Volume 18 No 5 September-October 2017
Rick B. Stanzione, RFC® A Holistic Approach to Financial Planning
IARFC Biltmore Conference April l7 – l9, 20 l8 Official IARFC Publication www.IARFC.org
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
IN THIS ISSUE The Maladaptive, Irrational, Cognitions of the Super Sales Producer Don’t Let Your Direct Mail Promotions Fall into that Junk Mail Pile Insuring The Pursuit Of Financial Goals Determining Asset Allocation and Withdrawal Rates with the Retirement CARE Analysis™
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DOMESTIC BOARD OF DIRECTORS Chairman, H. Stephen Bailey, LUTCF, CEBA, CEP, CSA, MRFC
Director, Isabel J. Cooper, MBA, RFC® Director, James B. Moss, CEP®, RFC®
Vice Chairman, Nicholas A. Royer, RFC®
Director, Rick B. Stanzione, RFC®
President, Peter J. D’Arruda, MRFC
www.IARFC.org/Register 1046 Summit Drive Middletown, OH 45042-0506 800.532.9060
Director, Mayo M. Woodward, CRPC®, RFC®
Treasurer, Jon M. Rogers, Ph.D., CLU, ChFC, MRFC
Editor-in-Chief Wendy M. Kennedy editor@iarfc.org
Secretary, Michelle Blair, RFC®
Editor Susan M. Cappa susan@iarfc.org Editorial Advisory Committee Peter J. D’Arruda, RFC® Michelle Blair, RFC®
INTERNATIONAL LEADERS Asia Chair, Jeffrey Chiew, DBA, CLU, ChFC, CFP®, RFC®
India Deputy Chair, Vijay S. Wadagbalkar, RFC®
China Development Organization (IMM) (China, Hong Kong, Macao & Taiwan), Liang Tien Lung, RFC®
Indonesia Chair, Aidil Akbar Madjid, MBA, RFC® Malaysia Chair, Ng Jyi Vei, ChFC, CFP®, RFC®
Australia and New Zealand Chair, George Flack, CFP®, FIPA, AFAIM, RFC®
Philippines Chair, Ralph Liew, RFC®
Bermuda Chair, Antony Francis, RFC®
Taiwan Chair, Kai Tu Yuan, RFC®
China Chair, Kai Tu Yuan, RFC®
Trinidad Chair, Inshan Meahjohn, RFC®
Hong Kong and Macau Honorary Chair, Samuel W. K. Yung, MH, CFP®, MFP, FChFP, RFC®
Articles, comments and letters are welcomed by email to: Wendy M. Kennedy editor@iarfc.org
Hong Kong and Macao, Chair, Teresa So, Ph.D., MFP, RFP, FChFP, RFC®
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IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
The Register | September-October 2017
The Register is published by the International Association of Registered Financial Consultants ©2017, 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.
Periodicals Postage Paid at Mansfield, Ohio. POSTMASTER: Send address changes to: P.O. Box 42506, Middletown, Ohio 45042-0506 SSN 1556-4045
Advertise The Register reaches 4,000 financial professionals every issue. Register advertising is an easy and cost-effective way to promote your company’s products and service to this dedicated audience. To advertise contact: 309.483.6467 advertise@iarfc.org www.iarfc.org Page 1
In This ISSUE
Volume 18 No. 5
Cover Story
Columns
Register Cover Profile: Rick B. Stanzione
Chairman’s Desk
14 A Holistic Approach to Planning
6 Connection By H. Stephen Bailey
IARFC – Viewpoint 13 DOL More, More… AND MORE By Nicholas Royer
Features The Maladaptive, Irrational, Cognitions of the Super Sales Producer 9 By Kerry Johnson
Don’t Let Your Direct Mail Promotions Fall into that Junk Mail Pile 11 By Jorge Villar
Marketing Unplugged 20 Financial Consultant and the Joy of Insurance By Bryce Sanders
Consumer Focus 28 Figuring Out Your Numbers By Peter D’Arruda
International News 30 2017 Event and Educational Program Highlights
Insuring the Pursuit of Financial Goals 22 By Jay R. Hardesty
Determining Asset Allocation and Withdrawal Rates with Retirement CARE Analysis™ 24 By Wade Pfau
The “Seniors’ Right to Know” Movement Gains Momentum: What if a Senior No Longer Needs their Life Insurance? 26 By Darwin M. Bayston
Departments 1 IARFC Domestic and International Directors
3 New IARFC Members 3 Events Calendar 4 From the Editor
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Page 2
The Register | September-October 2017
Biltmore Conference 2018
New MRFCs, RFCs, RFA, and General Members Domestic MRFC
Brian R. Weatherly, RFC®, TX Jeffrey L. Wendel, RFC®, OH
Michael T. Cice, MRFC, PA Michael J. Markey, Jr., MRFC, MI Gilbert Mercado, MRFC, TX
International Members
Domestic RFC®, RFA®, General Members Liru Chang, RFC , CA Alan T. Chu, RFC®, HI Mel A. Cohen, RFC®, TX Steven L. Crawford, RFC®, NC Jason Rocco D’Amelio, RFC®, NY J. Stuart Dempsey, RFC®, FL Jeffrey A. Donathan, RFC®, IL Amanda L. Dunlap, RFC®, TX Renn P. Everhart, RFC®, CA Grant A. Fossum, RFC®, MN Bradley A. Fritz, RFC®, IA Nancy E. Greene, RFC®, NJ Heather A. Jankord, RFA®, SD Booker Joseph, RFC®, NC Robert W. Keeler, Jr. RFC®, NJ Lovie T. Leach RFC®, MD Jerry E. Linebaugh, RFC®, LA Patsy R. Mandola, RFC®, TX Delmar V. McKinney, RFC®, TX Robert A. Mendenall, RFC®, SC Anthony L. Panto RFC®, NJ Renn L. Piantedosi, RFC®, CA Brett Pittsenbargar, RFC®, TX Brian E. Royer RFC®, FL Ronald D. Scherer, RFC®, IN Audrey Sendrowski, RFC®, MA Neville M. Tuft, RFC®, WY ®
Used with permission from The Biltmore Company, Asheville, North Carolina
Events Calendar 2017 September Board of Directors Phone Conference September 12, 2017 November IARFC Exhibits Money Concepts Conference November 13 –16, 2017 Hollywood, FL
Philippines 34
Members Who Recommended Members Michael Granados, RFC® Chris R. Benkendorf, RFC® Randy C. Cox, RFC® Christopher D. Dantin, RFC® Barry L. Dayley, RFC® Jeffrey Frankhouser, MRFC Joshua D. Hess, RFC® Pamela K. Mah, RFC® Patrick F. Masterson, Sr., RFC® Jeremy B. Nason, RFC® Nicholas A. Royer, RFC® Shane H. Siederman, RFC®
Member Referrer Recognition
Christopher D. Dantin, RFC ®
Members In the News Members In the News. Keep us informed on your recent accomplishments. Have you added staff, certifications, seminars, celebrated an anniversary in the business? Send a brief description and a print-quality photo when available to editor@iarfc.org.
IARFC Biltmore Conference & National Financial Plan Competition April 17 –19, 2018 Biltmore Estate, Asheville, NC
The IARFC was pleased to exhibit and recognize the outstanding financial services rendered by Money Concepts at their Financial Planning Congress, in Charleston, SC in July. Networking with RFC® candidates, new friends and many IARFC members was the focus as the IARFC team was out in full force. MRFCs and RFCs visiting our booth included: Evelyn Boes, Steven A. Conley, Barry Dayley, Patrick Dodds, Lisa Ford, Eric Fortney, Michael Granados, Matthew Haeffner, Jim Harris, David W. Hudson, Jay Hardesty, Steven M. Katz, Bill Kent, Moses LaCour, Ingrid K. Lamb, Fraj Lazreg, Lovie T. Leach, Pamela A. Kizzee, Darren Oglesby, Kenny Parker, Jeffrey L. Reitzel, Angie Tejeda, Darlene Van Beek, Denis Walsh (pictured), and Daniel Y. Yee. Visit the IARFC Facebook page for more photos of this amazing event.
The Register | September-October 2017
Page 3
December Board of Directors Phone Conference December 12, 2017
2018
From the EDITOR It is hard to believe there are only four months left in this year. Already we are well underway with the collegiate 2018 National Financial Plan Competition; participants have been registering since August. We have an inspiring and motivating calendar for 2018. In this issue, members are open to nominate positions for the 2018 IARFC Board and the Loren Dunton Memorial Award. And there is the IARFC Biltmore Conference, April 17 – 19, 2018 — make plans now to join us for this educational event that is designed to deliver industry experts and member sharing. Don’t miss out on all the IARFC has to offer financial consultants in 2018, start now. Wendy M. Kennedy, Editor-in-Chief
Nex t issue
the REGISTER, Editorial Calendar 2018 Issue
Theme
Possible Topics to be Covered
January/February
Legacy/Estate Planning
What do Consumers need, Will and Trusts, Trust Updating and Funding, Trustee Responsibilities
March/April
Longevity
Life Expectancy 91, Age 100 Problems, Life Insurance and Second to Die, What are the Consumers Longevity Needs, Rising Cost of Health Care
May/June
Digital Marketing Trends
Inbound Marketing, Website, Blogging, Onsite Video, Mobile Responsive, Niche Marketing
July/August
Art of Practice Management
Hiring, Internship, Mentorship, Growing Your Business Software Technology, Sales Strategies, Effective Office Management, Time Management, Event Planning
September/October
Generations of Clients – Identifying Their Needs
Generation Gap – Between Client and Consultant, Be HighTech and High-Touch, Be Available 24/7, Be Transparent — Trust is Key, Help First, Sell Second, Support Social Causes
November/December
Business Consulting
Succession Planning, Unique Financial Planning Techniques, Business Protection, Business Exit Planning, Business Valuation, Loan Cancellation
Issue
Copy Deadline
January/February
November 1
March/April
January 1
May/June
March 1
July/August
May 1
September/October
July 1
November/December
September 1
IARFC 1046 Summit Drive P.O. Box 42506 Middletown, OH 45042 800.532.9060 • editor@IARFC.org www.IARFC.org/Register Page 4
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The Register | September-October 2017
Call for IARFC Directors Nominations
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Our Board of Directors election process begins this month. In 2018, there are two current Directors that have fulfilled their 2 terms and will be coming off the Board — Jon Rogers and Isabel Cooper. We will be looking for individuals who wish to fill these positions. Here is our election procedure: tarting October 1, suggestions can be sent by any IARFC member (via email) to the S Nominating Committee staff liaison from those who wish to serve personally or endorsing a candidate for consideration. These nominations are welcomed from the general membership. Bio information, intent to serve and an optional statement on their intentions to promote the Association will be collected. On November 1, nominations from membership are closed and announcement of the initial candidate selection by the Nominating Committee is released. Those who did not make the initial selection by the Nominating Committee are notified and have an opportunity to collect 10 member supporters to keep their name on the ballot. Nominations are officially closed on November 20. On December 1 an election is conducted by the Board of Directors with the results being announced by December 15. During January and February, current and newly elected Directors make their travel plans to attend the Annual Board Meeting and 2018 IARFC Biltmore Conference in Asheville, NC at the Biltmore Estate April 16-19, 2018. • Annual Board Meeting convened and attended by voting Directors. Serving as a Director for the IARFC is an opportunity for you to influence Association policy. Be part of an Association that continues to grow and fill the needs of financial professionals!
