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ALSO INSIDE Trigger Change That Lasts with Marshall Goldsmith PAGE 12

Even a Little Tech Can Help Grow Your Practice PAGE 66 29> <PAGE

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Imeriti – Now Simplicity Life – Turns Agents Making $100k or Less Into Agents Pocketing $250k or More From full-circle training to cutting-edge marketing, Simplicity’s new Life Division has the touch of wizardry needed to make agents wildly successful.


he freshly minted chief marketing officer of Simplicity Life, Brian Schneier, has added a groundbreaking strategy to his marketing agenda. Known by many as the former president of Imeriti Financial Network, Brian’s specialty is in marketing sales development programs and training agents and advisors to be masters of their craft. In this Q&A with the (now) chief marketing officer of Simplicity Life, you’ll discover exactly what makes their agents so prolific.

Q: Let’s start at the beginning. What made Imeriti such a successful IMO? A: We always believed in the “work smarter, not harder” mentality. In the early days, we outlined where our competition wasn’t, and how to leverage that as best we could. Early on, CEO Jacob Stern found those opportunities in financial institutions, banks, credit unions and broker/dealers. If there was an opening, we’d take it. And the same goes for our renowned training. We saw a major need for knowledgeable agents in the field, and we designed a program that resulted in the most successful, informed and helpful agents in the industry. Last is our specificity. Our entire marketing platform was designed to make us the IUL experts. That’s all we focused on. That’s all we trained on. That’s what we marketed. And when you focus on one thing, you can do it really, really well. Q: Why does Imeriti have such a strong draw with younger agents?

A: I have to credit our complete marketing and sales training programs. A lot of younger agents aren’t as wellversed with life insurance basics, specifically explaining FIUL. So, from the very start, our agents are coached on working with leads and developing and delivering client presentations, as well as understanding and explaining software that demystifies IUL for clients. In all, our program guides agents through the whole sales circle. Another unique aspect that no other IMO in our industry has is our social selling platform. We work with Hootsuite to make sure our agents stay top of mind with their ideal clients throughout the social media world, making them a real feature subject to their audience. And last, we have powerful study groups. This is a unique way for newer agents to really learn from and work with older, successful advisors in the industry to help them close complex insurance planning. Study groups are also an excellent forum for succession planning — for advisors who may be retiring their book of business and looking for a way to retire from the industry. Q: What led you to transition into Simplicity Life? A: I would say this was driven by Imeriti’s president, Jacob Stern. He decided that our platform was so robust, and so deep and wide-reaching, that it would be a huge enhancement for all of the Simplicity Financial Marketing family of companies to take advantage of what we have. He called it “the ability to grow without building,” and everyone really liked that

idea. By just tapping into our platform, all the Simplicity companies can grow without building. Though growing might be an understatement. Truth is, by rolling it all up and joining Simplicity Financial Marketing, we’re going to be the largest financial distribution company in the United States. Q: What is in store for agents in 2018? A: For years we asked, “How do you bring up an agent who’s making $100,000 or less a year and turn him or her into one that’s capable of making well over $250,000?” That’s a big gap. But we recently put the finishing touches on two programs that are already showing some amazing success for agents of any skill level to climb the ladder as high as they wish. We’re calling them the EPG Premier Team and the EPG Choice Team. The Premier Team is designed for agents already making over $250,000 a year, and helps them become even MORE successful. And the Choice Team is our exclusive proDressander | BHC has joined gram that takes agents making $100,000 or less and graduates them to Premier Team member. FINANCIAL MARKETING It’s all really, really exciting, and I’m thrilled to be a part of it.


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» read it




20 Holistic Tech

By Steven A. Morelli By automating parts of their practices, advisors are freeing up their time and talents to focus on their ideal clients and market segments. 29 The 2017 Tech Guide

Future-forward digital inventions that give consumers unprecedented access to products, services and information.


8 T he Last Waltz? Republicans Prepare for Tax Reform Fight


40 The Real Bucket List: What Every Parent Needs

By John Hilton Republicans in Congress are under pressure to get the job done. Can they score a badly needed win?

By Louis S. Shuntich Young families are not immune to the tragedy that may come in the form of an accident or unexpected illness. Here are some things your young clients may not have considered.

50 W  ill Fixed Indexed Annuities Have Another Record-Setter? By Cyril Tuohy Some observers say FIAs could see a sales frenzy as 2017 comes to a close.

HEALTH/BENEFITS 56 B  reaking Into the Public Sector Market


42 How Not to Destroy Your Client’s Family After Your Client’s Death By Ted Bernstein Imagine how your clients would feel to learn their children would never speak to each other again because of what they inherited. Here is how life insurance can help avert the drama.

12 How to Trigger Change That Lasts

An interview with Marshall Goldsmith When the world’s top CEOs need help staying on track, they call on Marshall Goldsmith. Goldsmith has made a career out of coaching the best in the business. In this interview with InsuranceNewsNet Publisher Paul Feldman, Goldsmith describes how to combat the triggers that prevent us from doing the things we know we should be doing.



48 C arriers Releasing More Fee-Based FIAs

InsuranceNewsNet Magazine » November 2017

By Cyril Tuohy In time, fee-based products will rise in popularity as advisors become more familiar with them.

By Stephen L. Pontecorvo Over the past several years, the growth of voluntary benefits in the private sector has exploded. How advisors can take advantage of that trend.

62 Pies Are for Dessert: What Clients Really Need Is a Plan By David Stryzewski You need to provide more than a pie chart when helping clients chart their retirement course.

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66 How Even a Little Technology Can Help Grow Your Practice By Curt Whipple Technology can make the difference between a “so-so” year and a “great” year full of profit.


68 THE AMERICAN COLLEGE: Too Many Clients Underestimate Their Flood Risk By Jocelyn Wright Now is a good time to sit down with clients and complete an insurance review that includes property and casualty coverage.

69 N  AIFA: What Separates Top Producers From the Rest of the Pack By Robert A. Arzt Some of the characteristics of top producers may surprise you.

70 MDRT: How Digital Tools Can Propel Your Practice’s Growth By Brian Greenberg A digital strategy is essential to client recruitment and retention, as well as internal productivity and organization.

72 LIMRA: A Simple Take on Simplified Issue By Matthew Rubino and Kevin Tewksbury For all the benefits of simplified issue life insurance, current product offerings face some challenges that fully underwritten products are able to avoid.

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275 Grandview Avenue, Suite 100, Camp Hill, PA 17011 tel: 866-707-6786 fax: 866-381-8630 PUBLISHER Paul Feldman EDITOR-IN-CHIEF Steven A. Morelli MANAGING EDITOR Susan Rupe SENIOR EDITOR John Hilton SENIOR WRITER Cyril Tuohy VP MARKETING Katie Frazier SENIOR CONTENT STRATEGIST Kristi Raynor AD COPYWRITER John Muscarello AD COPYWRITER James McAndrew CREATIVE DIRECTOR Jacob Haas SENIOR MULTIMEDIA DESIGNER Bernard Uhden


Copyright 2017 All rights reserved. Reproduction or use without permission of editorial or graphic content in any manner is strictly prohibited. How to Reach Us: You may e-mail, send your letter to 275 Grandview Avenue, Suite 100, Camp Hill, PA 17011, fax 866-381-8630 or call 866-707-6786. Reprints: Copyright permission can be obtained through InsuranceNewsNet at 866-707-6786, ext. 115, or reprints@insurancenewsnet. com. Editorial Inquiries: You may e-mail or call 866-707-6786, ext. 117. Advertising Inquiries: To access InsuranceNewsNet Magazine’s online media kit, go to or call 866-707-6786, ext. 115, for a sales representative. Postmaster: Send address changes to InsuranceNewsNet Magazine, 275 Grandview Avenue, Suite 100, Camp Hill, PA 17011. Please allow four weeks for completion of changes.

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Legal Disclaimer: This publication contains general financial information. It should not be relied upon as a substitute for professional financial or legal advice. We make every effort to offer accurate information, but errors may occur due to the nature of the subject matter and our interpretation of any laws and regulations involved. We provide this information as is, without warranties of any kind, either express or implied. InsuranceNewsNet shall not be liable regardless of the cause or duration for any errors, inaccuracies, omissions or other defects in, or untimeliness or inauthenticity of, the information published herein.

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Night Guys Don’t Always Win


erry Seinfeld has known for decades why you can’t do the good things you want to do in life. It’s Night Guy’s fault, and Seinfeld has been talking about it for decades. The routine has improved over time because Seinfeld is on to an essential wisdom. (Although he’s also right about the socks that escape on laundry day. He doesn’t talk about that anymore, but really, where do those single socks slip off to?) Anyway, it goes like this: You are up late at night, way past a reasonable bedtime, partying away or binging through the entire run of How I Met Your Mother, when you realize that you are only going to get four hours of sleep. Then you think, “That’s Day Guy’s problem. I’m Night Guy!” The next morning you blearily groan, “I hate Night Guy.” My problem is, I love Night Guy. He’s relaxed, enjoying all the time in the world and fun to hang with. Day Guy is always in a hurry, a little snippy and a bit of a buzzkill. In either case, how do we get Night Guy and Day Guy to get along? A lot rides on that relationship — such as a fitness program, a career and all-around self-respect. Science says Seinfeld is on to something. At least, he has the beginning of it. It all depends on the alignment of present self and future self, according to research that was recently highlighted in a Wall Street Journal column. According to the 2009 Stanford University study “Don’t Stop Thinking About Tomorrow: Individual Differences in Future Self-Continuity Account for Saving,” if a people don’t see their future selves the same as their present selves, there is no self-continuity. Basically, Night Guy sees Day Guy as just some schmuck cleaning up after the popular guy. Seinfeld usually teed up that joke with one about the zero-payments-for-six-months sales. “No payments till June; people are going, ‘June. It’ll never be June,’” Seinfeld joked with David Letterman in 1994. “‘The guy in June — he’ll have money somehow.’ Night Guy always screws Day Guy!” Seinfeld even picked up on an important nuance that the Stanford study also identified. If people valued and liked the future self, they would care for it rather than wave it off as the self-serving Night Guy does. The Stanford study had participants select 6

the circles in the accompanying graph that best illustrated the relationship between their present and future selves in different scenarios. The more they overlapped, the more they thought that they would be the same people in the future as they are now. The researchers also asked the respondents to describe their present and future selves in positive, neutral or negative terms. The study found that the more the circles overlapped, the more assets the participant had accrued. So, it literally paid to feel connected with, and to like, the future self. Self-awareness is also key to the coaching that Marshall Goldsmith discussed with Publisher Paul Feldman for this month’s interview feature. Goldsmith said that people should be asking themselves the same questions every day to ensure that they are grounded to their purpose and values. That foundation helped people handle the events that trigger unwanted behavior, such as staying up too late. But being aware of that purpose and those values first has to come with a bit of exploration. Dave Edwards asked himself some tough questions to help redirect his life and business, as described in this month’s feature article, “Holistic Tech.” Several years ago, he was adrift in a new life that followed a divorce and an emptying of the nest. He found himself free to do what he wanted, and he essentially asked himself two questions: Do you like what you’re doing? Do you like where you’re going? Edwards had a boutique financial practice that did well enough — probably more than enough for many advisors. But he was impatient with plodding along in his oneman band. He wanted to expand, and the only way to do it fast was with tech. When it comes to investing and learning when people are a few decades past school age, many of us turn into Night Guy: “Ah, Day Guy will take care of it.”

InsuranceNewsNet Magazine » November 2017

And that day never comes. Edwards worked in his business during the week and on his business on the weekend. He sacrificed quite a bit of Night Guy time to give Day Guy a seven-person agency with $300 million in just a few years. He is proof that tech might provide the tools, but that is not enough. It takes a commitment to a vision of yourself in a better place in the future — where you might say Day Guy and Night Guy live in perfect harmony. OK, you might not say that, but at least they don’t mind being in the same room together. The Stanford study could be seen as the sequel to an earlier Stanford study, the marshmallow experiment. Many are aware of this one done in the 1960s, where kindergarteners were placed at a table with a marshmallow on it. They were told if they could refrain from eating it for 15 minutes, they would get another marshmallow. Of course, the kids who could delay their gratification did better later in life. We can see where the kids who had their Day and Night Guys on friendly terms would have gotten ahead. You can see the Night Guy and Day Guy kids in development in an experiment like this. But perhaps there is another guy, maybe even reading this feature right now. That would be Sales Guy — the kid who takes the marshmallow, sells it to the Night Guy kid who already ate his marshmallow and buys more marshmallows to sell to the Day Guy kid, who probably still had his allowance money saved up. So, Night Guy doesn’t always win. In fact, it’s often Entrepreneur Guy who collects everybody’s lunch money — and lunch.

Steven A. Morelli Editor-in-chief


The Last Waltz? Republicans Prepare for Tax Reform Fight Republicans in Congress are under pressure to get the job done. Can they score a badly needed win?

By John Hilton


ax reform is either going to end up as the signature win of the Trump administration’s first year, or another spectacular flameout for the GOP. There seems to be little middle ground. Pressure is extremely high on Republicans to get the tax issue to the finish line; however, the same hurdles that upended health care reform are lurking. Whatever happens, it isn’t likely to drag out for too long. Republicans have set an end-of-the-year deadline for a few key reasons — self-preservation, for starters. 2018 is a key election year, which generally takes controversial issues off the table. But the election specter works both ways. Lawmakers need a win to campaign on, as much as they need to avoid tough votes. 8

In addition, the Alabama special election to fill the remainder of Attorney General Jeff Sessions’ term is likely to cost the GOP a reliable vote from their slim 52-48 majority. The Republican candidate, Roy Moore, is hostile to Senate Majority Leader Mitch McConnell. Trump and congressional Republicans are proposing a far-reaching, $5 trillion plan that would cut taxes for corporations and potentially for individuals, simplify the tax system, and nearly double the standard deduction used by most Americans. In early October, lawmakers approved a budget resolution for 2018 that sets up a process for shielding the GOP tax bill from a filibuster in the Senate. The budget reconciliation rules allow Republicans in the Senate to pass tax reform with just 51 votes. “We haven’t reformed this tax system since 1986,” House Speaker Paul Ryan said. “We need to pass this budget so we can help bring more jobs, fairer taxes and bigger paychecks for people across

InsuranceNewsNet Magazine » November 2017

this country.” The key players and the stakes for each are as follows: » President Donald J. Trump: Beltway pundits report the president is eager to deposit some legislative victories in the win column. How eager? Trump turned to Democratic leaders Sen. Chuck Schumer, D-N.Y., and Rep. Nancy Pelosi, D-Calif., last month to cut a deal on the debt limit and DACA children of immigrants. The deal stunned Republicans, who likely haven’t forgotten. » McConnell: To be blunt, 2017 has been a rough year for the Senate leader. Despite a Republican president to go with a GOP majority in the House, little has gone smoothly. McConnell has a diverse caucus featuring hard-right members such as Sen. Rand Paul, R-Ky., and moderate Sens. Lisa Murkowski, R-Alaska, and Susan Collins, R-Maine. Pulling together 50 votes will be a challenge.

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IMG-ST09 | INN -11.17

09.17 November 2017 » InsuranceNewsNet Magazine




Current Law

GOP Tax Proposal

Personal Income Taxes

Seven tax rates, from 10 to 39.6 percent

Three rates: 12, 25 and 35 percent.


Numerous, from mortgage interest to student loans

Eliminates some deductions, including for state and local taxes

Corporate Taxes

35 percent

20 percent

Tax on Small Businesses 39.6 percent and "Pass Throughs"

25 percent

Estate Tax

Affects estates worth more than $5.5 million

Would be eliminated

Alternative Minimum Tax

Often affects filers between $200,000— $1 million

Would be eliminated Source: CNN Money

» Ryan: Of the three, Ryan’s path is the most predictable with perhaps the fewest obstacles. That does not mean his job will be easy. The Freedom Caucus — a hardline conservative group of about 40 Republicans — must be dealt with, but tax cuts are red meat to its members.

Estate Tax on the Griddle

The task facing Republicans is as much public relations as it is public policy. Lawmakers must convince investors and voters that another go at supply-side economics will unleash strong growth. The supply-side macroeconomic theory is simple: Lower taxes and deregulation will spur buying, which lowers costs and increases wages/jobs. Economists are generally split on whether the controversial theory works. The nonpartisan Tax Policy Center says the Trump tax plan will most certainly add billions to the federal budget deficit, a nonstarter for many House Republican hardliners. Adding to the GOP challenge is the outspoken independence of key Sen. Bob Corker, R-Tenn. Corker, who is giving up his seat, announced that he will not support any tax plan that adds “one penny to the deficit.” As for financial services, the budget concepts in play are mostly good news, especially if the taxing of retirement plan dollars is off the table, as Republicans claim. The American Council of Life Insurers “would very much like to support tax reform,” CEO Dirk Kempthorne teased. Reticence to go all the way with public 10

support likely has to do with the estate tax. Both Trump and Ryan have elimination of the estate tax in their sights. The tax applies only to estates exceeding $5.5 million and generates about $20 billion annually in revenue. Those super-wealthy on the hook for possible estate taxes are good clients for insurance policies and financial planning services. Estate tax repeal has been proposed many times in the past, always seemingly as a bargaining chip that is later abandoned. Industry officials say they cannot relax and rely on that history. “A strong life insurance industry helps Americans prepare for their financial futures, alleviating pressure on government programs,” Kempthorne said in a statement.

The Taxing Details

The central theme of tax reform is tax cutting and streamlining. There is general agreement among Republican leaders on several aspects, such as cutting the corporate tax rate. Here are the main tax issues in play: » Individual tax rate. The number of personal tax brackets would drop from seven to three, with individual tax rates of 12 percent, 25 percent and 35 percent. The plan recommends a surcharge for the very wealthy. But it doesn’t set the income levels at which the rates would apply, so it’s unclear just how much of a tax change there might be for a typical family, and whether

InsuranceNewsNet Magazine » November 2017

its taxes would be reduced. The plan would nearly double the standard deduction to $12,000 for individuals and $24,000 for families. A move to eliminate a deduction for state and local taxes is being opposed by Republicans from high-tax states such as California and New York. » Corporate tax rate. Corporations would see their top tax rate cut from 35 percent to 20 percent. For a period of five years, companies could further reduce how much they pay by immediately writing off their investments. The plan would impose a new, lower tax on corporate profits stashed overseas, and create a new tax structure for overseas business operations of U.S. companies. The proposed changes to the corporate tax structure do not stop there. New benefits would be given to firms in which the profits double as the owners’ personal income. They would pay at a 25 percent rate, down from 39.6 percent. This creates a possible loophole for rich investors, lawyers, doctors and others, but administration officials say they will design measures to prevent any abuses. Also slated for elimination is the alternative minimum tax, a supplemental tax for certain individuals, corporations and estates that enjoy exemptions lowering their income tax bills.

‘A Fairer System’

Administration officials are painting the package as an effort to make U.S. businesses more competitive globally. “With significant and meaningful tax reform and relief, we will create a fairer system that levels the playing field and extends economic opportunities to American workers, small businesses and middleincome families,” the blueprint states. As expected, Democrats pounced on the plan. Schumer called it “a massive windfall for the wealthiest Americans” and a plan designed “to be cheered in the country clubs and the corporate boardrooms.” InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@

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November 2017 » InsuranceNewsNet Magazine



InsuranceNewsNet Magazine Âť November 2017


t the end of every day, you might have one persistent thought: You’re doomed. That’s because despite all your good intentions, you veered off a plan — your diet, your quota, your fitness goal, your desire to be a better human being. But you are forgiven, because that’s what people do; they sabotage themselves without even knowing it. That’s the subject of Marshall Goldsmith’s recent book, Triggers: Creating Behavior That Lasts. Marshall is an executive coach who has worked with top CEOs from many of America’s top corporations. Those high-powered execs have the same problem you do — not doing what needs to be done and, more important, not becoming the people they want to be. But those people can afford to hire Marshall to help them. We have the benefit of the dozens of books Marshall has published revealing his secrets. In this interview with Publisher Paul Feldman, Marshall tells how triggers push us away from our goals and how we can learn to disarm them. FELDMAN: What is a trigger? GOLDSMITH: A trigger is any stimulus that may impact our behavior. It could be a sight, a sound, a word, a person, a smell. Triggers typically push us away from becoming the person we want to be. If we interview people and ask, “Who is the you that you want to be?” they all have this beautiful story of this perfect person who’s really nice and kind and works hard, is in perfect physical condition, and blah, blah, blah. Yet in life we seldom become this person. Depression is at an all-time high. Obesity is at an all-time high. It’s not that we don’t know what we’re supposed to do. The problem is, we’re constantly bombarded by triggers, and these triggers throw us off course. By learning how to deal with these triggers, we’ll be much more likely to become

HOW TO TRIGGER CHANGE THAT LASTS INTERVIEW the person we want to become, as opposed to the person who is actually being created by the world around us. There are a couple of schools of thought. One school of thought is, we are created by the world around us. This is the behavioral school. B.F. Skinner, the Harvard psychologist, said we’re like rats in a maze that are constantly bombarded by these triggers. And these triggers basically control who we are.

