Volume 20 No 4 Fall 2019
Designing Your Team REGISTER PROFILE
Bryan S. Slovon,
MRFC®
Still There for the Client When They Need Him
IN THIS ISSUE There’s a Term for That Hiring – Look Before You Leap Benefit Strategy Review Available for Consultants Key Man (and Woman) Insurance Building Financial Security for your Firm Less Than a Third of Americans 65 and Older Receive Financial Planning Assistance Change for the Better
Official IARFC Publication www.IARFC.org
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Smarter Retirement Planning to Age 70 Helping Your Clients Teach Money Concepts to Kids How To Find and Attract New Insurance Sales! International News Retire on Your Terms
Member-Refer-A-Member Drive November 1 - December 31, 2019
EARN FREE RENEWAL IARFC Member-Refer-A-Member EARN FREE RENEWAL
The value of your IARFC® designation or credential continues to grow by increasing members of highly qualified consultants using and displaying the RFA®, RFC®, and MRFC®. You can leverage this growth. Referring colleagues is a win-win with the Member-Refer-A-Member program. When you nominate professionals and they join the Association, you will receive a $25 IARFC CREDIT, for each new member who joins during the IARFC Member Drive November 1 - December 31, 2019! That’s it. You do the easy part — provide us with all the contact information. We follow through with them to show the benefits and advantages provided by the IARFC. Please print or type the information below. (copy this form to send in as many qualified referrals as you can.
__________________________________________________________________________________________ First Name Middle Name Last Name Prefix:
Mr.
Ms.
Mrs.
__________________________________________________________________________________________ Address
Rules: Recruit new member — get $25 IARFC Member Renewal Credit for each qualified nomination who joins. There is no limit to the number of individuals you may nominate. When you refer these professionals and they join the association, the IARFC will give you a $25 IARFC Credit toward your next renewal. Member-Refer-A-Member $25 IARFC Member Renewal Credit is not available in conjunction with any other referral campaign and applies to US members only. By sending or nominating referrals, you are granting your permission to mention your name as our source, and you will be eligible for the reward. Member Drive Expires December 31, 2019.
__________________________________________________________________________________________ City State Zip Code __________________________________________________________________________________________ Phone Email
__________________________________________________________________________________________ Referred by: __________________________________________________________________________________________ Address __________________________________________________________________________________________ City State Zip Code
IARFC International Association of Registered Financial Consultants P.O. Box 506 Middletown, OH 45042-0506 P: (800) 532-9060 F: (513) 345-9479 E: info@iarfc.org W: iarfc.org
From the
Chairman’s Desk… There’s a Term for That Regional Director and will give guidance when needed regarding Chapter issues.
Kerfuffle ker·fuf·fle – noun, informal def: A disturbance or commotion typically caused by a dispute or conflict. IARFC kerfuffle def: A quarterly visit from IARFC Board of Trustees Chair and CEO, H. Stephen Bailey, MRFC® to the home office in Middletown.
A little over a month ago, I returned from my quarterly visit to Middletown. It’s always great connecting with the Team for three days. Sometimes, however, I get the impression they are not sorry to see me leave. Mostly it shows up as a collective sigh of relief as the airport transfer service pulls up to the door. This past time was no exception. I see it as my job is to whoosh into town, stir up debates, participate in contested conversations, and then depart. When the dust settles and I am back in Charlotte, NC snug in my HB Financial office, I receive action plans, reports and yes, sometimes frustrated phone calls regarding the ideas I sprang on them at Headquarters. I’m affectionately known as an “IARFC Kerfuffle”. Living up to that title, one of the immediate projects we planned out was the restructuring of the Association through adoption of new By-Laws. We hashed out the details, got it organized and now it’s time to relay it to the members — particularly in the Governance Structure changes. Here are the pieces of that framework that are important to understand and our motivation. Our Purpose for Change In our new structure, the underlying purpose is to draw people together. Previously the Association was working under one traditional Board of Directors and a body of members. It has lasted. It had its good qualities but it is not poised to attract membership on a larger scale. I have seen it in other non-profit associations — there is a void between the two groups. It does not foster loyalty. To attract that membership, we need to get closer to the people. As you know, the The Register | Fall 2019
IARFC seeks members from all over the US and internationally. I’m going to walk you through the changes the Board voted in from the ground up. Regional Managers — position for hire either part time or full time To better serve and reach people, we have established regions and are looking for regional directors who will be the local contact of communication. The US Chapter, for example, is divided into 10 regions. The responsibilities will be to gain membership and hold educational activities within the region. This is a contracted position with compensation for each member that is acquired. So that means now instead of working on membership and making connections from 1 home office in Middletown, we will be working on membership from 10 offices. Sounds expansive right? Managing Regional Directors — position for hire either part time or full time Setting the pace for the Regions will be a Managing Regional Director. Reporting to the President of the Chapter and using the US model again, they will supervise their 10 Regions and the Directors. Their first task is to hire these Regional Directors. Together they will work to set up educational programs and classes. Chapters/Chapter Board of Directors — volunteer position in Non-Profit Associations These chapters will mostly be defined by the country that they represent. For example, the US will have its own Chapter with its own Board of Directors and Committees. They will review reports from the Managing
Board of Trustees – volunteer position in Non-Profit Associations This Board sets policy and controls the direction of the Association. It supervises the Certification Programs and the designations/ credentials. It was developed in August and they convened for the first time in September. It will be within their purview to provide vision and long range planning for the Association. To Recap The goal is to bring us closer together. We should see an explosion in our membership within a year to a year and a half. In the near future, we will be hiring and paying people just like they are paid by their broker dealer and insurance companies for performance — in this case by increasing membership in their area. It’s not a new concept. I have seen it work in many non-profit organizations. Building relationships at the regional level fosters loyalty. So… if it takes being a “kerfuffle” to change things, I guess I get the prize. I know the team recognizes that my heart is in every new project and every out-of-the-box idea just as I know they will do their best to make it happen.
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 chairman@iarfc.org www.iarfc.org Page 1
In This ISSUE Register Profile
Columns
Bryan Slovon, MRFC®
Chairman’s Desk
8 Still There for the Client
1 There’s a Term for That By H. Stephen Bailey
When They Need Him
Marketing Unplugged 12 Hiring – Look Before You Leap By Bryce M. Sanders
IARFC® News
Features Key Man (and Woman) Insurance Building Financial Security for your Firm 15 By Jeff Carter
Less Than a Third of Americans 65 and Older Receive Financial Planning Assistance 16 By Jorge Villar
14 Benefit Strategy Review Available for Consultants
IARFC – Viewpoint 21 Change for the Better By Peter J. D’Arruda
International News 28 2019 Event and Education Program Highlights
Consumer Focus 30 Retire on Your Terms By Peter J. D’Arruda
Smarter Retirement Planning to Age 70 22 By Michael Tove
Helping Your Clients Teach Money Concepts to Kids 24 By Jamie Bosse
How To Find and Attract New Insurance Sales! 26 By Jeremy Nason
Page 2
Departments IARFC Trustees, U.S. Directors, International 3 Directors
5 New IARFC Members and Designees 5 Events Calendar 6 From the Editor
The Register | Fall 2019
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®
U.S. BOARD OF DIRECTORS President, Peter J. D’Arruda, MRFC®
Treasurer, Bradley K. Maples, Sr., MRFC®
Executive President, Mayo M. Woodward, RFC®
Secretary, James B. Moss, RFC® Director, Frederick C. Ostermeyer, MRFC®
Vice President, Rick B. Stanzione, RFC
®
Greater China Chair (China, Hong Kong, Macau & Taiwan), Liang Tien Lung, RFC® China Development Center CEO Kai Yuan Tu, RFC®
Hong Kong and Macau, Chair Teresa So, RFC® Hong Kong and Macau, Executive Director Allan Wan, RFC® Taiwan Chair Kai Yuan Tu, RFC®
Australia and New Zealand Chair, George Flack, RFC® Hong Kong and Macau Honorary Chair Samuel W. K. Yung, RFC®
MRFC CERTIFICATION BOARD Chair, Barry L. Dayley, MRFC
Director, Mickey Jordan, MRFC
Secretary, Robert D. Lawson, MRFC®
Director, Julie Friend, Public Member
®
®
Vice Chair, Craig Lemoine, MRFC®
WEBSITES
IARFC OFFICE ASSOCIATE TEAM
United States — www.iarfc.org
Editorial Coordinator, Wendy M. Kennedy
China — www.iarfc.cn
Public Relations, Susan M. Cappa
Hong Kong — www.iarfc-hk.org
Membership Services, Vicki Caplinger
Indonesia — www.iarfcindonesia.com Philippines — www.iarfcphilippines.org Taiwan — www.iarfc.org.tw
The Register | Fall 2019
Editor-in-Chief Wendy M. Kennedy editor@iarfc.org Editor Susan M. Cappa susan@iarfc.org Editorial Advisory Committee Peter J. D’Arruda, MRFC® Michelle Blair, RFC®
INTERNATIONAL DIRECTORS Asia Chair, Jeffrey Chiew, RFC®
www.iarfc.org/publications/register 146 N. Breiel Boulevard Middletown, OH 45042-0506 (800) 532-9060
Membership Services, Judi Nelson Information Technology, Randy Kriner
The Register is published by the International Association of Registered Financial Consultants ©2019, 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: Wendy M. Kennedy editor@iarfc.org Periodicals Postage Paid at Mansfield, Ohio. POSTMASTER: Send address changes to: P.O. Box 506, Middletown, Ohio 45042 ISSN 1556-4045 (print) ISSN 2639-7374 (online)
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IARFC Ethics Approved Status
Ethics Approved Status means adherence to the IARFC Code of Ethics with a clear record for the past five years. Members are biennially verified through FINRA, State licensing records and internet searches.
