Volume 21 No 1 Winter 2020
Are You Ethics Approved? IN THIS ISSUE Ethics - the Heart of the IARFC Conveying Ethical Status to Clients
REGISTER PROFILE Angela Wentz, MRFCÂ® Insights from a Younger Professional
How to Recover from a Mistake How to Let Your Clients Know You Run an Ethical Business Ethical Behavior and a Code of Ethics For Our Businesses and Profession
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Official IARFC Publication www.IARFC.org
Trustee’s Chair A Moon Pie and a Handshake As you probably noticed this Register Editorial Theme focuses on Ethics. Our Ethics Program has been widely publicized and I hate pounding it into you again, but this issue rears itself from time to time – most recently in associations who are being held to task for not taking it more seriously. Putting on my North Carolina heritage demeanor, I refer back to the days of what I call a “Moon Pie and a Handshake”. Business was transacted on a level of familiarity and trust. While business was not entirely conducted without regards to ethics, it certainly was not questioned as much. Most people knew each other. Your integrity preceded you, it was regional - kind of familiar and comforting as a traditional Southern Moon Pie.
For the future, the Ethics Approved Program is further evolving. Look for other enhancements coming soon. Welcome New US Chapter Board Members Recently the Association held an election for US Chapter Directors. This was the first election since the new By-Laws that created the Board of Trustees and Chapter Boards. Because a number of our previous Directors moved up to Trustees and two Board Member terms came to an end, we have four new members who have stepped up to fill Director positions. This Board will work on setting up further managers within the Chapter to increase membership. I look forward to meeting them in April in Cincinnati, OH during our Annual Meeting.
International Advancement – Congrats to To address the change in ethical expectations the IARFC Philippines that we are seeing today, the IARFC adopted Moving on to international news, I am pleased its Ethics Approved Program over three with the restructuring of the Philippines years ago and it has proven to be one of the Chapter. We have a dedicated Board of more essential benefits we offer after our individuals who are setting up educational designations and credential. We find ourselves courses and promoting the RFC® designation far ahead of everyone else with this systematic throughout their country. They have worked check of members. The “Ethics tirelessly with the Approved Status” signifies to Ethics Approved Program home office to align the public that we monitor themselves with the We find ourselves far ahead our consultants very closely new By-Laws and plan of everyone else with this – and they are checked their future. The Board constantly through the life of systematic check of members. of Trustees will support their membership. We have Look for other enhancements their efforts in any way the approval backing in black possible to ensure their coming soon. and white. If a consultant does success. not measure up, they can Goals for the First Quarter be removed from the Association. When the Membership, membership, membership. Now public sees that level of due diligence, they that our basic foundation and management let down their guard. They know you are an systems are in place, we can start putting honest person. regional directors into the structure. I see in I encourage you all to use your Ethics the future that we are going to have massive Approved Seal (whether digital or paper) visibly increase in members due to the efforts of with pride. Later in this issue, you will read people out in the field. about the results of our Ethics Survey. Many Register Going Digital of you are not utilizing this representation These days, it’s hardly newsworthy when a in your branding. It has worked for me in magazine ends its print run due to profit loss many situations and I encourage you to let and its readership residing primarily on digital your clients know you are ethically approved. platforms. News is incorporated in other Along with our program, I salute the Ethics platforms: LinkedIn, website, social media, Committee that handles problems when making it more robust and up-to-date. they arise and are not afraid to make tough decisions. These people take their volunteer job seriously to serve the membership and the community. Page 1
I was involved with print publications for many, many years and feel a bit nostalgic at the change – however it makes sense to go forward digitally. We have held out probably longer than we should with many financial publications foregoing print two or three years ago. The upside – you will get your Register very quickly and can print out any of the pages you need. For me, I can visualize myself reading the Register on my ipad on the porch, with my Moon Pie and bottle of RC Cola. Some traditions run deep…
H. Stephen Bailey, MRFC® H. Stephen “Steve” Bailey, MRFC® started HB Financial almost 30 years ago after already having a life insurance career. Steve is the Chair and CEO of the IARFC Board of Trustees. He is also the 2010 recipient of the Loren Dunton Memorial Award. Contact: (704) 563-6844 email@example.com www.iarfc.org The Register | Winter 2020
In This ISSUE Register Profile
Angela Wentz, MRFC®
Trustees’ Chair Desk
13 Insights from a
1 A Moon Pie and a Handshake By H. Stephen Bailey
IARFC® News 17 Association Awards for 2019 and 2020 21 MRFC Update - JTA Focus Group 32 Plan Competition Update
Features Ethics...The Heart of the IARFC 7 By Michelle Blair
Conveying Ethical Status to Clients Always Put Yourself in Your Client’s Shoes... 9 By Jerry Royer
Survey Says - Surveying the Ethical Perceptions of the Membership
IARFC US Chapter Board 31 What I Learned From My Mistakes... By Lemuel (Lem) W. Kornegay III
International News 27 2020 Event and Education Program Highlights The Emergence of the Philippines Chapter
Consumer Focus 29 Understanding Your Credit Score By Bryan Kaderna
10 By Susan Cappa
How to Let Clients Know You Run an Ethical Business 11 By Bryce M. Sanders
How To Recover from a Mistake 15 By Jorge Villar
Ethical Behavior and a Code of Ethics for Our Businesses and Professions 23 By Rosilyn Overton
Departments IARFC Trustees, US, and International Directors 3
5 New IARFC Members and Designees 5 Events Calendar 6 From the Editor
Selling with Compassion and a Mission 25 By Adrian Yu The Register | Winter 2020
www.iarfc.org/publications/register 146 N. Breiel Boulevard PO Box Middletown, OH 45042-0506 (800) 532-9060 Editorial Coordinator Susan M. Cappa firstname.lastname@example.org
BOARD OF TRUSTEES Chair and CEO, H. Stephen Bailey, MRFC®
Secretary, Michelle K. Blair, RFC®
Vice Chair, Nicholas A. Royer, MRFC®
Chief Operating Officer, Charlotte Isbell
Treasurer, Michael Jay Markey, Jr., MRFC®
Editorial Advisory Committee Michelle Blair, RFC® Lemuel W. Kornegay III, RFC®
US CHAPTER BOARD OF DIRECTORS President, Rick Stanzione, RFC®
Treasurer, Bradley K. Maples, Sr., MRFC®
Executive President, Frederick C. Ostermeyer, MRFC®
Secretary, Lemuel W. Kornegay III, RFC
Vice President, Lisa Ford, MRFC
Director, Robert Laraia, RFC®
Director, Robert Miller, RFC®
INTERNATIONAL CHAPTERS Greater China Chair (China, Hong Kong, Macau & Taiwan), Liang Tien Lung, RFC® China Development Center CEO Kai Yuan Tu, RFC® Australia and New Zealand Chair, George Flack, RFC® Hong Kong and Macau Honorary Chair Samuel W. K. Yung, RFC®
Hong Kong and Macau, Chair Teresa So, RFC® Hong Kong and Macau, Executive Director Allan Wan, RFC® Taiwan Chair Kai Yuan Tu, RFC® Philippines President Gamalielh Ariel O. Benavides, RFC®
MRFC CERTIFICATION BOARD Chair, Barry L. Dayley, MRFC®
Director, Mickey Jordan, MRFC®
Vice Chair, Craig Lemoine, MRFC®
Director, Julie Friend, Public Member
Secretary, Robert Lawson, MRFC®
IARFC OFFICE ASSOCIATE TEAM
United States — www.iarfc.org
Chief Operating Officer, Charlotte Isbell
China — www.iarfc.cn
Editorial Coordinator, Susan M. Cappa
Hong Kong — www.iarfc-hk.org
Public Relations, Susan M. Cappa
Indonesia — www.iarfcindonesia.com Philippines — www.iarfc.org/about/philippines Taiwan — www.iarfc.org.tw
The Register is published by the International Association of Registered Financial Consultants ©2020 and circulated around the world.
Membership Services, Vicki Caplinger Membership Services, Judi Nelson Information Technology, Randy Kriner
It includes articles and advice on technical subjects, economic events, regulatory actions, and practice management. The facts and opinions in the IARFC’s Register articles represent their author’s views and are not endorsed by the publisher. The IARFC makes no claim as to accuracy and does not guarantee or endorse any product or service that may be advertised or featured. Articles, comments, and letters are welcomed by email to: Susan M. Cappa, email@example.com
Article Submission The average reader has more than four years of experience in financial services and possesses at least one professional designation/credential. Articles benefit the reader by providing specific planning techniques, practice management suggestions, or educational content about financial services which might include advisory professional responsibilities, industry news, insurance, investment, software, or compliance. For a the entire Register General Article and Editorial Policy, visit www.iarfc.org/register. The Register | Winter 2020
US Chapter Board of Directors 2019 Election Results Rick Stanzione, RFC® President R & R Group Washington Terrace, UT
Lemuel (Lem) W. Kornegay III, RFC®
Secretary Paladin Financial Services Inc. Golden, CO
Frederick C. Ostermeyer, MRFC®
Robert Miller, RFC®
Lisa Ford, MRFC®
Robert Laraia, RFC®
Executive Vice President Managed Resources, LLC Post Falls, ID
Vice President Ascend Financial Planning and Wealth Management Dallas, TX
Bradley K. Maples Sr., MRFC® Treasurer R & R Group Washington Terrace, UT
Director Money Concepts Indianapolis, IN
Director Northstar Wealth Partners West Hartford, CT
according to the By-Laws... Each Chapter of the IARFC will have its own Board of Directors who control the direction of their Chapter. The chief responsibility of the US Chapter Board is to increase membership. The Chapter Board reports to the Board of Trustees through the CEO and COO. Only MRFCs or RFCs who are in good standing may serve on the US Chapter Board of Directors (exception: COO). Congratulations to our newly elected Directors: Lisa Ford, MRFC®, Lemuel W. Kornegay III, RFC®, Robert Miller, RFC® and Robert Laraia, RFC®. Thanks to our former Officers and Directors: Peter D’Arruda, MRFC®, Jim Moss, RFC® and Mayo Woodard, RFC® for their years of service.
