As we continue to dig into the recent DOL ruling and as we continue to provide you with resources to navigate its implications, I wanted to share a few opportunities I see with the change. As you know, at FIG we are fiercely independent, objective and holistic in our approach to helping you and your clients protect their hard-earned nest eggs. We feel that the more holistic an advisor can be in making recommendations and solving client issues, the more opportunity for success an advisor may have, but more importantly, the more they become a fiduciary on behalf of their client. For example, what is more fiduciary than creating a plan to protect a client’s retirement in the event of a long-term care event? If you haven’t made this recommendation, are you acting in your client’s best interest? Or, when dealing with clients in higher income tax brackets, if you’re not discussing alternative ways to generate tax-free income to them or their beneficiaries, are you really acting as a fiduciary? I submit to you that the more holistic your approach is, the better you can navigate the post-DOL era.
Using life and long-term care insurance products as financial tools make you a more comprehensive resource for your clients and their families. In addition, these products can help diversify your firm’s revenue as well, and in some cases, without having to acquire a brand new client. For example, how many of your boomer clients have their plan in place for a long-term care event? Industry statistics vary, but only a very small percentage of Americans own any type of LTCI, yet most advisors shy away from this conversation when your clients need you the most. This smells like opportunity to me. Using the asset-based LTC approach, consider using a tiny sliver of one’s portfolio so that the entire portfolio is protected. Again, fiduciary. And again, diversify your revenue.
Consider using life insurance as a wealth transfer tool. For your boomer and senior clients, life insurance can be the most income tax-efficient way to pass wealth to the next generation. Imagine having a 20 year relationship with a client, managing their portfolio, seeing that the retirement plan you put in place for them is executed while they’re alive, and when they pass away, imagine calling their 3 adult children to set up an appointment to deliver a check to each of them for $1,000,000, without them having to pay income taxes. Do you think you will have created goodwill between your firm and the children? Do you think they might consider your firm to manage their assets now that you’ve delivered on your promises to their parents and to them? Absolutely. Oh, and how much did you spend on seminars and radio shows to acquire these 3 new clients? Nothing.
At FIG, we believe the future is bright for our advisors who embrace change and have the desire to become holistic in their approach. We have the resources necessary to not only help you survive the post-DOL era, but to thrive in it.