, Publication of NAIFA San Francisco Peninsula September 2012 September 19, 2012 11:30am to 1:30pm Crown Plaza Hotel 1221 Chess Drive, Foster City, CA “Selling Life Insurance… What Does That Mean To You? Moderated By: Elisha “Elie” Aharon, Pacific Advisors Distinguished Panel of Experts: Robert S. Bedi, Northern California Regional Vice President Pacific Life Tony Delumen, CLTC True North Financial Group Stephen B. Levy Managing Partner, New England Financial John McAfee, CLU, ChFC , CPCU State Farm Insurance Co. Are you thinking of getting into life insurance sales, growing your life insurance production, or reinvigorating your life sales in 2013? Come join four reputable and successful life insurance professionals who will share their life insurance sales strategies in 2013. They will (R.S.V.P to [email protected]/ 925.935.9691) No Later Than Monday, September 17, 2012 September 19, 2012 Lunch Meeting No Charge for Members: Guest Fee: $25.00 advance registration $30.00 at the door 11:30 a.m. – Buffet Lunch 12:00 p.m. – General Meeting R.S.V.P to No Later Than Monday, September 17, 2012 [email protected]925.935.9691 2012 Meetings & Events September 19, 2012 Lunch Meeting Crown Plaza 11:30a.m. to 1:30p.m October 17, 2012 Lunch Meeting MassMutual Office 11:30a.m. to 1:30p.m October 24, 2012 (AHIA Meeting) Lunch Meeting MacCorkle Ins. Group 11:30a.m. to 1:30p.m November 15, 2012 Turkey Bowl Time & Location TBA December 6, 2012 Holiday Social Time & Location TBA December 12, 2012 Holiday Luncheon Crown Plaza 11:30a.m. to 1:30p.m www.NAIFASFPENINSULA.org The NAIFA San Francisco Peninsula MassMutual Office 101 Montgomery, #600 San Francisco, CA Crown Plaza Hotel 1221 Chess Drive Foster City, CA
Transcript
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Publication of NAIFA San Francisco Peninsula September 2012
September 19, 2012 11:30am to 1:30pm
Crown Plaza Hotel 1221 Chess Drive, Foster City, CA
“Selling Life Insurance… What Does That Mean To You?
Moderated By:
Elisha “Elie” Aharon, Pacific Advisors
Distinguished Panel of Experts:
Robert S. Bedi, Northern California Regional Vice President Pacific Life
Tony Delumen, CLTC True North Financial Group
Stephen B. Levy Managing Partner, New England Financial
John McAfee, CLU, ChFC , CPCU State Farm Insurance Co.
Are you thinking of getting into life insurance sales, growing your life insurance production, or reinvigorating your life sales in 2013?
Come join four reputable and successful life insurance professionals who will share their life insurance sales strategies in 2013. They will
Young Advisor's training is for NAIFA members and potential members and geared towards those with 5 years or fewer in the financial services industry. The YAT committee is offering a great slate of programs for 2012-2013
September 2012 19 NAIFA General Meeting - 11:30am to 1:30pm Life Insurance Awareness Month Crown Plaza Hotel 1221 Chess Drive, Foster City, CA 94404
October 17 NAIFA General Meeting - 11:30am to 1:30pm Crown Plaza Hotel 1221 Chess Drive, Foster City, CA 94404
To start off I wanted to say hello and thank you all for being part of the NAIFA San Francisco Peninsula local! I hope everyone had an memorable and relaxing summer as I know I did; camping and spending time with friends and family.
This upcoming year stands to be an embracement of change. We have made a few adjustments to what we have done in the past to help both San Francisco and Peninsula co-exist and thrive. You will see our monthly meetings, alternating locations and special member
events available to accommodate and support all of our member needs. We are hoping these changes will not only help our local thrive but with your suggestions and participation also evolve into what we think it can become.
I successfully completed and recently graduated from the NAIFA Leadership in Life Institute also known as LILI. This experience changed my life forever. Through the network of members I met and all the knowledge I gained by participating has drastically changed my approach and outlook on life. Within these short summer months I have seen the results reflected in both my practice and personal life. I plan to apply those same lessons thoughout my year as president and beyond.