The Register | September-October 2017
If you wish to put forth your own name or nominate someone to fill a Director’s position, please contact the nominating committee staff liaison: Susan Cappa susan@iarfc.org 513.424.1589 IARFC Nominating Committee H. Stephen Bailey, CEBA, LUTCF, MRFC® Chairman Nicholas A. Royer, RFC® Vice Chairman Jon Rogers, Ph.D., ChFC, CLU, MRFC® Treasurer Michelle Blair, RFC® Secretary
Page 5
From the
Chairman’s Desk… Connection “Electric communication will never be a substitute for the face of someone who with their soul encourages another person to be brave and true.” — Charles Dickens Don’t get me wrong, I am very appreciate of the value of cell phones, email, texting, etc. But sometimes I just gotta get face-to-face with people and communicate. As Chairman, I work long distance with the home office of the IARFC. I find an inperson visit quarterly for about two to three days is just enough time to reconnect with the team and not too much time to overstay my welcome. Communicating with Home Office I am blessed to have a team that can function separately. I am away from the day-to-day which I feel I need to be. We have very competent management and I am not sure that both myself and the IARFC team would be as productive if I was there all the time. It gives me time to meditate and look at things from a perspective away from the Middletown office. This past quarter while visiting, after going through the usual reviews of the previous couple of months, I spent the time expanding on the relationships between myself, the Board and the home office team. While I respect all the individuals involved, I feel collectively our vision is too limited. Our goals are smaller than what they should be. We do not want to reach much higher because we don’t want to fail. My job is to move everyone out of their comfort zone and get them to think bigger, act bigger and expect bigger results. My goals are much higher than in the past and I am challenging our team to work through them on a daily basis. Connecting in the Field In July, I attended an event in Charleston, SC for the Money Concepts Annual Financial Planning Congress. It was one of the first exhibits of the IARFC out and about in considerable time. Our goal is increased visibility to our members and the financial industry. It was great to see the IARFC Page 6
team members Wendy Kennedy and Susan Cappa at work connecting with members and I enjoyed talking to many financial professionals. It keeps me enthused and motivated. At the Awards Banquet, as Chairman, we presented Denis Walsh, Money Concepts President a Proclamation for the many years of dedication to the industry. We also recognized Barry Dayley for his position of the MRFC Board Chairman. Speaking of the MRFC I have learned a lot during this accreditation process. It is a major step, but knowing that the MRFC credential will be held in high esteem by our colleagues and the public is strong motivation. We are working through the steps for final approval and need the help of the members to increase our exam numbers. I encourage you to send in your MRFC application and sign up for an exam time. Upon passing, you may use the MRFC designation – but it will not be accredited yet. Our financial world keeps changing and we need to keep up and continually improve. Connecting Internationally By the time you read this, I will have completed my first international visit. Meeting with these leaders and reporting back to the Board, the team and the members are a high priority. All of us need to feel a connection to our chapters overseas. We can only do that if communications are transparent. The international chapters are very interested in what is happening in the US – thus one of my presentations is “Going Forward with IARFC US”. Connecting the Members Together The 2018 IARFC Biltmore Conference is taking shape — agenda and registration forms are available. This is what I consider a strong opportunity to take advantage of your IARFC membership. Networking with like-minded consultants keeps us all aware
of our priorities and moving forward together a group. We are working hard to put together an interesting conference, with outstanding learning opportunities in a venue that can be appreciated for its beauty and legacy. Make your reservations soon as there is limited space for staying on the Biltmore Estate in Asheville, NC. Connection within our Association is nothing without the intent to serve and the commitment to improving everyone’s career and personal life. That is what we do for our clients and what we surely should be doing for ourselves…
H. Stephen Bailey, CEBA, LUTCF, CEP®, MRFC H. Stephen Bailey, “Steve” Bailey, CEBA, LUTCF, CEP®, MRFC started HB Financial almost 30 years ago after already having a life insurance career. Steve is an elected member of the IARFC Board. He is also the 2010 recipient of the prestigious Loren Dunton Memorial Award. When not working with his clients you will find Steve on a golf course, spending time with his grandson or traveling with his wife, Bobbi. Contact: 704.563.6844 chairman@iarfc.org www.iarfc.org The Register | September-October 2017
MRFC
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The Maladaptive, Irrational, Cognitions of the Super Sales Producer
Matt is a $1.5 million producer. He has a new Porsche 911, Maserati, and a 5000 square foot house overlooking a valley. He has 2 beautiful kids, a gorgeous wife and no debt. He has it made except for the happiness part. He is frustrated about paperwork, staff, compliance regulations and parent company edicts. But many top producers are frustrated. The difference is that Matt isn’t happy. But he likes his career and freedom. He loves his income. Why can’t he just count his blessings? 35% of the US population have mental problems. Some are more severe than others. In graduate school, a professor jokingly told me the difference between Neurotics and Psychotics. Neurotics build sand castles in the sky, Psychotics move into them and Psychologists collect the rent. I have always thought about the differences more concretely. If you ask a Psychotic what 2+2 equals, the will say 36, 98 112, with no sense of reality. But if you ask a Neurotic the same question, they will always say 4. But follow up with, “Why does it always have to be 4? It makes me nuts it can’t be 5 once in a while.” The Register | September-October 2017
The drive that causes one to be super successful can also the psychological disease that causes dissatisfaction. A US postal worker does an 8-5 day with no pressure. They know their job, show up for work and get paid. They rarely get fired, sometimes get promoted, but have no motivation to work hard and make more money. The super sales producer is unemployed until his next sale, and always under stress. When I was 26 and a new stock broker, my manager encouraged me to buy a new BMW 535. His attitude was a producer with financial stress was a harder worker than a financially comfortable one. But the stress super producers feel is self-inflicted. Why? There is a hole in their ego constantly in need of filling. They are super competitive and struggle to reach the next level. Managers love these producers but also find them challenging. These super producers complain constantly, sometimes think things are unfair, and are generally headaches to those who work with or supervise them. John had a good year. He grew his business to $2 million in income and is really irritated
it wasn’t more. His goal was to increase income by 25%. It only rose 10% and he isn’t happy. The average household income in the US is $54K. Only 1% of Americans earn more than $500K, and have a net worth of more than $1 million. But that doesn’t matter to maladaptive irrational super producers. Why aren’t they happy? It could be a non-approving father or a critical mother. It could be a poverty stricken upbringing. But these folks are constantly trying to fill the void, struggling to be good enough. I renewed my driver’s license at the DMV a while ago. The last step was a photo. Third in line, the photographer told each before me to put their feet in the yellow outline, look at the camera, wait for the flash and walk to checkout counter. When it was my turn, I handed him my paperwork and said, “Won’t you be glad when you can rotate out of this job to another DMV station.” He said, “I have been here doing the same job taking driver’s license photos for 25 years. He then said, “Put your feet in the outline, look at the camera………” This is not a super sales producer. They get easily bored, Page 9
need to be challenged constantly, and most importantly, feel valued.
Experience Education Integrity
In my coaching practice, we guarantee clients will increase their business by 80% in 8 weeks. Actually, because we first commit our clients to a business plan, it’s hard not to get on an 80% in 8 weeks track. They only need someone to hold them accountable. But the super sales producers are different. They need more praise than the rest. It was my mistaken belief that the biggest producers were psychological emotional giants. I thought they were more emotionally insulated that lesser producers. The opposite is true. They need more stroking, more praise, and more self-worth injections than others. It is a counter intuitive concept for most colleagues and managers. These super producers sometimes diminish praise by saying things like, “’It’s not enough”, or “Let’s see what happens next month.” Managers or colleagues think since they don’t accept stokes well, they don’t want praise. But these super producers need praise even more than the less gifted sort. A rule of thumb is to catch super producers in the act of being successful. When they complain about paperwork, tell them how well they are managing their time. When they whine about a slow internet connection, tell them you will work on it, but at their lofty level it’s only a speed bump. Remind them of how well they have done before or a hurdle they overcame earlier. “Hey Jim, remember the case you sold that produced $50K last month. Boy, you worked hard on that. You are absolutely gifted. You are the best I have ever seen.”
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Order your IARFC brochures at: www.IARFC.org/Store or call 800.532.9060, info@iarfc.org Page 10
It is hard to be gratuitous with a super producer. They are looking for any reason to build their self-esteem. Since they find it hard to self-praise, it needs to come from you. Obviously, you want the praise to be sincere. But a rule of thumb is to praise them 3 times a day and rationalize training as way to be even more successful than they already are. Remember, you are trying to fill an emotional hole. Don’t worry about sterilizing your super producer. They will just produce more and be happier in the process. I have 3 daughters. I have always told each they were my favorite. It’s now a family joke. But there’s a reason to my madness. One of my heroes was Congressman Jack Kemp. He was an NCAA All-Pro quarterback at Occidental College, won the NCAA championship and later played quarterback for the Buffalo Bills football team. He went on to be a US congressman and even the
running mate of Senator Bob Dole in a 1990’s US Presidential election against Bill Clinton. Just before the national championship, Kemp’s college coach called him into his office. “Jack, you are a natural born leader. You are the most gifted and hardworking player I have ever coached. I need you to lead this team to a national championship. Motivate the rest of the players to give all they can in the game and we will walk away with the championship. But don’t tell any of the players we had this conversation.” Kemp said, “OK coach. Thanks for believing in me. I will bring back the trophy.” They went on to win the championship and Kemp went on to a great career. At a reunion decades later, one player walked up to Kemp and said, “Coach liked me best.” Kemp laughed at such a random statement and asked why he thought that. The lineman said, “Coach called me into his office before the national championship and told me I was the most gifted and hardworking player he had ever coached. He told me to lead the team and motivate the other players.” The coach told every player the same thing. The Occidental College football coach won a national championship by motivating the maladaptive irrational super producers to even greater things.
