Beyond referrals

Jack Keeter is a terrific advisor, highly recognized in the industry, and recipient of multiple industry awards.  Jack's commitment to his clients is second to none and this is the secret of his success--complete and total attention to the people who have given him their trust.   This is when referrals work--and work well.  This is a timely read.  Wade Dokken

 

Referrals. They’re the lifeblood of many a financial services practice. Without them, books of business fail to grow, practices stagnate, incomes fall and careers fade. But even with referrals advisors can find themselves working too hard, chasing a numbers game that rewards too few and punishes too many.

“We used to do the numbers game, and we got business,” says Todd Wooten, president of Wooten Financial Services in Valparaiso, Ind. (www.wootenfinancial.com). “But we didn’t get long-term business. There was no loyalty factor.”

The difference between cold leads and warm leads is obvious to any advisor, but what about the difference between a referral and a personal introduction?

Referrals come in a couple of different manifestations. One type is where the advisor never even knows it was made: “Hey, this guy took care of my financial plan. You should call him; here’s his card.” The other leaves the advisor stuck making calls and name-dropping — “Hey, Mr. Advisor, here is a list of names and numbers of friends of mine you might be able to help” — which can work to a satisfying degree in many cases but leaves something to be desired.
Personal introductions from other professionals — whether in the financial services arena or peripheral to it — trump either form of referral. They carry an implicit endorsement of the advisor and, by taking place in the other professional’s office, can put all parties at ease.

 

Many advisors already have these kinds of relationships in place, having cultivated them for years. While the list of potential allies can be long, there are a few professionals that come up repeatedly. The big five are detailed below. These are folks whose help can take an advisor’s practice to the next level, provided the advisor is willing to do the same in return — actually, provided the advisor is willing to give something first. When seeking out these all-important alliances, remember one thing — maybe the one thing that costs some advisors the relationships they seek: “Give value before asking for it,” says Jack Keeter, president of Jack Keeter and Associates (www.jackkeeter.com) in Anaheim, Calif. “They’re going to want to know, ‘What’s in it for me?’ Convince them of the value you bring.”

Attorney
If this list were to be broken out by more specific individual titles, attorneys might occupy half of the top 10, that’s how often they are mentioned by advisors. Senior advisors likely are most interested in lawyers who specialize in elder law and estate planning — they have clients in the right age group and with the right needs. Keeter says estate planning attorneys are nice to form alliances with because they “deal with people at transitional times in their lives.” Estate planning attorneys are there when there is a death in the family; when someone is readying for retirement; or when someone receives an inheritance — all situations that make people take a second look at their entire financial picture.

Wooten says attorneys are a solid addition to any advisor’s team because — like it or not — they are higher up the admiration-ladder than advisors.

“People respect attorneys before planners,” Wooten says, especially in light of all the recent negative coverage of the financial services industry generally and annuities specifically.
   
CPA
Advisors love getting introductions from accountants. CPAs have access to all of the information an advisor needs to help clients and they have their clients’ trust, especially if they are as adamant about doing what’s right for the client as good advisors are. Nathan O’Bryant, president of O’Bryant and Associates (www.obryantandassociates.com) in Huntingdon, Tenn., works with a CPA, and he wishes he could work with many more. It’s not for lack of trying.

“In such a rural area, there’s only one CPA in town,” O’Bryant says.
Why does he like CPAs so much?

“They’re looking at everyone’s tax return,” O’Bryant says. “They can see people’s tax burden and introduce them to professionals who can reduce it.”
   
LTCI specialist
Long term care insurance takes too much time and effort. So goes the thinking for many financial advisors, but the product is important to most plans, so it cannot be pushed aside. Planners who don’t want to deal with the LTCI side of things would be wise to forge an alliance with an LTCI specialist — and there are plenty out there. Entire networks of LTCI-only advisors have sprung up in the last decade or so. Some are sponsored by marketing organizations and some have grown organically, but the common thread is that these are people who don’t want to steal an advisor’s planning opportunities or annuity business. They specialize in LTCI.

“There are a lot of reasons to discuss LTCI with clients, even if you don’t want to deal with it,” says Stephen Drain, senior vice president, marketing for Personalized Brokerage Services in Topeka, Kansas. “For a lot of advisors, LTCI is a messy thing. It’s a dramatic conversation that requires a lot of
patience. Some people might not have that.”
   
Personal lines agent
Other insurance agents are good people for senior advisors to know, especially those who specialize in the personal lines of insurance like auto and homeowners’ insurance, Wooten says. They usually have huge books of business — hundreds of clients — but they don’t deal with finances much.

“Personal lines agents represent a tremendous opportunity for advisors,” Wooten says. “They’ll have anywhere from 500 to 3,000 customers, but they don’t want to talk about financial planning [with their clients]. It’s a huge opportunity.”

Advisors will have to spend some time with the agent, teaching him how to recognize the advisor’s ideal client profile. Random, widespread introductions have the potential to bog an advisor down if most of the potential clients are the wrong fit.

Securities-licensed broker
Advisors who choose to eschew securities licenses and stay with their life and health licenses only will need to become friends with a securities licensed financial professional, Drain says, especially from a suitability standpoint.

“It boils down to doing the right thing for the client,” Drain says. And having the capability to talk about securities and insurance products goes a long, long way to doing the right thing.

Drain says many senior advisors get their securities licenses and park them with a broker-dealer so they can talk about variable products and securities even if they never plan to sell them. That way, he says, “They can have a conversation about risk assessment legally, and talk about moving money from variable to fixed products.”
Advisors who want to concentrate on insurance and annuities need to find a friendly securities broker who understands the importance of fixed products in an overall financial plan but doesn’t necessarily want to sell them.

Financial professionals who are still playing the numbers game should stop, unless the prospect of hundreds upon hundreds of short-term relationships sounds appealing. Long-lasting, fruitful relationships come from developing trust and friendship, and receiving personal introductions from other trusted professionals goes a long way to establishing the advisor as the planner. Find experts in other fields who share the same values and service philosophies and help each other be the best.

Referrals. They’re the lifeblood of many a financial services practice. Without them, books of business fail to grow, practices stagnate, incomes fall and careers fade. But even with referrals advisors can find themselves working too hard, chasing a numbers game that rewards too few and punishes too many.

“We used to do the numbers game, and we got business,” says Todd Wooten, president of Wooten Financial Services in Valparaiso, Ind. (www.wootenfinancial.com). “But we didn’t get long-term business. There was no loyalty factor.”

The difference between cold leads and warm leads is obvious to any advisor, but what about the difference between a referral and a personal introduction?

Referrals come in a couple of different manifestations. One type is where the advisor never even knows it was made: “Hey, this guy took care of my financial plan. You should call him; here’s his card.” The other leaves the advisor stuck making calls and name-dropping — “Hey, Mr. Advisor, here is a list of names and numbers of friends of mine you might be able to help” — which can work to a satisfying degree in many cases but leaves something to be desired.
Personal introductions from other professionals — whether in the financial services arena or peripheral to it — trump either form of referral. They carry an implicit endorsement of the advisor and, by taking place in the other professional’s office, can put all parties at ease.

Many advisors already have these kinds of relationships in place, having cultivated them for years. While the list of potential allies can be long, there are a few professionals that come up repeatedly. The big five are detailed below. These are folks whose help can take an advisor’s practice to the next level, provided the advisor is willing to do the same in return — actually, provided the advisor is willing to give something first. When seeking out these all-important alliances, remember one thing — maybe the one thing that costs some advisors the relationships they seek: “Give value before asking for it,” says Jack Keeter, president of Jack Keeter and Associates (www.jackkeeter.com) in Anaheim, Calif. “They’re going to want to know, ‘What’s in it for me?’ Convince them of the value you bring.”

