Post on 29-Jan-2016
transcript
Challenges in Changing Regulatory and Economic Environment
Financial Planning:
Presented by
Herbert K. Daroff, J.D., CFP®
Baystate Financial Services, LLC
Boston, MAHDaroff@baystatefinancial.com
2004 World Services Group Financial Services Meeting, Miami
May 7, 2004MetLife
Achieving the Dynamic Needs of High Net Worth Individuals
TIME Magazine
Sept. 29, 2003
Bad News = Big Headlines
Bad News Travels Fast
‘...the NASD is taking a “novel” approach and they’re sending the message that firms should “dedicate serious resources” to resolving problems after they were detected.’
She Was Found Guilty … The Brand Was Found Guilty
“By going to such lengths to serve a client, Mr. Bacanovic underscored how thin the line can be between exemplary client service and unethical or even illegal behavior.”
“The brand will never be the same the way it was.”
Troubled AnnuitiesMore than 800 insurers these days are considered vulnerable, or financially weak, by at least one of the major rating agencies.
Company Number of Vulnerable Ratings
Bankers Life & Casualty 5Conseco Annuity Assurance 5Allmerican Financial 4Old West Annuity & Life 3Old Standard Life Ins. 3Security National Life 3
Financial Planning
… is the dynamic process of helping people
• identify where they are financially today;
• identify where they want to be in the future; and
• then, achieve their financial goals, needs and objections.
Six Step Process
1. Mutually Defined Scope of the Engagement• planner’s expectations• client’s expectations
2. Data Gathering• goals, needs, and priorities• factual information
3. Analyze Data and Evaluate Alternatives
4. Present Recommendations
5. Implement Agreed upon Solutions
6. Periodically Monitor and Revise as Necessary
Changing Regulatory and Economic Environment
Changing Lawsand Regulations
EconomicConditions
• Split-Dollar
• NASD/SEC Compliance
• Retirement Funding Limits
• Estate Taxes
• 15% Dividends
• Insurance & Annuity Products
• Individual Securities Mutual Funds Managers of Managers
Life Insurance Products
Low Interest Rates (beginning to rise):
UL -- mostly short term debt -- increased performance
WL -- mostly longer term debt -- decreased dividends
VUL -- FLEXIBILITY
ClientLife &HealthIns. Co.
FinancialPlanners
Property &CasualtyIns. Co.
CPA
Banks
Evolution of Financial Services
WireHouses
Mutual Funds
Investments
Trusts Cash Management
Attorney
Evolution of Financial ServicesFirst Stage of Consolidation
FinancialPlanners
CPA
Banks
Trust Cash Management
Attorney
Client
Ins. Co Multiple LinesLife &HealthIns. Co.
Property &CasualtyIns. Co.
WireHouses
Mutual Funds
Ins. Co B/D
NES
Walnut St.S
ec.
MetLife
Nathan &
Lewis
Investments
Evolution of Financial ServicesSecond Stage of Consolidation
Attorney
Client
CPA
and
FinancialPlanners
and
Banks
Licensed to sell Product
Insurance
and
Investments
Licensed Insurance
Agents
Products
RegisteredReps.
Note: Attorneys in Boston have been investingtrust fund assets for many years
Evolution of Financial Services
Products Advice
Commissions Fees
Who is our Competition?
Other Advisors
Good Advice Bad Advice
Analysis Paralysis
The Internet
Do-it-yourself
Procrastination
Indecision