Brand Your Ethics Approved Status Set yourself apart from other consultants • Affix your Ethics Approved Seal to your framed RFA®, RFC® or MRFC® Certificate • Send an IARFC Ethics Approved media release to your contacts • Order business cards with the Ethics Approved Seal • Place digitized Seal on your website in a prominent position • Mention this program in client newsletters • Order additional Ethics Approved Seals as a visual reminder • Display the IARFC Code of Ethics plaque in office • Put a link to the IARFC Code of Ethics on your website
Visit the store store for these valuable branding tools tools VisitIARFC the IARFC for these valuable branding www.iarfc.org or contactor (800) 532-9060, info@iarfc.org www.IARFC.org/Store contact 800.532.9060, info@iarfc.org Page 4
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
The Register | September-October 2018
®
Events
N e w M R F C s, R F C s, R FA s, and Association Members MRFC® Ryan E. Biniak, MRFC , IA Bryan S. Slovon, MRFC®, MD
Colin J.S. Wereley, Association Member, ID Audrey West, RFA®, CA Jean Jacques Widmaier, RFA®, CA
RFC®, RFA®, Association Members
Members Who Recommended Members
®
Theodore R. Agrillo, RFC , NY Matthew T. Apodaca, RFC®, CA Paul M. Apodaca, RFC®, CA Marquay J. Baul, RFC®, OK Jonathan N. Browning, RFC®, VA Rodney G. Butler, RFC®, NC Christopher C. Cavallaro, RFC®, MA Jared L. Davis, Association Member, ID Eric J. Dileo, RFA®, CA Richard S. Ditter, RFC®, TN Kassondra J. Dykema, Association Member, WA Sean W. Fleming, RFC®, AL Saikat Ghosh Roy, RFA®, IN Jean A. Kwon, RFC®, CA Richard A. Lamore, RFC®, CT Betty G. Ludeke, RFC®, CA Stacey Maloney, RFC®, NJ Christopher S. McIntire, Association Member, OH Samuel R. Osborne, RFC®, CA Matthew E. Pratzner, RFC®, PA Douglas Gary Rhodes, RFC®, IN Gary Robertson, Association Member, AR Richard G. Saine, RFC®, AZ Kurt R. Schroeder, RFC®, CO Ronald A. Sneller, RFC®, MI Danny G. Steele, RFC®, FL Ken L. Stone, RFC®, OH Eric J. Stroehle, RFC®, CT Jennifer J. Trowbridge, RFC®, FL ®
Events Calendar 2019 November MRFC Board Phone Conference November 14, 2019 U.S. Directors Phone Conference November 13, 2019 December Board of Trustees Phone Conference December 10, 2019
2020 February U.S. Directors Phone Conference February 12, 2020 April Board of Trustees & U.S. Board Annual Meeting
Matthew T. Apodaca, RFC® Jeff Concepcion, RFC® Mark Dahlenburg, RFC® Susan Gelok-Cullen, RFC® Michael Gilliss, RFC® Thomas Hill, RFC® Ronnie Kaymore, RFC® Richard Lamore, RFC® Lew Nason, RFC® Fred Ostermeyer, MRFC® Kevin Richards, RFC® Nick Royer, MRFC®
Member Referrer Recognition
Matthew T. Apodaca, RFC®
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
Cincinnati, OH April 22, 2020 IARFC National Financial Plan Competition & Awards Banquet Cincinnati, OH April 23, 2020
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
The Register | Fall 2019
Page 5
From the EDITOR The giving season traditionally kicks off in late November, and I hope you are gearing up to support your favorite charities. Here at the IARFC we are kicking off the season early by giving to the IARFC Members. The IARFC is running a Member Drive from November 1 – December 31, 2019. During the season each member who refers a member that joins the IARFC will receive a credit of $25 to be applied to their next renewal. This will potentially, gain you a Free Member Renewal in 2020, and free up some funds for giving to a favorite charity this season. Along with the potential Free Member Renewal, this puts the member in the running for the 2019 Member Award program. First Place thru Third place are awarded a handsome crystal that will be announced at the Annual Awards Banquet April 23, 2020. The member who has referred the most members in 2019 will receive a trip to the Awards Banquet. We feel this is a way to give back to the member as well as growing the Association you have supported. Details on the inside cover. In this issue on page 8, is our final member profile for 2019 with Bryan S. Slovon, MRFC®. Bryan is a return member profile and Susan Cappa has again done a tremendous job of highlighting the success and changes in our member’s practice. In our 2020 issues, we would like to see more Register Profiles of members. If you are interested in teaching others about your practice and being published, reach out to us we have opportunities still open for the 2020 issues.
Wendy M. Kennedy, Editor-in-Chief
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www.iarfc.org/publications/register P.O. Box 506 Middletown, OH 45042 (800) 532-9060 Editor-in-Chief Wendy M. Kennedy editor@iarfc.org Editor Susan M. Cappa susan@iarfc.org Editorial Advisory Committee Peter J. D’Arruda, MRFC® Michelle Blair, RFC® The Register is published by the International Association of Registered Financial Consultants ©2019, 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: Wendy M. Kennedy editor@iarfc.org Periodicals Postage Paid at Mansfield, Ohio. POSTMASTER: Send address changes to: P.O. Box 506, Middletown, Ohio 45042 ISSN 1556-4045
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The Register | Fall 2019
2020 Editorial Calendar Issue
Theme
Possible Topics to be Covered
Volume 21, No 1 February
Ethics Approved
Office Team Building Staff Appreciation Office Perks—Health Insurance, 401K, Vacation Days—How to Handle This Educating Your Staff Keeping a Comfortable Working Environment
Volume 21, No 2 May
Wealth Protection
Life Changes: Divorce, Children, Marriage, Death of a Spouse—now what? Life Insurance and Why? When to Consider the Purchase of Long Term Care, When Do My Clients Need a Will or Trust? My Child has Graduated from College—Now What?
Volume 21, No 3 August
Next Gen
Financial Planning Topics: Putting Together Professionals to Guide Clients The Family Office When the Consultant and Client Don’t See Eye to Eye When is it Time to Fire a Client? Hiring the Next Gen to Grow Your Practice
Volume 21, No 4 November
Money Management
Debt Management Things to Consider when Buying a Home Guide to Setting up a Budget Should A Client Save for Their Child’s College or Their Own Retirement? Credit Card Balances
Issue Volume 21, No 1, February Volume 21, No 2, May
Copy Deadline December 1 January 1
Volume 21, No 3, August
April 1
Volume 21, No 4, November
June 1
The Register | Fall 2019
Advertise in the Advertise in the Register, published by the IARFC since 1999 and circulated in print and electronically around the world. Wendy M. Kennedy P: (513) 261-6047 F: (513) 345-9479 advertise@iarfc.org Page 7
Register Profile
Bryan S. Slovon, MRFC® Still There for the Client When They Need Him Over six years ago, a Register interview with Bryan resulted in very practical answers about fulfilling the needs of the client. Since then, things have updated, while others remain the same. Bryan is now a newly accredited Master Registered Financial Consultant, (MRFC®) but as always, continues to give attention to client’s goals and financial welfare. Here is a revisit to Bryan Slovon, MRFC® of Stuart Financial Group – Wealth, Retirement & Legacy Planners (SFG) in Greenbelt, MD. Register: Your interview for the Register was in 2013. What has happened to you since then? Bryan: In one word, growth. We moved into a new and larger 2500 sq ft office space in Greenbelt. We opened a satellite office in Annapolis. Our planning process, the Stuart Retirement Review® (SRR), is now a registered trademarked process. Our team has grown. I am still the main planner, my wife/business partner Lucy continues to manage the overall day-to-day of the business. Two other team members include a client service manager as well as a client relationship manager. Register: Your mission was to always protect our client’s best interests and provide both quantitative and qualitative success for parties. Is that still the goal? Bryan: Absolutely! It is still the goal. We work hard to keep on top of all the current issues and regulations, thus supporting our clients at the highest level to help manage and preserve the wealth of our clients and their families, so they worry more about their life and less about their money. Register: Your process is designed around 5 key areas of the client’s life. (Income, Investment, Tax, Healthcare, Legacy Planning). Has that process altered any? And in what ways? Page 8
Bryan: The SRR process is a comprehensive financial planning approach. Designed to help SFG clients achieve simplicity and confidence planning for and during their retirement years. In today’s world of investment planning, there is a multitude of choices all over the board — clients doing it themselves, super discount brokerage houses, or typical Wall Street professionals. At SFG, we act as a fiduciary on the investment side of planning. We believe that being a true fiduciary is an involved process requiring intense dedication to client discovery and continuous review of their entire situation.
opposed to mainly investment planning and that is where we differentiate ourselves as a company. The key is that we assist our clients comprehensively in all areas financial. We do get compensated in investment and insurance products, but we put in the time with clients over and beyond – implementing their estate planning, even setting up plans with attorneys, and following up with the clients. I know everybody says those things but we really do them. It has nothing to do with our bottom line. We tend to dig deeper with our clients, looking at their budget and giving them ideas to improve their cash flow.