Kerry Johnson, MBA, Ph.D. Kerry Johnson, MBA, Ph.D. is a best-selling author and frequent speaker at financial planning and insurance conferences around the world. Peak Performance Coaching (his one on one coaching program) promises to increase your business by 80% in 8 weeks. To see if you are a candidate for this fast track system, visit www.KerryJohnson.com/ coaching and take a free evaluation test. You will learn about your strengths and what is holding you back. Contact: 800.883.8787 kerry@kerryjohnson.com www.kerryjohnson.com The Register | September-October 2017
Don’t Let Your Direct Mail Promotions Fall into that Junk Mail Pile Use the Power of Properly Planned, Targeted, Executed and Tracked Direct Marketing to Generate Leads True direct marketers will tell you and prove to you that there is no better media to specifically target your ideal audience within a 20-mile radius of your office than Direct Mail. Think about it, homeowners go to their mailbox an average of 6 times a week. The odds are that you will only have to compete with 3 to 5 other messages and offers on any given day that your mail arrives at their home. In comparison, with Radio, TV, social media, and the Internet, you compete with hundreds of ads, messages, and offers that bombard your audience all at one time. Those also don’t have the ability to really target certain demographics that are available on very sophisticated mailing lists. Yes, I mention the word sophisticated because the abundance of information that is now available at the homeowner level is daunting. The Internet has generated an enormous amount of data that is being willingly entered into sites by millions of people on a daily basis. The data companies now have better access than ever to valuable demographic details that will help you reach your ideal audience. Now, about the junk mail topic of this article... with all that being said above, you now also have to “sophisticate” your message and the mail packaging. Those are two critical components to generate the maximum response. You have 6 seconds to get your audiences’ attention and it starts with the look and feel of your envelope and letter. Notice I didn’t say postcard or flyer, I will explain why later. Your package better have impact and relevance or it’s going in the trash immediately because it will be perceived as the proverbial ”junk mail”. Let me explain my “3 pile theory.” When all of us sort our mail at home on the kitchen counter, on the sofa or at a desk, we first separate the bills, invoices, and notices to stack them in the 1st pile. Then, we separate all of the shiny, slick, advertising flyers, postcards, and coupons The Register | September-October 2017
to stack them in a 2nd pile, the junk mail pile. Finally, we notice those pieces that look different, personalized, intriguing, interesting, relevant, but don’t really reveal much until we open them. That is the 3rd pile, the more sophisticated pile that you want your mailing to land on. That is the pile that will get the most attention because it stood out and caused further interest. There are several tested and proven techniques that you can use to create that type of package. The printing industry today has converted to digital technology so there are amazing things you can do now to generate action and involvement with the looks, message and your offer. Oh yeah, about your offer, it better be relevant and valuable to
your audience. If it makes sense they will respond favorably. If not, you will find out within days of your mail hitting the homes — crickets!! So when all combined, the list quality, the overall look and feel of the envelope and letter, the messaging and the offer have to be aligned to create favorable outcomes and maximize your response. Easier said than done right? Here is your huge advantage... very few in your industry even take the time to contract or use those techniques and resources. Instead they fall victims to saving a few pennies by using printers or mail houses that are not experienced in direct marketing Page 11
and have limited capabilities. They are small shops that have old tired equipment, scarce resources, and more importantly they lack the marketing talent in their personnel in several important areas. They can print and mail, that’s it. To add insult to injury, they also have to cut corners because they charge low rates and must make their margin somewhere. You can’t blame them for having to do that to make a living but it can’t be at your expense. They manufacture junk mail. Your results will suffer and you will think that direct mail does not work. You would be making that false assumption. That is why I wrote this article. As a direct marketer, I can’t let that happen, I know too much after 27 years of working in that great medium. We are starting to hear that, “Direct Mail is making a strong comeback.” Here’s why. Today, there are way too many emails, videos, social media posts, TV, radio, newspapers, magazine ads and news networks all striving for your attention by bombarding you with too many messages and too many options. It causes confusion so people block things out and don’t respond.
• Add components to your mailing that compel the recipient to have to look at bio card, features card, menu, etc.. • Don’t use jargon or industry talk. Speak to their everyday common language. • Only use a reputable mailing list source. There are way too many list wholesalers that use poor and very dated data. • Drop shipping mail directly to your town is more effective than using the standard postal delivery process. • Printers and letter shop/mail houses aren’t direct marketing experts. They can only do so much. It will cost you response, headaches, and money. • Get consulting and advice before you spend a penny in direct mail, it’s a science and it requires techniques. That’s all for now. You know what to do. The power of targeted direct mail can help you identify motivated prospects within 20 miles of your office and create a valuable ongoing funnel to continually acquire many new clients. It’s simple…just don’t do Junk Mail!
A well-orchestrated direct mail campaign can fight through all of that noise and get directly in front of your audience, all by itself with very little distraction... only if it’s done properly that is, with professionals. So, here are the critical elements to avoid the “junk mail pile”: • Skip postcard or flyers. Those are used for coupons, real estate, automotive repair, retail and announcements. • Use personalization. The most influential image is seeing their name in lights. • Add 2 to 3 high impact headlines throughout your message to get their attention. • Use clever envelopes. Look at Hallmark, they provide a specially-selected envelope with every card. Why? Because the envelope is a critical part of getting the piece opened. • Don’t send out an ad. It has to look and feel like a true invitation. • Your headlines and feature bullets need to have a lot of value and generate immediate, relevant interest. • Incorporate images that elicit action, thought and pleasure. Not your picture or a generic couple. This is about your target prospect – not all about you! • Utilize fonts that are legible to that 50+ age audience. Make it easy for them to read in those critical 6 seconds. Page 12
Jorge Villar Jorge Villar is the President and Founder of RME360, a $24 million dollar marketing powerhouse. With more than 26 years of direct marketing experience, he is known in several industries for his ability to create campaigns that garner the highest response rates. He is the innovator of the National Seminar Success program that for the last 17 years has accounted for more than 65% of the seminar events being held nationwide, with over 17 million attendees. Mr. Villar has also been very successful marketing to physicians and business owners regarding Succession Planning and Asset Protection. Mr. Villar is a frequent key note speaker at national financial symposium and marketing training conferences. Contact: 813.885.8231 josh.danielson@rme360.com www.rmeleads.com
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Member-Refer-A-Member Enhance the Designation “The only way that an Association grows is by attracting new members,” confirms IARFC Chairman H. Stephen Bailey. Encouraging your peers to join is the best recruiting effort an Association can utilize. We salute your pride in being a Registered Financial Consultant and are proud to have an award recognition program dedicated to members who have contributed to the growth of the Association. The Member’s Award is presented annually in appreciation to top IARFC members who have sponsored the most qualified professional consultants that subsequently joined the ranks of the Association.
An Ongoing Opportunity The IARFC is looking to enrich the careers of your professional peers with the same membership benefits you enjoy. By referring potential IARFC members, you offer them an opportunity to tap into the premier network of members who share best practices, strategies to help grow businesses and techniques for better practice management.
Referring a member is easy! Take a few minutes to grow our network of Registered Financial Consultants. Fill out the Referral form by going to: www.IARFC.org/ReferMember Call: 800.532.9060 Email: info@iarfc.org
For details go to: www.IARFC.org/ReferMember The Register | September-October 2017
IARFC
Viewpoint
The Register tap’s into the experience and viewpoints of the IARFC and MRFC Board. They come together from different backgrounds, with different goals and expressing different opinions. The constant is the respect and dedication given to their commitment to the IARFC.
DOL More, More… AND MORE DOL Regulations — the Status Obviously the DOL fiduciary rule has garnered a lot of attention over the past year. Many people feel this is a good thing while in other circles I’ve heard the terms “onerous”, “harmful”, and “confusing” to describe its effect on the financial industry. Recently, the rule had been given a window where opinions could be gathered, followed by an announcement that was made proposing to delay the implementation of the rule from January 1, 2018 all the way to July 1, 2019. It seems there’s something new happening every week, and usually more confusion and indecision follows. Either way, this whole process has been complicated and certainly one that is dragging the public along with it. As with any new regulations, there are a lot of gray areas in the conversation — so who knows exactly what will happen when the law goes into effect, if it ever does. The rule was originally designed to give new protections to consumers where financial professionals are required to act in the best-interests of their clients where, in the past, a suitability standard was the standard in use. Financial professionals are in essence raised to the level of a fiduciary and as such are bound legally and ethically to meet those enhanced standards. Why might this be happening? Unfortunately, over the years, there have been many people who have not acted in their clients’ best interests. Now the government has felt it necessary to become involved. However, additional regulation, while done in good faith, isn’t always the right thing. I can remember when I first started in practice that an application to open an account was five to six pages long, now it can be as long as forty to fifty pages. Certainly this hasn’t prevented anything other than give us an added headache. However, I whole-heartedly support the need for there to be a standard of care in Page 13
the industry that puts client’s needs first and a standard where the norm is to always act in a client’s best interest #1. To do otherwise is a violation of our ethics. With that being said, the way in which the DOL is going about it will most likely not solve the situation. I believe it could possibly do more harm than good and cause numerous financial professionals to leave the industry altogether causing a shortfall of people able to help a growing group of retirees and baby boomers. In my mind, when the government forces more and more regulations and more and more government control it ultimately will make the financial planning process more cumbersome. My concern has always been that this could be a step in the direction where the government makes the personal financial decisions for you. Taking the control away from the financial consultant and their client and instead telling you what you can and cannot do. It’s a double edge sword where added protection is important, but at what cost is something we’ve yet to really see. More rules aren’t always necessarily good for everyone. In my own practice, I was raised by my father (whose been a financial consultant for over 50 years) to always act in a client’s best interests. At times we’ve had to blow the whistle on people in our industry who acted in ways that hurts their clients. So acting as fiduciary is something we have believed in for many years. And while this rule will most likely not affect our process much, we know other financial consultants whose worlds will be turned upside down as a result of it. How they get paid may have to change, how they communicate will have to change, the advent of fee-based products instead of commission-based products may be upon us. Many people who might be hurt the most from the DOL are those in the insurance world who do not have recurring assets under management. They may not be able to keep themselves in business.
Those who have prepared themselves in advanced and who have gotten the proper licenses and act in the best interest of their clients will be able to weather this storm. However, these regulations could force a lot of consultants out of the business. This might be a good thing for those able to withstand the change, but I feel the future of the industry will be altered as many people wanting to enter the financial field may now avoid it. It’s a shame, but the writing has been on the wall. I’ve seen way too many people over the years being sold the wrong products with no one building an actual written financial plan to guide them through life. It’s like selling someone a car on an island where there’s no road to drive it on. Times need to change and as financial consultants we should elevate our standard of care and always do what’s in our client’s best interests. We shouldn’t have to live through a time where a political body determines what that is.
