Thought for the day:

When a man opens a car door for his wife, it’s either a new car or a new wife.
– Prince Philip

If you will read no further:

Financial planning for the retiree is much different than for the younger clients trying to build their wealth.  Average rates of return make sense to them as you grow their portfolio.  In retirement it is about sequence of return.  If you use averages to create your plan design you stand a very good chance of disappointing your client.  Look how an index annuity overcomes sequence of return issues.

Thought for the week:

I read last week in one of the financial newsletters I get that insurance products are soon to be the HOT financial instruments of the next 20 years as the markets settle in to a volatile, modest yielding period and the boomers are looking for predictable pensions and dependable health care resources. This sounded familiar to me as it is what I have been saying for several years.

But many advisors still ignore that idea and invest their clients’ money as if it were the eighties again. One advisor recommended including a non-liquid limited partnership to a couple I know who wanted as much guaranteed lifetime income as they could get. This couple had modest resources and had been keeping almost half of their 401(k) money in money-market accounts for the past 3 years, not wanting to risk it “going down again like it did 2008-09”.

To his credit, he also recommended an annuity for steady income from the 401(k). But instead of choosing a fixed SPIA that would have total guarantees for life, he recommended a VA using a GIA with competitively high income. However he either didn’t know or failed to disclose that the income would be reduced if/when the investment account value went to zero. With 3% combined fees plus “investment restrictions” the fund would have to earn almost 9% EVERY YEAR to break even. One bad year and the fund would most certainly be depleting almost every year thereafter.   Annuities are an important part of a retiree’s secure portfolio, but you must know how to choose properly or you can put a client at great risk later in life when they can least handle it.

Many advisors ignore LTCi planning assuming their clients will have enough money to self-insure; that if you commit the same premiums to a solid investment program, by the time you need LTCi you will have plenty more money to pay for it without buying insurance. It’s difficult to argue with that advice, since the planner most assuredly knows precisely when his clients are going to need care and will certainly be able to grow their money accordingly.

One planner who gave that advice to a healthy single female (age 63) was referring to a TLC policy from Genworth. He felt that by investing $100k at a “pretty secure” 7% (6% after his fees), by the time she reached age 85 (that’s when he determined she would need it for care) the account would worth $360,000 gross and $270,000 after taxes. That’s assuming the market wasn’t in a “funk” when she needed to take money to pay for care.

He simply ignored the fact that the day after she puts the money in, the TLC policy is worth $238,262 if she dies, and $557,622 at the rate of $93,000 per year whenever she needs long-term care all tax free and no matter what the stock market happens to be doing at the time. Can you imagine what it did to a client’s portfolio who had to begin drawing down about $8,000 or $10,000 per month beginning in 2008? What about the next downturn….or don’t you think that will ever happen again?

Thought for the day:

After the game, the King and the Pawn go into the same box.    – Italian proverb

If you will read no further:

The only people who don’t think your clients should have insurance or annuities in their portfolio are your broker/dealer or their accountant.  The BD doesn’t get paid (much, if at all) so they don’t care; and the Accountant doesn’t get paid. Neither one of them know much about it.  Westland does know about it and can be a rich source of information for you to tap if only you will let us.  And your clients will love what you have to tell them.

Thought for the week:

You enter a Vegas casino to play blackjack and are confronted by two tables with different rules:

Table #1 is very familiar.  Bet $10 and if you win, you keep your bet and get an additional $10.  If you lose, you lose your $10 and have to make a new bet.

Table #2 was something new.  Bet $10 and if you win you get to keep your bet and get an additional $6.  But if you lose, you just get to keep your $10 and bet it again. Which table would you sit down to?

Perhaps you would be like me and sit down at table #2 and send your spouse to table #1.  Mine always does better than me in Vegas.  This way, she has an opportunity to win big and I am assured of winning something without losing anything.

It’s sort of like the smart advisors who split annuity investments between Variable and Equity Index.