Register: Has the role of fiduciary changed over the years?
Register: What is the secret to getting referrals from clients?
Bryan: I think the role of the fiduciary hasn’t changed but the more knowledge you obtain, the better job you can do. We talk about it in our events. We believe no one product fixes everything. All investments and insurance products have pros and cons. That is why having a plan and monitoring it is essential to any long term success.
Bryan: To us, the secret is consistency in the level of service we provide. Our clients know that we will take care of their friends, family, co-workers the same way we took care of them. Good referrals take time to cultivate, and we are always working hard to keep earning their trust and providing our clients the opportunity to help those they care about in return.
Register: Do you find it more difficult to maintain the fiduciary role? Bryan: No, we have operated as a fiduciary from the beginning. I think trends in the industry and the deregulation and backing off of the DOL rule for now makes thing easier, however in the future we feel things will tighten up. We will continue to act in the highest fiduciary level regardless of the regulations. Register: How are your seminars going? What kind of results do you see from these events? What is the key to a successful program? Bryan: Our seminars are going well. We find that attendees want to make sure that they are doing actual financial planning as
Register: What is the status of your business continuation plan? Bryan: For now, my BCP is my wife, Lucy taking over the business down the road. I do not have real plans for retirement. My job is also something I enjoy like a hobby and will probably continue to work for quite a while. Register: What else is on the horizon for the Stuart Financial Group? Bryan: I consider myself a lifelong learner. I am constantly improving my knowledge of higher level business investments, tax planning for small businesses and higher income individuals, as well as comprehensively working with people who The Register | Fall 2019
need our assistance planning. I am part of a CPA group where we are constantly learning new charitable strategies. Financial Services can mean a hundred different things. To me, it means helping clients reach their end goals. It means utilizing strategies to help them live their life to the fullest and do the best job for the people they care about and…keeping their independence as they get older.
Stuart Retirement Review® Our Process is designed to help our clients achieve simplicity and confidence during their retirement years. It’s focused around 5 key areas of their current financial life.
Register: You recently became a Master Registered Financial Consultant. Why do you think it was a good move to sit for the MRFC Exam? Bryan: I considered this step my continuation in holistic financial planning. Advisors tend to focus on things that we do well and sometimes a refresher in other areas of financial planning is beneficial. I saw the MRFC as a very professional credential that I could apply myself to for the knowledge. Register: How can you relate the significance of the credential to your clients? Bryan: I want my clients to know that I am always looking to invest in learning. Everything changes in all areas of our business and we want to be top of mind in everything that is going on. This allows us to offer solutions that are up-to-date. The best benefit is the ability to align myself with the MRFC credential and the IARFC who promotes financial education for clients and consultants. Register: And the last word? Bryan: Our focus is on our trademarked holistic process. Maintaining an ongoing relationship with clients means constant monitoring and being there for our clients when they need us. It’s our commitment to those we serve. Contact: (301) 345-1635 bryan@stuartfg.com www.stuartfg.com The Register | Fall 2019
Bryan Slovon, MRFC® of Stuart Financial Group – Wealth, Retirement & Legacy Planners in Greenbelt, MD Page 9
Founder’s Award 2020
The IARFC Founder’s Award This Award is made in honor of the founder of the IARFC John J. Gargan. It is presented to persons who have delivered significant service to the operation and growth of the International Association of Registered Financial Consultants.
Page 10
The Register | Fall 2019
IARFC Founder’s Award 2020 Criteria for the Founder’s Award • M ust have been a past or present Board Director, Officer, or Committee Member. • Must hold or have held a professional designation awarded by the IARFC (i.e. RFC®). • Must have a clean regulatory record. • Must have been a member in good standing for a minimum of 5 years. • Must have high ethical and professional standards. • Must have contributed to the growth of the IARFC membership by referring membership, holding or attending events that additionally help expand (above and beyond) the visibility of the Association. Nominations Accepted From IARFC members: RFA®, RFC®, RFC® Retired, or MRFC®. Nominations Procedure Please fill out this form and on a separate sheet of paper please explain why the nominee should be considered for the Founder’s Award. Submissions are due by November 30, 2019
Nominee: Please print or type information below. ____________________________________________________________________ First Name Last Name ____________________________________________________________________ Firm or B/D ____________________________________________________________________ Street Address ____________________________________________________________________ City State Zip Code ������������������������������������������������������������������� Phone Email
Nominator: Please print or type information below. ____________________________________________________________________ First Name Last Name ������������������������������������������������������������������� Phone Email
Ways to send in a Nomination for the Founder’s Award Mail this from to: IARFC Founder’s Award P.O. Box 506, Middletown, OH 45042 Fax: (513) 345-9479 Emai: wendy@iarfc.org Questions: (800) 532-9060
The Register | Fall 2019
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Founded in 1984, the IARFC fosters and enhances the growth of the Association for the benefit of the members and the clients we serve by providing a continuing source of information, education and networking. The IARFC will strengthen the financial services profession through adherence to and promotion of ethical behavior by our members and focus on their continuing professional education. Page 11
Marketing Unplugged Hiring – Look Before You Leap firm still gets their part). You are willing to shoulder this cost. Bear in mind the cost is a lot higher, because you will also be responsible for the cost of benefits the firm provides employees. If the firm is bearing part of their health care plan costs, that becomes an expense for you. They may be a firm employee, but you hired them and they work for you. Firms use the expression “headcount.” They are part of your practice’s headcount, not the branch headcount. 4. Don’t hire in your own image. You love backslapping, can’t stand prospecting and paperwork. Don’t hire someone just because you get along well over drinks. You need to identify the areas of needed improvement in your practice and hire someone who can fill those gaps. You own your own business. Most consultants in the financial services industry work under a unique business model. They work for a large firm. They get a paycheck. They have an office, heating, lighting and lots of technology. Yet all this overhead is supported by the revenue you bring into the firm. The adjusted compensation you receive in addition to your monthly salary makes this pretty clear. It’s been going pretty well so far. You are wondering: “Should I hire someone?” Consultants grow their practices in many ways. The obvious way is by adding new clients and assets through prospecting and referrals. I’ve heard this likened to being a barber. There’s only a certain number of heads of hair you can cut in a day. To grow the business, you need to add another barber. Other consultant grow their business though buying an existing book of business or by partnering with another consultant. In this article, we are like the barber, seeking to hire another barber as an employee. Ten Things to Consider When Hiring an Employee Let’s assume you work for a large firm, like a wire house or a bank. Your practice consists of yourself and a fraction of a sales assistant. You are thinking of hiring one additional staff person. This isn’t an intern or an Page 12
independent contractor, this person will be an employee of the firm, paid by you, through the firm. 1. Have a plan. Why are you hiring a person? To increase revenue in your practice. At the very least the increased revenue must cover your costs to hire this person. Increased revenue comes from one of two places: Either they bring it in or they take the non-revenue producing activities like paperwork and preparing for client reviews off your shoulders, freeing up your time to prospect and produce more revenue. As your previous training taught you, it’s an “A to Z” process. Step A is hiring someone. Step Z is getting lots more revenue into the practice. What happens between step A and step Z? 2. Hire your entire sales assistant. You have a good relationship with your assistant. They are licensed. They currently do everything except prospect and recommend investments. They are comfortable with the firm’s systems. This might be the solution that’s right under your nose. 3. Acknowledge this will be expensive. You might say: “I’ll pay this person X dollars a year. That’s competitive.” You realize this will probably come out of your portion of the revenue you bring into the firm (The
5. Don’t assign the terrible tasks. Suppose you are that consultant who can’t stand prospecting. It’s like torture for you. Don’t hire someone and explain “100% of your job is client acquisition.” If you stick them with the least desirable task and berate them for not doing a better job, don’t be surprised if turnover is high. 6. Plan a career path. Some financial consultants treat their practice like a family business. They will bring on their sibling, fresh from college, hiring them as an employee. The message is: “Someday, this will all be yours.” If you are hiring a full time sales assistant, the path might be to first become licensed, then an investment associate and eventually a partner in the practice. This doesn’t need to be spelled out completely, circumstances might change. You don’t want them to feel stuck in a dead end job. 7. You own problems. This builds on “Don’t hire in your own image.” Suppose your early years included business practices that might be described as “working in grey areas.” You were either careful or just lucky. You are established now and walk the straight and narrow line. If you hire a version of your earlier self, you might find yourself facing possible compliance or legal issues if they color outside the lines. As your employee, their problem is your problem. The Register | Fall 2019
8. Labor laws. In your personal life, you can cut expenses by selling your second car or vacation home. Your business life is different. If you lose a couple of big clients and revenue is dramatically down, it’s difficult to say: “Sorry, but I can’t afford an employee any more. You are fired.” You have taken on a responsibility and must operate within the rules. Hopefully the firm could find another position for them, but that’s not guaranteed. 9. Poaching. Years ago, the financial services industry concluded it made sense to let competitors do the hiring and training, then hire away their experienced consultants. If your employee is doing well, expect word will get to some of the established consultants and teams in your office. They will seek to hire your experienced employee away from you. This is where having a career path helps. 10. Prospecting is a golden skill. Suppose you find that rare person, someone who is incredibly good at prospecting and opening accounts. Everyone will want that person working alongside them. It’s the major skill determining a consultant’s success. You will need to choose between getting them into the firm’s consultant training program, so they can reach their full potential on their own or bringing them into partnership within your practice. They are too valuable a resource to leave open to poaching. These ten points have probably gotten you thinking: In a business where revenue can be unpredictable in certain circumstances, do I want to hire a person? Are there other solutions to increasing revenue in my practice?