The Register | Winter 2020
N e w M R F C ® s, R F C ® s, R FA ® s, and Association Members MRFC®
RFC®, RFA®, Association Continued
Andrew A. Agemy, MRFC®, CT Jared L. Davis, MRFC®, ID Christopher S. McIntire, MRFC®, OH
Melvin T. Mills, Association, GA Robert A. Patrick, RFC®, AL Jonathan B. Pope, RFC®, NC Christina L. Rambo, RFC®, FL Dennis W. Richardson, RFC®, OH Alan B. Stern, RFC®, NJ Michael E. Teplinsky, RFC®, CA Aaron E. Tomita, RFA®, NE Young T. Tran, RFC®, OR Craig J. Watkins, Association, CA Jasper N. Watson, RFC®, NC Robert M. Whitcomb, RFC®, MI
RFC®, RFA®, Association Members
Events Calendar 2020 April Board of Trustees & US Board Annual Meeting Cincinnati, OH April 22, 2020 National Financial Plan Competition & Awards Banquet Cincinnati, OH April 23, 2020
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Seth I. Bassoff, RFC®, FL James D. Blaydes, RFC®, IL Lynzi R. Boatright, RFC®, FL John T. Buckley, RFC®, WA John R. Charbonneau, RFC®, CT John Anthony Costa, RFC®, CA Joey M. David, RFC®, FL Michael B. Davis, RFA®, NC Jonathan C. Furest, RFC®, MI David James Gerszewski, RFC®, AZ Matthew V. Gold, RFC®, FL William Hampton, RFC®, GA Michael R. Hemmerich, RFC®, NC Steve J. Hermanne, RFC®, CA Nicholas Hoeschel, RFC®, DE James G. Hugh, RFC®, FL Gabriel Kennedy, RFC®, OR Madeline E. Klatt, RFA®, NC Jason, M. Kreider, RFC®, PA Monica E. Lacey, RFC®, MI Anthony S. Lawson, RFC®, MN Paulette K. Mestas, RFC®, CO Mark L. Miletello, RFC®, CA
Members Who Recommended Members David Blaydes, RFC® Theresa Cochran, RFC® Barry Dayley, MRFC® Jeffrey Furest, RFC® Joseph Garbar Ralph Giasanti, RFC® Gabe Kennedy, RFC® Bill LaCasse, MRFC® Christina Rambo, RFC® Ron Sneller, RFC® Stuart Stern, RFC® Dominique Vercaemert, RFC® Jean Widmaier, RFA®
In Memoriam In reverence we would like to remember our passing member(s): Allen A. Weiner, RFC®, Metairie, LA
Journal of Personal Finance Access the full online version by visiting journalofpersonalfinance.com or by joining the IARFC. Hard and Adobe PDF copies are available to Members and Non-Members. Order Today https://store.iarfc.org/#EducationalPublications
ion t i d E g n i 2020 Spr le March! availab
The Register | Winter 2020
From the EDITOR Welcome to Year 2020 of the Register! This is the first issue in my duties as Editorial Coordinator. I hope to follow successfully in the footsteps of my esteemed colleague Wendy Kennedy, who for years worked diligently to bring our members a publication filled with articles that resonate with their mode of practice. Included in the Register are important changes happening within the Association itself. We are determined to be a dynamic entity that is constantly looking for improvement and member benefits. The Register is one of the platforms that details those changes. A specific item of interest in this issue includes the changes happening with the International Chapters. The Philippines Chapter has reinvented itself and is moving into 2020 with a determined effort to support the RFC® designation in their country. Page 27 describes their journey. New for this editorial year is a column authored by our US Chapter Board Members. This relates back to my “hobby” career of 10 years when I was a Scuba Instructor. Most of my fellow divers subscribed to an industry magazine much like the Register that printed up-to-date news of our sport. One of the most popular columns was always listed way at the end. It contained an account of Scuba professionals and the mistakes they made and how they “lived” through them. This was something we all related to with our own stories of combining luck and training to survive. We learned and gained valuable insights about ourselves by reading these mishaps of others. I wanted to emulate those “lesson learned” stories within the financial consulting confines. While not life threatening, they can certainly be life altering and relatable to many financial consultants. Lemuel “Lem” Kornegay, III kicks off this issue with What I Learned From My Mistakes on page 31. Much appreciation goes to Lem for being our “Mistakes Guinea Pig” and being transparent. Subsequent stories will be contributed by our newest US Chapter Directors in later issues. I hope you enjoy them. You might just recognize yourself in the telling...
2020 Editorial Calendar
Issue Winter Volume 21, No 1 February Theme Ethics Approved Spring Volume 21, No 2 May Theme Wealth Protection Summer Volume 21, No 3 August Theme Next Gen
Susan M. Cappa, Editorial Coordinator
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Fall Volume 21, No 4 November Theme Money Management
Deadlines Issue Volume 21, No 1, February December 1 Volume 21, No 2, May January 1 Volume 21, No 3, August April 1 Volume 21, No 4, November June 1 Page 6
Serving on the IARFC Ethics Committee: Michelle Blair, RFC® Nicholas Royer, MRFC® Fred Ostermeyer, MRFC® Charlotte Isbell
the Heart of the IARFC® Over the last several years, I have had the privilege of being involved in many facets of the IARFC® — each one serving a different purpose and objective in continuing to make the IARFC a valuable and worthwhile Association. A major component to keeping us strong, is participation in the Ethics Committee. The main objective of this Committee is to review any complaints made against or by a member, as well as confirming the member as being “Ethics Approved”. The Ethics Approved Status is something to proudly display, as the criteria to receive this is not as simple as it sounds. We have rules, guidelines, and conference calls to discuss the different situations that allow each member to become or stay Ethics Approved. Our Committee has a chairperson and 2 other volunteer Board or Trustee members, as well as the IARFC Team Member. Putting all our heads together and coming up with a resolution to a situation is time consuming and a very serious undertaking. All sides must be considered fairly and we discuss each and every case independently. Handling Complaints All Ethics complaints made by a consumer, other member, or the Association itself, must be addressed in a timely fashion. For that, we have guidelines to follow. A FINRA report is generated which allows us to see other complaints and a timeline. A Google search is done so we can put together as much data as possible before making a decision that will impact a member. We have had some complaints that have required us to have several conference calls to determine the correct direction to go. This task is taken extremely seriously, as we want to maintain the integrity of our Association. The Committee never wants to make a fast decision on how each ethics case is decided. Page 7
When we receive a complaint against a member that is made by a client (this could be a client who wasn’t happy for one reason or another or just wanted to reach out and “get it off their chest”), they are supplied a form to fill out detailing the member’s information and why they are registering this complaint. That is reviewed by the IARFC Team and supporting documents from the complaint filer are then put together and sent to the Ethics Committee. Each of us, independently, review the complaint and documents; then communicate via email with our individual thoughts. After that we hold a conference call with Charlotte Isbell, the Ethics Committee Liaison, to tell her what further information we need to make a decision. It could be in reality, the IARFC member was really doing their job properly and ethically. Just because a client does not receive the ROI they wanted, doesn’t mean that the consultant was unethical. That is the most important aspect of client care — to be ethical. The other party’s side is always requested. Many times we receive twenty to thirty pages of documentation, including the FINRA report. There was one situation, several years ago, where we received cartons of supporting documents in the defense of the member. There was another time that we had to make a spreadsheet to share with the Committee members to follow all the documentation and updates on a case. Making Decisions Everything must be reviewed and considered before making a final decision. Each party is notified in writing as the process moves along. In the rare case that a membership is revoked, we send a certified letter and ask the affected party to discard all their business cards, letterhead, and any other stationery that post the IARFC logo and/or a designation/credential.
While that type of situation is far and few between, we never take that step lightly. This is a very serious matter to us and an extremely important part of what makes us a respected and valuable membership association. Dedicated Volunteers While the committee members have changed over the years that I have been on it, we are all dedicated volunteers who want to keep our membership strong and held in high regard by all. The RFA®, RFC®, and MRFC® letters mean that you are part of a large group of honorable and praiseworthy ethical members, doing their best to serve their client base in the most highly respected way. Just know that receiving the Ethics Approved Status is truly an honor with well thought out criteria. Be boastful and display your seal and/or plaque proudly. You earned it!
Michelle Blair, RFC® Michelle K. Blair, RFC® is an office administrator specializing in management and relationship building. She is on the Board of Trustees of the IARFC as well as the Secretary of the Financial Planning Association, Long Island Chapter. Michelle devotes quite a bit of time to promoting professional and personal growth in the industry. Contact: 516.639.5078 email@example.com The Register | Winter 2020
A P P ROV E D
The Register | Winter 2020
Brand Yourself Above Other Consultants • Adherence to IARFC Code of Ethics • Clear record for past 5 years • Verified through FINRA, State Licensing records, and internet searches
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One would think that ethics should be foremost when it comes to serving our clients. However, some organizations offering financial credentials as well as some insurance companies look at it differently. Let me explain. Some organizations and insurance companies never want to be held accountable; rather, they expect their representatives, or agents to follow their schemes without question. Sort of like a one size fits all relationship. An example, have your ever really looked at the sales material floating around, showing benefits and bonuses, high commissions a product offers? Some even offering free trips, with a disclosure: for agent use only; not for use with consumers. Why? Some other examples are the financial advertisements on radio where the disclosure is read faster than a speeding bullet, or on television where the disclosure is shown in print so small and only shown for a full two seconds, making it impossible to read. Why? These organizations never discuss the ethical issues. This type of printed or media advertising seems to have the sole purpose of enticing the greedy representatives or the listeners to write or do business without question. Having lasted 50 plus years in this business, I’ve experienced firsthand some ethical issues. I remember having an issue with an insurance company many years ago that used the old money/new money routine. When I questioned this practice, I was told by the VP that the client would only be aware of it if I told them. Amazingly that company is no longer in business, but I still am.
Ethics to me, means always doing what is right for the clients. Perhaps this is why we have clients who have been with our firm for over 48 plus years. A good suggestion, if it says “for agent use only”, or “not for use with consumers”, you had better ask for a specimen contract and read it over and over. Then ask yourself, “would I buy this or put a family member into it”? If you answer yes, great. If not, there’s always a shredder. Always put yourself into the client’s shoes, what does ethics mean to you? A great way to practice ethics is never having to say I’m sorry. We hear a lot today about fiduciary or suitability rules and regulations. My thinking is everyone should apply the fiduciary rules to their practice, this means putting your client’s best interest first. I hope someday this is achieved. After all, it’s ethically and morally the right thing to do.
Thomas “Jerry” Royer, RFC® Founder of Group10Financial LLC. Beginning in 1965, Jerry realized that many people were sold financial products but were not provided the necessary information to understand what they bought. He began a lifelong crusade to mentor, coach and inspire people to take control of their financial decisions. Contact: 407.960.4052 firstname.lastname@example.org The Register | Winter 2020
S Y A S Y E URV
The topic of Ethics checks has received more and more attention lately. Recently the IARFC conducted a survey of the members to find out what they thought about the IARFC’s “Ethics Approved” Program. Is it helpful? Relevant? Meaningful?
For over two years now the Association has carefully checked the membership and given the “Approved Status” when appropriate. Review the survey results and determine if you need to adjust the way your “Ethics Approved” Status is utilized.
Do you use your “Ethics Approved” Status when communicating with your clients/prospects?
Yes...37.78% No...35.56% No Opinion...26.67% Do you publicize your “Ethics Approved” Status on Social Media?
Facebook...8.24% LinkedIn...21.18% Twitter...2.35%
Do you feel the “Ethics Approved” Program is a valuable benefit?
Yes...79.26% No...6.67% No Opinion...14.07 Do you feel the “Ethics Approved” Program sets you apart from other consultants?
Yes...67.41% No...17.04%% No Opinion...15.56% Are you aware that the IARFC has an Ethics Committee that reviews ethical issue of its members?
Do you display your “Ethics Approved” Certificate in your office?
Yes...62.22% No...37.04% Do you Utilize “Ethics Approved” Seals in any capacity (digital or foil version)?