Nicholas Royer, RFC® Nicholas Royer, RFC® President of Group 10 Financial, LLC and IARFC Vice Chairman. Nick and his father Jerry co-host their radio show on numerous radio stations. Contact: 800.245.0546 nickroyer@group10financial.com www.group10financial.com Investment Advisory Services offered by Brookstone Capital Management, LLC., an SEC Registered Investment Advisor The Register | September-October 2017
Register Profile
Rick Stanzione, RFC® A Holistic Approach to Planning Seven years ago, Rick Stanzione of R&R Group Inc, located in Washington Terrace, UT was our featured interview in the Register. (Vol 11, No. 3, March 2010). It gave a profile of Rick and his personal / professional journey. In that interview, Rick felt the focus of the Association to be “continued growth for membership and the resources being offered”. This past year, Rick has joined the IARFC as its newest Board Member. We are reaching out to him once again but from a different perspective. As he now has his first in-person full Board Meeting under his belt, we want to find out more about his interest in the IARFC and what led him to want to join the Board. Register: Before we get into the business of the IARFC – update us on your own journey since 2010? Rick: There have been many changes in our industry in the way we do business that stem from new products, regulatory and best practices for every financial consultant. For many who have acted in a fiduciary capacity, the burden is less when preparing for changes. Adapting the holistic planning approach in our business model has always made it easier for me. Holistic planning is essential for having the best protection for any one person’s well-being. So, what is holistic planning? Holistic planning is the difference in getting a complete customized financial plan or just a plan that is boiler plate or described as a plan just off the shelf with the basics components. If you don’t have a holistic plan, you usually leave out key components, kind of like a puzzle with missing pieces. Some of the key puzzle pieces in a holistic plan consist of a tax strategies, life insurance, disability insurance, long term care insurance, wills and trusts to name a Page 14
few. In addition, all of the examples above have several options as there is no one size fits all. All of the components need to work in harmony. Coordination of these areas is essential to meet all of your goals & objectives. This type of planning process will also assist in identifying any shortfalls you may have and how to best resolve them. Now you can see why holistic plans need to be customized to avoid dangerous gaps. Sound financial plans need to have sound financial strategies to meet the client’s goals and objectives. Holistic plans address paying too much in taxes and fees, the risk of losing everything due to a catastrophic event; and the risk of running out of money in retirement. Do you want a holistic plan that covers all your bases? If you do, you need to cover all these items in your fact finding or what we call in our office a “financial inventory”. Our financial inventory will address the income needs now and later, assets, debts, shortfalls but most important what the client goals and objectives are or need to be. All of this information leads to a place where the client feels most comfortable. This can be an overwhelming experience if addressing all at once. Defining the client step-by-step is the holistic planning approach to cover all the bases. As we all know, “people don’t plan to fail but rather fail to plan”. This is why holistic planning works if it is a priority. If it is not a priority and procrastination is part of the plan, it usually will never be finalized. So what is a holistic plan and why should one consider it as an important consideration when looking at a plan that will address the unexpected? A holistic plan should include the following areas:
1. Investment strategies that provide growth opportunities to meet long-term needs. 2. A strategy using life insurance protection to prolong the assets you have to meet your longevity. 3. Preservation of money through tax strategies that avoid unnecessary liabilities. 4. Complete estate planning to help ensure that your surviving spouse is protected and your final wishes are honored. Register: Your own philosophy is that you find joy in helping your clients. As the newest member of the IARFC Board, tell us your motivation to become a Director? Rick: This industry has been very good to me and I have learned so much that serving on this Board is a way that I can give back. In our business, you never seem to have the same needs for each client and I love the unique challenge that it gives me so we don’t stagnate in our day-to-day services we provide. That makes it fun and also gratifying to know we change people’s lives one at a time Register: Earlier in the year, you attended the first in-person Board Meeting in Charlotte, NC. Relate your takeaways from this experience? Rick: This was a tremendous opportunity for me to forge new business relationships with the Directors and get better acquainted with the details that make the IARFC a special group of people who care about our members and the cause we all serve. Register: What are contributions that you feel you can make during your Director term? Rick: During my season on this Board, I am committed in making contributions that matter to our membership. It is my hope that when I will leave the IARFC as a Board The Register | September-October 2017
complete the missing piece of your puzzle. So with a great venue, great people, and great meeting planned I hope to see you all there! Register: And then there is the MRFC designation. How do you see this helping the Association? Rick: I believe that the MRFC designation will significantly increase membership both in numbers and quality. This will help our leaders in our organization become stronger in a common cause and give opportunity for additional sharing as we all grow in learning from one another. Lastly, the benefits from having this designation will afford us all the opportunity to be recognized as more qualified individuals serving our clients. Register: What do you feel is the focus of the Association in the coming years and how can the Board support these plans? Rick: As we grow, our focus and experience brings more added value with the benefits we gain from being a member of IARFC. The cost of our membership for the benefits provided is the best secret in our industry and we need to let other know about it so we can spread the wealth. The Board will continue to focus on the improvement of member benefits and enhance more “best practices” to help us all in our day-to-day client opportunities. When we share and collaborate as a team, we all benefit from each other. Register: Back to your own future. Where do you see yourself in the next 3-5 years? Member, I will have made an impact in some way. I feel that my experience in my career as well as other organizations like MDRT, TOT, Forum 400 etc. will assist me in my journey here at the IARFC. I am excited and look forward to contributing and growing our membership as we face new challenges in our industry. Register: The IARFC is planning a Conference next April at the Biltmore. Explain the importance of members supporting this meeting? Rick: As IARFC members, we have a great opportunity to share best practices The Register | September-October 2017
and renew relationships at the IARFC Conference in April 2018 at the Biltmore. This is first class venue second to no other and will be a great conference. I can’t express the importance of utilizing such an opportunity like this one to share and learn from one another. This could be one of the biggest highlight from your membership benefits by your attending the Biltmore Conference. This is afforded to all of us to keep us sharp in our industry and to build upon our relationships with one another. You usually leave these meetings with that little bit of something you were looking for or perhaps found that nugget that is just what you needed to
Rick: This is an easy question for me as I don’t see myself retiring unless it is for health reasons. I love what I do and do what I love doing. With new challenges that we all face in our business, it keeps us focused on being the best we can be to our clients. I love that part of our business in that everyone is unique. We customize each plan to fit our clients. If I was to ever do less production, I would consider coaching and mentoring others to build a successful practice. I also see myself making time to write my second book. Contact: 801.622.5774 rstanzione@rrgroup.org www.rrgroupinc.net Page 15
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Biltmore Conference April 17 – 19, 2018 Asheville, NC
IARFC Invites You The International Association of Registered Financial Consultants invites you to mark your calendar for April 17-19, 2018 for the IARFC Biltmore Conference held on the Biltmore Estate in Asheville, NC. Opportunities will be available to network, attend CE sessions and judge the Finals of the IARFC Image used with permission from The Biltmore Company, Asheville, North Carolina
National Financial Plan Competition while enjoying the lavish Biltmore Mansion, grounds and gardens. “We chose the Biltmore Estate for the combination of a beautiful backdrop and the successful entrepreneurial spirit of the Vanderbilts,” related IARFC Chairman H. Stephen Bailey, MRFC. “It’s not your ordinary big city convention-type visit. At the Biltmore you can attend your CE sessions, relax in the mountain setting and
Keynote Speaker Ric Edelman, RFC®
2018 IARFC BILTMORE Conference
& National Financial Plan Competition Asheville, NC April 17 – 19, 2018
appreciate the splendor of a unique period of history.”
To learn more call 800.532.9060 or visit www.IARFC.org
Agenda
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Tuesday, April 17 5:00pm – 6:00pm 6:00pm – 7:30pm
Registration Welcome Reception,
Shuttle Departures Village Hotel Lobby
Biltmore Conference
Lioncrest Lobby
April 17 – 19, 2018 Asheville, NC
Lioncrest Veranda
Networking and Exhibiting
Wednesday, April 18 7:30am 8:00am – 8:30am 8:30am – 9:20am
Registration
Lioncrest Lobby
Breakfast, visit with Exhibitors CE Session
Lioncrest Veranda Lioncrest Grand Ballroom
9:30am – 11:40am
National Financial Plan Competition 3 Finalist Plan Presentations
11:40am – 1:00pm 1:00pm – 1:50pm 2:00pm – 6:30pm 6:30pm – 9:00pm
Luncheon, visit with Exhibitors Lioncrest Veranda CE Session Lioncrest Grand Ballroom Relax & Explore the Estate IARFC Awards Banquet Lioncrest Veranda ® Keynote Speaker – Ric Edelman, RFC
10:00am – 10:50am 11:00am – 11:50am 12:00pm – 1:00pm 1:00pm
Financial Plan Competition Biltmore House Guest Tours Golf
Thursday, April 19 8:00am – 9:00am 9:00am – 9:50am
Attend CE Sessions
Breakfast, visit with Exhibitors Lioncrest Veranda CE Session — Ethics Program (2 hour credit) Barry L. Dayley, RFC® CE Session CE Session Luncheon, visit with Exhibitors Closing
Lioncrest Grand Ballroom
Lioncrest Veranda
Added Tours
Behind-The-Scene Guest Tours & Golf Wednesday, April 18 10:00am 1:00pm
Shuttle Departures Village Hotel Lobby
Legacy of the Land Tour Red Wine And Chocolate Program
Thursday, April 19 10:00am 2:00pm
Guided Garden Walk Golf Outing, Legendary Omni Grove Park Inn
Agenda is subject to change. All Attendees and Guests receive a Length of Stay Pass, allowing you to take in the Biltmore House Tour, and gives access to our Guest Package which, includes: Legacy of the Land Tour, Red Wine and Chocolate Program, Guided Garden Walk. Golf Outing at Grove Park is separate.
Images used with permission from The Biltmore Company, Asheville, North Carolina
Biltmore – Guest Specialty Tours Package Includes All Three Tours
Legacy of the Land Go back in time with a narrated tour on a Biltmore motorcoach. Learn about the history of the land, structures, and former residents from a guide while visiting areas of the estate not usually open to guests. 90 minutes
Wednesday, April 18, 10:00am
Red Wine & Chocolate Program Hosted by the winery staff. Discover why chocolate and red wine is a match made in heaven. Including locally produced artisan chocolates from French Broad Chocolate and Chocolate Gems, the program centers on production of wine at Biltmore and chocolate where you will taste and experience the tactile attributes of a raw cacao bean and the process of farming origin-specific cacao and its influence on the finished product. You will sample dark and milk chocolates accompanied by four award-winning Biltmore red wines to determine which is more pleasing to the palate. A must-do for any serious chocolate or wine lover. 30 – 45 minutes. Guests must be 21 years or older to attend.
