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Serving Financial Advisors Worldwide
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Vol. 9 No. 1 • January 2008 Official IARFC Publication www.IARFC.org
Journal of Personal FinanceGaining Attention ... 4
Better ClientCommunication ... 8
Get Leads Quick with Pay-Per-Click ... 26
IARFC Mediterranean Cruise ConferenceCE at Seain the Cradle of Civilization
Ports of CallBarcelona, SpainFormerly a sleepy Spanish city, Barcelona has recently been reborn as an eclectic fusion of the modern and medieval. Seek inspiration from the creations of its modernist architect, Antonio Gaudí, or the Picasso Museum. Or, take in the breathtaking cathedral in the Gothic Quarter.
Nice and Villefranche, FrancePart of the Côte d’Qzur, Villefranche offers long, sandy beaches, terraced café and world-class cuisines. The city of Nice is situated at the foot of the Alps. Stroll the ultrafamous Promenade des Anglais or see masterpieces by Matisse, Renoir, Monet and Chagall. Don’t miss the onion, anchovy and olive tarts known as pissaladières.
Pisa and Florence, ItalyFounded by Julius Caesar himself, Florence is known as the birthplace of the Renaissance. History and art shake hands in this picturesque land, where masterpieces like Michelangelo’s David can be seen in the city’s many museums, churches and galleries. The city is known for its simple and delicious cuisine made from the freshest ingredients.
Rome (Civitavecchia), ItalyCenturies of breathtaking history have shaped the Eternal City. From the ancient halls of the Colosseum, where Roman gladiators once walked to Michelangelo’s opulent frescoed ceiling in the Sistine Chapel, the beautiful layers of Rome’s intricate past lead many to consider it the premier European destination.
For more information, contact the IARFC at 800 532 9060 or [email protected]
Naples and Capri, ItalyLocated on the southern coast of Italy, Naples has spectacular scenery that attracts artists from around the world. From this key spot, you can embark on a trip to the ruins of Pompeii or shop the many boutiques of Sorrento. You may work up an appetite for one of Naples’ greatest delicacies — pizza — invented to honor the Queen of Italy in 1889.
Palermo (Sicily), ItalyThe Phoenicians created Palermo, which means “surrounded by rocky cliffs,” in the 8th century B.C. Rich in history and works of art, Palermo will amaze you with its variety of architectural styles — Byzantine, Arab and Norman influences are blended in many buildings — reflecting the many nations which have ruled this small island over the centuries.
The CultureThe Mediterranean is famous for its countless contributions to the arts, architecture, science, drama and philosophy. The works of masters like Michelangelo, Da Vinci, Plato and Homer have left their indelible impression. The Mediterranean is home to where it all started. And there’s no better place to discover the unique and magical part of the world than on board a Royal Caribbean Cruise.
The CuisineIn the Mediterranean, food is another way to savor and celebrate life. Dining is one part fresh food and one part social occasion, and has been that way forever. This no place to eat and run. And once you’ve tasted authentic spaghettini Bolognese or saffron-laced paella accompanied by a glass of hearty rioja, you’ll understand why the dining experience is one of the many attractions of a cruise to the Mediterranean.
The ClimateThe forecast calls for sunshine, followed by more sunshine. The Mediterranean is blessed with a warm, subtropical climate. This means that most of the year you can expect clear skies and dry, comfortable days. This makes the trip to the beach at one of Royal Caribbean’s many resort towns or island ports of call an excursion not to be missed. But don’t forget your shades and your sunblock.
The Cruise ToursThere’s no better way to fully experience the culture and cuisine of a region than with a cruise tour. Experience the allure of Nice, the sophisticated playground of the rich and Eze, the mountaintop enclave with supreme views. You’ll drive along the Lower Corniche Road from the Citadel of Villefranche to the city of Nice where you’ll visit this beachfront jet set city. Or take a wonderous journey through the lush Italian countryside of panoramic Palermo.
The ConclusionRediscover the simple pleasures of the Mediterranean on the IARFC Mediterranean Cruise aboard Royal Caribbean’s Voyager of the Seas. You’ll treasure and celebrate every hour of every day. The attentive service staff will anticipate your needs and indulge your whims.
Professional Continuing Education. The presenters and the attendees will be among the most elite in the financial services profession: authors of many books, articles and popular speakers. You will spend seven exciting days and evenings in the company of the world’s leading professional advisors.
Conference Fee: $50 per advisor only, covers Registration, CE and Conference Workbook.
Airfare is not included in any of the quoted cruise prices. Consider using your frequent flyer credits. Contact Talgood Travel for airfare and the pre- and post-cruise options at: 877 651 9997
Deposit of $500 per person to secure your space availability for a stateroom. Final payment is due May 23, 2008.
Cruise and IARFC Cancellation Policy. Until June 11, 2008 penalty of $250 per-person. June 17, 2008 penalty of 50% of cost per-person. After August 8, 2008 non refundable. You can purchase insurance to cover unforeseen medical circumstances requiring trip cancellation.
Port Charges and Government Fees and Airport Transfers. Port charges are presently $235. Airport transfer in Barcelona $54, subject to change.
The Mediterranean has always been celebrated for its sunlit beauty and its mouth-watering cuisine. You won’t be disappointed by this beautiful region. Its cities and towns are as charming as its people.
Voyager of the Seas is a revolutionary marvel of naval engineering. Enjoy one-of-a-kind features like an ice-skating rink, the Royal Promenade and a rock-climbing wall, just for starters. The 138,000-ton, Voyager of the Seas became the world’s largest cruise ship when it entered service.
Ports of Call — 7 Night Mediterranean Cruise16-Aug Barcelona, Spain Don’t miss the Picasso Gallery. Several adjoining
15th-century palaces house a huge collection (over 2,000 pieces) of Picasso’s work.
17-Aug Nice (Villefranche), France is your gateway to the one-of-a-kind French Riviera, home to Monte Carlo, Cannes and Nice. Marvelous tours available.
18-Aug Florence/Pisa (Livorno), Italy You’ll definitely want to explore Florence, by visiting the church of Santa Croce, known as Italy’s Westminster Abbey.
19-Aug Rome (Civitavecchia), Italy The gateway to the magnificence of the ancient city of Rome. Wonderful touring opportunities here.
20-Aug Naples/Capri, Italy is not only picturesque, it’s also one of the world’s greatest cultural centers. One of the most romantic spots in the world.
21-Aug Sicily (Palermo), Italy Visit the city square in the heart of Palermo containing four seventeenth-century palaces, Palermo has played host to those seeking adventure for centuries.
22-Aug Cruising Including our CE at Sea Education Session.23-Aug Barcelona Last minute sightseeing or move on to Madrid, Toledo or Portugal.