It would be really great if we could manage a portfolio to produce an impressive return each year and remove the volatility from the clients’ portfolio.  Unfortunately, that is one thing even the best portfolio manager will struggle with unsuccessfully.  But it really helps to inject a fixed-indexed or Life Income Annuity into the mix.

An index annuity can only go up or remain the same making volatility a non-item.  A Lifetime Income Annuity increases the predictable income from a given portion of the portfolio by an average of 60%.

Learning to use annuities in your clients’ portfolio will increase security, predictability and peace of mind and reduce the stress (for you as well as your client) when the next financial “adjustment” comes along.

Fifty Two:

The percent of advisors who do not characterize the life insurance side of their practices as either “successful” or “very successful,” according to a Saybrus Partners survey released recently. Excessive paperwork (25 percent) and the complexity of selecting from a huge number of the various policies and fitting them to a client’s needs (37 percent) were the primary reasons cited. That is why it is so encouraging to see how nicely our life insurance sales are increasing.  Our planners always present the finest products with the most competitive rates because Nancy Woo and Randy Masciarelli, our senior life insurance advisors, are so very helpful and the people who experience their service once return again and again for their outstanding service and ideas.  Their understanding of the market and our portfolio of products and companies make placing insurance for your clients an easy and natural part of your planning practice.

If you haven’t tried us yet for life insurance, call Nancy or Randy at the next opportunity.   Let them give you a taste of our Westland service and expertise.  Then compare the product and the compensation with your current source and they will make a believer out of you.   You can reach either of them by calling Peggy at (800)238-8144 and she will connect you; or email them at Nancyw@westlandinc.com  or Randym@westlandinc.com.

PS  Perhaps the Saybrus Partners people should take a look at Westland to improve their sales.

Thought for the day: 

“Those who die without life insurance should be made to come back to see the mess they’ve created.”  

                                                                                                Will Rogers

 

If you will read no further:

As America ages, insurance and annuities are a growing segment in the arena of personal finance and must be understood by all who practice investment management and financial planning.

“In todays’ highly competitive, compliance-driven culture, you must be educated, informed and skilled.  Take advantage of the Westland expertise in every aspect of insurance marketing, case design, selling, underwriting, delivery and post-sale service. Put a higher degree of confidence into your insurance advice.                           – Charles F. Chillingworth

 

Thought for the week:

Steve has a successful company that has been managed by his daughter, Julie for the last five years.  At age 45 she is clearly capable of growing the company and taking it to another level….as long as he sticks around for a while to allow her time to mature her own relationships with their customers and complete the transition to a 21^st century business model. 

For years Steve has owned life insurance (several $million) as a “key-man” and to function as an integral part of the purchase agreement that Julie will use to buy out her brother who is anything but capitalistically inclined…but that is a story for another time.  The life insurance has always been term insurance to keep the cost low.  Actually for the past 15 years or so, keeping insurance premiums low needn’t have been a top priority and now we know that it shouldn’t have been. For now Steve has a $3million policy that is “terming-out” and his health is really tenuous….so bad in fact that new term insurance will cost him $68,000 per year (table 6).  He could convert the old term policy but they want $325,000 per year to convert to a permanent policy, his only other option. 

Fortunately, in a few more years, Julie will not have to rely on her dad’s contacts to keep the business viable so as a key-man policy it certainly won’t be needed.  However, with dad in such poor health, having that $3million as a resource to buy out her brother is certainly desirable.  But he will have to die in 10 years or they face another renewal which will only be an option to convert to a policy that will cost several hundred thousand dollars per year.  

Which begs the question; what happened to the old adage about “buy term insurance to protect your family and business when you are young then when you are older you will no longer need it”? 

Steve bought the cheap stuff and spent the difference all the time when he wasn’t very likely to die.  And now that he is certain to die and the proceeds could be put to such good use by all concerned, it is becoming more and more difficult and soon to be impossible.