Yes...22.22% No...65.19% Sometimes...11.85%
On a scale of 1-10, how valuable do you feel your “Ethics Approved” Status is to your clients/prospects?
The Survey Tells the Story... by Vicki Caplinger, Membership Services
Surveys are conducted to give feedback. The results of the “Ethics Approved” Survey conveys the positive and the not so positive. While high scores (79.26%) are attributed to the value of the “Ethics Approved” Program, only about 38% actually communicate this status to their clients. The percentages are glaringly low in the use of the digital or foil seals. The survey received a lot of comments. We will take this information and share it at our Team Meetings to address any areas where we can improve our in-house marketing efforts. You may not see the effect of these efforts, but in reality the “Ethics Approved” Program is constantly being reviewed and upgraded. Thanks for your participation. It was invaluable! The Register | Winter 2020
How to Let Clients Know You Run an Ethical Business Ethics and integrity are similar concepts. C. S, Lewis said: “Integrity is doing the right thing even when no one else it watching.” Both speak to your character as a consultant. These are necessary when a relationship is built on trust. How do you communicate integrity? How Not to Do It... Integrity is not a tangible possession. You can’t point to it like a parked car and say: “See, I have a Ferrari.” Prospects can access your disciplinary record online, but bragging about it can be interpreted as: “I haven’t been caught yet.” or “I have never been convicted of a crime.” Some politicians say: “I would never lie to you.” How do you know they aren’t lying now?
Fifteen Ways to Communicate Integrity
Reputation of the Firm Many clients consider you an agent of your firm. They have hired the firm because of its longevity and financial stability. You are bringing the resources of the firm into the client’s living room. Strategy: Lean on the reputation of the firm. Years in business communicates longevity. The number of clients and level of client assets conveys people trust the firm with their money. Client Interests Come First This might come up if there’s a discussion about fiduciary vs. suitability standards, which has been in the news for years. Prospects might wonder if your objective is to sell the products where the firm makes the most money. It’s a valid concern. Strategy: You and the firm place an enormous value on long term relationships. This is a prime motivator to “do right” by your clients. In the event there were “bad apples” in the firm, there’s a Compliance department in the background. I used to describe it as our firm’s “Secret Police”. Client Interests, From Another Direction My wife helped with this one. We were having dinner with another couple. They are all standing at the bar at the appointed time, I’m not. They ask why I’m late. She explained: “He probably got a call when he was leaving. It was a client with a problem. He sat down to help that client. Who knows when he will get here? Let’s go in for dinner.” Strategy: A true story like that highlights your client’s concerns come before your personal life. Longevity of Relationships Now the focus shifts from the firm to yourself. You have been in the business twenty years. Same firm. Many of your first clients are still with you today. In some
upset if a call is missed or a meeting postponed. Problems develop when the client wants to sign their spouse’s name to a document or instruct you to reinvest funds in their IRA without a Power of Attorney on file. Strategy: Try to anticipate. “Do you think you might want to also make decisions in your spouse’s IRA? Then let’s get a Power of Attorney on file.” When they say those words out loud, the spouse might interject “Not a chance.”
cases, you work with the children and grandchildren of your clients. Strategy: By talking about long-term relationships in an anonymous way, you are communicating you have established trust spanning long periods of time
Most people are more concerned with what you do, less concerned with what you say.
Confidentiality It’s one of the cornerstones of the financial services industry. You don’t talk about your clients. A friend might think you tell tales out of school to other friends over drinks. Here’s a way to get time on your side. Strategy: Explain: “We’ve known each other five years. We travel in the same circles. We know lots of the same people. Some of them might even be clients. You’ve never heard me mention client names before. I’m not going to start now.” More on Confidentiality It’s a two-edged sword. Clients don’t want you talking about them, but they wouldn’t mind getting some juicy details about clients from you. Strategy: A Northern California consultant would welcome friends into his office before going out for drinks. He could tell they were looking around at binders and papers. They would look puzzled when they saw code numbers. He explained: ”Everyone is interested in other people’s business. That’s why, when you come into my office, you will never see a client’s name on a binder or piece of paper on my desk. If we ever work together and friends come in, they would never see your name either.”
Confidentiality, One More Time Sometimes clients want a real-life example. Give them one. Strategy: You might wonder what happens when someone says: ‘I hear you know John Smith. How do you know him?’ I usually explain we first met downtown, years ago.
Avoid the Thin End of the Wedge As we get comfortable with people, it’s tempting to cut them some slack and bend the rules. Neither of you gets that
Updating Documents The firm probably requires it. Don’t put it off or neglect to tell clients. You are dotting the I’s and crossing the T’s. Strategy: If they are thinking of guessing or making up numbers to get the form done, remind them what a Federal employee told me: “When you sign your name, you are attesting everything above your signature is true.”
10. Transparency of Fees Nothing says integrity like explaining direct and indirect fees when a client is making an investment. Some consultants assume the client knows the firm charges something. Others try to hide or minimize fees. Strategy: I would explain “You need to understand how we make money...” This is followed by explaining bid/offer spreads and other fees. 11. Respect the Firm Earlier, “you are an agent of the firm” came up. Clients might like you a lot, but they probably respect the research capabilities of the firm. They may not like fees, but the firm has a rationale for why they charge them. Strategy: Don’t say: “The firm says sell, but I think otherwise.” Don’t distance yourself from fees saying: “I’m just the messenger.” If some of the fees go in your pocket, you own the issue.
The Register | Winter 2020
12. Don’t Play the “Not My Job” Card You make money from your ongoing relationship with your client. If they have a problem, don’t say: “Here’s who you need to call...” As Harry Truman’s desk sign read: “The buck stops here.” Strategy: Get on the phone with the client, call the right people and try to get them an answer. Learn what needs to be done next. 13. Respect Competitors It’s tempting to think “We’re the best.. When a prospect mentions they do business elsewhere, don’t laugh or ask: “Are they still in business?” Strategy: Generally speaking, when the prospect mentions the name of a competing firm, a good response is: “They are a fine firm.” 14. Don’t Speak Badly of Anyone When the phone rings during a meeting, it might be tempting to say to your assistant: “Get rid of them” or say “They are an annoying client”. The client present might assume you disparage them the same way behind their back. Strategy: Ask your assistant to take a message unless it’s urgent. Explain everyone deserves attention. 15. Inside Information. Don’t even joke about the topic. Strategy: If you get a funny feeling about a client, mention the regulators have ways of identifying anomalies in people’s trading habits. Your character is defined by your integrity. Your integrity communicates your ethics. Your ethics inspires trust.
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Current members. No physical required, applicants must fill out an in depth medical history questionnaire to be sent to underwriting to make a determination. Medical questionnaires vary from state to state. New members. Take advantage of 30 day Open Enrollment IARFC Group Life or Group Long Term Disability plan guaranteed issue up to $250,000. Call plan administrator: Michael Insurance Planning (800) 932-4075 download brochure www.IARFC.org/Insurance
Bryce M. Sanders Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book “Captivating the Wealthy Investor” is available on Amazon.
Voluntary Benefit partner program with The Standard Insurance Company and Michael Insurance Planning Company
Contact: (215) 862-3607 email@example.com www.perceptivebusiness.com The Register | Winter 2020
Member Profile Angela Wentz, MRFC® Register Member Profile Angela Wentz is a prime representative of consultants under 35 . Her insights as a younger financial professional are impressive as we get to know her better through this issue’s Member Profile. Based in Sarasota, FL, Angela is president of Sage Wealth Consulting, LLC. Her goal is to help clients achieve their ideal lifestyle while navigating changing financial circumstances and priorities.
Register: Relate your journey on how you decided to make financial consulting your calling to being president of Sage Wealth Consulting, LLC? Angela: I consider myself fortunate to have found the financial consulting profession in my early twenties. I truly found my calling and knew I wanted to be an owner eventually. I thought that would probably be in my fifties. After seeing the benefits of having a written plan, I wanted to build a firm focused on strategic planning. I became inspired to launch a Registered Investment Advisor (RIA) firm that focuses on demographics that aren’t typically served by the brokers, wirehouses, or bank financial consultants. I didn’t think I would be running a practice in my thirties, but it’s been one of the best decisions I’ve made for myself and my clients. Register: What are your clientele demographics? Angela: I specialize in working with younger, high earning families to establish a savings and investment strategy, and then working with them as they transition into retirement. Page 13
Many of my clients are active or retired business owners who own real estate properties in several states. I believe so many other business owners seek out an MRFC® because they understand the value of delegating to other professionals. I also work with women who have recently lost their spouse, and are faced with the daunting task of managing finances during a time of grief. As a consultant I want to assist clients through the good times and difficult times, and have clients come to me specifically for that service. Register: How does your degree in Business Communications & Technology help with your role as a Financial Consultant? Angela: The way we do business is changing rapidly with technology. Being well versed in current technology, and understanding when to adapt, is key in building a successful wealth practice. Register: Why do you feel you are successful in communicating with your clients? Angela: It’s important for clients to receive timely information. For example, when the Schwab/TD Ameritrade merger was announced, I send out messages to my impacted clients. A few people called to let me know I was the first to tell them, and they appreciated the information. Proactive communication is so important.
Register: Quote… “We leverage technology and cloud services to provide a modern wealth management experience.” What does that “modern wealth management” mean to the average client? Angela: Our clients want information about their finances available at all times. If you had a financial plan even a few years ago, it was a thick binder. Today it’s an app on your phone. It’s the same with investments. The other benefit is that our meetings become much more interactive and visual. The technology takes a somewhat dry topic and makes it easier to communicate complex ideas like sequence of return risk or the probability of success. Register: Since our issue is about Ethics, how do you address ethical concerns with your clients? Do ethic standards vary from baby boomers to millennials etc.? Angela: I think clients appreciate knowing that I’m Ethics Approved by the IARFC. Having a third party verify my clear record and having a stated code of ethical conduct builds credibility. Although it varies from person to person, I’ve found that everyone expects a high level of ethical conduct, and the Ethics Approved seal helps to start that important conversation. Register: Sage Wealth Consulting, LLC deliberately made a decision to operate under a Fiduciary Standard. Explain what that means to your clients and to you personally?
The Register | Winter 2020
Sage Wealth Consulting, LLC. Angela: RIAs have a fiduciary duty to their clients, which means I have a fundamental obligation to provide investment advice that always acts in my clients’ best interests. I believe that operating under a fiduciary standard better aligns myself to the client’s long term goals, and lends itself to long-term relationships. I’m proud of being a fiduciary, and genuinely enjoy those relationships. I get tremendous satisfaction from helping clients today, and also preparing and navigating changes in the future. My goal is to help my clients for the next 20-30+ years.
CFP program. The information in the exam is very relevant to everyday practice, so it wasn’t a burden to prepare for the exam.
Register: What made you join the IARFC and become a Master Registered Financial Consultant (MRFC®)?
Register: What advice would you give to younger consultants about the Association?
