain

DIED: June 8, 2018; 61; France CAUSE: Suicide by hanging MISTAKE: Not accounting for marriage separation

InsuranceNewsNet Magazine » May 2019

Overall, suicide increased 30 percent between 2010 and 2016. For women, it was even starker, rising 50 percent between those years. By far, the age group most at risk is 4564. Spade was 55; Bourdain was 61. Suicides always leave a trail of questions along with the tears. Was this or that a sign? As an advisor, is there anything to do? “It's very hard,” Gorman said. “One of the things as an advisor is, we sometimes see things that aren't pretty and can sort of get a good understanding of the client’s mental state. From an advisor standpoint, you have to sometimes have the tough discussions of, ‘I think you need help beyond someone like me; I think you need a mental health professional,’ and try to help get your client help. Whether you're noticing it as an investment advisor, as an insurance person, you have to raise the red flag. It's not uncommon.” Signs to watch for might be obvious, such as rapid change in demeanor, impulsive changes in planning and questions such as what suicide provisions exist in a life insurance contract. “These are all sorts of warning stop signs,” Gorman said. “And we have to be able to address those. We have to be willing to say, ‘What's going on here?’” Gorman herself had a client who committed suicide several years ago. The experience is still so raw that she doesn’t want to talk about it in any detail. Suicide radiates farther out than the victim might assume. “The beauty of this career path is you have long-term relationships,” Gorman said. “In the scheme of things, a lot of career paths are very transactional. But when you are doing deep financial planning or have long-term relationships that are tied to investment accounts, you build a relationship with someone. You want them to succeed, and you don't want bad things to happen to your clients. It’s very hard.” Steven A. Morelli is editor-in-chief for Insurance N ewsN et . He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at smorelli@adnewsfeedback.com.

May 2019 Âť InsuranceNewsNet Magazine

the Fıeld

A Visit With Agents of Change

Banking On

Herself

Vanessa Bucklin grew her practice by relying on oldschool ways and the relationship-building techniques she learned as a small-town banker. • By Susan Rupe 26

InsuranceNewsNet Magazine » May 2019

onrad is a Montana town of 2,500 in an area known as the “Golden Triangle” for its vast fields of wheat. Sixty miles from the Canadian border, Conrad is where the Great Plains meet the Rocky Mountains. It’s a place where everyone stops what they’re doing at harvest time to do whatever it takes to bring in the grain crops that fuel the local economy. “We have one stop light, no McDonald’s and one elevator in the entire town,” Vanessa Bucklin said. In an era where small towns such as Conrad are seeing their young people strike out for big cities and never return, Bucklin did things differently. She spent her teen years dreaming of leaving Conrad for Las Vegas. But after she moved, she realized she missed Conrad and she focused on getting the kind of business experience that would help her return there and be successful.

BANKING ON HERSELF IN THE FIELD

Bucklin and her family are firmly planted in Conrad, but when she was younger she felt the bright lights of Las Vegas luring her away. “I wanted to study hotel management and go to the No. 1 school for it — University of Nevada at Las Vegas,” she said. But her mother nixed that idea — at least for two years. Instead, Bucklin studied at the University of Montana at Missoula. After winning a full scholarship to UNLV for her remaining two years of college, Bucklin convinced her mother to let her go. On her second day in Las Vegas, Bucklin took a job that would change her life. She became a teller at Bank of America and soon changed her major to finance. She also realized that she missed Montana and wanted to go home eventually. After graduation, she took a job in Wells Fargo’s regional commercial lending division, which provided financing to the gaming industry. “I worked with big, huge hotel casinos,” she said. “But working for Wells also was

“I felt I could do it better, I could do it differently. Just like it is at harvest time, failure was not an option.” Bucklin, 41, founded Pondera County Insurance in 2013, and qualified for Million Dollar Round Table membership her first year in business. She is the descendant of homesteaders, with her family the fifth generation to live on the farm that grows wheat, barley and hay. She is also the second generation of her family to serve the community’s insurance needs. Her grandfather, Bob Emrick, was a State Farm Insurance agent in Conrad from the post-World War II years until his death a year before Bucklin was born. “I still have the rolltop desk that he used to write insurance policies on,” Bucklin said. “He served the people in the community and now I have some of those same people coming in to my office. Some of them tell me he sold them their very first insurance policy when they were young. Now I am continuing that promise.”

a way for me to get education and training. And then I knew I could come back to Montana because Wells has a presence in Montana.”

Back Home To Montana

Bucklin transferred to Wells Fargo in Great Falls, Mont., and began working in commercial and agricultural lending. She also earned an MBA in finance from the University of Montana. After a few years, it was back to Conrad, where she spent seven years at a small state bank, Stockman Bank, working her way up to vice president. Despite earning a good income as a bank vice president, Bucklin was unhappy. “I was hitting the proverbial glass ceiling pretty hard,” she recalled. “It’s an old-school place and there’s a good-old-boys club here. I soon realized that the only person who could change this situation was me.”

Bucklin decided to “bank on myself” and make the leap from banking to starting an insurance agency from scratch — with no book of business to take over. The financial stakes were high for her family, she said. Her husband was teaching school and struggling to get started in farming, and the couple’s three children were under 7. “I was scared because I was the main breadwinner,” she said. “I was the one who had the steady paycheck and the benefits. I was the VP at Stockman and was making a good living. But I was failing everyone and it was eating me up inside.” Bucklin looked back on that time and said she traded security for entrepreneurship. But she had a secret weapon – respect for her community’s old-school ways along with a desire to stir things up among the town’s established insurance agencies. “There were seven insurance agencies in our little town when I started out,” she said. “Most of them were very complacent. They were sitting in their offices waiting for that renewal to come in, waiting for people to come in to their offices. But I decided to take an aggressive approach to getting business.” Bucklin said that when she started her banking career, she was told, “Business doesn’t happen in your office, it happens out there.” So, during her time at the bank in Conrad, she concentrated her efforts on spending time “out there,” drumming up business. “I was always out trying to get in front of people,” she said. “I would go up to people and introduce myself and have conversations. I would use simple words no one uses anymore: ‘I would like to do business with you.’ “I sat at their kitchen table. I rode the combine with them. I visited their operations.” Bucklin studied the other insurance agencies in town before opening her own. “I felt I could do it better, I could do it differently,” she said. “Just like it is at harvest time, failure was not an option.” Her years in banking had given Bucklin a strong network of contacts. She quickly began to turn those contacts into clients for her insurance business, making calls, knocking on doors and “literally pounding the pavement.” May 2019 » InsuranceNewsNet Magazine

IN THE FIELD BANKING ON HERSELF

Vanessa Bucklin’s grandfather, Bob Emrick, wrote insurance policies at this rolltop desk when he served clients. “Now I am continuing that promise,” she said.

Because Conrad is a small town surrounded by vast stretches of open land, “pounding the pavement” took on a different nature. “She would get in her car and drive from one farmhouse to another, knocking on doors and talking with people,” said Kenzie Greer, the agency’s commercial lines specialist. “She wasn’t afraid to get in front of people and she made sure everyone knew her.” Bucklin’s efforts paid off. Her practice now employs four other agents. One of those agents, Victoria Terrones, is five years younger than Bucklin and said she has looked up to her since the days when Bucklin was a high school student and Terrones was a middle schooler. Years later, when Terrones and her husband were expecting a baby, she contacted Bucklin about buying life insurance. Bucklin eventually offered Terrones a job in her agency. “Vanessa is the epitome of what a successful woman is,” Terrones said. “She is strong. She is confident and she will do anything for you. I learn from her every day.”

Building Trust

Bucklin credits much of her success to her ability to relate to her prospects. “In my years at the bank, I built up a 28

InsuranceNewsNet Magazine » May 2019

huge network, and I built up people’s total trust. I was going over their statements with them, going over their budgets, financing their operations,” she said. “I spent time sitting down with them and they trusted me.” Because Bucklin previously had worked with many insurance prospects during her time at the bank, she already had a good idea of their financial picture and their needs. “I didn’t have to do the same kind of fact-finding as someone in a big city would,” she said. “I already knew their financials, how many kids they have, who has a kid about to go to college, etc.” Because Bucklin is so well known in her community, she has little trouble getting a prospect to meet with her. “If I call them and ask to meet, they’ll meet with me,” she said. “I’m politely persistent. And I know their life – because it’s my life as well.” Bucklin’s husband, Tyler, is from the opposite end of Montana, a seven-hour drive from Conrad. Bucklin has clients lined up between Conrad and her husband’s hometown. “When I travel back and forth, I’m stopping at little towns making appointments,” she said. “I’m known to stop in at a farmhouse or go from business to business in a small town and introduce

myself. So I get known. And the next time I go through, I will do that again. I’m always trying to meet new people.” Despite her desire to “stir things up” in Conrad’s insurance and financial community, Bucklin said she still likes to do some things in the way that honors her rural hometown. For example, the annual grain harvest season is a stressful, pressure-filled time as farmers and their crews work to bring in the crops before rain or hail damage them. Bucklin will provide what she calls “a happy touch point” by providing a picnic lunch for the harvest crews. On the day after Thanksgiving, she rents out the local movie theater to give the town’s children a chance to have fun viewing a holiday film. She and her staff also organize an annual triathlon for kids, called the End Hunger Games, which has raised a total of $25,000 for No Kid Hungry over the past four years. Bucklin and her husband have three children: Claire, 12; Nicholas, 9, and Colette “Coco,” 7. Her husband is now a school superintendent in addition to farming the land that has been in their family for generations. “We’re trying to do it all but we have a lot of help,” she said. She and her husband run ultramarathons — distances of as much as 50 miles. She likened her business journey to a long-distance race. “You never think about it when you’re doing it — you just do it,” she said. “You’re in it and you just keep going one step at a time, one mile at a time.” Susan Rupe is managing editor for Insurance N ewsN et . She formerly served as communications director for an insurance agents’ association and was an awardwinning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback. com. Follow her on Twitter @INNsusan.

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IN THE FIELD

LIFEWIRES

Indexed Life Sets Record In 2018 Indexed life sales are on a roll, setting a record for 2018, according to Wink Inc.

