InsuranceNewsNet Magazine - August 2019 by InsuranceNewsNet

August 2019

When Advice

Sparks

Inspirat ion Advisors describe the

BEST ADVICE THEY EVER RECEIVED and how it inspires them in their practices and their lives.

PAGE 14 David Stillman: Ignore Gen Z At Your Own Risk PAGE 8

Olympic Gold Medal Winner Lauryn Williams: Planning Is Winning PAGE 18

Turn $500K Into Income And Annuity Totaling $1.5M PAGE 28

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IN THIS ISSUE

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AUGUST 2019 » VOLUME 12, NUMBER 8

HEALTH/BENEFITS

FEATURE

When Advice Sparks Inspiration

34 Why Disability Programs Are The Solution To Extended Absences

By Susan Rupe Advisors share the best advice they ever received and how it inspires them in their practices and their lives.

INFRONT

6 Is Congress Set To Unlock A Bulging Annuity Market?

IN THE FIELD

18 C ompeting To Win

By John Hilton Lauryn Williams struck Olympic gold and now leans on her athletic experiences to help navigate a path to success in the financial services world.

By John Hilton and Susan Rupe Congress looks at a retirement security package that could boost annuity sales, while Medicare for All heats up the Democratic Presidential race.

LIFE

8 Ignore Gen Z At Your Own Peril

Generation X and the millennials are yesterday’s news. Meet Generation Z, the newest age cohort to enter the marketplace. Father and son David and Jonah Stillman tell Publisher Paul Feldman how Gen Z brings its own set of gifts to the rest of us.

By Jung Ryu Disability and absence are often invisible drains on productivity and overall workforce performance.

ADVISORNEWS

38 Three Reasons To Add Annuities To Your Financial Planning Toolkit By Michael Reidy The range of annuities available today may deserve a second look.

INBALANCE

24 Tech Is Key In Filling The Life Insurance Gap

INTERVIEW

online

www.insurancenewsnetmagazine.com

42 What Your Attire Says About You As An Advisor

By Mike Burns Today’s life insurance products do more than provide benefits after a policyholder’s death.

By Cassie Miller Advisors share their stories about why they dress the way they do for work.

ANNUITY

BUSINESS

28 H ow To Turn $500K Into $1.5M Worth Of Income And An Annuity

44 Questions: What Are They Good For? Absolutely Everything!

By John L. Terry III Annuities are an important component in planning for survivor income.

By Reggie Pearse You have the power to positively influence how you make prospects feel as you ask them important questions about sensitive areas of their financial lives.

INSURANCENEWSNET.COM, INC.

275 Grandview Ave., Suite 100, Camp Hill, PA 17011 717.441.9357 www.InsuranceNewsNet.com PUBLISHER Paul Feldman EDITOR-IN-CHIEF Steven A. Morelli MANAGING EDITOR Susan Rupe SENIOR EDITOR John Hilton ADVISORNEWS MANAGING EDITOR Cassie Miller VP SALES Susan Chieca

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Copyright 2019 InsuranceNewsNet.com. All rights reserved. Reproduction or use without permission of editorial or graphic content in any manner is strictly prohibited. How to Reach Us: You may e-mail editor@ insurancenewsnet.com, send your letter to 275 Grandview Ave., Suite 100, Camp Hill, PA 17011, fax 866.381.8630 or call 717.441.9357. Reprints: Copyright permission can be obtained through InsuranceNewsNet at 717.441.9357, Ext. 115, or reprints@insurancenewsnet.com. Editorial Inquiries: You may e-mail editor@insurancenewsnet.com or call 717.441.9357, ext. 117. Advertising Inquiries: To access InsuranceNewsNet Magazine’s online media kit, go to www.innmediakit.com or call 717.441.9357, Ext. 115, for a sales representative. Postmaster: Send address changes to InsuranceNewsNet Magazine, 275 Grandview Ave., Suite 100, Camp Hill, PA 17011. Please allow four weeks for completion of changes. Legal Disclaimer: This publication contains general financial information. It should not be relied upon as a substitute for professional financial or legal advice. We make every effort to offer accurate information, but errors may occur due to the nature of the subject matter and our interpretation of any laws and regulations involved. We provide this information as is, without warranties of any kind, either express or implied. InsuranceNewsNet shall not be liable regardless of the cause or duration for any errors, inaccuracies, omissions or other defects in, or untimeliness or inauthenticity of, the information published herein.

InsuranceNewsNet Magazine » August 2019

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WELCOME LETTER FROM THE EDITOR

Grin And Share It

e can marvel at, and moan about, how complicated humans are. But really, we are simple animals. Here is proof. The next time you are in front of a mirror, look yourself in the eye and give yourself a great big smile. (Maybe do this when you’re alone. No need to have coworkers and others think that you are more psycho than you actually are.) What happens as you force a smile? It turns into a real one. At that moment, you might think this is goofy, just grinning at yourself. Then you might find it funny and maybe even laugh. This is the moment your day gets a little better. Step out of the bathroom with that grin and someone might see it and reflexively smile back. You have improved that person’s day a little. And that radiates out to other people, perhaps endlessly for all we know. All from a little forced smile. Why does this happen? Again, we’re animals. The most primitive part of our brain says smiling is happy and bright. Just as it says frowning is unhappy and dark.

Animal Instinct

I have to tell the amygdala in my limbic brain on a fairly regular basis not to worry and be happy, because it is usually looking for the bad stuff. The limbic system is the primitive part some call the reptilian brain. It contains the amygdala, the seat of basic sensations such as fear and pleasure. The amygdala senses that your stomach is sour from anxiety about a presentation and interprets that sensation as a threat to your existence. It does not know that the predator is PowerPoint. It just knows that you need run out of the room and hide in a ditch — NOW! The amygdala also does not recognize that your happy reflections are not real. You are smiling, so you must be happy. Many of the experts that Publisher Paul Feldman has interviewed have spoken about similar issues. For example, Amy 4

Cuddy, featured in April 2016, is famous for power poses. Basically, stand like a winner, say in a Superman pose, and your body will tell your brain that you are a winner. Again, the amygdala is responding to what you are doing. Cuddy’s work has since faced strenuous questioning from other scientists but a meta-review of data along with some subsequent studies have replicated Cuddy’s research results. However, you can do your own experiment by giving yourself a smile in the mirror or standing like a cape is fluttering behind you. You might be thinking that this all seems a little phony. I also thought so until I tried it.

Adjust The Mask

And, after all, what is a person anyway? The word “person” comes from the Latin “persona,” which means “theatrical mask.” We can decide which one to put on. So, why am I going on about all this? Because of inspiration, the theme of Managing Editor Susan Rupe’s feature article this month. Susan pulled together a compelling story on the advice that people found most inspiring. Even beyond advice from others, the wellspring of inspiration can come from you. Susan spoke with Tracey Jones, a leadership expert who advised imagining an extra version of yourself. In that case, when you receive advice that might be a little painful, the extra version absorbs it. This creates a distance that prevents hurt and allows you to evaluate the advice itself. This method is another way of saying that your persona is not the essential you. It is your projection. If people are criticizing it, are you sure that you are projecting what you want into the world? If not, you can adjust your persona. Here are three things to keep in mind: » Understand your self-talk We all call ourselves awful names, things we would never accept from anyone else. That never goes away, even in the most successful people. You can

InsuranceNewsNet Magazine » August 2019

make friends with that voice, though. You can understand that it is your self-preservation screaming at you, a voice formed by your childhood fears. You can reassure your 11-year-old self that you are going to be OK. » Appreciate what you are doing Maybe it is a presentation. Perhaps it is just an after-work get-together. It’s easy to feel overwhelmed and imagine all the ways something could go wrong, which tempts the self-fulfilling prophesies. Instead, think about why you are doing what you are about to do. If it is a big presentation to a client, it is an opportunity you have earned by doing all the things that led you to that point. You have a right to be there and you have value to deliver. This is what you wanted. » Show some glow Yeah, that sounds cheesy. But this goes back to the smile. Try it for a week. Before you go out of the house or leave a bathroom, smile at yourself in the mirror. The person who deserves your kindness more than anyone else is you. Nothing is easy out in the world. Selling is not easy. Parenting, or just simple adulting, is not easy. And certainly, the constant barrage of lunacy delivered by our electronics is overwhelming. But one thing you can control is the image in the mirror. No matter how terrible everything is, you can choose something different that changes everything. And that choice can be as simple as a smile. Steven A. Morelli Editor-in-Chief

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INFRONT

Is Congress Set To Unlock A Bulging Annuity Market? Congress looks at a retirement security package that could boost annuity sales, while Medicare for All heats up the Democratic Presidential race. By John Hilton and Susan Rupe

Congress is able to pass any major legislation this year, a retirement security package is as good of a bet as any. The impact on future annuity sales cannot be overstated. The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which passed the House in May and awaited Senate action as of press deadline, includes a provision that would make it easier for companies to include annuities in retirement plans. And that is a very big deal. Although companies are allowed to include annuities in 401(k) plans now, just 9% do, according to the Plan Sponsor Council of America. The reason is liability concerns in the event the annuity provider fails to deliver the goods. The SECURE Act aims to eliminate that liability. Unsurprisingly, financial services trade associations are enthusiastic about the legislation. “Americans face a retirement crisis of too little savings amplified by existing barriers that discourage and hamper the ability of small employers to offer a workplace retirement plan,” said Wayne Chopus, president and CEO of the Insured Retirement Institute. Among other things, the SECURE Act also requires retirement plans to provide participating workers with an illustration of how much monthly income a retirement savings account might deliver. Additionally, the bill raises the age to begin required minimum distributions from retirement accounts from 70½ to 72. Annuity sales are already rebounding in a big way, with 2019 quarterly sales 6

showing increases as high as 40% in some product lines. After spending the last few years fighting against tougher federal regulation, many industry executives are happy to see Congress produce a change they can support. The statistics say annuities are needed and, once consumers understand them, popular products. An average man reaching age 65 can expect to live 19 more years, according to the Social Security Administration. Women can expect to live another 21.5. “Improving opportunities for workers to save, extending more access to lifetime income options and provide information to help savers make more-informed

InsuranceNewsNet Magazine » August 2019

KEY PROVISIONS OF THE SECURE ACT OF 2019 More time in IRAs and 401(k)s. The bill would push back the age for required minimum distributions (RMDs) from 70 1/2 to 72 years old. Grant part-time workers benefits. Long-term part-time employees would be able to participate in their company's 401(k) plans. Boost small-business 401(k)s. Small businesses could band together in group plans. A nnuity adoptions. Would allow employer-sponsored 401(k) plans to add annuities as investment options on the menu. 529 plans. 529 plans would be expanded to pay for expenses related to an apprenticeship or to pay back as much as $10,000 in student loans.

decisions about their finances, will boost Americans’ retirement confidence to help ensure they do not outlive their savings and can enjoy a secure and dignified retirement,” Chopus said. The SECURE Act is one of the rare legislative efforts that enjoys broad bipartisan support. Still, this Congress is known for its inability to work together on even the most innocuous items.