Attorney
If this list were to be broken out by more specific individual titles, attorneys might occupy half of the top 10, that’s how often they are mentioned by advisors. Senior advisors likely are most interested in lawyers who specialize in elder law and estate planning — they have clients in the right age group and with the right needs. Keeter says estate planning attorneys are nice to form alliances with because they “deal with people at transitional times in their lives.” Estate planning attorneys are there when there is a death in the family; when someone is readying for retirement; or when someone receives an inheritance — all situations that make people take a second look at their entire financial picture.

Wooten says attorneys are a solid addition to any advisor’s team because — like it or not — they are higher up the admiration-ladder than advisors.

“People respect attorneys before planners,” Wooten says, especially in light of all the recent negative coverage of the financial services industry generally and annuities specifically.
   
CPA
Advisors love getting introductions from accountants. CPAs have access to all of the information an advisor needs to help clients and they have their clients’ trust, especially if they are as adamant about doing what’s right for the client as good advisors are. Nathan O’Bryant, president of O’Bryant and Associates (www.obryantandassociates.com) in Huntingdon, Tenn., works with a CPA, and he wishes he could work with many more. It’s not for lack of trying.

“In such a rural area, there’s only one CPA in town,” O’Bryant says.
Why does he like CPAs so much?

“They’re looking at everyone’s tax return,” O’Bryant says. “They can see people’s tax burden and introduce them to professionals who can reduce it.”
   
LTCI specialist
Long term care insurance takes too much time and effort. So goes the thinking for many financial advisors, but the product is important to most plans, so it cannot be pushed aside. Planners who don’t want to deal with the LTCI side of things would be wise to forge an alliance with an LTCI specialist — and there are plenty out there. Entire networks of LTCI-only advisors have sprung up in the last decade or so. Some are sponsored by marketing organizations and some have grown organically, but the common thread is that these are people who don’t want to steal an advisor’s planning opportunities or annuity business. They specialize in LTCI.

“There are a lot of reasons to discuss LTCI with clients, even if you don’t want to deal with it,” says Stephen Drain, senior vice president, marketing for Personalized Brokerage Services in Topeka, Kansas. “For a lot of advisors, LTCI is a messy thing. It’s a dramatic conversation that requires a lot of
patience. Some people might not have that.”
   
Personal lines agent
Other insurance agents are good people for senior advisors to know, especially those who specialize in the personal lines of insurance like auto and homeowners’ insurance, Wooten says. They usually have huge books of business — hundreds of clients — but they don’t deal with finances much.

“Personal lines agents represent a tremendous opportunity for advisors,” Wooten says. “They’ll have anywhere from 500 to 3,000 customers, but they don’t want to talk about financial planning [with their clients]. It’s a huge opportunity.”

Advisors will have to spend some time with the agent, teaching him how to recognize the advisor’s ideal client profile. Random, widespread introductions have the potential to bog an advisor down if most of the potential clients are the wrong fit.

Securities-licensed broker
Advisors who choose to eschew securities licenses and stay with their life and health licenses only will need to become friends with a securities licensed financial professional, Drain says, especially from a suitability standpoint.

“It boils down to doing the right thing for the client,” Drain says. And having the capability to talk about securities and insurance products goes a long, long way to doing the right thing.

Drain says many senior advisors get their securities licenses and park them with a broker-dealer so they can talk about variable products and securities even if they never plan to sell them. That way, he says, “They can have a conversation about risk assessment legally, and talk about moving money from variable to fixed products.”
Advisors who want to concentrate on insurance and annuities need to find a friendly securities broker who understands the importance of fixed products in an overall financial plan but doesn’t necessarily want to sell them.

Financial professionals who are still playing the numbers game should stop, unless the prospect of hundreds upon hundreds of short-term relationships sounds appealing. Long-lasting, fruitful relationships come from developing trust and friendship, and receiving personal introductions from other trusted professionals goes a long way to establishing the advisor as the planner. Find experts in other fields who share the same values and service philosophies and help each other be the best.

via seniormarketadvisor.com

 

Comparing Lifetime Income Options | Financial News

Longevity risk is the greatest fear of most retirees. You can now buy insurance to protect you from longevity risk: the risk of outliving you money. Just like you insure your home, car, health, etc. from the expenses of loss, insurance companies now offer annuities to protect you in retirement. What's more, it is the best kind of insurance because even if you lose (die early) your spouse and beneficiaries can remain protected. Like all insurance, you need to shop for the policy that best suits your needs and circumstances. Unlike health and life insurance, longevity insurance is not based on your health because you're insuring against living too long rather than dying too soon.

 

The coverage you get to protect your retirement years looks more like an investment than insurance. You simply deposit with an insurance company part or all of your retirement money and they in turn guarantee you an annual income for life, or joint life if you want to protect your spouse. The amount of the guaranteed annual income is based on the amount of money you deposit with them and whether or not you want single or joint coverage. Let see how this works.

 

Lets assume you're age 55 and have started to think about retirement when you reach 65. You've been saving money during your working years and let's assume you have 0,000 accumulated for retirement (this could be in a 401(k), 403(b) or in an account that does not qualify as a pension such as stocks, bonds, bank CD, annuities, real estate, etc.). Let's say you want to make sure you'll have at least ,000 per year when you retire in ten years and this amount will be guaranteed for your lifetime. How could you arrange this lifetime guaranteed income now that will be ready for you in ten years? First, we need to see how much you'll be getting from other sources. Let's make this easy by assuming your only other source of income will be Social Security.

 

By going to the Social Security Administration's web site (www.ssa.gov) and making some assumptions, you can estimate your Social Security benefits. Let say you do that and find that your Social Security benefits will be ,803 in ten years when you plan to retire. The task at hand is to determine how much you'll need to give the insurance company today to buy an annuity that will guarantee you the remaining ,197 when you retire in ten years. You'll want to shop the market for the best buy and this is usually accomplished by engaging the services of your financial advisor. Let's say you find a fixed index-linked annuity that guarantees that your money will grow by at least 7% annually if you later turn it into an income (yes, there are annuities from top-quality insurance companies that will do this). Also assume the insurance company rewards you with a bonus of 10% of the amount that you deposit with them - that is, if you give them 0,000, they'll credit you with 0,000 if you later take a lifetime income. Yes, such bonuses are available if you shop.

 

At age 65 the annuity you chose will guarantee you a lifetime annual income equal to 5.5% of the amount in your account when you "lock in" the income at age 65. How much of your 0,000 will it take to get the guaranteed lifetime income of ,197 you need to supplement Social Security so you will always have at least ,000 for the remainder of your life? Since you'll need ,197 in ten years, and we know that will be 5.5% of your annuity's account value, we can determine the account value by dividing 24,197 by 5.5%. This amount is 9,945. But, you'll not need this for another ten years, so we have to determine how much you'll need to give the insurance company now. This is where the math gets complicated and why you'll need help. If you invested 3,314 with the insurance company today and they credited you with a 10% bonus and guaranteed that your account would grow by at least 7% annually over the next ten years, you'd have the needed 9,945 when you retire ten years hence.

 

You have successfully insured your longevity risk by buying an insurance policy. But, what happens if you don't get to age 65 or you die sooner than the insurance company estimated you would?

 

There's good news and bad news! The bad news is that your worries about money will be over. The good news is that your spouse can continue the income for the remainder of his/her life if you chose the joint life option. If you are not married or did not choose the spousal option, your beneficiary will get the remainder of your account value. The remaining account value will be based on how much income you have taken, if any, plus the earnings credited to your annuity. The earnings are credited based on the market index to which it is linked BUT you never participate in market losses; however, you will participate in market gains as measured by the market index. Additionally, you'll be guaranteed some minimum rate of return by the insurance company even if the market loses every year you've got your money in the annuity. In other words you can't lose but you could do really well.