Angela: As a younger consultant, it’s incredibly important to continue to build professional credibility. After I earned my CFP® designation, I wondered, what was next? There are a limited number of accredited credentials, and when I reviewed each program, I was impressed with the IARFC’s focus on ethics and continuing education. The CE requirements of 40 units every year are one of the highest in the industry. I value being a member of an association that requires that dedication from its members. Register: How was the exam process for your MRFC path? How did you study for it? Angela: To prepare for the exam, I reviewed the MRFC Blueprint Exam Content. For content that I wanted to focus on, I read reference material from various industry exams and the
Register: How do you see the Association helping you personally and with your client relationships? Angela: The professional credibility that the MRFC brings is meaningful to me. The business integrity, experience requirements, and Code of Ethics bring reassurance to clients when they are evaluating their consultant.
my future husband. After we’re married, I’ll use the same checklists and financial planning process that I use with clients to keep us on track. There’s a number of financial matters to address when two individuals come together, and it’s reassuring to know that we will be well organized during that process. Register: What’s in the future professionally for Angela Wentz? Angela: Looking ahead, I’m excited about the growth for the firm. My goal is to continue to expand the practice and bring on new planning and investment offerings to clients.
Angela: My advice would be to get involved in professional organizations as early as possible in your career. Not only will you grow more rapidly in your field, but also make meaningful connections with other professionals. Register: As your wedding is coming up in a few months, did the “Financial Consultant” in you influence your decisions in the wedding planning process and in the near future? Angela: We are getting married in April 2020. The financial advisor in me certainly took center stage in planning the wedding. Of course, I have the spending plan and guest list in excel. It was helpful to have the background to feel comfortable having financial conversations with
Angela Wentz and Chris Wetzig “We are getting married April 2020. The Financial Consultant in me certainly took center stage...”
Angela recently videotaped a series of videos for the Association. Along with Nick Royer, the IARFC Trustee Vice Chair, she visited Leading Response in Tampa for a recent session. Look for her in IARFC promotions.
The Register | Winter 2020
How To Recover From a Mistake It’s exciting to launch your own company, as I did nearly 25 years ago. While attending the University of South Florida in Tampa, I worked 60 hours a week in the local malls to pay for college. Then I landed my first real sales job at a direct marketing company. Little did I know my life would change forever. It was there I came up with a method to find new clients for financial advisors and estate planning professionals – the now famous “social” seminar presentation approach. In my mind, it was a way to create meaningful engagements between my clients and their ideal prospects. Of course, I was eager to turn my concept into reality. I eventually left that company and developed a market strategy, identified key clients, secured funding, allocated available resources, and partnered with a few loyal believers. The future was wide open, and the seminar event world was mine to conquer. Not long ago, I reflected back on my career. And I realized along the way, I made pretty much every mistake in the book. Legendary Corporate Miscalculations Huge companies make epic blunders. I can think of several right off the top of my head. But before we get into that, understand there is only one surefire way to avoid errors; it’s by not doing anything.
For most of us, this is not an option. You must act, which means you will take risks. Some giants of Corporate America have made bad decisions and recovered.
venues, chose the wrong days of the week, and identified the wrong hour of the day for clients to host events. Believing in Your Product
Remember when Coke changed its formula in 1985 and back again? How about when Wendy’s added Superbar buffets that were discontinued in 1998? More recently, there was the fallout when Facebook allowed Cambridge Analytica to obtain its members’ personal data without permission which Cambridge used to target ads in the 2016 presidential election. Mistakes are Inevitable Now, some of my own miscues. My social seminar concept became more powerful when I added a dinner scenario to the mix. It transformed the approach to a non-pressure, non-sales, relaxed evening out for individuals searching for answers to their financial concerns. After testing and validating it over 10 months, I gathered over 100 advisors as clients all over the country. I knew then that seminars would generate leads and help advisors get in front of hundreds of motivated prospects whether they were captive, independent financial advisors, estate planners, or insurance agents. However, I made several missteps rolling it all out. To begin with, I failed to nail down accurate demographics for prospects in the areas where my clients were doing business. As a result, I targeted some of the wrong people to attend the events. Then I selected the wrong type of
At the beginning stages, I let financial advisors and insurance agents tell me – the soon-tobe seminar innovator and marketing expert – what they preferred to promote. I also let them direct where they preferred to have their events, and how to market themselves. After all, it was more convenient for them. But I quickly learned my mission was to do the opposite of what our clients wanted. My job was to meet the needs of their target audiences, which were comprised of guarded consumers age 55s and up. While many older Americans make important life decisions, they will shy away from visiting a financial or estate planner in their office, since both the professional and the location are unfamiliar to them. With trust yet to be established, they were unlikely to take any action regarding their hard-earned money. As I discovered, these same folks enjoyed learning more about complex services and products in a neutral setting, surrounded by others like themselves, before agreeing to meet with an advisor. There was, I realized, a big psychological barrier I could break down by inviting millions of people with financial concerns to social and educational events.
There was, I realized, a big Psychological barrier I could break down by inviting millions of people with financial The Registerevents. | Winter 2020 concerns to social and educational
That I understood why these individuals feel and act the way they do is the reason I launched my company in the first place! Since breaking bread is the original way human beings have connected and bonded with each other, I incorporated the dinner as an integral part of the seminars. This kept the audience at the venue for an hour or so after the advisor’s presentation, allowing the advisor to socialize with attendees and the staff to schedule appointments. Then I pictured this marketing approach boosting client acquisition not just for professionals in financial services, but in other industries sharing the same target demographic. Trusting Your Instincts If I had stuck to my guns early in my career, and insisted we tailor seminar content and logistics to what consumers want, not advisors, all of us would have enjoyed greater rewards, sooner. Though even with my expertise and positive results, I was unable to make some advisors understand that marketing is an INVESTMENT, not an EXPENSE. Even today, not all our clients are on board with this point of view.
Because we are familiar with the audience’s journey of planning for retirement and protecting their money, we act with integrity in everything we do and, we ask the same of our clients. Acquiring our data in an ethical manner is hard-wired into our business processes. Keep Customers Top-of-Mind In closing, the single most important lesson I’ve learned from the slip-ups I made earlier in my career, is to put the consumer first. It can be tempting to go along with an advisor’s idea of how to best achieve the client acquisition results they seek. But I know from experience, some of it is painful, that consumers want to be educated, not just sold to. Remember, I’ve made every mistake in the book. Our history of success is fueled in large part by the strength of our data. These days, we can offer our clients a guarantee with most of our marketing programs. Believe me, none of us want to fill a restaurant, or any other seminar venue with random people. We’re looking for those who are genuinely interested in the information being offered – and even better, will find it valuable delivered in a comfortable environment. That’s doing the right thing by everyone, especially that sought-after, guarded audience with the money to buy and invest in a lot of things.
Mistakes build character and determination, no doubt. In October, the New York Times published an article, “How Early-Career Setbacks Can Set You Up for Success.” It referenced a paper published in the journal Nature Communications, which noted making mistakes early in one’s career can result in a more successful career long-term. In fact, those who tripped up in the beginning often went on to do better than those who did not experience failure. “This is not just survival of the fittest,” said study co-author Dr. Dashun Wang, an associate professor of management and organizations at the Kellogg School of Management at Northwestern University. “These people became better versions of themselves.” Growing From Your Mistakes As LeadingResponse grew over the years, I tinkered with our formulas. We refined seminar topics and the event marketing process. Today, after nearly a quarter-century and 1,000,000 social seminars, we’ve accumulated a trove of consumer response data. It allows us to pinpoint with a high degree of accuracy who our clients’ ideal customers are. The Register | Winter 2020
IARFC New National Interview Podcast Series NeIARFC
Behind the Scenes with
Top Money Masters Get insights and tips into various areas of your business from top producing consultants to founders and creators of very powerful tested and proven programs that were all designed to enhance your growth and help you reach thousands of motivated prospects. From the comfort of your office or home our podcast series will give access to hours of education and advice from speakers that are continually on stage at the biggest conferences in our industry. Many are keynote speakers that charge thousands of dollars to present. Don’t miss this opportunity for selfimprovement in your career. All brought to you by the IARFC®!
Jorge Villar After studying Marketing Communications at the University of South Florida, Jorge worked in direct marketing for several years. Then he discovered a new client acquisition opportunity – the social dinner approach and created the now-famous Seminar Success® marketing concept. Nearly 25 years later, Jorge plays an active role in LeadingResponse (formerly RME360). He is deeply involved in the development of new products, new services, innovations and promotions. Contact: (813) 885-8231 firstname.lastname@example.org www.leadingresonse.com
Inaugural Podcast Interview Jorge Villar Ne
Upcoming Speakers Dan Cuprill Frank Maselli Ric Edelman, RFC®
Loren E. Dunton Memorial Award 2020 Recipient
Barry L. Dayley, MRFC® Barry Dayley has worked in the financial planning and wealth management business since 1981 when he started his own Money Concepts Financial Planning Center in Las Vegas, Nevada. In 1985, he received a request from Jack Walsh, the founder of Money Concepts, to serve as a consultant for Money Concepts and CUNA Mutual to develop a financial planning program for credit unions nationwide. In this role, Barry helped lead the establishment of over 600 financial planning programs in credit unions across the United States. Later, Barry accepted a position as the Division Manager of Member Services, where he led the operations of CUNA Mutual Group in the Northwest Marketing Division. In 1998, he returned to Money Concepts as a Senior Vice President with emphasis on financial institution development. Currently Barry is the Executive Vice President of Money Concepts with national and international responsibilities. Barry’s educational background includes: a Bachelor of Science from Brigham Young University with a degree in Financial and Estate Planning (1980), the Achievement of the Certified Financial Planner (1989), and the Master Registered Financial Consultant (2017). He is a student of the business and is a frequent speaker at functions of the American Bankers Association, the National Federal Credit Union Association, and other industry conferences. In addition, Barry conducts ongoing series of training and continuing education programs nationally with the over 700 representatives of Money Concepts Capital Corp. In spite of Barry’s demanding corporate responsibilities, he still maintains a very small financial planning client base to keep his skills sharp and maintain involvement in a profession he loves. Barry is the Chair of the MRFC Certification Board and promotes the MRFC credential to Money Concepts rep audiences. Barry along with Dr. Craig Lemoine have hosted a webinar series and recorded a session to promote the MRFC in the summer of 2019. “I met Loren Dunton in the mid 1980s at the annual meeting of the International Association of Financial Planning, (now the FPA) in San Francisco. I was honored to talk to him and impressed with the impact he had on the financial planning profession. He even gave me a copy of his book, About Your Future. Mr. Dunton was a true pioneer and selfless leader. It is a great honor to receive his award. I will try to live up to the pattern he set for us.” Barry L. Dayley, MRFC®.
Generally regarded as the “Father of Financial Planning”, Loren Dunton organized financial professionals in the late sixties and with their help created the financial planning movement. Dunton developed associations, magazines, colleges, university programs and foundations. He used his experiences to frankly explain what all financial consultants now recognize - that the ethical sales of financial products and the delivery of competent advice is a noble calling. Loren Dunton was a man of vision who cared deeply about both financial consultants and consumers. The Loren Dunton Memorial Award was first conferred in 2000 at the IARFC Financial Advisors Forum. The selection committee has strived to honor consultants who have demonstrated effectiveness in carrying the message of responsible financial stewardship to the public and have high ethical and professional standards.