Number of adults in your party: _______
Number of children in your party: _______
Royal Suite with Balcony $5,940 _______
Owner Suite with Balcony $3,740 _______
Grand Suite with Balcony $2,940 _______
Balcony, Junior Suite $2,240 _______ suite based on availability
Balcony, Stateroom $1,680 _______
Oceanview, window $1,490 _______
Interior Cabin $1,060 _______ per guest, based on double occupancy
Port & Government Fees $235 _______
Airport Transfer (optional) $54 _______
Conference Fee per Advisor $50 _______
Subtotal: _______
Less Deposit: _______
Balance Due: _______Deposit $500 per person
________________________________________ _____________________________________Name exactly as it appears on your Passport Address
________________________________________ _____________________________________Companion Name exactly as it appears on your Passport City, State, Zip
________________________________________ _____________________________________Phone Country
________________________________________ _____________________________________Your Preferred Salutations — for our Name Tags E-mail
Method of Payment Check payable to the IARFC Visa Discover MasterCard American Express
________________________________________ _____________Credit Card Number Expiration Date
________________________________________Signature
Cruise rates are in U.S. dollars, per guest, based on double occupancy. Government taxes, fees and air transportation are additional.My signature indicates that I have read the cruise/conference policies and fully understand the charges involved, and if requested above, I am authorizing the amount indicated to be charged to my credit card. I agree to the terms and conditions of the IARFC Cruise/Conference refund policy.
I am interested in Cruise Insurance.
The International Association of Registered Financial Consultants
Phone: 800 532 9060Fax: 513 424 5752E-mail: [email protected] www.IARFC.org
IARFC MediterraneanCruise Conference
August 16 - 23, 2008
CE at Sea
Jeffrey Chiew DBA, CLU, ChFC, CFP®, RFC®
Asia [email protected]
Liang Tien Lung, RFC®
China Development Organization (IMM)(Taiwan, China, Hong Kong & Macao)
George Flack, CFP®, FPNA, AFAIM, RFC®
Australia and New Zealand [email protected]
Janet MundySecretary
[email protected] Kippen
Antony Francis, RFC®
Bermuda [email protected]
Jeffrey Eshun, Ph.D., RFC®
Canada [email protected]
Roger T. Blair, Sr. RFC®
Vice [email protected]
Bernadette Bowman, MBA, RFC®
Vice [email protected]
Choo Siak Leong, RFC®
China ChairBeijing, Dailan, Guangzhou, Shanghai
[email protected] Senyuan
Executive Secretary
Demetre KatsabekisMBA, Ph.D, CiC, CiM, RFC®
Greece [email protected]
Nick TessaromatisPh.D, CiC, CiM, RFC®
Samuel W. K. Yung, MHCFP®, MFP, FChFP, CMFA, CIAM, RFC®
Hong Kong and Macao [email protected]
Teresa SoPh.D., MFP, RFP, FChFP, CMFA,
CIAM, EDAM, RFC®
Adviser, Hong Kong and [email protected]
Tina Chan, JDExecutive Director
George Oommen, RFC®
India Chair
Laazarus Dias, RFC®
Mumbai Chapter [email protected]
Ashish WanjaraAssistant Director, Mumbai
Aidil Akbar Madjid, MBA, RFC®
Indonesia [email protected] Soemarto, MA, RFC®
Ng Jyi Vei, ChFC, CFP®, RFC®
Malaysia [email protected]
Mabel [email protected]
Zahid Khan, RFC®
Pakistan [email protected]
Ralph Liew, RFC®
Philippines [email protected]
Tony BalmoriExecutive Assistant
Jerry Tan, LLIF, CIAM, CMFA, RFC®
Singapore [email protected]
Serene NgAdmin Assistant
Admin [email protected]
Richard Wu, RFC®
Taiwan [email protected]
Nora Hsu, RFC®
Justina ChouPromotion & [email protected]
Preecha Swasdpeera, MPA, MM, RFC®
Thailand [email protected]
Nigel Salina, BA Hons Mgt, MABE, RFC®
Trinidad [email protected]
Inshan Meahjohn, RFC®
[email protected] Brennan, BA
IARFC International Directory
Edwin P. Morrow, CLU, ChFC, CFP®, CEP, RFC®
CEO & Editor-in-Chief [email protected]
513 424 6395 ext 11
Emma BallingerMembership Accounting
[email protected] 424 6395 ext. 23
Barb Chasteen Mailing and Shipping
[email protected] 424 1656 ext. 22
Wendy M. Kennedy Executive Assistant & Managing Editor
[email protected] 424 1656 ext. 14
James Lifter, MBA, RFC®
Educational Director [email protected]
513 424 6395 ext. 18
Kathleen OurantInternational Membership Services
[email protected] 424 6395 ext. 31
Amy PrimeauDomestic Membership Services
[email protected] 424 6395 ext. 34
David M. Stitt, ChFC, CFP®, RFC®
Software [email protected]
513 424 1656 ext. 12
Mark Terrett, RFC®
Operations [email protected]
513 424 1656 ext. 10
Nida ThompsonMailing and Shipping
[email protected] 424 1656 ext. 22
Page 2 The Register • January 2008
The Register is published monthly by the International Association of Registered FinancialConsultants ©2007, 2507 North Verity Parkway, Middletown, Ohio 45042-0506. It includesarticles and advice on technical subjects, economic events, regulatory actions and practicemanagement. The IARFC makes no claim as to accuracy and does not guarantee or endorse anyproduct or service that is advertised or featured. Articles, comments and letters are welcomed bye-mail to: Wendy M. Kennedy, Editorial Coordinator, [email protected] ISSN 1556-4045 Periodicals Postage Paid at Mansfield, Ohio.