I strongly encourage those interested in attending LILI to contact me. I plan on being very involved with LILI functions and volunteering to help more people understand the importance of this training and how it molds our future leaders.Our goal year in and year out is to send at least 1 person from our Association to continue to develop lead-ers by fostering personal growth, enhancing business practices and developing skills necessary for effective leadership thus keeping our membership and board strong. We have many changes taking place in our world and very own back yard this coming year and we as a collective need to be prepared and knowledgeable on how to embrace or and stay ahead of these changes by adapting, which allows us to grow and not get stuck in the mud.
One thing I want us all to think about moving forward is membership. Membership is everything and everything is membership…It seems simple and it is. We want to give back to everyone in our local, but if we can’t bring in new members, we can’t move forward. With the industry changing, so is our age demographic. We want to give the new generation of agent and financial advisors a fighting chance to survive and thrive. Membership is everyone’s responsibility. If you want to get involved, but do know how…just ask and we will let you Please think about this moving forward this year as it will be a topic we will speak much about.
Thank you so much for your time and I look forward to serving you this up coming year.
Sincerely,
Jesse Parenti, 2012-2013 President
PAGE 4 SEPTEMBER 2012
Action Required: SB 1431 (De Leon) – OPPOSE SB 1431 would effectively result in the elimination of the self-insuring option for small employers with 50 or fewer employ-ees. Under this proposal, it would become very difficult, if not impossible, for small employers wanting to self-insure to pur-chase stop-loss coverage.
SB 1234 (De Leon) – OPPOSE SB 1234 would create a state-run retirement savings plan for private sector employees. It would require employers with five or more employees to automatically enroll their workers into the state-run retirement plan unless a retirement savings option is already available at the workplace. It is imperative that you send your letter as soon as possible since both bills will be heard by the Assembly later this week. Please send a letter to your Assembly Member today.
Legislative Talk for August: Tax Issues Remain Unresolved as Congress Heads Home for Recess On July 25, the Senate approved S.3412, a bill that would extend current law rate, dividend, capital gains and other tax rules for individuals earning $200,000/single or $250,000/married or less. The bill does not extend current law estate tax rules. On Au-gust 1, the House of Representatives passed H.R.8, which is extended for everyone - including high-income taxpayers - a one year current law rate, dividend, capital gains, alternative minimum tax (AMT), estate tax and other tax rules. On August 2, the House approved H.R.6169, which lays out principles for tax reform, and a protected, expedited process for enacting it. House Democrats attempted to insert the language from the Senate-passed S. 3412 as an amendment to H.R. 8, but the amendment was defeated. Resolution is not expected until after the elections.
House Legislation Would Allow SEC to Collect Investment Adviser Exam Fees: On July 25, Rep. Maxine Waters (D-CA)—a sen-ior member of the House Financial Services Committee—introduced H.R.6204, the Investment Adviser Examination Improve-ment Act. The bill would authorize the Securities and Exchange Commission (SEC) to collect user fees from investment advisers to fund the cost of their exams. The bill was offered as an alternative to the bipartisan Bachus/McCarthy self-regulatory organi-zation (SRO) bill, H.R.4624, which was introduced in April. The industry is split on whether to support SEC user fees or an SRO to upgrade adviser oversight. Some investment advisers favor the user fee approach in H.R.6204, while others, usually those dual registered as a broker-dealer (or their registered representatives), prefer the SRO that would be created under H.R.4624. NAIFA supports the SRO approach and specifically for FINRA to be the SRO because 99% of our members who are investment advisers are dual registered and thus already subject to FINRA.
Report Recommends Ways to Expand Pension: On July 27, Sen. Tom Harkin (D-IA) released a report recommending creation of a new retirement plan that employers without automatic enrollment pension plans would have to offer to their workers. The new plan would pool required employer contributions with employee deferrals into one of multiple privately, professionally managed investment plans called USA Retirement Funds.