Indexed life sales for the fourth quarter were $617.4 million, up more than 16.8 percent compared with the third quarter, and up more than 7.2 percent compared to the fourth quarter 2017. Annual indexed life sales were more than Indexed Life Sales by Quarter $2.1 billion. $600M Non-variable universal life sales for the fourth quarter were more than $965.4 million, $500M up 10.3 percent compared to the previous quarter and down 7.9 percent as compared to the $400M same period the prior year. Annual sales for 2018 were more than $3.6 billion. Non-variable $300M universal life sales include both indexed UL and fixed UL 4Q17 1Q18 2Q18 3Q18 4Q18 product sales. In the fourth quarter, Pacific Life held onto its rank as the No.1 company overall for non-variable universal life sales, with a market share of 10.7 percent. Pacific Life also kept the No.1 spot in indexed life sales, with a 16.4 percent market share. nearly 80 percent of African-Americans said having life insurance is a goal for them, versus 63 percent of all adults. More than 90 percent of African-Americans said they believe life insurance helps future generations succeed.

QUOTABLE Variable universal life was the biggest driver of growth in the fourth quarter of 2018. — Ashley Durham, assistant research director, LIMRA

quarter and for the year. This is the third consecutive quarter of flat policy count and the second consecutive year without policy growth, LIMRA said.

FLORIDA LOOKS AT GENETIC TESTING AND LIFE INSURANCE

Genetic-testing products are showing tremendous growth and popularity. But some privacy advocates worry about their use. Florida lawmakers are looking into the use of genetic information in canceling, limiting or denying life insurance coverage. A state House committee voted to approve a bill that would prohibit the use of genetic information by life insurers.

CLAIM DENIED

NEW PREMIUM INCHES UP AFRICAN-AMERICANS SEE WEALTH TRANSFER VALUE

African-Americans view life insurance as more than a means to pay for final expenses. They are increasingly looking to life insurance as a way to transfer wealth and leave a legacy. Those were among the findings of New York Life’s Insurance Gap Survey that showed African-Americans report more financial stress than the overall population, but are also more proactive about addressing it. Despite this level of financial stress, DID YOU

KNOW

Total U.S. individual life insurance new annualized premium saw its fifth year of growth in 2018, with an increase of 1 percent over the previous year, according to LIMRA. However, fourth quarter new premium was flat, compared with fourth quarter 2017. Policy count was flat in the fourth

A federal law prevents health insurers from using genetic information in the underwriting process and in setting premiums. But the prohibition doesn’t apply to life insurance or long-term care insurance. Robert Gleeson, a physician and past medical director for Northwestern Mutual, said the proposed ban requires insurance companies to ignore important medical information about consumers.

New York Life exceeded $1 trillion of individual life insurance in force in the U.S. in 2018.

InsuranceNewsNet Magazine » May 2019

Source: New York Life

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LIFE

Life Insurance As The Bedrock Of Financial Discipline Many clients will want to “get enough money together” before they execute any of these four financial disciplines. But they may be going about it backward. By Ben McFie

here are four financial disciplines that are critical to getting ahead financially. They are:

» Protect. » Save. » Manage debt. » Invest.

And the order in which these disciplines are developed is critical. Protection should always come first. Without protection, clients risk leaving family, business associates, dependents and creditors in a difficult spot. Protection is even more important than saving because, for a small sum, life 32

InsuranceNewsNet Magazine » May 2019

insurance will provide several times more protection than what clients can save in a short period of time. Saving should be the second financial discipline that people develop. The biggest catch to saving is that you need to actually save the money. Many people invest money and think that they’re saving. Investing is not saving! To count as savings, the money needs to be in a safe place that does not expose it to market risk, or any other risk of loss. Managing debt naturally follows saving and should done before investing. There are many people who will get a much higher return by managing the debt they have before they invest. Think credit card debt, student loans or almost any other consumer debt. Managing debt doesn’t necessarily mean pay off all debt. Some debt can be good, if it provides better cash flow or better tax treatment. Managing debt means keeping the good debt and executing a plan to pay off bad debt. Investing should always come last, not just because of the risk of losing both earnings and capital, but because people

will have better financial acumen after developing the first three disciplines. For whatever reason, many people try to acquire these financial disciplines backward. They believe that if they invest first, then they will have enough money to pay off their debts. And once debt payments stop, then they’ll be able to afford to save something. Then by the time they get around to protecting, the protection may be much more expensive, and their health may have deteriorated. This may cause the cost of protection to rise, or perhaps they may be uninsurable. We know that investment income is not likely to replace savings, and using investment income alone is no way to pay off debt quickly. Still, there are numerous people who call our company because they want to “get enough money together so that they can start investing.” Many of these people have consumer debt or student loans, maybe both, but they believe “investing” is “where it’s at.” Nothing could be further from the truth. Ironically, the less we know about some things, the more they seem like a good idea. It’s the axiom of “ignorance is bliss.”

LIFE INSURANCE AS THE BEDROCK OF FINANCIAL DISCIPLINE LIFE

Pushing The Pedals

I remember riding in our Dodge Caravan growing up. One day, my older brother (probably 7 at the time) asked our Dad, “Can I sit down by the pedals and you can tell me when to push the gas or the brake?” If you are chuckling over this innocent question posed by a thoughtful 7-yearold, then your response is probably similar to our Dad’s. I was likely only 5 or 6 at the time, and my only question would have been, “Can I do it, too?” The truth of the matter is, we were ignorant that nerve impulses can travel at 390 feet per second (266 mph), which is much faster than our Dad could have

your debt before you start investing in higher-risk areas. You have the ability to make a huge difference for your clients’ financial future by simply adjusting their order of operation and starting them off with proper protection. But your opportunity to help doesn’t end with protection. You can do more. What if you sell your client a participating whole life insurance policy to provide protection as well as a safe place to save, with an average to better-than-average return and tax-free dividends? Would that give your client a leg up on both of the first two financial disciplines?

You have the ability to make a huge difference for your clients’ financial future by simply adjusting their order of operation and starting them off with proper protection. processed the situation, given the verbal instruction, let alone having us comprehend and comply with the instructions. Besides, from the question, you can tell that we were also ignorant of the fact that each pedal has progressive function. Pushing the pedals in a vehicle is not like pushing the start or stop button on your microwave. For my brother and me, driving was a dream. We wanted to do what Dad was doing. But we didn’t have the knowledge, experience or capability to do it safely at that time. Today, we are both good drivers, but enacting the ideas we had about driving years ago could have been disastrous. Instead, our parents started us on riding toys, then we moved up to bicycles, eventually moving up to riding lawn mowers and tractors before finally driving an automobile on the highway. Investing is a dream for many people, even though it may seem like investing is where it’s at. A great deal of knowledge and discipline must be mastered to be able to invest successfully, and what people don’t know about investing could ruin them financially. Of course, anyone can get lucky once, but betting on luck is no way to get ahead financially. It is much more responsible to protect first, build up secure savings and manage

And while you’re at it, what if you put a paid-up additions rider on the participating whole life policy, so that your client can borrow against their policy cash value to manage debt? Right now, some mutual companies are charging only 5 percent on policy loans. So if your client borrows at 5 percent to pay off a chunk of consumer debt at 18 percent, do you think they would be happy to not have to pay the difference? That kind of sounds like a good investment without big risk, doesn’t it? Teaching your clients about the hierarchy of these financial disciplines, and using the right product, can revolutionize your clients’ financial future. You have the opportunity to make that difference. Ben McFie is a coowner of Life Benefits. Ben may be contacted at ben.mcfie@innfeedback.com.

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May 2019 » InsuranceNewsNet Magazine

ADD RECURRING

REVENUE

BY SELLING

MED SUPP t Booming Market t Year Round Sales s Great Persistency y Lasting Renewal Comp p Easy Product to Learn Dedicated Support Team

ANNUITYWIRES

QUOTABLE

2018 Sales Smash Records

Annuities of all stripes broke sales $21B $23B $28.5B $29.5B $32.6B records in 2018, according to Wink Inc. Total fourth-quarter 4Q17 1Q18 2Q18 3Q18 4Q18 non-variable deferred annuity sales were $32.6 billion, up more than 10.1 percent over the previous quarter and up more than 54.4 percent over the same period the previous year. Total non-variable deferred annuities sales for 2018 were $113.6 billion, an increase of 29.1 percent over 2017. Non-variable deferred annuities include the indexed annuity, traditional fixed annuity and multiyear guaranteed annuity product lines. Fixed indexed annuities’ fourth-quarter sales were $19.2 billion, up more than 8.4 percent compared to the previous quarter. Indexed annuity sales rose 40.9 percent compared with the same period in 2017. Total indexed annuity sales for 2018 were $68.4 billion, an increase of over 26.8 percent from the previous year.

ILLINOIS TOP COURT RULES FIAS ARE NOT SECURITIES

The court has spoken. Illinois’s highest court ruled fixed indexed annuities are not securities under Illinois state law. It all started when the Illinois Secretary of State brought an administrative action against Richard Van Dyke, who sold FIAs to his clients. The secretary eventually ruled that the annuities sold by Van Dyke were not only insurance products regulated by the Illinois Department of Insurance as they had been for decades, but were also subject to regulation by the secretary as securities. The secretary’s ruling was later affirmed by the Sangamon County Circuit Court before appeal to the Fourth DID YOU

KNOW

District Appellate Court of Illinois. In July 2016, a three-judge appellate court panel unanimously reversed the decisions of the secretary and the circuit court, and, in a published opinion, held that FIAs “are not securities under Illinois law.” From there, the case went to the Illinois Supreme Court to review the appellate court decision. In the high court’s opinion, FIAs are not securities, based on two points: 1) the language of the state’s Securities Act did not allow for regulating FIAs as securities, and 2) because FIAs were already regulated as insurance, it would be “incongruous” to also regulate them as securities.