 

So, you've covered your longevity risk: you simply cannot outlive your guaranteed income because your insurance company must pay you until you die and Social Security is obligated to pay for the remainder of your life. Also, you will not lose your annuity money if you die too soon because your spouse, or beneficiaries, will get the remainder at your death. The best of both world! What's more, you can start, stop and store the income if your circumstances change (you might win the lottery or get an inheritance) AND you'll not pay income taxes on the earnings inside your annuity until you actually start withdrawing it ten years from now. What happens if you need the income in five years? You can start it after one year as long as you're age 59½ or better, but the amount will be lower than if you wait the full ten years. Do you have to start at the end of year ten? No, because you're in control. You could decide to take all you money in a lump sum and reinvest it elsewhere (make sure your annuity is not a payout two-tier that requires you to take installment payments over five or ten years if you don't want a lifetime income - see the article on two-tiers in this retirement blog). You've covered your longevity risk without giving up control of your money.

 

Why have insurance companies started offering these types of annuities? It's all because of the baby boomers. As you know there were 78 million folks born between 1946 and 1964. The demographic bulge started turning 62 in 2008 and one boomer will turn 62 every 7.5 seconds for the next 18 years. And guess what is utmost on their mind? Correct, outliving their money because they do not have a lifetime pension like their parents and grandparents did. They are turning to the insurance industry to guarantee that they'll have a lifetime income if they live too long and have demanded that they not give away their money if they die too soon. The insurance industry has responded.

 

Are these policies fair to the policyholders? Like all insurance policies, they offer protection against loss and in this case those who die too soon don't get nearly as good a deal as those who live too long. But, since your number one fear is outliving your money and you'll not be disappointed at leaving money on the table once you've transcended to a place where money is not important, you've covered your risk at a fair price. Insurance companies are doing what they do best: pooling risk across a large group and guaranteeing that they'll pay if the worse happens. In this case, the worst is living too long for the money you've set aside for retirement. If you're worried about longevity risk, call your financial advisor today and talk to him/her about this new type of insurance. When selecting an annuity with a guaranteed lifetime income benefit, always consider the following:

Compare carefully how much money is needed by doing exercises similar to the above. Get help from your financial advisor!
Compare the cost of the rider: they range from 0% to 0.4% annually.
How often do income factors change? Annually, every 5 years, every 10 years, etc.
Spousal continuation provisions and also is there inflation protection.
What income "step-up" features are offered? At step-up does the income factor, related to age, also increase?
How long can you lock-in the guaranteed growth of the income account?
What is the rating of the insurance company?

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Dr. Shelby Smith has an earned Doctorate in Economics from Iowa State University of Science and Technology along with a Bachelor’s and Masters degree in Economics from the University of Wyoming. He started his professional career as a college professor and held professorships at several Midwestern and Southern universities. He entered the corporate arena as the Chief Economist of a Regional Federal Home Loan Bank, moved then into the banking business where he served as Economists, Chief Financial Officer, President & CEO, and Chairman of several institutions. He started a financial marketing company that catered to financial institutions and their clients by providing investment products. For the past twenty years Dr. Smith has been providing consultation and services to conservative investors and savers positioning their assets for retirement. In the process Dr. Smith has managed a broker dealer and held licenses that allowed him to offer securities and insurance products to the general public.

via phonienews.com

 

Life Insurers Slip to Second Quarter Loss on Stock Market Slump - Bloomberg comments Wade Dokken

U.S. life insurers, a group led by MetLife Inc. and Prudential Financial Inc., slipped to a loss in the second quarter as the stock-market retreat prompted sellers of equity-linked retirement products to boost reserves.

The industry recorded a net loss of $900.3 million, compared with net income of $8.9 billion in the same period a year earlier, research firm SNL Financial said today in an e- mailed statement.

The Standard & Poor’s 500 Index dropped 12 percent in the three months ended June 30, its first decline in five quarters. Insurers that sell variable annuities often promise to shoulder a portion of investment losses for clients. When stocks fall, carriers add to funds backing these guarantees.

“Reserve strengthening significantly affected performance in the second quarter, especially at many of the largest annuity writers,” Jon Wright, SNL’s director of insurance, said in the statement.

SNL’s study was based on so-called statutory insurance data. Statutory accounting is used by state regulators to monitor insurer solvency and differs from the standards required by the Securities and Exchange Commission, using generally accepted accounting principles.

Prudential and New York-based MetLife are the top two sellers of variable annuities in the U.S., according to trade group Limra International. Both companies reported second- quarter profits, under GAAP rules.

Prudential, based in Newark, New Jersey, lost 11 percent in the second quarter and MetLife fell 12 percent in New York Stock Exchange composite training.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

via bloomberg.com

This details the complexity of managing variable annuity portfolios for the insurance company--and should remind investors of the real value of index annuity writers, fixed annuity writers and variable annuity writers. These products absorb investment risk from policy-holders and greatly aid Americans seeking shelter from the retirement crisis through annuity private pensions. Wade Dokken

Annuities Could Get Boost From Small Business Legislation - Financial Planning edited Wade Dokken

Annuities Could Get Boost From Small Business Legislation

This is a terrific change in government policy tenor.  During the 1980's and early 1990's annuities were castigated for their "tax deferred build-up" and the perception that this represented lost tax revenue.  Now annuities are recognized for their ability to provide guaranteed lifetime income and guarantees of principal.   Bravo.  Wade Dokken

 

By Donna Mitchell

September 28, 2010

The battered annuity industry seemed to have found a powerful ally in President Obama’s administration, when the Middle Class Task Force issued a report in January saying the executive branch would work to promote the availability of annuities and other forms of guaranteed income.

Part of that promise was fulfilled Monday, after President Obama signed the Small Business Jobs Act into law. The legislation includes a provision that allows holders of non-qualified annuities to carve out some of the funds from a deferred annuity and buy an immediate annuity contract with those proceeds. The original deferred annuity will continue to grow and accumulate tax-deferred income. Designated as an offset, it is designed to promote retirement preparedness.

The Small Business Jobs Act might open more doors for the annuity industry, specifically making independent advisors and their clients more comfortable with variable annuities, which are rebounding off of a period of unpopularity. Overall, annuity sales have been up and down recently. In its second-quarter roundup of annuity sales, LIMRA estimated that annuity sales overall were down 16% year over year. Of that number, however, variable annuity sales were up 8%, underscoring the fact that more independent financial advisors are becoming comfortable with the products.

More to the point, annuities are claiming a bigger slice of overall revenues at independent broker-dealers. Annuities accounted for $3.7 billion, or 26.2%, of total revenues for 2009. Variable annuities were responsible for $3.1 billion, or 85%, of that total, and variable annuities accounted for 22.3% of overall product revenues. For their part, fixed annuities accounted for $495.3 million, or 13.5%, of total annuity revenues.

Because of their size, some small business owners are not able to directly offer qualified retirement savings plans. For employees of these companies who happen to own a deferred annuity contract, the new law gives them greater flexibility to save outside of the workplace toward a secure retirement, according to Cathy Weatherford, president and chief executive officer of the Insured Retirement Institute, based in Washington, D.C.

Currently, if an individual wants to pull a portion of money out of his or her single guaranteed annuity and buy a separate contract, that investor would have to cancel the original contract and buy two separate annuities. They would incur a surrender charge beginning at 5% of the invested amount, at least, and ranging to 7% and up, Weatherford said.

“This is a giant step forward that will allow Americans to have annuities … as they build out their retirement savings strategies going forward,” Weatherford said. “It will save money on fees for exchanges or those types of things. It is a way for people to get one more option to continue to grow next egg at time when might need guaranteed lifetime income.”