Not All Dems Embrace M4A

Of the 25 Democratic candidates seeking their party’s nomination for president, only three so far want to abolish private health insurance in favor of a single-payer, Medicare for All program. Other candidates would like to offer a public option to Americans who have no access to health insurance or who are dissatisfied with their current insurance options. Despite their differences, however, Democratic candidates agree that they want all Americans to have health insurance, or what they call “universal coverage.” But they see many paths to get to that universal coverage. The televised debates among the Democratic candidates in June brought home the differences among these hopefuls when it comes to health care. Sen. Bernie Sanders, I-Vt.; Sen. Elizabeth Warren, D-Mass., and New York City Mayor Bill DeBlasio want to get rid of private health insurance and establish Medicare for All. Sanders would take it a bit further in the Medicare for All bill he sponsored earlier this year, and eliminate all out-of-pocket expenses for everything from primary care to long-term care. Sen. Kamala Harris, D-Calif., is a sponsor of Sanders’ bill, but said following the June debate that although she wants to see Medicare for All become reality, she is open for leaving some kind of private insurance in place or moving incrementally toward single-payer. Some candidates say they want to see Medicare for All, but realize it could take

IS CONGRESS SET TO UNLOCK A BULGING ANNUITY MARKET? INFRONT a long time to get to that point. In the meantime, they favor giving consumers a choice between private health plans and a government-run option while lawmakers work toward a single-payer system. They have voiced their support for everything from an optional Medicare buyin nationwide, a government-run public option to compete with private insurers and allowing states to open Medicaid to all residents. Candidates who fall into this camp include Sen. Cory Booker, D-N.J.; South Bend Mayor Pete Buttigieg, Andrew Yang, Rep. Tulsi Gabbard, D-Hawaii; Sen. Kirstin Gillibrand, D-N.Y.; Rep. Tim Ryan, D-Ohio, Rep., and author Marianne Williamson.

Expanded Coverage, But Not M4A

Some candidates are rejecting Medicare for All in favor of building on the Affordable Care Act. Their objections to a government-run single-payer plan range from not wanting to move consumers away from their current plans to their opposition to the potential cost of a government-run plan. Former Vice President Joe Biden said he not only wants to build on the health care structure that already is in place, but is “against anyone who opposes Obamacare.” Others want to give consumers a choice between private health plans and a government-run option. Sen. Amy Klobuchar, D-Minn., said she wants to keep both private health plans along with a government-run option, something that originally was part of the ACA. “I’m concerned about kicking half of Americans off their current health plans over the next four years,” she said. Former Rep. Beto O’Rourke said his goal is to get everyone covered through guaranteed universal health care while preserving consumer choice and keeping private insurance. Others who fall into the anti-M4A camp include Sen. Michael Bennet, D-Colo.; Montana Gov. Steve Bullock; Rep. John Delaney, D-Md.; former Colorado Gov. John Hickenlooper; Washington Gov. Jay Inslee and Rep. Seth Moulton, D-Mass.

NAIC Summer Meeting

There will be a lot on the line when the National Association of Insurance

Commissioners convenes for their annual meeting Aug. 2 in New York City. For starters, the Annuity Suitability Working Group meets Aug. 3 to further work on its annuity sales model law. The group scheduled two 90-minute conference calls in late-July, although sources downplayed the prospects for a final rule by the summer meeting. The group shifted gears in June, incorporating a draft rule authored by Iowa Insurance Commissioner Doug Ommen. The draft articulates a best interest standard through the following four obligations: care, disclosure, conflict of interest and documentation. The goal with the new draft is to be consistent with the Regulation Best Interest rule put forth by the Securities and Exchange Commission, Ommen has said. Also, two other potential rules changes are likely to be raised during the Life Insurance and Annuities Committee meeting Aug. 4. The first is a proposal to double the time indexes must be in existence to be used in annuity illustrations from 10 to 20 years. The Annuity Disclosure Working Group is concerned that consumers are being misled by unrealistic indexed annuity illustrations. The second is a long-delayed “policy overview” summary to accompany life insurance sales. The Life Insurance Illustration Issues working group is down to the fine details of its policy overview charge. NAIC model laws must be adopted by the states before the rules apply to agents. InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john. hilton @ innfe e dback . com. Follow him on Twitter @INNJohnH. 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.

August 2019 » InsuranceNewsNet Magazine

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INTERVIEW

IGNORE GEN Z

AT YOUR OWN PERIL A father-son team reveals why the newest generation just might change your life – sooner than you expect.

AN INTERVIEW WITH PUBLISHER PAUL FELDMAN 8

InsuranceNewsNet Magazine » August 2019

avid Stillman has been building bridges over the generation gap long enough to have had a whole new generation grow up to connect with: Gen Z. But the author, speaker and consultant has also grown a secret weapon — a Gen Z son, Jonah, who is helping in the good fight. Together they speak to audiences about this newest generational mystery. They wrote the book, Gen Z @ Work, to explore the new territory represented by those born between 1995 and 2012. The Stillmans have taken their show on the road, speaking to insurance and financial organizations among many others. But you might be thinking, “Doesn’t every generation go through the same stages and present the same challenges?” To a certain extent, you would be correct. But each generation is shaped differently. Not only do they represent a new crop of consumers and workers but they also bring unique gifts to the rest of us. In this interview with InsuranceNewsNet Publisher Paul Feldman, David and Jonah Stillman reveal what those gifts are and why you should not be so quick to write them off as too young to be insurance prospects. FELDMAN: David, you have been consulting with insurance and financial service companies since the ’90s. What are you seeing now with insurance and Gen Z and how does it compare with earlier generations? DAVID: The insurance industry on the whole is battling generational gap styles on a couple of fronts. One is the workplace, and how we recruit Gen Z to want to work into the industry and see it is a viable exciting career. But then also understanding this generation of potential clients. A lot of people may think Gen Z is too young for insurance. But they're also having a big influence over their Gen X parents because X’s really trust their Gen

IGNORE GEN Z AT YOUR OWN PERIL INTERVIEW Z kids when it comes to researching not only products but definitely even service providers. Going back to the ’90s it was all about Gen Xers and how they were going to assimilate with the baby boomers. I did a national tour for State Farm then. Then when the millennials came of age, it was what do we do to capture millennials? Insurance is like banking — it’s one of those industries that have to deal with new generations as employees and the customers. FELDMAN: What is the biggest disconnect between the insurance industry and Gen Z? JONAH: I think the biggest problem from the workplace standpoint that the insurance industry faces with Gen Z is there's a massive unawareness about what the careers are, what career options are in the insurance space. For example, one thing that we know that’s changing drastically with Gen Z is that over 60% of Gen Z are going to college with a predetermined career in mind. It’s no longer about going to discover yourself. They're going with an idea that “I want to work in real estate or I want to work in advertising.” The insurance space, which a lot of other industries are doing as well, is not

career options or career fairs. FELDMAN: How can the industry be more effective at recruiting younger people? DAVID: If you look at insurance, I'm not sure that generation realizes everything that there is to know. I think they just picture someone sitting at a desk making cold calls all day. Yet the value part of this is lined up very well at Gen Z. Gen Z is extremely entrepreneurial and really does want to own their own business. In a lot of ways a book of business with an insurer is very entrepreneurial. It’s more than just cold calling and solving problems. It’s helping make sure people get the right coverage. It’s strategic. Those are not the value propositions that I think the insurance industry has done a good job of putting out there. I think we have a lot of long-term professionals who just assume that anyone new would know what's involved in the career. Step one, as Jonah said, is getting on the radar, which is truly describing what a career in insurance looks like. FELDMAN: Yes, I couldn’t agree with you more. The industry is not getting that message out very well. DAVID: We know that other industries like the automotive industry hold huge career fairs for high schoolers looking at

The bond between Gen X and Gen Z is really tight, and 31% of Gen Xers say they consult a Gen Z child when making major purchasing decisions. thinking early enough for Gen Z. We are going to college and then we are learning about insurance when it’s too late because we’re already making way towards a degree in a different space. I think that one thing insurance industry is having to do is figure out new creative strategies and ways to get on the radar of Gen Z earlier and ideally before they go to college. Whether that be sponsored curriculum, research assignment, putting out video content about different

careers. But they don't just think “I'm on a showroom floor selling cars.” They’re thinking, “I can go into finance. I could go into service. I could go into leasing.” Insurance might not even have to reinvent itself, but repackage so that a new generation understands what they do. FELDMAN: Jonah, what about Gen Z as consumers? JONAH: One of the seven traits that we

August 2019 » InsuranceNewsNet Magazine

INTERVIEW IGNORE GEN Z AT YOUR OWN PERIL

7 TRAITS OF GEN Z AT WORK

identified in the book was hyper-customized. Customization in all aspects of consumerism is massive. Gen Zers have an expectation for very customized care and communication. If you're an insurance provider, Gen Z is going to have an expectation that if you're going to send a message that says, “Here is what everyone else has been doing; here is the cure, you fit this box perfectly,” Gen Z is going to look for an insurance provider that says, “Hey we understand that you might need a little extra insurance here, you don't need this one.” Then the idea of digital, Gen Zers don’t care for whether we do so in the physical space or the digital one. Whether I meet with my insurance provider via FaceTime or they want me to come to their office, Gen Z doesn’t see a difference and we’d hope that our provider wouldn’t either. I would just say the idea of playing into that notion, how can you create digital services that are as prominent as intuitive of those that, of meeting with their provider in person, because Gen Z is living in this digital world and we just have an expectation that for every physical element there is a digital equivalent, that is as if that is more efficient. DAVID: And as far as digital goes, a lot of trends seem to rise up through the ages. I'm seeing myself doing more and more Zoom conferences. My sales reps are doing the same thing. I'm seeing clients at older ages now embracing this. JONAH: Totally. Gen Z is spreading it up the ladder. We are a powerhouse in that aspect. An employee could have been on the job for 50 years and Gen Z comes in and their first year on the job recognizes a way to streamline a process or how to make something better. And that is naturally what we all do with our technology. FELDMAN: What are some other trends that you see rising right now? DAVID: With Gen Z, one of the traits that we talk about is FOMO, the fear of missing out. This is something they need to know something they pull up their phone they swipe to get their up-to-date information constantly. 10

1. Phigital. Gen Z is the first generation born into a world where every physical aspect (people and places) has a digital equivalent. For Gen Z, the real world and the virtual world naturally overlap. 2. Hyper-Custom. Gen Z has always worked hard at identifying and customizing their own brand for the world to know. Their ability to customize everything has created an expectation that there is an intimate understanding of their behaviors and desires. 3. Realistic. Growing up during the aftermath of 9/11, with terrorism part of everyday life, as well as living through a severe recession early on, has created a very pragmatic mindset when it comes to planning and preparing for the future. As Gen Z sees it, if you’re going to survive or even thrive, you’d better get real about what it’s going to take. 4. FOMO. Gen Z suffers from an intense fear of missing out on anything. The workplace will be challenged by Gen Z, who will want to have a lot in the hopper at all times to be sure they aren’t missing out. 5. Weconomists. From Uber to Airbnb, Gen Z has only known a world with a shared economy. Gen Z will push the workplace to break down internal and external silos to leverage the collective in new convenient and cost-effective ways. 6. DIY. Gen Z is the do-it-yourself generation. Having grown up with YouTube, which can teach them how to do just about anything, Gen Z believes that they can do just about anything themselves. 7. Driven. Gen Z is ready and hungry to roll up their sleeves. They will be more competitive as well as private than previous generations. Pressure will be on for companies to convince Gen Z that they are the winning team. — Gen Z @ Work, David Stillman and Jonah Stillman, Harper Business, 2017

The whole idea of being fast, fast, fast. Technology can definitely speed things up, but in insurance, we have everything from compliance. There's meeting Gen Z’s expectations on the speed, but we also just have to be careful because it’s an industry that needs to cross T’s and dot I’s. FELDMAN: What about Gen Z’s influence on their parents? DAVID: Yes, that’s the other thing. A lot of people might think, “I don't need to get to know Gen Z. I don't really need to worry about them quite yet.” That might be true for them as customers. They might not be ready to buy insurance, but I wouldn’t underestimate the influence they have over their Gen X parents. The bond between Gen X and Gen

InsuranceNewsNet Magazine » August 2019

Z is really tight, and 31% of Gen Xers say they consult a Gen Z child when making major purchasing decisions. Whether that be a home, a car — why would it not be the insurance provider? Why would it not be like these people say I can save 15% or less — “Is that true? Can you look it up for me?” They really trust their Gen Z kids because they're so resourceful. They're often the ones who might be putting the final choice in front of a Gen X parent. Hospitality would be one of the first industries to realize that. If you go to Disney’s website, there's a planning engine for kids, because they realized the kid will likely plan the trip, bring it to mum and dad who ultimately OK it and pay for it. That’s why I would really be saying there is a strong reason for the