In my book Triggers, I talk about a variety of delusions that we have that really keep us from becoming the person we want to become, and a lot of them are just underestimating the importance of triggers. Let me give you some examples. One is — I love this one — today is a “special day.” I say I’m going to go on a diet, but it’s the Super Bowl today. So I’ve gotta eat the pizza or guacamole because it’s Super Bowl Day. Well, I’m going to go and work

When I work in big companies, I tell people, “Look, it’s always going to be crazy.” When I work with entrepreneurs, I tell them, “Look, you are always going to be crazy.” The other school is the motivational school, that we create the world ourselves. I don’t believe in either one of those schools. I think we create the world and at the same time, the world is creating us. The goal of the book is to really just increase the part of that time when you’re creating the world and decrease the part of the time when the world is creating you. FELDMAN: What causes triggers? GOLDSMITH: A trigger largely comes from our environment. You want to go on a diet. You walk by the bakery. You smell the food. You’re like, “Well, I’ll go on a diet tomorrow.” Or you want to quit drinking. You just walk by the bar, and you think, “Well, I’ll just have one drink.” All kinds of stuff happens in our environment that throws us off course. Almost every day we plan our day, and very seldom does the day work out perfectly according to this silly plan that we’ve developed. That’s because we never count on extraneous environmental factors.

out, but it’s my birthday. It’s my kid’s birthday. It’s my parent's birthday. One thing we do is, we can make any day a special day to rationalize not doing what we’re doing. Another one is “the dream.” We all have this dream that “I’m incredibly busy right now. I’m overcommitted. But in two or three months, I’m going to get organized and spend some time with the family. The worst of this is going to be over, and I’m going to be in my new healthy life program. Everything is going to be different, and it won’t be crazy anymore.” We all have this same dream over and over and over again. Well, in two or three weeks, sanity is not going to be prevailing. If you work for a boss and you overachieve the boss’s goal by 25 percent, what’s the boss going to say next year? Is the boss going to say, “Take a break. You’re working too hard”? No. The goals are going to go up. By the way, entrepreneurs are worse. If they overachieve their goal by 25 percent, what’s going to happen to the goal next year? Do you think they’re going to lower it? Being an entrepreneur is worse than having a corporate boss. When I work in big companies, I tell people, “Look, it’s always going to be crazy.” When I work with entrepreneurs, I tell them, “Look, you are always going to be crazy.”

November 2017 » InsuranceNewsNet Magazine


INTERVIEW HOW TO TRIGGER CHANGE THAT LASTS GOLDSMITH: Any human or animal will replicate behavior that’s followed by positive reinforcement. The more successful we become in life, the more positive reinforcement we get. For example, if you’re a CEO, everyone laughs at your jokes, they all pretend everything you say is smart and you get FELDMAN: Why are people so bad at praised for walking down the hall. So if behavioral change? we’re not careful, we actually start believing this nonsense. It’s very hard to realize that successful people fall into something called the superstition trap: “I Becoming the Person We Want to Become behave this way. I am successful. Therefore, I must be successful because I behave this way.” Wrong. Everyone I work with behaves the way they behave. They’re all megasuccessful, and they’re megasuccessful because they do many things right in spite of doing some things that are Adding Reducing stupid. I’ve never met anyone so wonderful they had nothing Improving Delaying in that stupid category.

It’s not like they’re going to be satisfied or they’re going to start coasting. If they were that type of person, they’d never have been an entrepreneur in the first place. They’re always going to be raising that bar. It’s part of life. So you have to make peace with the fact of “What am I willing to change now — not next week, not next month, not next year?” FELDMAN: One of my favorite parts of your book talks about the decision-making process whenever you decide to do something or set a goal. You call it “AIWATT.” Would you explain how that works?















Making Peace




GOLDSMITH: In my New York condominium, one of my neighbors was Lindsay Lohan. How many millions of hours did people waste reading that Lindsay Lohan got drunk and stoned and had a car wreck? Who cares? What I tell people is, if you ever think Lindsay Lohan is a loser — she’s not wasting her life reading about you. Don’t waste your life on Lindsay Lohan or the athletic team or the



FELDMAN: Do you think people realize how much time they waste?

The Wheel of Change


GOLDSMITH: That’s also one of my favorite parts of the book. “Am I Willing At This Time” to make the investment required to make a positive difference on this topic? If the answer is yes, go for it. If the answer is no, take a deep breath and let it go. That’s one of my favorite chapters in the book. If readers don’t understand anything but AIWATT, they will save so much time and so much aggravation in their lives. Life is short. Put your time and energy where you can make a difference, not where you can’t make a difference.

football coach or the politician. They don’t care about you. If you want to have a great life, live your own life. Most of us are too busy now. If we take all the time we waste on living somebody else’s life and put it into our own life, we’ll have a lot more time.


This graphic tool illustrates the interchange of two dimensions we need to sort out before we can become the person we want to be: the Positive to Negative axis tracks the elements that either help us or hold us back. The Change to Keep axis tracks the elements that we determine to change or keep in the future. Thus, in pursuing any behavioral change, we have four options: change or keep the positive elements, change or keep the negative. • Creating represents the positive elements that we want to create in our future. • Preserving represents the positive elements that we want to keep in the future. • Eliminating represents the negative elements that we want to eliminate in the future. • Accepting represents the negative elements that we need to accept in the future.

InsuranceNewsNet Magazine » November 2017

Marshall Goldsmith, Triggers, Crown Business, 2015

FELDMAN: Why are people oblivious to these things? GOLDSMITH: We are often oblivious, and it’s not because we’re bad or stupid or evil. We just don’t get honest feedback. Two things happen as we become more successful. One, we feel better about ourselves, which is a good thing. We all accept feedback from others that is consistent with the way we see ourselves, and we reject or deny feedback that’s inconsistent with the way we see ourselves. The better we feel about ourselves, the harder it is to hear that we’re doing anything wrong. The second phenomenon as we get more and more power is, it’s harder and harder for others to tell us the truth. So, one, it gets hard to get negative feedback, and number two, it’s hard to hear it. It’s no surprise to realize how difficult it is and why people are oblivious.

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INTERVIEW HOW TO TRIGGER CHANGE THAT LASTS FELDMAN: How do you find those blind spots that you need to work on? GOLDSMITH: What I do for a living is give people confidential feedback. I interview everyone around them, typically an average of 18 of their key stakeholders. These would be their peers and their direct reports if they’re the CEO of the board. If they’re not the CEO, the CEO. Then I develop a profile, and I give them this confidential feedback to let them know what everyone actually thinks of them. I work with people for up to a year and a half. I don’t get paid if they don’t get better, and better is not judged by me or them. It’s judged by everyone around them. FELDMAN: That’s an interesting model and way of getting paid.

coach is customer selection. If you pick the right customer, your coaching process will always work, and if you pick the wrong customer, your coaching process will never work.” He said, “No. 2, never make the coaching process about yourself and your own ego and how smart you think you are. Make it about those great people you work with, how hard they work and how proud you are of them.” These were just fantastic lessons that totally changed the way I look at life. FELDMAN: You’ve worked with some really impressive CEOs and leaders around the world. What are some

get promoted, and it’s all about me. Every time I get promoted, though, it’s less and less about me, and more and more about them. One of my great clients said, “For the great achiever, it’s all about me, and for the great leader, it’s all about them.” Just because you’re a great individual achiever does not mean you’re going to be a great leader. It’s a big difference, and it’s hard. It’s hard to let go of that business of it’s all about me. It’s hard for entrepreneurs. That’s why the businesses don’t get bigger. It’s hard for them to let go of me, me, me. FELDMAN: How do you let it go?

The Six Active Questions

GOLDSMITH: Some people don’t. If you want to grow your business, if you want to be a great leader, you have to learn to delegate. You have to learn it’s not about you. You have to develop great people. You have to stop trying to be the smartest person in the room.

GOLDSMITH: Definitely. And when you get paid for results, you learn some humility. The These six questions are the first of client I coached that I spent the 32 daily questions that Marshall the most amount of time with Goldsmith said he asks himself. didn’t improve at all, and I didn’t get paid. The client I FELDMAN: You have worked spent the least amount of time with many CEOs. But even with improved more than anyso, many of our readers one I’ve ever coached and got might not believe that they better, and I did get paid. This need a coach because they was a humbling lesson. are already successful busiI made a chart of the results. nesspeople. What would you One dimension was called tell people who don’t think “Time Spent with Marshall they need coaches or conGoldsmith.” The other disultants? mension was “Improvement.” There seemed to be a clear GOLDSMITH: I think most negative correlation between CEOs would have been spending time with me and ashamed to have had a coach getting better. 30 years ago. Today, a lot of I talked to the client who imthe great leaders in America proved the most who I spent have coaches and they’re not the least amount of time with. ashamed of it. That was Alan Mulally, the CEO of the common issues or patterns that you’ve How many of the top-10 tennis players Ford Motor Co. The stock went from $1 seen? in the world have a coach? to $18.40. He was CEO of the year in the United States and ranked No. 3 greatest GOLDSMITH: In terms of strengths: FELDMAN: All of them. leader in Fortune magazine in the world smart, dedicated, hardworking, driven to behind only the pope and Angela Merkel. achieve, creative, entrepreneurial, cares GOLDSMITH: Of course they do. Does So I said, “Alan, the way this chart looks, about the customer, great values, high in- that mean they’re bad tennis players? It if you’d never met me, you’d still be really tegrity and gets results. means they’re smart tennis players. good. What should I learn about coaching In terms of challenges: ego, having to be So, people are getting over this ridiculous from you?” right and know everything. “I can do everything on my own” macho He taught me two lessons. He said, When we’re at the bottom, it’s all nonsense. My deepest learning over the past “Marshall, your biggest challenge as a about me. I have to be an achiever to two years is, we all need help, and it’s OK.

Did I do my best to:

1. Be happy? 2. Find meaning? 3. Be truly engaged? 4. Build positive relationships? 5. Set clear goals? 6. Make progress toward goal achievement?


InsuranceNewsNet Magazine » November 2017

HOW TO TRIGGER CHANGE THAT LASTS INTERVIEW Once we get over this macho “I know everything, I’m omnipotent, I’m perfect” nonsense, life is better. FELDMAN: How do you stop a bad behavior? GOLDSMITH: The first thing is, you need to have it brought to your attention over and over again. I hired a woman who calls me every day to hear me ask a question and read an answer that I have written. So almost any behavior will stop if it’s brought to your attention when you do it. For example, I fine my clients $20 every time they do something wrong. A lot of my clients are stubborn people. Well, one thing stubborn people do that they shouldn’t is, they begin sentences with one of three words: “no,” “but” or “however.” So I was talking to a client about this and he said, “But Marshall.” I said, “That’s free. If you do that again, I’m going to charge you $20.” He said, “But Marshall.” “$20.” “No.” “$40.” “No, no, no.” “$60, $80, $100.” He lost $420 in an hour and a half. At the end of the hour and a half, he said to me, “Thank you. I had no idea. I did that 21 times with you throwing it in my face. How many times would I have done it had you not been throwing it in my face — 50 times, 100 times?” He said, “No wonder people think I’m stubborn. The first thing I do when someone talks to me is tell them they’re wrong over and over and over again.” He got so much better at being an open-minded listener just by learning that one very simple thing to stop doing.

You go home and do that to your husband or wife and kids. FELDMAN: You talk a lot about commitment in the book. Would you tell us more about that? GOLDSMITH: You have to commit. My clients all publicly admit what they want to change. They ask people for ongoing input. They follow up on a regular basis and we measure improvement, and that’s how I get paid. One of the greatest choreographers in history is Twyla Tharp, one of the best dancers to ever live. She’s had the same personal trainer for 27 years. Now why has she had the same trainer for 27 years? The trainer is not

going to have a happier life and be better at influencing people. Peter Drucker said, “Our mission in life is to make a positive difference, not to prove we’re smart and not to prove we’re right.” So few people understand that. No. 2, he said, “Every decision is made by the person who has the power to make the decision. It’s not the best person, the smart person, the right person. It’s made by that person. Make peace with that.” And he said, No. 3, “The decision-maker is the customer. If I need to influence you, and you have the power to make the decision, one word to describe you, ‘customer.’ One word to describe me, ‘salesperson.’” Then he said, “Sell what you can sell. Change what you can change. And if you

Just because you’re a great individual achiever does not mean you’re going to be a great leader. It’s a big difference, and it’s hard.

FELDMAN: I can see how “no” could become an automatic answer. Business owners or entrepreneurs or managers get so used to people always asking for something. GOLDSMITH: Yes. And then it gets worse.

teaching her anything new. The trainer is just making sure she does what she knows she’s supposed to do. That’s why she looks so good in her 70s. FELDMAN: You have worked with Peter Drucker [influential management professor and author]. Many people talk about his influence, but not many people can talk about working with him. What did you learn from him? GOLDSMITH: A lot of AIWATT came from what I learned from Peter Drucker. Peter Drucker taught me so many wonderful lessons. I’m going to share one with your readers. If they don’t learn anything else but this Peter Drucker lesson, they’re

can’t sell it and you can’t change it, take a deep breath, let it go and make peace.” Peter Drucker’s point is, decisions aren’t made based on fairness or rightness. They’re made based on power. Whoever has the power to make the decision makes the decision. That’s life. That’s not going to change. That is one-third of my coaching business. One-third of my coaching business is that one bit of advice that Peter Drucker taught me. I have literally made over $1 million repeating that lesson to people. That’s it. It’s amazing. So few of us make peace with this. We go through life saying, “It’s not fair. It’s not right. Poor me.”

November 2017 » InsuranceNewsNet Magazine


NEWSWIRES Eat up, son! We've got 16% more!

Middle Class Gets Richer

More American families seem to be putting the Great Recession behind them. Middle-class households showed their first gain in net worth since the economy was turned upside down nearly a decade ago. The median net worth of all American families rose 16 percent between 2013 and 2016 to $97,300, according to the Federal Reserve. A low and falling unemployment rate has helped push up pay, while rising home prices have restored some wealth to middle-income families. However, the good news was not shared equally by all socioeconomic groups. Median wealth for white families last year was $171,000, 10 times that for blacks and roughly eight times that for Latinos.


Hackers are not hitting just retail chains and financial institutions. Even the Securities and Exchange Commission was hit with a security breach. The breach struck an SEC network that delivers company news and data to investors. News of that hack followed disclosure of the massive Jay Clayton data breach from credit company Equifax that allowed hackers to access or steal the personal information of 143 million Americans. SEC Chairman Jay Clayton faced a Congressional hearing where he was questioned about whether the SEC is up to the task of keeping data secure. The two major issues in the SEC breach are the potential for insider trading and whether the SEC knew about the security breach for months before officials decided to disclose it.


The SEC chairman isn’t the only bigwig to get dragged in front of Congress for questioning recently. Tim Sloan, Wells Fargo CEO, found himself before the Senate Banking Committee, expressing his sorrow over the bank’s sales scandal and describing his company’s efforts to make amends. Wells Fargo agreed to pay Tim Sloan $185 million in fines to settle claims employees opened accounts without customer knowledge as the employees pushed to meet high-pressure sales goals. The bank has repeatedly apologized for the scandal and pointed to changes it’s made as it seeks to improve its practices. Wells Fargo’s image took another hit by revelations that the number of potentially fraudulent accounts could total 3.5 million, a nearly 70 percent increase over initial estimates. The bank also has come under scrutiny for revelations involving other businesses, such as auto insurance.


KNOW The national debt topped the $20 trillion mark for the first time.



InsuranceNewsNet Magazine » November 2017

Source: U.S. Treasury Department


The wealthy now are so much wealthier than they were 25 years ago. — Billionaire investor Warren Buffett


The Federal Reserve amassed an enormous bond portfolio to try to sustain a frail economy in the wake of the 2008 financial crisis. Now, in a move that reflects a strengthened economy, the Fed announced it will begin shrinking its bond holdings. The Fed’s action could mean higher rates on mortgages and other loans over time. The Fed announced it will let a small portion of its $4.5 trillion balance sheet


mature without being replaced, starting with reductions of $10 billion per month and gradually rising over the next year to $50 billion per month. The central bank left its key short-term rate unchanged, but hinted at one more hike this year — most likely in December. The Fed policymakers’ updated economic forecasts show an expectation for three more rate increases in 2018.

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November 2017 » InsuranceNewsNet Magazine


How advisors use tech to offer comprehensive service and fuel breathtaking growth • BY STEVEN A. MORELLI • 20

InsuranceNewsNet Magazine » November 2017


avid Edwards was enjoying a leisurely strum of a career and family life that many would envy. He was a financial advisor in New York City who did enough business to take a few months off each summer to live on Nantucket with his wife and two sons. Because he was the sole person in what Edwards called a lifestyle firm, he could leave work at 3 p.m., pick up his kids from school and spend time with them. After a couple of decades of this, things went bad in 2011. Country-song bad. His wife divorced him, his grown sons left home and his dog died. Edwards stumbled into in a lonely life he had never imagined. He didn’t lie down and die as a classic country tune might have had him do. He dusted himself off, took a hard look at his life and turned the dial up to rock ’n’ roll. “I have no responsibilities to any living creature,” Edwards remembered saying after the shock wore off. “What do I want to do with the rest of my career? And I decided to grow my firm from $75 million in assets to $1 billion.” He has since expanded his practice to a seven-person agency with $300 million in assets under management and a map to reach $1 billion soon after 2020. Edwards made it happen by quickly adopting new technology, not only to handle the growth but also to deliver Tiffany-grade service that his high-networth clients expect. He sees that although circumstances inspired him to retune and get serious about his practice, no advisor can be complacent now. Clients are raising expectations and requiring more services. Technology is the lever to reach those higher standards. “We’re based in New York City, where real estate and personnel are the highest possible cost. So, you have to use technology to deliver the same service with fewer people,” he said. “No. 2, it’s an Amazon world. The clients have very high expectations about how we’re going to serve them.”


Edwards’ registered investment advisory, Heron Wealth, provides financial

HOLISTIC TECH FEATURE planning, investment advice and estate planning for “executive families” with $1 million to $10 million in investable assets. They are typically couples between the ages of 45 and 60, raising two children and worried about their parents. But they also want a second home and a dream retirement. Not only do these clients have complex needs, but Edwards also wants to provide a luxurious level of service. Both of those endeavors require substantial attention from his firm. In a move that shows how far he’s come, Edwards recently created a role to uphold that high standard online and in person — director of client experience. It is not a small job, Edwards said, because that level of service requires 30 to 40 touches per year.

The worst thing you can do to a client is make them sit in a waiting room with CNBC blaring in the corner. — David Edwards That can be tricky with clients spread across the U.S. and Europe. He uses a combination of platforms, including an up-close-and-personal one. “Some of those touches are in the form of an in-person meeting,” Edwards said. “I’ll do a loop through Southern California, a loop thorough Texas, through the Carolinas, through Georgia and Florida.” Everybody keeps plugged in to the office through laptops or cellphones running remote desktop protocol (RDP) that taps in to a server in Ohio. It doesn’t matter if an advisor is in New York or New Mexico;

they have the same access. “With that application and my cellphone — because there’s dual authentication on this — I can connect from a hotel room, a client’s office or an aircraft, and have all the resources of my firm right at hand,” he said. He has met with clients on their yachts, in their ski houses, in their summer homes — wherever they are comfortable. “Because they’re relaxed,” he said. “They’ve got a margarita in their hand; they can think ‘big picture.’ The worst thing you can do to a client is make them sit in a waiting room with CNBC blaring in the corner. By the time they see you, they’ll be so amped up that they won’t hear a word you’re saying.” And that is no condition or circumstance in which to talk about a subject that makes everybody anxious — money. “Even people who have tens of millions of dollars are still terrified of money,” Edwards said of why advisors should assume the role of therapist. “You’ll tell your best friend more about your sex life than about your financial situation, right? Money is the most intimate, difficult, shameful thing that most people confront.” Clients can also dive into their accounts remotely, through the financial planning online platform, eMoney. They can get questions answered that in the past might have required a call to the office and a staffer’s time. Through that application, clients can see their entire financial life broken down into cash, checking accounts and credit cards. They can dig into investment accounts, retirement accounts (even those the firm is not managing), real estate and insurance policies. “Furthermore,” Edwards said. “We have all of their cash flows, like salary income, routine expenses, taxes, mortgage expense. We know what their savings rates are.” The easily accessible data provides more than a convenience for clients; it was the fulcrum for an exponential leap for the practice. EXPANDED CLIENT BASE: The system allowed the firm to expand the type of clients it could serve. Edwards couldn’t really take clients with less than $1 million to invest because they couldn’t afford the service. All of the information used to be collected on paper.