There could be more to come from the current administration, in terms of supporting the annuity industry. In February, the Department of Labor and the Treasury Department requested information for how to encourage 401(k) plans to offer annuities to their participants, which has gotten many responses from insurance companies and trade groups.

via financial-planning.com

 

Annuity Shopping Becomes Easier for Vanguard Customers

Millions of baby boomers nearing retirement are starting to think about how much income they’ll need to cover monthly expenses once they stop working for good.

Social Security, personal savings and, if you’re lucky, a pension will all play a role. But some retirees may also decide to convert a portion of their savings into a basic fixed annuity, also called a single premium immediate annuity: you essentially hand over a pile of cash to an insurance company, and it pays you a guaranteed stream of income for life.

Vanguard is trying to make shopping for these annuities a bit easier. This month, it introduced an online marketplace called Vanguard Annuity Access, which allows Vanguard customers to compare the costs of annuity contracts from different providers. Price quotes are provided in real time, but what really sets Vanguard’s service apart from its competitors is that it discloses its commissions upfront, something providers aren’t required to do. (Did you read that, Elizabeth Warren?)

Vanguard charges a flat commission of 2 percent of the amount invested, and it shares the payment with Hueler Investment Services, which is essentially the engine behind the new service. The insurance companies that provide the annuities have their own expenses, and, like other annuities, those expenses are factored into the amount of income you receive.

But one competitor said it believed that the disclosure of commissions was simply a marketing gimmick: Since immediate-annuity quotes tell investors the monthly payment they stand to collect each month — with commissions and expenses already subtracted — they argue that investors can already tell what kind of deal they are getting.

If, for instance, one immediate annuity that costs $190,000 pays $1,000 a month, while another will pay $1,030 a month, the one with the higher monthly payout is clearly the better deal, everything else being equal (like the stability of the insurer and product features). Still, it’s hard to make a case against more disclosure. And Vanguard says it’s offering customers prices that are usually reserved for institutions with big buying power.

Vanguard, which is working with eight insurers, isn’t the first company to offer this type of online service. Fidelity has been offering annuities from up to six insurers for nearly 15 years. It doesn’t disclose commissions, but says its pricing is competitive with Vanguard’s offerings. Meanwhile, ImmediateAnnuities.com, an online comparison tool and brokerage service run by Hersh Stern since 1983, provides quotes for around 30 insurers. The commissions are not disclosed, though they run about 3 percent on average.

(Vanguard itself offered its own annuity through American General, a unit of the American International Group, for nearly a decade. But now, all annuities will be available through the new platform, including an annuity through American General.)

I decided to test out Vanguard’s new service based on a married couple — he’s 67, she’s 66 — looking to buy an immediate annuity that would generate about $1,000 a month and would pay the surviving spouse the same amount. Their calculator said it would cost about $191,000.

With that information in hand, I filled out a short questionnaire, and within 10 seconds, I received quotes from four insurers, ranging from $941 to $989 a month. (If I wanted my payment to rise by 1 percent each year, that would cost extra and lower the initial monthly payment by roughly $95 a month, across all insurers.)

When I plugged in the same numbers at ImmediateAnnuities.com, the 10 quotes I received ranged from about $898 to $975 a month. Fidelity’s service does not offer real-time quotes online, but instead requires you to call an annuity specialist — a salaried Fidelity employee — who will walk you through the process. Fidelity executives say that’s because they want investors to be sure the annuity makes sense for their financial situation. “This is a very long-term and often irrevocable decision, and there are significant complexities with the product,” said Jeff Cimini, president of the Fidelity Investments Life Insurance Company. Vanguard’s service, which also offers fixed deferred annuities, makes annuity specialists available by phone as well.

It became really clear to me, after looking at the online services, that many investors will require some hand-holding or other assistance — even though much of the explanatory information on the sites is useful. While immediate annuities are arguably one of the simpler annuity products available, they are still incredibly complex and require you to make several decisions: Should you pay extra so that your payout is adjusted for inflation? What kind of survivor benefits do you need? Is it worth it to pay for a “fixed period,” where another beneficiary will receive income for a stated period of time? And how stable is the insurer that’s backing the annuity?

Not all of these questions are easily answered. Vanguard’s service makes it much easier for do-it-yourself investors to comparison-shop, though I didn’t speak with one of its annuity specialists on the phone. In an ideal world, investors would get their annuity prescription from a certified financial planner, and then fill it at a place like Vanguard.

Has anyone purchased an annuity using an online service? What kind of experience did you have? Is anyone else considering it (or perhaps when rates improve)? Share your thoughts in the comment section below.

via bucks.blogs.nytimes.com

Annuities are "sold" not bought? Vanguard begs to differ. Wake up. Your clients being told to buy annuities and told that Vanguard's are diffferent. Doesn't appears so. Wade Dokken

Dow `Super Boom' to Drive Average to 38,820 by 2025, Hirsch Says - Bloomberg

Play Video

Sept. 27 (Bloomberg) -- Jack Ablin, chief investment officer at Harris Private Bank, talks about the outlook for the stock market and investment strategy. Ablin, speaking with Betty Liu, Jon Erlichman and Sheila Dharmarajan on Bloomberg Television's "In the Loop," also discusses gold prices and the performance of the U.S. economy. (Source: Bloomberg)

Play Video

Sept. 27 (Bloomberg) -- Mark Kiesel, managing director and global head of corporate bond management at Pacific Investment Management Co., talks about his investment strategy for U.S. banks and emerging market corporate bonds. Kiesel talks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)

The Dow Jones Industrial Average will surge to 38,820 in an eight-year “super boom” beginning in 2017, according to Jeffrey A. Hirsch, editor in chief of the “Stock Trader’s Almanac.”

“All previous major economic booms and secular bull markets were driven by peace, inflation from war and crisis spending, and ubiquitous enabling technologies that created major cultural paradigm shifts and sustained prosperity,” he wrote in a press release sent with the 44th edition of the book.

Hirsch’s forecast comes more than a decade after James K. Glassman and Kevin A. Hassett predicted the Dow would rise to 36,000 by 2005 in “Dow 36,000,” a New York Times bestseller. The 114-year-old average ended 1999 at 11,497.12 and sank as low as 7,286.27 in 2002 following the Internet bubble. The Dow then jumped to a record 14,164.53 in 2007 and fell to 6,547.05 in March 2009 after the worst financial crisis since the 1930s.

“He’s got some crazy number on there,” said Frank Ingarra, a Stamford, Connecticut-based money manager at Hennessy Advisors Inc., which oversees about $900 million. “We’ve had probably one of the worst 10-year periods in history, and I think there’s just too much overhang with the government for it to get to those numbers.”

259% Surge

The Dow closed today at 10,812.04, meaning it must gain 259 percent, or about 8.9 percent annually in 15 years, to reach Hirsch’s projection. It has lost an average of about 1.3 percent a year since the end of 1999. The Standard & Poor’s 500 Index slipped 0.9 percent a year including dividends between 1999 and 2009, the first negative return for a decade since data began in 1927, according to S&P.

The withdrawal of U.S. troops from Iraq and Afghanistan and inflation caused by the wars and spending to end the financial crisis will help push the Dow higher, Jeffrey Hirsch said in the statement. Advances in energy technology or biotechnology may also help spur the rally between 2017 and 2025, he said.

“I can’t throw a dart that far,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion. “It’s too unknowable with regard to the things that would set up that kind of move.”

The “Stock Trader’s Almanac,” first published by Hirsch’s father Yale Hirsch in 1967, is known for revealing seasonal patterns in equity market returns. The “Best Six Months” strategy shows that since 1950, investors made the most money owning shares of Dow companies between Nov. 1 and April 30 and avoiding them the rest of the year. The book includes data showing the third year of U.S. presidents’ terms -- such as 2011 -- produce the best returns.