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
IARFC Member Group Rate Insurance L i f e A D & D LT D K EY B E N E F I T S I N C L U D E : • Life, AD&D and LTD Insurance • Highly affordable premiums with core coverage • Guaranteed issue/no medical or financial underwriting • Competitive premiums designed for consultants • Travel benefits and employee assistance programs 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 brycesanders@msn.com www.perceptivebusiness.com The Register | Fall 2019
Page 13
IARFC® News Benefit Strategy Review Available for Consultants The International Association of Registered Financial Consultants (IARFC®) provides a detailed listing of benefits that are available for consultants through their newly released White Paper entitled Utilizing Member Benefits. It guides consultants on what to look for in benefits when considering membership in a financial services association with suggestions on how best to utilize them…including examples of what the IARFC has to offer.
Being in line with the mission of an association is the most important consideration. The IARFC feels it is equally essential to determine if the benefits are right for the consultant. Many times benefits appear ordinary on the surface until they are explored more fully. The White Paper explores such topics as Benefit Strategy, Timeliness, Designations, Credentials, Trademarks, Code of Ethics, Ethics Approved Status, Practice Management Tools, Branding, Publications, Visibility, Partner Programs, Social Media, Networking, Award Recognition, Insurance, Educational Programs, Leadership Positions, Give Back Opportunities, and International Recognition. “We feel that the most valuable benefits that are obtainable to the members of the IARFC are the designations/credential,” observed Trustee Chair and CEO, H. Stephen Bailey, MRFC®. “The Association has gone to considerable time and expense to accredit the Master Register Financial Consultant (MRFC®) credential in order to stay relevant in our industry. This was in answer to member’s request which was more acceptable to their broker dealers.” While not exactly a tangible product, adhering to an established Code of Ethics is a way of announcing to clients, prospects, and consumers that the consultant realizes a fiduciary responsibility. Qualifying those commitments is accomplished through the IARFC Ethics Approved Status where high standards are met for members and are under constant review. “When we first started this program, we didn’t realize the significance of this rating,” continued Bailey. Page 14
“Now, more than ever, the program means something in this day and age when ethics is crucial. It is an integral part of our membership benefits.” Visibility should not be overlooked. A financial services association provides opportunities to assume leadership positions, expand on financial topics through written articles, and distribute social media on a more widespread platform. Credibility is established though these connections to a well-established organization.
Susan Cappa
Complete descriptions of benefits can be found by going to the IARFC Store and downloading the White Paper.
Susan Cappa, IARFC Public Relations is an editor and public relations coordinator for the IARFC. She gets the word out about the IARFC in the form of media releases, articles, interviews, blogs, and White Papers. Additionally she works with the International chapters keeping them connected to the Association.
For more information on the IARFC and all the benefits it has to offer visit http://www.iarfc.org.
Contact: (800) 532-9060 susan@iarfc.org www.iarfc.org The Register | Fall 2019
Key Man (and Woman) Insurance Building Financial Security for your Firm Every firm should consider the impact of suddenly losing a partner or key employee. The unexpected death or disability of a key member of your staff can cripple your operations. Along with losing a valued member of your management team, you would also be losing the manager’s skill, “know-how”, and perhaps, the important business relationships he or she had cultivated over the years. Navigating the Shoals Although it is impossible to prevent the sudden and unexpected loss of a critical employee, you can receive compensation through insurance to protect against the loss of a key person. A key person policy covers or “indemnifies” a company against the loss of a valued team member’s skill and experience. The proceeds help: provide funds to recruit, hire, and train a replacement; replace lost profits; assure customers that business operations will continue; and reassure lenders that funds will be available to help repay business loans. Generally, the firm owns the policy, the premiums are not deductible, and the death proceeds are received by the company income tax free, although there may be alternative minimum tax (AMT) consequences for businesses structured as C Corporations. Charting a Course Needless to say, it is not easy placing a value on a key employee. Generally, there are three different approaches used to determine the amount of insurance that is necessary: 1. The “multiple” approach uses a multiple of the key person’s total annual compensation, including bonuses and deferred compensation. The popularity of this method may reflect the difficulty business executives The Register | Fall 2019
have in quantifying a key employee’s value. On the other hand, the disadvantage is that the estimate, typically for five or more years’ annual compensation, may or may not relate to actual needs. 2. The “business profits” approach is a more sophisticated method. It attempts to quantify the portion of the business’s net profit that is directly attributable to the key person and then multiplies that amount by the number of years it is expected it will take for a replacement to become as productive as the insured. For example, if net profit attributable to the key employee is estimated at $250,000 annually, and it is expected that it would take five years to hire and train a replacement, then the policy’s face amount would be $1.25 million.
vital component in protecting your firm from the loss of your most valuable assets—the people who help it grow and prosper.
3. The “present value” approach calculates the present value of the profit contributions of the key employee over a specified number of years. This amount is then used as the face value of the policy. For instance, with an anticipated profit contribution of $250,000 per year for the next five years and a discount rate of 8%, the policy’s face value would be about $1 million. This method assumes insurance proceeds can be invested at a given rate of return and will be expended over a given period of years.
Jeff Carter, RICP, LUTCF, CSA, RFC® a veteran financial services professional with 29 years of experience and the author of the bestselling book retirementboom.org
Regardless of which method is best suited for your practice, key person insurance is a
Contact: (623) 933-9500 jeffcarter@smartfinancialstrategies.com www.smartfinancialstrategies.com
Jeff Carter, RICP, LUTCF, CSA, RFC®
Page 15
Less Than a Third of Americans 65 and Older Receive Financial Planning Assistance Consultants Are Missing Out on a Huge Opportunity
Did you know less than one third of people age 65 and up — 31% to be precise — say a financial professional helps them manage their money? This is according to the Invest in You Savings Survey released in April by CNBC and Acorns, a financial wellness platform. The survey measured Americans’ confidence in their retirement savings. As you might imagine, several factors have shaped that statistic – emotional, psychological, and behavioral. What, then, is the best way to take advantage of this untapped market? Consultants, insurance agents and estate planning attorneys need to put themselves in their prospects’ shoes. And that means hosting dinner seminars and educational workshops. Overcoming that ‘expert anxiety’ At first, even people who are receptive to your assistance will be cautious and guarded. Therefore, you must break down the barriers between the person who has assets but doesn’t know what to do with them, and you, the one with the resources to help them. This requires dealing with a dynamic I call expert anxiety. Some prospective clients are reluctant to meet with professional service providers because they do not understand the information to be presented. If this lack of knowledge makes them uncomfortable enough, they will avoid taking action. For example, when you visit an auto mechanic, doctor, or lawyer, you are essentially at their Page 16
mercy. Their recommendations and decisions are based on the training and knowledge they have, but you lack. Has that ever made you feel vulnerable, or doubtful? Then you have an idea how a financial services prospect feels. Making a connection If you want to motivate people to seek your advice, you’ve got to meet them face to face. After 25 years in the marketing business, I’ve found the easiest and most effective way to engage people is to get in front of as many as possible. If members of an audience feel safe, secure and empowered, they will pay attention to your information. In this group setting, a consultant can effectively deliver their compelling message: I have answers to your financial questions and solutions for your problems. Exploring “YOUR” business opportunity If 31% of Americans 65 and up are working with a financial consultant, this means 69% are not. Consultants, use the power of seminars to reach these underserved people! I know many of you are dismissive of seminar marketing, despite the fact it is a time-tested, proven process.
