SAN DIEGO – “The biggest thing we see ahead on the government relations front is the tax issue,” said Juli McNeely, the incoming president of the National Association of Insurance and Financial Advisors (NAIFA).
The owner and vice president of McNeely Financial Services, she is the first woman to be elected president of NAIFA. She is assuming the post at the same time as the organization is entering its 125th year.
“We have done so much in our 125 years,” McNeely told InsuranceNewsNet in advance of today’s opening events. “We have a rich and strong history of helping advisors serve Main Street America.” But she made it clear that NAIFA has continued work to do.
Threats to tax protections
New threats to tax protections in life insurance products can be seen in the tax expenditure report published in August by the Joint Committee on Taxation of Congress. The report lists a variety of tax expenditures (federal tax exclusions, exemptions, deductions, credits or deferrals that impact federal income tax liability) that could, if curtailed or removed, be targeted for federal revenue generation.
“The expenditures related to the insurance industry alone amount to about $3.2 trillion,” McNeely said.
In general, those expenditures touch on just about every area of life insurance, according to McNeely. These areas include life insurance, annuities, retirement savings plans, health insurance benefits, traditional individual retirement accounts (IRAs), Roth IRAs and taxation of NAIFA members.
The expenditure items are not currently the subjects of new legislation, she pointed out.
However, NAIFA’s federal relations experts believe that the potential exists that insurance-related “pieces” from the expenditures list could be pulled into certain legislative proposals by next year. This could happen through comprehensive tax reform or business tax reform that seeks to raise revenue by cutting back on specified expenditure items.
NAIFA will be watching this closely, because the association believes curtailments would remove existing incentives for Americans to take personal responsibility to save for retirement and protect their families from financial loss and hardship.
Some proposals in this area “really do look closely at our industry,” McNeely said. That “worries me,” she added, because Americans need the tax features in their retirement savings accounts and other insurance products.
NAIFA members want to help Americans take personal responsibility and they work “very hard” to help them do this, she added.
Another front burner issue that McNeely identified is advisors’ need for continued innovation. Some advisors are very comfortable the way things are today, she allowed. “But they — and NAIFA too — need to continue to innovate” in order to keep up with changes in the environment.
She cited her own practice as an example. When she took over the reins of the Spencer, Wis., agency from her father 18 years ago, “we had very little technology.” Her father was “tech-averse,” she explained.
But under her stewardship, the agency began implementing tech-related changes that have benefited the business. A recent example is the decision to start using social media to educate and inform clients — a decision made a year ago with the approval and support of the firm’s broker/dealer, she added.
The agency now puts daily posts on Facebook and Twitter, she said. “We’ve found this is an incredible way to reach our clients.” For example, she said some people respond to the posts, saying they want to know more. Others tell her in person that they saw one post or another. Many say thanks for the information.
This has been so productive that the agency is starting to post on LinkedIn too.
McNeely said she believes social media is working well for her firm because “consumers are looking for information about insurance and financial products from a trusted source, and their own advisor is someone they trust.”
Women in the industry
McNeely views her election as NAIFA’s first woman president as an indication that the number of females in the insurance and financial services industry is starting to grow.
When she started out in the business, “there were no long lines in the women’s rest rooms at industry meetings,” she laughed. Those times are now over.
The increased number of women advisors is good for the industry and for customers, she maintained. “More and more women are making financial decisions in the household, and they want to work with someone who looks like them and who understands them, their values and their beliefs,” she explained.
In general, she said, the industry needs to attract more women and also more people from multi-cultural backgrounds and from various religious backgrounds. It’s not that established advisors, male or female, cannot learn how to work with customers who are different, she said. However, it can be easier for advisors to work with certain customers when there is some common understanding or background.
In the case of women advisors, many bring skill sets that some male advisors may not have, McNeely added. These may include listening, empathy, multi-tasking and detail orientation.
As she looks at the year ahead, she thinks the important thing about her role at NAIFA is that she is bringing skill sets that NAIFA needs right now. She is not focusing on being the first woman president but rather on being “the president who will lead this organization as other leaders have done in the past.”
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