NAIFA Engages in Retirement Savings Initiatives:NAIFA, along with other industry trade associations wrote to Congress in sup-port of H.R. 3287, a bipartisan bill introduced by Rep. Sam Johnson (R-TX) and Rep. Richard Neal (D-MA) to reduce leakage from 401(k) plan loans by extending the repayment period for individuals who lose their jobs or change jobs. H.R. 3287, The Savings Enhancement by Alleviating Leakage in 401(k) Savings (SEAL) Act, makes a constructive step in the 401(k) plan loan system by providing flexibility to loan repayment and hardship withdrawal rules regarding 401(k) plans. Every year, workers can lose valu-able retirement savings when they lose a job or change jobs if they have an outstanding 401(k) plan loan. In addition, under current law their participation in a 401(k) plan will be interrupted if they take a “hardship distribution” from their plan to cover a personal emergency. NAIFA believe these proposals, taken alone or in tandem, could fundamentally alter the structure of money market funds, potentially rendering them less desirable for retirement savers and the plans they participate in. Respect-fully, we urged the Commission not to pursue these proposals. Continued on Page 7
NAIFA Responds to WSJ Editorial on Life Insurance, Tax Reform Recently, The Wall Street Journal published an editorial stating that elimination of the tax status of inside build-up of life insur-ance products is “on the table,” as Congress looks toward tax reform. In response to this editorial, NAIFA President Robert Miller issued the following to the Wall Street Journal:
“Dear Letters Editor: For nearly 100 years, millions of American families have realized the value life insurance provides in protecting the financial se-curity of their homes and their businesses, yet proposals to limit its value may surface as the federal government seeks ways to pay for its increased spending (“Mathematically Possible,” Aug. 14).
Today, life insurance is a mainstay of the U.S. economy, accounting for 20 percent of long-term savings. Since 1913, members of the National Association of Insurance and Financial Advisors – who primarily serve middle-market Americans – have helped se-cure bipartisan support for tax policies by helping Congress understand that tax rules are not for the benefit of an industry, but for the fundamental financial security of all Americans. Now is not the time to make it harder or more expensive for families to build their own financial safety net. Public policy should continue to encourage families to plan for and protect their financial and retirement security.
With mounting national debt, Congress is once again preparing for comprehensive tax reform in 2013. The members of the Na-tional Association of Insurance and Financial Advisors will work unwaveringly to ensure that American consumers - and our cli-ents - will not be penalized for taking steps to secure their future. Robert Miller, NAIFA President”
NCOIL Holds Summer Meeting in Vermont NCOIL Reaffirms Support For Producer Licensing Modernization
NCOIL adopted a Resolution Urging Producer Licensing Modernization. The resolution is to promote uniformity in pro-ducer licensing. It urges state legislators and regulators to work together to review existing producer licensing statutes and regulations, and to eliminate any unnecessary licensing barriers. NAIFA testified in support of the resolution at the meeting and emphasized the importance of greater uniformity in producer licensing.
NCOIL Adopts Unclaimed Life Benefits Model NCOIL unanimously adopted an amended Model Unclaimed Life Insurance Benefits Act. The Model requires insurers to compare their in-force life insurance policies against the U.S. Social Security Death Master File on a semi-annual basis. Other provisions call for timely insurer efforts to confirm an insured or account holder’s death, locate any beneficiaries, and provide claim forms and instructions. NAIFA has followed this closely but has taken no position on the Model.
Federal Insurance Office NCOIL held a panel on the Federal Insurance Office (FIO), where panelists asked the legislators to keep an open mind on the role of the FIO. Speaking on behalf of the NAIC, Commissioner Roger Sevigny (NH) said that state regulators have been working closely with the FIO on international regulatory issues and emphasized that the FIO is not a regula-tor. NCOIL remains very wary about the role of the FIO and opposed its creation in the Dodd-Frank Law. NAIFA sup-ports the FIO and feels that it can play a crucial role inside U.S. Treasury to represent the interests of the insurance in-dustry.
