With more than 40 years of experience in financial services, Joe Jordan has had a unique career. His ability to inspire has made him a regular speaker in the most important venues for the insurance and financial services industries as he takes financial professionals on a journey to discover their true purpose and significance.
He has brought his gift for storytelling around the world, most recently as far as the Middle East, and in some cases, he has financial professionals from 10 or more countries in the room at one time. His experiences that inform his message range from selling life insurance to running a major division in a Wall Street stock brokerage firm to becoming a senior vice president at MetLife in charge of retail sales and product development. His bestselling book, Living a Life of Significance, has been published in five languages and has created fans around the world. Joe believes that being client-centric and creating value are not only the right things to do but they’re also good for business. For Joe, serving clients is not “all about the numbers” but about building relationships.
He is an outspoken supporter of business ethics and the concept of “doing well by doing good,” and he believes advisors should be driven by inspiration. In this interview with Publisher Paul Feldman, Jordan explains why the industry must focus more on inspiration and less on numbers.
Paul Feldman: You have said you believe we need more inspiration in our business and that too much time is spent on numbers. What do you mean when you say we need more inspiration?
Joe Jordan: The business is built on two foundations: prospecting — and then everything else. And that’s not a joke. There’s a tremendous amount of rejection when it comes to prospecting. You must have a tough skin. So, you must be inspired. How else can you do it?
I wrote Living a Life of Significance for advisors because I didn’t think that there was enough discussion about the inspiration in what we do. And I don’t think there’s enough discussion about inspiration in the culture. I think our business is very left-brain oriented and deals with numbers. I don’t think that’s where the business is going, and I don’t think that’s what people ultimately want.
Feldman: What are some of the new ideas you’re working on? What’s next?
Jordan: One of the things I’ve realized is that while Living a Life of Significance was for advisors, I’ve found out that significance is also what their clients want.
I guess I’m a little slow. I’ve always talked about the aging population of the world being the predominant issue that the planet faces. But beyond that was the idea that people need purpose and meaning in retirement. Most people have an unrealistic view of what retirement will look like. Dr. Riley Moynes talks about “The Four Stages of Retirement.” Stage 1 is the vacation stage. That’s when everyone says, “Oh, this is great. I can sleep all day and do all of this other stuff.” It usually lasts about two to three years.
Stage 2 is the loss period. There are five losses. You lose your routine. You lose your identity. You lose relationships. You lose purpose, and you lose your power. It takes trial and error to get out of that. That trial and error is stage 3.
And then, the last stage is happiness. That’s when you rewire yourself. I think that’s something new that we, in our business, need to gravitate toward. There was a great quote from one of the astronauts. He said, “If you think going to the moon is hard, try staying home.” So that’s a whole new challenge that people face. And I think that’s where the business is going.
There was a report from McKinsey. It said that in 10 years, advisors will gradually shed their role as investment managers and become more like integrated life and wealth coaches. Who else does that? Who else could possibly do that?
I think our approach is kind of wrong. Instead, it should be about creating relationships. And that’s all been exacerbated by the pandemic, right? People have felt more lonely than they ever have before. Isolation kills. When people have a sense of isolation, it’s equivalent to smoking 15 cigarettes a day in terms of their health.
I’m really turning on to the fact that I think this is the age of the fraternal organizations, because they also focus on relationships. I’m doing something with the Knights of Columbus — a couple thousand of their members. They have a lot of programs designed to keep people active — mentorship programs with younger people, a travel club — so they’re spending time together.
And that’s a huge competitive advantage. I’ve spoken at a number of these fraternal organizations, and I want to talk more about it, because the insurance industry doesn’t have that same kind of relationship with its clients. I think that would be a competitive edge.
They have a value proposition more like where I think our business is going. Insurance products are commoditized. So right now, how do you differentiate yourself? It’s the idea of becoming a kind of life coach. This is an evolution that must happen. There was a study that said people retain 6% of what you’ve said and 100% of how you’ve made them feel. I think the industry needs to move more toward a service culture.
Feldman: Tell me more about being an integrated life and financial coach. What does that look like for an advisor?
Jordan: Actuarily speaking, when people retire, their life expectancy goes down significantly. So what do you say to that? First of all, as an advisor, how do you coach your clients into not dying and into staying on this planet awhile and finding significance?