Steve opted to purchase the new term insurance policy hoping to outlive it and “waste” $680,000.  The insurance company hopes he turns out to be right.  Both feel it is a gamble worth taking.  Julie, on the other hand has a $3million term insurance policy she will now convert to a permanent policy and pay only $17,000 per year.  She actually is planning on increasing the premium deposits over time so that by the time she is 70 and ready to deal with transition issues, the life insurance will be paid up. 

We are seeing more and more of these lately; proof that many high net-worth folks will find that their use for life insurance will continue as they age. The cost will just become more and more uncomfortable unless they plan ahead and at least purchase some with permanence in mind.  You might want to advise them of that.

Thought for the day:

“A golf match is a test of your skill against your opponent’s luck”                                                           

 

TO OUR MANY NEW RECIPIENTS OF THIS “MONDAY GREETING”, A FEW WORDS OF EXPLANATION; AS IT IS UNLIKE MOST ANYTHING  YOU RECEIVE FROM  OTHER VENDORS.

“PEARLS” is intended to provide four minutes of education and entertainment once a week.  If you take the time to read it, you will find over time that you have an added awareness and appreciation for the role that fixed and variable insurance products can play in a well-designed portfolio. Not always a revelation; but we won’t waste your four minutes either… Unless, of course, you find my humor “not funny”.

The mission of Westland Financial Services is to support the financial advisor community with solid, up-to-date strategies that include insurance products to meet certain needs of clients.  We show financial planners the reasons to use insurance as a desired option rather than just because it’s needed.

Open it, give it a glance; and then delete if you see nothing of interest.  We think that most of the time you will go ahead and allocate a whole four minutes.

 

If you will read no further:

“Long-term care insurance provides choice and control, protects retirements and lifestyles, and allows loved ones to care about you rather than being forced to care for you. You can’t put a price on that kind of value.”  http://hub.am/10moir9 

Bill Jones, president of The MedAmerica Companies

 

Thought for the week:

Following a recent presentation I made to a group of consumers a gentleman came up to me and said that I was a “Fraud”.  Quickly consoling myself that he was only one out of the 70 folks in attendance, I naturally asked him why he would say that.  “Because, he said, I came here expecting to learn how to self-insure for long-term care; and all you did was try to sell me an insurance policy”.  He was referring to my compelling presentation (that everyone else thought was quite insightful) about placing a linked benefit insurance policy like MoneyGuard or TLC from Genworth into the portfolio to leverage the value of their savings by 3-5 times when LTC is needed.

When I asked him just what he expected to hear, he said that he wanted to know how to get the most from any government programs and other ways to reduce the impact on his portfolio when paying for long-term care.  I pointed out that we did carefully go through the five Government programs and tax laws that address and define the government’s participation in the long-term care issue. Then went on to point out that the remainder of the presentation was about how to best position money in his portfolio to provide the maximum value at the time of need with the minimum impact to his legacy.  Pretty awesome, huh? 

Even though I pointed out that money could be placed in an account with the insurance company that would be safe and liquid and earn three times the interest (or more) than the bank to purchase needed benefits. That these annual earnings are not taxed.  That the deposit could be retrieved at any time for any reason.  That, if he ever needed care, his account would be instantly revalued at 300% to 500%* of the deposit and generate tax-free income of 4% to 6% PER MONTH of that value for as long as six years. And finally, if he never needed to use the money in the cash account for any reason, or he never needed long-term care, his heirs would receive the money when he passed away, plus a tax free rate of return equaling or exceeding any bank interest he could expect. From that point on he sounded like some financial planners I know, “Yes, but you are just trying to sell me an insurance policy”.  

I started to explain to him (again) that he had to have his money somewhere.   And he interrupted me by calling me a “fraud” for the second time and bragging that he could do better by investing the money elsewhere; and instead, I would try to sell him a life insurance policy.  Needless to say, I determined that our conversation was over and I told him he could have his money back.  Oh wait!  The lecture and the wine and hors d’oeuvres were free.