POSTMASTER: Send address changes to: P.O. Box 42506, Middletown, Ohio 45042-0506
Financial Planning Building2507 North Verity Parkway
P.O. Box 42506Middletown, OH 45042-0506
800 532 9060 • Fax 513 424 5752www.IARFC.org
BOARD OF DIRECTORS
Edwin P. Morrow, Chairman & CEOCLU, ChFC, CFP®, CEP, RFC®
Lester W. Anderson, V.P. MBA, RFC®
Wilma G. AndersonRFC®
H. Stephen Bailey, PresidentLUTCF, CEBA, CEP, CSA, RFC®
Antoinette Francis BoldenCA, MBA, RFC®
Jeffrey ChiewDBA, CLU, ChFC, CFP®, RFC®
Vernon D. GwynneCFP®, RFC®
Derek D. KlockMBA, RFC®
Edward J. Ledford, V.P.CLU, RFC®
Ruth Lytton, V.P.MS, Ph.D., RFC®
James McCarty, SecretaryCLU, RHU, LUTCF, CFC®
William L. MoorePharm D., CLU, ChFC, FIC, RFC®
Rosilyn H. OvertonMS, Ph.D., CFP®, RFC®
Ruben Ruiz, TreasurerChFC, CLU, MSFS, CSA, RFC®
in this issue2 IARFC Staff and International Coordinators
4 Journal of Personal Finance Gaining Attention
5 From The Chairman’s Desk
5 Calendar of IARFC Events
6 RFC Financial Planning Process CourseProsper While Helping Clients Achieve Financial Independenceby Jim Lifter
8 Better Client Communication: The Out of Office Letter by Gabe Stepanic
10 Business Profile Join Duane Daniels for a Round of Golf and Find Out if You’re Compatible!
12 Working with Net Unrealized Appreciation by Dirk Dixon
13 The Sign Said, “Feel Important All Day Long!”by Ed Morrow
14 LTCA and AnnuitiesUse Them Together to Boost Your Senior Market Salesby Wilma Anderson
16 The Fed’s Version of ‘Russian Roulette’by Barry Ferguson
19 Morrow Addresses €FPA Initial
20 Cato CommentsThe World’s Wealthiest Private Investor Called Me Recently and Said…by Forrest Wallace Cato
23 Plan Builder FINRA Approvedby David Stitt
24 Compliance-Friendly MarketingThe Million Dollar Closing Ratio Formulaby Katherine Vessenes
26 Get Leads Quick with Pay-Per-Click — Online Adsby Sylvia Todor
27 Business Mirrors Life Beyond “How’s the Family”by Hesh Reinfeld
28 A Message from the Founder by Jack Gargan
The Register • January 2008 Page 3
The IARFC technical journal, The Journal of Personal Finance (JPF), continuesto gain credibility in the marketplace and broaden its exposure. Most recently,reprint permission was granted to Finsea Education for a number of articlesoriginally published in JPF.
Finsea Education is the leading provider of financial services educationacross Australia and New Zealand. The organization first began in 1966 withthe formation of the Securities Institute of Australia (SIA) and since then hasbuilt a solid reputation for excellence in education. In June of this past year,Finsea was acquired by Kaplan, a leading global education provider and willcontinue to open a world of new opportunities for its students.
The diligent early efforts of 4 and many authors as well as support staff havebuilt the Journal into a respected peer reviewed publication.
Earlier this year, EBSCO Publishing signed a licensing agreement with theIARFC granting electronic distribution rights for future editions of JPF. EBSCOPublishing, based in Ipswich, MA, is a leading provider of information resourcesto thousands of institutions worldwide. Through this distribution, the Journalwill be available to countless libraries and other research organizations. TheJPF is already referenced and indexed by both ProQuest and Cabell’s Directory.
If you are an author, a new writer, or just thinking about the idea of writing for the first time, JPF could be a prestigious publication vehicle for your article. Contact Ruth H. Lytton, Editor at [email protected] or 540 231 6678 about your manuscript ideas. More information is available at http://www.jpf.agecon.vt.edu/Index.htm
Subscription Information Subscription Rates: Individual $55 U.S., $68 Non-U.S.
Institution $98 U.S., $115 Non-U.S. To subscribe to the Journal, send a subscription request with complete mailingaddress and payment to:
IARFCJournal of Personal Finance
The Financial Planning Building2507 N Verity ParkwayMiddleton, OH 45042
Journal of Personal Finance Gaining Attention
The IARFC is proud of ourmembers and in reverence wewould like to remember ourpassing members:
Virginia R. Bartleson, RFC®
Rochester, MN
Carl J. Hegner, RFC®
Miami, FL
Kirk M. Nagel, RFC®
Shaker Heights, OH
You Can Write A Great Article for the Register
We are accepting articles of from 500 to 2,000 words on planning andpractice management topics. Please submit your copy by e-mail, along withan electronic photo and a short bio statement of less than 100 words to: [email protected]
Your article can be sent to clients, prospects and centers of influence in yourcommunity — either as reproductions, or as complete copies of the entirepublication. This is a powerful and effective form of public relations, and yourarticles are a very effective way of attracting favorable attention from yourlocal media.
• Get Published • Get Distributed• Get Noticed!
Register Articles
Volume 7, Issue 1 2008
Tools, Techniques, Strategies & Research to Aid Consumers,Educators & Professional Financial Advisors
Page 4 The Register • January 2008
The regulation of financial planning continues to evolve. Everywhere in the world we seemore governmental regulation that is having an impact on the way services and productsare delivered to the consumer. Often these regulations are beneficial, especially when theyrequire more disclosure and greater parity between the opportunities available to thewealthy and to giant conglomerates and the ways available to average citizens. For examplein Europe we have recently witnessed the adoption of Markets in Financial InstrumentsDirective (MiFID). The empowerment of average citizens to make wise decisions will onlyencourage the worldwide need for greater investment.
Governments may govern, but they don’t manage well. Nowhere is this more obviousthan here in the United States. Recognizing that millions had no savings and nodependable security in the event of death, disability or old age, Franklin Roosevelt pushedthrough the adoption of the Social Security System. Conservatives and businessmen railed against this “Socialism” but the American public embraced the need for it.Contribution percentages and ceilings grew predictably — to large extent merely matchinginflation. Funds poured into the “Social Security Trust Fund” to be invested and to stabilizethe economy.
The greatest crooks are in government. Then Congress realized here was cash for theplundering. They “borrowed” the funds from the security haven of the public, and spent it.Spent the money on earmarks and pet projects, on giveaway programs in their backyards, intheir home districts, on international largess to other governments, and on militaryprofligacy. Do we really need hundreds of military bases, with enormous payrolls ofuniformed and civilian personnel? The money contributed by workers and employers wentinto the left pocket, and then was “loaned” to the right pocket, replaced with a nearlyworthless IOU from the right pocket. Why worthless? Because your members of Congressspent the money. They did not invest it. They blew it!
Worse than Sub-Prime loans. At least there is real estate backing the loans made atunrealistic terms. Perhaps not in full, but at least there is partial security. In the case of the“loans” made by the Social Security System to Congress and then spent — there is no equity!Only the faith in the U.S. government. The recent steady decline in the dollar indicates howthe world is coming to consider how valuable a form of collateral that represents.
Who will Pay for this Theft? Certainly not the members of Congress! Many of them are“triple-dippers.” They have enacted for themselves a Congressional pension system that ismagnificent in its munificence of benefits. Most also have Social Security accounts fromprior employment in the real world. Many even have defined benefit pension accounts.Nearly all have IRAs, 401Ks and deferred compensation plans. The typical congressionalretiree will live in splendor, while those who elected him or her to guard their interests willwatch as a rising cost of living erodes the comfort level of their nest egg.
Watch the prices of imported goods. In the past twenty years we have benefited from low-priced, and increasingly higher-quality, goods from overseas. But productivity gains andinflation are raising the wage levels in China and India, just as they did in Japan. Whencoupled with the devaluation of the dollar we can expect sharply rising costs of these goods.This will only increase the imbalance of international payments, further depressing the valueof the dollar.
What is the Solution? I don’t know. Unfortunately, the very best solution is not available tous. That would be a five to eight year vacation of Congress. We have enough laws now. Ifthey would all go away, and quit spending, we might catch up. But that is not too likely, is it?The second best solution would be a divided government. President Clinton is credited withgood fiscal management, for almost balancing the budget. The reality is that he would notsign many of the bills advocated by a Republican Congress, and they would not pass bills tospend for his and Hillary’s favorite programs. Whoever is the next President, I can only hopethat Congress is controlled by the opposite party.
Is this politics? No, it is fundamental economics. The more I travel around the world, themore perspective I have in seeing what is happening at home. How are we doing? Not verywell. Be sure to read Barry Ferguson’s article about the Fed on page 16.