AIG TAKES THE LEAD IN ANNUITY SALES

For the first time since 2007, AIG has taken the top spot on the leaderboard for annuity sales, according to LIMRA Secure Retirement Institute. And there are two additional new companies joining the ranks of the top five annuity sellers for 2018. The top five sellers of total annuities in 2018, representing 32 percent of market share, were AIG, Jackson National Life, New York Life,

While sales were down for 2017 because of the Department of Labor, this year’s sales [in 2018] have more than made up for last year’s loss in sales. — Sheryl J. Moore, president/CEO of Wink Inc.

Lincoln Financial Group and Allianz Life. AIG led the pack among fixed annuity sellers, followed by New York Life and Allianz Life. On the variable annuity side, the three top sellers were: Jackson National Life, AXA US and TIAA, representing 38 of market share.

GENWORTH SUSPENDS ANNUITIES THROUGH BGAS

The brokerage world was left reeling by the news that Genworth is halting its annuity and long-term care insurance sales through the brokerage general agency channel.

LTC annuities

May 31 is the last day to place pending business. The products will continue to be sold through other channels, Genworth said.

China Oceanwide Holdings Group of Beijing is in the process of acquiring Genworth, a transaction that has been postponed eight times since the deal was first announced.

4Q 2018 multiyear guaranteed annuity sales increased by more than 80% over the same period in 2017.

InsuranceNewsNet Magazine » May 2019

Source: Wink Inc.

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ANNUITY

How To Match An Annuity To A Retirement Need Securing a reliable source of protected lifetime income is one way to help manage retirement risks and help clients alleviate a major retirement concern. By Bryan Pinsky

uch is written about the need to accumulate money for retirement, but accumulation is only part of the retirement equation. Clients also must think about how to protect their income in retirement while considering the financial risks they face as they get older. Securing a reliable source of protected lifetime income is one way to help manage retirement risks and help clients alleviate a core retirement concern — outliving their savings. In a recent AIG survey, we found that 59 percent of Americans say they fear running out of money more than death — a startling fact that underscores the importance of protected lifetime income. To start the income planning discussion, ask your client three basic questions: 1. How much have you accumulated for retirement? 2. How much income will you need in retirement? 3. What are your expected sources of protected lifetime income?

The answer to the first two questions will vary widely, but the answer to the third will likely be some combination of Social Security, pensions and lifetime income products such as annuities. If your client doesn’t have enough protected lifetime income to cover their essential or discretionary expenses in retirement, they could be facing an income gap and may need your help. 36

InsuranceNewsNet Magazine » May 2019

Addressing Key Risks

Here is why eliminating your client’s income gap is important: Once your client is in the decumulation phase, they likely won’t have additional material sources of income. An unexpected turn of events could reduce their ability to meet their basic needs. Of course, although each client will have their own risk factors, there are three main risks that will affect most retirees: 1. Longevity Thanks to medical advances and healthier lifestyles, Americans are living longer. Consider that the Society of Actuaries estimates nearly one out of three females aged 65 will live to 95, while more than one out of five males aged 65 will live to 95. Given those odds, you want to be sure your clients have their bases covered for what could be a lengthy retirement. 2. Low interest rates Historically low interest rates in recent years have made it difficult for retirees to generate sufficient income from investments like CDs and bonds. This has put some retirees in the position of taking on perhaps more risk than they should to help meet their income needs. 3. Stock market volatility Although we are in the midst of the longest bull market for stocks in history, this likely won’t go on forever. Market downturns can come unexpectedly and can be severe, especially with markets at such historically high levels. Retirees who are heavily invested in stocks at the wrong time risk putting their retirement income in jeopardy.

Rethinking The “4 Percent Rule”

One additional point to keep in mind is that traditional rules of thumb such as the well-known “4 percent rule” recommended safe withdrawal rate may no longer hold up in the current interest rate

environment — especially when considering today’s longer life expectancies. According to retirement income expert Wade D. Pfau, the 4 percent rule today is more like the 3 percent rule. And even this reduced rule cannot guarantee your clients won’t outlive their money.

Meeting Diverse Client Needs And Risk Tolerance Levels

When developing a strategy to help protect your client’s retirement income, consider allocating a portion of their overall retirement portfolio to a protected lifetime income source such as an annuity. The different types of annuities available allow you to provide clients with a solution that best matches their risk tolerance. With an annuity, you can ensure your clients receive an income stream they cannot outlive, and potentially generate even more income, depending on the type of annuity they choose. Annuities can also help address retirement income gaps. For example, one of your clients has saved $1 million for retirement. This particular client is looking to maximize long-term growth potential. Your income planning analysis has determined that they need $70,000 annually to meet their needs. However, they have only $50,000 coming from Social Security and a pension. The resulting $20,000 income gap could be covered by allocating $250,000-$400,000 to a variable annuity with a guaranteed lifetime withdrawal benefit, providing the client with long-term growth potential while securing additional guaranteed income to cover the income gap. This strategy also allows the balance of the client’s overall portfolio

HOW TO MATCH AN ANNUITY TO A RETIREMENT NEED ANNUITY ($600,000-$750,000) to be invested with less worry because their identified income needs are now covered with guaranteed income. Of course, the actual amount to be allocated to an annuity will depend on the type of the annuity product purchased, features of the product elected, client age and how long your client intends to wait before starting income from the annuity. Let’s walk through examples of two more conservative clients: Gary is a single 62-year-old who wants to retire in five years. He wants his retirement income to be protected from market downturns, but also have the opportunity for growth. He allocates a portion of his retirement savings to purchase an indexed annuity with a guaranteed living benefit rider (also referred to as a guaranteed lifetime withdrawal benefit). Once withdrawals begin at age 67, Gary’s income can continue to grow with annual income credits that match his interest earned (if any). Even if his contract value becomes completely depleted, Gary’s income is locked in for life, providing him the security he’s looking for.

Certain fixed annuities are also available with guaranteed lifetime withdrawal benefits. For example, Doris is 65 and wants to retire at 72. She wants income that will last for the rest of her life when she retires, and is looking to generate more income without the risk of a market downturn. She also wants access to her money for unexpected situations. Doris uses a portion of her savings to purchase a fixed annuity with a guaranteed lifetime withdrawal benefit. By waiting seven years before taking any withdrawals, Doris can automatically grow her future lifetime income with an income credit every year withdrawals are not taken — with the assurance that her principal is protected from market volatility. Annuities can also be helpful for those who have to retire unexpectedly. For example, if a client is laid off from their job or has to take care of an ill spouse or parent, protected lifetime income from an annuity can help address retirement needs, despite an unexpected turn of events. Guaranteed living benefits riders and guaranteed lifetime withdrawal benefits are generally

available for an additional cost and are backed by the claims paying ability of the insurer. Age restrictions and other limitations apply.

A More Secure Retirement Experience

Ultimately, the goal is to help your clients retire without the worry of outliving their money. Of course, you’ll also want to consider other important factors like their age, time horizon and liquidity needs. By incorporating your client’s risk profile into their retirement income strategy and utilizing a protected lifetime income solution such as an annuity as part of their overall portfolio (when appropriate), you can help clients address their retirement income goals and retire with confidence. Bryan Pinsky is senior vice president, individual retirement products, with AIG. Bryan may be contacted at br yan.pinsk y@innfeedback.com.

May 2019 » InsuranceNewsNet Magazine

HEALTH/BENEFITSWIRES

Hospitals, Insurers Spar Over Surprise Bills Congress is focusing on surprise medical bills, and a battle

is breaking out within the health care industry as a result. The fight is pitting insurance companies who want to see price caps for provider services against hospitals who argue such a move would be a severe government overreach. At the heart of the dispute is “balance billing,” or the difference between what a physician or hospital charges for a service and what an insurance company covers. Sens. Bill Cassidy, R-La., and Maggie Hassan, D-N.H., are working together after introducing separate proposals last year that suggested different mechanisms to determine fees. Cassidy’s prior bill would cap charges for out-of-network procedures at 125 percent of the average cost for the service in the specific geographic area, while Hassan’s would employ an independent arbitrator to resolve fights between insurers and providers. Meanwhile, America’s Health Insurance Plans urged lawmakers to include a cap on reimbursement rates. The American Hospital Association said in a statement that the government’s setting rates in the private sector is “a dangerous precedent.”

DEMENTIA DEATHS DOUBLED SINCE 2000

More Americans are living with dementia and more are dying of it, too. The National Center for Health Statistics reported that the rate of Americans who died from dementia more than doubled from 30.5 deaths per 100,000 people in 2000 to 66.7 in 2017. The death rates associated with dementia more than doubled in 85- to 89-year-olds, compared with 90- to 94-year-olds, according to the report. More than 60 percent of deaths due to dementia in 2017 occurred in long-term care facilities, nursing homes or hospice facilities designed for end-of-life care. The number of those in the U.S. who are living with dementia is expected to hit 14 million by 2060, according to the U.S. Centers for Disease Control and Prevention. Dr. Ellen Kramarow of the National Center for Health Statistics, part of the CDC, explained that the aging population in the U.S. is one cause of the rising number DID YOU

KNOW

of dementia deaths. “If people live longer, they don’t die of other causes. So they live to the point where the risk for dementia is higher,” she said.

CENTENE TO BUY WELLCARE FOR $15B

Centene said it will buy WellCare Health Plans in a $15 billion deal to bulk up its government-backed health-care business. The acquisition would likely reduce Centene’s dependence on the Affordable Care Act health-care exchanges at a time when the Trump administration has stepped up its war on the Obama-era law. Centene relies on its ACA business for about 40 percent of its earnings, making it vulnerable to any possible strikedown of the law, analysts told CNBC. The WellCare deal also would allow Centene to better compete against large rivals UnitedHealth and CVS Health in the consolidation wave that swept through

350,000 Americans purchased long-term care protection in 2018. Source: American Association for Long-Term Care Insurance

InsuranceNewsNet Magazine » May 2019

QUOTABLE Everyone wants to point fingers at the providers, but … a lot of times [insurers] roll over and pay the rates — Leemore Dafny, Harvard University health care economist

the U.S. health-care sector in recent years. The WellCare purchase is expected to become final in the first half of 2020. It would allow Centene to grow its Medicaid business and save costs as well as expand into Medicare Advantage, analysts said.