At least I was able to console myself that a financial planner would never think like that. He/she would know that even at a constant 8% tax free return it would take 18 years to grow his money four times and almost 25 years at 6%; while my plan delivers that amount THE NEXT DAY if needed.  And what if he needs it sooner rather than later?  But then, it’s really only insurance.  And who wants that? 

 *Depending on sex and age at time of issue and the policy design chosen.    

                                                                                                                                                          

Josh Ver Hoeve is the “Amazon.com” of the annuity business.  Call (800)238-8144 or email joshvh@westlandinc.com your proposal by noon and it is guaranteed to be shipped that very day.

Genworth is now offering 5.75% cap and 5.25% bailout on 7 yr. index and everyone else is raising their rates as well. That is why Josh Ver Hove is so busy lately.

Thought for the day:

“Even if you are on the right track, you’ll get run over if you just sit there.”

                                                                                                                Will Rogers

If you will read no further:

If you have been paying attention to the market lately you can’t help but notice an increase in the “sensitivity” to the issues going on here and around the world. None of these “issues” are positive. Diversification is the watchword for your clients who will not take kindly to another experience like 2008-9. You should maybe pay closer attention to some “product diversification” particularly designed to address those needs that that require certain solutions; Guaranteed Lifetime Income, extra income when they eventually need convalescent care and perhaps even legacy planning. No one does “product diversification’ like Westland.

 

Thought for the week:

I regularly follow the writings of a number of economist and financial analysts. One of the things that constantly impresses me is the bias that is evident in their writings….especially those who write investment newsletters and those written by broker-dealer’s experts . When was the last time you heard any serious words of caution from these folks? Even when they hedge a little in their positive outlook, they always seem to have a “work-around” to prevent any serious losses. Yet when the down markets happen, many planners are caught unaware and their clients lose a significant losses in their portfolio. It seems like this happens every 5 or 6 years; which is probably why I am feeling a little cautious about now; especially when I look around the world and see very little to feel positive about….economy-wise.

We are seeing a little sunshine recently in the U.S. with housing, energy and a slight increase in interest rates (18% increase in 10yr Treasury Rate in just the last three days) . But the capital markets are clearly being supported by the Fed’s printing press and it’s just a matter of time before it must be curtailed. Every time Bernanke speaks the market holds its breath or runs for the exits. Then look around and see Brazil on fire, France back in recession, Italy, Greece and Cypress teetering on the edge of complete disaster, with only Germany there to help; and losing patience along the way. The UK is chronically unhealthy, Japan is struggling to keep afloat and now China is showing signs of faltering. Where is the love? Where are the returns? When will we see another serious pullback in the U.S. capital markets?

I’m just saying, everyone should think about the next stock market collapse and where they would like to have their clients’ money reside when it happens. Can they withstand another 20%-40% pullback? How about the ones who are taking income while this is happening? I want my advisor to be thinking about what my portfolio should look like if/when we get the next major down-market…not just the value, but what kind of income can it provide without risk of failure? What are those bonds looking like when interest rates rise significantly?

My portfolio will supply us with most of the money needed to take care of us if we need care, will provide a base amount of income without any concerns about the market; and I am certain there will be some left over for the kids…or a charity if they tick me off. It’s not that difficult and it’s done without reducing the bottom line net worth. How many clients (or prospects) do you have who would like to feel that comfortable with their future…even after a few sizable back-to-back losses? 

 

A BOOMER SURVEY

On June 17^th 2013 a Nationwide Insurance Financial Consumer Survey released the following statistics from respondents:

$111,507 – the average estimate of Annual long-term care cost by 2030

$265,000 – the Actual estimated cost by the industry

4% – the average annual increase in nursing home cost since 1974

75% – respondents who think that long-term care means nursing home or assisted living

50% – long-term care that takes place in the home

70% – Dept. of Health & Human Services estimate of Americans over age 65 who will need care

25% – respondents who said they have long-term care insurance

22% – respondents who plan on paying for their care from their 401(k) or IRA

21% – respondents who plan on paying out of savings

81% – respondents who have never been asked to discuss the issue by their financial planner

(OK I made that last one up.  But it sure seems pretty close to correct.) 