IGNORE GEN Z AT YOUR OWN PERIL INTERVIEW industry to get to know Gen Z today, because they're already influencing the current customer base. FELDMAN: What are some ways for older agents to connect with younger people? JONAH: It’s not like trying to relate, trying to be cool. Sure, it’s important to relate, but it’s more about having understanding of who they are. Like understanding that they're going to want hyper-customization.

we see of value. Just make sure that we understand pricing. FELDMAN: David, has any insurance or financial person that you dealt with reached out to Jonah? DAVID: Sure. Some ask, “Hey can I get an introduction?” Then they meet with Jonah and I think they're all surprised at just the level of sophistication. Jonah walks into meetings with ideas about where his money should be invested, how insurance should work, term

There is a strong reason for the industry to get to know Gen Z today, because they’re already influencing the current customer base. It’s understanding them as a client, what they need, but more so who they are as a person. How do I get to know you to create that relationship? Gen Z has an intense focus on authenticity and having their relationship with somebody that they can trust. To me, the No. 1 thing that’s important to focus on, especially in a service-based industry, would be authenticity and creating relationships. That is so important with Gen Z. DAVID: That’s interesting, too, because this is a business about creating relationships. JONAH: Another thing is price justification. One of the major influencing factors of Gen Z is that we came of age during the midst of the 2009 recession. We are extremely price-conscious. We are very aware of money. We are going to be asking a lot of questions about why does it cost this much? How do I save money? Understand that doesn’t mean we are trying to cut corners or cheat you out of money. But that we are just very aware of what we are spending. We can understand, “Yes, we are a little bit more expensive but here is why.” Because we will pay a premium for a product that

versus whole life. He’s got some ideas and usually the expert or the financial planners can get threatened by that and go, “You can't believe everything you read on the internet.” That’s just a huge mistake. The smart ones are saying “Wow, I wish more of my customers were as engaged as you are, you’ve done some homework. Let’s look at what you’ve got.” Respect him for his approach. Those are the ones who are definitely going to win. But the ones that just assumed that I’ll hand over that business and say, “This guy is great,” those are the ones that are in trouble. FELDMAN: Do you generally see professionals put off by your level of sophistication? JONAH: Yes, whether it be at a doctor or regardless of the space, they come out with a predetermined notion. They get so threatened because they're the expert and they just want to tell us. When in reality it should be seen as a positive thing. NEXT MONTH: The Stillmans talk about the differences between generations and how to market to them.

August 2019 » InsuranceNewsNet Magazine

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Facebook Launching Digital Currency It’s called Libra and it’s Facebook’s foray into the

financial world. The social network announced it is moving beyond the realm of digital advertising to launch a digital currency in 2020. A new nonprofit group based in Geneva, the Libra Association, will oversee the currency, called Libra. Facebook said that it wants the currency to be available starting the first half of 2020, adding that it believes many of the 2 billion people who already use the company’s services will regularly use the Libra to buy things or send money internationally. Facebook said it plans to offer financial services, possibly including loans, through a new subsidiary that specializes in Libra. The social network said it plans to begin offering accounts next year through a new subsidiary called Calibra. Calibra will be a digital wallet that will allow people to send money in the form of Libra “at low to no cost,” the company said. Calibra will be integrated into through Facebook’s WhatsApp and Messenger services.

AMERICANS REGRET NEGLECTING SAVINGS

“Regrets, I’ve had a few,” goes a line in the song “My Way.” But Americans have more than a few financial regrets. What’s t he c om mon 27% regret not saving for thread among retirement; 19% regret not those regrets? saving for emergencies; Not saving 10% regret not saving for enough money. children’s education In a new Bankrate survey, 56% of Americans admit that neglecting their savings in some capacity was the thing they regret the most. Retirement — or not setting enough money aside for it earlier in life — was the chief regret for 27% of those surveyed. Meanwhile, 19% of Americans regret not saving enough for emergencies, and 10% are sorry that they didn’t save adequately for their children’s education.

SENIORS SPENDING BIG BUCKS ON HOME RENOVATIONS

Older Americans are spending big on home improvements, and it’s not just because they’ve been binge-watching HGTV. Harvard University’s Joint Center DID YOU

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for Housing Studies found that in 2017, Americans spent a record $425 billion on home improvements. That’s a 10% increase from 2015 and a more than 50% jump from 2010. Seniors are fueling this surge in spending, with the baby boomer generation spending $117 billion on home renovations, a growth of 150% over the past decade. These older homeowners said they are spending money to make their homes more accessible should they become disabled. The Harvard researchers found that as people begin to age into their 70s and 80s, they start to make changes in their homes so that they can remain there instead of relocating. The study found a relationship between rising home prices and increased improvement spending. Because homes are more expensive, fewer people are changing residences. The national mobility rate has fallen by almost half over the past 40 years.

More than 3,800 bank branches across the U.S. closed their doors since 2017. Source: Federal Deposit Insurance Corp

InsuranceNewsNet Magazine » August 2019

QUOTABLE There are still tens of millions who are struggling to even get back to where they were before the economy took a turn for the worse. — Mark Hamrick, senior economic analyst at Bankrate.com

GREAT RECESSION STILL HAUNTS AMERICANS

The Great Recession has been over for a decade but it still has many Americans in its grip, according to Bankrate.com. A new Bankrate survey found that more than half of Americans who were adults during the recession experienced some type of negative financial i mpac t f rom it. And half of that group said they are doing worse now than they were before the crisis hit. Fewer than half (46%) said they have seen a raise in pay since the recession. Of those who said they, or their partner, lost a job during the recession, more than a third said their pay has actually decreased. More than a third of those who said they, or their partner, lost a job during the recession said their pay has actually dropped since the recession. And the hits just keep on coming. Seventy-one percent of Americans said they lost money in the stock market; 46% said their home decreased in value; 24% depleted their emergency savings, and 19% said they took on increased debt.

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COVER STORY

When Advice

Sparks

Inspirat ion Advisors describe the

BEST ADVICE THEY EVER RECEIVED and how it inspires them in their practices and their lives. by Susan Rupe

InsuranceNewsNet Magazine Â» August 2019

WHEN ADVICE SPARKS INSPIRATION COVER STORY “Hey, Dad, can I have an allowance?” pleaded 8-year-old Brian Haney as he tugged on his father’s shirt. Haney thought it was a completely reasonable request. His father felt differently, though, but believed it was an opportunity to convey some wisdom to his young son. “To this day, I don’t remember exactly how he told me no, but I do remember not hearing those coveted words, ‘Sure! Now that you’re old enough, that seems fair,’” Haney recalled. “As my father tells it today, his

year to 72 houses in my neighborhood at 5 a.m. each day was every young boy’s dream,” he said with a bit of sarcasm. “But beyond the meager amount of income it provided me, those 11 years of delivering papers provided some of the most formative moments of my life.” On Haney’s first day of delivering newspapers, his father told him, “If you’re going to do anything, do it with excellence.” “It sounded good, but I had no idea what it meant,” Haney said. So his father didn’t just tell him what it meant, he showed him. Because the 8-year-old Haney wasn’t quite capable of pulling a cart loaded with 72 newspapers by himself, his father

“If you’re going to do anything, do it with excellence.”

Taking Root

Advice Brian Haney received from his father. reasoning was it didn’t make sense to start paying a kid money simply because he had aged.” Haney’s father was the son of two Great Depression-era Indiana farmers and had always worked for any money he had received, so his son’s request seemed like a good opportunity to teach a lesson. The advice that advisors said was the most valuable they received often went back to something they were told early in their lives or careers — usually from a parent or one of their first bosses. In Haney’s case, a typical question that any kid would ask triggered a lifelong lesson. A few weeks later, Haney’s father presented him with that opportunity. He showed Haney an advertisement seeking newspaper delivery workers. “He framed it as a great way to make more money than I would likely have made from an allowance [which was zero],” Haney said. “So I said what any naïve 8-year old would say, ‘Sure, I guess so.’” Haney continued delivering newspapers for the next 11 years until he graduated from high school. He did such a good job that he earned a college scholarship — a scholarship that helped him to obtain a degree in journalism. Today he is vice president of The Haney Company, a financial services firm in Silver Spring, Md. “Delivering newspapers 365 days a

considering your audience and about caring for those you can serve professionally. “I’ll never forget it, as it influences how I work to this day,” he said. “There are many ways to do a job, but only one way that would be considered excellent. We get to choose each day how others will receive our work, and I strive to make sure my clients would consider the quality of what we do for them to be excellent.” Advice. It’s at the core of the word “advisor” and it’s what advisors give to their clients every day. But what advice influences advisors? What words of wisdom did they receive that stuck with them and inspired them to be better people and more conscientious professionals?

joined him every morning for the hour or so it took to make the neighborhood deliveries. While they made their deliveries, Haney’s father gave him advice on how to do his job with excellence. “My father taught me that you don’t just throw the newspapers on everyone’s lawn,” he said. “While that may be faster and more convenient, it was also a careless way to do things. “We needed to walk each paper up to the door of the house and either put it behind the screen door if it was unlocked or leave it under the person’s mat if it was locked, ensuring the paper would not be accidentally blown away by the wind and protected from any rain. This also meant each person getting a paper would barely

Many advisors who told InsuranceNewsNet about the best advice they ever received went back to something they were told early in their lives or careers — usually from a parent or one of their first bosses. These insights took root because of something called “extra version” — meaning you want to be an extra version of yourself, said leadership expert T ra cey J o n e s of Tremendous L eadersh ip. “It means you have an adaptive capacity, and you are willing to receive input and process it and use it to create a better version of yourself.” Advice sometimes gets a bad rap. There’s the advice we seek from others when we need guidance, and there’s the unsolicited advice that often is unwel-

“The world is your oyster; go find something and do it well.” Advice Joanne Giardini-Russell’s parents gave to her. need to leave the comfort of their home in order to find their paper. No search of the lawn in a robe or boxer shorts, no soggy papers because those thin plastic bags offer little protection from rain and the elements.” His father’s advice provided a lesson in

comed or ignored by the person on the receiving end of it. “It takes a humble heart and a heart and personality that’s willing to be adapted and resilient to be able to hear and apply counsel — whether it’s solicited or unsolicited,” Jones said. “This is a big problem

August 2019 » InsuranceNewsNet Magazine

COVER STORY WHEN ADVICE SPARKS INSPIRATION that many adults struggle with.” “Advice can save you a lot heartache and wasted time and resources,” she continued. “You have to be open to receiving advice. You have to have an open heart about it even if someone comes at you in a caustic manner.” Even unwelcomed and unsolicited advice can be a good thing, Jones said.

going into credit card debt at 12-20% interest! It will take years to pay if off, especially when you are first starting out in the world and not making much but trying to balance rent, groceries, etc.,” she said. “As it was explained to me, you need credit to purchase things in the future, and you must make sure you pay off your credit cards each month.”

“I shave two faces today: the young man I am today and the one I will be at age 65 — time goes quickly. So saving a little now will have a huge effect on your retirement in the future.” Advice Karen DeRose received from a coworker. “Anytime anybody shares unsolicited advice with you, don’t get defensive; they’re not calling you a failure,” she said. “They’re caring enough about you to get invested in you. They’re seeing something that you’re not seeing and they’re helping you hone the rough edges and become like a diamond. “So when you get unsolicited advice, consider the source, take it to heart and if it’s completely 100% false, you can chalk it up to, ‘I wonder where that came from?’ But 99% of the time, there’s a little element of truth to it.”