MORE RECOVER FROM JOINT REPLACEMENT AT HOME

For elderly patients who undergo hip or knee replacement surgery, the route is a familiar one: hospital to rehabilitation facility to home. But more seniors are electing to skip the rehab hospital and recover at home. The Journal Of The American Medical Association reported that people who were sent directly home with home health care services after joint replacement recovered as well as those who went to a rehab hospital. The trend toward a home-based recovery is likely to increase as hospitals alter medical practices in response to changing Medicare policies. Overall, costs were significantly lower for patients who went home, but hospital readmissions were slightly higher. This is a possible signal that home health care services needed strengthening or that family caregivers needed better education and training, the JAMA report said.

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HEALTH/BENEFITS

‘Emerging Benefits’ Is The Next Workplace Trend An annual survey shows employees are looking at benefits that will help alleviate their financial stress as well as maintain their overall health. By Susan Rupe

orkers say stress over their personal finances hampers their productivity on the job. Employers say they are challenged with attracting and retaining workers. Both groups are looking to a trend in voluntary benefits as a way to help them overcome the challenges they face as the world of work continues to evolve. MetLife’s 17th annual U.S. Employee Benefit Trends Study showed a greater interest in workplace benefits that go beyond the traditional medical, dental and vision insurance. These newer benefits are described as “emerging benefits.” They include everything from help with paying student debt to subsidies for egg freezing or gender reassignment support to financial counseling. Fifty-eight percent of workers said having nontraditional benefits would reduce their stress. “It used to be that employers told their workers, ‘Here are my benefits; here’s what I pay for, here’s what you pay for,’” Todd Katz, MetLife executive vice president-group benefits, told InsuranceNewsNet. “But now, employees are saying, ‘We’re all different.’ You have multiple generations in the workforce, and even within generations there are different views of what’s important. “So employers have said, ‘I get that. The best way for me to deal with that is to give my employees choice.” Choice, Katz said, is not only giving workers an option between Medical Plan A and Medical Plan B. It’s coming up with an array of benefits — some employer-paid and some voluntary — that give 40

InsuranceNewsNet Magazine » May 2019

Top 11 Emerging Benefits By Generation Total

Gen Z (21-22)

Gen Y (23-36)

Gen X (37-52)

Boomers (53+)

Wellness/well-being programs that reward my healthy behavior

69%

71%

77 %

69%

59%

Unlimited paid time off

72%

73%

80%

70%

63%

Concierge programs (e.g., assistance with finding and booking reservations for things like travel, dining, entertainment, and dependent care services)

44%

55%

59%

41%

26%

Phased retirement program (to support a gradual shift from full-time employment to full-time retirement)

68%

74%

63%

65%

Genetic testing

38%

47%

54%

36%

18%

Subsidized egg freezing

33%

39%

51%

29%

Gender reassignment support/ subsidy

32%

46%

49%

27%

12%

Paid sabbatical program (e.g., extended paid leave after a certain amount of time at the employer)

66%

67%

77%

62%

56%

Onsite free/subsidized services (e.g. meals, gym, massage therapy, hair, dry cleaning)

61%

66%

76%

60%

43%

Onsite health/medical care (including physical and mental health)

59%

65%

71%

58%

45%

The ability to work abroad or take work assignments in a foreign country

54%

65%

67%

52%

34%

workers the opportunity to select what fits them best. It also gives an employer the ability to differentiate themselves from others in the marketplace by providing a unique set of benefits. So what are these emerging benefits, and who wants them? According to the MetLife survey, the top five emerging benefits across all worker age groups are:

3. Phased retirement program (to support a gradual shift from full-time employment to full-time retirement) — 68 percent

1. Unlimited paid time off — 72 percent

5. Onsite free/subsidized services (e.g. meals, gym, massage therapy, hair, dry cleaning) — 61 percent

2. Wellness/well-being programs that reward healthy behavior — 69 percent

4. P aid sabbatical program (e.g., extended paid leave after a certain amount of time at the employer — 66 percent

‘EMERGING BENEFITS’ IS THE NEXT WORKPLACE TREND HEALTH/BENEFITS Other emerging benefits mentioned in the MetLife survey included genetic testing, onsite health and medical care that includes mental health care, pet insurance, and identity theft protection and resolution. Despite the interest in emerging benefits, however, traditional benefits scored high among the workers MetLife surveyed. Medical insurance was the top-rated employee benefit, with 82 percent of workers in all age groups and 89 percent of baby boomer workers saying it was their biggest must-have benefit. Prescription drug coverage (68 percent of workers), dental insurance (67 percent), defined contribution retirement plan (63 percent) and vision care (53 percent) rounded out the list of top five traditional benefits.

worries. Nearly two in three workers said they are confident in their finances, but half said they are living paycheck to paycheck. In addition, many workers said they have dipped into retirement savings, and an increasingly large group said they will have to delay their retirement because of finances. Two in three workers said their benefits package helped alleviate their financial concerns. However, workers are increasingly turning to their employers to help ease their financial stress, the MetLife study showed. Fifty-three percent of workers said their employers have a responsibility for their financial well-being, up 3 percent from last year. Fifty-four percent of workers said their employers have a responsibility to help them save for retirement, up 2 percent from last year.

Top 5 Sources of Employee Financial Stress

72% Being able to afford the cost of healthcare in retirement 68% Outliving my retirement savings 67% Having money to pay bills if someone loses their job 67% Having money to cover out-of-pocket medical costs 66% Ability to rely on Social Security/Medicare in retirement Short-term financial concerns

High Stress

The MetLife study revealed workers are experiencing high levels of financial stress, and much of that stress stems from worries about their future retirement. Three of workers’ top five financial concerns relate to retirement worries. Being able to afford the cost of health care in retirement was the top financial concern mentioned by workers in the survey, with 72 percent rating this as their No. 1 concern. The remaining top five financial worries included outliving retirement savings (68 percent), having money to pay bills if someone loses their job (67 percent), affording out-of-pocket medical costs (67 percent) and the ability to rely on Social Security and Medicare in retirement (66 percent). One in three workers said they are less productive at work because of financial

Long-term financial concerns

The survey showed “a big push around things that are stress reducers,” Katz said. “Financial wellness is becoming a big deal for workers. We’re also seeing a large amount of the workforce dealing with student loan debt. They want their employers to help them come up with a way to be more efficient around their student loan debt.”

What Employers Want

Workers are not the only group taking a different look at their benefits. Employers’ view of benefits also has changed in the nearly two decades since the survey began. “In the early years of this survey, employers’ top goal for benefits was centered on cost savings and cost-effectiveness,” Katz said. “They are still concerned about that today, but we are seeing the emerging goal of using benefits for employee

attraction and retention, and we are seeing a trend toward using benefits for more worker engagement and productivity.” With unemployment at record lows, employers are challenged with attracting and retaining workers. That challenge is reflected in the most recent MetLife survey, with three in four employers saying that having a company-sponsored retirement plan increases worker loyalty and 43 percent of employers saying a comprehensive benefits program leads to greater worker retention. Employers are not only concerned about attracting and retaining employees, but more than one third said they predict a knowledge drain in their workplace as a wave of older, experienced workers retire. “Benefits are becoming more strategic as a means for employers to accomplish their goals by motivating employees, engaging employees and reducing employee stress,” Katz said. “Those are the themes that we have seen emerging from this survey in recent years.”

What’s A Benefits Broker To Do?

Katz said the most recent survey result contains three takeaway points for benefits brokers. Choice. “Give employees the opportunity to personalize benefits to meet their needs, which means offering a broader choice of voluntary benefits,” he said. Communication. “Make sure you have a good strategy to help people understand their needs and understand what you’re offering and how that intersects with their needs.” Convenience. “Make it easy for workers to enroll in or elect benefits that they determine they want.” “If you do those three things, employees will make the decisions that are in their best interest,” he said. “Ultimately, workers will feel less stress because they bought the right stuff and they’re protecting themselves. And it will lead to greater loyalty to their employer.” Susan Rupe is managing editor for Insurance N ewsN et . She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.

May 2019 » InsuranceNewsNet Magazine

! 'D OH

NEWSWIRES

All Advisors Are Fiduciaries, So Say Half Of Americans

Do your clients know the difference between fiduciary and non-fiduciary? Probably not, says Personal Capital’s 2019 Financial Trust Report. The study found that 48 percent of Americans mistakenly believe that all financial advisors are required by law to act in their clients’ best interest. But wait, there’s more – the study also found that one in five clients did not know how their financial advisor was compensated. Even more distressing, another 18 percent were unable to identify if their advisor is a broker/dealer or a fiduciary.

QUOTABLE Yes, growth is slowing, but I don’t see it slowing to a level that will cause a recession. — Janet Yellen, Former Chair, Federal Reserve

their savings, this emphasis on saving tax refunds could be a good sign of changing financial well-being.

AMERICANS COUGHING UP MORE DOUGH

Americans now spend an average of $164.55 per day. GoBankingRates analyzed spending data from the Bureau of Labor and Statistics to figure out where all that cash is going. From housing and utilities to gas and groceries, workers are finding it harder to keep that money in their pockets. Americans spent the most on housing costs, followed by groceries, utilities and health insurance, but those figures can vary based on generation. Baby boomers spent the most on health insurance at nearly $13 per day. Gen Xers spent the most on utilities and housing while millennials spent more than any group, mostly on clothing and eating out.

DID YOU

20-SOMETHINGS PUTTING OFF ‘I DO’ WHAT’S IN A REFUND?

Although initial data from the IRS showed that 2019 tax refunds shrank when compared to previous years, according to a National Retail Federation survey, 65 percent of respondents expect to receive a refund. For consumers who got a refund this tax season, it’s likely going one of two places. Eighty-four percent of those surveyed said they will use their refund to either pay down debt or save. Half of the respondents are putting their refunds into a savings account while 34 percent planned to pay down debt with their refund money. Taking into account that 60 percent of Americans can’t afford to pay for a $1,000 emergency with money from

Increasingly, young couples are postponing their nuptials in the hopes of being more financially stable before taking the plunge. According to Pew research, the median age for getting hitched is now 27 for women and 29 for men. A stark contrast to 1960 when those numbers were 20 for women and 23 for men. So, what’s stopping the happy couples from walking down the aisle? Studies show climbing housing costs, insurmountable student debt and stagnant wages are the main reasons that millennials would rather wait until they’re more financially secure before getting married.