November 2017 » InsuranceNewsNet Magazine


FEATURE HOLISTIC TECH A paper-based financial plan took 20 hours at $500 an hour, totaling $10,000. Now it takes two hours, costing $1,000. “All of a sudden, we could take on clients who didn’t meet our historic $1 million minimum,” Edwards said, adding, “That was important for the HENRYs.” HENRYs are high-earners, not rich yet and an important new group for the firm. They’re important enough that Edwards has an advisor devoted to them. “These are individuals and couples who are making $200,000, $300,000 a year designing web apps, and they’re still paying off 80 grand of student debt,” he said. “If we say to them, ‘Hey, Billy. Hey, Jamie — we would love to work with you, come back when you have $1 million,’ we’re never going to hear from them again.” The group is particularly important because they are younger, in their 30s rather than in their 50s. “You have a significantly more valuable process, because now, your lifetime connection with that family is not from age 55 to age 75, it’s from age 35 to age 90,” Edwards said. “That is a very satisfying sense of protection on the client’s side. And it’s very valuable for the advisor because that’s a very long income stream.” SOPHISTICATED ADVISING: The firm can quickly play out scenarios so clients can decide what is really important for their future. They can even peel away the dollars to uncover true value. “Because we can model all the clients’ cash flows for the next five, 10, 25 years, and because we know that things change, we can show clients not only the likely path that they have, but also alternatives.” For an example, Edwards described a client family with about $10 million in assets. He’s a law firm partner and she is a managing director at a bank, both making $600,000 annually. But they hated their jobs. So, they wanted to retire now, at age 52. The problem was that they owned two expensive properties. The advisors were able to show them that if they kept them both, they would run out of money by age 85. But if they sold one and put the money in retirement accounts, they could retire today. If they worked for five more years, they could keep both. “So now, it’s no longer a numbers question for the family,” Edwards said. “It’s 22

a values question. Which do we value more? Retiring early or keeping the big country house?” During the meeting, the advisors can instantly model any scenario the clients might imagine.


Edwards began his career a little on the geeky side. He started with Morgan Stanley in the early 1980s in systems, bringing his math degree to bear. Although he had a head start in computers and had done programming until the early ’90s, he was relatively late to digitizing his practice. His office went paperless three years ago, as he was adding staff and ramping up business. He instituted processes for new business and worked backward to digitize existing records.

Edwards’ early career at Morgan Stanley came in handy in figuring out how to systemize his processes. It also gave him an opportunity to assess the value of tasks and eliminate the unnecessary ones. It was a heavy lift, as going paperless always is, but the work paid off exponentially in the freedom he gained to focus on clients and growing his business. The system and dependable staff made it so he doesn’t even have to go into the office to work. “I’m not much of a manager — I hire only self-managing people,” Edwards said with a laugh. “We have two offices. I talk with the Midtown office once a day by phone. I don’t need to worry about what they’re doing, because I can see through the CRM, the task management system, exactly what’s going on.” Now he can travel and still access the tools and data he needs. But even with

4 Questions for Effective Tech These are the four questions that David Edwards used as a guide to adopt technology effectively.

1. What is the service you're selling? 2. Who is your target market, your ideal prospect?

3. What processes will enable you to find,

to identify and successfully sell this ideal prospect?

4. What technology can make the process you use easy, cheap and repeated?

The first two questions are key to guiding the process. Edwards said he has found that many people fail to answer these and go right to processes. He said he learned an important lesson early in his career when he was in the systems department of Morgan Stanley: “Never automate a stupid procedure.”

InsuranceNewsNet Magazine » November 2017


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FEATURE HOLISTIC TECH high-tech support, he still can deal with clients just as he did in his analog days. He uses a paper agenda and writes notes as he goes along the process with clients. “Then I walk out the door and around the corner or back to my office, or I sit in my car,” he said of his post-meeting process. “I take out my phone and use an application called Mobile Assistant, and dictate five or 10 bullet points into the phone. Eight hours later, I get a transcript prepared by a human being, not by Dragon, because I never was able to get that to work.” He then edits the document before he uploads it into his CRM as a strategy note. If the list calls for tasks, he creates them in the system and assigns team members. “Let’s say we decide in our client meeting that we’re going to change the asset allocation from 75 percent stocks to 70 percent. Well, I’ve written that down on a piece of paper, then documented it in Mobile Assistant, and uploaded that into the CRM and created specific tasks for our portfolio manager to change the asset allocation.” Edwards knows not only that request will be an open item in his portfolio manager’s system the next morning, but also that he’ll get a notification when the manager has completed the task. “Previously, all that work was contained on about eight to-do lists scattered across my desk,” Edwards said. “And I lived in permanent paranoia that something was overlooked.” Now, instead of spending 80 percent of his time on administration and 20 percent on his clients, he has reversed that proportion.


For Tony D’Amico, technology and fiduciary duty go together at his aptly named firm, Fidato. The seven-person registered investment advisor agency outside of Cleveland focuses on helping near-retirees become secure retirees. “We’re not just doing a light financial plan and saying, ‘Hey, the financial plan shows that we should reposition your assets,’ and then not really pay a lot of attention from that point,” D’Amico said. “We’re actually doing tax analysis, working with a CPA, looking at Roth conversions and that impact on the plan. We look at harvesting 24

losses or gains, or we’re looking at estate planning. So, if you’re providing that deep of a service, technology is a must.” Like Edwards, D’Amico relies on robust financial planning software — MoneyGuidePro, in his case. “That’s our most important technology,” D’Amico said. “It’s a goal-based approach.” D’Amico described the key distinction between two kinds of financial planning software. MoneyGuidePro is considered a leader in a goals-based approach. On the other side, eMoney is a leader in a cash-flow-based approach. That’s the software and the approach that Edwards

If you’re providing that deep of a service, technology is a must. — Tony D’Amico uses. He speaks about cash flow and projections as far as 25 years and beyond. Although Edwards does also talk about goals, such as retiring at a certain age while maintaining a particular lifestyle, the two schools of thought have some distinctions and both have ardent followers. The essential difference is looking at the destination or the means available to the client. With a cash-flow approach, the analysis starts with a deep dive into the financial situation and structures a scenario with the numbers. With the goals-based approach, the advisor starts with the client’s dream and works backward. Whether the client wants to retire to the Riviera or collect Buick Rivieras for the rest of their days, the analysis can determine how much money would be required to realize that vision. This approach has become more

InsuranceNewsNet Magazine » November 2017

popular lately, largely because of its association with holistic planning. Advisors and tech experts identify financial planning software as the essential tool for sophisticated advising. So, it makes sense for advisors to determine what style of planning they prefer, to help guide the software choice. Both of these approaches have detractors who have a similar criticism — each approach is limited. The cash-flow approach is confined to a track presented by cash flow. And the goal-based approach is restricted by the dream — is the dream big enough? Honest enough? Of course, that’s a simplified version of the discussion. Advisors can manage a bit of both in either system. For example, when Edwards works with clients, he is asking about their retirement dreams, and then determining whether their cash flow will sustain them. Before the planning software enters the picture, a CRM has to form a foundation. D’Amico’s firm took the big leap in 2012 with Redtail. They transitioned from paper notes and Word documents to a digitized system little by little to make sure they were onboarding correctly. “We looked at calendaring, how we track ongoing financial planning priorities, and what the client has to do versus what we have to do and when the next activity is due,” D’Amico said of the process. Although it was a time-intensive, laborious process, D’Amico’s staff of four at the time was all on board with it. It helped that they were on the younger side and comfortable with the digital life. “I was motivated,” he said. “But they were more motivated to get that in place because I think they just were used to that.” One thing he did outsource, though, was his IT needs. He recognized the office needed the expertise so his employees could work on what they knew best. A company runs the office’s systems and has the data on remote servers with redundant locations. D’Amico had been using a cloud-based service, but a friend who works in cybersecurity warned him against it. “He just made me aware of the increasing security threats,” he said. “And it was taking the office manager’s time to run updates on computers and things like that.

November 2017 Âť InsuranceNewsNet Magazine


FEATURE HOLISTIC TECH So, it was a security improvement and a time savings for us. They update all of our computers on an ongoing basis. They have redundancy. They have a disaster recovery plan. It’s basically kind of what you would find at a big firm.” The service costs a minimum of $1,500 a month, which is not onerous now. But when he started the service, it was a comparatively big expense. However, it paid for itself pretty quickly because of the business it helped generate as an unintended consequence. It seemed that high-net-worth clients with several million dollars to invest were keenly interested in the firm’s security and were reassured by what they heard. With nearly $130 million AUM and growing, D’Amico’s firm is on solid footing. His earlier, painful investments paid off. He and his employees were able to work through the details and do the heavy lifting.


Some firms and individual advisors turn to consultants for help with the process. They call people like Joel Bruckenstein. Bruckenstein is a tech consultant, author and producer of the well-respected T3 technology conferences. He transitioned from financial advising in the 1980s to technology as it developed. He conducts two conferences: the T3 Enterprise Conference in the fall, which focuses on C-suite and other leaders looking for technology and enterprise information, and the T3 Advisor Conference in the winter, which in 2018 is Feb. 6-8 in Fort Lauderdale, Fla. As a consultant, Bruckenstein helps advisors think through the choices in new systems and sees some common themes. One of those is the thought process that advisors need to follow if they are considering leaving a wholesaler or company to grow into a larger business or offer a wider array of services. “There are two decisions to be made,” Bruckenstein said. “One is a business decision, which is, does it make sense for my future business plan to maintain a relationship? The other part of the puzzle is, given my new business model, can my current distributor support what I’m trying to do?” Advisors have to decide whether the company’s software and support will help them grow in the direction they need to. If 26

it isn’t acceptable, that simplifies the decision to break away. But, of course, the next stage is anything but easy. The advisor is looking at a large expenditure of time and money. But Bruckenstein argues that the advisor is already paying for technology but might not realize it. “Nobody gives you free technology,” Bruckenstein said. “They say it’s free, but somehow, it’s getting paid for. You’re either paying for it on your own, which to me, is

management software, if you want to do the downloads and reconciliation, you’re probably looking at a minimum of $500 a month, and it could scale up from there. Enterprise content management — if you need a simple document management system, it’s well under $100 a month. It depends on the amount of data you’re storing.” Another necessity would be Microsoft 365 — including Word, Excel, PowerPoint and Outlook — at about $12.50 a

Sometimes it’s better, if you can afford to, to pay a little more upfront and do it right, because if not, you pay three or four or five times more later to make the conversions. more transparent. You’re making the decisions. Or you’re having somebody else make the decision and pass on the cost to you either through a monthly technology fee, which is a little more transparent, or out of the commissions or the cash flow that you generate.” If advisors decide to make that break and support a more comprehensive or holistic practice, Bruckenstein said, they can expect to put certain things on the software shopping list: » Customer relationship management (CRM) system. » Financial planning software. » Portfolio management software. » Enterprise content management software. Although that sounds like a hefty list, it may be as heavy a cost as an advisor might imagine. Bruckenstein ticked off what the most cost-effective prices might be at a minimum. “You can get a Redtail CRM license for under $100 a month,” he said. “Financial planning software — you’re probably looking at somewhere between $100 and $300 a month. With portfolio

InsuranceNewsNet Magazine » November 2017

month. Advisors might also want a risk assessment tool, which can be another $200 a month, if it is not already included in the financial planning software. “It’s not a tremendous amount of money,” he said. “But there are firms that spend much, much, much more than that.” The biggest challenge for a firm is choosing the right technology at the beginning. It can be costly in time and money. But it is a difficult decision even for informed consumers. Bruckenstein recalled an event he attended recently where a group of advisors who had their firms for about five years were discussing their technology purchases. It turned out that none of them had the same technology they had originally bought for their business. And they were formerly in technology-related fields before becoming independent advisors. “They were penny-wise and poundfoolish,” he said. “They were probably looking for the absolute cheapest systems at the time because they were starting up. But then they incurred a bigger cost a few years later on because they had to convert from suboptimal systems to better systems. Sometimes it’s better, if you can afford to, to pay a little more upfront and do it right, because if not, you pay three or four or five times more later to make the conversions.”


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FEATURE HOLISTIC TECH A key first step is one that Edwards identified — reviewing processes that are in place. Which ones are worth keeping, and can they be automated? Bruckenstein said he worked with an advisor who left a large insurance company to become a wealth manager. Bruckenstein visited the firm for two days to evaluate their needs for the transition. A key finding was that the advisor was looking to buy a CRM system that was not a good fit — and was far more expensive than a more appropriate CRM.

planning on an abacus, basically, who’s going to want to work there?’” The same applies to younger, more tech-savvy clients. “If you’re trying to get millennial clients, or even clients in their 40s, if you don’t have a good digital presence, you’re not going to win the client,” he said. “If you’re walking in and doing planning on a legal pad, you’re probably not going to get the client.” That falls under the similar issue of not recognizing the real issues that should be driving choices in tech. Bruckenstein

If the first impression they get walking in is that you’re doing financial planning on an abacus, basically, who’s going to want to work there? “They were trying to think about their investment process without taking into account the technology that would run that process,” he said. “So maybe some of their workflows could have been much more automated if they did things a slightly different way. There were just some inefficiencies that were obvious to me and easily rectified, but clearly were not obvious to them.” Often, he said, people are buying a brand name that someone else recommended but might not be the right product for them. Upgrading hardware is another important consideration. Not only does it help with efficiency, but it can be a key factor in recruiting younger employees and clients. Bruckenstein sees advisors wanting to hire tech-savvy workers, but they aren’t looking at their own tech first. These firms struggle to get young, qualified people in for an interview, who then invariably go elsewhere, leaving advisors mystified. “I look around their office and I say, ‘Well, let’s look at your computers. The most modern computer you have here is five years old. You’re still using the CRT monitors. They went out with the dinosaurs. Do you think a young, ambitious tech person is going to want to work in this office? If the first impression they get walking in is that you’re doing financial 28

often discovers that the task he was hired to help complete isn’t the one the client needs. “What does happen sometimes — in fact, often; I would say 50 percent of the time or more — is I’ll get hired because people think they have a specific problem. They’ll hire me to help them find a new CRM software, or a new portfolio management software or what have you. I’ll come in there and say, ‘You know what? In my list of priorities, that’s number five. I think you have three or four bigger problems.’”


Edwards is familiar with the disconnect. He saw it and studied it in his own boutique Manhattan practice. He realized he had been looking at his business as a job that paid him instead of as a living practice that required care and attention to grow. He didn’t see his issues before because he wasn’t looking at them. As his business grew, other advisors would ask his secret. They didn’t care much for the answer. “I go to conferences all the time, meet with my peers and compare notes,” Edwards said. “I’ll mention that we grew 30 percent last year, and they go, ‘Gee, we only grew 5 percent last year.’ And they’re offering the exact same services that I’m offering. There’s nothing magical

InsuranceNewsNet Magazine » November 2017

about financial planning and investment advice — we all do the same thing. But they don’t have a leader who obsesses about this stuff seven days a week.” When he re-evaluated his business, he realized fixing it wasn’t a 9-to-5 job. And maintaining it would not be either. On weekdays, he works in the business; on weekends, he works on the business. He said he still has long stretches when he spends Saturdays and Sundays working on such things as figuring out technology solutions and producing marketing material. “The pace of change is constant. It’s like, even your email signature should change every six to nine months,” he said. “Presidents of other firms who mentally check out at 5 p.m. on Friday afternoon and check back in 9 a.m. on Monday morning don’t understand why their firm’s not growing.” Edwards said he knows this full well because that was him for more than 15 years of his business. He sees other advisors going on 20 to 40 years of a comfortable living. And although circumstances spurred him to make significant changes, today’s market and regulatory environment ought to be the prod to get his peers to change what they are doing. He worries about his peers, particularly when they bring to mind the Thanksgiving turkey story. “If you’re a Thanksgiving turkey, for the first 89 days of your life, everything is awesome,” Edwards said. “You live in a protected place. There’s a nice farmer who comes around every morning and makes sure that you have water, feed and antibiotics. There’s no chance that predators are going to get to you. Everything is awesome until day 90, when you get your head cut off.” Steven A. Morelli is editorin-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. He was also vice president of communications for an insurance agents’ association. Steve can be reached at

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This year’s Tech Guide covers futureforward digital inventions that give consumers unprecedented access to products, services and information, as well as those that give agents and carriers unprecedented access to consumers. CONTENTS Sagicor’s Accelewriting® Covers Clients Faster Than the Speed of Life.......... 30 Pershing Enhances Subscribe® Annuity Platform for Even Easier and More Efficient Annuity Business Management.....................32 Global Atlantic: The Future of Underwriting in the Palm of Your Hand...... 34 One Update Every Agent Needs by 2018: Is Your Office Ready for Agency Automator 2.0?................................................36 John Hancock Pursues “Smart Insurance” With Digital Technologies and Advanced Analytics.................................37 November 2017 » InsuranceNewsNet Magazine


Technology Issue • Special Sponsored Section

Sagicor’s Accelewriting Covers Clients Faster Than the Speed of Life ®

Imagine a life insurance underwriting process that takes minutes instead of hours or days. Sagicor Life Insurance Company’s Accelewriting® gives agents and clients an underwriting decision within minutes (one to two minutes on average), issues the client’s policy faster and pays commission sooner.

Fast underwriting decision

Sagicor recognized that life can change in a blink of an eye, and it envisioned a technology solution that would help agents stay one step ahead of their clients — so it developed an innovative underwriting system with a robust automated rules engine called Accelewriting®. “As an insurer, we knew we had Bart Catmull - president and chief the opportunity to use technology operating officer to change the face of the industry,” says Bart Catmull, president and chief operating officer. “Consumers are used to purchasing products through companies like Amazon with immediate delivery. We wanted to respond to that trend to meet clients’ needs while making the process as simple and foolproof as possible.” Accelewriting® is a comprehensive automated new business technology that integrates product Illustration and eApplication solutions from Insurance Technologies with automated underwriting. Once the illustration has been completed, the client’s data and product data then automatically populate the majority of the eApplication. Once the illustration is saved, approximately 77 percent of the eApplication is complete. “Because eApplication screens help ensure complete information, it eliminates the typical back-and-forth for additional information that frustrates both agents and clients,” says Catmull. The agent assists the client with completing the remaining portion of the eApplication and clicks on the submit button. The eApplication with electronic signature also ensures the application is in good order before it is submitted.

Efficient, time-conserving processes

“Accelewriting® is ideally suited for those who are healthy and ages 18 to 65. We still have fully underwritten processes in place to accommodate clients who are not candidates for Accelewriting®,” says Mike Stricker, chief administrative officer and senior vice president. “Seven questions start the process. If the client answers yes to any question, the agent instantly knows that the Accelewriting® program is not the right fit for them,” he adds. “The bottom line is we want to help our family, friends and neighbors, and we can’t do that unless we get a policy issued,” says Catmull. “We are continually refining the process to help clients who are eligible for Accelewriting® get to yes so they can meet their protection goals for their family faster.” 3030 InsuranceNewsNet Magazine » November 2017 InsuranceNewsNet Magazine » November 2017

The process is designed to be efficient and remove the perceived pain points of multiple phone calls, multiple meetings and repeatedly answering questions. eApplication eliminates the third-party telephone interview and allows agents to meet with a client in person or by phone. Currently, there are five products available through Accelewriting® — Sagicor’s Sage Term, Sage No Lapse Universal Life, Gold Indexed Single Premium Whole Life, Gold Interest Sensitive Single Premium Whole Life and Sage Whole Life. “Accelewriting® eliminates the need for an agent to meet face-toface with the client, the tele-interview, and traditional underwriting requirements such as paramed exams, attending physician’s statements and bodily fluid tests, alMike Stricker - chief administrative though brief health questions may officer and senior vice president be asked,” says Stricker. Instead, Accelewriting® relies on a robust rules engine utilizing predictive analytics tools and databases to provide a final underwriting decision in one of multiple risk classes in as little as one to two minutes. “Everything is done in real time. The analytics considers the information on the application in addition to information we receive from several databases that are in the industry, such as MIBs and pharmaceutical databases,” says Stricker.