People who retire to something are happier than people who retire from something. And so when people retire, if they haven’t made any plans, they get isolated. They lose their routine, their identity, their relationships — they lose their purpose. And they lose power.
People who have meaning and purpose are the ones who will live longer.
Our business has been designed to go in, make the sale and then get out. I think the way to create a great relationship with people is by adding value. That’s what Mitch Anthony describes in his book The New Retirementality. There’s the rep’s perspective and then there’s the client’s perspective — and you can bring the two together.
I recently heard one CEO say to his team, “I was proud of you guys during the pandemic because you acted more like life coaches than you acted like financial guys.” If you stay where you are in a commoditized marketplace where everybody does the exact same thing, the products don’t differentiate you anymore.
Feldman: In your book, Living a Life of Significance, you mention that at some point, life is like a marathon. What do you mean by that?
Jordan: I mean that from a standpoint of a cultural change. It’s a marathon for people who retire. Clients don’t understand that they have to do something meaningful and worthwhile when they retire. A lot of them don’t know what that would be. I was at MDRT, and a lady got up and said, “Purpose is not the thing you do. It’s what happens inside of others when you do what you do.”
You can’t attain purpose and a meaningful life unless you’re impacting others.
So when people retire, they have to be somewhat active in terms of being involved with others. And that has to be pre-thought-out. And I think helping clients realize that and create a plan is the next step of our evolution. And that’s why I think fraternal organizations have the advantage — they’re already thinking like that.
Feldman: We’re an older industry, with a higher-average-age workforce — and many are getting closer to retirement. I think this is such a good opportunity, as an industry, to mentor new people into the business as older people transition out of their practices. How do you bring in and mentor a new person?
Jordan: There are two types of challenges. People moving from another industry are one type of new person. Usually, people who have moved over from another profession have some business experience. They’ve been around the block. They understand that it would be nice to be able to run your own business.
The other type of people new to the business is those who are younger and haven’t experienced much of life. One of the things that they have to do when they get into this business is try to understand clients’ opinions, feelings and what have you. You’re at the client’s service, and so that’s where someone without much experience will need the most help.
Feldman: Do you feel advisors should be focusing on retirees or pre-retirees right now?
Jordan: Both. I think focusing on pre-retirees is important because you can help make certain that they don’t fall into the traps, the mistakes, that some retirees do. For example, some of them sign up to take Social Security early, and if you’re not in need of it, that’s bad. Your monthly payout will increase the longer you wait. On top of that, you can prepare new retirees for some of the things that might change due to various changes and regulations so they could start thinking in that manner.
I think pre-retirees and retirees are a big, big market. Of course, we can’t forget about the younger people who are raising families. I would recommend looking at both of those areas.
Feldman: How do you see the business market evolving as a source of potential clients?
Jordan: The business market is huge. It’s the main engine of the American financial system. Those clients create a lot of wealth, and they also have their own particular needs. A lot of their wealth is built within their business. How are they going to dispose of that business? What happens if they die and they have partners?
There’s a guy who’s in our business now. He worked for his dad, who had a big car dealership. The father died. He and his brother took it over. The two sisters wanted income but didn’t want to work. The mother sold the business out from under them. Destroyed the family. We can help businesses avoid that type of crisis.
Feldman: What’s one of the newest things you feel that advisors should be thinking about today?
Jordan: I’ve recently become an advocate for reverse mortgages. I used to hold up a garlic and the crucifix whenever I heard about reverse mortgages. But for people over age 62, there’s $10.2 trillion tied up in their houses. And reverse mortgages are not just for the wealthy people.
You’ve got some poor guy who bought a house for $25,000 some 30 years ago. It could be worth $250,000 now. For the first time in his life, he has access to funds.
And so there could be the possibility of using a buffer asset. If you’re in a situation like recently, when the Dow went down 1,000 points in a day, that’s volatile. Well, guess what? You shouldn’t be taking money out of your account. Perhaps you could shift to another pocket. And it could come from your reverse mortgage. And the money comes out on a tax-free basis. And so it allows the portfolio to heal, the classic buffer-asset type of approach. That’s one thing to do.