KNOW 66% of affluent parents said they would choose to spend on themselves in retirement over passing on an inheritance.

Source: Natixis

InsuranceNewsNet Magazine » May 2019

THE BEAR IS (COMING) BACK … IS YOUR CLIENT'S 401K AT RISK? Most Americans depend on 401k investments to carry them through retirement. And, that’s a strategy that, for the most part, works — for now. But the bear is coming back. And when it does, your clients’ savings could be gutted. Why not be the advisor to buck the trend and show your clients how to preserve their nest egg: • WITHOUT paying ANY taxes • WITHOUT facing massive penalties • EVEN IF they’re under 59½ and still employed! In less than 5 minutes — and without spending a dime — you can help your clients access the same strategy that’s already at work for more than 200 companies nationwide!

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LIFE M&ANNUITY A S T E R S

Getting With The Plan: Why It’s More Than Just Investments Investment planning and financial planning are often used interchangeably, but there’s a big difference between the two. • Aurora Tancock

onsumers seek financial advice at different stages in their lives, from when they purchase their first home to when they start a family. Advisors should encourage goalbased financial planning at all stages to successfully prepare clients not only for retirement but other goals along the way. Often clients tend to shift their focus to retirement saving only when they start to age. But the reality is that the sooner clients start saving toward retirement, the easier it will be for them to reach their goals.

Financial Plans Versus Investment Plans

Early in my career, I found my clients and prospects didn’t understand the difference between investment planning and goalbased financial planning. “Investment plan” and “financial plan” are often used interchangeably, but there’s a big difference between the two. An investment plan is just that, a plan to save toward one specific goal, such as retirement. Clients stick to the plan based on risk tolerance, diversification and asset allocation to maximize returns. 44

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A goal-based financial plan is a more holistic view that involves an assessment of every aspect of the client’s financial life versus investment plans that view each goal in isolation. Client understanding of this distinction is key, especially in today’s world. Many prospects are under the impression they have a financial plan. But after I ask them a few questions, I help them realize what they really have is an investment plan, which isn’t aimed toward long-term goal planning. This realization concerns them, and this is how I started successfully converting prospects to clients by helping them solve these unanswered questions. This was my entry into the financial planning world. By providing this service, positioning products to cover a need became much easier.

Goal-Based Financial Planning

Although financial advice involves the sale of a product to fill a need, financial planning provides a service. Goal-based financial planning is understanding what money means to my clients and how they would like to provide for their loved ones

along the highway of life while preparing for any obstacles that may come their way. It’s a helpful tool to use with individual clients and company audiences. To adapt retirement planning into a goal-based framework, you can ask clients or employees key questions to reveal their financial priorities, such as: » Do they prioritize saving for education costs over retirement? » Do they pay off the mortgage or increase how much they save toward retirement? » What type of products should they purchase to meet their retirement goals? » Will they have enough to provide for their desired lifestyle? This approach will reveal what needs to be done to create a holistic financial plan that will help them achieve their retirement goals. Their plan needs to cover debt management, cash flow analysis, insurance as needs and means change, tax planning and, most importantly, understanding that all these elements are linked together.

GETTING WITH THE PLAN: WHY IT’S MORE THAN JUST INVESTMENTS

Investment Plan vs. Financial Plan The two terms are used interchangeably, but there’s a difference between the two.

An investment plan addresses the following issues:

• What are your goals?

• When do you need to reach those goals?

• How much do you have to invest now or incrementally, as time goes by?

• Do you have concerns about taxes, or assets you already own?

• How much risk are you comfortable with?

• How often do you want to adjust your plan?

A financial plan looks at all or part of the following:

• Summary of assets and debt.

• Budget based on income and expenses to help client save for the future.

• Evaluation of insurance coverage and needs.

• Investment plan for how to grow the money the client puts aside.

• Estate plan.

• Consideration of the impact of income taxes and changes in the law.

Trends With Employer-Sponsored Plans

As companies reduce or eliminate pension plans, consumers feel they are left to plan on their own for retirement. On top of that, consumers are faced with increased life expectancy that implies they may outlive their savings. This trend is both a challenge and opportunity for benefit advisors. Benefit advisors have a greater role and value to employees who are fortunate to have company-sponsored plans. This role enables us to communicate more frequently with employees and develop personalized retirement strategies with them. This will lead to strong relationships with the employers. On the other hand, benefit advisors may face challenges with prospects as they see other companies reduce or eliminate pension plans.

As a result, I have presented a seminar about a comprehensive approach to retirement to the employees of the Niagara Regional Police for the past 17 years. They had another advisor who could provide information on investments, but they did not have anyone who focused on a comprehensive financial planning approach. My client felt that it was important to share information about the process she just went through to those in attendance at the event. Even though I presented strictly from an educational standpoint, I was able to hand out business cards. While the results were not immediate, I eventually realized the long-term value of this opportunity, which has created a steady flow of prospects over the years. From our clients and the seminars, we have had more than 50 referrals this past year and closed more than 90 percent of them. When I started in this business 19 years ago, the focus was on product selling. Goal-based financial plans were not a prominent strategy. But the industry and society have changed since then as our clients’ lives have become much more complicated and fast paced. Consumers have a lot of information at their disposal, but they do not always have the time to implement or understand it on their own. As advisors, we can help individual clients and employees establish a goal-based framework to promote successful retirement planning. Aurora Tancock, CFP, FLMI, is president and owner of Aurora Tancock Financial Services, a financial planning firm located in Ontario, Canada. She is also an author with more than 30 years of experience in the financial services industry. Aurora is a 17-year member of The Million Dollar Round Table with seven Court of the Table honors. Aurora may be contacted at aurora.tancock@innfeedback.com.

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Prospecting Opportunities In The Community

Retirement specialists can work with key community organizations and hold informational seminars to promote business growth. One of my clients presented me with a unique opportunity to share my insights and expertise with our community. May 2019 » InsuranceNewsNet Magazine

INBALANCEWIRES

QUOTABLE

Take A Minute, Test Your Longevity How long will I live? It’s a basic question we

all ask. Dr. Claudio Gil Araújo came up with a quick test you can take to use as a longevity calculator. It’s called the sitting-rising test and here’s how it goes. 1. Start standing up, cross your ankles, and sit down on the floor while attempting not to use your hands for an assist. 2. Stand back up. Again, attempt to avoid touching anything for balance. 3. Calculate your results. If you don’t need any help from your upper extremities then, congratulations, you scored a perfect 10. If you gave yourself a hand, subtract one point for every instance you used your hands to help you stand up. What does this have to do with longevity? Gil Araújo’s research showed that dexterity and flexibility were key traits of longevity, and that adults who had the ability to sit and stand without needing help in balancing were the most likely to survive to an old age. Those who had the lowest score (zero to three) in the study had a risk of death that was five to six times higher than those who scored eight to 10 points.

FORGET ‘HYGGE,’ THINK ‘PYT’

Denmark is perennially on the list of the world’s happiest countries, and the Danes have many ways to express that sunny feeling. You may have heard of “hygge,” the concept of using your surroundings to create peace and intimacy. Think of a room that’s warm and cozy, that invites you to kick back and relax. It’s pronounced “hoo-gah,” by the way. The Danes have another word that might be helpful for you to add to your vocabulary. It’s “pyt,” and its meaning is a cross between “forget about it” and “shake it off.” It’s a good word to say to yourself when life’s little annoyances crop up. We think that’s pronounced “pid.” In fact, a pyt button has become popular among Danish adults, who can buy one that, when pressed, says, “pyt pyt pyt” and “breathe deeply, it will all be OK” in Danish.

DID YOU

Source: Dairy Farmers of America

InsuranceNewsNet Magazine » May 2019

— Henry Nicholls, author of Sleepytime: The Neuroscience Of A Good Night’s Rest

German researchers found that people who reported being annoyed by sounds such as the rumble of car and truck engines and horns in their neighborhood had a higher risk of atrial fibrillation – an irregular heartbeat that can lead to blood clots and stroke.

OVERWORKED? A ‘CHEAT DAY’ COULD HELP

NOISE LINKED TO HEALTH PROBLEMS

Exposure to loud noise can do more than damage your hearing. Prolonged exposure to high decibels can wreak havoc on the body in many ways, according to the U.S. Centers for Disease Control and Prevention. One CDC study found higher rates of hypertension and high cholesterol in people who were regularly exposed to loud noises at work. In this case, loud meant that for four or more hours a day, several days a week, they needed to raise their voice or shout to be heard by someone standing a few feet away.

KNOW Milk sales in the U.S. fell $1.1B in 2018.

Most people do not appreciate how disruptive artificial light is to the brain. It confuses your brain into thinking it’s daytime when it’s actually bedtime.

Dieters frequently debate the virtues of taking a “cheat day” where they allow themselves to indulge in junk food. But it turns out that a “productivity cheat day” could do wonders for those who feel themselves overworked, overscheduled and just plain overwhelmed. Maarten Van Doorn, Ph.D. candidate and blogger, advocates the benefits of scheduling a cheat day into your jampacked itinerary. As he explained it, two rules apply to a productivity cheat day: 1. Schedule the cheat day in advance. 2. Don’t do anything work-related on that cheat day. When we don’t take breaks from the workplace grind, we never re-energize, and the quality of our work can suffer as a result, Van Doorn writes. But do this at the office? Well, it is instructive that in an essay on the subject, Van Doorn advocated cheating on a Sunday.

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INBALANCE

Office Greenery Can Help Stave Off The Workplace Blues Plants make your office look attractive while improving the health of your workspace. By Susan Rupe

f your office seems a bit stuffy and sterile, there’s an easy way to give life to your surroundings while giving your indoor health a boost. Add some plants to your décor. These potted powerhouses do more than look pretty. They can improve the air quality inside your office and provide other benefits as well. I know what you’re thinking right now: Oh great, something else I have to take care of. But there are many types of houseplants that will thrive in your office without requiring much fuss.

What Good Are They?