presentation about how you can help us strengthen our retirement finances or our estates. Then we will consider meeting with you one-on-one. Setting the “social” dinner seminar stage vs. “workshop” There are two ways to provide the safety-innumbers ambiance that will boost your business. The first and most effective is the dinner seminar. Think about it. Untold numbers of deals, arrangements, commitments, agreements, and celebrations are done over a meal in our professional and personal lives. A great local restaurant is perceived by attendees to be less “salesy” than a consultant’s office and it attracts a wealthier demographic than non-food events do. Pick a place with room to hold 20 to 30 prospects. The comfortable and private setting helps to create a bonding experience. Dinner seminars tend to draw couples looking for second opinions about money management. Your guests are also more likely to stick around after you speak, which makes it easier to set appointments.
This is what response data from pre-retirees and retirees all over the country tells me about their preferences:
Now, I’ve heard lots of consultants complain about those dreaded plate lickers, who attend a seminar only for the free meal. The truth is, most of your audience will be driven by a sense of urgency about their finances. They can easily afford to dine out.
We want to hear from a consultant or attorney in a neutral location, with others like ourselves, where we can take in your
Hosting an educational event Your second option is an educational seminar or workshop. They can be held at a The Register | Fall 2019
IARFC® Note Cards
We want to hear from a consultant or attorney in a neutral location, with others like ourselves, where we can take in your presentation about how you can help us strengthen our retirement finances or our estates. Then we will consider meeting with you one-on-one.
local library, conference center, hotel, country club, or college.
Remember, it all goes back to giving your ideal audience what they want.
These events attract individuals who are in a learning and information-gathering mode. Educational seminars tend to draw smaller and less affluent crowds.
I’ve built a successful career helping consultants do exactly that.
Use the IARFC Note Cards for a quick personal Thank You
As a result, fewer people will be inclined to meet with you after your presentation. Regardless of which format you choose, though, my experience is that you’ll make appointments with 30% to 50% of your attendees. Powering YOUR business growth How do top producers fill their dinner seminars with prospects? By combining highly targeted direct mail with Facebook ads.
Jorge Villar
No other company in our industry will give you this option for a combination direct/ digital seminar marketing campaign.
Jorge Villar Founder of RME360, 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.
Making the case for the seminar approach In conclusion, I hope you will consider – or reconsider – dinner seminars and educational workshops as part of your business development strategy.
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.
They are a proven way to generate leads and acquire new clients, and they can dramatically increase your production and income.
A Tampa native, Jorge and his wife, Jill, have two children. Jorge relaxes by entertaining friends and family, boating, listening to music and shopping.
Because LeadingResponse has accumulated so much response data and consultant feedback, we are able to charge clients on a per-reservation basis.
With over two-thirds of Americans age 65 and older not working with a financial consultant to manage their retirement savings, the possibilities are enormous. The Register | Fall 2019
IARFC® Note Cards
Contact: (813) 885-8231 jorgev@leadingresponse.com www.leadingresonse.com
Order your IARFC Note Cards, packages of 25, $30 plus s&h, quantity pricing available
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Visit the IARFC store for these valuable branding tools. store.iarfc.org or contact (800) 532-9060, info@iarfc.org
Page 17
I m p a c t Yo u r I m a g e IARFC Partner Programs Partnering with others strengthens the IARFC community of consultants. The Association continually seeks and forms strategic alliances with other organizations and businesses to provide members with discounts for services and products necessary to their practice. For a complete list and details visit: www.iarfc.org/members/general/member-benefits
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IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
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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 IARFC membership 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; and I agree to comply with all such requirements, subject to right of appeal as provided by law, and I agree that any decision as to the result of any examination(s) that I may be required to pass or annual CE requirements will be accepted by me as final. 3. I further agree that neither the Association nor its 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 authorize the Association 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. 5. I further agree that any part of the information contained in this application and any subsequent documents in my IARFC file may be divulged to interested parties as part of the referral system for the benefit of members and the public. 6. 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. 7. 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 membership and all its privileges, without refund of any dues or fees paid. 8. I understand that failure to disclose any regulatory event, including suspensions or revocations, may disqualify me. 9. I agree to maintain proficiency in my work by completing continuing education in the field of financial planning and counseling — which can include subjects relating to practice management, delivery of professional services, portfolio management or financial product application and service. 10. As an applicant for membership, I understand and agree that my RFC® or RFA® designation with the IARFC will not become effective until submission of all required documentation in proper order and upon written acceptance by the IARFC. 11. I understand that all IARFC Certificates of Designation remain the property of the Association and must be destroyed or returned to the Association should my membership or the right to display the certificate of designation be suspended or terminated. 12. I understand that continuation of the RFC® or RFA® designation requires 40 units of professional Continuing Education, 4 hours related to ethical practices (CE) every two years. 13. I understand that if I do not meet the required professional experience of 3 years for the RFC®, the IARFC will qualify and award me the RFA® designation. RFA® designation converts to the RFC® upon completion of three years of experience.
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IARFC International Association of Registered Financial Consultants P.O. Box 506 Middletown, OH 45042-0506 P: (800) 532-9060 F: (513) 345-9479 E: info@iarfc.org W: iarfc.org Revised Date 10/9/2019
Viewpoint
IARFC®
We are covering our IARFC and MRFC Board Member’s philosophy of change, historically meaningful personal changes and current changes trending in today’s economy as it relates to the client and to you as a consultant.
Change for the Better Changes in Retirement Planning Attitudes One of the main changes I have made in my own practice is being more focused on my client’s retirement income needs. That seems to be the prevailing interest in the industry overall. It just seems more and more attention is being paid to lifetime income and guarantees. I think now we have a better national political environment that is actually paying attention to consultants and consumers’ needs — with even better leadership in the DOL than in the previous administration. In response, there are specific designations such as the RICP®, Retirement Income Certified Professional, that are addressing these issues. I challenge you, if you claim to be in the business, then BE in the business of helping people through retirement. Lot of people are just sticking their toe in the seas of retirement planning. Because of this, it seems I spend my days cleaning up messes made by other financial planners — a sort of “financial janitor”. My message in running your business is to spend money…but spend it smartly. Mostly, I hear people taking more risk when they are younger and being more conservative as they get to their retirement years. I maintain that if the core lifetime income account is solid, then the client is able to take risk even during retirement. I call this the Core & Explore model. The Register | Fall 2019
US Chapter Board President Peter J. D’Arruda, MRFC®
More Changes in IARFC It seems I will be “retiring” so to speak off the IARFC US Chapter Board of Directors — my two term limit is up. I think the IARFC is going forward in good hands with positive leadership. I have been very proud to have been a member of the Board and worked through the changes we made in the past three years. We deal with all different personalities on the Board that have the common goal of the Association’s mission. Look for even more advances in the next year. Although, my role as President of the US Chapter Board is changing, I will not lose contact with the Association. My involvement on committees, contribution to the Register, and working on development of a podcast series for the IARFC, supports the belief I have in the organization. I urge every member to get involved.
income tax. But, I do not see myself retiring out West. I don’t even see myself retiring! My shows are on over a hundred stations nationally and my content is even bigger and better. Life and Change is good!
Peter J. “Coach Pete” D’Arruda, RICP, MRFC®
My Own Personal Change I have been expanding offices — from one location to three in the locations of Apex, NC; Wilmington, NC; and Las Vegas, NV. I constantly hear complaints that “your area is different than mine”. I am on a roll to change that thinking and prove that solid financial concepts work everywhere.
Peter J. “Coach Pete” D’Arruda, RICP, MRFC® is a Financial and Tax Coach. He is host of the nationally syndicated weekly radio show, The Financial Safari, as well as the author of four books, including “Fine Print Fiasco”, “Financial Safari, 7 Financial Baby Steps” and “Have you been talking to Financial Aliens?” Themes of these easy readers include helping others avoid being taken advantage of and translating financial jargon for any layperson.