From theChairman’s Desk...
Calendar of IARFC Events
IARFC Accelerated CourseFebruary 4-8, Columbus, OH
IARFC Accelerated CourseFebruary 18-22, San Antonio, TX
Critical Illness Insurance ConferenceMarch 12-14, 2008, Toronto, Canada
Financial Planning ExpoMarch 20, 2008, Tampa
MDRT Experience 2008April 11-13, 2008, Chiba, Japan
Financial Advisors SymposiumApril 16-18, 2008, Las Vegas
IARFC Accelerated Course — TrinidadApril 28 – May 2, 2008, Port of Spain
MDRT Annual MeetingJune 22-25, 2008, Toronto, Canada
CE at SeaTM Cruise/ConferenceAugust 16-23, 2008, Mediterranean
Worldwide Chinese Life Insurance ConferenceSeptember 4-7, 2008, Singapore
NAIFA Annual MeetingSeptember 6-10, 2008, San Diego, CA
RFC Accelerated Course — TrinidadOctober 4-8, 2008, Port of Spain
Financial Advisors SymposiumOctober 13-15, 2008, Chicago
MDRT Top of the TableOctober 22-25, 2008, Austin, TX
World Financial Services ForumOctober 20-31, 2008, Beijing, China
SFSP ForumNovember 30 – December 3, 2008Las Vegas, NV
IARFC Members we welcome you tovisit us at IARFC exhibit booths.Please contact us for booth numbersand dates of exhibiting for theconference you plan on attending. 800 532 9060 or [email protected]
The Register • January 2008 Page 5
They came from all across the globe.They came from near and far. Theycrossed rivers and mountains, pastdeserts and streams. Through thick andthin they passed, all with one goal inmind… Wait a minute. That’s getting alittle out of hand. Let’s start this again…
They came from across North America toFort Mitchell, Kentucky to get a fresh starton their new year of business. The mostrecent attendees of the RFC FinancialPlanning Process Course™ spent fivedays exploring new ways to enhance theircareers, learning the secrets toprospecting successfully, and discoveringthe keys to increased revenues.
The students included long-time financialprofessionals, commodities brokers,insurance salespeople, and bank trustofficers. All gathered with the hope ofreinventing their practices for the newyear. They discovered, planned, arguedand even played some games all as partof a curriculum unmatched in the world offinancial education.
The students were greeted at TheDrawbridge Inn by IARFC CEO, Ed Morrowand Education Director Jim Lifter andstarted on the path toward success. Eachstudent received a mobile file boxcontaining the classroom materials,including textbooks, workbooks, computersoftware and the obligatory homeworkand outside planning assignments.
The students began by sharing their storiesand what they each expected to walk awaywith at the end of the 5-day program. Eachwas also asked to reveal something thatmakes them unique. As you can imagine,the answers were novel, but spacelimitations prevent us from revealing themhere. The actual classroom sessionskicked off by looking at perhaps the mostimportant subject for a financial advisor,prospecting. Based on the ClientAcquisition text, originally developed by I.David Cohen, RFC® and Jim Lifter, thestudents dove into the subject and learnedwhat prevents them from being successfulprospectors. They learned what they cando to narrow their markets and increasetheir prospects and how to properly explaintheir services to promote moving aprospect to a full-blown client.
Day 2 found the students exploring thefinancial planning process and the client
engagement through group discussionsand some fun role-playing. The prospectsthey developed in day one were now goingto be turned into fee-paying loyal clients.Students were introduced to the ClientBuilder presentation software and shownthe proper use during the initial stages ofthe financial planning process.
The students learned the keys to asuccessful engagement and the variousadjustments they would need to make totheir practices to achieve a new level ofproductivity. Many of the students had notpreviously charged fees for their servicesbut each now had the tools they needed toadd this to their list of services. Studentswere given the IARFC code of ethics and afull-blown discussion of ethics in theindustry ensued. Each student was madeaware of the strength of the IARFC’s Codeof Ethics and how it can be used toimprove the client engagement process.
Day three found the students beginningthe information gathering process andlearning the proper use of fact finders andthe client archive system. It was in daythree that the students had the chance totruly understand that the gatheringinformation process is the building blockof a successful plan. Students learnedabout the importance of communicationto the financial advisor and how what issaid is not often what is heard. They gotthe chance for more role-playing as wellas a chance to play some children’sgames. If you want to hear more, sign-upfor one of the classes being offered in2008. You too can have fun and learn atthe same time.
Day four was spent working with FINRA reviewed, Plan Builder software and creating an actual financial plan. Each student receivedtheir own fully-functional copy of theprogram that they were able to takehome. The students were to use this to create the full comprehensive plan that is a requirement for passage of the class. The students also had thechance to work with David Stitt, CLU,ChFC, CFP®, RFC® the CEO of the PlanBuilder program, and learn the ins andouts of the program and how it comparesto other programs currently being used inthe financial marketplace.
We finished the class by reviewing theVirtual Advisor on-line program that the
students will use to create their modularplans. The students are required tocomplete 5 modular plans using the web-based program that they have available tothem at no charge for six monthsfollowing the class. The students onceagain reviewed the financial planningprocess and had the chance to shareideas and advice amongst themselves.Within the room there are no competitors,only compatriots.
Future classes are being held around the country in 2008. Look in this editionof The Register for enrollment forms and details on the program. We arelooking at adding additional citiesthroughout the U.S. based on interest.Please let us know if you would like to see a class in your area. Contact Jim Lifter at [email protected] with anyquestions about the classes.
Jim Lifter, MBA, RFC®, the IARFCEducation Director, has an undergraduatedegree from Ohio State University inMarketing and an MBA from theUniversity of Dayton. He holds the RFCdesignation and will be responsible forcoordinating the development anddistribution of the new RFC courses.
Contact: 800 532 9060 ext. [email protected]
RFC Financial Planning Process CourseProsper While Helping Clients Achieve Financial Independence
Page 6 The Register • January 2008
Jim Lifter, MBA, RFC®
On the Register CoverRow 1: Jerry Thielmann, Ruben Ruiz and
Ed MorrowRow 2: Bernadette Bowman, Brenda
Whitman, Charles BernardRow 3: Siniva Tulua, Ron Williams,
Greg WilliamsNot shown: Gary Poling
The Financial Planning Process ™ A Financial Planning and Practice Management Curriculum for the Advisor who wishes to prosper by helping clients achieve personal financial independence. Unlike other financial planning courses which consist of academic topics and rigorous technical examinations, the RFC Course™ also equips the financial advisor to prosper by immediately acquiring the skills and tools to acquire and serve clients successfully. It includes 10 books, and 10 CD-ROMS of material, plus practice management components and the necessary software:
1. Client Acquisition, a marketing component based on the highly regarded Prospect or Perish, materials and projects developed by I. David Cohen, CLU, ChFC, LUTCF, RFC®.
2. Successful Prospecting by Jim Lifter, MBA, RFC®, editor and instructor for Prospect or Perish, developed this volume as a companion to Client Acquisition, containing practical prospecting assignments.