One of the reasons plants and people make good indoor companions is that their respiratory systems work in opposite ways. People inhale oxygen and exhale carbon dioxide. Plants take in carbon dioxide and produce oxygen. This may be a simplified way of explaining the photosynthesis that we all studied in high school biology, but you get the idea. As plants take in carbon dioxide from the air, they also take in many of the toxic substances floating around our indoor airborne environment and help clear the air in the process. When we say plants 48

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clear the air of toxins, we’re talking about some serious poisons — ammonia, benzene and formaldehyde, to name a few. Generally, the larger the leaves on the plant, the more oxygen the plant releases into the air and the more toxins it removes. Some plants do a better job of this than others. And some of the most efficient air-cleaning plants also are low maintenance, requiring minimal effort from you to keep them green and growing indoors.

The NASA researchers concluded that microorganisms living in the plants and in their soil contributed to the plants’ clean-up abilities by feeding on the chemicals in the air, thus converting the airborne poisons into plant food. These research findings helped to determine the best way to use plants to clean the air when humans are confined to a small space over a long period of time — such as while orbiting Earth in the International Space Station.

Houseplants remove up to 87 percent of toxic chemicals in the air every 24 hours. Even NASA studied the role plants play in maintaining a healthy indoor environment. In 1989, NASA and the Associated Landscape Contractors of America examined whether indoor plants can help rid enclosed spaces of airborne toxins that contribute to “sick building syndrome.” They found that houseplants remove up to 87 percent of toxic chemicals in the air every 24 hours. In addition, NASA found houseplants that required low light in order to grow were the most effective at removing chemicals from the atmosphere.

Plants also raise the relative humidity of their indoor environments, researchers at the Agricultural University of Norway found. Plants release 97 percent of the water they take in, and the resulting moisture in the indoor atmosphere reduced the incidence of sore throats, colds and coughs, according to the research, leading to a 60 percent reduction in illness among those who worked in offices with plants. Even those who are forced to spend their days toiling in a windowless room can benefit from having plants around.

OFFICE GREENERY CAN HELP STAVE OFF THE WORKPLACE BLUES INBALANCE Washington State University researchers found that when plants are added to a windowless environment, workers were 12 percent more productive than they were in a plantless environment. The workers also showed less stress when they did their tasks among plants, with their systolic blood pressure readings (the top number of the two numbers that make up a blood pressure reading) lowered by one to four units. On top of that, the workers who had plants in the room said they felt more attentive to their tasks than those who worked in a room without plants.

What Plants Should I Choose?

The most important factor in selecting plants for an office environment is the amount of light available, said Jay Holcomb, Pennsylvania State University professor emeritus of floriculture. An office that is lit mainly by fluorescent light may seem bright to human eyes, but the plants don’t see it that way, he said. Brightness is measured in footcandles, with fluorescent light coming in at about 50 footcandles, he said. “But that’s borderline bare minimum for plants,” he said. “It looks bright to us but the plants think it’s still pretty dark.” Compare that with full sun coming through a window, which is about 5,000 to 7,000 footcandles. If a sunny window is not part of your office environment, you can give plants a chance at more light exposure by placing them up higher, closer to the ceiling lights, Holcomb advised. “If you’re working in a cubicle, the plants sitting on top of the cubicle will do better than plants sitting on top of the desk.” Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@ innfeedback.com. Follow her on Twitter @INNsusan.

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Green Office Mates

Here are some low-maintenance plants that add some green space to your office and clean the air without requiring you to spend much time on keeping them growing. Peace lily: The peace lily’s pointy white flowers last for up to five weeks and the plant thrives even with low light and inconsistent watering. Its large leaves are good for ridding the air of benzene and ammonia. The plant is a little too large to keep on a desk, but it will do well sitting in a corner on the floor. Chinese evergreen: This plant also has large leaves, making it an exceptional air purifier. In addition, a Chinese evergreen doesn’t need much light and can keep going with only an occasional watering when the soil is dry. Snake plant: One of the easiest plants to grow indoors, this plant would do well near a window. It will survive even if you forget to water it now and then, so you don’t have to worry it will die while you’re away on vacation. Its tall, broad leaves also are good at removing contaminants from the air. English ivy: Research shows this plant is good at removing airborne fecal particles from the environment. Keep the soil moist and keep the plant away from direct light and you will have a vine that keeps on growing. Cast iron plant: I was looking for a low-maintenance plant to put in a corner of my dining room when I came across this in my local greenhouse. “Thrives on neglect” was the message written in the description that accompanied the plant, and they weren’t kidding. This plant does well even with sporadic watering and low light. And its large leaves are good air purifiers. Philodendron and pothos: These two plants resemble each other. Both are easy-care plants that keep growing and growing. You can train the vines to climb over a stake in the pot, or you can cut them back if they get too long. Give the cuttings to someone else in your workplace; the cuttings are easy to root in a container of water, and this is a good way to spread the greenery around. — Susan Rupe

May 2019 » InsuranceNewsNet Magazine

INBALANCE

How To Get The Royal Treatment From Flight Attendants

Your upgrade just came through.. .

Show them courtesy and respect, and you may be surprised at what you receive in return. By Bryce Sanders

ir travel used to have a certain degree of romance, but now it has all the romance of bus travel. We all know prices have been steadily rising for most everyday goods and services we purchase, but air travel is a major exception. Competition has forced prices down to absurd levels. But air travel often means long lines, cramped seating and fees for everything from checking luggage to getting a better seat. Passengers are unhappy. How could it possibly get any worse? Easy. You could work on the plane.

What Does A Flight Attendant Do?

From some passengers’ point of view, the role of a flight attendant is similar to that of a kindergarten teacher. They make sure passengers are in their seats and buckled up before the plane leaves the gate. “No, you can’t change seats.” “Get your feet off the seat.” “Stop kicking the seat in front of you.” Other passengers see flight attendants as flying waiters and waitresses. They take drink orders and sell you food that airlines once served passengers for free. “What would you like to drink?” “Do you want milk in your coffee?” From the airline’s point of view, flight attendants are safety officers. One of their incredible skills is the ability to completely evacuate a plane on the ground in 90 seconds! FYI: In our conversations with flight attendants, we’ve learned about two unexpected problems during evacuations: women in high heels sliding down the inflatable ramps and passengers insisting on bringing their duty-free liquor, which shatters during the process. Both run the risk of puncturing the inflatable slide. 50

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The role of the safety officer has dignity. But many passengers give flight attendants little respect. This factor will work in your favor. Not all flight attendants are equal. Most flights include a chief flight attendant, known as the purser. The purser dresses the same as the other flight attendants, but runs the show and makes the announcements. Here’s another little known fact: Once the outer door closes, the purser runs the show. You can make the case the senior person is the pilot, but when it comes to looking after passengers, the purser is in charge.

Boarding The Plane

Let’s assume you are flying overseas on a legacy carrier, i.e. an established airline, not a discount carrier. You are flying in coach. You have your seat assignment. You’ve cleared security and are ready to board the plane. Here are some tips for getting noticed before the plane takes off. Dress well. I always wear a suit and tie when flying. Even on Sundays. Always on vacation. Over the years, I’ve learned if something goes wrong, they take good care of “the guy in the suit.” Here’s another reason to dress well. Flight attendants usually prefer to work international flights. Many have flown when air travel was something you dressed up to do. Also, attendants are required to wear uniforms. Dressing well is a sign of respect. Gain airline status. Try to consolidate your flying to one or two carriers. This moves you up the pecking order for upgrades and allows you to board in one of the earlier groups. This is important because overhead luggage space is at a premium. If you don’t fly a lot, look at getting credit cards that have flight perks included. Let people cut you off. There will be people who have sharp elbows. Everyone wants to get some overhead space. Don’t get into a pushing or shouting match.

Flight attendants informally size people up as they board. Who’s going to be trouble? Who might be ill? You can come across as a classy person amid a sea of other people. Help someone with their bag. You’ve reached your seat. It’s an aisle seat. Someone is struggling as they try to get their bag into the overhead compartment. Step out and help. But this does not pertain to the person trying to get an 18-inchwide bag into an 8-inch-wide space.

Intermission — Time to Meet the Purser

You are seated on your international flight. Your bag is stowed. Passengers are still boarding, but the crowd has thinned out. Walk over to the nearest flight attendant and ask: “Are you the purser?” They will say no and point you to the very front of the plane. Walk forward. My wife and I always bring a half-pound box of giftwrapped chocolate truffles from our hometown. I attach my business card with a note: “Thanks for looking after us. Bryce and Jane Sanders. Seats 31 H, 31 J.” The purser leads off with, “How can I help you?” They expect you to ask for an upgrade. I usually introduce myself and say: “We are big fans of this airline. I don’t want anything. We are in the seats we paid for.” Who admits they are in the seats they paid for? Many passengers want to impress the staff with their airline status, etc. But the staff already has that information on file. Next, I explain: “When we fly internationally, we bring a box of chocolate truffles from our town of New Hope for the flight crew. Please share them once the meal service is over and things quiet down.” Sometimes I mention, “We realize you are safety officers who happen to serve drinks, not the other way around.” Once, I was hugged after saying that. They might ask, “Where are you sitting?” I mention the business card has

HOW TO GET THE ROYAL TREATMENT FROM FLIGHT ATTENDANTS INBALANCE

How to get on a flight attendant’s GOOD SIDE: » Dress well. » Smile. » Engage with them. » Help others stow luggage. How to get on a flight attendant’s BAD SIDE: » Push ahead. »B roadcast your frequent flier status. »C omplain about overhead bin space. » Block the aisle. our seat numbers on it. Then I head back to my seat.

What Happens Next?

You are back in your seat. It’s important not to expect anything. Don’t crane your head looking for the flight attendant. Several things might happen. » Nothing. They got busy. They forgot about the box. » You are thanked. Later in the flight, almost every flight attendant thanks you for those great chocolates. “You are so thoughtful.” » Special drinks. A flight attendant asks, “What can I bring you?” You might say, “Champagne would be nice.” Once, they put a bottle in an ice bucket by our feet. If you order a mixed drink, they might use expressions between themselves that translate as “Keep them coming.” » Physical comforts. They might bring amenity kits, a better pillow or a blanket. » Upgrade. It’s the Holy Grail. Just after the door shuts, they might approach and whisper “Your upgrade came through. Follow me, please.”