Thought for the day:

In a hospital they throw you out in the street before you are half cured, but in a nursing home they don’t let you out until you are dead.               – George Bernard Shaw

If you will read no further:

The increased volume of cases coming into our LTCi department is indicative of the unique service we provide to financial professionals.  We offer a selection of policies from all of the top tier carriers, provide a spread sheet of rates and benefits to determine the best value, then make a recommendation to present to the client…breaking it down to the simplest parts so that everyone understands and feels comfortable with the information and with the decision they must make.  Then we continue by taking the application over the phone, managing the case through underwriting, then sending you the policy with instructions for delivery to the client.  In the meantime, we are always here to answer every question for you or your client. 

 Thought for the week:

“My client(s) can pay for long-term care if they ever need it, so we won’t be purchasing insurance.”

Most financial planners and investment advisors have tended to ignore this issue, I believe, because they are not comfortable discussing the (often) complex insurance contracts with their clients.  But how much money should a client have in order to justify ignoring the risk (over 50%) of needing care that could cost upwards of a $quarter million?  The average LTCi client will spend $3300/year for benefits of around $250,000.  That’s perhaps as much as $82,000 if they live to age 85 or 90 with no need for care.  A planner told me his client could pay for it himself because he had over $1.2million in financial assets, so didn’t need to waste money on insurance.  So, I’m thinking what if the client was lucky, never needed care and saved the $82,000?  In the end, would that “savings” have represented a meaningful part of legacy or would he have just spent the roughly $300 per month on something no one can even remember?  If he needs to spend the $250k, that is 20% of his $1.2million.  So, you recommend saving 3/10% of the financial assets each year while risking the possibility of needing LTCi sometime during the next 20 years; and forgo (if you are wrong) the advantage of having an extra $1/4million (20%) to assure your client the best quality of life possible.  I think no one will thank you for saving the 3/10% each year.  But they sure will want to know why there aren’t any insurance benefits available to help with the $6,000 or $7,000 per month LTCi bills.

Oh, and by the way, if you just take 10% of those financial assets and put them safely into a linked benefit plan like MoneyGuard or TLC, the money will be safe and available for any purpose; and if needed it will be increased 3-5 times for long-term care.   Believe me; they will definitely thank you for that.

Thought for the day:

“Man stands for long time with mouth open before roast duck flies in.”

– Chinese Proverb

 

If you will read no further:

A client of mine for over 30 years is just retiring as a school teacher.  She has a life insurance policy initiated in her second year of teaching and a TSA that was tax deductible.  She invested the TSA in equities, and the insurance money went into Universal life.  Today, the after-tax income she can draw from the insurance policy is almost the same as from her TSA…(proportionately, as she put a lot more money in to the TSA). Fortunately she did not have to draw from her TSA until this year; after it had come back from the shellacking it took in 2008-9.  Which account do you think wakes her up at night?

Thought for the week:

We have been talking a lot lately about index life insurance and its ability to accumulate great account values, especially for people who have an interest in setting aside money in a planned retirement strategy.  No doubt a young client in their mid-forties could expect some impressive results by setting aside $10,000 per year in a mutual fund inside an IRA.  And the extra motivation achieved by the tax deduction is most helpful.  But at the end of the day, they still have to deal with the down markets every 6 to 8 years and the uncertain tax burdens that will be in place when it’s time to spend the money in retirement.

For years we have been discussing life insurance as an impressive alternative to the IRA accounts…particularly the Roth IRA accounts.  Imagine a ROTH IRA with no government limit to the amount one can contribute, no restrictions on when or how much can be withdrawn.  All that is needed is for the insurance contract to credit a decent return.

When we introduced UL the late 70s, interest rates of 10% to 12% motivated many people to “invest” in those contracts for retirement. They kept the death benefit small to minimize the insurance cost and allow the cash account to grow as much as possible.  They did pretty well considering they never lost money in the account and even now the minimum guarantees are 4% per year.