“Accelewriting® allows us to give you the underwriting decision on average within one to two minutes, issue your client’s policy faster and pay your commission sooner. Thanks to our robust automated rules engine, you’re getting our best underwriter on their best day, every day.” — Bart Catmull, president and chief operating officer, Sagicor “Accelewriting® evaluates all that data to make a decision within that two-minute time frame. That speed allows the agents to also complete more sales because they’re not sitting around focusing on one piece of business,” adds Catmull.

24/7 availability

Accelewriting® provides a quick decision 24 hours a day, seven days a week. “This creates incredible flexibility for the agent and the customer,” says Catmull. “People work nonstandard work hours. Families have busy schedules. Accelewriting® removes the traditional 9-to-5 availability of an underwriter from the equation. Now agents and clients can access underwriting and the decision when it’s convenient for them.” Flexibility also extends to how agents want to interface with the system. eApplication was designed to be mobile-friendly for agents who prefer tablets.

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“There’s going to be a time when these consumers’ needs become more complex and they’ll need the advice of a qualified, trained agent,” adds Stricker. “With a positive introduction to the • RATE CLASSES process through SagicorNow®, we see Preferred ° these consumers coming back for more Standard ° information and assistance and help° Rated ing to grow the overall marketplace.” ° Preferred Tobacco Within seconds, a customer can get ° Standard Tobacco a quote; within 20 minutes or less, they • AGES 18-65 can get coverage up to $500,000 on term life or $250,000 on whole life insurance. • FACE AMOUNTS Customers get all this with fast and con° Term $50,000 - $500,000 venient access to an online service that The speed and ease of UL $25,000 $400,000 ° is available when they are, day or night. policy eDelivery ° WL $25,000 - $250,000 And should help be needed, Sagicor Sagicor followed the introduction of ° SP $5,000 - $250,000 up to 65 ° SP $5,000 - $150,000 up to 70 agents are available to provide support. Accelewriting® with eDelivery. eDeliv° SP $5,000 - $100,000 up to 75 “As we move forward, we continue ery provides electronic policy delivery to see opportunities for introducing to the client at policy issue and allows Sagicor issues life insurance and annuities. Products are not available in all states, and this technology for other products and the agent to monitor the entire process state variations may apply. continuing to lead the way in how the through the eDelivery dashboard. products are developed and delivered After the underwriting decision is to consumers and to our agents,” says Stricker. made, the policy is delivered approved as applied within eight “Today, we rely on digital platforms more than ever, and business hours. life insurance needs to keep pace with our lifestyles,” adds “This enhancement cut back on the added time associatCatmull. “We wanted to create something that is simple ed with mailing and delivering policies. eDelivery means the and clear, with no pressure and instant information about client and agent receive notification of the underwriting decipricing. We understood that protecting loved ones was imsion at the same time,” says Stricker. perative for some consumers who did not want to go the eDelivery has efficiency built in, because automated retraditional route.” minders are sent to the client if the policy has not been accepted by them, starting on Day 3 and then every seven days for the next 31 days. iPipeline’s DocFast has been Responding to agent and customer needs incorporated into Accelewriting®, providing agents with SagicorNow® is just one way to get life insurance from Sagienhanced access to policies and control in monitoring outcor. Accelewriting® and traditional underwriting processes standing policies. complement a number of affordable life and annuity prodThere is no waiting on wet signatures on policy amenducts for individuals and families that are distributed through ments. Amendments are signed electronically by the client, a network of local life insurance agents and insurance partand eDelivery amendments do not require the agent’s signaners. No matter the method used to obtain the coverage, the ture. price will always be the same. Sagicor’s focus on technical Secure credit-card and debit-card payments are accepted innovation and meeting the market’s needs is another examfor the initial premium. ple of how Sagicor is striving to protect family, friends and neighbors across the United States. Sagicor’s agents and customers also benefit from the combination of available higher face amounts, pricing for multiple risk classes and a modern, convenient way to obtain life insurance coverage. “Sagicor was the first in the industry to offer single-premium whole life on an automated underwriting system,” says Catmull. “We continue to incorporate consumer trends and the direction that purchases are heading into our technology and products.”

SagicorNow® attracts new consumers to the marketplace

Accelewriting® Product Snapshot builds on the Accelewriting® platform to offer consumers a direct purchasing option. SagicorNow® is a digital platform that takes the online purchase of life insurance to a new level with a fully online experience. It is currently available in three states: Arizona, Florida and Texas. Consumers get a quote by answering five simple questions. From there, the amount of coverage can be adjusted to see the impact on the price. Once the type of product and the amount of coverage have been selected, a series of qualification questions are answered, and a decision on coverage is provided within minutes. Once approved, the policy can be purchased online, using direct withdrawal from a bank account or a credit card, allowing flexible payment options and immediate life insurance coverage. “There is a large segment of the population that is uninsured,” says Catmull. “We see this as a great opportunity to introduce them to the industry in a positive, no-hassle way.”

About Sagicor Life Insurance Company

Licensed in 45 states plus the District of Columbia, Sagicor is rated A- (Excellent). Founded in 1954, Sagicor is a wholly owned subsidiary of Sagicor Financial Corporation Limited, one of the oldest insurance groups in the Americas.

To learn more about Sagicor, visit or call the Producer Resource Center at 888-724-4267, ext. 4680.

November 2017 » InsuranceNewsNet Magazine 31 31 November 2017 » InsuranceNewsNet Magazine

Technology Issue • Special Sponsored Section

Pershing Enhances Subscribe® Annuity Platform for Even Easier and More Efficient Annuity Business Management and feel of the system plus plans for life order entry and consolidation, for an even higher-quality experience for firms and advisors.

What is Subscribe?

Subscribe is Pershing’s annuity and life insurance solution, which consists of many components. First, available through NetX360®, our advisor-facing platform, Subscribe allows advisors to electronically submit annuity transactions with many of the country’s leading insurance companies. Second, Subscribe allows networking of contracts to brokerage accounts, which gives advisors and their clients a more complete picture of their portfolio. And finally, there is our Annuity Analytics Dashboard as well as our approval and oversight tools, which help broker-dealers manage their annuity business.

How can Subscribe play a role in helping with a firm’s compliance efforts for annuity business? Hans Schemmel - Director, Individual Retirement Products and Annuities In 2003, Pershing introduced Subscribe®, an easier way for firms and advisors to manage their annuity business. Subscribe streamlines how advisors process, service and maintain fixed, variable and indexed annuities — helping enhance the overall experience of clients and capture a greater share of this growing market. Subscribe’s technology platform enables advisors to electronically submit annuity transactions and interface with many of the country’s leading insurance companies. In this interview, Hans Schemmel, director, individual retirement products and annuities at Pershing LLC, a BNY Mellon company, describes upcoming enhancements to Subscribe, including streamlined order-entry and administrative screens that improve advisor efficiency, make the most of their time and make the process even more user friendly. Enhancements also include aesthetic improvements to the look

3232 InsuranceNewsNet Magazine » November 2017 InsuranceNewsNet Magazine » November 2017

This is one of the main benefits of Subscribe. First, we have our Enterprise Rules Engine™, which facilitates license and appointment checks and allows firms to set certain thresholds, such as liquid net worth for purchases. Also, our online order-entry system has the ability to integrate firms’ suitability questionnaires into the wizard, and at the end of the order, it automatically routes the order for home office approval. Another great feature is the reporting, which is available through either Pershing’s Report Center or Annuities Analytics Dashboard — providing reporting for transactions, activity and positions. All of this is available through a consistent advisor order-entry process.

How does Subscribe help an individual advisor?

Great question. With this single order-entry system, Subscribe can offer tremendous benefits to advisors by lowering not-ingood-order (NIGO) rates, completing updated broker-dealer paperwork and requiring less time to navigate various carrier differences. It’s really a timesaver for advisors, and, in fact, they potentially can get paid faster too.

Technology Issue • Special Sponsored Section

Despite the delay in the DOL conflict of interest rule, do you think the fiduciary mindset is here to stay?

Yes. And it’s not just me. We hear it from our clients too. Many of them want to take the appropriate steps to this fiduciary mindset, regardless of the fate of the rule. With Pershing’s DOL rule solutions and other various solutions, our clients may get more from our Subscribe compliance capabilities during the order-entry process and post-trade compliance than with direct-to-carrier business as it’s done today.

Earlier, you mentioned Subscribe’s Annuity Analytics Dashboard. Would you mind telling us more about it?

Absolutely. We worked closely with our affiliate, Albridge Analytics, to develop the Annuity Analytics Dashboard, which provides firms with an enterprisewide view of their annuity and life insurance business. The dashboard is an integrated and efficient solution for managing annuity sales flows, and it offers more transparency of new and existing business for improved oversight, compliance and regulatory review. Via the dashboard, firms can review their annuity business — both networked and non-networked — through three distinct modules: the Positions module, Order module and Financial Activity Reporting (FAR) module. I’d like to point out that this is contingent on data provided to the DTCC. The Positions module allows firms to search existing annuity position by carrier, plan type, issue and surrender date, or advisor. In addition, firms can review positions that are networked to a brokerage account and those that are not networked to a brokerage account, also called non-networked. With the Order module, firms can review the data associated with new and subsequent transactions. This information may also include 1035 exchanges and qualified transfers, product types, issuing carrier, state of solicitation, qualified versus nonqualified details, and other advisor information. And finally there’s the FAR module, which provides a holistic summary of insurance carrier transactional information, including contributions, withdrawals, money in motion (contract and subaccount changes) and systematic changes.

You mention networked and non-networked positions. What are they, and what’s the difference?

If a client has a Pershing brokerage account, an annuity position can be linked, or “networked,” to this account, providing greater transparency or a more holistic view of the client’s assets. Non-networked policies are those that are not tied to a Pershing brokerage account. So information like contract values and premiums will not display in the brokerage window. We constantly work with our clients to efficiently assist with

networking existing contracts to a Pershing account to show those contract details.

How does Subscribe eliminate paperwork for firms and advisors?

There are a few ways in which Subscribe helps eliminate paperwork. For example, the electronic order entry allows paperwork to be uploaded and attached and submitted electronically to the carriers. This feature helps significantly reduce applications that are submitted NIGO. Our efforts to eliminate paperwork are specific not only to advisors and firms but also to investors, as we allow for e-delivery of statements.

What’s new in Subscribe, and what were Pershing’s goals for these changes?

Well, for starters, we are always considering and looking to add additional carriers. We currently have 50+ carriers available. In 2018, we are introducing a new and improved order-entry platform — improving the look and feel as well as navigation through the online order-entry process. For example, screens and tasks that are currently spread over multiple screens will be consolidated into fewer screens, and the same can be said for the administrative screens. We are constantly looking at ways to improve and build on the platform — making the platform more user friendly and efficient with the goal of improving the way firms and advisors manage their annuity business.

In addition to its annuity features, how does Subscribe also support advisors with life order entry and life consolidation?

Ah, good question. We spoke a little bit about our networking capabilities with annuities, but this same networking capability is currently available for life insurance policies. We currently provide details, such as the contract values, total premium and surrender value, as well as any owner and beneficiary information, in NetX360. These and other details are also available to clients using our NetXInvestor platform. In addition, this information appears on the clients’ statements. Right now, we are working on integrating a life insurance electronic order-entry solution into our NetX360 platform. This single sign-on, wizard-based solution will streamline processing and managing life insurance applications. We hope to make formal announcements shortly.

November 2017 » InsuranceNewsNet Magazine 3333 November 2017 » InsuranceNewsNet Magazine

Technology Issue • Special Sponsored Section

The Future of Underwriting in the Palm of Your Hand from any device with an internet connection, agents can enter some basic case information to receive tailored underwriting guidance. In addition to age and desired face amount, the tool asks six yes/no questions based on the client’s history. No personally identifiable information is required. Topics include driving history, bankruptcies, foreign residency and travel, criminal history, prior life insurance offers and major medical conditions. Depending on the responses, agents may be asked the policy type — term or permanent — and the client’s height, weight and gender. UnderRight Life will either indicate the likely underwriting class the client will be offered, to help you quote with greater confidence, or it will prequalify the client for Global Atlantic’s Fast Lane Accelerated Underwriting program.

Get your clients in the Fast Lane

Fast Lane Accelerated Underwriting is a dynamic approach to underwriting life insurance cases. Rather than completing a full traditional medical exam with labs, Fast Lane streamlines the process, using:

By Adam Lucas, Marketing Manager, Global Atlantic With UnderRight Life, Global Atlantic is helping you do away with cumbersome underwriting tables by moving underwriting tools into the palm of your hand and making the underwriting process a more customer-friendly experience. Since the dawn of the life insurance industry, underwriting has weighed on the sales cycle. Its cumbersome and invasive nature, as well as its unpredictable results, slow the overall application process and may even deter some people from seeking the protection they need. Especially today in the digital age, where people are conditioned to expect immediate gratification, purchasing life insurance is inconvenient and time-consuming. People want instant feedback and results. Global Atlantic understands these challenges and is investing in underwriting initiatives that pave the way to a smoother and quicker experience. While underwriting is an essential part of the life insurance process and isn’t going away, modern technology and knowledge gained through decades of underwriting experience can lead to meaningful improvements — such as Global Atlantic’s UnderRight Life.

Real time, real value

UnderRight Life is a new, mobile-friendly, web-based underwriting tool that saves time by allowing agents to provide a deeper level of underwriting insight in real time during client meetings, facilitating more accurate quoting and more informed decision-making. By accessing the UnderRight Life tool at 3434 InsuranceNewsNet Magazine » November 2017 InsuranceNewsNet Magazine » November 2017

• Fewer sections of the application. • Authorization for our underwriting team to use a variety of personal consumer information sources to complete the underwriting process. • Tele-med medical interview by phone. According to LIMRA’s 2017 “Barometer Study,” consumers are looking for a more transparent, simple experience — especially in the area of underwriting. The study found that 70% of respondents would be more likely to buy if there were no need for a medical exam. Fast Lane Accelerated Underwriting makes this a reality. It can be a faster, simpler way for clients to receive a life insurance offer without the hassle of a medical exam. Although Fast Lane underwriting and traditional underwriting produce consistent results, they get there in different ways. Fast Lane uses information clients provide and information from consumer-reporting agencies. All information gathered is used only to evaluate and

Technology Issue • Special Sponsored Section

Modern technology and knowledge gained through decades of underwriting experience can lead to meaningful improvements...

underwrite a life insurance application. The questionnaire completed during a tele-med interview becomes part of the policy and will be included in the policy documents when they are delivered to the policy owner. The UnderRight Life tool makes it easy for you to see on the spot whether a client qualifies.

Not sure? Just ask.

Finally, UnderRight Life features a prominent Ask an Underwriter link that provides quick access to an online form where agents can reach out directly to the Global Atlantic underwriting team with questions. On normal business days, inquiries received by 2 p.m. Central Time will receive a same-day response. Those received after 2 p.m. will receive a response on the next business day. The goal of Global Atlantic’s Underwriting department is to complement and enhance the relationships you have with your clients and prospects. The team, having an average of 19.7 years of experience, promises to provide you with the services and value you deserve. We do this through competitive and prudent underwriting decisions that ensure the needed protection will be there for you and your clients. We call this approach the Global Atlantic Underwriting Advantage.

About Global Atlantic

LIMRA found 70% of respondents would be more likely to buy if there were no need for a medical exam.

Global Atlantic Financial Group, through its subsidiaries, offers a broad range Fast Lane Accelerof retirement, life and ated Underwriting reinsurance products designed to help our custommakes this a reality. ers address financial challenges with confidence. A variety of options helps Americans customize a strategy to fulfill their protection, accumulation, income, wealth transfer and end-of-life needs. Global Atlantic was founded at Goldman Sachs in 2004 and separated as an independent company in 2013. Its success is driven by a unique heritage that combines deep product and distribution knowledge with leading investment and risk management capabilities, alongside a strong financial foundation.

Adam Lucas, a marketing manager at Global Atlantic Financial Group, has over 15 years of experience in the financial services industry with a focus on life insurance.

UnderRight Life P OW E R E D BY G LO B A L AT L A N T I C

November 2017 » InsuranceNewsNet Magazine 3535 November 2017 » InsuranceNewsNet Magazine

Technology Issue • Special Sponsored Section

John Hancock Pursues “Smart Insurance” With Digital Technologies and Advanced Analytics Imagine life insurance that’s fun, engaging and easy to purchase. That’s the vision at John Hancock, where innovation is focused on the modern consumer. In this Q&A, Brooks Tingle, senior vice president, marketing and strategy, John Hancock Insurance, discusses the company’s latest life insurance solutions and how they are transforming customer’s purchasing and ownership experiences. Q: In what ways has John Hancock been leading in streamlining and simplifying the life insurance purchasing process? A: Our industry has to be more relevant and more accessible to today’s consumer. That’s what led us to focus on innovation in the buying process. John Hancock ExpressTrack™ is a new underwriting approach that accelerates the life insurance buying process and provides many consumers with a faster and easier way to get the important coverage they need. By leveraging analytics and predictive modeling together with the traditional underwriting process, we can deliver underwriting decisions in as little as three days, with no in-person paramedical visits or lab work required.1 Q: How has John Hancock been working to make life insurance policy ownership more rewarding? A: We’ve invested a great deal to transform the life insurance ownership experience from one where consumers get a life insurance policy, tuck it away and don’t think about it again. John Hancock Vitality integrates life insurance with a technology-enabled wellness program to offer premium savings and valuable rewards and discounts for the everyday things people do to stay healthy. We now have over two years’ experience with the program and client participation has been fantastic. We’re having an average of 22 positive interactions with Vitality customers a month — from a paradigm that was one administrative interaction a year. Vitality is working in terms of its fundamental purpose, which is helping people take measures to lead longer, healthier lives. For example, with exercise, our Vitality customers are taking nearly twice as many steps as the average American consumer. Our belief that we need to make life insurance more meaningful was further validated by a recent survey that found over eight out of 10 consumers prefer Vitality over traditional life insurance.2 1. Consumers, ages 18-60, initiating their application with a John Hancock proprietary ticket and applying for single life coverage of up to and including $1 million may qualify for John Hancock ExpressTrack. 2. Insurance nationwide survey conducted by Qualtrics on behalf of John Hancock. Interviews were completed in July 2017 among 1,052 U.S. adults ages 25 and above. The data were weighted by gender and income to accurately represent the population.


Q: How has John Hancock been using technology to help customers meet their insurance goals? A: LifeTrack solves a problem that has impacted the life insurance industry for decades: how to keep customers on track with their insurance goals. With policies often held for decades, factors that affect policy performance, such as interest rates and the timing of premium payments, can change over the life of a policy. That means the premium the customer initially pays may not be the right premium that will keep them on track with their insurance goals. LifeTrack addresses this issue by making automatic adjustments, based on policy performance, to the customer’s billed premium every year. LifeTrack further improves the customer experience by integrating with the John Hancock Vitality solution. Vitality policyholders who enroll in LifeTrack are sent communications in advance of their policy anniversary encouraging them to reach the next Vitality Status and increase their premium savings. Q: Why is it so important to lead with these types of innovative solutions? A: Having engaged relationships with customers where they see that you support their goals and well-being is crucial. We want their product to perform the way it’s expected to, and we want to give clients all the information they need. Historically, life insurance has not been particularly engaging, and it’s viewed by some as an uncomfortable obligation. Combine that with the perception that the buying process can be lengthy and cumbersome, and it’s not a winning formula for staying relevant with today’s consumers. That’s why it’s more important than ever to change the conversation about what it means to both buy and own life insurance. Q: Why is it important for the life insurance industry to keep pace with the rapidly changing needs of consumers? A: John Hancock spends a great deal of time keeping abreast of other industries, such as consumer technology and retail companies, to better understand how they design, develop and bring to market solutions that engage and connect with consumers in a more modern way. We need to deliver products and services that today’s consumers value. So that’s what we’re working to do — come up with smart life insurance: engaging products that are easier and more enjoyable to purchase and own.

To learn more about John Hancock Vitality, visit

Insurance policies and/or associated riders and features may not be available in all states. Some riders may have additional fees and expenses associated with them. Vitality is the provider of the John Hancock Vitality program in connection with the life insurance policy and Healthy Engagement Rider. John Hancock Vitality program rewards and discounts are only available to the person insured under the eligible life insurance policy. Rewards and discounts are subject to change and are not guaranteed to remain the same for the life of the policy.