Jeremy Siegel

Glassman and Hassett based their forecast on work by Jeremy Siegel, a professor of finance at the University of Pennsylvania’s Wharton School, who had noted that since the early 1800s, equities had never offered a negative return, after inflation, if held for 17 years or more. To the authors, that meant stocks were a safe bet for long-term investors if they could handle short-run volatility.

Glassman served as President George W. Bush’s undersecretary of state for public diplomacy and is now executive director of the George W. Bush Institute. Hassett is the director of economic-policy studies at the Washington-based American Enterprise Institute and a Bloomberg News columnist.

The Dow, created on May 26, 1896, by Wall Street Journal co-founder Charles Dow, was initially valued at 40.94 and included American Cotton Oil, Chicago Gas, Distilling & Cattle Feeding, National Lead and Tennessee Coal & Iron. General Electric Co. is the only remaining original member, though it wasn’t in the average for nine years starting in 1898.

The Dow surpassed 100 in 1906 and reached 1,000 in 1972. It topped 5,000 in 1995 after jumping 1,000 points in nine months. It was made up of 12 stocks initially, increased to 20 in 1916 and expanded to 30 in 1928. The average’s biggest single-day point loss was 777.68, or 7 percent, on Sept. 29, 2008.

To contact the reporters on this story: Tara Lachapelle in New York at tlachapelle@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

via bloomberg.com

Another post, Dow 2,000,000, merely extrapolates the current Dow by 5% for a century--same performance as last century. Wade Dokken

Top Financial Advisor Series: Boomer Advisor 2010

Published 5/1/2010

Mark Cortazzo isn’t one for platitudes. He tells you what he thinks (it’s a Jersey thing). In interviews, at industry conferences, or just batting around ideas, his refreshing candor might have once been thought abrasive. But after what we’ve been through, and his success in protecting and growing his clients’ retirement assets, this abrasiveness is now critical insight.

He’s tutored Wall Street Journal columnists on the need for comprehensive financial planning; Worth Magazinenamed him one of “The 250 Best Financial Advisers in America”; Reuters AdvicePoint named him a “Top Advisor for 2008”; He was accepted into the 2003 Hall of Fame by our sister publication Research Magazine; He was chosen as one of New Jersey’s “Top Forty Under 40” by NJ Biz Magazine and one of “America’s Top Financial Advisors” in 2008 by Fortune Magazine.

Anything we forgot? Quite a bit, but we only have so much room.

He did the requisite stint at a wirehouse early on, but big firm politics got the better of him. A stop at Sun Life’s broker/dealer followed before starting Macro Consulting Group in 1992. Today, the firm has $400 million in assets under management and he’s been an individual multimillion-dollar producer every year since 2000. In the variable annuity space, he’s done a little more than $100 million in production in 15 months. No wonder he’s No.1 at his broker/dealer, SII Investments.

“I love math and I love people,” he says, when asked about the reasons for his success. “Those are two skill sets that don’t normally go together. I was fortunate early on in my career to cross paths with an exceptional attorney who was able to explain complex strategies in plain English. As a young advisor, I was so anxious to tell everybody how much I knew. I impressed them, but they didn’t understand how it was going to help them. That was a really important turning point in my career. This will sound corny and it is very cliché, but I really think people don’t care how much you know until they know how much you care.”

For his dedication and no-holds barred approach to helping his clients realize a successful and affordable retirement, we’re proud to announce Mark Cortazzo as our 2010 Boomer Market Advisor of the Year. (Meet the other finalists now.)

Boomer Market Advisor: Let’s get right to it. Overall, how would you say you came through the market downturn?
Mark Cortazzo: 2008 was a terrific year for us.

BMA: How so?
MC: Our accounts had floors and guarantees built into them, so when our clients’ account values got hit, their paychecks didn’t. They didn’t get out in February and March of last year, when we saw one of the largest net equity redemptions in mutual fund history. We have emerging market portfolios and real estate portfolios that are up 90 percent to 100 percent in the past 12 months. The difference between me saying “don’t worry, the market should come back” versus “don’t worry, even if the market doesn’t come back, this is what your check will look like for the rest of your life” gave them the confidence to stick.

BMA: You’re known for taking on the consumer press and industry critics over their product misconceptions, no matter what the product might be? Are there any products that you’re biased against?
MC: No; not even indexed annuities, even though I’m not a fan of current designs. We try to look at everything with a fresh and objective eye. As markets change and rules change, programs that I looked at two years ago that weren’t attractive are now more attractive relative to the current environment. Just because we don’t like you now, doesn’t mean we won’t like you a year from now. It’s really all about looking at the best solution relative to all of the alternatives. We had accounts from 2002 to 2007 that tripled and almost quadrupled in value, and they had the guarantees.

BMA: So these guarantees were your strategy for managing downside risk?
MC: There are basically three things you can do to address risk: You can avoid it, you can manage it or you can transfer it. All three of them have their place. For your short-term money (you need money for a car or a wedding) you need to avoid risk with that because you don’t have time to recover if there is a one- or two- or three-year time horizon. Risk management, that’s managing the diversification, portfolio optimization, and that’s going to give you good relative performance. The market being down 50 percent and you being down 20 percent is good relative performance, but you still lost 20 percent of your portfolio. It did its job, but that doesn’t necessarily mean that you are going to succeed in your goals. So our clients had an absolute guarantee in an environment where pensions are disappearing and people’s predictable income streams are fewer and fewer, and that takes a lot of pressure off the rest of the management of the portfolio.

BMA: Your focus is on your clients’ retirement. But how does that specifically translate to your practice and how it’s structured?
MC: We have the advantage of proximity. By that I mean we’re niche focused on retirement, as you mentioned, and I’m in a marketplace where there are plenty of people who need our help. We’re the expert instead of being a great generalist. Some locales mean advisors don’t have that option. I talk to people in Oklahoma and they have to be generalists because there is not enough people to feed in their niche. Being in a concentrated area like we are, the great news is that there are plenty of people that fit your niche. The tough part is that we’re not alone, and our competition is much greater.

BMA: We don’t know of too many large financial services firms in your area that are niche.
MC: True. But when I worked the big firms, I had six inches of knowledge across an entire spectrum of strategies. Now we’ve got 10-feet-deep worth of knowledge across a much narrower band. It works better when I’m showing you visually. But we’ve recently added another partner and five staff to the firm, so we’re doing something right.

BMA: How is the office structured?
MC: In teams. Every client has a staff planner, a primary advisor and a relationship manager. The relationship manager takes care of the operations on the account; changing companies, getting distributions done and setting up the agendas so we know what issues are still outstanding from the last meeting. It’s a very process-driven approach. We do a plan for every client, we implement the plan, we maintain the plan and we do semi-annual reviews with each client. That might be with the primary advisor, it might be with the staff advisor. But it is very structured, very uniform and we have a pretty homogenous book of clients, so we do get some scale and some redundancy when we conduct research and find a program that really works.

BMA: That’s interesting that you say homogenous. What income and investible assets do you require before working with clients?
MC: We start at $500,000 and move upwards to the $10 million level.

BMA: How do you reconcile the need for customized plans with the homogeny you just mentioned?
MC: It’s interesting, because whether a client has $8 million or $800,000, if you look at their goals and “income needs” (I put income needs in quotes, because some of the numbers get humorous when they say they say how much they need in retirement) it’s very similar, plus or minus that extra zero. We had a client come in that said, “I need $500,000 a year of income during retirement.” We went through the numbers and discovered the property tax on just one of his houses was $100,000. That’s a fixed cost. Percentage-wise, what he was spending on entertainment and housing was similar to somebody with a million dollars, there’s just more of it.