There are three times as many people in Las Vegas than the Apex area, with people migrating to Nevada due to zero state
Contact: (919) 657-4201 pete@capitalfinancialusa.com www.capitalfinancialusa.com Page 21
Smarter Retirement Planning to Age 70
Most people are aware of the advice “delay your Social Security until 70” but many reject it. Perhaps they created an Excel spreadsheet that seems to contradict that advice. Maybe they think they won’t live long enough. Maybe they just can’t stand working past 65 (or 66 or 67) and disdain withdrawing their IRA or 401(k), etc. early because it’s 100% taxable upon receipt and they hate giving money to Uncle Sam. Unfortunately, the decision to start Social Security before 70 and delay withdrawing from an IRA until RMDs begin at 70½ may be backward. Some facts: 1. Social Security checks get 8% larger every year delayed through age 70 (technically, 2/3% per month). For a person born in 1960 or after, the “crossover point” is age 82½. For example, suppose at Full Retirement Age (67), a person’s Social Security income is $24,000/year or $29,760/ year if delayed to age 70. Starting Social Security at 67 will mean three years of payments (of $24,000 each) more than by delaying; a total of $72,000 more. But at 70, the annual Social Security income is $5,760 greater. By age 82½, the sum of the payments from either schedule will be identical and every year thereafter means more income per month monthly and more income total from having delayed. According to a 2013 Stanford University study on longevity (http://longevity3. Stanford.edu/wp-content/uploads/2013/09/ SOA_SCL_Final.pdf), there is a 50% chance Page 22
a healthy male age 65 will reach age 85; a healthy female age 65 will reach age 87 and at least one of a healthy couple age 65 will reach age 91 and 60% of them will live another 3-5 years or more. 2. Social Security payments, once begun, increase by an annual cost of living adjustment (COLA) linked to the Consumer Price Index of All Urban Measures (CPI-U). These adjustments serve to compound the Social Security payments, making the larger (age 70) payment grow faster than the smaller (age 67) payments. As a consequence, the functional “crossover point” is shortened and the bigger the COLA, the sooner the “crossover.” 3. It’s not how much money you make that counts but how much you keep. Social Security income is never more than 85% taxable, but it could be 0% taxable. The IRS worksheet calculation adds half Social Security income to all “other income” and then includes a series of calculations to determine how much Social Security is taxable (between 0% and 85%). The bigger a Social Security check and less “other income” (for the same total income), the less the total taxable income. 4. IRAs (including, 401(k), 403(b), etc.) must be liquidated starting at 70½ and the funds received are 100% taxable. If inherited, the heirs must fully liquidate the IRA and it is 100% taxable. Delaying does not change those facts. There is no tax benefit by delaying to age 70.
From these points comes a realization that there may be a benefit in delaying Social Security until age 70 and living off IRAs in the early retirement years. For example, Bob & Mary, both 65, have just retired. Together, they receive pensions of $1500/month and are eligible for combined Social Security benefits of $3500/month. They need $5000/month to live. They also have an IRA worth $300,000. If Bob and Mary start Social Security at 65, that plus their pensions delivers the $5000/month they need. In addition, their IRA grew at 5%/year. Five years later, it’s worth $383,052 and will generate a RMD of $13,308.46. Bob and Mary’s total income is $73,308.46 of which only $44,370.65 is taxable. They are happy. Conversely, if they delayed Social Security and withdrew $3500/month from their IRAs until 70, their IRAs would then generate RMDs of $5076/year. But, waiting to 70 caused their Social Security payments to increase to $61,716/year; a total income increase to $83,501.70. In addition, their taxable income has dropped to $39,288.15. In other words, their total income increased by $10,193.24 while taxable income decreased by $5082.50. That’s a net difference of $15,275.74. This advantage will continue for the rest of their lives. Further, after one of them passes, the survivor will get the larger of the two Social Security checks, either of which is now a lot larger by having waited. This is important The Register | Fall 2019
because the surviving spouse’s standard deduction just got reduced by half and having a larger portion of their total income 100% taxable may disproportionately increase the total income tax load. Finally, if Bob and Mary have any non-IRA type investments, they can grow those without spending them down for routine income. If an emergency arises, that money may be accessed at a lower tax rate (long term capital gain). If they don’t need the money, when they pass, it will transfer to their kids with a step-up in basis meaning they will not owe income tax if liquidated upon receipt and there’s no requirement to withdraw if they don’t want to. That’s not the case with IRAs. In summary: The value of delaying Social Security until 70 is far more than just getting “more money per month.” There are tax advantages, surviving spouse advantages, even inheritance advantages when the entire portfolio and estate are considered as a whole. However, there are times and circumstances when this advice is not suitable. For this reason, professional financial guidance before deciding when to start Social Security and when to take IRA withdrawals is crucial.
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 The Financial Planning Process 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.
Michael Tove, Ph.D., CEP, RFC® Michael Tove, Ph.D., CEP, RFC® president and founder of AIN Services, is insurance licensed. A published author and guest speaker on syndicated radio programs regarding finance, he works with clients at all levels of financial, estate and insurance planning. Dr. Tove’s philosophy is that every client, regardless of net worth, deserves the best planning that can be had. Over the years, he has developed a substantial network of professionals to which he can refer if clients’ specific needs are in areas other than his personal expertise. Contact: (919) 462-6622 mtove@ain-services.com www.ain-services.com The Register | Fall 2019
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Order your IARFC brochures at: www.store.IARFC.org or call (800) 532-9060, info@iarfc.org
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Helping Your Clients Teach Money Concepts to Kids I am a Financial Consultant with 4 kids ages 6 and under. I have become fascinated with teaching them about money and teaching others how to help their kids grow into financially responsible adults. One of the best resources I have found on this topic is the website www.MoneyAsYouGrow.org. It provides some wonderful guidelines on the financial concepts that kids can grasp at every age. Here is a summary of the highlights: Ages 3-5: • You need money to buy things. • Money is earned by working. • Sometimes you have to wait before you can buy something. • There is a difference between what you want and what you need. I know this seems a little early, but I can tell you from experience that kids are very interested in money at this age. They’ll glaze over if you start talking about the time value of money, but you can start by talking about how your family makes money. You can start adding short and simple chores to their routine that they are paid for so they start getting to know the basics. Ages 6-10 • You must make choices when it comes to how you spend your money. • You should compare prices before you buy. • Sharing information online can be dangerous. • You can earn interest on your savings. Things get a lot more interesting in this age range as they tend to want more “stuff” and to do more activities, so they need to understand what those things cost. They are now in school so they see what other kids have and may be influenced by whatever the “cool kids” are doing. Take them shopping with you so they start to see what all this “cool” stuff costs. When you are at the store you can talk about why you chose to purchase one item over another or give them some money with the task of choosing which snacks to buy for the week. Most kids at this age use computers in school and use some sort of tablet for recreational use. You need to have the Page 24
discussion about sharing information online and how dangerous that can be. Talk to them about keeping their social security number and personal information private and that pop ups should not be clicked on. Ages 11-13 • Save at least a dime for every dollar you earn. • The sooner you save, the faster your money will grow. • Using a credit card is not free money – it is like taking out a loan. • Money is finite – when it’s gone, it’s gone.
You can show some examples of compound interest and what they might gain if they forego a purchase today and save the money instead. For older kids in this group, you can start to talk about healthy credit card behaviors and how it is really like a loan. Most likely, they watch you use cards all the time and might have questions about it. They need to understand that this is a financial transaction and money is going out the door. If you don’t pay the bill in full every month, interest can work against you and you’ll end up paying more for the item than it actually cost. Once The Register | Fall 2019
you’ve decided to purchase something, that money is gone. Ages 14-18: • Compare colleges and what they cost. • Don’t use a credit card to buy things that you can’t afford. • Money is taken out of your earnings for taxes. • Basic investment concepts This is where you start training them to be mini-adults and set them up for success in the working world. You need to be having conversations about college. They need to understand how expensive it is and how much of it you are able and willing to pay for. Set the expectation of what they will be responsible for funding and how they can do it through loans, savings, or working. You need to set these expectations early so they are not surprised when you tell them they can’t go to an expensive liberal arts school in another state. They may start doing part-time jobs at this point and need to understand that their first paycheck will be much lower than they think due to taxes. This is an important concept to understand well before they graduate from college and get their first full-time job. If they are earning income, consider setting up a Roth IRA and talking about basic investment concepts so they can get some hands-on experience in watching their money grow. At this age, they are a lot closer to having their own credit card. They need to understand that If they use a card, they need to be able to pay it off each month. Ages 18+: • You should only use a credit card if you can pay it off in full each month. • You need insurance. • It is important to have an emergency fund. • Investing comes with risks and expenses. Hopefully at this stage, they are ready for a lot more autonomy and can navigate the “real world” without a ton of help from their parents. The credit card discussions are super important now because they may have one and can get one without you knowing about it. I have a funny personal story about this. When I was a freshman in college, I signed up for my first credit card because they were giving away free t-shirts in front of the student union. A free t-shirt is not a good reason to sign up for a credit card. You want your kids to be ready to navigate that situation better than I did. Insurance is a concept they should understand — why they need it and what it The Register | Fall 2019
does and cost. They should have 3-6 months’ worth of expenses in an emergency fund. You can site examples of emergencies that you’ve experienced during your lifetime — car accidents, refrigerators going out, or losing a job. In previous generations, the topic of money has been pretty taboo. It wasn’t that long ago that husbands didn’t even tell their wives how much they made, much less discuss it with their children. If your kids are asking questions about money, don’t shy away from the conversation or make it seem like they shouldn’t talk about it. We want money to be a normal topic of conversation. You want them to keep coming to you with questions about money (and other things in life), so it is important that you address their questions and create teachable moments. If you make it awkward, they will likely stop coming to you with life questions and get their information from other sources like kids on the playground or the internet and you don’t want either of those to be their go to place for information. We all want to raise money smart kids who become financially responsible adults and the early we start having these conversations, the better.
