Thought for the day:
“The retiree’s worst nightmare….too much life and not enough health.”
Gene Pastula, CFP
If you will read no further:
Look for our announcement of the expanded LTCi department from Westland. All of your clients should be provided with information about how to prepare for an eventual long-term care episode. No one will be able to provide more viable strategies, better products or a higher level of service than Westland. And… we will take the application for you and pay top commissions. Try us out and see how we do it.
Thought for the week:
The article starts out quoting officials of Russell Investment at a press briefing for a new retirement planning program for advisors. “I desperately need you to secure an adequate retirement for me” says the retiree, “I’m afraid my assets will run out before I do. But stay away from me advisor, because I don’t trust you.” Then it goes on to talk about a computer program intended to help advisors design customized retirement plans that can be modified throughout the clients’ life. It allows the planner to change course if things don’t work out the way we expect.
Here is a question. If we have another meltdown in the next 12 -18 months like the one in 2008-9, how many clients will you lose? What if they are in poor health at the time and spending money on nursing care? What if there is no meltdown, but the markets just don’t perform well? Will your clients accept that and stay with you, continuing to pay 1% or more for your services?
I think these are some questions that should be answered about every client portfolio you manage. Because if you can point to the positive steps you have taken to accomplish that, you have no doubt created protections from the things that retirees fear most….too much life and/or not enough health. Where have I heard that before???
I was at a party the other night and talking with a friend who just recently retired from his practice as a CPA. He’s a pretty bright guy who always had worthwhile perspective on things financial. He told me that all of his money is in the bank. Not a single stock, piece of real estate (except his house) or any other financial product does he own. “I know that sounds rather stupid to some”, he said, “but no one has ever convinced me that they had a plan that was assured of working and I have seen too many that didn’t.” As we talked I realized that he was probably right. The Planners and stockbrokers always talked about how their market recommendations would average this-or-that rate of return with this-or-that level of probability. The insurance guys said, “Just give the insurance company your money and they will take care of you”. Do I really need to tell you what the real estate guys said?
So Jim says, “I’ll keep my money in cash, even though it is probably counterproductive. I have plenty to last as long as I’ll probably need it; and if I start to run out, I can just cut down on my spending. At least I know I won’t be spending it on advice that doesn’t end up working”.
An awful lot of people think like Jim; even though they don’t express it so well. “Show me a reason I can relax knowing my income is safe as long as I live. Prove to me that if one of us gets sick, there will plenty to pay for our care. Explain why we don’t have to worry about income after one of us dies and part of our pension and social security goes away.” Do that and I will continue to be your client?
This is not difficult to do if you combine the stocks, bonds and real estate with insurance and annuities. Doing so properly, allows you to show them how much income will always be there no matter what bad happens in the markets. Also how their income will increase automatically if they get sick enough to need professional care. And you will also be able to show them how the value of their portfolio is protected, even when the market goes down as it does every few years.
There is no doubt that financial planners and investment advisors are beginning to understand the strategic value of these products in the portfolio and the incredible benefits they will provide. If you have not pursued this with our clients you need to get with the program. This is not about needing insurance….or not. This is about placing some of their money safely where it will perform best when needed….by the client, by his heirs, or in the event of long-term care when its value expands five fold.
Do I need to remind you that we are here to help? (800) 238-8144