BMA: How are you structuring your portfolios now given what’s just over the horizon? What do you see happening and how are you positioning yourself for it?
MC: Inflation protection is going to be critical. We have very low inflation and a very low interest rate environment. The next big bubble to pop is going to be long term government bonds. As interest rates rise, they’re going to get hurt. There are a lot of people who bought long term bond funds because they did well in 2008 and 2009. I think people don’t understand how significant a hit to their principal they can take if rates increase 1 percent. So we’re shortening maturities. We’re trying to move into positions that would benefit from a rising interest rate environment. We’re working with a few of the largest insurance companies in the world right now with their product development departments to bring to market a more consumer friendly longevity insurance product. Longevity protection, obviously, will be key moving forward. When my daughter was born, she had seven out of eight great grandparents still alive.

Van Mueller: Top Financial Advisor

Image by davedehetre via Flickr

Spend some time at an event where Van Mueller is scheduled to speak and you’d get the impression you are waiting for a rock star to arrive. At this year’s MDRT conference, held in Vancouver, British Columbia, there was a palpable energy in the air as Mueller readied to make his presentation. But ask the down-to-earth Milwaukee resident about his appeal and he’ll downplay the whole thing with his self-effacing charm. The secret, he says, is that the advisors he coaches know that he truly walks the walk, with a sales record to back up his words.

In addition to making dozens of public speaking appearances, Mueller (pronounced, as he says, like Miller beer) maintains an active client base of about 3000, with his wife and daughter helping with his website, newsletter, marketing and his monthly column for SMA, and Laurie Kim, his ever-vigilant office manager/sidekick, keeping his schedule in order.

We’ve selected Mueller as the 2010 Advisor of the Year for his hard-working spirit and his dedication to developing and improving the life (and business) of those in the industry. Mostly, it’s the story of his personal reinvention and the success he’s enjoyed in the days that followed that make him an advisor to emulate.

SMA: What is it that you’ve done to become such a star in your speaking engagements?

Van Mueller: It’s pretty simple—what I do is talk about things that can be easily transferred into action, immediately, under any company’s system. The problem with most speakers is that they talk about their own special market or their particular seminar … that’s not the case with me. I could move to New York City, Los Angeles or Atlanta, and it wouldn’t take me long to catch on. I’d use the same ideas and I’d have had the same success I’ve had in Milwaukee.

People know that I’m really doing what I say, going out and knocking on doors, sitting in households and talking to people. I don’t talk a lot about myself, I mostly talk about the transferrable ideas … and that’s why I keep on getting invited back to events. And it also works with my own clients, as well. They always ask, “Will you talk with my mom and dad or with my kids about the same solutions?” And that’s great—I don’t have to prospect, I have so many people ready to see me.

SMA: You credit a job loss as one of the best things that ever happened to you. How did that occur?

VM: Change takes courage and I wasn’t very courageous. I worked selling health insurance for 16 years but I was a coward, happy just making $30,000 or $40,000 a year, figuring that if I just stayed put, no one would bother me. But I had a totally negative attitude—I was the cancer of the office, the guy that always said that everything sucked and everything was bad—and because I was 6-foot-3 and 250 pounds, nobody wanted to deal with me. It was so hard to replace an agent back then that they were willing to live with me.

Finally, I got fired—and I still fall to my knees, thankful that this happened, though at the time, I didn’t know what to do. So I picked up the phone and called James Gaylord, who was VP of training for a life insurance company, and I asked for help. He told me, “Van … you’re a moron. But I can fix your career, if you do exactly what I say.” He told me I needed to take care of people and not worry if what I did was going to earn me a profit. It needed to be about them, not me.

Almost immediately, I began public speaking and learning to put my information out there and let people look at it. I thought I was going to starve to death, but in my 17th year in business, I made the MDRT, and now, in my 37th year, I’ve been Top of the Table for 20 years. Much later, I asked him, “Jimmy, what can I do to say thank you for what you’ve taught me? He told me, ‘just pass it on.’”

SMA: Which of your roles do you enjoy more?

VM: At my core, I’m an insurance and financial professional, but speaking and writing enhances what I do. I love it all, but if you asked me what I would do if I could only do one thing, I would do the advisor business. I might have a week where I’ve done 50 appointments and I’m tired, but I arrive in Dallas to do a speech and I’m in my hotel room, and I’m re-energized. These jobs feed into each other and rejuvenate each other. I just think, I need to let people know that this is the greatest time in history to do what we do and offer the advice that we do. You’ve missed the point if you don’t realize that.

SMA: And what is that message?

VM: My message, and my mission, is to let people know that in the 21st century, you don’t have to be dependent on government, on unions or on pensions, that you can be financially self-reliant. So many Americans, and even financial professionals themselves, don’t understand what a serious place we’re in. You have to get in front of people, and you have to be able to ask them, “Do you understand how Social Security, Medicare and Medicaid and the new health care reform really work?”

You need to let them know a couple of important bits, but the most important thing is that it’s all manageable if you understand what’s going on and you develop some strategies to deal with things. If we don’t tell them the truth, the politicians will tell them otherwise. There will never be another time like this; we have an opportunity to significantly change their lives.

SMA: How do you go about explaining that to clients or to other agents?

VM: Here’s my simplest sales idea. The goal of every presentation should be to make sure that clients understand that taxes will be higher in the future, that benefits will be lower and that the government will have toinflate the moneysupply to keep up. It’s as simple as that. We, the advisors, are your only hope. We have strategies that will help you deal with and even thrive in the future. It’s really that simple. People would be so much happier if they knew that and could start to prepare.

On a practical note, I also have five simple “elevator talks” that I share with agents and advisors. Boil your message down to that level and you’ll always be the hit of the cocktail party. But I can go up to practically anyone, a lady working in a gas station, and start into one of those speeches—“If I told you you could win by not losing, would you be interested in hearing what I had to say,” for instance, and they’re hooked.

SMA: With such a busy schedule, do you have any downtime?

VM: I have plenty of downtime. I’m a season ticket holder to the Milwaukee Bucks, I like going to Packers games, I love going to movies and I love to be around crowds, at state fairs and festivals and events like that. My wife Pamela and I have lived in downtown Milwaukee for 12 years and we’ve decided that we’re permanent city dwellers—we love living here, and we love going out to eat. She also manages my newsletter and my website, so we get to spend a lot of time together doing this work. I also love golfing, and I get to do tons of business when I’m out on the golf course. And I like to collect Beatles memorabilia; I’ve got tons of photos and I’ve seen “Love” at the Mirage in Las Vegas 10 times.

SMA: Who are your own mentors and where do you find your inspiration?

VM: I’ve always felt that in order to be successful, you have to offer something unique—this is what Dan Sullivan says about developing your own unique abilities—so I love to read, a lot. I became known for all that information that I’ve gathered. And I try to emulate the best … Tony Robbins, Zig Ziglar, Tom Hopkins, Ed Slott, all of the MDRT, NAIFA and GAMA leadership. You just have to remember that the secret of life is what you give, not what you get.

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2009 Top Financial Advisor of the Year: Stan Corey & Paul Bennett: BMA

It’s obvious, but worth repeating nonetheless; attention to detail pays (especially in this business). After consuming far too much black coffee and pizza, we thought we had the Advisor of the Year nominees wrapped up and looked forward to putting it to bed. Then we got an entry from C5 Wealth Management and tossed it on the pile.

When we finally got around to reviewing it … well, we were blown away. It’s by far the best presentation we’ve received; detailed bios, investment philosophy, background information on the firm, charitable involvement, life outside the business, testimonials from clients (the table of contents was a big help). When we did our own due diligence, we found it all measured up — and then some.