3. Five Textbooks, one for each of the five RFC course elements, with case-based examples and practice materials developed and used by veteran financial planner, Edwin P. Morrow, CLU, ChFC, CEP, CFP®, RFC®. The Client Engagement, Gathering Information, Problem Identification, Developing Recommendations, and Implementation and Monitoring.
4. Modular Planning Guide. Equips the advisor to prepare modular plans and to supplement all types of plans with additional materials: text, charts, graphs and calculations. Written by William O’Quin, LUTCF, CLU, RFC®.
5. The Process of Financial Planning: Developing a Financial Plan, published by National Underwriter Company. This is an academically reviewed university curriculum textbook, authored by professors, Ruth Lytton, Ph.D, RFC®, John Grable, Ph.D., CFP®, RFC® and Derek Klock, MBA, RFC®.
6. The Advisor’s Marketing Plan. This textbook, manual and sample plan is supplemented with software for easy completion by the financial advisor. It was developed by Ed Morrow and Jim Lifter. A CD-ROM includes all necessary forms for easy preparation by the advisor of their own unique marketing plan.
7. Client Relationship Management (CRM) software, Practice Builder Financial, for use during the course and for four months thereafter; correspondence, letters, agendas, planning checklists and service forms. Includes five marketing and client service automatic campaigns, complete with cover letters, articles and user-editable sequencing. Complete customer and prospect database with event calendaring, advisor task prompting, and management records of all necessary correspondence and interview notes.
8. Presentation of Services. A well tested presentation system, Client Builder Financial – for use by the financial advisor directly with prospective clients to help them recognize the need for planning, understand the process, and appreciate why the planning process requires the assistance of a professionally trained advisor. Includes all text supplements.
9. A Comprehensive Plan software program, Plan Builder Financial, which contains Monte Carlo simulation and the powerful Scenario Manager to answer “what if” questions with clients. Tax calculations powered by CCH; Petersons’ college cost database, and Estate planning flow charts. Students will produce a written comprehensive plan using Plan Builder.
10. Five Internet-Based Examinations. These exams are also learning tools, because after the student has completed the questions, the examination re-cycles for a review of all items answered incorrectly.
11. 10 CD-ROMs which contain forms, letters, agendas, checklists, agreements, pre-formatted notes, service letters and articles relating to each segment of the course, in Word, Excel and PowerPoint format.
5 Course Material Supplements — PowerPoint presentations, Word files and Excel spreadsheets in addition to text and classroom discussion based on each of the five RFC course components.
3 Software Programs: Client Builder, Practice Builder and Plan Builder for hard drive installation. Advisor’s Marketing Plan contains all the files for constructing the advisor’s personal marketing plan. Tutorial for the Virtual Financial Advisor. Acquaints the student with all the features and how to prepare and save client
reports and documents from this powerful online resource.
12. The Virtual Financial Assistant, an Internet-based compendium of modular planning tools and information resources from Financial Services Online, available during the course and for six months thereafter.
Contact the IARFC for a complete course brochure: 800 532 9060 or e-mail [email protected]
From time to time, we all find ourselvespreparing for a trip (be it business orpleasure) which will take us away from the office and ultimately out of touch fromour clients.
The challenge then becomes how to best manage client communication during that time away for two veryimportant reasons:
• To ensure that you have theopportunity to fully focus on the taskat hand, be it a trip to relax, recharge,and rejuvenate or an importantbusiness seminar.
• To ensure that any urgent client requests will be handled in an efficient, timely and professional manner.
Have you ever been away from the officeonly to discover that you have beentethered to your desk by your cell phoneand computer? Have you spent valuabletime forwarding messages to theappropriate individual or individualshandling such correspondence in yourabsence? If you answered yes to one orboth of these questions then read on, thisis meant especially for you!
Timely communication is a cornerstone of our business. Clients feel valued and cared about when we respond totheir needs and requests in an acceptable time frame. We all like to
have our needs met quickly and ourclients are certainly no different.
Personally, I operate under the 24 HourRule — all communication is answeredwithin a 24 hour period. Additionally, if itis an urgent need requiring above averageresponse time, I may need to operate offof a 24 Minute Rule! The key here is toset ourselves up for success so that wemay serve our clients and not sabotageour lives in the same instant. Time is trulya valuable resource and proper planningcan make a world of difference in its use.
So how can one proactively plan for timeaway from the office and significantlyincrease the likelihood of fully focusing onthe trip at hand and ensure that any clientrequests are handled as if you were stillseated in your office? The answer to thatcrucial question is the Out of Office Letter.
The Out of Office Letter
The Out of Office Letter or OOL(pronounced like cool, just drop the c) is an essential tool when preparing for time away from the office. Itaddresses the concerns previouslydiscussed when absent from our clientsand allows any individual to fully enjoytheir excursion. The OOL is comprised ofthree primary sections:
• The first section Explains that I willsoon be out of the office — it includesthe reason for the trip, the location I
Better Client Communication: The Out of Office Letter
will be visiting and most importantlythe dates I will be away.
• The second section Identifies theexact individual or individuals who will be providing immediate supportand service in my absence andprovides details regarding theircontact information.
• The third section Presents a Call toAction — if a client has a need whichrequires my attention or desires tospeak directly to me; I urge them tocontact me for immediate service. Asa rule, I mail out the OOL two weeksprior to my departure to allow for anysuch requests.
The OOL has proven to be an invaluabletool in maintaining excellent clientcommunication and maintaining effectivebusiness practices. The feedback I havereceived reinforces the use of this simple,yet effective planning instrument. Theoverall client feedback has been centeredon three major points:
• Clients appreciate me keeping them informed regarding my travelschedule — it also removes anysurprises of me being out of the areawhen they have a need.
• Clients feel secure knowing that I have a dedicated Service Team Representative prepared torespond to their individual needs as appropriate.
• Many clients take the initiative tocontact me for personal service priorto my departure. They appreciate theopportunity to speak with me one-on-one and know exactly when I will be available and unavailable.
Unexpected Benefits
The OOL has also provided someunexpected and important benefits to mybusiness and personal life:
• It has created urgency within mypractice and has consistentlygenerated business. Many clientshave been moved to action on anissue that was being considered or decided to contact me regarding a piece of new business prior to my departure.
Page 8 The Register • January 2008
continued on page 9
• Clients have had the opportunity toshare in various aspects of mypersonal and business life. Thiscommunication supports the creation of deeper, more intimaterelationships — ultimately, clientssimply appreciate being informed.
• I have received great travel advice,wonderful gifts, and most importantlyclient referrals of family and friendswho live in the areas I will be visiting.
Uniform Communication
The Out of Office Letter also provides aconvenient template when setting up yourextended absence voice mail messageand e-mail auto-responder. Simplyreproduce your OOL announcement ontothese other mediums and you havecreated a uniform message regarding yourabsence. Just make sure you updateeverything upon your return!
So the next time you’re headed out of town or you just need a break awayfrom the office, make the effort toeffectively communicate your plans withyour clients. It will make your time awaymore efficient and enjoyable, and mostimportantly your clients will appreciateyour thoughtfulness!