InsuranceNewsNet Magazine » November 2017 2017 36 InsuranceNewsNet Magazine » November

Premium savings are in comparison to the same John Hancock policy without the Vitality program. Annual premium savings will vary based upon policy type, the terms of the policy and the level of the insured’s participation in the John Hancock Vitality program. Insurance products are issued by John Hancock Life Insurance Company (U.S.A.), Boston, MA 02210 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595. MLINY091817117

Technology Issue • Special Sponsored Section

One Update Every Agent Needs by 2018 Is Your Office Ready for Agency Automator 2.0?

Before you close out the year, Bill Levinof your prospects would rather buy online and skip the human interaction if at son, managing partner with Levinson & all possible. Now that Agency Automator Associates, wants you to take stock of your current tech and marketing. is updating to version 2.0, your prospects Most notably, he wants to make sure that can become your clients and buy from a you’re not working too hard, wasting your multitude of insurance products directly valuable time with office tasks or missing opfrom your website, giving you the credit portunities to convert prospects into clients and commission for every product sold!” and current clients into even bigger ones. Levinson exclaimed. Bill, known by many as the life and annuity industry’s most prolific innovator, “If you want to remain top of mind and Bill Levinson, managing partner has been introducing tech that disrupts the maximize your sales, then you have to status quo and makes agents’ lives easier and their income anticipate and embrace how your clients do business.” brackets higher. His advancements have been so monumental and gameAnd it gets even better. changing that every time he announces a new breakAgents can now easily and automatically capture, market through, two things always happen. to and sell — using customizable drip campaigns proven to First, agents from around the country rush to his doors increase sales — to anyone who has responded to their solike the next iPhone is going on sale. cial media posts, visited their website or clicked on an email. And second, other IMOs that can’t keep pace start panicking. They’re automatically added into the agent’s CRM. This year, even the developers are in awe of how easy an So if you want to send out a drip campaign specifically to agent’s job will become thanks to the release of Agency Aupeople who ran an online quote but didn’t buy, you can! Want tomator 2.0. to follow up with an online purchase to see whether they’d do So what’s all the fuss about? better with another product? Piece of cake! And if you want To a keen observer or any active agent with Levinson & Asto follow up on prospects who opened an email you sent but sociates, this update is the long-awaited marriage between took no action, you can set up a unique campaign for that too! the two most powerful sales platforms in the industry, AgenEvery marketing angle that you can think of can be easily cy Automator® and I-Genius®. and intuitively handled, thanks to Agency Automator 2.0. Unrolled several years ago, I-Genius remains the most And if anything becomes too technical, don’t worry! comprehensive platform where agents can host their own Agency Automator 2.0 has you covered there too! That’s because it comes with your own real life virtual assistant. This optional virtual assistant “This takes almost all of the work out of an agent’s hands. provides up to 10 hours of dedicated support to help you build and send If you don’t have Agency Automator 2.0 on your computer your email campaigns, by January, you’re working too hard and missing some update your CRM rereally easy money.” — agent Elliott Diamond (beta tester) cords and fill your calendar with scheduled custom websites, increase their social media presence, allow calls and meetings resulting from your site visitors to run live quotes (with built-in lead capture), and Agency Automator campaigns.” select and buy nearly a dozen products online — without any Now, in addition to gaining revenue agent interaction. from online purchases, all agents have E st 197 2 Released last year, Agency Automator was the first CRM to do is show up to appointments! And for agents looking to build their very own downline, ever designed from the ground up to meet the specific and unique needs of life and annuity agents. Not only was it Agency Automator 2.0 also offers a special upgrade called the most agent-friendly client dashboard, but also it is the Agency Automator Plus that allows the user to easily switch most powerful, integrated lead-gen tool available, handing between prospecting for clients and recruiting new agents. agents 1,000 qualified leads per month so they can automatically and instantly develop and launch all sorts of market“If that doesn’t take all of the work off an agent’s ing email campaigns to those prospects. hands, I don’t know what else will,” said Levinson. What does the merger of the two powerhouse technologies mean for agents like you? For more information regarding this powerQuite a lot, according to Levinson. ful upgrade and to make sure you’re one of “If you want to remain top of mind and maximize your the first agents in line when Agency Ausales, then you have to anticipate and embrace how your tomator 2.0 becomes available in January clients do business. Like it or not, times are changing, and 90 percent of your market is online. Eighty percent 2018, visit today!


November 2017 » InsuranceNewsNet Magazine 37 37 November 2017 » InsuranceNewsNet Magazine

IUL Premiums



IUL Propels Life Premium Growth In First Half of 2017

in the first half of 2017, 21% of all individual life premium

Some good news in the world of individual life insurance. New individual life premium increased 4 percent in the first half of this year compared with the first half of 2016, according to LIMRA. “All major product lines experienced annualized premium growth during the first half of 2017,” said Ashley Durham, LIMRA associate research director. “While whole life led the way in terms of absolute dollar growth during the first half of the year, indexed universal life was the primary driver during the second quarter.” But, although premium growth was on the rise, policy count was a different story. Total policy count dropped 3 percent in the first half of the year, and was down 4 percent in the second quarter.


More people than ever have life insurance through their employers but fewer employers are offering it. As many as 108 million Americans have life insurance coverage through the workplace, compared with 102 million covered by individual life insurance, LIMRA reported. The number of Americans covered by employment-based life insurance will continue to grow, but only slowly, said Anita Potter, LIMRA’s assistant vice president, workplace benefits. Companies are cutting back on group life as rising health care costs erode budget allocations for other benefits, Potter said. Another reason for the retreat is that employers do not think their employees value this benefit. Less than half of employed Americans even have access to workplace group life insurance, according to a survey by OneAmerica. In the survey, only 45 percent of employed Americans claimed to have voluntary group life insurance provided by their employer. DID YOU





The life insurance industry continues to bring new products into the marketplace. Here are some of the latest offerings. New York Life is introducing Asset Flex, a universal life policy giving owners access to nearly five times the premium for long-term care expenses. A 60-year-old buyer paying a single premium of $100,000 for an Asset Flex policy has access to as much as $461,695 for covered long-term care services and/or $153,899 in life insurance protection, the company said.

John Hancock launched a new indexed universal life (IUL) portfolio with lower premiums, improved income potential, and policy management tools designed to help policyholders achieve their financial goals. John Hancock’s IUL policyholders also can earn significant savings and rewards for living healthy through the John Hancock Vitality Program, available with the IUL product series.

QUOTABLE Consumers value life insurance. What is changing more than anything else is where they are getting it. — Anita Potter, LIMRA


When it comes to getting help with their coverage, more policy owners are interested in going online for service, according to LIMRA research. LIMRA found 37 percent of policy owners went online for service in 2017, 23 percent higher than in 2014. Even more significant, the study found that 74 percent of policy owners said they would go online for service in the future, twice as likely as today.


went online for service this year


said they would go online in the future

But even though policy owners are more likely to go online for service than they were previously, they haven’t abandoned the thought of seeking help from a professional. Meeting a financial professional or calling a life insurance company to speak with a customer service representative are still the most chosen service channels at 44 percent and 45 percent, respectively.

New York Life has launched a student loan repayment program offering up to $10,200 over five years for eligible employees. Source: New York Life

InsuranceNewsNet Magazine » November 2017

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The Real Bucket List: What Every Parent Needs Young parents may not be ready to think about estate planning. But an advisor can be the catalyst to motivate them to plan for their children’s well-being if the unexpected occurs. By Louis S. Shuntich


oung families don’t tend to think about estate planning because they are of modest wealth and in good health. Despite that, young adults are not immune from the tragedy that may come in the form of an accident or unexpected illness. In fact, unintentional injury is the leading cause of mortality among those ages 25 to 34. Therefore, parents with minor children need to address issues such as how to provide income to the children, how inherited assets may be managed for their benefit and who will care for the children if both parents are gone.

Naming a Guardian

If something happens to one parent, the remaining parent usually will continue raising the children. That leaves the question, however, of who will take care of the children if both parents are killed in something such as an auto accident. This presents a difficult decision for parents. But unless the parents name a guardian, the court will have to appoint someone without knowing the wishes of the parents, children or other family members. This process may be slow, expensive and unresponsive to a particular child’s unique needs. The place for naming a guardian is in the parents’ wills. In naming a guardian, parents should consider the proximity of the guardian’s residence to the children’s current home, as well as the guardian’s lifestyle, religious beliefs and financial situation. Further, since it is such a major responsibility to take over raising a child, 40

the preferred guardian should be asked whether they are willing to accept that role. In any case, guardianship provides for the children’s care until they reach age 18. Guardianship gives someone the power of a parent to make decisions about the child’s schooling, religious training and medical treatment.


This leaves the question of how the parents’ estate assets will be transferred to the children. The answer is that if the parents do not name a conservator in their wills, the court will appoint someone to oversee the children’s inheritance. That will cost money, and the children usually will receive their shares equally on reaching age 18. Because the children may not be ready for such a responsibility at age 18, the parents may prefer to establish a minor’s trust in their wills. This trust would receive, manage, invest and distribute the assets to the minor according to the terms of the trust. Importantly, the trust may delay distribution of the assets to the child to a time or times chosen by the parents. Alternatively, in the case of a special needs child, the parents could establish a trust that would leave all distributions to the child to the trustee’s absolute discretion. This would keep the child eligible for certain government needs-based benefits such as Medicaid.

Children From Previous Marriages

Clients who have children from a previous marriage may want those children to inherit certain property. That might be accomplished by the parent keeping the property in question in their own name and leaving that property to the children from the prior marriage under their separate will or trust.

InsuranceNewsNet Magazine » November 2017

Life Insurance

A review of the young parents’ life insurance needs is crucial to the planning process. That is because the income earned by one or both parents would have to be replaced if they died. A key point to remember, however, is that it is not just breadwinners who need life insurance. The stay-at-home parent provides services that the surviving parent would have to pay to replace. This leaves the question of what kind of life insurance to purchase. The answer is that term insurance is sufficient for most families since it is more affordable for young parents and enables them to create an adequate safety net until the children are grown. On the other hand, if there is a special needs child who will be a dependent for life, permanent insurance is more suitable. This might include a second-to-die policy since the greatest risk to the children occurs when both parents are dead. In any case, when calculating the amount of insurance needed, the following four-step process may be followed: 1. Determine the number of years for which coverage is needed and multiply the parents’ income by that number. 2. Add the amount of nonrecurring financial obligations such as debts and college costs for the children. 3. Include the cost of replacing the services of the lost parent. 4. Subtract the cost of savings and existing life insurance coverage. Next is the issue of designating the beneficiary of the coverage. Normally, each parent might simply designate the other parent as the beneficiary of their coverage. Alternatively, an option is to set up a life insurance trust with the spouse or another person named as the trustee with the

THE REAL BUCKET LIST: WHAT EVERY PARENT NEEDS LIFE responsibility to manage the trust for the children’s benefit according to the terms of the trust.

Durable Power of Attorney/Medical Advance Directives

To complete their planning, young parents should create durable powers of attorney and medical advance directives. Durable powers of attorney are documents by which a parent authorizes another person, such as their spouse, to manage their property interests if they are unable to do so because of injury or illness. A medical advance directive is a document through which the parent may authorize another individual to make medical decisions for them if they are unable to do so for themselves. A further advance directive may take the form of a living will under which the parent specifies what kinds of medical services or treatments they want or do not want to be administered if they are terminally ill. Young parents may not want to think

Parents with minor children need to address issues such as how to provide income to the children, how inherited assets may be managed for their benefit and who will care for the children if both parents are gone. about their own mortality. Yet tragedy happens, and unless parents take steps to deal with matters such as guardianship, conservatorship and their children’s income needs, the results may be most unfortunate. In that regard, advisors can act as a catalyst to motivate parents to take action. Further, advisors may help inform parents about the advantages and disadvantages of various estate planning tools and

techniques that can be applied to protect children, considering the family’s lifestyle, values and relationships. Louis S. Shuntich, J.D., LL.M., is director, Advanced Consulting Group, Nationwide Financial. Louis may be contacted at louis.

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November 2017 » InsuranceNewsNet Magazine



If your client’s wealth transfer plan isn’t done carefully, your client’s wealth will be transferred, that’s for sure — just not where they intended.

How Not to Destroy Your Client’s Family After Your Client’s Death Every advisor can relate to reallife horror stories about unintended and irreparable damage done to families when their wealth transfer plans get messy. Here’s how life insurance could have averted the drama. By Ted Bernstein


good homework assignment for your clients before your next wealth transfer planning session is to have them watch the Netflix miniseries, Bloodline. If that doesn’t spur your clients to think about a better plan, nothing will. Gone are the days when disgruntled children and grandchildren passively accepted the gifts from their parents and grandparents. Imagine how your clients would feel to learn their children would never speak to each other again because of what they inherited. Not only are heirs regularly suing 42

each other, but they’re also suing surviving parents, the advisors who did the work and the institutions where the money is held. Everything is challenged, including intent and competency. As advisors, it is our strong resolve that helps clients create financial plans, succession plans, retirement plans and wealth transfer plans. Often, if not for us, these plans are never completed or updated.

The Collateral Damage

If your client’s wealth transfer plan isn’t done carefully, your client’s wealth will be transferred, that’s for sure — just not where they intended. It will end up being transferred to their litigation-minded children, law firms and other professional firms. “I have seen successful family businesses fail and real estate empires implode. Even modest estates of less than a couple million dollars can be wiped out in litiga-

InsuranceNewsNet Magazine » November 2017

tion expenses, tearing families apart,” said Larry Adkins, CEO of Atlantic Coast Brokerage Services. And this carnage is not always contained to the family, evidenced by cases that threaten attorneys, guardians, trustees, judges, Realtors and wealth management advisors all over the nation. When one or more disgruntled heirs are in the mix, emotions can run high. When you combine death, money, children and skilled lawyers, wealth destruction is inevitable.

Not My Clients!

“Not my family” is what we hear most from clients. But these stories are increasingly becoming the rule, not the exception, and everyone has a story to tell. We should help our clients consider better alternatives to help their heirs enjoy their gifts and preserve family relationships. Make sure to include both husband and wife in the initial wealth transference discussions about

In a sea of sameness, SecureCare is making waves Securian’s SecureCare Universal Life offers a guaranteed death benefit, indemnity-style long-term care benefits,1 as well as a return of premium option.2

Learn how SecureCare’s competitive pricing and unique combination of benefits can make a splash with clients and strengthen your product offerings. Call Securian’s Life Sales Support Team today: 1-888-413-7860, option 1


Upon the insured’s meeting the policy’s eligibility requirements.


Upon surrender, the policyowner will receive the greater of the surrender value and the return of premium value minus any benefit payments received minus any indebtedness. The return of premium may not equal the sum of premiums paid. Surrenders during the first five policy years are subject to a return of premium vesting schedule. Surrenders requested on or after the sixth policy year are eligible for a return of all premium paid.

Insurance policy guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. Please keep in mind that the primary reason to purchase a life insurance product is the death benefit. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. SecureCare may not be available in all states. Product features, including limitations and exclusions, may vary by state. SecureCare is a single premium universal life policy with tax qualified long-term care benefits that cover care such as nursing care, home and community based care, and informal care as defined in this policy. This policy provides for the payment of a monthly benefit for qualified long-term care services. This policy also provides an accelerated death benefit for terminal illness. This policy is intended to provide tax qualified long-term care insurance benefits under Section 7702B and tax-free accelerated death benefits for terminal illness under Section 101(g) of the Internal Revenue Code, as amended. However, due to uncertainty in the tax law, benefits paid under this policy may be taxable. Please ensure that your clients consult a tax advisor regarding long-term care benefit payments, terminal illness benefit payments, or when taking a loan or withdrawal from a life insurance contract. These materials are for informational and educational purposes and are not designed, or intended, to be applicable to any person’s individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action. Securian Financial Group, and its affiliates, have a financial interest in the sale of their products. POLICY FORM NUMBERS ICC16-20047, ICC16-20047U; Extension of Long-Term Care Benefits Agreement ICC16-20048, ICC16-20048U; Long-Term Care Inflation Protection Agreement ICC16-20049

Insurance products issued by: Minnesota Life Insurance Company Securian Financial Group, Inc. Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York, products are issued by Securian Life Insurance Company, a New York authorized insurer. Minnesota Life is not an authorized New York insurer and does not do insurance business in New York. Both companies are headquartered in St. Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues. 400 Robert Street North, St. Paul, MN 55101-2098 ©2017 Securian Financial Group, Inc. All rights reserved. F87549-17 7-2017 DOFU 6-2017 ICC17-199414

For financial professional use only. Not for use with the public. This material may not be reproduced in any form where it would be accessible to the general public.


“Don’t kid yourself as trustee or executor — families fight. Parents are well-served to consider a harsh penalty for any kind of contest.” goals and objectives. When both partners participate, a more realistic assessment about family dynamics will emerge. “The wealth transfer planning strategies from 10 or 20 years ago are simply not enough today,” said Alan Rose of Mrachek Rose, a litigation specialist in Palm Beach, Fla. “Don’t kid yourself as trustee or executor — families fight. Parents are wellserved to consider a harsh penalty for any kind of contest.”

Planning for Successful Wealth Transfer

To minimize destruction of wealth and family, clients should consider each child (and their families) separately and work backward from there. Many people did not treat their children equally throughout their lives, so it may be beneficial to consider unequal treatment after the parents’ deaths as well. The traditional starting point for estate planning discussions is usually the same: “The more money we can leave our heirs, the better.” But better for whom? Is it better for each child and their families? Does each child handle money differently? Do some children have marital issues, mental health issues or any issues that would prevent your client from handing money over to them today? What typically starts from a place of good intentions often ends with family feuds, scorched-earth tactics and worse in some cases. Inheritances are gifts, not entitlements. Too much given at the wrong time to the wrong children can lead to a lifetime of problems. In some cases, even telling certain heirs about their inheritance can be damaging. To be clear, I am not suggesting people disinherit their heirs. I am suggesting that we are responsible to recommend solutions that deliver everything our clients want from their planning.

Permanent Life Insurance – The Great Equalizer

A client’s team of advisors is well-served to include a life insurance professional who relates to the problems of wealthy people. Adding income-tax-free liquidity at death 44

is always sensible planning, but it should be elevated to essential planning in order to increase the chances for successful outcomes. Many noninsurance professionals have an insufficient appreciation for the value of instant liquidity at death. Estate planning advisors tend to implement complex strategies such as discounted asset sales, limited liability entities, sheltering vehicles and many others. Many are great ideas that work, no doubt. Consequently, too many clients adopt a view that life insurance is not necessary. We need to help them adopt a view that instant, income-tax-free liquidity will increase the likelihood of preserving their family relationships after they are gone. That is not the job of attorneys, financial planners or accountants. It is the sole job of the life insurance professional. These complex planning strategies depend on all the variables coming together as predicted. Market conditions, IRS trends, economic conditions, the real estate market and several other factors all intersect, raising the chances for failure and misunderstanding. An infusion of guaranteed, income-tax-free and estatetax-free liquidity goes a long way in reducing the fears of anxious heirs, and it gives the plans time to be executed properly.

The Insured Giving Pledge Lessons

Warren Buffett and Bill Gates called on their friends who are worth at least $2 billion each to give at least half their wealth to charity during their lifetimes. From a utilitarian perspective, this request — also known as The Giving Pledge — is brilliant. Buffett is spot-on by questioning how much good his next million dollars does for him as opposed to how much good that million dollars would do for a charity. As good as The Giving Pledge is, the use of leverage would improve it. Although neither Mr. Buffett nor Mr. Gates asked for my opinion, I suggest that charitably inclined people consider a large, charity-owned life insurance policy as a condition for making the pledge. For example, assume my wife and I agree to give $25 million to the American

InsuranceNewsNet Magazine » November 2017

Heart Association during our lifetimes. Simultaneous to making the gift, a $25 million survivorship life insurance policy will be purchased with one payment of $5 million. As a result, the total value of our $25 million gift increases by 100 percent, to $50 million. Here’s how The Giving Pledge with life insurance works in this situation. 1. Pledge and transfer $25 million to charity. 2. Upon receipt of the gift, the charity purchases a $25 million life insurance policy. 3. A single premium of $5 million buys a $25 million policy on the donors, with an immediate $5 million cash surrender value. 4. After the insureds die, $25 million is paid to the charity. There is no “cost” because this is simple leverage using the donors’ insurability. Those who already made The Giving Pledge might consider scaling this strategy to the maximum amount of insurance on their lives. A $1 billion gift could be increased to $1.5 billion by including life insurance.