Stan Corey and Paul Bennett built the business together, and we couldn’t get either to take credit, so in a twist on the annual award, we named them both 2009 Boomer Market Advisor(s) of the Year.

The feat is all the more impressive in a year such as this. Not to take anything away from past winners or this year’s other nominees, but that they were so solidly recognized by peers and clients (with all that’s happening) means they’ve set the bar that much higher for us all. And they lay waste to the pessimistic, sky-is-falling, nothing-can-be-done attitude reported by too many advisors in the consumer press.

Both have been entrepreneurial from the start and this spirit, combined with their extensive experience, has paid off — big time. The partners have $750 million in assets under management, a family-office RIA and a third-party administration business. They have clients in 20 states and some overseas, and they are in the enviable position of choosing the clients with which they work. Overall, they say, they’re keeping busy and doing right by their boomer clients.

It hasn’t always been this way, but they both recognized the need for independence early on. Corey, in particular, has grown up with the modern financial services movement.

“I had my first company when I was 17 and it paid for most of my college as a result,” Corey says. “I was evaluating things in the 1970s and the financial services industry really intrigued me. I found the easiest way to get into the program at that time was through an insurance window with no real upfront money to do it. I got some basic training and I started at the end of 1979. My goal from the beginning was to develop myself as an independent financial planner, which was fairly new. In 1983 I formed my RIA, and started charging fees.”

Bennett took a bit of a different route, following his mother’s advice and working for what is now (post mergers) Bank of America as a commercial loan officer and credit analyst.

“It’s where I picked up a lot of my finance experience, having to analyze companies and financial statements and all that,” Bennett says. “But I realized I wasn’t working one-on-one with people. I was looking at credit files and it just really wasn’t me. I’m more of a people person.”

After a stint with John Hancock Financial Services, he landed at The MONY Group, a broker/ dealer where he met Corey. Both advisors had independent RIAs at the time. They eventually decided to merge the two, and Great Falls, Va.-based C5 Wealth Management was born. “Stan and I sat down, had a mind-meld and said, ‘What are we are we all about? What do we stand for?’” Bennett says. “We kept coming up with these C words and phrases such as client first, comprehensive, collaboration, cutting edge ideas (401(k) fiduciary responsibility is one area of particular pride in this area) and credentialing.”

C5 — get it? This last of the C’s, credentialing, is a large part of their success.

“We’re huge proponents of continuing education,” Bennett says. “We pay for it for our employees. We have several CFPs, we have two people in the CFA program currently. We have MBAs. Bottom line, credentialing is huge.”

Industry involvement, either with ongoing education or advocacy organizations, is “in our blood here at the firm,” says Bennett. As an example, he’s a Certified Financial Planner, Chartered Financial Consultant and an Accredited Investment Fiduciary. He’s currently enrolled in the CFA program and is getting his master’s in security analysis and portfolio management.

So they have the credentials, the expertise and the experience. All well and good, but what specifically are they seeing from their baby boomer clients? Not surprisingly, lots of emotion.

“The clients referred to us over the last six or eight months are what I call ‘the walking wounded,’” Corey explains. “They’ve gotten beat up terribly. We’ve been fortunate enough, since our goal has always been to outperform the downside of the market dramatically, and we’re not as worried about outperforming the upside. And we have absolutely killed the downside. We’re not going to take 10 years to recover the damage that’s been done. A reasonable scenario is that over the next five years they’ll be in fine shape.”

“We stress test the retirement cash flow scenarios,” Bennett adds. “We’ll actually run that out for our client based on the goals and objectives, resources, etc. We’ll stress test it, back test it, run bad timing tests, we’ll use rolling period tests, Monte Carlo analysis –  anything we can get our hands on. We’re all about risk mitigation first and the returns are a byproduct of that.”

As if to emphasize the point, Corey is quick to note he’s had clients that retired in the 1980s who are still on the same (increasing) income stream. But he is concerned (and rightfully so) about baby boomer retirement in general. Baby boomers in their 50s making less than $100,000 a year who are putting all their money in 401(k)s have gotten hammered. As a result, he says, they sell low and wait for the market to recover, afraid to invest in down markets (which is exactly the time they should).

“My advice to boomers in this position is simply, ‘Don’t give up the ship. You’ve got to continue to invest. Don’t wait for the market to recover.’

“(Boomers) need to reevaluate their allocations, they may have been exposed to too much risk but they need to continue to invest. And yes, it may mean that they’re going to work a little longer. Or they’re going to have to live with less in order to save more,” Corey concludes.

But, he points out, it’s a problem baby boomers have always had.

“We (baby boomers) go beyond our means. We made the credit card industry overwhelmingly successful. I’m struggling to find out if there are other things we can do to help the boomer population in general.”

via boomermarketadvisor.com

Boomer Market Advisor has selected their top advisor for several years. This is last years, but congratulations Stan Corey & Paul Bennett. Wade Dokken

The Way We Pay for Fund Managers is about to Drastically Change-edited by Wade Dokken

<iframe src="http://www.businessinsider.com/embed?id=4c9d47e07f8b9a486b010100&amp;width=600&amp;height=430" width="600" height="430" border="0" frameborder="0"></iframe>

Van Mueller--Top Financial Advisor of the Year-Senior Market Advisor 2010

Spend some time at an event where Van Mueller <http://www.seniormarketadvisor.com/Exclusives/2010/8/Pages/Van-Mueller-Named-2010-Advisor-of-the-Year.aspx> is scheduled to speak and you’d get the impression you are waiting for a rock star to arrive. At this year’s MDRT conference, held in Vancouver <http://www.seniormarketadvisor.com/Exclusives/2010/6/Pages/MDRT-dispatch-Best-sales-steps-to-motivate-action.aspx> , British Columbia, there was a palpable energy in the air as Mueller readied to make his presentation. But ask the down-to-earth Milwaukee resident about his appeal and he’ll downplay the whole thing with his self-effacing charm. The secret, he says, is that the advisors he coaches know that he truly walks the walk, with a sales record to back up his words.

In addition to making dozens of public speaking appearances, Mueller (pronounced, as he says, like Miller beer) maintains an active client base of about 3000, with his wife and daughter helping with his website, newsletter, marketing and his monthly column for SMA, and Laurie Kim, his ever-vigilant office manager/sidekick, keeping his schedule in order.

We’ve selected Mueller as the 2010 Advisor of the Year for his hard-working spirit and his dedication to developing and improving the life (and business) of those in the industry. Mostly, it’s the story of his personal reinvention and the success he’s enjoyed in the days that followed that make him an advisor to emulate.

SMA: What is it that you’ve done to become such a star in your speaking engagements?

Van Mueller: It’s pretty simple—what I do is talk about things that can be easily transferred into action, immediately, under any company’s system. The problem with most speakers is that they talk about their own special market or their particular seminar … that’s not the case with me. I could move to New York City, Los Angeles or Atlanta, and it wouldn’t take me long to catch on. I’d use the same ideas and I’d have had the same success I’ve had in Milwaukee.

People know that I’m really doing what I say, going out and knocking on doors, sitting in households and talking to people. I don’t talk a lot about myself, I mostly talk about the transferrable ideas … and that’s why I keep on getting invited back to events. And it also works with my own clients, as well. They always ask, “Will you talk with my mom and dad or with my kids about the same solutions?” And that’s great—I don’t have to prospect, I have so many people ready to see me.

SMA: You credit a job loss as one of the best things that ever happened to you. How did that occur?

VM: Change takes courage and I wasn’t very courageous. I worked selling health insurance for 16 years but I was a coward, happy just making $30,000 or $40,000 a year, figuring that if I just stayed put, no one would bother me. But I had a totally negative attitude—I was the cancer of the office, the guy that always said that everything sucked and everything was bad—and because I was 6-foot-3 and 250 pounds, nobody wanted to deal with me. It was so hard to replace an agent back then that they were willing to live with me.