IARFC’s CAREER CENTER at
careers.iarfc.org JOB SEEKERS, YOUR NEXT Financial Planning CAREER OPPORTUNITY COULD BE CLOSER THAN YOU THINK.
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Jamie Bosse, CFP , RFC ®
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Jamie Bosse, CFP®, RFC® is a financial planner at Aspyre Wealth Partners, in Overland Park, KS. Jamie holds a Bachelor’s Degree in Personal Financial Planning from Kansas State University (2004) with a minor in Business Administration. Jamie enjoys writing financial articles and has been featured in the Kansas City Star, KC Parent, The Journal of Financial Planning, the Register, Solutions, and Investment Advisor Magazine. She has also published a children’s book, Milton the Money Savvy Pup. Contact: (913) 345-1881 jbosse@aspyrewealth.com www.aspyrewealth.com References: “Smart Money, Smart Kids” by Dave Ramsey and Rachel Cruze, moneyasyougrow.org
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How To Find And Attract New Insurance Sales! something for them that no one else does. Once you understand this and you have identified your strengths, then you will have taken the first step to consistently attracting new Insurance sales to you. Ask yourself these questions: • Why do people buy from me? • What do I really do for my customers? • How am I better than my competition? • What special skills or advantages do I have? The answers to these questions are your competitive advantages and will make you stand out from your competition. These competitive advantages may be related to your professional skills, attitude, responsiveness, services, or problems you solve. No. 2: Identify your target market To effectively promote your business, you should focus on people who will see the value in what you do. Your strengths (competitive advantages) will help you focus on who will most value your service or product.
Would you like to know the best insurance prospecting strategies for you to consistently find and attract new sales? And then learn how you can do it all in your local community?
salespeople. People are looking for a real advisor to help them! So, they can improve their financial situation. But they want impartial advice!
Whether you are new or have been in the industry for 40 years or more, the insurance prospecting strategies you will use to find and attract new sales will be the same. However, if you want them to work for you today, then you are going to have to learn some little secrets. If you want to succeed today, then you will need to learn how to really connect with people. Today, you must stay in touch with your clients, prospects, friends, and family… So, you build your credibility and trust. The point is to show people that you understand their fears and aspirations. And that you can guide them to financial security and peace of mind.
So, if you want to attract your best prospects to you, then you must become a better marketer than your competition. And, that is about you by delivering: the right message: to the right people: at the right time!
Most people are much more skeptical today. So, they have a hard time trusting most Page 26
Example: If your strength is your specialized knowledge of how to reduce or eliminate debt, then your customers should be people who have problems with or concerns about too much debt. They will be the people who can benefit the most from your specialized knowledge. If saving for retirement is your strength, then your customers should be the people who are concerned about their retirement.
There are four little secrets you need to know, if you want to out-market your competition! They are… Define your strengths! Identify your target market! Deliver a unique and meaningful message! And deliver your message as often as you can!
To get an idea of who your target market is, take look at your current customers. Look at your natural market: vocational, geographic, social or ethnic. Look at the people that you have the most in common with. You might have several target markets because you have several services and a variety of strengths.
No. 1: Define your strengths If you want people to buy from you, instead of your competition, then you must do
Bottom line: You must focus on people who will place a high value on what you can do for them. These are the people who will The Register | Fall 2019
benefit the most from your knowledge. They are the people who will be your most loyal and profitable customers. It is how you will consistently find and attract new sales. No 3: Deliver a unique, meaningful message The key to you out–marketing your competition is to deliver the right message…to the right people…at the right time. You need a message that tells these people why they should do business with you instead of your competition. And, because people buy when they are ready to buy, and not when you are ready to sell, you must make sure you deliver your message in everything you do. Your message should reflect your strengths, because they are what you do best. And, your message should be in terms that your target market is interested in. In other words, speak in their language, so they understand what you are saying. Example: If your strength is that you help people reduce and eliminate consumer debt; and your target market is middle income families who want to eliminate debt and save for their future, then your message might be: “Helping middle income families live debt-free and truly wealthy.” And, by using statistics and testimonials, you can give your target market details to demonstrate how you can help them better than anyone else in town.
Example: If you know that your best prospects live within 5-10 miles of you, then you will want to focus your message delivery on people who live within 5-10 miles. This gives you the ability to repeat your message to them multiple times, putting the power of repetition to work for you.
Experience Education Integrity
There are many ways to deliver your unique meaningful message: advertising, direct mail, networking, joint ventures, phone calls, or personal visits. Plus provide the information on social media. You can also teach classes or offer educational workshops on topics that relate to your product or service. Or, you could partner with a nonprofit organization or sponsor events or offer informational sessions about what you do. Whatever you do, try to achieve a balanced mix of medium when delivering your message. This increases awareness of your business and multiplies the impact of your message. Do these insurance prospecting strategies sound complicated and like a lot of hard work? Maybe, but if you want to consistently find and attract new sales today, then you must out–market your competition. Which means you must define your strengths, identify your target market, deliver a unique meaningful message and deliver your message as often as you can… starting today!
Note: You can have more than one message. Each marketing focus (based on your target market and strengths) should have its own message. However, it is important not to overwhelm yourself right away by trying to do too much. For starters, work on just one message. Then, as you develop a system that works, add others to your marketing system. No 4: Deliver your message as often as you can Now you will want to find the appropriate delivery vehicles for your marketing messages.
Jeremy B Nason, RFC®
There are three things to remember as you plan how to deliver your message: 1. Set a budget for the project 2. Get the most exposure possible for that budget 3. Focus your exposure on your target group
Jeremy B. Nason, RFC® is the co-founder of the Insurance Pro Shop™ – The first affordable, full-service Insurance Marketing and Sales Resource Center for today’s Financial Pro, and Found Money Management™, a life insurance sales system dedicated to helping Middle-Income Families to ‘Live Debt Free and Truly Wealthy!’
Unless your budget is unlimited, you need to choose delivery vehicles that focus your message.
Contact: (877) 297-4608 jeremy@insuranceproshop.com www.insuranceproshop.com
The Register | Fall 2019
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, info@iarfc.org
Page 27
International News 2019 Event and Education Program Highlights Highlights IARFC Hong Kong and Macau August 1, 2, 8 and 9, 2019 IARFC Course The IARFC-approved Curriculum August 2019 class was held on August 1, 2, 8 and 9. The program consists of essential subjects in Financial Planning, i.e. (i) Economics, (ii) Finance and Investment, (iii) Law and Tax and (iv) Practical Aspects of Financial Consulting and Case Studies. To graduate from the program, candidates must achieve 100% class attendance and a “PASS” grade of their end-of-class assignments. Graduates who also meet the IARFC admission criteria for RFC are eligible for the conferment of the RFC professional designation.