First Jobs Bring Advice

Just as Haney’s father gave him a valuable nugget of advice when he started his very first job, many other advisors found someone offering them counsel early in their careers that rema i ned w it h them for life. Karen DeRose recalled several pieces of advice she received when she entered the working world and how they impacted her personal finances. DeRose is president and managing partner of DeRose Financial Group in Chicago, but she spent her early career working for an engineering firm. “The first piece of advice was never spend more money than you make by 16

The second set of advice had to do with retirement saving. “When started my first job at an engineering firm, one of the engineers explained to me how important it was that I contribute now to my 401(k) for retirement. He was funny and he said, ‘I shave two faces today: the young man I am today and the one I will be at age 65 — time goes quickly. So saving a little now will have a huge effect on your retirement in the future.” DeRose was also advised not to pass up “free” money her employer offered to her in the way of a 401(k) match. “And there were a couple of other things,” she said. “Don’t use your 401(k) as a piggy bank. This is for retirement. You want to set it and not use it until then. So don’t borrow on it and when you leave the company, don’t cash it in. You can always roll it over to your next company’s plan or put it in an individual retirement account.” Her former coworker also explained how compound interest works, along

“You have to fill your pitcher first. You can’t pour into others without a full pitcher.” Christy Aleckson heard this advice from a friend who was speaking at an event.

InsuranceNewsNet Magazine » August 2019

with the rule of 72 — dividing 72 by the annual rate of return will give you a rough estimate of how many years it will take for your initial investment to double. He explained how a 7% return will double your money in 10 years. “This stuck with me for a long time!” she said. And the advice kept coming. DeRose said when she became a homeowner, she was advised to make one additional mortgage payment each year if she was able, as it would knock six to eight years off her 30-year mortgage. “It worked, and I loved having my house paid off when I was 55 years old,” she said. “I danced for a week. So freeing!” Harry Cylinder of The Beacon Group, a financial services firm in King of Prussia, Pa., also remembered words of wisdom from a former boss: “Bite off more than you can chew, and then chew it.” “What it taught me is that you don’t grow unless you’re prepared to learn more and tackle what you’ve never done before,” he said. Early career advice inspired Sandy Schussel, a consultant and financial coach from Princeton, N.J., to change his mindset and rev up his practice. “One of the best pieces of advice I've ever received was to stop selling and start serving instead,” he said. “This simple mind shift helped me grow my advisor coaching practice to a level I did not believe possible.”

Parents Know Best

Much as Brian Haney was influenced by his father’s adv ice, other advisors said their parents provided them with wisdom that lasted a lifetime. “The world is your oyster; go find something and do it well,” was the advice Joanne Giardini-Russell frequently heard from her parents. She is a Medicare expert and the owner of Boomer Health Group in Howell, Mich.

WHEN ADVICE SPARKS INSPIRATION COVER STORY “I had parents who raised me to believe that I could do anything in the world — that anything was possible,” she said. “As an awkward teen, they would say, ‘You’re beautiful.” I wanted to be a pilot, a doctor, a lawyer when I was 17 and my parents would tell me I could do anything.” That “I can do anything” message propelled her confidence in the business world and is a message she conveys to her children, Giardini-Russell said. And she hasn’t stopped dreaming big herself when it comes to potential future clients. “As I’ve approached the world, it’s easy to think that I can actually deliver Ellen DeGeneres a Medicare policy when she turns 65 in a few years,” she said. “People laugh, but I can totally see it happening.”

Take Care Of Yourself

Advisors frequently spend so much time and energy helping their clients that they may not realize they must look after their own needs. A piece of advice led to an “aha” moment for Christy Aleckson, owner of Single Point Financial Advisors in Beaverton, Ore. “One day, my friend gave a talk for a group whose board I serve on. My friend said, ‘You have to fill your pitcher first. You can’t pour into others without a full pitcher.’” Aleckson feels pulled in many directions as she runs her practice and volunteers on a number of boards, she said. “We hear about self-care and putting ourselves first all the time. But as a giver and doer, those words never resonated with me.” Her friend’s speech made her realize “I have to have abundance to be able to share without my pitcher running dry.” This inspired her to “be more concentrated with my time so I have more free time to do the self-care work,” Aleckson said. 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.

GOOD ADVICE

There’s no shortage of advice out there. But what bits of advice actually stick? Here are some more tales of advice the sparked inspiration.

Kathryn M. Soderberg, president of Soderberg Insurance Services, Lynnfield, Mass. “My father, who is the founder of our agency and my mentor, would always say, ‘Take time to do it right the first time. You only get once chance to make a first impression.’ “The other piece of advice that he gave me and it applies to all areas of my life — not just business — was ‘Get the best you can get, buy the item that is better quality, upgrade your experience. It does not cost that much more and it is well worth it.’” Vanessa Bucklin, owner, PCI Conrad, Conrad, Mont. “‘You get out what you put in’ and ‘Everything comes with a cost’ are pieces of advice I have received from family and friends. Most people want and like to win, but are not willing to put in the sacrifices and preparation it takes to prepare to win.” Sherry Schaffert, business development manager, Titan Wealth Solutions, Bloomfield Hills, Mich. “My dad gave me great advice when I was young that I have never forgotten. That was to learn to bend in the wind or like a branch you will break. Great words.” Barb Snyder, office manager, Morrissey Insurance, Ephrata, Pa. “My former coworker handled a lot of clients. Back in the day, when we had paper files, she would have them stacked on her desk, and later her desk would be clear. I would comment to her about how she managed to get so much accomplished. Her advice was to start at the top of the pile, work your way down and not set any file aside. Her method didn’t allow you to push off the problem or feared item for a later date. I think of this when I look at my workload and say I don’t know where to start.” Jane Wary, commercial lines customer service representative, Morrissey Insurance, Ephrata, Pa. “One of the best pieces of advice I have ever been given was posted above the chalk board in Mr. Ripple’s English classroom at Windber [Pa.] Area High School. It simply said: ‘Don’t be afraid to ask dumb questions. They are more easily handled than dumb mistakes.’ It still remains with me because it’s very simple, and it’s so very true.” August 2019 » InsuranceNewsNet Magazine

the Fıeld

A Visit With Agents of Change

COMPETING

TO WIN

Pushing for Olympic gold showed Lauryn Williams how planning is winning. By John Hilton

InsuranceNewsNet Magazine » August 2019

printer Lauryn Williams debuted as an Olympian in 2004, taking a silver medal in the 100 meters during the Athens games. The American fell .03 seconds short of gold. Williams worked and trained daily for years to keep her dream of Olympic gold alive. Finally, she got the chance at the 2012 London games and returned home with a gold medal as part of the USA’s record-setting 4X100 meter relay team. Now in her second career as a financial advisor, Williams, 35, is leaning on her athletic experiences to help navigate a similarly challenging path to success. “I’m trying to teach myself to measure and really focus on what I’m accomplishing one step at a time instead of basically feeling like every client conversation is a championship race,” said Williams, who started her virtual company, Worth Winning, three years ago. “You’re planting seeds all the time as an entrepreneur and some of those seeds are going to have a really delayed return on investment. But just show up and do the best that you can in that moment and be really proud of yourself.” Spurning a traditional office means Williams can communicate with her mostly young client base in their medium of choice — be it Facetiming, over the phone or even via texts. Her client base is about 60 now, a number Williams is building through social media marketing on Instagram, Facebook and other sites. She also does webinars and delivers talks on topics such as student loan debt. Much as in her athletic career, Williams is perpetually working and recalibrating along the way as she fights to establish her career in a field dominated by white, older men. She has a Master’s of Business Administration from the University of Phoenix, along with her Certified Financial Planner designation. Williams has a plan for additional designations as her business and client base grow. In a unique approach to compensation, Williams offers specific services, such as student loan advising, for which she charges according to a specific fee schedule. She does not charge traditional asset under management fees.

COMPETING TO WIN IN THE FIELD

“A lot of people are just blown away by that,” said Williams, who lives in Dallas. “But I think it’s really, really cool to be able to easily explain to clients what the fee is and that there are no additional charges.”

‘I Enjoy Math And I Enjoy Money’

Born and raised in suburban Pittsburgh, Williams developed into an elite runner while still in high school. Many of her records still stand nearly two decades after she became a high school sprinting sensation. Collegiate track success followed at the University of Miami, where Williams majored in finance. “I enjoy math and I enjoy money, so that’s what led me to finance as a major,” she recalled. “It wasn’t a lot of research and I didn’t know what kinds of jobs existed in finance.”

are what turn into good competitions.” As she moved into her mid-20s, Williams’s running career experienced more downs than ups. At the 2008 Olympic Games in Beijing, she ran a strong 11.03 in the 100 meters, but finished fourth. She was the anchor on the 4X100 relay squad, but a botched exchange caused a dropped baton. Williams picked it up, but ran outside her lane, which caused the USA team to be disqualified. Williams earned her MBA and retired briefly from sprinting before returning to finally nab the elusive gold medal in 2012. That year was life-changing in another way: a Google search led Williams to the CFP program. As a young athlete making six figures, she received poor financial advice and that experience stuck with her. She want-

“You don’t just show up, run a race and become an Olympian. You go to practice. And you practice day in and day out and some days practice sucks and some days you’re super sore ... But it doesn’t mean you don’t show up the next day.” As her running profile grew, it enabled Williams to defer any career decisions. By the time she graduated from Miami in 2004, Williams was already competing in track meets around the world. She won gold in the 2002 World Junior Championships, the 2003 Pan American Games, and the 2005 World Championships in Helsinki — all in the 100 meters. That run of dominance established Williams as one of the fastest female sprinters in the world, which made her silver medal showing in the 2004 Olympic Games a disappointment. But lessons were learned. “You don’t just show up, run a race and become an Olympian,” she said. “You go to practice. And you practice day in and day out and some days practice sucks and some days you’re super sore. And some days, you don’t have anything in the tank and it’s not a very good practice.” “But it doesn’t mean you don’t show up the next day. Because the good practices

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ed to help others in similar situations. “I really didn’t know the basics, so that stuff was over my head,” said Williams of those early experiences. “There was not a lot of time spent explaining it to me. There was a lot of ‘You don’t worry. You just run.’ It was kind of frustrating to me, being a finance major.”

Virtual Office

Today, Williams remains the same energetic, ambitious success seeker on the move. She does podcasts, public speaking, wrote a book and arranged Worth Winning as a “100% virtual financial planning company.” It’s not a concept that is easy to pull off, said Bill Perryman of Perryman Financial Advisory in Dallas, an early mentor to Williams. “She’s an adventurer and a more traditional practice probably doesn’t fit her,” he said. “She’s reaching out and finding clients all over the world and designing her

August 2019 » InsuranceNewsNet Magazine

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IN THE FIELD COMPETING TO WIN

I was like, ‘Five years!? I want to be profitable in Year One.’ It gave me a little bit of fuel, but it also helped ground me and helped me understand that this is a long game. This is not an overnight success story.

practice to allow her to serve them wherever they are or wherever she might be.” Williams recalled her shock when another mentor told her what to expect before she launched Worth Winning in 2016. She was encouraged to do it, but told not to expect to register a profit for at least five years. “I was like, ‘Five years!? I want to be profitable in Year One,’” Williams said, laughing. “It gave me a little bit of fuel, but it also helped ground me and helped me understand that this is a long game. This is not an overnight success story.” With a focus on young people, Williams is building some early success in two areas: new college graduates and student loan borrowers. Her recent college grad package is $375 for the basics of finance and advice to get started with a solid fiscal foundation. “It’s been a huge success with other advisors with clients who have children,” Williams explained. “Because it’s kind of like ‘How do I talk to kids, what do I do?’ And I’ve created this short road map of ‘OK, here’s what you do’ and other advisors love that.” Williams also earned a student loan certification and is developing into an expert advisor on the topic. “With the age group that I’m serving, mostly involving people in their 20s and 30s, student loans are a huge deal,” 20

she said. “I wanted to get ahead of that and learn everything that I could and I bumped into the right people and, by way of learning anything that I could, that’s a huge driver of business for me.” As she plants the seeds and develops relationships, Williams leans on the lessons she learned during a six-month internship at Briaud Financial Advisors in College Station, Texas, in 2013. “It was just wonderful in the way that they were able to help their clients, the service they were providing, the value system that they had,” she recalled. “I was just like ‘Wow, there are good people in the industry.’ Because up to that point, with my experiences, I was super leery of what existed and what was out there. And I got something different and I got super excited about being able to help people.”