Wednesday, April 18, 1:00pm
Guided Garden Walk Enjoy a meandering walk through the estate’s Italian Shrub and Walled Gardens with a Biltmore host offering insights into the landscaping history behind the estate’s world renowned gardens, grounds and Conservatory. You will discover the choices made by George Vanderbilt and acclaimed landscape architect Frederick Law Olmstead and see how their designs have endured for more than a century. 60 minutes, ¼ – ½ mile
Thursday, April 19, 10:00am
Omin Grove Golf Outing Golf Outing sold separately
Golf Outing – Legendary Golf at the Omni Grove Park Inn Swing into a round of golf on the legendary 18-hole course at The Omni Grove Park Inn. The 6,400-yard championship course has been played by PGA stars Bobby Jones, Ben Hogan and Jack Nicklaus and even President Obama. Feel a sense of pride and accomplishment after navigating the tree-lined fairways and bent greens with amazing views of the Blue Ridge Mountains all around. Elevated tee boxes on the par-70 course provide perfect sight lines for each drive. Includes golf fees and shuttle from Biltmore Village to Omni Grove Park Inn.
Tee Time, Thursday, April 19, 2:00pm
Images used with permission from The Biltmore Company, Asheville, North Carolina
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
call 800.532.9060 or visit www.IARFC.org
IARFC Biltmore Conference Registration Admission Item
April 17 – 19, 2018, Asheville, NC
IARFC Member Registration fee Registration Deadline: February 15, 2018 $595 Discounted Price $545
Thursday, January 18, 2018
CE Sessions, Ethics Program National Financial Plan Competition, Judge the Finals
Registration Deadline: February 15, 2018
Optional Items
April 18 & 19, Luncheon with Exhibitors
Biltmore Length of Stay Ticket April 17, Reception, Wine & Hors d’oeuvres April 18, IARFC Awards Dinner Banquet
Shuttle Service, Charlotte Douglas International Airport (CLT) Departing CLT at 2:00pm EST, Tuesday, April 17, to Biltmore Estate $75
Total Amount due
$
(Total Registration, Shuttle, and Tour fees)
Indicate Quantity Needed
Payment Options
Departing Biltmore at 9:00am EST, Friday, April 20 to CLT
1. M ail Registration with payment to: IARFC P.O. Box 506, Middletown, OH 45042 2. F ax Registration to: 513.345.9479 (credit card only) 3. E mail Registration to: info@iarfc.org Make Checks payable to: IARFC
Indicate Quantity Needed
Guest Specialty Tours $80
April 18 & 19, Breakfast with Exhibitors
Guest Registrations Includes
Guest Registration fee Guest/Spouse/Friend
$75
April 17, Reception, Wine & Hors d’oeuvres
April 18, IARFC Awards Dinner Banquet
Thursday, January 18, 2018
$275
Member and Non-Member Registration Includes Biltmore Length of Stay Ticket
If Registered By
$745
INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
If Registered By
Non-Member Consultant Registration fee Registration Deadline: February 15, 2018 $795 Discounted Price
IARFC
Package Tours (includes all three, per person) Indicate Quantity Needed
Credit Card# (Visa, MC, Amex, Discover)
Legacy of the Land Tour, Wednesday, April 18, 10:00am Red Wine and Chocolate, Wednesday April 18, 1:00pm
Exp. Date
Guided Garden Walk, Thursday, April 19, 10:00am
Golf Outing - Legendary Omni Grove Park Inn $140 Outing (includes shuttle and golf fees, Thursday, April 19, 2:00pm, Tee Time) Indicate Quantity Needed
Attendee Information First Name
Middle Initial
Ste/Apt#
Business Phone
Cell Phone
Last Name
Salutation
Middle Initial
Special Rate $179 per night online: villagehotel.biltmore.com Click Promo Code and Enter Group Code: 19P6DI, click Update, click Find Rooms, Select Option
City
State
Zip
Email Address
Last Name
Continuing Education Credits: Each state has different insurance and securities CE regulations. This event has not been pre-registered for CE. Varying credits will be available for IARFC, PACE, and state credits, depending on sessions attended. Lodging: IARFC is not responsible for attendee/guest hotel fees and/or taxes.
Guest Information First Name
Lodging: Village Hotel on Biltmore Estate
Call: 866.779.6277, mention 2018 IARFC Biltmore Conference
Business Name Street Address
Security Code
Salutation
Recommended Attire: Business casual is appropriate. A jacket or dress is optional, but recommended, for the Awards Banquet April 18. Cancellation: A refund (less 20% administration fee) will be made if notice of cancellation is received in writing three weeks before the event. We regret that no refunds can be given after this period. A substitute delegate is always welcome at no extra charge. Disclaimer: The program may change due to unforeseen circumstances, and the IARFC reserves the right to alter the venue and/or speakers. IARFC accepts no responsibility for any loss or damage to property belonging to, not for any personal injury incurred by attendees at our conference. The IARFC reserves the right to publish pictures and or video of this event and its attendees. A list of attendee contact information, will be shared with Exhibitors.
Marketing Unplugged Financial Consultant and the Joy of Insurance Insurance further fits into two additional categories: • You are licensed to sell it — It’s one stop shopping for your client. • You are not — You need to refer the business elsewhere.
Exactly how comprehensive do you want to be? As a financial consultant you strive to begin each new relationship with a comprehensive financial plan. After all, your doctor learns a lot about you before dispensing drugs or suggesting surgery. (Don’t we love being lumped together with doctors?) Once the plan is completed and reviewed, it’s tempting to immediately do all the business we can, then saying: “You really should get these other problems addressed too.” Wouldn’t you be better serving your clients if you tried to address everything? Often this includes your client’s insurance needs. What Is Insurance, Anyway? You ponder the question: “That’s a great idea! I’m licensed for insurance!” Let’s be more accurate. You hold a license allowing you to sell some types of insurance. Insurance fits into several categories: • Life Insurance — Selling life insurance in the US began in the 1760’s. Credit the Presbyterian Synods in Philadelphia and New York. You continue the tradition. It usually is written as whole or term life policies. • Annuities — A form of “investment insurance”, they are sometimes called “private pensions”. That name says it all. Fixed and variable are two main categories. • Disability Insurance — According to Marketwatch half of American families are living paycheck to paycheck. They pay their bills with cash flow from salary and wages might be a kinder way to say it. What happens when that cash flow is interrupted due to injury? • Health Insurance — Everyone needs it. No one understands it. • Auto, Home and Liability Insurance — Everyone needs protection for peace of mind. Sometimes, it’s the bank extending the loan that wants that peace of mind. As a financial consultant, you are likely licensed to provide the first three, but not the last two. What now? How Do You Price Financial Planning? Clients expect financial planning. Unfortunately, over the years they have Page 20
Your clients like and trust you. In many cases they would be happy buying all their financial products from you, assuming the products were high quality and priced fairly. Many people want a turnkey operation allowing one stop shopping. One of the purposes of adopting financial planning is to establish yourself as their “go to” person when they have financial questions of any kind. Assuming you are an independent financial consultant with your name on the door, there are several ways you can address the insurance issue.
been conditioned to expect it for free. What’s your approach? • It’s Free — We offer it as part of the new client experience. We expect to recoup costs from fees and commissions charged on the products they buy. • Basic is Free, Advanced is Not – Most people feel their situation is unique. • Planning Costs Money — We charge a fee on all plans. Some people might offer a credit towards investment fees, others don’t. • Planning Is Our Primary Product — We charge by the hour, similar to law firms. The plan can be implemented away from us, if you choose. It’s a standalone product. How Should You Approach Insurance? Insurance is part of a client’s life. It broadly fits into two categories: • During Life — Annuities provide retirement income. Health insurance keeps them alive. Auto and homeowners insurance provide protection. • After Life — Life insurance provides for beneficiaries. It can leave a legacy. Used as part of an estate plan, it can provide money to pay estate taxes, enabling the family farm or fortune to pass to the next generation.
• Get additional licenses — Study, study, study. Now you are licensed to sell health, auto and homeowners insurance. Pros: You can address more of your client’s needs. You gain a larger share of wallet. Cons: This might take lots of time. You need product lines. Profit margins might be slim. • Bring on an insurance expert — Hire a fully licensed insurance agent as part of your team. Ideally they have clients who will buy investment products. Your clients have access to a range of insurance products. Revenue goes into a large pot. Pros: Someone else did the studying. The expertise is under one roof. Yours. Cons: Added team members means added expenses. This includes office space and salaries. • Join an Insurance Company — You leave the independent space and join a large firm on the insurance side. Pros: Expenses are lower. You aren’t paying for your own office. Someone else pays to get you licensed. There are plenty of people in your new office who are insurance experts, but not investment experts. Fee sharing is a possibility. Cons: It’s an extreme solution. Will your clients follow you? • Develop a Strategic Partnership — You find an agent in your area who shares your The Register | September-October 2017
values and can fill the gaps in your product line. You refer business back and forth. Pros: You’ve outsourced. Maybe you share revenue too. Cons: Is it in your client’s best interest to offer only a single alternative? What if something goes wrong? You made the initial connection. • Develop Multiple Referral Relationships — You build a network. Clients needing products outside your range are given three business cards from insurance agents you trust. Pros: The client chooses where to bring their business. Their need is met. You follow up afterwards. Cons: Do they send referrals in return? There’s no fee sharing involved. • You Do Research Only — Your consulting services are billed by the hour. You let them know the type of insurance they need, what it should cost and which major firms offer it. You provide similar advice for mortgage refinancing, reducing credit card interest expenses and car leasing. Pros: You are selling advice. The client clearly sees its objective. This has great value. Cons: Some clients think advice should be free because you are making money on the investment side of the ongoing relationship. Virtually everyone needs some type of insurance. It’s a confusing product. Clients often prefer one stop shopping. They also wonder if they are getting the best deal. These are all factors to consider when you determine how insurance will fit into your business. If you don’t offer it, someone else will. The other fellow will likely make a case for them to move the entire account relationship away from you.