Award Criteria • • • •
Professional Designation Worked in a financial practice or firm for more than 5 years Published on financial topics (articles, journals, books, etc. Provided outstanding service or leadership in the financial services industry • Promoted or participated in some aspect of financial education, either to the public or to members of the profession • Demonstrated effectiveness in carrying the message of responsible financial stewardship to the public • Member of the IARFC The Register | Winter 2020
ASSOCIATION AWARDS Founder’s - 2020 In honor of the founder of the IARFC John J. Gargan, this award is presented to persons who have delivered significant service to the operation and growth of the International Association of Registered Financial Consultants. Burnett Marus of Burnett Marus Associates in Richardson, TX has been a long time RFC® from the beginning in 1984. With two terms on the IARFC Board of Directors and currently with the RFC® Retired status, he has been a regular contributor to the Register. He has praised the IARFC for reaching beyond its geographical limits to include international chapters. Initially he was attracted to the Association by the multitude of Burnett Marus, RFC® Retired professionals with years of experience and the concern about continuing education. The IARFC always www.burnettmarusassociation.com provided a broader forum for topics that are inherent to financial consulting.
Ambassadors - 2020 Bestowed upon those members who have selflessly supported the IARFC mission through extraordinary efforts of time, service, and dedication. The Ambassador Award is an international Award given by each IARFC Chapter Annually. Ambassador Award Committee Chair: Jon Rogers, MRFC®.
Nicholas Royer, MRFC®
Dr. Craig Lemoine, MRFC®
Fred Ostermeyer, MRFC®
Members - 2019 Presented annually in appreciation to the top IARFC members who have brought in the most new qualified professional consultants that join the ranks of the Association in the prior year.
Lori P. Crilley, RFC®
Derek K. Moore, RFC®
Craig A. Bane, RFC®
Matthew Apodaca, RFC®
Kevin Richards, RFC® Roy Strong, RFC®
The Register | Winter 2020
Dominique Vercaemert, RFC®
Our Strategic Alliances A f f e c t Yo u r B o t t o m L i n e IARFC Partner Programs - Investigate what the IARFC has to offer its members.
Connect to your Benefits ÂŽ
IARFC Home Office
email@example.com (800) 532-9060 P.O. Box 506 Middletown, OH 45042
COMMITTEE FOCUS S T R AT E G I C A L L I A N C E S Randy Kriner, Information Technologies Team Member for the IARFC, additionally coordinates the Strategic Alliance Committee for the Association. The purpose of the Committee is to oversee the development of strategic alliances with other associations and institutions. It also ensures the relationships with other alliance partners do not violate the IARFC Code of Ethics or construe a conflict of interest.
New Member Benefit
Fully Compliant SMS Texting Platform
Randy Kriner, IARFC Team
Expansion of member benefits is ALWAYS a priority for the IARFC. The savings and incentives are part of the membership package. Continually we look for ways to enhance the value of your invested dues. Our efforts these past months have brought about administrative changes that I feel will help us increase the number of alliances. For 2019, we have been investigating new benefits for the IARFC. We began with forming a “Strategic Alliance Committee” to brainstorm what would be of value to our members. Our Committee involves Board Members and any interested members who feel they can contribute.
Strategic Alliance Committee Members Michael Markey, MRFC® Brad Maples, MRFC® Fred Ostermeyer, MRFC® Randy Kriner, IARFC Team Email firstname.lastname@example.org for Alliance suggestions.
The process starts with suggestions for practice management tools that are popular and utilized currently by our consultants. These suggestions come from the committee, members, or requests from the vendor themselves. The vendors of interest communicate their offerings and their relevancy to our consultants. From there, advantages of an alliance are discussed with the Committee culminating in a vote to continue on with a contract. Contracts are developed with specific responsibilities for the vendor and for the IARFC. These details can contain advertising schedules, email marketing, social media posts, and most important the savings to the member. With all parties in agreement, the contracts are then approved by the IARFC Board of Trustees. Contract responsibilities and maintenance are then distributed to the other Team Members to appear in the Register, on the website, and in promised email marketing. So when you get notice of a new item of interest, know it has been negotiated, reviewed and accepted with careful consideration. Along with our designations, MRFC credential and Ethics Approved Program, these robust benefits are an integral part of your IARFC membership. I encourage each member to review the list of engaged companies and utilize their services.
The Register | Winter 2020
• Text and Group Messaging: Birthdays, anniversaries, events, appointments and more. Clients will never have to download an app or software to communicate with the consultant. • Compliance Features: Communication is directly with the consultant’s compliance department ensuring that messages are properly monitored and retained. • Scheduling Function: Ability to plan and schedule messages in the future and create recurring messages to celebrate important dates. • Digital Assistant: Scheduled, automated and efficient client communication leaving the consultant for more time to do what they do best. • Contact Import: Easy import of contacts from CRM or mobile phone to being texted immediately. Conversations will be instantly archived in the CRM. • Auto-Forward: If a landline number is non-existent, MyRepChat can create a text number and auto-forward all calls to a number of choice.
Members Receive Discount Pricing of $15 per month per Account Page 20
MRFC Update Job Task Analysis What is a Psychometrician? A psychometrician is a professional who practices the science of measurement, or psychometrics. Psychometrics is the field of science associated with the development of instruments (such as examinations) that measure knowledge, skills and attributes (KSAs). A psychometrician develops assessments such as examinations for educational, employment or professional credentialing purposes. From the Greek root word psych which means mind and metr which means measure, psychometrician is just what it sounds like — a person who measures what is in someone’s mind.
This year the MRFC Certification Program has to focus its attention on developing a new Job Task Analysis (JTA). The JTA is the core analysis, from which the Blueprint is derived, from which the exam questions are created. It’s a significant undertaking. Why is this necessary? The Job Task Analysis is a laundry list of tasks that a financial consultant performs on a day-to-day basis. It needs to be evaluated periodically to keep the exam relevant. Sounds Simple? On the surface it seems to be straightforward. On examining the levels of involvement, it is a complicated process. Here is a step-by-step rundown.
8. Data amassed from the survey is analyzed by the Psychometrician. This would affect the core content of the Blueprint when it is updated. 9. Focus Group reconvenes to examine the results of the Psychometrician and make a last review of any changes to the Blueprint. 10. Blueprint is adopted by the MRFC Certification Board and is put in practice. 11. Current exam questions need to be examined to see if any of the material has changed, been deleted, or new material added.
1. An action plan is developed by the MRFC Team along with a project timeline.
12. If new questions are needed, they have to be written by Item Writers, tested, and inserted into the Exam Item Bank.
2. Discussions are needed with the Psychometrician to verify the plan was in accordance to industry standards and to determine her level of engagement.
13. Any materials being affected by the new Blueprint will need to be updated such as the Candidate Handbook, website pages, marketing material, or study guides.
The foundation of a defensible certification program is a Job Task Analysis (JTA) study.
3. A Focus Group is recruited through a campaign of volunteer emails. Interested parties may send in resumes to determine if they are a good fit for the project.
14. A report is sent to the NCCA to document that NCCA protocol was followed and that the exam is validated.
The JTA research study findings establish the link between test scores and competency on-the-job.
4. Meetings are set up for orientation to the job duties which involve training on how to best review the current Blueprint - the product of the initial JTA 6 years ago.
All this is accomplished by the IARFC Team members who are responsible for aspects of the MRFC Certification Program and volunteer members. It also needs the blessing of the MRFC Certification Board. So when we ask, please help us with your survey input.
Source: http://www.proftesting.com/ test_topics/psychometrician.php
Job Task Analysis
Specifically, the scores derived from an examination must have a relationship to the content of the examination, and in turn the content must point back to what professionals do on the job. This “chain” of validity provides proof that pass/fail decisions are sound. ...Exert from Standards-Based Certification and Licensure ©2012 by KWindom Consulting.
5. Items are looked at for their relevancy. Are the tasks outdated? Have new trends taken hold that affect the industry? Each line item of the Blueprint needs to be scrutinized. 6. The Psychometrician gathers all the data and make recommendations on building a survey. 7. Surveys are sent out to IARFC members for completion. This process involves splitting the surveys into manageable chunks of data to make it easier to finish, thus better use of consultant’s time.
The Register | Winter 2020
Explaining the Financial Planning Process A well mapped informational flow for a successful and lasting relationship between You and Your Clients/Prospects. All financial consultants use a planning process. But what does that mean to the consumer? The IARFC has a trifold brochure Following a Structured Process in Financial Planning product number (SG107)that clarifies expectations and sets a roadmap to financial success. It is directed to the consumer, written in an easy-to-understand, organized manner. The brochure defines: • Why use a process • The benefits • The steps to follow • The financial areas it addresses The information is adaptable to any practice. It is generic, yet specific enough to guide the consumer through the essence of Financial Planning.
For the Job Task Analysis Members — when the time comes and we start sending out emails to survey for the Job Task Analysis, please take the time to respond to the call for participants.
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
We will need a good representation of the membership to qualify the study. It will involve some of your precious time, but it does help keep the MRFC credential a viable award in the eyes of the NCCA Certification Agency. The surveys will be sent out in small groups of data gathering, so consider completing all of them. Your responses matter. From the information received, our Focus Group and Psychometrician will develop a new Blueprint on which to base the MRFC exam. The Register | Winter 2020
Order your IARFC brochures at: www.store.IARFC.org or call (800) 532-9060, email@example.com
Ethical Behavior and a Code of Ethics for Our Businesses and Professions 1. Lead an Ethical Business Life 2. Enforce an Ethical Culture Within Our Firm and in Our Professional Associations 3. Make Ethics Fashionable In the 1970s and 1980s, many business schools dropped ethics from their course list. The tenor of the times prompted Milton Friedman to state in a New York Times Magazine article (1970) that the only social responsibility of a business was to maximize profit. The legendary and reverently quoted Peter Drucker denied that business ethics had any relevance whatever. Since the 20-something old MBA students of that era were the next generation of corporate management and the executive suite, the result was a predatory business culture in search of maximum profit at all costs. That culture encouraged the corrupt practices and corporate scandals of the 1990s and early 2000s as those studentsâ€™ careers took them to the team at the top. The pendulum now seems to be swinging back to the other direction for businesses (although we must be careful that it does not swing so far that it causes equitable trade to be punished). That 1970s generation of MBAs is now retired or is retiring. Business leadership has passed to people who saw the results of those unsavory practices. Today, most people seem to assume that a code of ethics and ethical behavior is important not only for their personal life but also for organizations. A study by Debbie Haski-Leventhal in 2014 showed that todayâ€™s students are willing to take a lower salary if they know that the organization they work for will be ethical. Even people who do not have the guidance of a religious moral code will often push for ethics in business dealings. Part of the reason is that it has repeatedly been shown that ethical behavior results in a more productive and satisfying life. Ethics are also the key to success in business. Business is based on trust: Unethical behavior violates trust. Page 23
Some trace that temporary madness of the 1970s and 1980s to a decline in church attendance. Others place the blame on an environment that encouraged the questioning of authority such as the unpopularity of the Vietnam War, the growing resentment of women and people of color to unfair practices in the workplace, and the activism of a generation that came of age in the 1960s. In the years since 2000, there has developed an almost fanatical devotion to ethical concepts like fairness and protection of helpless persons by one group of people while simultaneously there have developed political rewards for corrupt and unethical behavior from another group. This divisiveness has ironically led politicians who once decried business for its unethical practices to now being the primary bad behavers.