‘Pale, Stale And Male’

Like many in financial services, Williams quickly learned the value of industry conferences for networking and idea-sharing. She occupies a very slim demographic, African-American female, and often finds herself the only one in the room. Although racial strife is often in the news these days, Williams said she has not run into it in the financial industry. “At first I was very intimidated because I would go into a room at a conference of 400 people and there would be four

InsuranceNewsNet Magazine » August 2019

people of color there and I would just be like ‘Wow, there’s a huge mismatch here,’” she said. “But I was welcomed with open arms. The older, Caucasian guys are very excited to see new people joining the industry. They’re like, ‘Hey, how can I help you be great?’” Williams has an innate desire to succeed and wants no special treatment, said Perryman, an industry veteran of 35 years. “I appreciate that about her, because she has a real passion for helping people of her generation,” he said. “She really has her heart in the right place, a high-integrity young lady who really wants to make a difference.” I n s u r a n c e N ew s N e t Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@ innfeedback.com. Follow him on Twitter @INNJohnH.

Tell Us!

Do you know someone who would make a compelling profile story? Shoot us a quick email telling us who it is and why you think so. Send it to editor@insurancenewsnet.com, and put PROFILE in the subject line.

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experience, they’re probably going to stay with us when their needs change or if they want another product,” Maringer states. “This results in customers who are confident they can protect and grow their money, as well as financial professionals who are happy to have satisfied clients for the long term when they write with Great American,” he continues. American Landmark 3 offers different exposure opportunities through low-cost, diversified investments within a principal-protected framework. He adds, “We believe it’s a unique proposition for our market, and it does something vitally important for our clients — keeps things simple.”

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HEALTH/BENEFITSWIRES

White House Expands HRAs for 2020 The Trump administration is expanding options known

as health reimbursement arrangements that would allow employers to use special accounts to help workers buy their own health insurance, upgrade job-based coverage, or choose low-cost plans with limited benefits. Next year, employees will be able to use tax-free HRAs to buy their own health insurance plans. Employers that offer regular workplace coverage can also set up another type of HRA account — limited to $1,800 a year — that will allow workers to get additional benefits such as dental and vision care. This second type of account can also be used to purchase lower-cost, short-term insurance that comes with limited benefits and doesn’t have to cover pre-existing medical conditions. The White House says the HRA expansion is aimed at small-to-midsized businesses. The administration estimates that eventually 800,000 employers and more than 11 million workers and family members will be able to take advantage of these HRAs.

COALITION TO FIGHT SURPRISE BILLING

Millions of consumers who think their health insurance will cover their medical bills end up with an unwanted surprise — an unexpected bill from a health care provider that was outside of their insurer’s network. Now a group representing employers, physicians and health plans has formed to fight these surprise bills. The Coalition Against Surprise Medical Billing launched a national advocacy campaign to push reforms that would protect patients from exorbitant medical charges from out-of-network providers. A recent Kaiser Family Foundation poll found 41% of U.S. adults received a surprise bill in the last two years. The coalition is calling for federal legislation that would provide new patient safeguards related to emergency care while also implementing a fair and reasonable payment benchmark for providers. The coalition includes America’s Physician Groups, America’s Health Insurance Plans, American Benefits Council, DID YOU

KNOW

Blue Cross Blue Shield Association, ERISA Industry Committee, HR Policy Association, National Association of Health Underwriters and National Retail Federation.

SMALL EMPLOYERS LESS LIKELY TO OFFER DI

Employees at small businesses are less likely to have disability insurance than those who work for larger employers, a Guardian Life study showed. Guardian’s most recent workplace benefits study showed 76% of those who work for a company of 1,000 or more employees have DI, versus 41% of those who work for an employer with 50 workers or less. The vast majority (92%) of Americans who have DI acquired it through their employer, Guardian said. And fewer Americans own DI — down from 65% in 2017 to 54% in 2018. Not having DI as a workplace benefit

QUOTABLE I’ve seen the good, the bad and the ugly of single-payer health care. — U.S. Rep. Seth Moulton, D-Mass.

“is clearly contributing to lower financial wellness among working adults in America, given that 40% of the working population in the U.S. works for small companies,” said Gene Lanzoni, assistant vice president, thought leadership, Guardian Life.

NURSING HOMES FAIL TO MAKE THE GRADE

More than 400 nursing homes in the U.S. fail to meet federal health and safety requirements, and they will be subject to more frequent inspections. The facilities were named to a list of nursing homes called a “special focus facility candidate list.” The nursing homes will receive extra scrutiny because they were identified as having a persistent record of poor care, according to Sens. Pat Toomey, R-Pa., and Robert Casey, D-Pa. The facilities on the list were cited for everything from insect infestations to poor nutrition resulting in rapid patient weight loss. About 1.3 million Americans live in nursing homes, with most of the cost of care paid for by Medicare and Medicaid. Fewer than 3% of the 15,570 nursing homes in the U.S. have had issues that would make them eligible to be designated as special focus facilities.

San Francisco officials are considering whether to make their city the first in the U.S. to ban all sales of electronic cigarettes. Source: Associated Press

InsuranceNewsNet Magazine » August 2019

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HEALTH/BENEFITS

Why Disability Programs Are The Solution To Extended Absences A strong absence and disability management program is the key to improving employee attendance and getting workers back to their jobs.

By Jung Ryu

company can’t run on two-thirds of its workforce. Unfortunately, due to disability related leaves, some companies are forced to do that. A recent study conducted by The Standard showed that one employee, on average, could spend as many as 112 days a year

helping employers be fundamentally more productive.

Addressing A Longstanding Issue

Disability and absence are often invisible drains on productivity and overall workforce performance, in the sense that employees who are out of work on disability can quickly turn “out of sight, out of mind” for employers. The Standard’s Absence and Disability Readiness Index states that only one in four employers view their companies as leaders when it comes to managing employee absence and disability. At the same time, nearly twothirds of employers (64%) scored a C, D or F in workplace disability management.

employers should consider the wide range of temporary and chronic conditions that can trigger a disability leave, such as mental health conditions, drug addiction, illness, injuries or musculoskeletal conditions. The impact of disabilities on employee absence quickly adds up — six in 10 U.S. companies report having job openings that remain vacant for 12 weeks or longer per year. Taken together, these productivity losses and job vacancies quickly become expensive for employers as well. The Standard’s research also found organizations that proactively address employee absence and disability report better success managing these challenges. Having programs in place that

What Are Employers Getting Right?

25%

say their formal programs are very successful

92%

say their employee programs help control other costs and reduce exposure to risk

93%

are compliant with current disability laws and are committed to remaining compliant

From The Standard’s Absence And Disability Readiness Index

away from work on disability leave due to mental health conditions. Employees with chronic conditions are out of work an average of 64 days a year, and the average leave time for all types of disability claims isn’t much shorter — 59 days. Although these numbers don’t look promising for employers, there is a clear solution: a strong absence and disability management program. As a benefits broker, you have both an opportunity and a responsibility to advise human resource decision-makers about programs that improve employee attendance and bring them back to work. By doing so, you’re 34

These are sobering statistics for employers facing an increasingly employee-driven job market. In addition to lost time and productivity, organizations that fail to address absence and disability needs jeopardize their own ability to retain valuable talent. In a competitive economic landscape, employees will increasingly look to employers with robust benefits programs that address their needs.

Calculating The Cost

When thinking about the factors that cause extended employee absences,

InsuranceNewsNet Magazine » August 2019

support both absence and disability needs can help with accommodations and have a positive effect on employee engagement. Of employers with formal programs, 32% reported improved employee productivity, 36% had improved workplace morale and 40% indicated better employee retention.

Communicating The Benefits Of Disability Management

In addition to the economic advantage they provide, absence and disability management programs offer a wide array of supplementary benefits:

WHY DISABILITY PROGRAMS ARE THE SOLUTION TO EXTENDED ABSENCES HEALTH/BENEFITS

Employers are seeing benefits for the programs they offer — especially for employee engagement. Among those with formal employee ABSENCE PROGRAMS...

46% report lower absenteeism 42% report better employee retention 38% report improved workplace morale 32% report improved workplace productivity

3. Legal regulation compliance Due to changing regulations, complying with the Americans with Disabilities Act has presented a real challenge for employers. Our research found that 61% of employers agreed that changing disability laws and guidelines make it difficult to properly support employees. Although disability carriers do not replace the employer’s legal responsibility to comply with the ADA, they can still provide valuable assistance. Disability consultants can provide expertise and help clients determine reasonable accommodations that meet their employees’ needs while still complying with ADA regulations.

Applying The Solution

Among those with formal employee DISABILITY PROGRAMS...

32% report lower absenteeism 37% report better employee retention 34% report improved workplace morale 31% report improved workplace productivity From The Standard’s Absence And Disability Readiness Index

1. Return-to-work support Most employers agree: When disability prevents an employee from working, the goal is to bring them back as quickly as possible. Despite this, fewer than half of the employers in our study had formal return-to-work and stay-at-work strategies in place. A strong benefits program, with consultants who work alongside clients to coordinate return-to-work plans, can greatly improve the employee leave process. This

their employees alone, causing delays in the return-to-work process or preventing stay-at-work success. A competent disability carrier can help HR managers create the right provisions for employees in need.

support can take many forms, including monitoring employee progress, providing worksite modifications, addressing emotional and behavioral needs, and coordination between benefits. 2. Accommodations management Without a strong absence and disability program in place, providing employees with the appropriate resources can turn into a difficult guessing game. HR decision-makers are often left to accommodate

The facts are clear: Employers that ignore absence and disability management programs do so at their own economic risk. As a benefits broker, your role in this changing economic landscape can be the solution organizations desperately need by offering expert counsel to HR managers struggling to keep up. Armed with the knowledge that strong disability programs improve employee productivity, reduce employer exposure to risk and improve retention in an employee-favored job market, HR decision-makers are far more likely to consider strengthening their current programs or implementing new ones. Now is the time to help employers apply the organizational solution they need — one that will inevitably enhance your client relationships at the same time. Jung Ryu is national accounts practice leader for The Standard. He may be contacted at jung. ryu@innfeedback.com.

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August 2019 » InsuranceNewsNet Magazine

NEWSWIRES

Advisors All Stressed Out

Grab the stress ball and step away from the desk. A survey from the Financial Planning Association says that financial advisors are more stressed out than their investor clients. When asked to evaluate the stress in their lives, 71% of advisors said they experience moderate or high negative stress compared to 63% of investors. It doesn’t get better. According to the survey, advisors feel that the situation is getting worse. Twenty-eight percent of them said they were feeling more stress than they did a year ago. Another 44% said they were feeling more stress than they did five years ago. To contrast, only 34% of investors said they were more stressed than five years ago. So, what’s causing advisors to crack? When asked how satisfied they were with a variety of aspects of their lives, only 18% were satisfied with the profitability of their business and just 15% were satisfied with its growth trajectory. Additional challenges where advisors struggled were work/life balance (65%) and building their business (56%). Others cited concerns over increased regulation in the post-financial crisis environment as a stressor in their practices.

AMERICANS STRUGGLING TO SAVE FOR EMERGENCIES

SKIPPING SUMMER VACAY

Millions of Americans are skipping summer vacations this year, according to a Bankrate survey. The 39 million Americans skipping resorts, beaches and road trips say that they can’t afford to take a trip this summer. Vacation costs average nearly $2,000 nationally. One in five of those who say they can’t afford vacation this summer say that the biggest obstacle standing in their way is paying down debt. Therefore, going into more debt for a little R&R just isn’t worth it.