Inflight Interaction

Suppose there’s no upgrade. The plane is packed. What else should you do? Easy. Continue being the person you were when you boarded. We’ll meet again. We always interact

with people with the idea we will see them again someday. It’s not a “one and done” experience. The crew might be working your return flight. Also, everyone should be treated as an equal and as a professional. As the playwright Walter Mizner said, “Be nice to the people you meet on the way up because you will meet them on your way down.” Start a conversation. If you are seated in the exit row on a wide-body plane, there’s a pretty good chance there’s a flight attendant seated in the jump seat facing you. That’s why we always try to get Row 31 on Boeing 777s. Introduce yourself. Mention where you are from. Are they part of a New York-based flight crew? Airlines work out of hubs. Flight attendants might live anywhere in the country, but they start work in a certain city. They might mention they live in Tulsa but fly out of Dallas. Do they speak any other languages? How long have they been flying? You’ve now moved from passenger to person. Smile. Flight attendants will check to see that everyone is wearing their seat belt. They will close overhead bins. They are busy, but if you catch their eye, smile. Say “Good morning.” You are acknowledging them. Watch the safety video. OK, you’ve seen it dozens of times. If the flight attendant is primarily a safety officer, they want passengers to get with the program in case they need to evacuate the plane. Paying attention to the video shows you recognize the importance of their job. Engage. When they come along with the beverage cart, address them by name. When they offer food — “Do you want the chicken or the pasta?” — ask their opinion. Once again, you are saying “Your opinion matters.” On a New York to London trip, a flight attendant shared: “I can serve an entire row of passengers. Only one will say ‘Thank you.’” Ask for suggestions. It’s your first time in London. But the flight crew travels there twice a month. Ask for restaurant recommendations. If you are traveling over for a reason, tell them the sights or activity that brings you to town. On a flight to Asia, after a passenger brought up shopping, a flight attendant came over with a stack of business cards from various stores! Benefit from their expertise.

Respect their privacy. Before 9/11, it was common knowledge which hotels air crews used. We found this to be valuable information because those hotels were modern, fairly priced and convenient to the airport, even if they were in the center of town. After 9/11, this became a security issue. Don’t ask, because they are probably not allowed to tell. You might mention where you are staying, but say you realize they can’t talk about their hotel. Don’t offer cash. The flight crew treated you well. Maybe they took your jacket and hung it in business class. They brought you stuff. In a restaurant, you would tip. Why not in the air? Because they are safety officers, flight attendants are considered professionals. Some airlines may have policies. It’s confusing. They should be allowed to accept small gifts. That’s where the chocolates come into the picture.

After The Flight

Here are a couple of other things you can do, even if you never cross paths with your flight attendant again. Trip Advisor reviews are important. If you had a good experience, review your flight. Mention great service. The airline will appreciate it. Write a letter to the company president. Who writes letters anymore? That will make yours stand out. Tell about your great experience. Mention the date, destination, flight number and at least the flight attendant’s first name. Describe what made the flight special. Avoid saying “I got bumped up to first class” and “They gave me stuff.” Instead, say that they were attentive. They always smiled. You saw them address another passenger’s problem. Water flows downhill. This should get into someone’s personnel file. What have you done? You’ve radiated a good image, been a giver instead of a taker and treated people as equals and professionals. These are all good reasons for them to take good care of you. Bryce Sanders is president of Perceptive Business Solutions, New Hope, Pa. He provides high-networth client acquisition training for the financial services industry. He is the author of Captivating The Wealthy Investor. Bryce may be contacted at bryce.sanders@innfeedback.com.

May 2019 » InsuranceNewsNet Magazine

BUSINESS

Sitting On A Gold Mine: How To Open 20 Cases This Month The answer to where your next 20 sales will come from is easy. But you have to ask the right questions. By Chris Jarvis

henever I ask advisors what they need to become more successful, one answer always shows up on their list: I want more leads! I’ve never met a salesperson who didn’t claim to close “at least 90 percent” of leads. How salespeople determine a “lead” may frustrate their managers. And how they calculate their percentage might make a mathematician (like me) laugh. All kidding aside, it really doesn’t matter whether advisors sell 20 percent, 50 percent or 90 percent of their leads. Sales go up when activity increases. Activity has been the mantra for decades. Whether you learned to “smile and dial” or “dial for dollars,” you were taught to get on the phone, set appointments and “get out there!” But although activity is valuable, increasing efficient activity should be your goal. Figuring out what activity is efficient is important. But for now, let’s focus on how to increase activity immediately.

You’re Sitting On A Pile Of Gold

The answer to where your next 20 sales will come from is easy: from your existing clients. You only have to ask them 52

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the right questions and they will tell you what to do next. At a recent sales training I taught to 250 advisors, I asked how many of them surveyed their clients annually. Not a single person raised a hand. When I asked how many thought it might be a good idea to survey clients annually, “the wave” rippled through the crowd. We all spend too much time looking for the next client (presumably someone we’ve never met) and not enough

through to the next income level. Paul spent a lot of time doing annual reviews with his clients. He invested time taking meetings and he conducted seminars to bring in new clients. As he added more clients, the service took more time — leaving less time for new business development. He was stuck. Three months ago, Paul enrolled in my advanced course. He followed the instructions even though they included activities that pulled him out of his

The answer to where your next 20 sales will come from is easy: from your existing clients. You only have to ask them the right questions and they will tell you what to do next. time cultivating the ones who already appreciate our service. If you don’t believe the value that’s hiding right under your nose with your strongest relationships, read about what one advisor was able to do.

Paul Talks To John, George And Even Ringo

Paul has about 20 years of experience. He has regularly been a $100,000-$250,000 producer in the Midwest. He has insurance and securities licenses and he offers fee-based plans as well as products. Big income swings come from big cases every few years, but he hasn’t been able to break

comfort zone — also known as a rut. He sent out my 20-question survey to 25 clients. All but six of them responded to the survey right away, and three-quarters of them were happy to discuss their answers with Paul. The most interesting conversations happened with John, George and Ringo. John’s survey answers told Paul that he would be more successful at introducing himself in person, over coffee, than by sending an email. John then asked Paul for some dates when John could buy Paul a cup of coffee and introduce him to the others. As I write

SITTING ON A GOLD MINE BUSINESS this, Paul has already met one new client who has engaged him for financial planning and he has two more coffee dates set up. Paul always assumed the clients wanted the least intrusive interactions, so he requested email introductions to new referrals. What his clients really wanted to do was to show off their rock star advisor in person. Paul never would have known this if he hadn’t asked. When George spoke with Paul, he told him that he had been thinking about one of the items mentioned in the survey. George had $50,000 sitting in the bank doing nothing. He asked if Paul could help him invest the funds. He did help George, and earned $1,800 in the process. George thanked Paul, and then introduced him to his business partner. Ringo wasn’t even a client, but Paul surveyed him anyway. Paul went to high school with Ringo and hadn’t spoken to him in 20 years. He sent the survey with the note, “I’ve always admired your business sense. I’d value your opinion on what other people worry about financially.” After catching up on lost decades, Ringo told Paul that his father had just died and his estate was a mess. Ringo needed to get his own affairs in order. Guess who Ringo asked to help him with his financial planning and life insurance?

The Law Of Unintended Consequences

When Paul started following my recommendations, he was hoping to increase his sales numbers. Paul simply wanted to make more money. Within 60 days, he had earned a few thousand dollars, had a couple of new clients engage him for financial planning, and was working on insurance quotes for a few more. The financial return on investment was significant. But something much more valuable took place. When Paul started asking his clients what they thought of him, what they liked about him, and what they wished he did differently, the feedback made him feel really good about himself. He also received some constructive

criticism that helped him build stronger connections with clients and referral sources — and within a few weeks these were already bearing fruit. Paul said, “I feel like I stopped ‘selling,’ and I started having real conversations. I stopped measuring my days by commissions and started counting valuable and enjoyable conversations. I started to enjoy my job for the first time in years.”

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Your Turn For A Turnaround

How much more effective would you be if you had less stress and had more positive interactions in your day? This can all happen if you change the way you communicate with your clients, prospects and centers of influence. When you listen to what they say, you will be able to do more business with them, fix things that aren’t working (so you preserve and improve the relationship), and sell more. Most importantly, it won’t feel like selling. If you do nothing else this year, send a survey to your existing clients, prospects and key strategic relationships. Ask them: » What do you like about me and my work? » What do you value most about me, and why did you decide to hire me in the first place? » What do you wish I did differently? » What are your biggest challenges for the upcoming year, and who do you need to meet to help tackle them? After you ask the questions – in your own words, of course – the key is what to do with the answers. When you receive their answers, act upon them. You are sitting on a gold mine and you don’t even know it. Chris Jarvis, MBA, CFP, specializes in finding unconventional growth paths for business owners, sales organizations, and nonprofits. He is the author of 15 books and is the creator of “The Million Dollar Agent Program.”

May 2019 » InsuranceNewsNet Magazine

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Founded in 1890, NAIFA is one of the nation’s oldest and largest associations representing the interests of insurance professionals from every congressional district in the United States.