Gabe Stepanic, RFC® is a Senior Associatewith Hawaii Financial Specialists, Inc. inHonolulu, HI. His primary focus isassisting clients to enhance and improvetheir life plan through investmentadvisory, tax strategy, risk managementand estate preparation services. Hebelieves in the importance of creating life-long relationships with clients andstrives to become an invaluable partnerthroughout the entire planning process.
Contact: 808 349 [email protected]
Gabe Stepanic, RFC®
Why have thousands of FinancialProfessionals turned to Copytalk to taketheir business to the next level?
They enjoy increased productivity, savetime, and improve compliance by usingtheir phone to document theirclient/prospect meeting notes, letterdrafts, to-do lists, and more. Speakingnotes into a phone immediately aftereach meeting allows them to easilycapture more detailed information whileit is fresh on their mind. IARFC haspartnered with Copytalk to help theirmembers improve their practice!
The most successful financialprofessionals have one thing in common;they know EVERYTHING about theirclients… their likes, dislikes, hobbies,kids’ names, and more. According toPaul Morrison, V.P. of Sales andMarketing for Copytalk, “Our clients tellus that Copytalk improves clientrelationships. The stronger therelationship with prospects/clients, themore likely financial professionals canbuild trust, develop the best financialplans, and create clients for life!”
Copytalk is as simple as 1, 2, 3:
1. Pick up your phone, speed dialCopytalk and dictate the details ofyour client/prospects meetings
2. Copytalk transcribes the messageand returns the text back to youand/or your Assistant via an email orsecure web site within a few hours.
3. You and/or your Assistant can theneasily copy and paste the text intoyour current client managementsystem or print for the files for future reference.
Let’s also not forget compliance.Producers understand the need fordocumenting each client and prospectinteraction, but it’s not easy toaccomplish that in a detailed, accurate,and efficient manner. “What Copytalkclients tell us,” says Paul Morrison — VPof Copytalk, “is that they use our servicefor the productivity and relationshipbuilding benefits, and improved
Here is just one example of the impact of Copytalk:
“In the last year, my practice grew 86%. Copytalk played a key role incontributing to that growth. Imagine... a compliance tool that actually helpsproductivity and sales! I recommend itto anyone looking to take their businessto the next level.”
– Cindy, Prosperity Planning, Inc
compliance documentation is the icingon the cake.” Since notes aredocumented immediately after eachmeeting, and spoken instead of writtenor typed, they are more detailed and thistranslates into more in-depth profiles onclients/prospects, better organization,increased productivity for the producerand/or their assistant, and betterdocumentation for compliance.
Copytalk is a monthly service withunlimited use per person and NO long-term contracts. Through the IARFCrelationship, you get a discounted flat-rate and there are no long termcontracts.
Call Copytalk at 866 267 9825 for more information or to go towww.copytalk.com/IARFC. Sign up inand ask how to get a free month! Be sure to mention IARFC to get your discount.
IARFC Member Services
The Register • January 2008 Page 9
continued from page 8 Better Client Communication
Duane A. Daniels is a RegisteredFinancial Consultant (RFC). He began his career in financial planning in 1989. He was interviewed by Hesh Reinfeld.
This is Duane’s business dilemma.He is doing well. He doesn’t need to grow his practice much. He can be very selective about which new clients he takes on. However he is not sure about how to select prospective new clients.
What should the criteria be? All the trademagazines tell him to raise the bar andonly select clients who have a higher networth. So if his best clients averageabout $1.5 million in net worth, he shouldexclude anyone with less.
But that strict dollar oriented approachdoesn’t work for Duane. No, it’s not thathe feels that he can’t turn anyone away;it’s that his criteria are much morepersonal and subjective.
“I have to like the people,” says Duane. “Ihave to want to spend time with them.”
Duane is working on some questions thatwill help him weed out people who maynot be a good fit. They may be solidmiddle class families and God fearingpeople — they just may not be right forDuane. (I know this can make Duanesound egotistical and self-centered. Buthe isn’t).
The first question he asks is: “Do youaccept personal responsibility for
managing your finances?” If you do, youlive below your means in order to savemoney; and you keep your personal debtat a manageable level. If not, Duanewon’t be able to help you. He doesn’tknow what the next great stock pick willbe. He can’t help reverse years of poorjudgment and dreadful financial behavior.
So Duane assumes that you understandthat you are ultimately responsible foryour own financial well being, and then hissecond question is: “Can you manageyour investment plan yourself?” Do yougo on-line researching stocks and mutualfunds; do you read the Wall St Journalregularly? Are you the one at parties thattries to explain what the Federal Reservedoes? Be honest, are you reallycomfortable managing your portfolio?
If yes, then go for it, you may not needDuane’s support.
Duane works best with people who aren’ttrying to be financially sophisticated, butwho realize that managing their financesis important. As Duane says, “If you havea plan and manage it, meaning you stayon course, and live below your means, it’smore likely you’re going to do fine. Thisthing we call financial planning is notrocket science.”
His colleagues argue with him and saythat a home owner would never try to fixthe plumbing in his house, he’d hire aprofessional. So it should be the samething for financial advice. You should hiresomeone with experience.
But Duane thinks that if you’re really goodat plumbing, and if you have the time, thetools and the interest, (and your spouseagrees) then why not go for it?
Duane’s third question for potentialclients is: “Do you take advice willingly?”When your doctor tells you to stay awayfrom carbs, do you? (Or at least do youmake a serious effort). When yourmarriage counselor tells you to be nice toyour mother-in-law, because you only haveto see her once a month, do you?
If you answer yes, then Duane wants tomeet you. Why? Because Duane sees hisjob as offering advice. He helps youmanage your own financial plan; Duane
Business Success ProfileJoin Duane Daniels for a Round of Golf & Find Out if You’re Compatible!
continued on page 11Page 10 The Register • January 2008
Duane A. Daniels, RFC®
continued from page 10 Business Success Profile: Duane Daniels
Duane wants to know if you lose your coolwhen you can’t get the ball out of abunker. If you do, you might also be thetype of person that panics when themarket has a correction. And when youlet your emotions drive your decisions, theresults can be bad and life altering.
Duane realizes that trust is the key to asuccessful relationship. And trust worksboth ways. Once a prospective client toldhim outright, “To put it bluntly, I don’tknow you, so I don’t trust you.”
Duane’s answer floored him: “Not to put you down, but I don’t need yourbusiness — I appreciate your business.The reason we’re meeting is to see if welike each other.”
Duane says “In the old model ofnegotiating with a prospective client, hethrows up an objection and the sales guyis supposed to overcome it. For example,the client says: “We worked with a stockbroker who got us this rate of return, canyou beat that?”
“However, I don’t work that way,” Duanesays. “I’m not a car salesman trying to
turn around every objection and beat outsome theoretical competitor. I may startlethem and say ‘you know, maybe we justaren’t a good fit.’”
Duane understands that a newly mintedadvisor, just trying to build up a practicemay not be able to be so selective.However, he would argue that if you don’tfollow your gut when it comes to people,you’ll be sorry in the long run.
