Why Financial Advisors Should Consider Adding Medicare To Their Practice

By Wendy Swanson

Working in the industry for more than 25 years, I’ve talked to many types of producers. Some work through broker-dealers while others go through Registered Investment Advisors. Still, others are insurance-only agents.

Over the years, I’ve discovered a trend with some advisors. They scoff at the notion of offering Medicare products to their clients. They give a multitude of reasons why they don’t offer these products. Some prefer not to mess around with it and simply refer that business away.

Others can’t imagine why you would bother since the compensation is comparatively less as compared to other products and solutions. Regardless of the reason, advisors just don’t want to monkey around with Medicare products.

Why on earth would I then urge a financial advisor to add Medicare to their business? The reasons are many!

• Reason 1: It makes the client stickier to you
If you sell one product to a client, they may or may not stay with you. However, if you sell multiple products to the same household, it makes it more difficult for them to leave you for another advisor. Adding Medicare to your practice helps you offer a comprehensive retirement plan that includes both health and wealth solutions. If the client feels all their needs have been met, then there’s no reason for them to speak to another advisor.

• Reason 2: It brings more value
Healthcare coverage is a huge concern of those entering retirement. You have lots of competition that want to steal your clients. If you are not willing to discuss healthcare costs and your competition is, then you might lose clients to those competitors. By continually bringing value to your clients, you consistently remind them that they are working with the right advisor in retirement. This helps to safeguard the clients you work so hard to bring on board in the first place.

• Reason 3: It’s important to them
Admittedly it can be more exciting for an advisor to talk about things like mutual funds, real estate investment trusts, exchange traded funds, hedge funds and the like. However, you may find that your clients are exponentially more excited to have someone help them navigate through the myriad of potential Medicare solutions. If it’s important to them, shouldn’t it be important to you?

• Reason 4: It’s the lead system that pays for itself
Using Medicare-related products initially is a great door opener for eventually cross-selling to other products you offer. The thing about Medicare and Social Security is, these are high-urgency topics. People both want and seek help with both Medicare and Social Security, as these are things they know they can only put on the back burner for so long. Decisions have to be made within certain time frames.

These are things we all pay into during our working years so we are eager to tap into these benefits. These are fabulous topics for attracting new prospects to your practice while letting your expertise shine! For years, I’ve known of major agencies that build their assets under management (AUM), life, long-term care and annuity sales by using Medicare as a door opener.

• Reason 5: It can serve as a major continual revenue generator
Most Medicare products have trail commissions. Some will limit the years they offer trails while others will offer trails for life. As you add on clients, that revenue stream will continue to grow. I’ve known of many in the field that with time and effort, make more than $100,000 a year in Medicare trail commissions. And that’s before they even roll out of bed. Imagine having your AUM continual revenue stream and a Medicare revenue stream under the same roof. You’re bringing more value to your clients as well as more value to your pocketbook. How awesome is that?

• Reason 6: Part B premium guidelines are clear indicators of wealth
When working with Medicare, one of the items you will review is Part B premium. The premium is based on income levels. Please see the chart below to see what that looks like. If your prospects are paying any of these premiums, then they likely have money saved for retirement as well. By knowing this aspect of your prospects’ planning, it gives you a clearer understanding of where additional sales opportunities may exist.

The bottom line is this: If you are not offering Medicare to your retirees, then you’re missing the boat to increased revenue and complete client satisfaction.

Wendy Swanson, RICP, CLTC, NSSA Certificate Holder, is an annuity marketing senior consultant with SMS Financial in Omaha, Neb.