Change the Starting Point

Your clients can reduce the chances of wealth destruction by answering a series of important questions at the outset. »» Which children cannot handle money now, or ever? »» Which heirs do you support now? »» Which heirs will need support forever? »» Which children don’t need or want an inheritance? »» Should you include a penalty for contesting your will? Finally, this may be your client’s last act of “tough love” for their heirs. Part of our role going forward will be to help the client understand that children who are problematic during their lifetime are likely to become grownup children causing problems after the client’s death. Screaming “fraud” repeatedly in court is like yelling “fire” in a crowded theater. I view it more clearly now than ever before. Ted Bernstein is the principal of Life Cycle Financial Planners, a retirement planning and wealth preservation company located in South Florida. Ted may be contacted at







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Annuity Buyers Have a Need for Speed In an age when consumers have the ability to purchase almost anything with a few keystrokes or taps on a smartphone, the annuity-buying process almost harkens to the days of the Pony Express when it comes to speed. The annuity-buying experience continues to lag behind the rest of the financial services industry. That was the word from Kevin Kennedy, managing director and head of individual annuity for AXA Distributors in New York, at the Insured Retirement Institute’s annual meeting. The buying process around fee-based and commission-based annuities cries out for more speed and simplicity. This becomes more urgent as milions of baby boomers look to retirement income solutions to compensate for their gradually evaporating defined benefit plans, he said. Kennedy called for greater use of financial technology — or fintech — to streamline the annuity buying experience.


When we think of civilization, we think of things like fire or architecture, or we think of a course we had to take when we were in college. Could it be that annuities also are part of civilization? That was the thought from psychologist Ken Harman, managing director of the AB Advisor Institute. Harman told attendees at the Insured Retirement Institute’s annual conference to think of risk pooling as an act of civilization. For decades, annuities have been sold narrowly as income products with bells and whistles. But a wider view would help advisors communicate more context for annuities, which are going to become a vital part of the solution to the coming retirement crisis, Harman said. As Harman described it, a fire insurance DID YOU




policy pools, or dilutes, the individual risk of property loss among thousands of policyholders who pay the premiums. It’s much the same concept for annuities, because they guard against individuals outliving assets through a similar risk-pooling mechanism.


Identity thieves are everywhere, and even annuities aren’t safe from this type of fraud. The Nebraska Department of Insurance issued a consumer alert that an insurer

Cathy Weatherford, Insured Retirement Institute president and CEO, said she will retire from that post in December 2018.

InsuranceNewsNet Magazine » November 2017


There 11 companies offering Startarethe conversation QLAC (qualifying longevity annuity as income insurance, not an contract) annuity. products. While this is a small and new part of the DIA —market, Jamie Cox,we managing director expect to see an uptick of Harris Financial Group in sales in 2016. reported several attempts to disburse funds from annuity contracts held by that state’s residents. The insurer’s security measures stopped the fraudulent transactions, the department said. According to the insurer, those responsible for this attempted fraud possessed personal information associated with the annuity account, including specific contract numbers and Social Security numbers.


Delaware Life Holdings rebranded to Group One Thousand One in September. Now its subsidiary, Delaware Life Insurance, is boosting its distribution network and making its mark in the fixed indexed annuity world.

In the past year, Delaware Life added new independent marketing organizations and five new independent broker/dealers (IBDs) to its distribution network, according to A.M. Best. The five IBDs alone added 10,000 independent financial advisors to the company’s distribution platform. Delaware Life bought Sun Life Financial’s U.S. annuity business and built out from there. Today, the company’s sales of FIAs rose 57 percent in the first half of 2017 to $416 million compared with the year-ago period, according to Wink’s Sales & Market Report. Sales of Delaware Life’s multiyear guaranteed fixed annuity rose 4 percent in the first half of 2017 to $660 million compared with the year-ago period. The company was the No. 5 MYGA seller in the U.S. in the first half of this year.

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Carriers Releasing More Fee-Based FIAs More companies are adding fee-based fixed indexed annuities to their product mix, as the industry adapts to the fiduciary rule. But will advisors warm to selling them? By Cyril Tuohy


ore insurers are adding to the stream of fee-based fixed indexed annuities (FIAs) in the marketplace. Fee-based FIAs are designed to make it easier for advisors to sell under the Department of Labor’s (DOL’s) fiduciary rule, key parts of which have been delayed until July 1, 2019. But will advisors warm to fee-based FIAs? In time, fee-based products will rise in popularity as advisors become more familiar with them, said consultant Howard Schneider, president of Practical Perspectives, who regularly surveys the advisory market. But for now, fee-based FIA sales remain a blip on the FIA sales screen.

Fee-Based Sales Tiny but Growing

The industry reported an estimated $21 million in fee-based indexed sales in the second quarter. That was double the volume from the first quarter but still a fraction of overall indexed sales, according to LIMRA Secure Retirement Institute. FIA sales, the bulk of which fall under a commission-based transaction, will range between $50 billion and $60 billion this year, after coming off a record $58 billion in sales last year, according to 48

market forecasts. Still, there are many more fee-based FIAs on the market now than there were a year and a half ago, when they were almost nonexistent. Since August 2016, fee-based FIAs have been launched by Great American, Voya Financial, Allianz Life, Nationwide, Lincoln Financial, American Equity and Nationwide. Ohio National Financial Services, which entered the FIA market for the first time earlier this year, said it has plans for a fee-based version of its ONdex FIA. American Equity Investment Life Holding’s first fee-based fixed indexed annuity, marketed as Eagle Advisory 8, was launched at the end of August 2017. It joined commission-based Eagle Select 6, Eagle Select 8 and Eagle Select 10 in Eagle Life Insurance’s FIA line. Eagle is a

subsidiary of American Equity. Most recently, Symetra Life joined the ranks of the fee-based FIA issuers with the launch of Symetra Advisory Edge and Symetra Advisory Income Edge.

Equity Index Annuities Attract Flows

Fee-based FIAs offer independent advisors more choices in the face of the Department of Labor’s fiduciary rule, designed to limit conflicts of interest found in commission-based sales. FIAs, which base interest earned on an increase in an equity index, have also been helped by strong equity market performance. Also, money that in the past would have gone into variable annuities is now going into indexed annuities, market analysts said. With the Standard & Poor's 500 index up 10 percent this year, FIAs can potentially

The Shift to Fee-Based Annuities Twenty-one percent of advisors surveyed said they plan to increase their use of fee-based or low-cost annuities as a result of the Department of Labor fiduciary rule. The percentage of advisors who said they plan to increase their use of fee-based annuities varies by channel — 6 percent of registered investment advisors said they plan to do so, compared with 31 percent of independent advisors and 25 percent of full-service advisors. Source: “Financial Advisors and Insights on Implementation of the DOL Fiduciary Rule, Q3 2017” by Practical Perspectives

InsuranceNewsNet Magazine » November 2017

CARRIERS RELEASING MORE FEE-BASED FIAS ANNUITY earn a higher return than other safe money alternatives. Agents who sell FIAs have shifted their attention from guaranteed income to accumulation-focused products with “upside potential,” Ron J. Grensteiner, president of Eagle Life and American Equity Investment Life, said in a recent conference call with analysts.

Shifting in Favor of Fee-Based Products

Regardless of the fiduciary rule’s longterm fate, advisors in broker/dealer channels will continue shifting to fee-based products, a survey found. Likewise, advisors say they expect changes in how they manage rollovers from employer-based retirement plans, concluded the survey published by Practical Perspectives. Trends toward fee-based products aren’t new, but the fiduciary rule gives further impetus to the shift, Schneider said. “The DOL rule seems to propel them even more” to fee-based products, he added.

The survey results were published in a report titled “Financial Advisors and Insights on Implementation of the DOL Fiduciary Rule, Q3 2017.”

Challenges With Fee-Based Products

Fee-based products aren’t without their challenges, Schneider said. Advisors questioned whether they should accept a fee from a fee-based income annuity, for example, since there’s no active management involved. “They have questions around that and are looking around for guidance from firms or regulators” to make sure they won’t run afoul of the rule, Schneider said. Whether the rest of the fiduciary rule goes into effect in 2019, or even if lawmakers decide to gut the rule, a fiduciary framework is taking hold and advisors who work through broker/dealers recognize it, he added. As a result, many broker/dealers are deeply involved in offering advisors feebased products and implementing fiduciary procedures.

Research Conducted Before Rule Delay

The survey was conducted before Labor Department regulators announced an 18-month delay to the second phase of the rule, Schneider said. The second phase, delayed until July 1, 2019, deals with exemptions that regulate the sale of annuities sold with retirement funds. Phase two includes the Best Interest Contract Exemption, which advisors consider burdensome. The exemption requires a financial institution to accept liability for each contract and gives clients the right to sue over investment advice. A delay was widely expected and considered a win for the financial services industry. InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at

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Will Fixed Indexed Annuities Have Another Record-Setter? Between the fiduciary rule delay and enhanced features, FIAs could see a sales frenzy in the second half of 2017, some observers say. By Cyril Tuohy


he second-quarter sales rebound in fixed indexed annuities (FIAs) and the delay of the Department of Labor’s (DOL’s) fiduciary rule mean we could see a sales frenzy during the last half of the year. But will FIAs top last year’s $58 billion record? “The DOL rule is on hold, and my response to that is ‘game on’ for FIA sales,” said Sheryl J. Moore, president and CEO of Moore Market Intelligence and Wink Inc., publisher of Wink’s Sales & Market Report. “The last two quarters are likely to be much better than the first two,” she said. 50

“Will it beat last year’s sales? Probably not, but it will be close.” Second-quarter FIA sales rebounded 13 percent to $14.6 billion compared with the first quarter, though FIA sales were still down nearly 6 percent when compared to the year-ago quarter, Wink reported. Some insurers sweetened FIA features, and that helped spur sales in the second quarter, but “we still have work to do to get FIAs back on track,” Moore said. FIA gains in the second quarter over the first quarter this year outpaced the quarter-over-quarter sales increases in each of the preceding two years, according to SunTrust Robinson Humphrey analyst Mark Hughes. Overall, FIAs seem to be recovering in the wake of the first phase of the DOL rule taking effect June 9, he wrote in a second-quarter sector update to clients. But interest rate volatility may also be keeping cash on the sidelines waiting for

InsuranceNewsNet Magazine » November 2017

higher future yields, Hughes wrote. Uncertainty surrounding the fiduciary rule and a rising stock market has dampened the appeal of fixed annuities and other “safe money” products, Hughes wrote.

Some Uncertainty Swept Aside

Some of the fog surrounding the DOL rule lifted this week with the announcement that phase two of the rule would be delayed until July 1, 2019. The delay is a win for the financial services industry, as the effective date of the most punitive measures in the rule is pushed back. “It’s going to be interesting to see what exactly happens given more clarity and compliance as far as annuities are concerned,” said Bill Shelow, president and CEO of LifeMark Partners, an independent marketing organization. “There’s a chance that the numbers will bounce back,” he added.

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ANNUITY WILL FIXED INDEXED ANNUITIES HAVE ANOTHER RECORD-SETTER? In 2016, indexed annuity sales rose 10 percent to a record $58.2 billion compared with 2015, Wink reported. Insurers and distributors are still adjusting systems and procedures to comply with key elements of the fiduciary rule. Of all the fixed annuity market segments, indexed products hold the most promise for a robust second half. Without a doubt, FIAs were granted a major reprieve with the delay in the DOL rule and may yet surprise the industry with another record year in 2017.

Long-Term Sales Prognosis Is Strong

Although some annuity sales numbers are fluctuating wildly, analysts say the long-term prognosis for annuity products remains very strong. Like power changing hands from one political party to another, the money in the annuity world sloshes about between the variable and fixed buckets and back again,

“In the long term, it will not really matter, but it does cause turbulence in how some folks respond,” said Tamiko Toland, product research manager for Cannex, an annuity pricing information exchange, and a longtime observer of the variable market. Besides, insurance company executives continually remind shareholders that demographic trends favor the annuity marketplace. Americans live longer than they used to and tens of millions of them find themselves in the hunt for guaranteed income to make up for disappearing pensions, underfunded retirement accounts and the jitters surrounding the survival of Social Security.

Fixed Annuities Take the Lead

These days, fixed annuities are making a meal of their variable annuity cousins as they steadily eat into the VA market share. But while the balance of power has swung in favor of fixed annuities, it represents natural oscillation within an annuity market that has maintained overall sales of between $220 billion and $240 billion over the past five years. Last year, for the first time in a long time, fixed annuities ($117 billion) outsold VAs ($104 billion), according to LIMRA Secure Retirement Institute. That represented a record year for fixed annuities. This year, fixed annuities appear to be keeping a similar pace, according to firsthalf numbers. Fixed annuity sales came to $56.7 billion in the first half, a 54 percent share, while variable annuities sold $49.1 billion, for a 46 percent share. What a difference a half-decade makes. In 2012, fixed annuity sales finished the year with $72.3 billion in sales, but variable annuities more than doubled that figure with $147.2 billion in sales.

“People keep saying there’s a big downturn, a big downturn, a big downturn, but I don’t see it. I think it’s a strong market.” analysts say. Some numbers look bad, but can be misleading in the big picture. “People keep saying there’s a big downturn, a big downturn, a big downturn, but I don’t see it,” said Jeremy Alexander, president of Beacon Research, a provider of annuity data. “I think it’s a strong market.” The tax-deferred nature of annuities renders them “sticky,” like money staying within the family, so it’s not as if banking products are stealing annuities’ thunder, he explained. Consternation around the lowest firsthalf sales numbers in 16 years doesn’t seem to bother Alexander. He noted that fixed and variable sales collectively have remained in the $200 billion to $250 billion range for many years. 52

Volatility, Yes. Death Spiral? No

Despite the long-term stability of the annuity market, there has been plenty of

InsuranceNewsNet Magazine » November 2017

short-term volatility, data show. And there is no shortage of reasons: fiduciary regulations, rising interest rates, investment restrictions in the variable annuity space, a block of fixed-rate deferred annuities coming due in the first half of last year, and insurers “managing down” their variable annuity portfolios. The upshot has sent the annuity market sideways as subsegments rise one quarter and fall the next, or as niches rise even as an overall annuity segment shrinks. “We’ve had a lot of volatility around expectations [from] DOL. When you look at the movement and take a step back, that’s what it is,” Toland said. One of the fixed annuity segments on the receiving end of that volatility has been indexed products. Indexed annuities finished last year with a record $61 billion in sales, a 12 percent increase from 2015. This year, those products saw first-quarter sales drop 13 percent to $14 billion before rebounding with nearly $16 billion in second-quarter sales. In the spring, after the release of first-quarter sales, analysts doubted that 2017 would turn into a record year for indexed annuities. But, as Moore said earlier, it’s “game on” for the indexed segment in the second half of the year. Last year, the annuity industry was gearing up to implement the fiduciary rule, resigned to the fact that a Hillary Clinton White House would push to regulate the financial services sector even further. Instead, the industry awoke to find a new president calling for a moratorium on Obama-era financial regulation, and now major parts of the fiduciary rule are not expected to be implemented until next year. No wonder the annuity market is suffering from a severe case of whiplash. InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at

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Ex-Obama Officials Push Enrollments Efforts to repeal the Affordable Care Act may be at a stalemate, but that hasn’t stopped open enrollment season from coming around again. This year’s enrollment efforts are getting a boost from some former Obama administration officials. They are undertaking a private campaign to get Americans to sign up for coverage when enrollment season begins Nov. 1. The Trump administration has slashed the ad budget, as well as grants to navigator organizations that are supposed to help people sign up. The former Obama officials said their campaign will focus on young adults and try


The Department of Labor fiduciary rule does not apply to only products such as annuities. The rule also applies to health savings accounts (HSAs). In its rule, the DOL determined that HSAs have associated investment accounts that can be used as long-term savings accounts for retiree health care expenses, and that HSA account holders are entitled to receive the same protection as individual retirement account (IRA) owners. HSAs are individually owned accounts that are typically structured so that they are not employee welfare benefit plans subject to the Employee Retirement Income Security Act (ERISA) and its compliance requirements. However, the DOL rule covers advice offered to participants in non-ERISA plans, including IRAs and HSAs. Employers may be impacted by the final rule if they: 1) provide investment advice to their employees concerning HSAs, or 2) benefit from such advice being given to





They’ve been growing slowly and steadily since the day they were introduced in 2004.

to encourage people to sign up for government-backed private health insurance because of subsidies available to cushion the impact of rising premiums. The effort is headed by Lori Lodes and Joshua Peck, who directed outreach and sign-up efforts during much of former President Barack Obama’s second term. Joining them is Andy Slavitt, who served as Obama’s acting administrator for the Centers for Medicare and Medicaid Services (CMS) from 2015 to 2017. their employees (such as revenue sharing in connection with a specific HSA investment, or compensation for directing employees toward a particular HSA vendor).


Home-based long-term care services have long been touted as less expensive than care given in an institutional setting. But the cost of those home-based services is escalating, according to the 2017 Genworth Cost of Care Survey. The greatest percentage increase in longterm care costs went to home health aide services, which went up by a median of 6.17 percent to $21.50 an hour. The median cost of homemaker services also

87% of Americans want health insurers to cover pre-existing conditions.

InsuranceNewsNet Magazine » November 2017

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jumped – by 4.75 percent to $21 an hour. Although those increases were substantial, the cost of home-based services is still dwarfed by the cost of nursing home care. The median cost of a semiprivate nursing home room went up 4.44 percent to $7,148 per month, while the median cost of a private nursing home room went up 5.5 percent to $8,121 per month. What’s driving the higher costs for homebased care? Rising minimum wage in some states, shrinking profit margins, and service providers passing costs on to clients, said Jennifer Johnson, clinical director of the Genworth-owned company Carescout, which conducted the survey. Home health care aides, who often commute, sometimes travel long distances for clients and those costs are also a factor, Johnson said.


How much are Americans really willing to spend on health insurance? HealthPocket asked that question and found that more than half of the respondents said $100 was the most they could spend each month on health insurance. The $100 monthly ceiling was compatible with the $106 average monthly premium paid in 2017 by those who qualified for subsidized coverage under the Affordable Care Act (ACA). But for those who do not qualify for subsidies, the cost of coverage is much different from the $100 that the majority state is their ideal premium limit. The average monthly 2017 premiums across the nation for a 40-year-old nonsmoker for each of the four standard ACA plans are $350 for bronze, $411 for silver, $522 for gold and $623 for platinum.


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Breaking Into the Public Sector Market Government workers and public school employees can be a ripe market for benefits, if you know how to break in. By Stephen L. Pontecorvo


hether they are employed in state, local or federal government or public K-12 schools, colleges or universities, a significant percentage of today’s workforce is engaged in public service. About 15 percent of Americans work in the public sector, according to the U.S. Bureau of Labor Statistics. This market traditionally has not been a focus for many brokers and advisors. However, helping to meet the needs of the dynamic public sector workforce presents an opportunity for advisors to expand their businesses, particularly with 56

respect to state and local government and public education. According to the public sector findings from “MetLife’s 15th Annual U.S. Employee Benefit Trends Study,” employers in this group — including state and local governments and public education employers — are seven percentage points more likely than employers in general to plan to put benefits out to bid. Yet they’re 10 percentage points less likely to consult with a broker or advisor. Because public sector employers anticipate the need to evaluate their benefit offerings, and the market is not currently highly served by brokers and advisors, now is a prime opportunity to engage. But before diving in, it is important to understand the sector and its subsegments, as well as the unique challenges facing public sector employers — and their workers.