Now we have index UL that can credit the increase in the S&P each year up to 11% to 13% comparable to most stock funds. Subtract the cost of insurance (about 1.5%) which equates to the cost of managing a stock fund, and you have a very competitive alternative;  PLUS the unique features that are missing in an ROTH IRA.  And the Index life cash value cannot go down due to poor market conditions.  When the S&P goes down, this cash account doesn’t lose a cent.  “Sequence of returns” is the term that describes the difference in results achieved when the average return is the same but gains and losses are experienced at different times.  An account value that increases when the market is up but keeps its value when the market goes down is a beautiful thing; a perfect option to bonds or conservative stocks in one’s portfolio.  And for those who must be invested in equities, we have Variable UL products with the same tax features but with returns tied even closer to the market and investment options to satisfy every financial planner.

Young professionals would be well advised to consider an insurance contract such as this as a base for their personal retirement plan.  Additional funds when available can then be invested in a managed portfolio as time goes on.  The insurance plan balances the portfolio while satisfying some or all of the clients need for life insurance to cover family or business needs.

Next time you are counseling a young “up-and-comer” about building their wealth for the future, call us for a proposal and review of the logic of including this early on in their planning process.  It’s truly a good way to begin.

Thought for the day:

“There has never been a statue erected to the memory of someone who let well enough alone.”

– Jules Ellinger

If you will read no further:

Then have a nice week!  …unless you choose to read the article that is linked since several million people have read it already and you might want to stay current.

Short week, Short Pearls:

This article appeared in yesterday’s (Tuesday) edition of USA Today.  There are many like this in local papers across the county every week.  We are approached constantly by planners on behalf of clients who want to purchase long-term care insurance but are no longer healthy enough to qualify.

Unfortunately their clients will face what they have been allowed to believe for years… writing checks for $6000 to $10,000 a month out of their estate will be no problem.

Doesn’t make much sense to me!

Thought for the day:

Retire? I’m going to stay in show business until I’m the only one left.
— George F. Burns

If you will read no further:

If you had an opportunity to provide your clients with a retirement investment strategy that would credit annual interest based on the performance of the S&P index each year  up to 12%  and charge you 1% to guarantee no losses in down years, would you offer this to them?  What if it would also provide lifetime tax-free retirement income?  What if it would guarantee to pay any balances to the heirs tax free?  Sound good?  What if it was called life insurance?  Oh crud. Guess we can’t do it then.

Thought for the Week:

As the government continues to go after our 401ks and IRAs there is going to be more and more interest in finding ways to create tax free retirement income and pass tax favored money to our heirs.  This is why every young client in the process of building their financial net worth should seriously consider adding an Index Universal Life insurance policy (IUL) to their portfolio.  These products allow the client to deposit large amounts of money into the cash value which will be credited each year with interest based on the performance of the S&P (or other chosen index) typically up to a maximum of 12%-13%.  That means if you have $20k in the cash value and the index rises 15% in a given year 12% or $2400 will be credited to the account. Then the account will be charged for the cost of insurance (perhaps 1%) so that the cash value will now be $22,200.  (not precise amounts, but give you the general idea.)  If the market went up only 10% the same 10% would be credited to the cash value before deducting for cost of insurance.  The real value here is that if the market loses money in a given year the cash value does not go down, except for the (approx.) 1% charge for insurance.

An account that can only go up or stay the same is a really good deal as long as it doesn’t cost too much.  Add to that the fact that there are no income taxes applied against the annual gains and, when properly designed, income can be taken without income taxes, and you have the basis for an excellent private pension strategy that can look like a Roth IRA but without the government regulations and limitations.  Check out the results on pages 15-17 of the illustration that a 45 year old client can achieve for his retirement while protecting his family with almost ½ million dollars of life insurance.  If you are not showing this to your younger clients or to your retired clients for their children, everyone is missing out on an excellent opportunity.