Nearly half of all Americans are struggling to save just $400 for their emergency funds. This news came from J.P. Morgan Chase’s consumer banking chief Thasunda Duckett. Many banks, including J.P. Morgan, have begun to adopt auto-saving features as part of their digital banking platforms in an effort to make saving easier. “We still have to make sure that access to capital, access to building that rainy day fund, is accessible to all Americans around the country,” Duckett said. Duckett emphasized the need for the banking industry to raise awareness for the importance of saving and educate customers on how to save effectively.

DID YOU

KNOW 30% of Americans make money decisions Lexington by searching Google. Source:Source: LIMRALaw

InsuranceNewsNet Magazine » August 2019

QUOTABLE The Chinese conflict on the trade issues is serious, and I think it’s going to be prolonged, but I don’t think it’s going to create a recession or a bear market. — Byron Wien, Stock Market Strategist and Vice Chairman of Blackstone Group

INVEST IN PETS?

With U.S. birth rates at an all-time low, analysts are saying now is the time to check out pet stocks. No, really. There are more p e t s than children in the U. S ., a nd spending on pets is growing at double the rate of the economy, said one analyst. Spending on veterinary care is estimated to rise 4.8% this year to $19 billion, the American Pet Products Association reported. Trupanion sells pet health insurance plans to cover rising vet bills. Next year, Wall Street expects the company to swing to profitability as revenues rise 20% to $447 million. Another area of strong spending is pet food, which has seen a 4.5% growth this year to $31.7 billion, according to the American Pet Products Association. Millennials, who are the largest group of pet owners, are willing to pay higher premiums for natural foods for their pets. Exhibit A: General Mills, which purchased Blue Buffalo, an all-natural pet food, last year, saw its stock rise 11% in that time.

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Three Reasons To Add Annuities To Your Financial Planning Toolkit It’s time for registered investment advisors to take another look at integrating annuities into their clients’ retirement plans. • Michael Reidy

hen 73% of clients say they like the idea of adding a source of protected monthly income — on top of Social Security — to their retirement income plan, registered investment advisors pay attention. As traditional pension plans become increasingly rare and an uncertain rate environment jeopardizes the value of many fixed-income investments, clients will likely continue to demand more — and better — guaranteed income strategies. It may be time, then, for RIAs to take a fresh look at integrating annuities into their financial plans for pre-retirees and retirees. In fact, a 2018 survey by Global Atlantic Financial Group revealed that 56% of financial professionals believe that annuities are an important part of retirement planning. As investment research firm Morningstar noted at the end of 2017, $2 trillion was invested in variable annuity products. And LIMRA reported sales of fee-based variable annuities jumped 43% year-over-year to $800 million in the third quarter of 2018.

forward. Theses platforms allow the RIA to integrate annuities with an entire client account. With regards to their complexity, RIAs would benefit from using plain language to explain annuities, as there is some evidence that consumers are more interested in annuities when financial professionals explain their features without using the product name (keeping in mind that what they may say is limited if they are not also insurance licensed). A

Given the disconnect between consumer interest and perceived obstacles to their use, should financial professionals reconsider the role of annuities in their clients’ retirement income portfolios? With optional benefits, including guaranteed income for life over longer retirements, and index-linked interest potential with downside protection, the range of annuities available today may deserve a second look. RIAs are uniquely positioned to present annuity products alongside investment solutions in one consolidated plan.

Perceived Value of Guaranteed Lifetime Income in Addition to Social Security [7=Extremely valuable, 1=Not at all valuable]

Perceived Obstacles To Using Annuities

For years, however, many RIAs have steered clear of annuities because the products were seen as too expensive or complicated. Commission-free options for fee-only RIAs have been introduced as one possible solution to the cost issue and they are often simpler than their traditional annuity counterparts. Although LIMRA reports fee-based variable annuities still represent only 3% of the market, several annuity carriers are getting their fee-only annuity products placed on a variety of wealth platforms, with expectations of significant growth going

Using Annuities To Stand Out In A Crowded Market

Source: Greenwald & Associates and CANNEX Fourth Annual Guaranteed Lifetime Income Study, 2018.

National Bureau of Economic Research study found that presenting annuities as income, rather than as an investment, made the retirement tool much more valuable and appealing. Annuity carriers are resolving the technical barriers that have hindered RIAs from integrating insurance products within their wealth management platforms. Integrating annuity carriers into the RIA’s unified wealth management platform, supporting their clients’ financial planning objectives, is the goal.

InsuranceNewsNet Magazine » August 2019

Annuities can serve to complement overall financial planning strategies, bringing added protection, diversification and the opportunity to meet clients’ retirement income goals. RIAs who combine investment and insurance products may differentiate themselves as market leaders in a highly competitive space and may result in increased assets under management and more satisfied clients. Specifically, RIAs should consider deploying annuities into client portfolios for these three main reasons.

THREE REASONS TO ADD ANNUITIES TO YOUR FINANCIAL PLANNING TOOLKIT

1. Robust investment line-ups paired with lower cost investment options. Whether replacing an existing annuity or by establishing a new variable annuity contract, providing clients with powerful investment options at the right price always makes sense for financial professionals. Variable annuity providers continue to deliver more investment options within their annuity contracts, which is good news as market participation means clients have the potential to outpace inflation. Variable annuities typically offer a variety of subaccounts in various asset classes, including alternative strategies, to help meet retirement goals. And adding a guaranteed income rider — available with some annuities for an additional cost — may enable owners to lock in their gains to increase their payout.

The range of annuities available today may deserve a second look. Some advisors are using fixed or fixed indexed annuities as a replacement for bonds and bond funds in client portfolios. Typically, as interest rates rise, bond values may fall, although it is possible that any losses may be short term or eventually recouped. However, if some retirement savings are linked to those declining bonds, the savings value may drop as well. Fixed or fixed indexed annuities can help diminish or eliminate this uncertainty around the fluctuating values of a bond portfolio. Fixed and fixed indexed annuities can provide the flexibility to avoid market risk, while allowing financial professionals to construct cost-efficient portfolios. 2. Retirement planning with guaranteed lifetime income. Financial professionals can help provide long-term growth potential, eliminate market-related downside risk, and deliver guaranteed lifetime income with fixed indexed annuities. Feeonly FIAs are just hitting the market. FIAs may be especially interesting for clients who are nearing or in retirement, which is typically the worst time to take on unnecessary risk. Educating advisors on FIA benefits and how they can play a role in their clients’ retirement income goals is paramount. The decumulation phase may be a more difficult retirement issue to solve than the accumulation phase. RIAs understand that it is how they solve for retirement income that will determine whether they are ultimately successful, and how they will be remembered by clients and their families. In addition to FIAs that include guaranteed lifetime withdrawal benefits, single-premium immediate annuities can be an extremely useful tool in retirement planning. The client pays a sum of money up front and, in return, they receive a certain amount of money periodically for the rest of their lives, no matter how long they live.

Annuity providers may offer an “exclusion ratio” for non-qualified contracts which, from a planning perspective, enables advisors to plan income distribution with the aim of lowering their clients’ upfront tax bills. The annuity exclusion ratio shows how much of a non-qualified annuity’s interest the client will have to pay taxes on for a particular withdrawal (it doesn’t avoid taxes but simply changes the timing of when taxes must be paid). Because taxes have already been paid on the principal, the annuity exclusion ratio is calculated by dividing the principal paid by the contract’s value. Once all principal has been received back, the remaining annuity payments are fully taxable. The age of the annuity owner helps determine the exclusion ratio. It may be a significant number of years before the annuity payments become fully taxable, although this factor should still be included in any retirement income tax planning. For an older annuity buyer, this can provide a significant amount of non-taxable income, based on the amount used to purchase the annuity.

The Bottom Line

Annuities can help RIAs seek opportunities and manage risk throughout the economic cycle. Financial professionals are better able to provide diverse investment options, alternative assets and strategies, expertly constructed portfolios and important tax advantages. It may indeed be time to consider them as a core product offering that can provide the potential for reliable asset growth and guaranteed retirement income — at least for those who wish to differentiate themselves as holistic client advisors. Michael Reidy is vice president, RIA manager, at Security Benefit Life. Michael may be contacted at michael.reidy@innfeedback.com.

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3. Predicting retirement income tax liability. A nonqualified annuity is funded with after-tax dollars, meaning taxes were already paid on the money before it went into the annuity. Upon partial distribution of these annuities, interest credited is taxed on a last-in/first-out basis as ordinary income at the taxpayer’s marginal rate. August 2019 » InsuranceNewsNet Magazine

INBALANCEWIRES

More Education = More Drinking? If you have a graduate degree, you’re probably more likely than a high

school dropout to spend money on alcohol. That’s according to the U.S. Bureau of Labor Statistics. The BLS studied how Americans spend their money and concluded that the more educated someone is, the more money they tend to spend on booze. Americans with a graduate degree spend an average of $992 per year on alcohol, according to the BLS. This compares with $760 spent annually on alcohol by college graduates, $276 a year spent by those with a high school diploma and $102 a year spent by high school dropouts. People who have more education tend to have higher incomes, but that’s not the only reason behind their higher spending on alcohol. Those spending averages could be affected by the number of people who do not drink. A Gallup survey found that eight in 10 college graduates say they sometimes drink, compared with about half of those with a high school diploma who say they drink.

FOOD ALLERGIES? BLAME JUNK FOOD

SAUNA WORKS AS WELL AS A WORKOUT

Don’t feel like lifting weights or running on the treadmill today? Relax in the sauna instead. German researchers found that a sauna session does as good a job as an exercise session when it comes to reducing blood pressure and heart rate. “A sauna session is a physical strain,” said Dr. Sascha Ketelhut, a sports scientist at Martin Luther University HalleWittenberg. “Its long-term positive effects are similar to sports activities.” Spending time in the sauna doesn’t burn calories the way a bout of exercise does, and any sauna-related weight loss is a result of water weight that the body sweats out, but the sauna helps increase blood circulation and relieve sore muscles, researchers said. DID YOU

KNOW

Why do so many children have food allergies? Scientists point the finger at what they call “advanced glycation end products.” We call them processed junk food – everything from candy bars to potato chips to frozen pizza. Researchers at the 52nd Annual Meeting of the European Society for Pediatric Gastroenterology, Hepatology and Nutrition linked the rise in childhood food allergies to the prevalence of junk food in the diet. Food allergies have been rising steadily around the world. In the United Kingdom alone, there has been a 500% increase in hospital admissions for food allergies since 1990. The incidence of food allergies in American children went up by 50% between 1997 and 2011, the Centers for Disease Control and Prevention reported.

QUOTABLE The human brain is wired to crave high-calorie foods, especially sugar and fat. — Michael Long, co-author of The Molecule Of More

Nail care products led to 28% of ER visits, hair care 27%, skin care 25% and fragrances 12%.

MAKEUP LEADS TO ER VISITS

When little kids get into Mom’s cosmetics, they make a big mess. But they also can wind up in the emergency room. Researchers at the Center for Injury Research and Policy at Nationwide Children’s Hospital found that every two hours, a child goes to the hospital after swallowing or being exposed to beauty products ranging from nail polish remover to cologne. The researchers estimated that between 2002 and 2016, 64,686 children younger than five years of age were treated in US emergency departments for injuries related to personal care products such as shampoo, lotion and makeup. Seventy-five percent of the injuries resulted from children swallowing the product while 19% of injuries occurred as a result of the product coming into contact with a child’s eyes or skin. Nail care products were the most common cause of injuries, accounting for 28.3% of ER visits, followed by hair care (27%), skin care (25%) and fragrance products (12.7%). Nail polish remover led to the most number of visits to the emergency room, responsible for 17.3% of all injuries.