InsuranceNewsNet Magazine » November 2017

Challenges Facing the Public Sector

Despite a strong economy and high levels of consumer confidence, employees on the whole continue to be worried about their finances. This worry is especially acute in the public sector. On average, public sector employees feel six percentage points less in control of their finances, and eight points more financially worried than employees on the whole, the study revealed. This financial stress is affecting how public sector employees, particularly those in state and local government, think about retirement and working afterward. More than half of state and local government workers said they plan to return to work after retirement. However, the reasons why state and local government workers are returning to work are very different from those of employees on the whole, according the study. Government employees are going back to work due to financial concerns, whereas employees in general plan to work after retirement for personal fulfillment. For example, 61 percent of state and local government workers said they plan to work after retirement to pay current bills, compared with only 46 percent of employees on the whole. More than 70 percent of state

BREAKING INTO THE PUBLIC SECTOR MARKET HEALTH/BENEFITS and local government workers also said they plan to continue working after retirement age to accrue money for retirement later on, compared with only 50 percent of employees in aggregate. When it comes to other reasons to work after retirement — such as getting out of the house — only about a quarter of state and local government employees said this is a reason to work after retirement. This compared with about half of employees in general, the study found. As more and more workers become eligible for retirement, public sector employers know they have a role to play in boosting their employees’ financial confidence. The study shows that nearly all (85 percent) public sector employers agree they have a responsibility for the overall health and well-being of their employees. And the “silver tsunami,” or growing number of retirement-eligible public sector workers, will continue to be an issue for state and local governments. According to research from the National Association of Counties, state and local government experienced a 54 percent higher number of retirements in 2016 than in 2014. Voluntary benefits play a key role in meeting employees’ personal finance needs, but the public sector still needs education and adoption to continue to expand these offerings to employees.

they plan to increase their voluntary offerings, and that number drops to only 18 percent among state and local government, according to the study. Looking at state and local governments specifically, fewer than a third are currently offering supplemental health benefits such as accident insurance, critical illness and hospital indemnity plans, the study revealed. This presents a key opportunity for brokers and advisors to engage. Brokers and advisors have been critical to driving the importance of strong employer voluntary strategies in the private sector, and the same counsel and expertise can be applied to public sector clients.

45% of employers overall plan to increase the number of nonmedical benefits offered to workers in the next one to three years.

Voluntary Benefits in the Public Sector

Over the past several years, the growth of voluntary benefits in the private sector has exploded. Driven by skyrocketing health care costs and increased employee expectations, private sector employers are keenly interested in offering voluntary benefits to help their employees feel financially secure. They’re doing this by offering voluntary supplemental health products such as accident insurance, critical illness insurance and hospital indemnity plans that can offset gaps not covered by medical insurance. These plans may also provide access to other types of financial protection such as legal services plans and even insurance for pets. As they look ahead, 45 percent of employers overall plan to increase the number of nonmedical benefits offered to workers in the next one to three years. However, only 37 percent of public sector employers said

Getting Your Foot in the Door

As you think about engaging in the public sector market, consider its unique needs, particularly when it comes to addressing the financial wellness needs of public sector employees, and the challenges public sector employers are facing. To begin to engage, keep the following tips in mind. Understand the rules of engagement. The benefits that public sector employees receive are funded by tax dollars. Therefore, request for proposal processes in the public sector may be subject to more rigid parameters than those in the private sector. Anticipate some red tape, but don’t let that stop you from making the right recommendations to help employers engage their employees. According to the study, more than half of public sector employers

now allow brokers, consultants and carriers to make recommendations for products or services not specifically requested in the RFP. Lend the expertise the public sector seeks. When it comes to the advice that public sector employers are seeking, they’re particularly interested in a few areas, the study shows. More than employers in general, public sector employers value advice and insights into employee needs, new and innovative benefit solutions, and product bundling. Know controlling costs is top of mind. The public sector continues to be concerned with controlling benefit costs. In fact, 83 percent of public sector employers say that controlling health and welfare costs is an important benefits objective, compared with 79 percent of employers in general. This reinforces the opportunity for strong voluntary strategies that can provide workers with the choice they’re seeking, but without adding significant cost to employers’ bottom lines. Think beyond working years. With a significant number of public sector workers set to retire, retiree benefits are top of mind for both employers and employees. Make sure they understand retiree benefit options, and also discuss portability with current or potential public sector clients. Interest in portability in the public sector has risen dramatically over the past couple of years from 50 percent in 2014 to 67 percent in 2016, according to the study. As pensions for state and local government workers continue to face cost pressures, recommend alternatives such as annuities. Opportunity awaits brokers and advisors in the public sector market. By understanding the unique needs and challenges of this important sector, you’ll be well-positioned to engage and lend the expertise as a broker or consultant partner that the private sector has long valued. Stephen L. Pontecorvo is vice president of MetLife’s Group Benefits National Accounts U.S. Government Customer Unit, which provides benefits solutions to the federal government, public sector and sponsored affinity groups. Stephen may be contacted at

November 2017 » InsuranceNewsNet Magazine



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Americans Really Fear The Swamp Thing The list of things that go bump in the night goes on and on when thinking about what would most threaten the U.S. economy over the next six months. There’s terrorism, rising interest rates, a stock market drop, war with North Korea, and so on 36% — Political Environment and so forth. But most Americans believe the big24% — North Korea gest threat to the nation’s economy comes from what many call “the swamp” 10% — Rising Interest Rates — Washington, D.C. A survey found that 36 percent of Ameri10% — Terrorism cans believe the political environment in Washington is the biggest threat to the 8% — Declining Stock Market U.S. economy. Washington beat out the next four choices: the threat posed by North Korea (24 percent), rising interest rates (10 percent), terrorism (10 percent) and a decline in the stock market (8 percent).


Despite an improving economy, Latinos lag behind other population groups in the U.S. in financial security, a study said. MassMutual found middle-income Latinos in the workforce feel less financially secure and worry more about money than do other Americans. Unlike other consumer segments, debt and the cost of living tie as the top issues that face Latinos in their households. Latinos in the workforce find it more difficult than others do to manage their monthly finances, and nine in 10 attribute this difficulty to high levels of debt and not having enough money. Latinos in the workforce are less likely than others are to have at least $5,000 set aside for emergencies. A key concern for Latinos is the well-being of their parents and their own personal health. More than half worry about household finances at least once a week. DID YOU




MILLENNIALS SAVING MORE FOR RETIREMENT THAN PRIOR GENERATIONS DID You gotta hand it to the millennials — they’re acting more like grownups when it comes to planning for their financial future. Members of this generation are casting off the image of being underemployed and over-indebted. They’re saving more for retirement than are members of other generations, according to the Insured Retirement Institute’s most recent survey. IRI’s research showed more than half of millennials are making contributions to 401(k) accounts, and about four in 10 are contributing to their personal savings. This is a higher savings rate than

It cost consumers $4.1 billion to freeze their credit reports after the Equifax data breach. Source: Renaissance Capital

THE AVERAGE RETURN ON AN INITIAL PUBLIC OFFERING was 20 percent this year. The average increase in the first day (or “pop”) is 13 percent. Source: CNBC

InsuranceNewsNet Magazine » November 2017

Source: LIMRA

People are coming into retirement with a lot more anxiety and a lot less buying power. — Teresa Ghilarducci, a labor economist who specializes in retirement security

that of the baby boomers and Generation X. What’s motivating the millennials to get serious about retirement saving? One word — freedom. Millennials see freedom as the biggest retirement benefit of all, and they view themselves as being on their own when it comes to retirement income.

ADVISORS WANT SUPPORT FOR ACTIVE MANAGEMENT Investment advisors will use active management, often over passive investment portfolio strategies — but only under specific conditions. That’s one of the findings of a survey by Practical Perspectives. During the next 12 to 24 months, 30 percent of advisors who use active portfolio management models said they would increase their usage of active management. Advisors who deploy active portfolio management at their firms demand access to low-fee investments, want greater clarity and transparency on active management strategies, and fresh data insights on investment issues, the report found. Better customer service is a must have as well.



November 2017 » InsuranceNewsNet Magazine


What really matters when

CHOOSING A RIA? — INVESTMENT ADVISOR CHECKLIST — Not all RIAs are created equally. With regulations and the industry shifting towards a holistic approach to advising, there have never been more Advisors adding RIA services to their firms. Fiduciaries are popping up seemingly overnight. So, how do you know what to look for when choosing a RIA? Recently named the #2 Fastest Growing RIA in the Nation, Brookstone Capital Management outlines what matters most when searching for a RIA to support your practice.

PERFORMANCE: * Do they have in- house investment intelligence? * Do they take a risk - managed approach that also captures market upside? * Will you have the freedom of choice and a flexible open architecture platform? * Do they have a track record of competitive returns in all market cycles?

THE RAISE INVESTMENT PHILOSOPHY The Brookstone investment philosophy is referred to as “RAISE,” which stands for Risk Appropriate Investment Strategy Evaluation. The concept is simple, as they aim to achieve six important goals:

1 2 3 4

Deliver competitive returns


Utilize a combination of strategic/tactical and active/passive approaches


Focus on goals-based performance and do not chase benchmarks

Avoid large losses or drawdowns Incorporate a risk-managed approach Offer both brand name and boutique money managers


Over the past few years, many RIA firms have relied solely on using defensive tactical management, which is designed to perform in specific market cycles with limited upside capture. Understanding the need to provide clients with positive returns and to protect against potential downside, Brookstone created the RAISE 360 Select model portfolios. The RAISE 360 Select model portfolios are designed to be competitive throughout changing markets and are a globally diversified blend of strategic and tactical components. Each model aligns with a specific risk profile using a range of equities and fixed income vehicles engineered by a seasoned investment committee. Brookstone truly believes that this approach gives clients the security of downside protection, while still participating in upside performance, and the results have validated this.


InsuranceNewsNet Magazine » November 2017

EXPERIENCE: * Is there stability in growth / how much ? * Do they have a solid track record / how many years in business? * Do they provide DOL-ready service and support? EXPERIENCE MATTERS

Recently surpassing 2 billion in assets under management and on the heels of being named the #2 fastest growing RIA in the nation, Brookstone has more than doubled its AUM over the past three years. With a network of over 350 affiliated Advisors, Brookstone has reached the top by being laser focused on providing an all-inclusive infrastructure that will help Advisors start, build, and grow their businesses. “Our structure is that of a true partnership for Advisors with the mutually beneficial goal of asset growth.” – Founder and CEO Dean Zayed

TRAINING: * * * *

Is their training targeted to multiple experience levels? Do they focus on all aspects of an advisory practice _ not just education of investment models? Do they have experienced instructors and an experienced leadership team? Is there onboarding available for insurance agents entering the RIA space?


The financial advisor’s job has never been more complex than in today’s volatile global economy. At Brookstone, we place a premium on providing the most comprehensive education and training possible. Brookstone’s Positioning Advisors for Success Series (PASS) is an expansive, multi-level training program built to suit any advisor’s experience level. Led by our Founder and CEO, Dean Zayed, this comprehensive professional development series is also enhanced by sessions with our portfolio managers and several guest experts representing some of the most innovative thinking in investment management today.

SERVICE: * * * *

Do they have proven service/support? ( Ask to talk to current advisors) Do they have "on- call" advisor support? How do they _ and how often do they - measure advisor satisfaction? Are personal interaction and relationships prioritized?


Brookstone has 40+ employees who are on-call to help Advisors grow. Each and every employee has the singular goal of doing whatever it takes to satisfy the needs and concerns of our Advisors. “Ritz-Carlton defined high level service in the hotel industry. Our goal for Brookstone is to reach that same pinnacle of service in our industry,” said Zayed.

To learn more about Brookstone and their philosophy that everything matters, visit November 2017 » InsuranceNewsNet Magazine


Pies Are for Dessert: What Clients Really Need Is a Plan A pie chart may look impressive. But what’s more impressive is an advisor’s ability to be effective in meeting clients’ retirement income goals. • David Stryzewski


fter your clients reach age 50, they need more than a pie chart. They need a retirement plan. I meet with many retirees and preretirees who tell me they have been “working with a retirement planning firm for years.” Yet when we dig into what they actually have, often there is not much more than a diversified pie chart of stocks, bonds and mutual funds. What’s astonishing to me is that many of the big Wall Street firms that are considered by most to be trusted names in finance have been hanging their shingles out as “retirement planning firms.” However, we find that very few of these firms have done much to advise their clients on issues such as maximizing their Social 62 62

Security benefits or efficiently coordinating withdrawal strategies that will help clients minimize the impact of taxes on their retirement income streams. In the face of lackluster advice and the inability of many money managers to beat their benchmarks over time, wouldn’t you agree that an investor nearing retirement should question whether they’re really receiving valuable advice and whether they truly need to pay someone to help them? This thinking is the reason why we’ve seen such a dramatic migration away from the traditional advisor/client relationships to the passive, low-cost indexing platforms that Vanguard and many 401(k) platforms have made available. What I find unfortunate is that many investors have made up their minds to have a “do-it-yourself ” retirement with advice through an 800 number. This approach doesn’t give retirement investors the opportunity to truly evaluate the strategic long-term and tactical short-term decisions that they should be making.

InsuranceNewsNet Magazine Magazine »» November November 2017 2017 InsuranceNewsNet

As you know, someone who is in the accumulation or savings phase of their life has completely different needs than someone who is entering the distribution or spending phase. In retirement, the rules change. Our clients’ paychecks stop coming in, and they become dependent on funding their retirement through various savings accounts and defined benefits programs such as Social Security. These folks now need to focus on the preservation and distribution of their assets, as opposed to accumulating them and seeing how they have performed over the past 12 months.

The Value Advisors Provide

I want to summarize a few studies that Morningstar and Vanguard have compiled independently to identify whether there really is a quantifiable value that an advisor can provide beyond a good pie chart. There are many things that we cannot control, such as what the markets will do on a year-over-year basis. But there are


plenty of things that we can do through strategic coordination that will help us identify efficiencies and inefficiencies in funding our clients’ quality of life, which can make a considerable difference. Each investor has different goals that change how they would describe a “good financial decision.” But, for the sake of this discussion, let’s say that it’s not the highest potential return. Instead, the definition of a good financial decision depends on the effectiveness of meeting financial goals. For most clients, this refers to their quality of life in retirement. These third-party, independent sources have shed the light of math and science on what really is the true value of an advisory relationship and what retirees look for in their relationship with an advisor.


Vanguard conducted a study, “Putting a Value on Your Value,” that showed the potential impact that a financial advisor’s knowledge and experience can have on the growth of clients’ retirement accounts. The study considered three best prac-

What I find unfortunate is that many investors have made up their minds to have a “do-it-yourself” retirement with advice through an 800 number. tices that investors can use when controlling their accounts. These best practices are not necessarily geared toward getting the highest return for all investments. Instead, they accounted for several other factors, such as reducing tax liability and investment or transaction costs and managing risks. The study found that a retirement plan, if properly managed by an advisor, can produce as much as a 3 percent net benefit beyond a plan managed by a do-it-yourself (DIY) investor. The advisors were able to find these extra growth opportunities by focusing

on low-cost investments — those with low expenses. Advisors also were able to grow a client’s account by choosing appropriate accounts for tax reduction, by selecting a wide variety of investments and by focusing on total return as opposed to increased income. In addition, the advisors were able to coordinate an account withdrawal strategy, reallocate funds for the best possible scenario for tax/income purposes, and encourage their clients to hold steady to the investment plan even when things appeared to be less than desired.


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In their study, “Alpha, Beta and Now … Gamma,” the folks at Morningstar Investment Management compared the results of investors who receive professional retirement advice with the results of DIY investors — refered to in the study as “naïve investors.” Morningstar researchers took five different issues related to making good financial decisions and explained how naïve investors typically react to each issue, as opposed to the better outcome that a financial advisor could have inspired. The issues discussed in the study included 1) how to allocate the client’s total assets, 2) decisions on income planning, 3) deciding which accounts and

people have saved money in large 401(k) and individual retirement accounts, and have very few Roth or after-tax dollars. Many families today looking to retire on annual income between $50,000 to $100,000 are typically unaware of the significant things they can do to improve their ability to fund their quality of life. The single easiest improvement that an advisor can make is by evaluating and creating a distribution strategy designed to maximize the clients’ Social Security benefits over their expected lifetime. We regularly see this add anywhere from $50,000 to $200,000 in additional benefits over a lifetime. In addition to the increased monthly benefit this strategy can provide, the fact that these Social Security dollars

Using the methods suggested or recommended by financial advisors could boost clients’ retirement accounts by as much as 31 percent — or 10 years of additional income. Source: Alpha, Beta and Now … Gamma, Morningstar how many products to use in retirement planning, 4) how to leverage tax advantages through allocation and withdrawal strategies, and 5) considering expected expenses during retirement. The Morningstar study concluded that using the methods suggested or recommended by financial advisors could boost clients’ retirement accounts by as much as 31 percent — or 10 years of additional income. Many retirees today are finding out that the No. 1 expense they will have in retirement is taxes. This is because most 64 64

have tax-preferential treatment means they also will provide tens of thousands of dollars in additional tax savings over a lifetime because they now represent a larger portion of funding a quality of life. The secret to earning more from Social Security is not when you file, but rather how you file, in order to create the largest net income after taxes. Of course, these studies are limited in the extent of value that can be measured definitively. Financial advisors can add nonmonetary value in all sorts of ways.

InsuranceNewsNet Magazine Magazine »» November November 2017 2017 InsuranceNewsNet

These ways include lessening the risk of poor financial decisions caused by declining cognitive ability and protecting and supporting family members who are not as financially savvy but may be left in charge, as well as helping coordinate estate matters, Medicare and other health care decisions as clients age. Your clients most likely want to spend more time with their families and doing the things they enjoy, as opposed to tracking allocations and staying on top of tax laws. As an advisor, you need to show them that if they pay you 1 percent and they receive a difference of 4 percent, they will have netted 3 percent and will be a lot better off for it. Basically, they can’t afford not to pay you the 1 percent if you really can bring them all this value. Don't let your clients be confused about their finances as they enter retirement. I tend to believe the coordination of all these elements is something that gives people the ability to sleep at night, because they know they have a plan that takes into account the risk management appropriate to their tummy test. Everything advisors do can be quantified so that clients know they are still on track. As an advisor, you have the opportunity to show your clients your true value — by creating an actual retirement plan for them and helping them stick to the plan throughout their golden years. Again, no one knows what the market will do, so advisors must focus on the areas that matter and those they have the ability to control. Most advisory firms focus on offering a pie chart that worked fine while their clients were accumulating assets. But when it comes to retirement, you need to provide more than a pie chart. You need to be producing, evaluating and adjusting a real plan. David Stryzewski, CSA, NSSA, is a mentor for Simplicity Financial Marketing and the president of SPG Advisors, a registered investment advisory firm in Kirkland, Wash. David may be contacted at

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How Even a Little Technology Can Help Grow Your Practice You may not consider yourself to be a “techie,” but adopting a few basic forms of technology can make a difference to your practice. By Curt Whipple


et’s face it, you really can’t run a modern-day practice without using some form of technology. Technology can be the difference between a “so-so” year and a “great” year full of profit. Some of the greatest keys to a great year are making sure you have a solid system for following up with prospects, a presentation software to illustrate your recommendations to clients and a program that helps you better communicate and market with everyone who comes in contact with your firm.

It begins with a contact resource management (CRM) system

If you find your office is covered with colorful sticky notes everywhere, you may need some help — in the form of a reputable CRM system. The use of a CRM system has helped my practice in many ways. I once had a referral with a net worth of $45 million. He wanted help with doing a 1031 exchange on some real estate he planned to sell. Each time we spoke, I would make detailed notes in my CRM. I then would put on my calendar the date and time I told him I would get back to him with answers. He was impressed when I called back with all the details for which he was looking.

Although I didn’t get the sale on the 1031 exchange, the prospect said he wanted to invest $400,000 with me because he liked and appreciated my professionalism. A foot in the door, all because of good notes. You may be thinking you have no 66

time to learn a new CRM software program, but you never know what type of client a CRM system may lead you to. There are several different types of CRM systems available to financial professionals. Many advisors seem to be

I would find that prospects truly didn’t understand the level of risk they carried. I noticed that clients preferred the simple six-page client presentation that RBG offers, rather than the 25-50 pages that can overwhelm a client. Using RBG helps

Technology can be the difference between a “so-so” year and a “great” year full of profit. gravitating toward a system called Redtail Technology. Another useful CRM to check out is ACT for Financial Advisors.

It continues with presentation software

Presentation software allows you to illustrate and visually share your ideas with clients. A simple presentation software such as RedBlueGreen Concepts (RBG) can build illustrations in 15-20 minutes. The ease of an RBG-illustrated plan helps clients make educated and informed decisions. Another great thing about RBG is

that there is a model for securities-licensed professionals, as well as life-only advisors. RBG is designed to make sure your client has the right amount of money diversified, in regard to risk tolerance, suitability and Department of Labor fiduciary rule requirements. Many advisors find that clients tend to be overweighted in higher-risk investments (stocks, bonds and mutual funds). I use RBG in my office even though I am signed up with several other presentation software programs. Prior to using RBG,

InsuranceNewsNet Magazine » November 2017

present both a pictured scenario and a numerical scenario, so all parties involved understand what is best for them. Since utilizing RBG, I have seen my annuity sales grow substantially. With this program, I have doubled, and in some cases tripled, the conservative investments clients showed an interest in, which would result in a more balanced and possibly safer approach to their futures. Some other presentation software programs include MoneyGuidePro and eMoney Advisor. These programs develop comprehensive plans that present a much larger presentation to the client. While a larger presentation may be better for one client, a simple presentation may be best for another. Therefore, it is important that you understand your clients and their needs before choosing which software program to use.