In most cases if your client is in his forties, he probably should have $1million or more of life insurance.  Half of it should be this kind.  They don’t need to fund the policy with maximum deposits initially if they don’t want; but set it up so it will be grandfathered in when this tax favored product is also taken away by the government.  They will be really glad you put it in their portfolio then.  Nancy Woo and Randy Masciarelli can help you design a proposal to show your client.  Call Peggy at (800) 238-8144 and she will put you in touch with one of them.

A Final thought:

It is interesting to me that when you describe what insurance and annuities do, what benefits they provide and what security they offer, they rise to the top of the charts for desirability.  Then the press and the rest of the folks who don’t, can’t or won’t bother to understand them come forth with all the negative reasons why these are no good.  And, almost always, they are wrong.  But then we move on and fewer people get the benefit of these outstanding solutions for financial security.  And now with the easy apps that are available for so many of the products, you are quickly running out of excuses to avoid offering them to your clients.

Thought for the day:

Before you build a better mousetrap, it helps to know if there are any mice out there.                           -unknown

If you will read no further:

Quality financial advice and planning is more than simply investing money and “managing the wealth”.  It’s about providing ways to guarantee results.  Westland deals in guaranteed results.  We love what we do and we are really good at it.

Thought for the week:

The story of Ralph and Alice…and Roger

Ralph & Alice have been retired for a couple of years and Ralph is soon turning 70.  Fortunately they were both still working when the 2008 recession hit and were not affected much other than to be scared almost to death by what they saw happening in their 401Ks.   Now they have substantially recovered and are trying to decide what to do going forward.  They’re looking for a financial advisor to assist them and have interviewed a couple of fee-based planners and a stock broker.  Alice thinks they are all very nice but can’t be sure how good they are.  The one thing that jumps out at her is that they all want to show her how good their past results have been…especially the last 4 years, but none of them will guarantee her that their future advice will work.

Ralph doesn’t particularly like any of them. He just thinks they want to get their hands on his money. Since he and Alice have about $750k in their 401k’s and he has a pension, these candidates  are all telling them that they can invest their money in stocks and bonds and will do their best to make sure it mostly goes up….over the long term.  What Alice really wants is to not have to be concerned about their money; and their only answer seems to be “trust them and they will take care of everything”.

But then they met Roger.  Roger was different because he suggested that they might want to set up their money such that it will provide guarantees that certain issues be addressed regardless of the uncertainties in the markets…and the world for that matter.  He suggested that they create a personal pension for Alice that, along with their social security and the Ralph’s pension, would guarantee to provide a monthly check for the rest of their lives to provide added certainty that they could always maintain their current lifestyle.

He also discussed the risk to their portfolio when one or the other of them were to suffer a debilitating illness or condition that would cause them to pay for long-term care…a highly likely situation eventually as over 60% of us ultimately do have such an event in our lives.  He suggested they structure their portfolio with 15% in cash placed in a life insurance policy that would leverage that value by about 400% if/when one of them needed care.  They wouldn’t have to give up control or access to that money but it would guarantee that an additional $6000 a month would be coming in to help pay the bills for care when needed for either of them.

They asked him what they should do with a couple of old insurance policies. The other guys suggested they didn’t need them anymore and that they should cash them in and invest the money with the rest of the portfolio.  Roger pointed out that “need” wasn’t really the issue.  Where they interested in leaving a legacy for their family eventually?  If so, “let’s take a look at those policies”, he said, “maybe we can even make them more valuable”.  What about the rest of the money in their 401k?  “Once we have the major issues addressed and solutions guaranteed, we can discuss options on how we should build the rest of your investment portfolio”.

Naturally, Ralph and Alice both felt comfortable with the advice Roger was providing and they selected him as their advisor.  They also referred some of their friends and their children who lived in town to him….something they would never have thought to do if it weren’t for all those solutions that were guaranteed to work.

I know this is all true, because Roger got all his ideas and the great products to put them into action from Westland Financial.  If you aren’t sure how Roger was able to do that, and/or would like some assistance becoming as successful as Roger, give us a call.  We love to help with this stuff.