Finally, I got fired—and I still fall to my knees, thankful that this happened, though at the time, I didn’t know what to do. So I picked up the phone and called James Gaylord, who was VP of training for a life insurance company, and I asked for help. He told me, “Van … you’re a moron. But I can fix your career, if you do exactly what I say.” He told me I needed to take care of people and not worry if what I did was going to earn me a profit. It needed to be about them, not me.

Almost immediately, I began public speaking and learning to put my information out there and let people look at it. I thought I was going to starve to death, but in my 17th year in business, I made the MDRT, and now, in my 37th year, I’ve been Top of the Table for 20 years. Much later, I asked him, “Jimmy, what can I do to say thank you for what you’ve taught me? He told me, ‘just pass it on.’”

SMA: Which of your roles do you enjoy more?

VM: At my core, I’m an insurance and financial professional, but speaking and writing enhances what I do. I love it all, but if you asked me what I would do if I could only do one thing, I would do the advisor business. I might have a week where I’ve done 50 appointments and I’m tired, but I arrive in Dallas to do a speech and I’m in my hotel room, and I’m re-energized. These jobs feed into each other and rejuvenate each other. I just think, I need to let people know that this is the greatest time in history to do what we do and offer the advice that we do. You’ve missed the point if you don’t realize that.

SMA: And what is that message?

VM: My message, and my mission <http://www.seniormarketadvisor.com/Issues/2010/June-2010/Pages/Its-your-job-to-provide-the-answers.aspx> , is to let people know that in the 21st century, you don’t have to be dependent on government, on unions or on pensions, that you can be financially self-reliant. So many Americans, and even financial professionals themselves, don’t understand what a serious place we’re in. You have to get in front of people, and you have to be able to ask them, “Do you understand how Social Security, Medicare and Medicaid and the new health care reform really work?”

You need to let them know a couple of important bits, but the most important thing is that it’s all manageable if you understand what’s going on and you develop some strategies to deal with things. If we don’t tell them the truth, the politicians will tell them otherwise. There will never be another time like this; we have an opportunity to significantly change their lives.

SMA: How do you go about explaining that to clients or to other agents?

VM: Here’s my simplest sales idea. The goal of every presentation should be to make sure that clients understand that taxes will be higher in the future, that benefits will be lower and that the government will have toinflate the money <http://www.seniormarketadvisor.com/Issues/2010/February-2010/Pages/Inflationits-back.aspx> supply to keep up. It’s as simple as that. We, the advisors, are your only hope. We have strategies that will help you deal with and even thrive in the future. It’s really that simple. People would be so much happier if they knew that and could start to prepare.

On a practical note, I also have five simple “elevator talks <http://www.seniormarketadvisor.com/News/2010/3/Pages/Four-tips-to-perfect-your-elevator-speech.aspx> ” that I share with agents and advisors. Boil your message down to that level and you’ll always be the hit of the cocktail party. But I can go up to practically anyone, a lady working in a gas station, and start into one of those speeches—“If I told you you could win by not losing, would you be interested in hearing what I had to say,” for instance, and they’re hooked.

SMA: With such a busy schedule, do you have any downtime?

VM: I have plenty of downtime. I’m a season ticket holder to the Milwaukee Bucks, I like going to Packers games, I love going to movies and I love to be around crowds, at state fairs and festivals and events like that. My wife Pamela and I have lived in downtown Milwaukee for 12 years and we’ve decided that we’re permanent city dwellers—we love living here, and we love going out to eat. She also manages my newsletter and my website, so we get to spend a lot of time together doing this work. I also love golfing, and I get to do tons of business when I’m out on the golf course. And I like to collect Beatles memorabilia; I’ve got tons of photos and I’ve seen “Love” at the Mirage in Las Vegas 10 times.

SMA: Who are your own mentors and where do you find your inspiration?

VM: I’ve always felt that in order to be successful, you have to offer something unique—this is what Dan Sullivan says about developing your own unique abilities—so I love to read, a lot. I became known for all that information that I’ve gathered. And I try to emulate the best … Tony Robbins, Zig Ziglar, Tom Hopkins, Ed Slott, all of the MDRT, NAIFA and GAMA leadership. You just have to remember that the secret of life is what you give, not what you get.

Debt Levels back to 2000 levels

via businessinsider.com

American has reduced our overall debt levels to 2000 levels. No wonder there is no consumer demand.

Senior Market Advisor Announces 2010 Advisor of the Year Finalists

See more news releases in: Magazines, Publishing & Information Services, Banking & Financial Services, Insurance, Awards, Trade Show News, Senior Citizens

Senior Market Advisor Announces 2010 Advisor of the Year Finalists

CENTENNIAL, Colo., Aug. 3 /PRNewswire/ -- Senior Market Advisor, the leading monthly business publication for advisors and producers serving the senior market, today announced the finalists for its 2010 Advisor of the Year Award.  

(Logo: http://photos.prnewswire.com/prnh/20100316/SUMMITLOGO )

(Logo: http://www.newscom.com/cgi-bin/prnh/20100316/SUMMITLOGO )

The award recognizes an outstanding advisor with a senior-focused practice.  The winner will be announced at Senior Market Advisor Expo 2010, scheduled for August 25-27, 2010 in Las Vegas, NV.

The five 2010 Finalists are:

Chris Abts, Cornerstone Retirement Group; Josh Jalinski, Jalinski Advisory Group; William McLaughlin, The McLaughlin Financial Group, LLC; Van Mueller, Wisconsin Agency of New England Financial Services, and Mike Suttle, Suttle Financial Group.

A record number of nominees were evaluated by the editorial staff of Senior Market Advisor based on the following criteria:

• Have a minimum of five consecutive current years as an advisor
• Have sold a minimum of $5 million in annuity/life insurance premium in PERSONAL production during 2009; or have sold a minimum of $400,000 in LTCI premium in PERSONAL production during 2009
• Clear a 7-year background check for civil, criminal and business violations by the National Ethics Bureau (for complete details about the background check, visit www.ethicscheck.com)
• Have an average client age of 60 or older
• Be able to demonstrate a commitment to community involvement

"We strive to celebrate the independent advisor and I believe we have done a great job of that this year with the five finalists," said Daniel Williams, editor of Senior Market Advisor. "All of these finalists are terrific producers, who also uphold high ethical standards and have an innate ability to understand their client's greatest needs."  

In addition to being recognized at the opening of Senior Market Advisor Expo, the winner will be featured on the September cover of Senior Market Advisor.  Exclusive, first-hand interviews with each finalist are featured in the August issue of Senior Market Advisor.

To register to attend Senior Market Advisor Expo and find out first hand who becomes the 2010 Advisor of the Year, visit SeniorMarketExpo.com.

About Senior Market Advisor

Since 2000, Senior Market Advisor has been an advocate for independent advisors serving the senior market. Senior Market Advisor was the first publication to recognize the unique information needs of independent advisors to seniors and to provide information and guidance they need to build their business. The magazine highlights proven sales techniques, the latest trends, and effective strategies for serving the insurance needs of seniors. Based in Colorado, Senior Market Advisor is a product of Summit Business Media. For more information visit SeniorMarketAdvisor.com.

About Summit Business Media

Summit Business Media is the leading B2B media company serving the insurance and investment markets. Through its Media and Reference Divisions, SBM publishes 17 magazines, more than 30 targeted industry Websites, and 150 reference titles. The Events Division hosts a dozen conferences supporting these brands. SBM's Data Division is the leading provider of group benefits and retirement prospecting tools and insurance industry financial data. For more information, visit SBMedia.com.

SOURCE Senior Market Advisor

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