In this chaotic environment, leadership away from political misbehavior must come from the business sector. Businesspeople must take charge of improving the ethics of our businesses and professions but also of maintaining an environment where business can thrive and people can benefit from a vibrant economy. We also must show while corrupt practices are wrong that enlightened self-interest is not wrong. So, how do we as business leaders and financial consultants improve our profession and society in our own business dealings? A code of ethics in our profession and in our firms, whether they be a two-person shop or a large corporation, can give guidance when the decisions are difficult. Financial consultants have such codes readily available and they should be studied in detail. The first action, of course, is that we must ourselves lead an ethical business life. Great leaders lead by example. So if Caesarâ€™s wife must be beyond reproach, Caesar must be even more careful. If you are trying to promote ethics and trust, you must work hard to avoid even the appearance of failing to act responsibly and immediately admit and correct errors when you make a mistake. This is not simply avoiding socially incorrect language. This is putting the interests of the client before your own and actively helping them make sound decisions. It is not unethical to be motivated to make a profit. It is unethical, however, to
The Register | Winter 2020
be motivated to make a profit at the cost of hurting other people. Fair compensation for fair advice is ethical. Ethics requires taking the long-term view and not taking a short-term advantage that will explode into damages later. For some people, all they have to do is ask themselves if they would be ashamed if their mother knew what they were doing. Others, whose mothers didn’t give them such a strong ethical compass, need corporate or professional honor codes and codes of ethics. A code of ethics is also a public commitment to laudable ideals that forces us to think about our actions from an ethics point of view. For example, many business people are philosophically utilitarian. Although Jeremy Bentham originated this school of thought in the early 1800s, many of the current generation see Spock of Star Wars fame intoning “The needs of the many outweigh the needs of the few or the one.” Sounds great, but utilitarian ethics taken to a logical conclusion has a dark side. Is it correct to violate fundamental rights of one person to fulfill the desires of 5 or 6? Is it acceptable to kill one million people so that five million people are more comfortable? A code of ethics developed in a neutral environment in an organization gives the same guidance to business decisions as a moral code or devotion to ethical behavior gives to an individual. The admonition to “put the clients’ interests first” and the golden rule of “do unto others as you would have them do unto you” are equivalent statements. It is important to note however that nothing in either statement says we have to hurt ourselves to do the ethical thing. So we start our quest for a better society by holding our own selves to an ethical standard. The well thought out and written Code of Ethics makes it easier to make the right decision. There is an unfortunate tendency of human beings to overcorrect. If rapaciousness to maximize profit is wrong, they think that any profit must also be wrong. The second thing we can do is to enforce an ethical culture within our firm and in our professional associations. If we are in a position of leadership in our organization, we need to make it clear that misbehavior is not acceptable. This means setting up penalties and enforcing them for ethics violations. If someone is producing profit in our organization, all too often they get a free pass on behaving unethically. One of the most shocking things about some of the abuses that have occurred in recent years is the revelation that there were many people who knew what was going on and who chose to do nothing about it. When asked why they did not do anything, they expressed their fears that they would be blacklisted themselves and their careers ruined for life. So not only does the The Register | Winter 2020
violator have to be punished but we have to protect the whistleblowers. They are modern heroes. The third thing we can do is work to make ethics fashionable. Although ethics make sense from a long-term business and individual point of view, there are still those who think that ethical thinking is old-fashioned and not cool. The financial services profession needs to do its part to convince those misguided people. Any culture that can make it fashionable to wear jeans with ragged holes in them with high heels can promote ethics. Some business leaders are exemplary in their commitment to doing the right thing. Let’s do what we can to promote their behavior as the cool thing to do. Some of the things that we can do is publicize our professions’ Code of Ethics, particularly highlighting successful ethical leaders. Having visible on the internet little self-tests to determine our EQ (Ethics Quotient) can generate those important conversations when people are sitting around on a Saturday night. Getting people to recognize the importance and then talking about ethics will benefit society. So, the financial services profession has to lead by example, set up workable codes of ethics and do what it can to make ethics hip. While this is not necessarily easy, it is the right thing to do.
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Rosilyn Overton, Ph.D., CFP®, MRFC®, CRPS Dr. Overton specializes in pensions for businesses, retirement planning for individuals and families, and loves to work with the owners of closely held businesses. She has more than 35 years in the business. She has earned numerous designations/credentials in financial consulting, long term care and retirement planning. In 2019, she was awarded the Loren E. Dunton Memorial Award. Dr. Overton earned an MS in Economics, a BS in Mathematics from Wright State University, and a Ph.D. in Business from Capella University. Contact: (718) 631-4000 Mid Atlantic Securities, Inc.
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Members Receive 10% Discount off Regular Pricing Page 24
Selling with Compassion and a Mission
So what’s selling with compassion? “Listening with heart” is a slogan an insurance company in Hong Kong adopted for its company branding 20 plus years ago. “We have 2 ears and one mouth. Do we use them in proportion?” Do more of listening with open ears and an honest heart, and less of talking and selling before understanding client’s major worries. Listening empowers us to truly address the deepest worry a client may have. In most circumstances, would you put your feet in your clients’ shoes?
There is the old cliche that “Life is a journey into the many unknowns”.
clients, namely, a strong sense of COMPASSION and MISSION.
I would have thought being an insurancebased financial advisor is uniquely positioned in helping our clients in dealing with some of the unknowns along the way so that the journey will hopefully come to a better ending! In order to do that, we have to discard our role as a sales person and take on the role as a friend listening with our heart to understand our clients’ worries, concerns, aspirations and objectives in life before we could contemplate on recommending them the best solutions in meeting their needs. This can only be accomplished by gaining their trust without sounding like a second hand car salesman!
Selling with Compassion
My personal experience over the years has taught me the tricks in gaining the trust of our
Compassion is the sympathy for the sufferings of others, causing a desire to help.
Unlike selling an i-phone which could be an impulse buying or just to meet one’s vanity, our services in providing the best insurance advice could have an implication beyond the life time of our clients and an impact on the closest and dearest persons to them. Therefore, it is absolutely imperative that we have to build that connection through trust with our clients to be able to resonate their thoughts and emotions. Selling in our line of trade is about having a real connected dialogue with our clients and could involve an exchange of feeling and emotion.
Say If I was him or her, and in facing the unenviable scenarios of untimely death or disability due to some critical illness. What would I want for myself and my most beloved family? For some situations, do we have the courage to recommend a very huge face amount if we understand our clients do need them? In other situations, would we be glad to walk away from a client if we don’t think the products we have to offer will be of use to the client? While I first joined the industry, I learnt a saying “People don’t care how much you know until they know how much you care”. Yes, that’s so true!
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Selling With a Mission I have helped more than 10 friends and clients with critical illness claims or death, majority of which happened at insured’s age between early 30s to mid 40s; at the golden age they were building their career or/and family. Early this year one of my clients, aged mid-40 passed away suddenly due to an acute heart issue, leaving a 5 month old baby girl, 10 years old son, his housewife widow, and an 80-year old mother...and he is the only breadwinner of the family. Very tragic! How could his wife and kids live on without a loving and caring husband and dad? In all honesty, I could feel the emotional pain my client’s widow suffers, but what’s most important and most fortunate, my client did secure several substantial-amount insurance policies for his family which can free them from financial worry for many years to come. The moment I delivered those cheques to my client’s wife, it might well be the most gratifying moment experienced by me this year because I was blessed to have been given the opportunity to help my client’s family in a small way to lift them from potential financial abyss. I could probably remember that moment for the rest of my life.
Those personal claim experiences like the ones mentioned above has made me more humble, compassionate, caring, and further fill myself with a stronger mission to serve and help. I always share with my friends, clients and prospects that my team and I will take care of them and serve them until the day I’m not physically able to or the day I die.
Experience Education Integrity
I have an inner voice in my heart or I could admit it’s like a little calling that it’s my mission to serve and help those friends and clients when they need me most, perhaps at their elderly age. Dare you share this long term service commitment with your clients? Our job is to understand clients’ worries and needs with compassion, ask the right questions, listen with an honest heart, educate them, make a selection that best suits their specific needs and motivate them to take action. Our Career is not merely a business, rather a mission and responsibility to fulfill my clients’ dreams and goals; may they live a long and fruitful life, or die prematurely or disabled along the way.
don’t care how much you know until they know how much you care.“ Adrian Yu
Senior Unit Manager AIA, Hong Kong, Macau Adrian is a global and local industry speaker. He resumes MDRT experience in Bangkok, Hong Kong, Shanghai, and Beijing. His most recent awards include GAMA HK Frontier Leader (FLA) Platinum Award 2018 and GAMA HK International Manager Award (IMA) Gold Award 2018. He joined the financial services industry in 1996, is a lifetime member of MDRT and leads a team of 20 financial consultants with 70% of them being MDRT members.
IARFC Brochures – a well mapped informational flow for a successful and lasting relationship between You and Your Clients/Prospects.
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Order your IARFC brochures at: store.iarfc.org (800) 532-9060, firstname.lastname@example.org
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International News Philippines IARFC®... Transformation in Progress With the re-organization of IARFC in the Philippines, a small group of RFC Members in the Philippines, most of whom are lecturers of the RFC Conversion Course and active members of the RFC Manila Club, saw the need to continue the advocacy of developing professional and ethical financial consultants with the end objective of assisting Filipinos in financial literacy, financial planning and financial wellness.
IARFCPH Chapter Board President Gamalielh Ariel O. Benavides, RFC® Executive Vice President Grace V. Escobar, RFC® Vice President Ismael Melendres Jr., RFC® Corporate Secretary Atty. Nicasio C. Cabaneiro Treasurer MA. Arlene M. Baguyo Director Cynthia Rimando Director Allan Tamayo
“Welcome to the new group taking charge of the Philippines IARFC International Chapter. These leaders have put forth a very organized effort to reach out to the RFC community and potential members. We look forward to your future successes.” H. Stephen Bailey, MRFC® IARFC Trustee Chair and CEO.