“Using your gut to make long termfinancial decisions is a big mistake.” He argues, “You need independentanalysis and thinking. However, when itcomes to starting a relationship, your gutknows you best.”
Contact: 800 956 [email protected]
Securities and Advisory Services offeredthrough Mutual Service Corporation. Mutual Service Corporation and LPLFinancial are affiliated companies and are members of FINRA/SIPC.
tells his clients, “My job is to help manageyou. With my help you could potentiallymake more good and fewer bad decisionsover your life time. You’ll take risks whenit is appropriate and avoid them whenthey are inappropriate.”
To summarize: If a prospective client doesn’t want to start subscribing to the Wall St. Journal and is open toletting someone advise them onmanaging their finances, then Duanewants to meet them.
Duane has a final question that can onlybe answered with a face to face meeting.“Will we like each other? Will there bethe right chemistry between us?” (OK,that’s two questions).”
Duane would like to invite you out for around of golf. Now don’t worry, he isn’tgoing to ask you a lot of personalquestions about your finances, nor is hegoing to bore you with his credentials andsuccess stories. He just wants to tee it upfor a couple of hours.
For Duane, golf is the ultimate experiencein which to gauge a person’s character. Itis not a question ofhow well you play.You can be anovice or a skilledamateur. Golfreveals how wellyou deal withstress, changingenvironments, andyour ability to keepto your game planwhen shots startgoing awry.
Now don’t expect tosee a world classgolfer when Duanetees off (he holds amodest 12handicap). It’s notalways fairways andgreens. And if youlisten closely youmay even hear himmutter a few choicewords under hisbreath as the ballhooks left. Butthen you’ll see a bigsmile as he trots offinto the woods. Heknows it’s a gameand that the mostimportant shot isthe next one.The Register • January 2008 Page 11
I recently had a client, Frank (Age 64),walk into my office and wanted me toreview a recommendation he had receivedfrom a friend. Frank was retiring soon andhis friend had recommended to him thathe roll his qualified plan into an IRA afterhe retires and then pull income off thatIRA to live on for the rest of his life. I toldFrank that was a pretty common planningmethod, but I then asked him if he wasinterested in paying more in income taxesthen he really had too? Frank’s responsewas “NO” of course, and he then wantedto know what I was talking about.
I explained to Frank that there is aplanning method called Net UnrealizedAppreciation that we could use to payfewer taxes on his retirement planbecause Frank’s qualified plan wasinvested in his employer’s stock. NetUnrealized Appreciation is the growth invalue of the stock between when it wasoriginally purchased (usually average costbasis) for the account and the fair marketvalue of the stock when it is distributed.Then the gain is taxed at the long termcapital gains rate no matter how long ithas been held. The cost basis in thestock is then taxed as ordinary incomewhen it is distributed from the employer.
So back to my client Frank, let’s say hehas 5,000 shares of his company stock inhis qualified plan that he purchased for$1 a share. Then Frank worked his entirecareer at this company and as he is aboutto retire the value of that stock is now$100 a share ($500,000 balance). Nowif Frank was going to roll that amount toan IRA he would then be taxed for everywithdrawal as ordinary income. However,if we utilize Net Unrealized Appreciationthen we could take a lump sumdistribution of the $500,000 and Frank’soriginal cost basis of $5,000 is then taxedas ordinary income and then his gain of$495,000 is then taxed at long termcapital gains rates.
Key Net Unrealized Appreciation Planning Points
1. Timing is everything and in order totake advantage of the NUA the stockmust be distributed as part of a lumpsum distribution. In order to qualify asa lump sum distribution, the entireaccount balance must be withdrawnwithin one calendar year. (Hint: Neverstart a NUA process in the last quarterof the year!)
2. Do not rollover the stock! While youcan rollover the other investments,rolling over the stock to an IRAeliminates the NUA benefit.
3. Proper distribution. Taking 72(t)distributions, in-service distributions,and required minimum distributionsafter separation of service will causethe distribution of the stock to fail thelump sum distribution test.
4. Selling the stock while still in the planeliminates the NUA benefit.
5. Consider the financial risk — Client’swith substantial investments inemployer stock may be taking serious
risk in order to obtain a tax benefit.(ENRON!)
6. Participants separating from servicebefore age 55 will be subject to the10% premature penalty on the costbasis of the stock.
7. Be timely. Make sure the selling ofthe stock is done in a timely mannerto hopefully avoid any major decreasein the price in the stock.
8. The NUA benefit can be used by theheirs. While the NUA is income withrespect to the decedent, it stillqualifies for capital gain treatment.
Financial Planners need to be carefulwhen utilizing Net Unrealized Appreciationand I would recommend that they work closely with the client’s accountantand/or tax advisor. The Net UnrealizedAppreciation is reported on 1099-R, Box 6. The portion that qualifies forcapital gain treatment is reported in Box 3. If the Net Unrealized Appreciationis not reported in Box 3 then theaccountant/tax advisor can use theworksheet and instructions in Form 4972to calculate it. Another importantplanning note is that the lowest capitalgains rate in 2008 is going to be zero.
Dirk Dixon, LPA, RFC® is a LicensedPublic Accountant (LPA) with the State ofIowa and a Registered FinancialConsultant (RFC) with the InternationalAssociation of Registered FinancialConsultants. Dirk works in the areas oftax preparation, tax planning andfinancial planning and has more than adecade of experience. He is currently apartner in the accounting firm of Baker &McClure CPAs PC in Des Moines, Iowa.
Contact: 515 285 [email protected]
Working with Net Unrealized Appreciation
Dirk Dixon, LPA, RFC®
Page 12 The Register • January 2008
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My friend Wally Cato is the founder ofCato Inter-Group in Atlanta, Georgia. Herecently told me about a street vendor hemet on the streets of New York who wasselling flowers. His sign read, “Buy aFlower, Only $2.00!” As the vendor andMr. Cato visited, the vendor complainedthat sales were limp and not many peopleeven bothered to stop and smell thebeautiful roses. Many a sales trainer orcompany leader can sympathize but on alarger scale!
The next day, Cato, a famous celebritypromoter, walked down that same streetonly to find the street vendor in the samepredicament as the day before. Sales werelagging and the vendor was discouraged.Mr. Cato, a veteran sales trainer andcorporate leader then offered the followingadvice, “Change your sign; I’ll tell you whatto write and sales will skyrocket!” So thevendor changed his sign to read, “Want tofeel important all day long? Buy a flowertoday! Only $2.00!” He sold out of flowersin just one hour.
Cato knows that sometimes we want tofeel important, even if it’s just for a shortwhile. Something as simple as a flowercan give us the added comfort andmotivation we need to sell more. Highachievers and strong leaders make their staff and their customers feelimportant all day long!
We make ourselves feel important bypurchasing gifts for ourselves such as,jewelry or new shoes, or we frequently
change our hairstyle. Successful salestrainers, motivational speakers andleaders know the power that comes with aword of praise, a compliment or a thank-you note. These are all powerful tools thathelp others feel important all day long too!