1/3 of adults sleep with a teddy bear or comfort object from when they were a child. Source: Sleepopolis

InsuranceNewsNet Magazine » August 2019

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INBALANCE

What Your Attire Says About You As An Advisor With some traditional firms ditching the ties, we asked advisors what type of dress code they follow at work — and received a wide range of answers. By Cassie Miller

mong financial professionals, opinions vary greatly about what is appropriate attire for meeting with clients, attending conferences with peers and leaving their own personal mark on their style. J.P. Morgan and Goldman Sachs loosened their ties recently – and threw them away, now that their updated dress codes call for business casual. But what about advisors in the field? Was business casual already the norm? Largely yes, but not exactly, according to some advisors. “Business casual” means different things to different people. AdvisorNews asked advisors for their thoughts on attire. Here’s what they had to say:

The Traditionalists:

Formal Attire A Must Kristin Sullivan, Denver – I think it’s nice to dress 42

up for clients. Even though I meet with many clients in my home office, I always wear a skirt and heels. Yes, one-color suits for women are boring and a little 1980s, but we should still put effort into how we present ourselves to clients and networking partners — personal branding!

The Centralists:

Seek Balance Between Traditional And Contemporary Mark Beaver, Dublin, Ohio – I’ve been in the business going on 10 years and this is something I’ve gone back and forth on. Most of the time, I now wear a sport coat or maybe a suit without a tie. I feel it strikes a good balance between being professional and carrying some authority, but in a softer, more approachable way. The way I see it, there is a risk of coming off as overdressed and a risk of coming across as underdressed. The underdressed risk carries more weight, in my opinion. I don’t think anyone would see me as underdressed in a sport coat and likely not overdressed either – a good balance. I do have a few clients where

InsuranceNewsNet Magazine » August 2019

I still wear a full suit and tie; these are mostly retired executives who will show up to the meeting in a suit even though they’re retired. It’s in their blood. Ben Smith, Milwaukee – During my time at Ameriprise (a very traditional broker/dealer) working with mass affluent clients, I wore business casual, for the most part. If I was meeting with highnet-worth prospects and clients, I often wore a suit and tie. At conferences, suits and ties were pretty normal. When I worked at Russell Investments, we always wore a suit and tie when meeting with our clients, who were financial advisors. We also wore at least a suit coat or blazer, and women wore dresses or skirts, during conferences. During my time at a large RIA, I almost never put on a tie, and often wore business casual during client meetings, as clients often preferred it. The highnet-worth clients I worked with preferred not to dress up (for the most part) for meetings, and expected us as their advisors to do the same. When I was in the office not meeting with clients, I often wore a polo or half-zip sweater, depending on the weather.

WHAT YOUR ATTIRE SAYS ABOUT YOU AS AN ADVISOR INBALANCE

The Modern Chic:

Classy, Formal Attire With Modern Inclusions/ Exclusions Kashif Ahmed, Bedford, Mass. – I always wear trousers and shir ts ironed. Most of my shirts have French cuffs. I never wear a tie, nor a jacket, though my jacket is always on a jacket stand in my office (it has been with me my entire career and traveled the world with me) when meeting clients. I have always worn bespoke suits, always with a tie and proper, full-sized handkerchief in the pocket. Whenever you see me dressed formally like that, it means I am not meeting any clients (not for a meeting anyway). I wear that for my own personal satisfaction.

The Futurists:

Technology And Changes In Industry Shape Attire Autumn Campbell, Tulsa, Okla. – Autumn is the 2019 Financial Planning Association NexGen President — Given that most of my business relationships are virtual, I usually wear a semi-casual shirt paired with comfy pants, warm socks and no shoes. When I have in-person meetings, I may wear a dress or perhaps a blouse and pants. I rarely wear jeans or T-shirts, unless meeting on a Saturday. I do not always wear makeup, occasionally wear heels and don’t wear expensive jewelry. I believe being prepared, put-together and present are the most important things in building a relationship, so that’s what I focus on.

The Empaths:

Rely On Feedback, Then Stick To Desired Style David Bize, Oklahoma City – I intentionally wear dress shirt and dress slacks to the office. Early in my almost 20-year

career, I discovered that when I wore a coat and tie, I attracted prospective clients that I didn’t like and with whom I did not want to work. When I dressed less formally, I attracted prospective clients that I liked. Michael Kay, Livingston, N.J. – Nothing builds a wall faster than an advisor meeting with a client while wearing the ubiquitous power suit and tie. We greet our clients in casual clothes (i.e. khaki and button-downs or sweaters). Money is stressful enough without adding attire that is intimidating. We want our clients to feel comfortable and relaxed in talking about their money stories, money mindset, their fears, concerns and transitions that might be keeping their heads off the pillow at night. It makes no sense to inject any factors which might create more anxiety. Thus, it’s comfy clothes ... all the time. It’s who we are.

The Chameleons:

Switch Between Approaches, Depending On Audience R. Philip Petrowski, Verona, Wis. – I left suits behind nearly 10 years ago. Most days, I ’m i n d a rk jeans and a vintage-style tee. Foot wea r is usually cowboy boots or Adidas Campus shoes of various colors. A sport coat can jazz it up if needed. I used to joke that if clients want me in my Brooks Brothers bespoke suits, they’ll pay double. One guy said that’s what he wanted. Jon Ten Haagen, Huntington, N.Y. — I am in the business 40-plus years. For the first 30-plus years, I always wore a jacket and tie (rarely a suit). Then after I established my own offices, I occasionally would leave the tie at home. Now I almost never wear a tie – the business is changing. I do wear a jacket and tie to a new client’s office and to networking events.

I have never lost a client for not wearing a tie nor have I heard any negative comments. The business is very different than it was 20-30 years ago.

The Regimented Casuals:

Accustomed To Formal Uniforms, But Incorporate Casual Attire George Reilly, Fairfax, Va. – I was a Navy attorney for 22 years, and wore uniforms to work every day. It certainly made my dai ly “what to wear” decision very easy! When I re t i re d a nd worked in the private sector and later in the government, I had that dreaded decision to make every day. When I went out on my own, I decided to bring back, more or less, the uniform idea. I also wanted to have a casual approach in my legal and financial practices, and the result is that I wear logo shirts — short or long sleeves, mostly polos, but some button-downs — and business casual pants, every day. I have a closet full of suits and ties that I don’t really need anymore and my hardest decision is matching up shirt and pant color combinations. Since I have two businesses with different logos, I also keep extra shirts in the office and swap out as needed. And my summer casual approach is to forgo socks. After all, we are a nautically themed business here at Safe Harbor Financial Advisors! And last but not least, I bring my dog to the office and she is our unofficial receptionist. No logowear for her, though! AdvisorNews Managing Editor Cassie Miller may be reached at cassie.miller @Adnewsfe edback . com. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM.

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August 2019 » InsuranceNewsNet Magazine

BUSINESS

Questions: What Are They Good For? Absolutely Everything!

Say it aga in, y'all!

Here are four ways to use more of your presence to help keep you and your prospects engaged.

Characteristics, Traits, and Behaviors of People with Great Presence

What Great Presence Allows You to Do

By Reggie Pearse

uring a discovery meeting with a prospect, you are probably already doing most of the following: asking open-ended questions, actively listening, maintaining good eye contact and asking follow-up questions. The questions you’re asking are likely the same questions you have asked hundreds of times before as you’ve met with prospects. But although these discovery meetings are routine for you, your prospects are in uncharted territory. They will be trying to answer your questions thoughtfully and accurately. In return, they will expect you to be actively engaged, and they will catch on quickly if you’re indifferent. What more can you do to help keep your curiosity genuine, and get open and honest responses when meeting with prospects? Here are four ways to use more of your presence to help keep you and your prospects engaged. Know yourself. Improving your ability to positively influence the emotional climate of a discovery meeting begins with increasing your understanding of how you show up in different selling situations. Are you able to readily show up with ease and poise, or do you tend toward becoming more formal and “stiffer” than the occasion demands? If the latter is your tendency, consciously remind yourself to relax and be yourself. Connect. Emotional co-regulation is a human attribute that every salesperson must use to their advantage. Our brains are wired to emotionally 44

InsuranceNewsNet Magazine » August 2019

Comfort in own skin

Have self-belief

Projection of self assurance

Feel personally powerful

Relaxed alertness

Read the audience and adjust

Making good eye contact Empathy

Establish credibility Be more creative

Listening Curiosity about others

Connect

ommunication values and C beliefs

Engage Show vulnerability

Confidence

Persuade

Passion

Recover more quickly

Boldness

Motivate

Expressiveness

Speak truth to power

Authenticity

Influence

Congruency of voice, body, and content

Be trusted Inspire

Obstacles to Great Presence Excessive anxiety

Personal blueprint

Excessive stress

Lack of presence feedback

Shame

Poor eye contact

Negative self-talk

Rapid speech

Shyness

Wandering feet

Task orientation

Tension in your face, eyes

Workload

Stiffness and stillness in body language

Physical appearance

From Selling With Presence: Use Your Personal Power To Close More Deals, by Reggie Pearse, 2017, Archway

QUESTIONS: WHAT ARE THEY GOOD FOR? BUSINESS connect and be affected by those around us. Through our facial expressions and the variety in our voices, we share vast amounts of information with the people in our vicinity. Be sure you are emotionally tuned in to your prospects and, with that information, manage your own emotions and responses appropriately. That’s empathy at work! Adjust. Pay attention to the overall energy and mood of the meeting and be able to adjust the structure or direction of the meeting based on implicit or explicit feedback. Is the prospect attentive? Do they seem engaged? Your job is to gauge the situation and respond in a constructive way to your prospect’s presence. Stay present. Staying present allows you to be authentic, credible and connected to your prospects. So, during the meeting, make time periodically to check in with yourself and determine how well you are showing up. Are you breathing enough? Are you conveying an appropriate level of interest and engagement with your voice, facial expression and body language? Are you maintaining eye contact and staying emotionally available? Larry, a 29-year-old advisor, formally began the discovery meeting with an ease, confidence and humility that belied his age relative to the late 40-something couple — Chris and Meryl — with whom he was meeting. Having learned that rigorous preparation helped him be more confident with older and very wealthy prospects (Know Yourself), he’d spent the previous evening poring over his notes from their prior conversations and the financial statements the serial entrepreneur couple had sent him. “It’s wonderful to finally have the opportunity to meet face-to-face,” he said with a warm smile. “The last time we talked, Meryl, you were helping your parents sell their home and move to a condo. Did everything go OK? I know such a big change can be stressful for everyone.” (Connect) “As we discussed on the phone, the purpose of this meeting is to give us the opportunity to get to know each other better. I’d like to understand more deeply how you feel about where

you are financially, and to learn more about your life goals five, 10 and even 15 years from now. So as our conversation evolves over the next hour, I’d like to ask you some specific questions about your finances, and also some questions that will encourage you to be more aspirational in your long-term hopes and goals. Is that OK with you?” Meryl and Chris nodded their agreement in sync. “And to help us make a decision,” Meryl said resolutely, “we’d also like you to give us some highlights of your estate planning services today.” Larry responded without missing a beat. (Adjust) “I’d be delighted to add that to our agenda. Would you like to start there, or add it to the bottom of our list of topics to discuss?” As they approached the halfway point of the meeting, Larry felt things were progressing well. Meryl and Chris were proactively sharing important details of their lives with a vulnerability that signaled to Larry that they were beginning to trust him. They were not afraid to ask him pointed questions such as how he gets paid and if there were hidden fees to be aware of. At one point, as Meryl and Chris got into a discussion with each other, Larry took a moment to do an inner scan. Am I breathing enough, he wondered. Am I still calm and engaged? He took a conscious slow breath into his lungs and turned his attention (Stay Present) back to his, he hoped, soonto-be clients. The above scenario takes place every day as advisors meet with prospects. These discovery meetings can either cement the prospect’s resolve to work with the advisor, trigger a retreat — or worse, spark a complete withdrawal from the sales process. You have the power to positively influence how you make prospects feel as you ask them important questions about sensitive areas of their financial lives. Reggie Pearse is a keynote speaker and coach, the managing partner of Organization Learning Group and author of Selling With Presence, Use Your Personal Power To Close More Deals. Reggie may be contacted at reggie. pearse@innfeedback.com.