On the Web.... www.iarfc.org/philippines/about Page 27
With over 1,000 graduates of the RC Conversion Course, the task at hand is to increase the number and coverage of RFC Professionals, as well as ensure membership, continuing education, skills improvement, and strict adherence to strict ethical standards of the practice. Thus, IARFCPH Inc., a non-stock, not for profit organization was formed by the five (5) Founding Directors; Ma. Arlene Baguyo, Gamalielh Ariel (“Boyet”) Benavides, Atty. Nicasio (“Nick”) Cabaneiro, Grace Escobar, and Ismael (“Lito”) Melendres. The group was subsequently joined by Cynthia Rimando and Allan Tamayo, as Directors. This will be the National Chapter directly reporting and working with IARFC USA. IARFCPH Inc. was registered and authorized to operate by the Philippine Securities and Exchange Commission (January 2020). IARFCPH Inc. will accredit Regional Directors in Luzon, Visayas and Mindanao as part of its plan to expand the reach of conducting the RFC Conversion Courses and Continuing Education sessions in various cities all over the Philippines. The network of Regional Directors will also ensure closer ties, support and networking of RFC Professionals working towards an ethical and professional financial consulting practice.
In close coordination with and guidance from IARFC USA, IARFCPH as the national chapter in the Philippines aims to bring to RFC Members the key value proposition of being an RFC Professional through the quality and relevance of training, as well as direct access to a global network of RFC Professionals and resources to improve an RFC Professional’s practice. IARFCPH will conduct at least one conversion course and continuing education session every quarter. It will likewise ensure the adherence of Members to the highest standards of ethical standards in their profession. The national chapter will also encourage the formation of regional RFC Clubs to expedite the sharing of best practices and networking of RFC Professionals at the local and national level. We wish the new and re-energized National Chapter all the success in their endeavors to achieve the goals of IARFC in the Philippines. For more information on IARFCPH Inc., the National Chapter of IARFC in the Philippines, click on this link (www.iarfc.org/philippines/ about).
Gamalielh Ariel O. Benavides, RFC®
February: RFC® Conversion Course (In House) March: CE Sessions April: RFC® Conversion Course (In-House) May: RFC® Conversion Course (Public) June: CE Sessions
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International News Macau An RFC Graduation and Conferment Ceremony was held at City University of Macau on Saturday, 4 January 2020. Mr Alex Shum, Chairman, Member Development Committee, IARFC Hong Kong and Macau; Mr António José Félix Pontes, Chairman, Executive Board, Macau Institute of Financial Services and Professor Fanqing Kong, Vice Rector, City University of Macau officiated at the ceremony. On this occasion, Dr Chung Sing Leung, Assistant Professor, Faculty of Business, City University of Macau deliver a keynote speech theming on the opportunities and challenges of Financial Services in Macau.
RFC Graduation and Conferment - Macau
Pictured to Side (L - R) Mr. Allan Wan Executive Director - IARFC Hong Kong and Macau Center Dr. Theresa So Chairman - IARFC Hong Kong and Macau Professor Raymond Ng Director - Lingnan Institute of Further Education Ms. Sze-wai Shing Assistant Director - Program Development and Management, Lingnan Institute of Further Education
Ralph Liew, RFC® Transition to Retirement The IARFC announces the retirement of Ralph Liew, RFC® as Chairman of the Philippines Chapter. During his tenure with the Association, he has been dedicated to the expansion of learning platforms through IARFC educational services. In 2004, Mr. Liew was awarded the Loren Dunton Memorial Award for promoting financial planning education in the Philippines, Thailand, and India. He was a popular lecturer at RFC courses and has spearheaded scores of projects for the communities in which he has lived. “We appreciate the dedication of Mr. Liew in developing the Chapter in his country and wish him well in his future endeavors. The IARFC Philippines will continue to progress building on the foundation of his Chairmanship.” IARFC Trustee Chair and CEO H. Stephen Bailey, MRFC
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Other distinguished guests included Professor Adrian Cheung and Dr Eva Khong, respectively Dean and Associate Dean of Faculty of Finance, City University of Macau and Mr Chris Ma, Adviser of a multinational insurance group. The RFC conferees were accompanied by family members and friends who shared the joy at the ceremony.
Hong Kong The next intake of the IARFC-accredited program, Certificate in Financial Consulting (Executive Program), will be held in April 2020. The subjects of this 4-day program are essential elements of Financial Planning: Day 1 – Finance and Investment Day 2 – Economics Day 3 – Law and Tax Day 4 – Practical Aspects of Financial Planning and Case Studies. The program is jointly organized by IARFC Hong Kong and Macau Centre and Lingnan Institute of Further Education, the arm of Lingnan University for continuing education. Program graduates are eligible to apply for the RFC professional designation. Qualified students of the program are entitled to government subsidies.
Greater China Regional Conference The 6th IARFC Greater China Regional Conference will be held in Singapore March 14-17, 2020. The theme for the event is “Professionalism vs Technology”. Though not able to attend, IARFC Trustee Chair H. Stephen Bailey, MRFC® has reached out to attendees in his greeting address for the program. “For all of us, professionalism comes from within and the development of our core person. You cannot get it from a spreadsheet or a planning software, you have to feel and empathize from your heart a desire to make a difference in someone’s life”... H. Stephen Bailey, MRFC®. Page 28
Consumer Focus Understanding Your Credit Score “If you know the value of money, go and try to borrow some.” Benjamin Franklin
300-579 Poor, 580-669 Fair, 670-739 Good, 740-799 Very Good, 800-850 Exceptional Many people struggle with the concept of a credit score, often ignoring its existence until it matters. Then it seems to be all that matters. An individual’s credit score is a three-digit number that ranks his or her ability to repay debt. Why should anyone care? In the 1980’s credit scores became commercially available. Then in the 1990’s Fannie Mae and Freddie Mac informed mortgage brokers and lenders that credit scores needed to be a part of the mortgage decision process ( https://your.vantagescore.com/ resource/384/history-credit-scoring ). Today there are billions of data pieces collected from over 13,000 different sources. Any time that money is wanted, the corresponding lender will first ask, “What’s your credit score?”
Why Do I Have Different Scores? To muddy the waters before we separate fact from fiction, one must note that there is more than one credit score. The three main credit bureaus are Equifax, Experian, and TransUnion. They typically use a range of scores from 300850. These companies can provide different scores because of unique methodology combined with the fact that many lenders report their customer information to some Page 29
bureaus and not others. In other words, one bureau might be aware of a late payment on an old store credit card where perhaps another is not. These three major credit reporting companies collaborated to create Vantagescore in 2006 in an effort to simplify matters. There are also FICO scores, created by the Fair Isaac Corporation. The Federal Housing Finance Agency (FHFA) has established a process in which no single brand is allowed exclusive right for use by lenders (www.vantagescore.com). So, expect to see these varieties of scores and reporting agencies to continue.
How’s My Credit? According to most major rating bureaus, 300-579 is considered Poor, 580-669 is Fair, 670-739 is Good, 740-799 is Very Good, and 800-850 is Exceptional. According to Experian, 67% of Americans have a Good FICO score or better (https://www.experian.com/blogs/askexperian/credit-education/score-basics/what-isa-good-credit-score/). The factors that dictate this score typically include payment history of loans and credit cards (including any late payments and their severity), credit utilization rate, number of
and age of credit accounts, total debt, public records such as bankruptcy, how many credit accounts have recently been opened, and number of inquiries for the credit report. Credit utilization is a commonly confused metric that measures revolving credit, which is debt that does not have a pre-determined end date, such as a credit card. It is equal to outstanding debt versus total available credit. Simply checking your credit score does not hurt them, it’s considered a “soft inquiry” which is not factored into calculations ( https:// www.experian.com/blogs/ask-experian/crediteducation/score-basics/what-is-a-good-creditscore/ ).
Ways to Improve a Credit Score After a credit score is pulled, the company will offer “reason codes” which explain why the credit score is not higher. Naturally, they’ll be relevant to the aforementioned factors. The most obvious ways to improve a credit score are to pay all bills on time, apply for credit only when necessary (this may have a positive impact on credit utilization as more credit is available, but temporarily negative as more accounts are opened), keep outstanding balances low (FICO and Vantagescore always recommend keeping below 30%), hold open The Register | Winter 2020
accounts for long periods of time, or use different types of loan products (i.e. credit card, car loan, mortgage, etc.). As far as how long it takes to repair credit, most delinquencies last for seven years, public records for ten years, and inquiries for two years.
Are You Listed?
A common complaint amongst millennials is the impression that no credit equates to bad credit. Some quick fixes to a “thin credit file” are to apply for a secure credit card (works like a normal credit card but requires a refundable security deposit), become an authorized user on another creditworthy individual’s account, apply for a credit builder loan through a bank, and ask for rent payments to be reported to credit agencies. Frozen credit can lead to financial disaster for individuals, households, businesses, banks, and even countries. Be sure to keep this lifeblood of finance flowing smoothly by understanding how the most important of scorecards works.
Bryan M. Kuderna, CFP®, RICP®, LUTC Bryan M. Kuderna is the host of The Kuderna Podcast, author of Millennial Millionaire, and founder of Kuderna Financial Team, a NJ-based financial services firm. Subscribe to “The Kuderna Podcast” on any podcast apps and http://thekudernapodcast. libsyn.com/ or pick up a copy of “Millennial Millionaire- A Guide to Become a Millionaire by 30” for more insight.
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Radio Podcast Page 30
What I Learned From My Mistake... I started in this business in 1984 as a career agent with Principal Life. In 2000, I opened Paladin Financial Services because I was intrigued by all that becoming independent offered me and my clients, especially the freedom to choose what products and services best fit my client’s needs. For the first seven years, I experienced both the highs and lows of this independence, being chief cook and bottle washer at the same time. My annual plan for growth followed a traditional pattern in that I was continuously looking for ways to meet wealthier clients and add them to my book of business. The rationale behind this being that the more investable assets a client had, the larger my practice would become, the fewer clients I would work with, and my income would increase proportionally. In short, I was seeking “success”, as defined by the industry as a whole. And, I was able to find and achieve a good measure of this “success.” This success brought its own ups and downs. The thrill of adding my first seven-figure account was something I’ll never forget. My feeling that day was one of pride and accomplishment and validation of my decision to become independent. And, while that day is memorable, I had others that stand out for a different reason. Among my clients were several who demanded attention and services that tried my patience. Some of them required a great amount of “hand holding”, some had unrealistic expectations for their accounts and some believed that, since I was their consultant, they were entitled to speak to me everything on their mind and in any manner they deemed appropriate. In short, there were some clients whose calls I did not look forward to taking. And yes, most of these were the higher networth clients I was intentionally seeking. At the time I believed this was a cost of doing business and that I was somehow failing in my duties to these clients. My thought process was that I must be doing something wrong because these are just the type of people that I should be working with, based on account size. A turning point came in early 2006 when my wife was diagnosed with an inoperable brain tumor. She passed away in 2007 after a lengthy and courageous fight. I made the decision to take a large step away from my practice for a number of years to Page 31
support my wife during her treatment and focus on our two children. During this time, I had limited contact with clients. I learned quite a lot during those 4 years; about life, about myself and about the things that really matter — family, friends, faith, the uncertainty of life and how these things were influenced through my own outlook on and attitude towards life. When I restarted my practice, it was with a new understanding about how to approach building and working with clients. I realized that seeking and working with highnet-worth and ultra-high-net worth clients was not where my strengths were because their needs and expectations were greater than what I can, or wanted to, deliver upon. I wanted to focus on developing long-term relationships with clients and be of service to them not just as a consultant but as a friend. To this end, I reshaped my prospecting efforts towards the personality traits that matched the way I work. I sought out Middle Americans, (who today are called the “mass affluent”). More specifically, I wanted to work with amiable and expressive personalities who desired an advisory relationship to educate and guide them to and thorough retirement. Seeking these personality traits became the first and primary determining factor when I decided to offer to do business together with a prospect. It remains the case to this day. When I see these traits, I am confident that, if someone is seeking a long-term relationship to guide them to and through retirement, I have a lot to offer them.
