Whether it’s casually asking a client about their parents or children, or it’s crafting an investment portfolio that incorporates an indexed universal life policy, an advisor who has paid more than $1 billion in death benefits presented nine ideas to build your practice.
Howard Sharfman, senior managing director at NFP Insurance Solutions, spoke during the National Association of Insurance and Financial Advisors’ virtual Impact Week.
Use an agenda. “We need an agenda because we tend to rush through things,” Sharfman said. He suggested the agenda include telling the prospect what you are going to say, saying it and then telling the prospect what you said again.
The agenda should include answering the questions, why insurance, why you and why now. The meeting should conclude with the advisor and the prospect agreeing to the next steps in the process.
Always ask about the older and the younger generations. Ask about your client’s parents and children, Sharman suggested. It’s part of establishing rapport but it also can lead to a referral.
Interest rates/inflation/income replacement. Inflation and interest rates have affected income replacement calculations. Sharfman said this is a good time to review the needs of your long-time clients.
The new tax proposal. Although we don’t know exactly what a new tax bill will look like yet, “this is an opportunity to get ahead of the conversation,” Sharfman said. “Wouldn’t your clients like to know you are informed? And wouldn’t they like to know they are important enough for you to call them and discuss this?”
He suggested reviewing the client’s holdings to make sure they don’t leave their children assets that have tax liabilities. This provides a good opportunity to make sure the client has enough life insurance to provide liquidity for paying taxes.
The automatic referral system. Sharfman said advisors should conduct a complete fact-find with clients that includes the names of their CPA, attorney, wealth advisor or banker and any other important advisor. The advisor then should get the client’s permission to contact these professionals. Each professional is a referral with leverage, he said – they have other clients.
“I don’t want to be the client’s most trusted advisor,” he said. “I want to be an advisor on their advisor team.”
Marketing and social media calendars. Keeping a schedule of marketing events and social media posts forces the advisor to be organized and creative, Sharfman said. The calendars also are a way to connect with clients during events such as Life Insurance Awareness Month. An added bonus to social media posts, he said, is that “the social media post is working when you’re not,” helping the advisors to stay in front of clients and prospects.
The leverage LIRP (life insurance retirement program). By incorporating IUL into a client’s investment portfolio, you can add benefits to ensure the client’s future success and lifestyle in retirement, Sharfman said. Adding $1 million of long-term care rider to the policy reduces the income of a standard LIRP by only 2% while providing additional protection and value.
Private placement life combined with a guaranteed universal life or whole life policy. Sharfman described this as a plan for wealthy individuals, families and institutions with $20 million or more in investable assets that desire tax deferral, asset protection, capital preservation and wealth accumulation.
SERP swap, split dollar and the excise tax. Split dollar programs can be used in many nonprofits to supplement an executive’s retirement benefits, Sharfman said. The sponsoring entity receives their premiums paid to the plan returned at death plus interest. The executive receives income from the plan free of income tax. A death benefit is paid to the entity so they can recover the cost of the plan plus interest. The additional death benefit over recovery is paid to the executive’s beneficiary income tax free.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.