IARFC Philippines, Makati City, Philippines August 16, 2019 IARFC Annual Financial Forum 2019
IARFC Hong Kong and Macau Centre IARFC-approved Curriculum Class Group Photo
IARFC Hong Kong and Macau Centre IARFC-approved Curriculum Class
Back row 3rd from left - Mr Allan Wan, Executive Director, Back row 5th from left – Mr Kenneth Chan, lecturer
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The Register | Fall 2019
Graduates: IARFC Philippines Annual Forum 2019, Makati Sports Club, August 16, 2019
Graduates: IARFC Philippines Annual Forum 2019, Makati Sports Club, August 16, 2019
Graduates: IARFC Philippines Annual Forum 2019, Makati Sports Club, August 16, 2019 The Register | Fall 2019
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Consumer Focus Retire on Your Terms If you have money, you need to have a game plan. Not only when you are working and earning, but also after you retire. It’s that simple. — Coach Pete
Studies show that people spend more time and effort planning their yearly vacations than they do strategizing for retirement. There are many reasons for this, but foremost, many people find the concept of retirement planning to be overwhelming. But mapping out your retirement plan is not unlike planning your next vacation. Just as you need to choose how much you will spend on your trip and how you will save for it, you must decide how much money you will require in your post-retirement life, and where that money is going to come from. Your main goal should be to create a spending pattern and budget that you will be able to stick to when you stop working. That is not to say that designing your individual retirement plan will be easily Page 30
accomplished with some simple math. You also need time, a clear mind, and an abundance of information to develop a strategy that will help you live the life you envision after you retire. A good retirement income plan will help you to thrive, not just survive, in retirement. Many people have financial plans and household budgets. Almost everyone has glanced at their accounts and seen money flow in and money flow out. But having a financial plan is not the same as having a retirement plan. The day you turn 52 and enter the Financial Redzone, you need to ask yourself how you will spend the rest of your life once you retire. Where will your lifetime income come from? Were you too busy living in the present and not thinking
about the future? The reality is, when you turn 52, it is time to think about mapping out an income transition strategy so that you can enjoy the luxury of retiring on your own terms and living the life you want. Even if you have considered how much income you will require, you have only taken a step in the right direction. You still need proper professional guidance and a Total Retirement Plan. Retirement Income Planning — Why & When Who is the oldest living person you know? How old are they? It might sound surprising to you, but thanks to healthier lifestyles and advancements in medicine, people are living longer than ever before…up to 80, 90… The Register | Fall 2019
even 100 years old. This is great news, but it also means that retirement is far from the end of the road. It is smart to think of retirement as the beginning of a new chapter in your life’s journey. Truth be told, it would not be shocking if you go on to live 50 years after you have stopped earning money.
40, even 50 years in the future. Do you see yourself struggling to make ends meet? Knowing what you want in the future and understanding the importance of being able to fund that vision will make it easier for you to set goals and adjust them over time as your life continues to change.
This means that your retirement savings needs to last a great deal longer than it once did. So why is it that so many people have not yet adapted their plans to account for this new longevity? The truth is that many tend to put the idea of saving money at the back of their minds while earning it. That is because it is so much easier to care about present outcomes than future obstacles. Do not despair if you have held that mindset up until now. It is never too late to get a proper customized lifetime plan in place.
Retirement is an inevitable fact of life and you certainly will not want to be dependent on your children’s generosity or on the government to support you during these years. You cannot work forever at least most cannot, will not, or do not want to. A wise man once said, “it is better to not merely retire from something, but to have something to retire to.”
Your future self is a stranger to you now, but you should attempt to imagine yourself 30,
Developing a Total Retirement Plan (I call it Financial Cruise Control) is a difficult process for most people. Despite the availability of consultants, you may be frozen by procrastination and the fear of math. Maybe that is why many people begin planning for
retirement when they are only 10 short years away from their retirement party. But the longer you wait, the harder the task becomes to accomplish successfully. You are left with less time to plan and less time to save. It is also important to realize that the longer you wait to save (or save in the right places), the less compound interest will accrue to help you out. Start planning your retirement today, even if you are 35. In fact, that is the best time to start thinking about your post-retirement life, instead of when you are a few years shy of that retirement party. Try putting time on your side. Speak to your HR manager about your pension plan, 401(k), 403(b), or TSP. Visit a retirement planner and get some expert advice on retirement income planning and do it as soon as possible. A study by the American Bureau of Labor revealed that of the 91% of Americans who live to the age of retirement, 1% were wealthy, 4% were maintaining their standard of living, and 23% were still working. A whopping 63% of retirees were dependent on their children and charity for financial support. If that sounds like a situation you want to avoid, it is time to begin your retirement income planning so that you can enjoy a dignified, peaceful, and self-sufficient life after you stop working. Let your income plan be your salary all the way through retirement!
Peter J. “Coach Pete” D’Arruda, RICP, MRFC® Peter J. “Coach Pete” D’Arruda, RICP, MRFC® is a Financial and Tax Coach. He is host of the nationally syndicated weekly radio show, The Financial Safari, as well as the author of four books, including “Fine Print Fiasco”, “Financial Safari, 7 Financial Baby Steps” and “Have you been talking to Financial Aliens?” Themes of these easy readers include helping others avoid being taken advantage of and translating financial jargon for any layperson. Contact: (919) 657-4201 pete@capitalfinancialusa.com www.capitalfinancialusa.com The Register | Fall 2019
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Call for Corporate Sponsorships
2020 IARFC National Financial Plan Competition The International Association of Registered Financial Consultants (IARFC®) is reaching out to corporate entities in the financial services industry to support their 2020 National Financial Plan Competition. The competition challenges undergraduate university students to craft a financial plan, the core of a consultant’s practice, and submit their recommendations for judging. Working from a fictional family financial case narrative, the students have to analyze data, find solutions, and present their financial plan articulately. Last year the entries included 13 universities nationwide, encompassing 71 teams. Ultimately 3 teams were brought to Nashville, TN during the IARFC Conference to present their plan to experienced financial professionals. The importance of this experience is to take what they are learning in class and apply it to a real world scenario. Encouraging This NextGen of Consultants The shrinking number of financial consultants equates to a shortage of up and coming professionals. A job outlook statistic from the Bureau of Labor Statistics sees a 7% faster than average growth in job outlook for 2018-28. This becomes an important statistic when attracting the next generation to a career in financial services. What better way to support an Page 32
Your Corporate Sponsorship means the continuation of the out-of-classroom education for these future consultants who need to understand fiduciary responsibility. It is a win-win scenario for everyone… IARFC Trustee and CEO H. Stephen Bailey, MRFC®.
industry that encourages this career interest than to reach students at the collegiate level? “Coming from a consultant who has enjoyed a successful and lucrative career in financial services, we have got to reach out to young people and instill in them the benefits of helping others through financial responsibility,” comments IARFC Trustee Chair and CEO, H. Stephen Bailey, MRFC®. “Your Corporate Sponsorship means the continuation of the out-of-classroom education for these future consultants who need to understand fiduciary responsibility. It is a win-win scenario for everyone.” Corporate Involvement Corporate Sponsorship gains positive visibility and advertising. Download the Corporate Sponsorship Opportunities Information to find out how the IARFC can
promote corporate backing. A short webinar that details Competition Phases and Sponsorship is available upon request. Corporate Sponsorship Levels Include: • • • •
$25,000 - Diamond $15,000 - Platinum $10,000 - Gold $5000 - Silver
For more information on Corporate Sponsorship, contact Susan Cappa, Public Relations at 513.424.1589. Visit https:// www.iarfc.org/events/nfpc for more information on the competition itself. Contact: (513) 424-1589 susan@iarfc.org www.iarfc.org The Register | Fall 2019
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
NATIONAL FINANCIAL PLAN COMPETITION Cincinnati, Ohio — April 23, 2020
Corporate Sponsorship Opportunities Take part in the IARFC National Financial Plan Competition as a Corporate Sponsor. This is a give back opportunity to help the NEXT GEN of collegiate undergraduates to develop the skills they need to perform in the Financial Services industry.
SPONSOR LEVELS VISIBILITY AND PROMOTIONS
Diamond
Plan Competition Sponsor Award recognition during banquet
Banner Advertisement on Plan Competition web page provided by sponsor (600 pixel x 110 pixel)
Recognition during Plan Competition
Email Advertisement as Sponsor, campaign(s) Logo recognition featured on Plan Competition web page and Competition live promotion
Gold
Silver
2
1
1
1
full page
1/2 page
1/3 page
Logo recognition, in the Register magazine, during run duration of Plan Competition promotion
Advertisement recognition, in the Journal of Personal Finance, 1 time
full page
1/2 page
1/3 page
Individual
Individual
General
General
$25,000
$15,000
$10,000
$5,000
Advertisement recognition, in the Register magazine, 1 time
Logo recognition in Journal of Personal Finance, during run duration of Plan Competition promotion Media Release, Individual (personalized), General (pre-event release) Cost
Platinum
A percentage of Plan Competition Sponsorship proceeds are directly donated as monetary prize awards to the winning teams at the Awards Banquet. Sponsorship opportunity promotions run duration: 12 months from the date payments are received. Promotions follow the IARFC advertising guidelines. International Association of Registered Financial Consultants 146 N Breiel Blvd., P.O. Box 506, Middletown, OH 45042 P: (513) 424-1589 F: (513) 345-9479, E: susan@iarfc.org
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P.O. Box 506 Middletown, Ohio 45042
Sponsor the Collegiate 2020 IARFC National Financial Plan Competition! Take part in the IARFC National Financial Plan Competition as a Corporate Sponsor. This is an opportunity to help the NEXT GEN of collegiate undergraduates to develop the skills they need to perform in the Financial Services industry.
learn more www.iarfc.org
(513) 424-1589 susan@iarfc.org
sponsor today