I learned that in order to successfully build a practice with long-term client relationships, I needed to be true to myself. In seeking the type of client personality traits I wanted to work with, I realized those same traits were the ones that I possessed. It would be unreasonable, if not impossible, for me to change who and what I am. At this point a fair question is “Why did it take you an emotionally challenging loss and 4 years to realize this?” I do not have a definitive answer to that question even now. The arrogance and self-assuredness of my youth had a lot to do with it. What I do know and am confident of, is that once I started down this path of realization, it changed my life, personally and professionally, in a positive way. If any of this makes sense, I urge you to think about who you really like working with. Why do you like spending time with them? Do they feel the same way about working with you? If they do, will they help you meet others, of a similar personality, who will see the same value in a long-term relationship?
While I have friends and associates across all the entire spectrum of personality types, I do not have them as clients. So, whatIdid I learn from myMy mistake(s)? What Learned From Mistake... I learned that ours is one of the few remaining professions where we determine who we work with as clients. We have the opportunity, and I believe the obligation, to seek out and work with those people who best fit who and what we are. Doing so makes life, both personally and professionally, easier and more stress free. I learned that success can and should be determined on my terms and not from our professional media or corporate executives. Success on my terms means being of value to my family and clients.
Lemuel “Lem” W. Kornegay III, RFC® is a newly elected Secretary to the US Chapter Board He is President of Paladin Financial Services, Inc., an independent financial advisory firm specializing in retirement income planning located in Golden, CO. Contact: 303.321.6875 K3Lem@outlook.com The Register | Winter 2020
2020 IARFC National Financial Plan Competition!
The Process so Far... 2020 Semi-Finalists
Jackie Battles, University of North Texas, Dave Ragan, RFC®, Professor Abigail Adams and Zachary Wakamatsu, Utah Valley University, Dr. Luke Dean, RFC®, Associate Professor Michele Boyle and Gianfranco Gonzales, William Paterson University of New Jersey, Dr. Tao Guo, Assistant Professor Dominique LaSalvia and Ethan Krumwiede, University of Illinois Urbana-Champaign, Dr. Craig Lemoine, MRFC®, Director Allison Biddix and Michael Austin, Western Carolina University, Dr. Patrick Payne, Assistant Professor Jacob Hogan and Brenden Fillerup, Utah Valley University, Dr. Luke Dean, RFC®, Associate Professor As February approaches, the Finalist are being selected - that is, 3 teams travel to the IARFC annual meeting in Cincinnati, OH to present their plans in person for judging. How did they get to this point? Six teams had to go through the Semi-Final (the recorded sessions first). Here is how that went down. After receiving the news that they were to present their plan for videotaping for the SemiFinals, logistics took over. Emails went out to the semi-finalists assigning them a technical check session and then the presentation session. Easy enough. The IARFC IT person, Randy Kriner spent time with each team making sure the connections were working correctly, they were able to bring up their PowerPoints, the lighting and sound was right etc. etc. etc. Emphasis was put on having a hard wire connection. Presenting via WiFi resulted in an annoying and disruptive time lag. Students were given a list of recommendations on what to wear, what their office environment should reflect, and especially to understand they would actually be talking to a couple.
What the students didn’t know is that Susan and Randy had reviewed the 6 plans and developed a set of identical questions for the teams. They spent time rehearsing their scenario that would put the students on the spot according to weak points in their plans. The goal was to find out how the teams reacted to real life emotions as acknowledged by many “real” consultants, who have had to address fears, confrontation and sometimes tears. Perhaps the students expected a cut and dried experience - but that was not in this planned out scenario. At the end of the questions by the couple, there is a surprise situation that sometimes results in a “deer in the headlights look” on the part of the students or has scrambling to think on the fly. Last year at the end of the student presentations, the couple announced they were probably going to for divorce...Say What?
These thinking on your feet situations help the judges analyze the team’s ability to react productively. When the students get to the Finals however, they will be facing an actual Financial Professional asking the questions - so it prepares them for the end contest. After the recordings are finished, they are sent to all of the US Chapter Board of Directors. Each Director will judge and score accordingly. From these scores will come the final 3 teams who will move on to Cincinnati. By Finals time, the students will have tweaked their presentations, have the opportunity to fix areas where they were stumbling, and be more prepared for surprises. It is an interesting process because last year at the Nashville Conference, teams had upped their game or downgraded their performances from their recorded sessions. As this moment, the judges are reviewing the Semi Finalists and making their choices. Stay tuned for who will be headed to Cincinnati!
So enter the “client” couple. At this stage, the couple was two of the IARFC Team members Susan Cappa and Randy Kriner. They were a rather unassuming couple who engaged a financial consultant and were in the office to find out the results (aka student’s recommendations.) These two represented the “emotional and non professional” clients. Students presenting to IARFC Team members (aka fictional couple) in Semi-Finals video taped round.
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Teams presenting to financial professional Michael Markey Jr., MRFC®
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Series 6 and 66
Life Health Variable Contracts Prop. & Casualty Other_____________________________________________________________
Primary Insurance Company (if any)_________________________________________________________ Affiliated with an SEC Registered Investment Advisor (RIA)?
Name of RIA____________________________________________________________________________
Code of Ethics (Applicants must subscribe and adhere to the IARFC Code of Ethics) I will at all times put my client’s interest above my own. I will maintain proficiency in my work through continuing education. When fee-based services are involved, I will charge a fair and reasonable fee based on the amount of time and skill required. I will abide by both the spirit and the letter of the laws and regulations applicable to financial planning services. I will give my clients the same service I would give myself in the same circumstances.
Questions relating to business and ethical conduct
Recommend a colleague for the MRFC
(If you check “Yes” to any of the following questions, please attach a written explanation.)
Have you ever been refused a surety bond or other form of employment security? Full Name
Have you ever been denied or enjoined from selling or dealing in securities or from functioning as an Investment Advisor? Have you ever been arrested, indicted, or convicted for any felony or misdemeanor, except for minor traffic offenses? Have you ever been known personally by any other name, or have you ever conducted financial activities, conducted business or carried brokerage or bank accounts in any other name? Have you ever become insolvent, failed in business or compromised with creditors? If “Yes” – please provimrfe the date, name, and location of court, disposition, liabilities, and assets.
Have you ever had a license, permit, certificate, registration or membership denied, suspended, revoked or restricted, or have you had an application of such type ever withdrawn for cause?
Have you ever been the subject of any order, judgement, decree or other sanction of a foreign court, foreign exchange, or have you ever been the subject of any action by a foreign or domestic governmental or regulatory agency?
Attestations (Applicants please read carefully)
1. I hereby certify that I have read and understand the foregoing statements and that my responses are true and complete to the best of my knowledge. 2. I hereby apply for the MRFC credential and in consideration of my application, I submit myself to the jurisdiction of the Association and hereby verify that I agree to abide by all the provisions of the By-Laws and regulations of the Association as they are and may be amended. I agree to comply with all such requirements, subject to right of appeal as provided by law. I agree that any decision as to the result of any exam(s) that I may be required to pass or annual Continuing Education (CE) requirements will be accepted by me as final. 3. I further agree that neither the Association nor its trustees, directors, officers, or employees shall be liable to me for action taken or omitted in official capacity or in the scope of employment, except as otherwise provided in the statutes, By-Laws, or the Association’s regulations. 4. I hereby certify that I have a sound record of business integrity with no suspension or revocation of any professional licenses, and I hereby subscribe to the IARFC Code of Ethics, a copy of which I have read and understand. 5. It is agreed and understood that any material misrepresentation of facts or information given in this or subsequent application or renewal may be cause for immediate revocation of the MRFC credential and all its privileges, without refund of any dues or fees paid. 6. I understand that failure to disclose any regulatory event, including suspensions or revocations, may disqualify me from initially obtaining the MRFC credential or could result in revocation of the credential. 7. As an applicant for registration, I understand and agree that my MRFC credential will not become effective until I have met all the eligibility requirements and had have successfully passed the MRFC exam. 8. I understand that the MRFC credential remains the property of the MRFC Certification Board, (MCB) and must be destroyed or returned to the MCB should my right to display the credential be suspended or terminated. 9. I understand that the continuation of the MRFC credential requires the successful awarding of forty (40) units of financial services focused CE credits — of which two (2) units every year must be related to Professional Ethics commencing the January of the year following initial acceptance. 10. I understand this application is valid for sixty (60) days from the date of receipt by MCB’s home office and I have ninety (90) days upon application approval to schedule the MRFC exam. 11. I authorize the organization to make available to any federal, state or municipal agency, or any securities or commodities industry self-regulatory organization, any information they may have concerning me or to request confirmation of my status, and I release those organizations, employees and agents, from any and all liability of whatever nature by reason of furnishing such information. 12. I further agree that my contact information contained in this application be divulged to interested parties as part of the member profile on the IARFC website for the benefit of members and the public. 13. I understand that except for my certification status, written authorization by me is required to release my information.
How did you learn about the MRFC? Advertisement Article Association Broker/Dealer Direct Mail Email Exhibit IARFC Website Insurance Co. Referral FB LI Twitter Other _____________________________
Referred by (if applicable)
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
International Association of Registered Financial Consultants P.O. Box 506 Middletown, OH 45042-0506 P: 800.532.9060 F: 513.345.9479 E: firstname.lastname@example.org W: iarfc.org
I attest that I have read and understand the above, that the information I have provided is complete and accurate to the best of my knowledge and belief, and I further understand that my MRFC credential may be revoked if I have provided any false or incomplete information.
Signature of Applicant (required)
P.O. Box 506 Middletown, Ohio 45042
Individual Donations Diamond Michael Markey, Jr., MRFC® Barry L. Dayley, MRFC® Platium Michelle K. Blair, RFC® Gold H. Stephen Bailey, MRFC® Bob K. Meints, RFC® Sandy D. Propst, RFC® Jon M. Rogers, MRFC® Silver Rick R. Mueller, RFC® Dominique G. Vercaemert, RFC®
Diamond Michael Markey, Jr., MRFC® Barry L. Dayley, MRFC® Platium Michelle K. Blair, RFC®
Gold H. Stephen Bailey, MRFC® Bob K. Meints, RFC® Sandy D. Propst, RFC® Jon M. Rogers, MRFC® Silver Rick R. Mueller, RFC® Dominique G. Vercaemert, RFC® Scott A. Wright, RFC® Steven B. Katz, RFC®
The Register is published by the International Association of Registered Financial Consultants and circulated worldwide. It includes article...
Published on Jan 23, 2020
The Register is published by the International Association of Registered Financial Consultants and circulated worldwide. It includes article...