It ends with a communication/ marketing program

Another form of technology that is critical to your practice’s success is an effective communications/marketing program. My favorite is Infusionsoft. It allows my firm to communicate with both prospects and clients. Preset emails can be set up and automatically delivered to welcome clients to the firm, remind them about upcoming appointments, inform them of products


HOW TO RUN A SEMINAR WITHOUT IT RUINING YOU BUSINESS or invite them to a seminar. This list goes on and on. Because of Infusionsoft, I obtained a client who had millions of dollars to invest. I conducted a client event that focused on tax savings. A local CPA spoke and I did my own presentation as well. One attendee was on our “drip” list of people who

It’s now possible to write HUGE whole life insurance contracts without buying leads, wasting money on SEO placement or hosting seminars for plate-lickers!

attended one of our introductory workshops, but never came in for an appointment. Thanks to Infusionsoft, he automatically got an invitation and he attended the saving-on-taxes event. After this event, he decided to schedule an appointment and he eventually moved millions of dollars to my firm. I know this never would have happened if not for Infusionsoft, because we would not have had the time to invite past workshop attendees.

Make time for technology

Most people in the financial services industry believe they are too busy doing things that are urgent. As a result, they miss the opportunity to do the important things that could take them to the next level. Don’t let this happen to you. Block some time in your calendar each week to investigate all the technology options available to you. Then narrow it down to the top three. Finally, choose one that you want to begin using and book two hours per week to dive into learning the program you have chosen. You may invest upward of 104 hours during the first year of learning your chosen technology. But it’s important to remember that the right technology could change your business, your life and even your family. Whether it is a CRM, presentation software or communication/ marketing program, your time will be well invested. Even more significant: You could double or triple your income as a result. Curt Whipple, CWS, CEP, is founder of C. Curtis Financial Group in Plymouth, Mich. Curt may be contacted at curt.

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Too Many Clients Underestimate Their Flood Risk Two devastating hurricanes illustrate the need to help clients create a plan to assist them with rebuilding their homes and finances in case of a natural disaster. By Jocelyn Wright


ver the span of several days in late August, I was consumed with the news coverage of Hurricane Harvey and its impact on the Houston area. I was especially concerned about the devastation because I called Houston home for nearly nine years. Therefore, I was personally aware of how easily the area can flood after a heavy downpour, let alone after a hurricane. I’ve often said that, having been born and raised in Philadelphia, I will gladly take a blizzard over a hurricane any day. At the time I wrote this column, at least two additional named hurricanes were building strength. One of them — Irma — ended up being even more powerful and devastating than Harvey. You can imagine my anxiety as reports showed countless families being rescued from their homes with just the clothes on their backs. Some were even barefoot. The image that circulated on social media of the elderly women in the nursing home sitting calmly in waist-deep water waiting to be evacuated was just one of many examples of how vulnerable people were during the storm. It was heartbreaking to watch the devastation unfold in real time and hear the countless number of stories of people who lost their homes, cars and possessions. What was even more devastating is learning that only 20 percent of properties in Houston were covered by flood insurance, according to the Federal Emergency Management Agency (FEMA). Rebuilding will be long and expensive because tens of thousands of homes were impacted. It is estimated that damages will be more than $160 billion, making Harvey 68

the most expensive natural disaster in U.S. history. This surpasses the damage from Hurricane Katrina and Superstorm Sandy. As people slowly begin to return to their homes to assess the damage and start the long rebuilding process, these are a few of my thoughts. Now is a good time to sit down with clients and complete an insurance review that includes property and casualty coverage. Far too many people still believe that flooding is covered under their homeowners or renters insurance policy. Flooding is the most common natural disaster. It occurs more often than we realize and not only in flood zones. Additionally, clients who own artwork or other collectibles should be sure to have these items properly appraised and listed on their insurance. Re-evaluate or establish backup recovery plans to determine how they will access files in the event they are displaced from our homes or offices. Many online tools are currently available to store documents securely. In 2007, I became a believer in eMoney’s Vault after reading an article about an advisor in Louisiana who encouraged his clients to set up their personal websites on the system and upload documents. As a result, his clients who were unable to get back to their homes after Katrina could access insurance policies and other important documents from wherever the clients were. Including a household inventory is also important. This is a detailed list of major household items that includes a photo, date of purchase, cost (receipt if available)

InsuranceNewsNet Magazine » November 2017

and serial number for major appliances such as a refrigerator or washer/dryer. This information will be extremely helpful for any insurance claims. Emphasize the importance of maintaining an emergency fund and/or having access to a line of credit. This could provide the resources for temporary shelter if clients are displaced. It’s also a way for clients to access essential funds needed to begin repairing and replacing lost and damaged items. For advisors who have clients impacted by the storm, be sure to reach out to them early and often. Being a resource for information on such things as how to file a claim with FEMA or how to request a distribution from their accounts can be especially helpful. Other ways to help may be volunteering your time or talent to assist those in need. Let this year’s hurricanes be a reminder that natural disasters have no regard for race, religion or political affiliation. I pray that the selflessness and compassion that we see being demonstrated by neighbors and even complete strangers lasts longer than the current news cycle. Material possessions can be replaced but people cannot. Jocelyn Wright is the chair of the State Farm Center for Women and Financial Services at The American College. Jocelyn may be contacted at jocelyn.wright@


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

What Separates Top Producers From the Rest of the Pack There are traits that all top producers have in common. By Robert A. Arzt


hy does one producer outperform another producer who has a similar background, training and experience? What traits separate top producers from the rest of the pack? For many years, sales organizations have invested a great deal of money on profiling their top salespeople to develop competency models that accurately describe which traits set their top performers apart from everyone else. The hope was to use these models to make better hiring decisions, thus increasing the chances of bringing more successful producers onboard. The reality is that one size does not fit all. Studies show that top producers who specialize in a niche market need a different skill set from those who work in multiple industries. As you might imagine, there is a great deal of overlap as well. With that as background, I found that some characteristics of top producers are not obvious to most outside observers. In fact, some traits might even surprise you. Curiosity – Top salespeople are naturally curious. They consistently ask themselves, “Is there a better way to do this?” They are also very inquisitive when speaking with their clients and prospects. Their goal isn’t just to get through their fact-finding process, but to navigate the conversation with intense interest as well. They want to connect with their clients on a deeper level and develop a better relationship with them. They achieve this by asking relevant questions that spark meaningful conversations. Follow-up – Top producers are aware of how difficult it is to obtain a new client and how easy it is to lose one, especially through lack of effective and consistent follow-up. So they make sure they deliver on the commitments they’ve made during

the sales process on a timely basis. They don’t let too much time elapse without touching base with their clients to give them updates. After the sale, they have a well-defined written-out process to keep in touch. Some touches are personal; others may involve newsletters, birthday cards, notes and client-appreciation events. Masters of time – This trait probably doesn’t come as a surprise. You would expect that top producers are good at time management. But they go well beyond it. They are ruthless with their time. They know what the highest and best use of their time is every day. They automate what they can, delegate efficiently and effectively, and know how to hold others accountable. They also schedule an adequate amount of time to work on their businesses and not just in their businesses. They reflect, strategize, plan, and create goals and progress benchmarks for those goals. During this time, they evaluate where they’ve been, where they are and where they are going. They make adjustments to their plan when necessary. Passion – Top producers are passionate about fulfilling their mission and vision. It isn’t just about making sales, qualifying for their company’s top club or earning an award. They are enthusiastic

about helping their clients achieve their goals and leaving them in a better position than when they first met. They also are devoted to their careers and are always striving to be their best. Sense of urgency – “Do it now” is the motto of top producers. They don’t put things off until tomorrow, and they get a lot done in a day. I tell my coaching clients that any number of things can happen when you put things off until the last minute and none of them are good. Having that sense of urgency pushes them to close sales as soon as possible. Having that attitude is contagious. It spills over to staff and other team members. If it’s possible to get it done today, do it. Life-long learning – It’s easy to become complacent or stale, especially if we are already successful. Top producers are always looking to improve themselves and their businesses. Of course, they want to keep up with regulatory developments, but they also want to keep abreast of the latest technologies and other time-saving tools. Doing so may give them a competitive advantage. Professional development is high on their list of priorities and this goes for their staff as well. In addition to keeping up with developments in their own industry, they make a point of being knowledgeable about the industries in which they have clients. This is especially true if they work in a niche market. Not every producer will possess each of these traits, and there are many more obvious ones not mentioned here. But by focusing on these traits, you can elevate your success. Robert A. Arzt, CLU, ChFC, LLIF, is founder and president of Polaris One and He is a NAIFA member and author of the book, What Every Great Salesperson Knows, A No Nonsense Guide to Sales Success. He may be contacted at robert.arzt@

November 2017 » InsuranceNewsNet Magazine



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

How Digital Tools Can Propel Your Practice’s Growth How adopting digital initiatives helped one advisor add a larger volume of clients and keep pace with the increased workload. By Brian Greenberg


igital tools made available to advisors over the past decade have revolutionized practice marketing, operations and client communications. For advisors at every level — from captive agents to independent operators — a well-honed digital strategy is essential to client recruitment and retention, as well as internal productivity and organization. Adopting a few digital best practices and initiatives has propelled my practice’s growth. I’ve added a larger volume of clients and streamlined the internal management process to keep pace with the workload. Curate a personal digital presence to build social proof. Clients want to partner with a professional they trust. In the digital age, advisors who provide social proof, or a digital presence verifying a positive reputation, are more likely to attract clients. People want to know who they’re getting into business with, and the lack of an online persona is a red flag for

a unique identity and competitive edge, it gives clients a central hub for communication. Although many agencies provide a web page for advisors to personalize, I recommend a branded, personal URL. Owned sites offer a cohesive brand and location for the duration of a career and bring an added layer of professionalism. Hosting companies support email through the URL, which enables advisors to use their name as their business email, rather than another brand or a generic email address (such as gmail). The site should include high-quality photos, a description of services, and links to social profiles and client testimonials. Links to active profiles on LinkedIn and business review platforms such as Yelp or the Better Business Bureau also help clients learn more about your personality, your track record and others’ impressions of you. Like word-of-mouth marketing, testimonials on these sites reinforce your brand and trustworthiness. A presence on these high-traffic sites will also boost search engine results when clients search for financial professionals in their area. Digitize client management processes. Each of your clients and contacts has a lifetime value to you as an advisor. Points of contact and projects shouldn’t be singular, but should evolve into a greater, longterm relationship. I’m perpetually inspired by one of the most noted salesmen, Joe Gerard, who attributed a record-breaking career to his relationships with clients. In 15 years, he sold more than 13,000 cars after making regular, personalized touch points. Each holiday season, he sent thousands of handwritten holiday cards — not that you need to go that far. Customer relationship management (CRM) systems can automate the client outreach process and alleviate logistical stress. Most programs lend themselves

Every advisor should create a digital presence they own and control. most. Leveraging your online platforms to establish trust and accountability will help attract and retain clients. It also results in less of a hands-on management system since you’re not constantly trying to prove yourself. Every advisor — even captive agents and contractors — should create a digital presence they own and control. Not only does an independent website create 70

InsuranceNewsNet Magazine » November 2017

well to segmenting clients into unique categories, scheduling messages and automation. Whatever the content strategy of your email campaigns, make an effort to connect with each client at least once every quarter. Because client data is rich, it’s possible to target messaging to unique groups, rather than blanketing an entire client roster with one broad message. Programs also can help automate emails for important policy milestones, key birthdays or anniversaries. Upgrade newsletters to boost engagement. Emails that stand out in crowded inboxes will boost engagement and readership, and deepen the overall connection with your clients. To create a more impactful communication, consider including more media-rich materials such as stylized graphics, videos and tailored content in your emails. Craft messages that share information or unique concerns that are relevant to your clients’ demographic. Content that is engaging or highly relevant will not only boost engagement, it likely will be forwarded to others and saved for future reference. If you’re not a master of these tech tools, it’s easy to access someone who is. Freelance workers can assist in setting up CRM systems and in creating emails, digital assets and collateral. Networks for freelancers, like Upwork, can help identify specialists to complement the skills gap on your team. Brian Greenberg started his financial career working for MetLife. Using his internet skills, he built a life insurance quoting engine and founded True Blue Life Insurance. He has been an MDRT member since 2013. Brian may be contacted at

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November 2017 » InsuranceNewsNet Magazine


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


A Simple Take on Simplified Issue WHEN APPLICANTS AREN’T PERFECT

Simplified issue life insurance is getting attention from consumers, but carriers need more claims experience with it.

Follow-up for Disqualified Applicants Always Declined

By Matthew Rubino and Kevin Tewksbury


he industry has shown a great deal of interest in simplified issue life insurance over the past few years. We often field questions from member companies asking for the latest news on simplified issue. This coverage has features that fill a useful role in an advisor’s toolkit. For those consumers who hesitate when faced with the fully underwritten application process, simplified underwriting may prove valuable. In order to get a snapshot of the products that are currently out there, LIMRA conducted a study called “Simplified Issue Made Simple” (2017), collecting a variety of information from member companies on how they are simplifying their products to appeal to a wider range of consumers. The concept of a simplified process for buying life insurance is alluring to consumers and producers alike. Consumers trying to buy typical, fully underwritten life insurance must endure visits from medical staff, or send their blood or urine to a company for analysis. Advisors would prefer to use fewer resources while matching products to their clients’ needs. Carriers want to speed up the process to reach more customers while potentially reducing costs. These are a few reasons why simplified issue products fill a valuable niche in the insurance industry, although there are some key ideas to keep in mind when considering these products. According to LIMRA’s 2017 “Insurance Barometer Study,” “seven in 10 consumers indicate they would be likely to purchase life insurance priced by using data without a physical exam.” Simplified issue products can capture consumers normally turned off by the full underwriting process. Applying for simplified issue products removes the need for a medical appointment, and the applicant doesn’t face needles or sample cups. Applications take less time to fill out, too, because simplified 72

Can Be Moved to Full Underwriting Source: “Simplified Issue Made Simple,” LIMRA (2017)

issue applications have a limited number of questions — generally four or five are about the applicant’s health and anywhere from zero to 12 about their lifestyle. Seventy-one percent of consumers find this speed and ease of simplified underwriting to be very appealing, the study found. Carriers do supplement the information they get from the application with other sources, although most products in our study use only two tools: the Medical Information Bureau and prescription databases. This makes it seem as though insurers rely more on the information provided in the application than they do on external data sources, with the exception of prescription information. Every company in our study that asks about prescription drugs in the application also checks prescription databases to confirm that the application’s information is accurate, so it is important to ensure that your clients’ prescription history is complete.

Current Products Face Challenge

For all of the benefits of simplified issue life insurance, current product offerings face some challenges that fully underwritten products are able to avoid. For example, 20 percent of baby boomers suspect that they can’t qualify for fully underwritten life insurance, according to the 2017 “Insurance Barometer Study,” possibly because of their medical history. These consumers may find simplified issue products particularly attractive. This appeal exposes insurers to the risk that more unhealthy people will be able to buy insurance coverage. Some carriers are now comfortable enough with this risk to provide a fully underwritten alternative, even after an applicant’s disqualification for a simplified issue product. This has its advantages and disadvantages for advisors,

InsuranceNewsNet Magazine » November 2017

because some clients may relish the second chance to buy insurance, and other clients may balk at the higher price tag of a fully underwritten policy. To manage this risk, most carriers keep the products simple and the amount of coverage they offer low. But that is starting to change. A few companies do offer up to $750,000 in coverage for simplified issue whole life products, and most companies now offer a simplified term or universal life product. Still, whole life policies with coverage at or below $50,000 in face amount account for the majority of simplified issue sales. Either customers aren’t interested in other products or advisors aren’t selling them. Many companies have begun offering simplified issue products in recent years. For these products to grow in popularity, insurance companies must continue to gain comfort with the hazards posed by this underwriting style. After carriers get more claims experience, they may be able to price their simplified issue products more closely to their fully underwritten portfolio. Although simplified underwriting is not ready to replace full underwriting for the majority of consumer needs, combining the consumer-friendly process with more modest pricing may open new opportunities to advisors and carriers alike. Matthew Rubino is associate analyst, insurance research, LIMRA. Matthew may be contacted at matthew. Kevin Tewksbury is research analyst, insurance research – product, LIMRA. Kevin may be contacted at kevin.

Everything MATTERS.





Choose a fiduciary that understands the importance of experience, training, service and performance. CHOOSE BROOKSTONE. [ [ [ [


Read more about what really MATTERS when choosing a RIA on PAGE 60. To request our FREE guide, visit:

CHOOSING A RIA? — INVESTMENT ADVISOR CHECKLIST — Not all RIAs are created equally. With regulations and the industry shifting towards a holistic approach to advising, there have never been more Advisors adding RIA services to their firms. Fiduciaries are popping up seemingly overnight. So, how do you know what to look for when choosing a RIA? Recently named the #2 Fastest Growing RIA in the Nation, Brookstone Capital Management outlines what matters most when searching for a RIA to support your practice.

PERFORMANCE: * Do they have in- house investment intelligence? * Do they take a risk - managed approach that also captures market upside? * Will you have the freedom of choice and a flexible open architecture platform? * Do they have a track record of competitive returns in all market cycles?

THE RAISE INVESTMENT PHILOSOPHY The Brookstone investment philosophy is referred to as “RAISE,” which stands for Risk Appropriate Investment Strategy Evaluation. The concept is simple, as they aim to achieve six important goals:

1 2 3 4

Deliver competitive returns


Utilize a combination of strategic/tactical and active/passive approaches


Focus on goals-based performance and do not chase benchmarks

Avoid large losses or drawdowns Incorporate a risk-managed approach Offer both brand name and boutique money managers


Over the past few years, many RIA firms have relied solely on using defensive tactical management, which is designed to perform in specific market cycles with limited upside capture. Understanding the need to provide clients with positive returns and to protect against potential downside, Brookstone created the RAISE 360 Select model portfolios. The RAISE 360 Select model portfolios are designed to be competitive throughout changing markets and are a globally diversified blend of strategic and tactical components. Each model aligns with a specific risk profile using a range of equities and fixed income vehicles engineered by a seasoned investment committee. Brookstone truly believes that this approach gives clients the security of downside protection, while still participating in upside performance, and the results have validated this.

EXPERIENCE: * Is there stability in growth / how much ? * Do they have a solid track record / how many years in business? * Do they provide DOL-ready service and support? EXPERIENCE MATTERS

Recently surpassing 2 billion in assets under management and on the heels of being named the #2 fastest growing RIA in the nation, Brookstone has more than doubled its AUM over the past three years. With a network of over 350 affiliated Advisors, Brookstone has reached the top by being laser focused on providing an all-inclusive infrastructure that will help Advisors start, build, and grow their businesses. “Our structure is that of a true partnership for Advisors with the mutually beneficial goal of asset growth.” – Founder and CEO Dean Zayed

TRAINING: * Is their training targeted to multiple experience levels? * Do they focus on all aspects of an advisory practice _ not just education of investment models? * Do they have experienced instructors and an experienced leadership team? * Is there onboarding available for insurance agents entering the RIA space? TRAINING MATTERS

The financial advisor’s job has never been more complex than in today’s volatile global economy. At Brookstone, we place a premium on providing the most comprehensive education and training possible. Brookstone’s Positioning Advisors for Success Series (PASS) is an expansive, multi-level training program built to suit any advisor’s experience level. Led by our Founder and CEO, Dean Zayed, this comprehensive professional development series is also enhanced by sessions with our portfolio managers and several guest experts representing some of the most innovative thinking in investment management today.

SERVICE: * Do they have proven service/support? ( Ask to talk to current advisors) * Do they have "on- call" advisor support? * How do they _ and how often do they - measure advisor satisfaction? * Are personal interaction and relationships prioritized? SERVICE MATTERS

Brookstone has 40+ employees who are on-call to help Advisors grow. Each and every employee has the singular goal of doing whatever it takes to satisfy the needs and concerns of our Advisors. “Ritz-Carlton defined high level service in the hotel industry. Our goal for Brookstone is to reach that same pinnacle of service in our industry,” said Zayed.

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InsuranceNewsNet Magazine November 2017  

Holistic Tech: How advisors use technology to offer comprehensive service and fuel breathtaking growth. Also inside, the 2017 Tech Guide.

InsuranceNewsNet Magazine November 2017  

Holistic Tech: How advisors use technology to offer comprehensive service and fuel breathtaking growth. Also inside, the 2017 Tech Guide.