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 Enrolment 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. Contact: 215.862.3607 brycesanders@msn.com www.perceptivebusiness.com The Register | September-October 2017
Voluntary Benefit partner program with The Standard Insurance Company and Michael Insurance Planning Company
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Insuring the Pursuit of Financial Goals A financial plan that is lacking in proper risk management is only a financial wish, a “financial plan-ish”…sort of like a plan but really not. There are basically two questions a client has in their mind, “Am I going to make it?” and “Am I going to get blindsided?” Effective risk management addresses the latter. A portfolio, or plan review should ALWAYS include a review of insurance policies/needs….is there enough coverage, too much coverage, beneficiaries up-to-date, what has changed for the client, what the client wants to change etc. Although I was raised a city slicker, I have always held a special love for horses and have sought out their “company” when possible. It was most likely from this connection that created an analogy that I use, and sometimes overuse, “If you build a corral to protect your horses, would you use chicken wire? No. A 20-ft. concrete wall? No. It is our duty to minimize the risk to your “assets” by effectively utilizing our resources as we pursue your goals” good old fashioned horse sense. Let’s look at Life Insurance It is with a mix of sorrow and anger when Page 22
reading of a tragedy in the news and at the footnote is notice that a “Go Fund Me” account has been set up for the survivors/ expenses. Somewhere a planner failed or the victim failed to plan. Life Insurance is our Swiss Army knife while exploring the perilous path towards our financial goals. Life insurance can protect the obvious loss against an early demise but can also act as the great equalizer when used as a tool in legacy planning. Should there be an asset such as a family business, art collection, gun collection, classic auto etc. that will pass to a selected offspring than a life insurance policy can be used to offset and rebalance the distribution benefiting the other(s). In reviewing our client’s tax returns, as all good consultants do, we may notice an annual donation to a charity or alma mater. That donation can instead be turned into an annual premium to a life insurance policy that is owned by the cause, which is also the beneficiary, greatly increasing support while maintaining tax benefits. Why have a brick with your name on it when your client can have a building with their name on it. An inexpensive term policy can also be put in place to offset a market correction should one finally happen. When the portfolio
regains, you can integrate the term policy in to their legacy plan…or just walk away from it after it has served the purpose. A whole life policy can also serve as a cash supplement during retirement years or emergencies. Through loans, a non-taxable event that are not necessary to repay, the client can use it to supplement their cash “bucket” in their later years. Keep in mind that any outstanding loans would be subtracted from the policy benefits when the insurance policy “matures”. Also for HENRYs (High Earning Not Rich Yet), how Wall Street loves their acronyms, a solution such as a Fixed Index Universal Life policy can meet their immediate insurance needs while also serving as a future cash supplement to their retirement. Under current tax treatment these high earners fail to qualify for ROTH, and quickly find themselves maxing their 401(k) and Traditional IRA contributions. The underwriting for Life Insurance and Disability/LTC are yin/yang from one another. One of the hurdles for many planners in properly addressing risks to a client’s financial goals is the task involved in The Register | September-October 2017
policy not be a possibility or turn out to be cost prohibitive.
the underwriting process “War and Peace” length applications, paramed exams, attending physician statements and then the underwriter. The underwriters are there to help our client, not to suppress our business. Most likely our clients have some “bumps and bruises”, so while following HIPAA guidelines we use an optional health screen form as an informative guide to learn which carriers may be more favorable, or if coverage is possible at all, at which point we can adapt our financial plan accordingly and save the client a decline.
this personal pension, just in case Social Security is not in the mix. Then there is also the benefit of deferred tax treatment with annuities for those that max their 401(k) and IRA options. When placing an annuity we suggest a “checklist of understanding” for the client to initial so that they fully understand that it is tax deferred (not tax free), the surrender fees, and the restrictions and benefits. This will serve as a refresher for the client during reviews and future reference to dependents or beneficiaries should the client have a medical concern.
Income Protection (Disability Insurance) A necessity, presents the solution as income protection not Disability Insurance. The latter paints a picture in the client’s mind of needed only in the case of a car accident or other tragedy when the far greater claims occur due to cancer, transplants and other soft tissue illnesses. If the client has premiums paid by their employer the benefits will be a taxable event so you may want to consider a supplemental policy to close that gap. During this discussion, an additional teachable moment arises in stressing the importance of emergency savings. Generally three months expenses for a dual income household and six months expenses for a single income household. Did I mention that Income Protection is a necessity?
Annuities can be used as a legacy tool and in estate planning. We have found one of the most common obstacles to a client’s financial freedom are their children. Children in their 30s, 40s and 50s still requiring ongoing financial bolstering. In such circumstances an annuity can also offer “shelter” for the client. In one extreme case we emphasized the restrictions of an annuity as a form of a “Ulysses Agreement” for the client, “tying the client to the mast” through surrender fees and guaranteed future income. Through the restrictions, they could not succumb to the sirens song for more money from their kids, offering the client plausible deniability. The client was very appreciative over the following years and their kids became a bit more self-sufficient.
Annuities Annuities are greatly maligned and rightfully so when presented as an investment. Many of our clients come to us with annuities they do not understand. That is because the “salesperson” that sold them the puzzling policy did not understand the features and restrictions themselves, but the salespeople fully understood the commission structure. An annuity is an insurance product offering insured income, not to be confused with an investment offering guaranteed returns. For advisors presenting an annuity as an investment, you are doing a great disservice to your client and our profession. From the investment view, it is far too high in fees to present without a strong sense of guilt. When properly placed, an annuity however can be a vital component to a sound financial plan. We position annuities to take over the role of income protection (Disability Insurance) as the client enters their retirement phase so that essential expenses such as property taxes, healthcare costs, insurance premiums, rent/mortgage, groceries etc. are insured to be paid should the zombie apocalypse fall upon us. Then again we may have bigger concerns than property taxes should zombies be found on our property. We do not consider Social Security benefits in the mix when developing
Extended Care (Long Term Care) It was through family experiences with extended care that I entered our profession. Firsthand I saw not only the financial drain but the emotional drain of passé planning. I witnessed my mother’s health quickly fail under the stress of my father being in a nursing home as a result of a head injury from a fall. My brother taking red-eye flights most every weekend from Dallas to the northeast to help us as we tried our best to juggle the burden. These life experiences, nearly 20 years ago, forged a newfound passion and forever focus for me, to help families and businesses pursue their financial goals while addressing the threatening risks which are ALWAYS looming.
So that we may offer our clients and their loved ones greater assurance in our service as they pursue their financial goals and dreams we, as financial consultants, must offer greater insurance service.
LTCI has seen an orbital rise in premiums, it is due to two factors, the high risk and high need. The actuaries greatly under estimated the growing, and lengthy need and how fervent clients were to hold on to their policies…extremely lower lapse ratio than originally projected.
Jay R. Hardesty, MRFC
The Register | September-October 2017
Carriers are responding and developing, at a rapid pace, hybrid products with life insurance and annuities policies offering long term care benefits as an alternative should a standalone long term care
As I mentioned there is a difference between the underwriting concerns for LTC/Income Protection and life insurance. In very simple terms LTC underwriters aren’t as concerned with skydiving, auto racing and being a stunt pilot as the insurance carrier would not be on the hook with a near instant passing. On the other hand underwriters for life insurance wouldn’t be too concerned with issues that may cause a lengthy lingering extended care situation. As I stated underwriters are your friends, you must respect their task. They need to project the future possibilities using only a current snapshot. Think about if we had to lockdown what the market will be 20-30 years from now based upon only today’s market environment. Help your client by working with the underwriters. A rating or denial, can help alert us and our client to a previously unforeseen risk…which can now be addressed with the best use of remaining resources. Always consider including a cover letter with any application be it life, DI or LTC to help the underwriter know of any concerns and the underlying reasons explaining if it was situational due to a divorce or loss of a parent or if the client has been symptom free for a period of x years.
Jay Hardesty developed Ashton Wealth Management. Teaming with Money Concepts, Jay offers steadfast fiduciary service by always placing the interests of clients paramount, truly free of any undue influence from Big Banks, large investment firms or insurance carriers. Contact: 970.799.2540 jhardesty@moneyconcepts.com www.moneyconcepts.com Page 23
Determining Asset Allocation and Withdrawal Rates with the Retirement CARE Analysis™ A natural guideline for the retirement spending decision is to first determine what spending rate would satisfy a client’s lifestyle goals. Beyond this vital detail, advisors should also consider the following: 1. The client’s degree of spending flexibility to make spending cuts if necessary, 2. Your general view about whether the client’s spending may need to keep pace with overall consumer price inflation, and 3. Whether the client wishes to maintain a safety margin for assets. Armed with this information, you can then consider the broad range of variable spending strategies and choose the one that seems to best match client goals and manage risks. My research in the area of dynamic spending strategies has sought to develop a framework to help with the decision-making process. How should a retiree choose a spending method and parameterize the initial spending rate? I have provided a framework to think about the important issues, such as spending flexibility, feelings about upside spending growth vs. downside spending risks, the possibility of a minimum spending threshold to be protected, the desired direction of spending (for instance, whether to decrease spending over time), the appropriate planning horizon, and any legacy goals. A broader set of issues to consider when deciding on a withdrawal rate and asset allocation relate to a Retirement CARE Analysis™ for the client. Client answers to the following questions will help guide these decisions:
C
apacities:
• Do you have sufficient retirement income from reliable sources that will not be diminished by market downturns? • How would you adjust your lifestyle if you had to spend less? Is your answer reasonable?
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The Register | September-October 2017
• Are your portfolio distributions flexible enough that you could reduce them after a market downturn without adversely affecting your standard of living in retirement (either because it is easy to make simple lifestyle changes or you have sufficient reliable income sources like pensions and annuities available outside your portfolio)? • Do you have insurance to protect from dramatic spending shocks related to health, long-term care, or an unexpected death? • Related to your funded status, do you have reserve assets that could be deployed to cover spending after a market downturn (that are not earmarked to meet retirement spending goals)? Is the value of these assets correlated with the stock market?
A
spirations:
• What are your retirement spending goals? How are they divided between basic and discretionary expenses? • Do you expect your lifestyle spending goals to keep pace with inflation? Are your spending needs sensitive to inflation? • How long do you want your money to last? • Do you want to build in a margin of safety for remaining assets? • What are your legacy objectives?
R
eturns:
• What are reasonable expectations for different asset classes during retirement?