INSIGHTS

How To Be Your Client’s Financial Fitness Coach Help clients identify what they need to address, what steps it will take to get there, and how to gain the discipline they need to achieve those goals. By Ayo Mseka

or NAIFA past resident Paul Dougherty, the best strategy an advisor can use to help improve his client’s financial wellness is to serve as the client’s financial fitness coach. Like so many deeply personal issues, talking to people about their money elicits a broad array of responses from them, Dougherty said during a recent interview.

a unique perspective — the client’s perspective — to recognize what may be required, according to Dougherty. But it takes the advisor with the necessary experience to apply what he knows to the challenges at hand. As advisors, he said, we often say that we can look around corners and see what the client can’t see — challenges, risks and solutions. Financial-wellness strategies and tools are far more common now than they have ever been and can be accessed through a variety of platforms. Consumers can learn about strategies to save and invest without leaving their homes or offices. However, data and surveys show us that clients who use a professional advisor save more money, are more disciplined

Clients who use a professional advisor save more money, are more disciplined with their investments and have a more successful retirement. What may be a meager sum and cause for concern to one client may represent the proud total life savings of another. What is consistent, however, is the client’s feeling of empowerment when they achieve a full and complete understanding of their financial picture. Some basic tools an advisor uses while working with clients may address items such as budgeting, debt management, basic investment strategies, planning for college or retirement, and protecting against risk every step of the way. But other circumstances may require more advanced planning. These include helping an employer create a benefits package for their workers, the purchase or sale of a business, or protecting family members who have special needs or longterm care requirements. Each of these circumstances requires 54

InsuranceNewsNet Magazine » May 2019

with their investments and have a more successful retirement. There are reasons why gyms and fitness centers generate over $30 billion per year in the United States, Dougherty pointed out. One reason is that even though you can do a pushup or situp pretty much anywhere, you will be more successful when you commit to a plan, engage a professional trainer and put yourself in the right environment for success. Advisors should act like financial-wellness trainers to their clients. In this scenario, Dougherty explained, the advisor (the trainer) helps clients identify what they need to address, what steps it will take to get there and how to gain the discipline they need to achieve those goals. It is also critical that advisors revisit their clients’ plans often to ensure they are functioning the way the clients expect them

to function and to address any changing circumstances that may require them to tweak or restructure their strategy. This is critical because many things can change in a year — life and family changes, home and work changes, investment and market changes. The client you have may look different a year from now, Dougherty said. So, while “checking in” once a year may have been the expectation a generation ago, it no longer is. Therefore, it is incumbent upon advisors to find out how often their clients expect them to stay in touch and how they want to hear from them as their “financial fitness coach.” At a time when it has never been easier to communicate, clients are inundated with information, Dougherty added. News headlines, social media feeds, emails and texts are popping up on their computer screens and lighting up their phones to the point at which “phantom vibration syndrome” is now a diagnosed condition. As advisors, it’s important to communicate with your clients not only at the right time, but with the right content as well. Forwarding a pertinent article that you think your client will find of interest may be just as impactful as leaving a voicemail message or sending a text. And although compliance requirements may constrict the format in which advisors reach out to clients, relationships will survive. The bottom line in serving the financial services market is to know your clients, Dougherty said. “Know their needs and goals and know how they need you as their financial fitness coach to keep them on track. So, grab your towel and water bottle and don’t be afraid to break a sweat!” Ayo Mseka is editor-in-chief of Advisor Today, the official publication of the National Association of Insurance and Financial Advisors. Ayo may be contacted at ayo.mseka@innfeedback.com.

INSIGHTS

The Million Dollar Round Table is the premier association of the world’s most successful life insurance and financial services professionals.

It’s Never Too Early To Begin Estate Planning Clients don’t like to talk about their own mortality or the possibility that they may be incapable of making decisions someday. Here is how you can ease them into the planning process. By Jim Wessels

eople often avoid conversations associated with mortality, meaning they probably don’t discuss estate plans, and may not be aware of the living benefits they offer. As a result, seniors may lack preparation and plans for their estate, which could make them vulnerable to financial exploitation. To engage your clients in a truly comprehensive financial planning approach early on, emphasize that unpredictable life events could happen at any moment and leave them incapable of performing simple financial tasks such as paying bills.

Ease Clients Through Loss Of Control

Incapacity associated with aging can be a threat to your client’s financial well-being, and it can be particularly difficult for clients with dementia or Alzheimer’s disease to give up control or recognize that they no longer have the same capacity as in the past. If these clients haven’t established durable power of attorney, an advisor must determine the appropriate next steps to solidify that component of their plan. Joint meetings between clients and their families can be complex, yet effective in these situations. You cannot anticipate the direction of the meeting, but flexibility and strategic thinking can often lead to the client recognizing that a durable power of attorney needs to be established and enacted. Most clients think of their will when they hear the term “estate planning,” but creating a plan for when they are no longer able to control their estate is a necessary, often overlooked, component to address.

Establish Appropriate Contacts

Although cognitive deterioration and the inability to manage finances may be clear to you as your clients age, privacy policies limit your options to communicate your clients’ needs to their family members. Financial exploitation of seniors is on the rise, due to the influx of baby boomers nearing retirement. The Financial Industry Regulatory Authority has established new industry regulations that provide guidance and necessary measures to navigate and protect senior clients in these situations. FINRA Rule 4512 requires advisors to make an effort to establish a trusted contact person for administration and communication purposes. This added structure aids advisors who have clients facing incapacitation and need to maintain their estate plans. FINRA Rule 2165 enables temporary holds on accounts if there is a reason to believe financial exploitation has occurred with a “specified adult” customer. These regulations address the gray areas to protect your clients as they age, as well as to protect the integrity of their estates.

Establish Checkpoints

Technology encourages the next generation to become involved in estate planning. Many of our current clients’ heirs are tech-savvy and want access to their parents’ finances for peace of mind. Financial planning software that allows each account to have multiple IDs can capture a client’s entire financial picture, including credit cards, checking accounts and more. Your clients can still have a sense of independence while their children can monitor their spending behaviors to ensure they are not being taken advantage of financially.

Leverage Available Resources

The key to sophisticated estate planning is understanding the boundaries of your knowledge and how you can expand your it through industry resources. Mutually beneficial relationships with attorneys

whose specializations align with your clients’ needs can be vital to your success. For example, you may refer clients to different attorneys who are best aligned to work with small-business owners, retirees or any number of particular situations that would affect an estate plan. Conduct thorough interviews so that you can trust your clients are in good hands, ensure attorneys can devote time to your clients and confirm their fees fit into your clients’ financial plans. The attorneys you work with are immensely valuable resources and have a great depth of estate plan knowledge from which you can learn. Stay up to date on the intricacies of estate planning at the state and federal levels. Although there are federal regulations that pertain to estate planning, certain states have exceptions that you may not be aware of. Your advice should be tailored to your client’s specific location and individual needs. It is never too early to begin estate planning with clients. As the industry evolves and your clients age, you must continue to hone your estate-planning knowledge to provide your clients with exceptional, well-rounded service that protects their financial health. A sophisticated approach will set them up for success later in life when their finances can become vulnerable. Overall, your targeted knowledge can help protect your clients’ well-being throughout their lives and potentially lead to a secure financial future for their families. Jim Wessels, CPA/PFS, CFA, is an investment advisor representative with Gremler Financial Group, Des Moines, Iowa. He brings more than two decades of active money management experience to provide daily insights on the markets and help investors find practical applications. Jim is a 2-year MDRT member with two Top of the Table qualifications. He may be contacted at jim.wessels@innfeedback.com.

May 2019 » InsuranceNewsNet Magazine

INSIGHTS

More than 850 financial services companies in more than 70 countries turn to LIMRA first to help them build their businesses and improve their performance.

The Factors That Put Women At A Disadvantage In Retirement Women’s retirement challenges can translate into opportunity in serving this market. By Alison F. Salka

hen we hear the words “gender gap,” the most publicized and pervasive type usually comes to mind — the difference in male versus female wages earned. This discrepancy continues even today: On average, female workers earn approximately 80 cents for every dollar their male counterparts earn, the U.S. Census Bureau reports. A more overlooked gap merits attention, however, when it comes to preparation and planning for retirement. Two key factors can put women at a disadvantage. First, they live longer than men and must sustain their lifestyle for a longer time. LIMRA Secure Retirement Institute research shows the average life expectancy for women is 85.6 years old, versus 83 years old for men.

into opportunity in the women’s retirement market: Size. In the United States, a total of 7.6 million single households are aged 55 and older, with more than $100,000 in investable assets. Nearly two-thirds of them — or 4.7 million — are single women. Thus, there is a large market to serve. Timing. LIMRA research shows that, on average, women retire two years earlier than men (at 63 years old versus 65 years old). At the same time, four in 10 female pre-retirees say they have major concerns about outliving their assets.

Female pre-retirees (aged 50 or older) are more worried than their male counterparts about the impact of financial risks they may face in retirement. Second, women may not be comfortable with their level of financial acumen. For example, our research shows 40 percent of single-women retirees say they have little or no knowledge of financial products — a higher proportion than single-men retirees (25 percent). This can result in more risk aversion and possibly less diversity in their investment mix, both of which may limit the long-term performance of their portfolio. Given this perspective, there are several ways these unique challenges translate 56

InsuranceNewsNet Magazine » May 2019

This combination points to a recognized need for lifetime income solutions. Mindset. Our research shows female pre-retirees (aged 50 or older) are more worried than their male counterparts about the impact of financial risks they may face in retirement. This is true in terms of both the likelihood and severity of the potential effects on their retirement security. In addition to these considerations, women express specific preferences related to working with advisors. For example,

female clients are more likely than men to delegate investment decisions to advisors: Nearly 40 percent of women retirees say they want to depend on their advisors when making future financial decisions. Further, they seek long-term partnerships, as two-thirds of women say they would like to work with their advisors for the rest of their lives. These preferences extend to consolidation as well. Retired single women are also more likely than retired single men or retired couples to consolidate their assets with their advisor. In fact, 50 percent of single-women retirees have consolidated the bulk of their assets (90 percent or more) with their advisor. Advisors can position themselves for success in this market by helping women prepare a formal retirement plan. Our research clearly shows that formal retirement plans increase consumer confidence and allow advisors to develop strong client relationships, while carving out realistic goals. For single-women clients in particular, advisors can begin with offering to prepare a formal income plan — as only one-third of single retiree clients (both men and women) currently have one in place. Ultimately, best-practice advisors understand that single-women clients may have different needs than others. Those who connect with their unique vantage point will be most prepared to attract and serve this large potential client base for the long term. Alison F. Salka, Ph.D., oversees a team of more than 85 researchers and other staff professionals in LIMRA’s research division who conduct consumer research, benchmark studies and white papers focused on helping member companies better understand industry issues and trends. She is also a managing director of the LIMRA LOMA Secure Retirement Institute. Alison may be contacted at alison.salka@innfeedback.com.

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