Another benefit a reverse mortgage could provide for someone who reaches age 62 is to provide a Social Security bridge. This would allow you to obtain the funds you might need and then wait until age 67 or 70, when the monthly payout would be significantly more. If you wait till 70, it’s 77% more.
With IRMAA [income-related monthly adjustment amount], how much money you make in retirement dictates the premiums you pay for Medicare. Well, if you use some of your income from your reverse mortgage, it’s tax-free, and so using it could help lower Medicare premiums.
So there’s a lot of flexibility there.
People have to begin to use the wealth they have in their home. For the most part, it’s three-quarters of a person’s net assets in terms of the average person. And they’re able to use that wealth instead of just saying, “The house is paid off.” This could be helpful, especially because people are living a lot longer.
Feldman: In the volatile market situation that we’re currently experiencing, interest rates are going up. Is this the best time to get an annuity?
Jordan: You’ve got a couple of things going on. RILAs, for example, seem to really have been taking off. They have that buffered approach. There are a lot of people today who wish they had a 10% buffer on their money. Also, I’m a big fan of variable annuities because they provide, again, the idea of a guaranteed lifetime income.
There has been a lot of criticism of annuities. A DALBAR study found in 2021, however, that the average equity subaccount investor outperformed the average equity investor by 3.5%. Why? Because they didn’t get out of their investment. They didn’t panic, because they know they have a guarantee that they’re going to get some income.
We all know that inflation is a major issue. If I’m living longer, $100,000 of purchasing power has got to become $240,000 at 30 years out to help keep me solvent. So that’s why equities are important — because equities went up in value 10 times over 30 years.
A lot of people would be happy if they could sustain their current lifestyle. And so that’s where I think the RILAs come in and the indexed annuities come in. It doesn’t go all the way to solve long-term income challenges, but it allows you to have some upside participation with no downside risk.
I would say right now I think the annuity business is on the verge of exploding.
Feldman: What are your thoughts on life insurance in this market?
Jordan: Life insurance is crucial at this stage of the game. Life insurance has been elevated as the premier vehicle for distributing a legacy. There’s no restriction on how much money you put in. There’s nothing saying that you have to take money out at a certain time. The income comes out on a tax-free basis. You don’t need a trust.
My nephew’s 18 years old. If he gets all the money in one lump sum, he’s going to blow it on a Corvette. So what I want to do is control it over his lifetime. Well, if it’s a 10-year payout, he can’t go blow it all at once. So there’s more control. And it’s all tax-free.
Life insurance sales went up 20% in 2021, the highest increase in 20 years. I think that’s what the pandemic did, getting people to think more along those lines. I think the future for life insurance is bright.
Feldman: Let’s talk about the impact of the pandemic. It definitely spurred more life insurance sales. Statistics show it. But statistics are also showing that sales are going down a little bit now. Are we losing an opportunity?
Jordan: There are three main reasons to buy life insurance — in or out of a pandemic.
The three reasons are: You love somebody. You owe somebody money. You have a cause. If you don’t have any of those three reasons, why buy it? But if you do, then there’s nothing better that will provide for those three needs.
Feldman: What’s one of your favorite sales ideas that most advisors may not know?
Jordan: I have an old one, which I think is really great. It’s a version of “The Ben Franklin Close.”
I draw a “T” and list the pros on one side and the cons on the other. What are the obligations of the agent versus the obligations of a client?
On one side, you have the client obligation, which is to pay for our services. So you list that one item, maybe how much they’re paying either monthly or annually. On the other side of the T, you list “Our obligations” — meaning all the services you are providing — and all the benefits.
For example: We’ll create a half-million dollars in case you die. We’ll pay those premiums if, for some reason, you become disabled. If you become sick, you’ll have some access to the money. Etc.
So, you end up having only the one item listed on the client obligation side, while on the advisor side, there are many items listed. Then you cross out the client’s obligation: their fee. And then in the advisor’s column, you add a “Y” before “Our obligations” and it becomes “Your obligations” … meaning those advisor obligations have suddenly become the client’s obligations.
So, without your help, the client now has to: Create a half-million dollars in case they die. Pay those premiums if, for some reason, they become disabled. Provide some income if they become sick. Those are now the client’s obligations.