E
require ongoing complex decisionmaking on your part? • How financially savvy are different members of your household? Would surviving household members be able to carry on financially if you were incapacitated due to illness or death? In answering these Retirement CARE questions, a more conservative retiree will experience some of the following characteristics: • Fewer reliable income sources outside of the investment portfolio to help cushion the impact of market volatility on lifestyle, • Lower flexibility to make spending reductions because spending goals are fixed and adjust with inflation, • Fewer reserves, buffer assets, or insurance policies to help cushion spending shocks, • A greater desire to build in a margin of safety for the financial plan, • Greater worry and stress about shortterm market volatility, and • Greater worry and stress about outliving your retirement assets. Meanwhile, a more aggressive retiree will tend to fall in the opposite direction on these matters, highlighting the highly personal and complex nature of determining asset allocation for retirement. In my view, it is only after thinking about these different types of questions and assessing assets and liabilities on the retirement balance sheet that clients are able to fully determine their appropriate asset allocation and withdrawal rate decisions.
motional Comfort:
• How much short-term market volatility can you stomach before it starts affecting your sleep with undue stress or causes you to panic and sell stocks after a market downturn? • What is your longevity risk aversion? How worried are you about outliving your assets? How strongly do you wish to avoid spending reductions in the event you live well beyond your life expectancy? • Can you stick to the spending and investment objectives for your financial plan without being strongly tempted to overdo things or arbitrarily change course? • Are you vulnerable to making other behavioral mistakes that could harm the long-term prospects for your financial plan? • How complex is the financial plan? Can it run on autopilot or be facilitated by a trusted financial professional, or does it
The Register | September-October 2017
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The “Seniors’ Right to Know” Movement Gains Momentum: What if a Senior No Longer Needs their Life Insurance? This summer, the State of Florida gave a jolt to the growing “Senior’s Right to Know” movement in America — and all Registered Financial Consultants need to be aware of these latest developments. The Florida legislature passed an important piece of legislation that will likely encourage other states to increase consumer disclosure requirements to protect seniors who are considering making changes to a life insurance policy, such as the painful decision to lapse or surrender a policy. Florida has the highest percentage of residents over the age of 65 of any state in the U.S. and is often a leader in pro-consumer legislation that affects American seniors. The new law, which worked its way through the state legislature as HB 1077 and was signed by Governor Richard Scott on June 26th, requires that “a life insurer shall provide an individual life insurance policyholder with a statement informing him or her that if he or she is considering making changes in the status of his or her policy, he or she should consult with a licensed insurance or financial advisor.” This disclosure requirement must also provide the policyholder “that he or she may contact the department for more information and include a website address or offer location or manner by which the policyholder may contact the department.” This legislation is a major step forward in the Senior’s Right to Know movement, which advocates for similar consumer disclosure laws nationwide. Proponents argue that seniors have a right to be made aware there are a number of alternatives to lapsing a life insurance policy and surrendering it back to the insurance company they should consider, such as: • Maintain the policy through loans, using the policy or its cash surrender value as collateral. • Seek an accelerated death benefit. • Convert the policy to a long-term care health insurance policy. Page 26
• Assign the policy to someone else as a gift or to a non-profit organization as a charitable contribution. • Sell the policy through a life settlement transaction. Your Clients Have Options Of these options, a fast-growing trend in the marketplace is the life settlement transaction, a category that soared by 47 percent in 2016, according to The Deal. A life settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its net death benefit. In a life settlement, the policy’s owner transfers ownership of the policy in exchange for an immediate cash payment. Many financial consultants don’t realize that life insurance is personal property, so your clients can sell it just like any other property they own. Each year, more than $140 billion worth of life insurance owned by Americans over the age of 65 is lapsed or surrendered back to the insurance
companies that sold the policies – mostly from a lack of knowledge that an unneeded or unaffordable policy may be sold. Candidates for life settlements are typically aged 70 or older, with a life insurance policy that has a death benefit of more than $100,000, although policies of all sizes owned by seniors of all ages may be sold if there are health problems involved. Depending on characteristics of the policy and the health circumstances of the insured, on average, policy sellers receive anywhere from four to seven times the amount of the policy’s current cash surrender value. Life Settlements as Financial Planning Option There are a variety of factors that are driving the importance of life settlements as part of the holistic financial planning process. First of all, the financial landscape has changed significantly over the past decade. Sustained low interest rates have made it more difficult The Register | September-October 2017
for investors to generate income, while more volatility in the equity markets has made seniors gun-shy about banking on predictable returns from stocks, bonds and other traditional investments. The result is that the psychology of seniors is fragile, even to the point that one survey found more than three in five said they fear depleting their assets more than they fear dying. Second, seniors are becoming increasingly well-informed about life settlements as a possible supplemental retirement income strategy. This growing awareness makes it inevitable that a wider swath of financial consultants will be asked about life settlements by seniors seeking to find out if they are viable financial planning options for them to consider. Third, there is a growing chorus of voices calling for more pro-active and transparent disclosures about life settlements. Developments in some state legislatures – such as Florida — portend that life insurance carriers may eventually be obligated to inform clients about the life settlement option for policies that are determined to no longer be needed or affordable, prior to lapsing the policies. This Senior’s Right to Know movement may eventually create a
duty to inform for consumer advisors, so financial consultants who seek to be ahead of the curve are already engaging in more pro-active consultation with seniors about their life insurance assets. Conclusion For most seniors, the decision to purchase a life insurance policy came down to this basic idea: they were trying to provide financial relief for their loved ones in the event of their untimely death. Today, however, many seniors are in a different place than when they first purchased their life insurance policies. For many, their kids have turned into adults and have begun their own families, assuming the personal financial responsibilities that each generation of parents has to provide for their own kids. For others, their income has tapered off in retirement, transforming those annual premiums that were once just another expense in the family budget into a financial burden. Regardless of the reasons, if your client decides that they no longer need or can no longer afford their life insurance policy, they have a right to know they have options to consider for what to do with that policy.
Darwin M. Bayston, CFA Darwin M. Bayston, CFA is President and CEO of the Life Insurance Settlement Association (LISA). In addition to responsibilities of managing the day to day operations of the Association, he is also charged with extending the outreach to all participants of the life settlement industry from consumers to capital providers, including producers, brokers, providers, service providers and investment firms. He also recently authored the book called “The Hidden Value in Your Life Insurance: Funds for your Retirement”, a consumer guide to help people unlock the hidden value in their life insurance policies. Contact: 888.521.8223 www.lisa.org
sponsor the collegiate 2018 IARFC National Financial Plan Competition! Participation as a sponsor for the National Plan Competition is mutually beneficial and allows for various levels of interaction with the students and members.
learn more www.iarfc.org/FinancialPlanCompetition 800.532.9060 info@iarfc.org The Register | September-October 2017
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Consumer Focus Figuring Out Your Numbers
‘If your outgo exceeds your income your upkeep will be your downfall” – Bill Earle
As the sun was setting on a small airstrip in Essex County, New Jersey on July 16, 1999, John F. Kennedy Jr. climbed into the cockpit of his small twin-engine airplane and prepared for takeoff. At 39, he was in the prime of his life. He was also running late for his cousin’s wedding 300 miles away in Martha’s Vineyard, Massachusetts. Page 28
His original flight plan called for a 6 p.m. departure, but traffic was heavy getting out of New York City. By the time the Piper Saratoga lifted off, it was 8:39 p.m. What was to have been a daylight flight would now take place in haze and darkness. Tragically, the light aircraft would plunge into the inky waters of the Atlantic Ocean a mere
seven miles short of its destination, claiming the lives of young Kennedy, his wife, Carolyn Bessette, and her sister, Lauren. What caused the crash? Kennedy was flying blind. He was qualified to fly a plane in daylight but did not have an instrument rating. Instead of flying over the shoreline where lights on the ground could have The Register | September-October 2017
guided him, young Kennedy chose the more direct route over open water. Authorities investigating the crash said that Kennedy was likely a victim of something called “spatial disorientation” – the inability to know where your body is in space when you have no reference points to go by. At some point, JFK Jr. must have known he was lost in the haze and gloom of the night sky. He may have stared in panic at the many dials and gauges on the plane’s control panel, hopelessly confused at what they meant. Investigators say the plane went into the water nose-first, which means he probably never knew he was flying straight toward the water. 2[Source: National Transportation Safety Board Aviation Accident Final Report, July 16, 1999; http://app.ntsb.gov/] There is an old expression, “A little knowledge is a dangerous thing.” Kennedy had completed about 50 percent of the training he needed for instrument certification. He had just enough training to make him think he was safe at the controls. His fatal mistake was not just the lack of knowledge, but believing he had all he needed. To plan properly you need data. Without data, you are flying blind. To land safely in retirement and not crash (prematurely run out of money), you must know two things: (a) your net worth, and (b) your retirement number - how much you need to save up before you can safely retire. Armed with that knowledge, you can safely disconnect yourself from your umbilical paycheck, and permanently derive your income from other sources. Net Worth Your net worth is simple. It’s what you have saved minus what you owe. Problem is, a lot of people forget those last three words – what you owe. Why is accurately calculating your net worth such an essential first step to planning your financial future? Because you must know where you are before you can get to where you are going. That was JFK Jr.’s problem. He knew where he wanted to go, but he could find no reference point for where he was. Have you ever lost your bearings in a large, indoor mall and had to consult the information kiosk? If you did, you probably remember seeing a map of the mall encased in glass. And what was the first thing you looked for. Wasn’t it the big red arrow pointing to a dot above which were the three words, “YOU ARE HERE”? The map of the mall layout was information you The Register | September-October 2017
needed. But unless you knew where you were, you couldn’t get to where you were going, could you?
much do I need to put away so that, when I start taking money out, I will have enough to last throughout my life?
It’s like that with planning your financial future. It is crucial to know where you stand financially at the present before you start plotting a course to take you into the future.
2. Will I be able to maintain the same lifestyle I have now in retirement?
Your Retirement Number A few years ago, a large insurance company aired a commercial featuring a man walking his dog down a tree-lined street. What grabs your attention is the man has a huge, orange number (probably made out of Styrofoam) under his right arm. It’s his retirement number – the amount he must save before he can safely retire. You know this, because on his walk he encounters his neighbor, standing on a ladder trimming his hedge. On top of the hedge to his right rests the word “Gazillion” preceded by a dollar sign. “What’cha got there, Clark?” says hedge trimmer. “It’s my retirement number – the amount of money I need to have saved up before I can safely retire. Is that your number,” asks dog-walker, pointing to the big word “Gazillion” resting on the hedge?”
From a retirement planning point of view, nothing is more important than your ability to generate income. Understanding how to turn your savings and investments into income trumps everything else. As I write this, interest rates are at record lows and stock market valuations are sitting on a razor’s edge of volatility. People are living longer lives, too. All of this makes not running out of money in retirement more challenging than ever before. That’s why we must approach this area carefully and strategically, armed with as much information as possible, and with as many planning strategies and techniques as possible at our disposal. Let a fully-trained professional with fiduciary capacity (your best interests at heart) help you figure out your number – how much you must put aside now. And what if you lack the resources to put that much aside immediately? Then let that same professional help you accelerate your savings so you can achieve that goal.