Health Insurance Law In the wake of the Supreme Court upholding the PPACA, NCOIL held a series of meetings discussing the likely outcome of the ruling. With so few states having acted to create state exchanges, there was considerable dialogue regarding what will happen if states do not act. During the meeting, on July 11, The U.S. House of Representatives voted the re-peal the 2010 health care reform law by a hefty margin. This move was very much expected and had no sway with many of those states with Republican governors. The issue remains a front-burner item and will clearly be discussed at future NCOIL meetings.
Senate Committee Holds Hearing on Enhancing Women's Retirement Security While more women are looking toward defined contribution plans (as employers phase out defined benefit plans), women are still contributing less to these plans than their male counterparts. This, coupled with the general lack of understanding about the benefits of deferring social security, has created vastly higher rates of poverty for retired women than retired men. Chair-man Kohl pushed for the SSA to increase its educational efforts on the benefits of deferral in the future.
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There is probably no more powerful trend in the financial advisory industry today than the momentum toward transitioning from a
transaction or commission-based structure to a fee-based one. Research has shown clients are generally better served and advisors’ practices become more productive as a result of that change. Many advisors hesitate to make the switch because they are concerned they will lose clients. However, most clients will embrace the arrangement if they realize the value they receive from a fee-based
relationship with you exceeds their perception of what that relationship costs monetarily.
Getting your value proposition right It is difficult to stand above the crowd when everyone around you is offering similar products and services — ones consumers have
largely reduced to commodity status. To be effective, your value proposition must focus on the personal and emotional benefits clients will enjoy from their relationship with you, not the products and services you offer.
Communicating your value proposition
Once you have identified your value proposition, you must communicate it in a way that is: a) Empathetic — demonstrates that you have put yourself in the client’s shoes; b) Specific — details exactly how the structure will work; c) Compelling — makes a convincing
case in favor of the concept.
Handling objections Invariably, you’re going to have clients who bring up objections. Bear in mind that most objections are simply the client’s way of
saying, “I need more information,” so treat them as requests for additional data to support your recommendations. By explaining the reasons for the transition and the advantages of fee-based advice, you will be able to get them to embrace the new model.
Advantages of fees versus commissions
1. Unbiased advice. Clients will feel less intimidated and more confident that you are working as a team on their behalf. 2. Broader product range. Clients will be reassured that they have the whole world of product possibilities available to them — you
can recommend what you think is best for them overall, not just what’s on the limited list of products that pay you. 3. Consistent advice under all conditions. Clients gain peace of mind knowing you’re looking after their affairs regardless of what is happening in the world.
4. Potential cost savings. Clients will potentially enjoy the satisfaction of lower costs because you’ll have more flexibility using lower fee products. 5. More professional approach. Clients will sense they are being treated with respect and in a more professional way.
6. More client-centric. Clients will feel their time is well-spent as a result of a more consistent, efficient and effective experience. 7. Easier liaison with other professionals. Clients will gain confidence knowing a professional team of specialists is managing their
total needs. 8. Potential tax reduction. Clients will be euphoric if the government is paying part of your fees. 9. Shared risk. Clients will appreciate that the advisor has the same motivation as they do to improve their financial well-being.
10. Bragging rights. Early adopter clients will get an ego boost knowing they are at the forefront of an industry trend.
How much should I charge? There are a number of variables you should consider when determining an appropriate fee structure that treats both you and your clients
fairly. Review factors such as staff costs, overhead, products and services, your service commitment, your target market and how your annual compensation would look broken down into an hourly rate.
There is no need to approach the transition of a practice from commissions to fee-based with anything other than optimism and
confidence. If you believe it is the right thing to do, those clients with whom you have valued, mutually respectful relationships will know you have been thoughtful and will sense your enthusiasm. They will understand you are proposing a win-win arrangement and,
rather than feeling alienated, they’ll feel aligned and appreciative.
George Hartman is CEO of Market Logics, Inc., a firm that provides solutions to organizations and individuals looking to take their
business to new levels. Purchase his entire 2011 Annual Meeting presentation at http://www.mdrtpowercenter.org/.
The goal is to fill in the empty cells, one numeral in each, so that each column, row, and region contains the numerals 1–9 exactly once. Each numeral in the solution therefore occurs only once in each of three "directions" or "scopes", hence the "single numbers" implied by the puzzle's name.