August 2019 » InsuranceNewsNet Magazine

We turned our sales around... just in the wrong direction

GROW YOUR

BUSINESS BY SELLING

MED SUPP  Access to 25+ Carriers  Top Commissions

 Agent & Mgmt Contracts  Production Incentives

 Rate Comparison Tool  Experienced Support

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

Mo’ Minds = Mo’ Money Mastermind groups can help you solve problems and expand your horizons, and grow your business. By Elie Harriett

“Y

ou are not alone.” This is the message that was most recently brought home to me by a somewhat difficult case I had to deal with. Brokers are typically on their own. But am I really on my own? Let me tell you about a recent case and how my relationships helped me earn business. I had a prospect — a business owner — who was about to go on Medicare. I found that he had some expensive prescriptions and an allergy to the inexpensive stuff. I set out to find him affordable coverage. After a bit of searching my routine options, I knew this person would be out of luck with the standard products. This is where things get interesting. After 15 years in the business, I’d cultivated a group of people in the industry I can call on to help move my thinking outside the norms. Napoleon Hill called this group of people the “mastermind.” A mastermind, in Hill’s definition is, “the coordination of knowledge and effort of two or more people who work toward a definite purpose, in the spirit of harmony.” I had help. I had people I trusted whom I could call for advice about the problem at hand. Here are the people who represent the mastermind I used for this business: » My business partner. I have never really been alone in my work, and I would not be here today if I had not been in business with her. I’m not even sure I’d want to be. She keeps the job interesting. The problem in this circumstance is that she knows everything I do. She had no new ideas I had not already thought of, but she is also my first point of contact every time I need a new idea or a second opinion. 46

» My independent marketers. Most insurance companies strongly encourage us to offer their products through independent marketing organizations. Those IMOs make sure we get questions answered, we get back-office support and we get help when we need it. So I placed a call to my rep among the IMOs I work with to explain the situation to them. They might have something that could solve the problem, or they might know of an existing product’s feature I didn’t know about. » The companies. There are a couple of companies I can call directly. I was able to contact some reps and explain my problem to them. They had nothing I had not thought of already, but the fact that I can call in for a direct answer to a tough problem is quite helpful. » My professional associations. These are the hidden gems of my mastermind. I am a member of NAIFA and the National Association of Health Underwriters. NAIFA meets locally every month. If you are not part of a professional organization, you’re missing the biggest component of your mastermind: other local people who are in your position. Are they competitors? Well, some are, technically. But when the NAIFA sign is lit, we help one another and share ideas, tips, and advice.

InsuranceNewsNet Magazine » August 2019

So at our last meeting, I asked if anyone had an idea about my client’s situation. It paid off! One person suggested I contact another member who did not attend the meeting that day. They had a product that would work to reduce my client’s drug costs. And because of a combination of factors, including what the client did for a living, this colleague was able to contact the company to confirm the costs and copays. And we were able to apply for reasonable coverage. Now, I have a happy client! That’s how masterminds work. Over the last decade, I have been able to find groups of people who can help me win tough cases that I would not be able to solve on my own. If I need a sales tip, I know who to call. Product help, I have a guy for that. Special circumstances? What’s special for me might be routine for someone else. The one thing a new advisor needs more than anything is a network to go to for help. Knowing who to talk with is not only key to the business you want, it also helps to expand your horizons. And expanding horizons will grow your business. Elie Harriett is a NAIFA member and co-owns Classic Insurance & Financial Services Co., specializing in Medicarerelated insurance. Elie may be reached at elie. harriett@innfeedback.com.

INSIGHTS

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

The 10-3-1 Method: Still Relevant In a monthly meeting, you report your activities with your peers. Again, you are looking in a mirror – you are accountable. This meeting is an opportunity to share ideas and congratulations with your peers and learn from their successes.

No matter where you are in your career, this time-honored method of prospecting and tracking will bring you success. By Frank Creaghan

Client Quality And Quantity

n this fast-paced insurance industry, it is important for experienced advisors and new advisors craving success to establish a work system that includes recording and reporting their daily activities. If you want to make every year better than the previous one, recordkeeping combined with regular reporting to an assistant and work peers can produce exponential sales and success. The tried-and-true systems put in place by industry giants should be passed along to the next generation entering the field or looking to improve their results.

Find A System That Works

I firmly believe that Al Granum gave us one of the best blueprints for success. At an MDRT Annual Meeting, Granum and his team of six advisors explained their scientific research to develop a sound system to sell cash value life insurance. For 10 years, his team tracked 50,000 prospects and discovered the 10-3-1 formula. If advisors accurately track their efforts, they will discover that, on average, 10 prospects and three fact-finding interviews with prospects equal one sale. What is noteworthy is that it does not matter whether an advisor is 25 or 55 years old, new or experienced; they arrive at the same results. Granum changed the focus from sales that are unpredictable to the requirements for sales. These requirements are prospects, fact-finding meetings and reporting. Advisors start each day making 25 contacts between 9 and 10 a.m. For each try, mark a period. If you talk with a contact, change the period to a check mark. If you gather information, such as a birthdate, add a slash and add a second slash if you schedule a meeting. A shorthand system was developed to track advisors’ daily activities with half a point for each prospect, and one point for each of the following: fact-finding meeting, case

Al Granum developed the 10-3-1- system.

opened, case closed, business meal. Your daily goal of five points and monthly goal of 100 points will keep you on track to success.

The Importance Of Reporting

I cannot overstate the importance of reporting. Dr. Karl Pearson, a renowned English mathematician, said, “That which is measured improves; that which is measured and reported improves exponentially.” To paraphrase: Advisors who measure results improve; advisors who measure results and report improve exponentially. Reporting is magic: It takes minutes to do it and your sales results improve greatly as a result. Report twice a week to someone you trust and who is nonjudgmental. Both of you know your daily goal of five points and 25 contacts. In a face-to-face meeting, report your actual activity. It’s like looking in a mirror — you are accountable. It is powerful because you see what you planned to accomplish and what you actually accomplished. You celebrate your successes and you recognize where you could have done better and resolve to improve so you become self-managing.

Remember that you are constantly on a client-building mission to improve the quality and quantity of your active clientele. Keep up your recording and reporting habits. If you stop, you could experience premature retrogression, a condition that Granum described when he wrote “the greatest pitfall I have witnessed occurs when clients drift off their client-building mission and pay insufficient attention to the quantity and quality of their active clientele.” Successful advisors avoid premature retrogression because they report and dead-file clients and prospects if they do not contact them twice yearly: once on their birthdays and again six months later. The dead-filed clients get the similar service as the active clients; however, they have to initiate it. To avoid premature retrogression, continue reporting biweekly and monthly with peers and those on the dead file. So what do successful advisors want out of life? Exponential growth of their business, more quality clients, greater earnings, self-management, working less, avoiding premature retrogression. Is this possible? Absolutely, if you want it. Consider adopting Granum’s 10-3-1 method. Remember whether an advisor is 25 or 55, new or experienced, they arrive at the same result. Find a mentor, a most valuable ally, and adopt their methods to advance your career and the industry. Frank Creaghan, CLU, has been an MDRT member for more than 50 years. He is the founder of Creaghan McConnell Group of Toronto, Canada, working with high-net-worth entrepreneurial families and their businesses. Frank may be contacted at frank.creaghan@innfeedback.com.

August 2019 » InsuranceNewsNet Magazine

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.

INSIGHTS

What Are The Lyrics Of Your Practice? Millennials and Generation X have different expectations of advisors, but advisors are needed and can stay relevant. By James Kerley

ob Dylan’s 1964 song, “The Times They Are A-Changin,’” is an iconic song that has long signaled that the world around us is in constant flux. Protesters and social change groups have used the song as a rallying cry, while others have used it to celebrate necessary and significant events. The song has been licensed for advertising messages and movie themes. Who could have predicted 55 years ago that the lyrics would live on and mean so much for so many? While the world has dramatically changed, the meaning of the lyrics still reflect Dylan’s prophetic insights. It is an appropriate song for us to reflect upon as we face the world of change in our business. Consumer buying preferences, attitudes and understanding of what life insurance can bring to the family are different now. Thanks to the internet and technology, consumers have many ways to learn about and purchase life insurance and other financial products. Competition for our share of the consumer’s attention has increased and other financial commitments have taken priority over purchasing life insurance or saving for retirement. LIMRA research tells us that the number of policies written every year is at an all-time low. Yet nearly 50% of consumers tell us they understand and value the need for life insurance protection. Interestingly, LIMRA research also tells us that millennials are more likely to own life insurance than Generation X consumers did at the same age. The good news is the market opportunity has never been greater, because these two generations combined 48

are larger than the baby boomers, and may have greater needs. They are at the crossroads of protection and retirement savings needs. Another important fact to consider is that consumers are still very interested in working with qualified advisors to help guide them in their financial decisions. The lack of financial literacy among

InsuranceNewsNet Magazine » August 2019

these consumers is a significant problem. Although there is plenty of good and bad advice on the internet, there is nothing more valuable that having a qualified advisor help make sense of it all. The internet will never replace the value of the personal relationship. So are “the times a-changin’” for you? Yes, in many ways, mostly around the way customers want to interact with you and the way you manage your practice. Technology has driven both of these new business realities. Our 2018 Insurance Barometer study found almost a quarter of consumers expect their advisors to have an active social media presence — that percentage grows to 4 in 10 with millennials. Invest in the most up-to-date technology to drive customer engagement and practice management. Stay current to be relevant. What has not changed? Your lyrics — the compelling reasons that drove you into the industry and that keep you excited about the field. Like Dylan, you have deep beliefs for why you serve your customer. Recently, while speaking to a group of 220 Canadian financial advisors, I asked each of them to send me an email listing the two words that describe the passion they had for our business. Sixty-five people replied. Is it a surprise to you that the three words that occurred most often are people helping people? After being in this industry for 50 years, I have gotten to know thousands of financial advisors. You, like the 65 Canadians and the thousands of others I know, are driven to help people. It is what sets you apart from others and drives you to help your clients achieve their financial goals. Yes, the times they are a-changin’. But the service that you provide to your customers at critical life junctures, remains constant and predictable. Thank you for the work you do every day. Jim Kerley is chief membership officer for LIMRA and LOMA, responsible for member relationship management for the 450 U.S. and Canadian members. He is also a member of the LL Global executive team that leads LIMRA and LOMA. Jim may be contacted at jim.kerley@innfeedback.com.

NEVER SAY

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Visit www.TomorrowsBoom.com TO GET YOUR PLAYBOOK NOW OR CALL 833.233.3901 TO LEARN MORE. *Applies for issue ages 0-75. The “S&P 500®” is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by Atlantic Coast Life Insurance Company. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Atlantic Coast Life Insurance Company. Retirement Plus MultiplierSM is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500®. ANNUITY GUARANTEES RELY ON THE CREDIT RATING, FINANCIAL STRENGTH AND CLAIMS-PAYING ABILITY OF THE ISSUING INSURANCE COMPANY. The Retirement Plus Multiplier Annuity is issued by Atlantic Coast Life Insurance Company. Product approval numbers: ICC18-ACLSFIANPOL-ICC, ICC18-ACLSFIANGLWB18, ICC18-ACLSFIANBU18, ICC18-ACLSFIANPREN-OT, ICC18-ACLSFIANAP Rev 092018. ACLSFIANPOL XX, ACLSFIANGLWB18 XX, ACLSFIANBU18 XX, ACLSFIANPREN XX, ACLSFIANAP18-XX. For more information about the Retirement Plus Multiplier™ Fixed Index Annuity offered by Atlantic Coast Life Insurance Company please visit: https://www.aclico.com/runtime/uploads/Files/ACL-RPM-WEB.pdf For Agent Use Only. Not to be distributed to consumers.

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InsuranceNewsNet Magazine - August 2019

Articles inside

Tech Is Key In Filling The Life Insurance Gap

How to Turn $500K Into $1.5M Worth of Income And An Annuity

Competing to Win

Ignore Gen Z At Your Own Peril