“Yeah, gazillion, bazillion. I’m just going to throw something at it and hope it’s enough.” Obviously, the point of the commercial was that hedge-trimmer hadn’t done any planning and was clueless as to how much money he would need for income in retirement. Sufficiently chastened for his lack of vision, the dog-walker exited the scene and we are left shaking our heads at how foolish it is not to find our retirement number. I am not usually a big fan of TV commercials, but this one had a point. So, how do you arrive at your retirement number? Let’s say you want to retire in 15 years. If you can tell me how much income you want, then, believe it or not, I can tell you to the penny what you will need to put away today, using some time-collapsing income strategies and techniques. The value of collapsing time is you can leap-frog ahead and look forward. The most crucial piece of the retirement puzzle is income – what your paycheck will be once you retire and how long it will last. When I meet with potential clients, two questions come up nearly every time. 1. Have I saved enough so that my money will last as long as I do? In other words, how
Peter J. “Coach Pete” D’Arruda, CTC, MRFC Peter J. “Coach Pete” D’Arruda, CTC, 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 Consumer Focus articles are available to IARFC members. You may view and reprint Consumer Focus articles at: iarfc.org/consumer_articles.asp Page 29
International News 2017 Event and Education Program Highlights Highlights IARFC Hong Kong, Hong Kong June 20, 2017 IARFC Member Development RFC® Day, 4 RFC CE Hours The RFC Day, a spotlight continuing education event themed “Welcome Challenges Embrace Opportunities”, was successful. The event featured high caliber professionals as speakers, including; Dr. Haksin Chan, Head and Associate Professor, Department of Marketing, Hang Seng Management College; Mr. Benny Mau, Chairman, Hong Kong Securities Association and Ms. Susan Li, Principal Consultant, Macro Learning Company Limited, a professional training and consultancy organization.
IARFC Member Development RFC® Day, June 20,2017, delivering opening remarks Alex Shum, RFC®, Chairman IARFC Member Development Committee, Hong Kong and Macau
Speaker topics included: Business Continuity, Planning, Customer Growth: Challenges and Opportunities, The Shanghai-Hong Kong and the Shenzhen Hong Kong Direct Securities Trading: Implications and Effects. In addition Mr. Matthew Yic, RFC® and Mr. Solomon Young, RFC®, shared impressive experiences. Supporting Organizations: GAMA of Hong Kong, LUAHK, Executive Development Center of Hang Seng Management College Media Sponsor: Hong Kong Economic Times Photos of the following events will be shared in the next issue of the Register.
IARFC Hong Kong, Hong Kong August 15-16, 2017 IARFC Meetings with U.S. Chairman H. Stephen Bailey Hong Kong and Macau Chair, Dr. Teresa So, Honorary Chair, Samuel W.K. Yung, Executive Director, Allan Wan and members of the Development Committee, and U.S. Chairman H. Stephen Bailey, shared time working. A visit to Lingnan University, a potential RFC education program provider was also accomplished. IARFC Philippines, Makati City, Philippines August 17, 2017 IARFC Meeting with U.S. Chairman Stephen Bailey Philippines Chair, Ralph Liew and U.S. Chairman H. Stephen Bailey, met with Insurance Commissioner Dennis Fuma, President of Manulife Rayan Charland, President of Philamlife Aibee Cantos
IARFC Member Development RFC® Day, June 20,2017, Dr. Haksin Chan presented, Customer Growth: Challenges and Opportunities
IARFC Annual Forum and Graduation August 18, 2017 The RFC® Day attended by Financial Planning practitioners, IARFC members and non-members, for knowledge enhancement. IARFC U.S. Chairman, H. Stephen Bailey, MRFC presented: Financial Consulting-a new graduate’s primer. IARFC Meeting with U.S. Chairman Stephen Bailey Greater Asia Chairman, Jeffrey Chiew met with H. Stephen Bailey IARFC Taiwan, Taipei, Taiwan August 19, 2017 IARFC Meeting with U.S. Chairman H. Stephen Bailey China and Taiwan Chairman, Kai Tu Yuan met with H. Stephen Bailey at IMM International Page 30
The Register | September-October 2017
ne 20,2017, ® t RFC Day, Ju Road” en m op el ev D r ne IARFC Membe Overview on “One Belt O ents es pr Li n sa Su
IARFC Member Development RFC® Day, June 20,2017, Dr. Teresa So, RFC® , Chairman, Hong Kong and Macau,(centre) and Kai Tu, RFC® , Chairman, China and Taiwan, (second from right) presented souvenirs to Wilson Wong, General Manager, Hong Kong Economic Times Limited (left) Colan Yiu, President, General Agents and Managers Association of Hong Kong (second from left) Joanna Kwok, Director, Executive Development Centre, Hang Seng Management College (right)
(L-R) RFCs and IARFC Member Development Committee, Hong Kong and Macau , Eugene Lam, David Lai, and Anita Yiu, Kai Tu, RFC, Chairman, China and Taiwan, Dr. Teresa So, RFC®, Chairman, Hong Kong and Macau, RFCs Chairman and Vice Chairman of IARFCDevelopment Member Development Committee, Hong Kong and Macau Alex Shum, and Rosanna Yu, IARFC Member RFC® Day, June 20,2017, RFCs and IARFC Member Development Committee, Hong Kong and Macau, Hui Wai San and Bobo Hong
IARFC Member Development RFC® Day, June 20,2017, (L-R)Matthew Yip, RFC®, Solomon Yung, RFC, Forum speakers during interview session with host Rosanna Yu, RFC®, Vice Chairman of IARFC Member Development Committee, Hong Kong and Macau The Register | September-October 2017
IARFC Membe r Development RFC ® Day, June Benny Mau pres 20,2017, ents The Shangh ai-Hong Kong Shenzhen Hon and the g Kong Direct Securities Trad Implications an ing: d Effects
IARFC Member Development RFC® Day, June 20,2017, (L-R) Wilson Wong, General Manager, Hong Kong Economic Times Limited and Lau, Advertising Director, Hong Kong Economic Times Limited Page 31
Nominees for the
2018 Loren Dunton Memorial Award You may use this form to nominate a recipient for the Loren Dunton Memorial Award, presented annually to a person who has made significant contributions to the financial services profession and to the public. This form may be supplemented with additional information of your choosing. Nominations close on November 30, 2017. Nominee Name: _____________________________________________________________________________________ Nickname: _____________________ Address/City/State/Zip________________________________________________________________________________________________________ Phone and email: ___________________________________________________________________________________________________________ Professional designations: ____________________________________________________________________________________________________ Current position/title: ________________________________________________________________________________________________________ Firm/organization/institution: __________________________________________________________________________________________________ Positions of responsibility in associations, etc: _____________________________________________________________________________________ ___________________________________________________________________________________________________________________________ How has this person benefited the general public? ________________________________________________________________________________ ___________________________________________________________________________________________________________________________ How has this person benefited the profession? ___________________________________________________________________________________ ___________________________________________________________________________________________________________________________ Publishing credentials: _______________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________ Speaking and/or teaching credentials: __________________________________________________________________________________________ ___________________________________________________________________________________________________________________________ Nominator Name: ______________________________________________________________________________________ Nickname: ____________________ Address: ___________________________________________________________________________________________________________________ Phone and email: ___________________________________________________________________________________________________________ Email: wendy@iarfc.org or; Mail this form to: IARFC Loren Dunton Award Committee c/o staff liaison, Wendy Kennedy International Association of Registered Financial Consultants P.O. Box 506 Middletown, OH 45042
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The Register | September-October 2017
Loren Dunton Memorial Award Dunton continued to promote the value of the financial consultant as a professional whose quest for knowledge should never cease. He authored seven books that have helped to shape the careers and services of financial consultants. Dunton’s commitment to these principles was evidenced in the Institute for Consumer Financial Education that he nurtured for many years, and which earned a Presidential Citation for public service. What Dunton Recognized… Having been a successful businessman, although never a financial consultant, his comments were from the heart. He used his experiences to frankly explain back then, what we recognize now, that… Planning is not separate from the “sale” of insurance and investment products, but are different roots of the common tree. Products are necessary elements in the implementation of the financial plan. Salesmanship should be taught by the managers and trainers of the financial services industry. The ethical sale of financial products and the delivery of competent advice is a very noble calling.
Honoring the Recipient The Loren Dunton Memorial Award is made, in honor of the founder of the financial planning profession, Loren Dunton, to a person who has made a substantial contribution to the financial services profession and/or the financial interests of the public. Father of Financial Planning Loren Dunton, generally regarded as the “Father of Financial Planning”, organized financial professionals in the late sixties. In 1969 he convened a group of financial professionals in Chicago and founded an industry of outstanding service and commitment. From this event and from Dunton’s leadership and interactivity with many persons now in the IARFC would come an educational institution, the College for Financial Planning and the personal financial planning curricula now taught on over one hundred campuses. As the first editor of Financial Planning magazine Dunton helped to publicize an emerging profession, bringing various practitioners together for a common cause, sharing practice and marketing techniques and promoting ethical conduct. That respected magazine has continued contributing to the profession for thirty years. Two associations came initially from this effort, the International Association for Financial Planning and after the first class of Certified Financial Planners graduated in 1973, the Institute of Certified Financial Planners. These organizations have since merged to become the Financial Planning Association. Using Dunton’s model, more than forty countries have formed similar organizations.
Criteria for the Dunton Award Candidates must hold a professional designation (i.e. ChFC, CFP®, CLU, RFC®, MRFC, CPA/PFS, CEBS, MSFS, MSFM or Doctoral degree) and have been widely published on financial topics in articles, journals, books, etc. They must have provided outstanding personal service or leadership in the financial services industry. Nominees must have participated in some aspect of financial education, to the public or to other members of the profession. Candidates must have demonstrated effectiveness in carrying the message of responsible financial stewardship to the public, and have high ethical and professional standards. Their career must be in support of Loren’s mission, “to help people do a better job of spending, saving, investing, insuring and planning for the future, in order to achieve financial independence.” 2018 Nomination Committee H. Stephen Bailey, LUTCF, CEBA, CEP, CSA, MRFC — (2010 Recipient) Lester W. Anderson, MBA, RFC® — (2014 Recipient) Bill Carter, CFP®, ChFC, CLU, RFC® — (2006 Recipient) Ric Edelman, RFC® — (2017 Recipient) Jerry Mason, Ph.D. — (2016 Recipient) Jon M. Rogers, Ph.D., CLU, ChFC, MRFC — (2015 Recipient)
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
P.O. Box 42506 Middletown, Ohio 45042
Brand Your Ethics Approved Status 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. Visit the IARFC store for these valuable branding tools www.IARFC.org/Store or contact 800.532.9060, info@iarfc.org
IARFC INTERNATIONAL ASSOCIATION OF REGISTERED FINANCIAL CONSULTANTS
Published on Aug 25, 2017
It is hard to believe there are only four months left in this year. Already we are well underway with the collegiate 2018 National Financial...