When we feel important and valued, wecan do just about anything, not only forourselves, but also for others! Salestraining is about creating an environmentto win! Helping people feel special all daylong is a good start!
This incident about Wally Cato revealedwhy he has been so successful in helpingadvisors enhance their image. He doesthis, not by inventing details about them,but by revealing elements of theirpersonality in ways that make potentialcustomers want to meet them.
Ed Morrow
Forrest Wallace Cato, RFC® presents TheCato Award at the IARFC Forum and writesa column for the international Advisersmagazine. As a media advocate he helpsfinancial advisors receive the localpublicity they deserve by promoting andpublishing their services in an effectivemanner. Cato polished his education atOxford University in England, but you’dnever guess it from his southern drawl.
Contact: 770 516 [email protected]
The Sign Said, “Feel Important All Day Long!”
The Register • January 2008 Page 13
Display the IARFC Code of Ethics
Where does the IARFC stand? We solidly re-affirm ourCode of Ethics. The simple, straightforward yet thoroughCode is easily and clearly understood by consumers as wellas other advisors, and it sends a strong message of yourprofessionalism.
Proudly Display your Code of Ethics Wall Plaque in theentrance of your office, waiting area, or in the room whereyou meet with clients. The Code of Ethics is handsomelyplaced behind clear plastic on a walnut base. Wall ortabletop display.
(8.5” x 13” — with some assembly required)
To order the RFC Code of Ethics plaque: $50 plus $10 shipping: 800 532 9060
LTCI and Annuities are the perfect one-twopunch in penetrating the senior market.Here are the secrets about how to use thetwo together effectively.
Long-term care insurance and annuitiesare the keystone products for success inthe senior market — they perfectlycomplement each other.
Yes, there are certainly plenty of other opportunities, including lifeinsurance and mutual funds. But farmore often, you’ll make your first sale to a new senior prospect with an annuityor LTC policy.
They’re both safety products that protect against the financial catastrophesof long-term care and living “too long”respectively. That’s why they’re such compelling door-openers. Incontrast, other financial products are more like luxuries — and much harderas a first sale.
Annuities and LTC complement eachother, and it doesn’t really matter whichproduct you sell first. Once you’ve madethe first sale with either, you’re in thedriver’s seat to make the second sale andmore. In fact, it’s a great idea to have LTCand annuity marketing campaigns going inparallel, because many people willrespond to a direct-mail piece for one butnot the other.
LTC, though, does have one big drawback:clients have to be healthy enough toqualify for it — a barrier that doesn’t applyto annuities. Later in this article, you’lllearn how to pivot to the annuity salewhen a client can’t buy LTC.
Long-term care is fraught with a lot more emotion and fear. That’s why thelead piece I recommend in direct mail is a well-designed looking package inviting the recipient to fill out the cardand return it to our office. The annuitysale is more straightforward, and lessemotionally charged. For that product Irecommend using large postcards with atoll-free number which recipients can callfor more information.
Making the LTC Sale in One Call
Whenever possible, when selling LTC,have your first visit in your prospects’home. It’s where they have all theirfinancial and medications — and wherethey feel most comfortable. Serving theretiree market, you can make all yourappointments in the daytime. Schedule10 appointments a week because anaverage of one will probably cancel.
On your appointments, drive an ordinarycar instead of a luxury vehicle, which canmake you look like a “fat cat” to ordinaryfolks. Once inside warm up yourprospects with small talk and make them feel completely comfortable withyou. This usually takes about 15 to 20minutes. Don’t skimp on this; take asmuch time as you need to get to that first laugh and start to create trust. It’s easy to spot since your prospects’
shoulders will start to relax. You’ll know itwhen it happens.
Now, you can start your sales process.Remember, if you don’t create need, you’ll never get an LTC application. Thissale is not based on logic; it’s based oncreating an anticipated need for long termcare insurance WHEN their healthchanges. You must be able to get yourprospects to envision a time when theirhealth will change. People, especiallymen, think they’ll just live forever or diepeacefully in their sleep. You have toovercome their denial.
The health interview questions arecrucial. In a gentle, sensitive way, askabout their health and the medicationsthey take. Then ask the BIG question,“What are your plans for when yourhealth changes?” This is where you arecreating the Need. Do not go any furtheruntil you can establish the need for LTCprotection in the client’s mind. But don’tuse scare tactics. The facts will speak for themselves.
When it dawns on them that withoutinsurance, long-term care would befinancially devastating, you’ve cleared thefirst big hurdle, creating the need, butyou’re not home yet. You’ll probably have
LTCI and Annuities —Use Them Together to Boost Your Senior Market Sales
Wilma G. Anderson, RFC®
Page 14 The Register • January 2008
continued on page 15
continued from page 14 Boost Your Senior Market Sales
major health problem that definitelyprecludes applying for LTCI. How can youstill make a sale? It’s a challenge —especially when you’re talking to a couple, and one partner qualifies and the other doesn’t.
Here’s the approach that I use verysuccessfully. I say, “Unfortunately, it’s a little too late for you to apply for long term care insurance, but here’s what I would suggest: We need to setaside a portion of your financial resourcesjust to pay for care when you need it. Your money can sit there and work ashard as it can for you. Then, WHEN youneed care, you can access those dollarsto help pay for your care. And the factthat you don’t qualify for insurance makesit even more important for your husband(or wife) to be covered for their long-termcare costs.”
Once you’ve gently given the client thebad news, you can discuss how anannuity can act like a self-insurance fundfor long-term care, pointing out theadvantages of the tax deferral and greaterliquidity than CDs.
Annuities also help overcome another bigobjection to buying LTCI, namely: “I can’tafford it.” However, with an annuity, theclient can make regular, penalty-freewithdrawals to pay for LTC premiums while
the rest of the money grows tax-deferred.Make sure the client understands that thewithdrawal each year from their annuitywill be a taxable event. You now have theopportunity to make two sales and serveyour clients too.
Cheese and crackers, Gehrig and Ruth,Martin and Lewis, LTCI and annuities — all natural winning combinations!
Wilma Anderson, RFC®, has been knownas The LTC Coach, one of America’sleading LTCI sales trainers and apracticing producer who sells 400 LTCpolicies a year. Continuing to expand herservices, she now supports the rapidlyexpanding market as the Critical IllnessCoach. She offers personalized tele-coaching sessions, workshops, speechesand several sales tools to help Advisorslearn how to master the LTCI sale. Wilmais a widely published author and frequentspeaker at conferences and salesseminars, including this year’s ForumWatch for a series of products coming tohelp you learn how to sell Critical IllnessInsurance too!
Contact: 720 344 [email protected]
to overcome some objections beforenailing the sale.
The first objection is the myth thatMedicare or a private Medicaresupplement will cover all of their long-termcare costs. You must clearly explain the limits of your prospect’s existingcoverage and the amount of financial risk they’re exposed to. Once peopleunderstand this, they’re much more likelyto buy the product.
Overcoming denial is crucial in the LTCIsale. Most people — especially men — like to think that “it won’t happen to me”despite the statistics. They’ll say things like, “Everyone in my family justdrops dead.” And, “Call me when I’mcloser to 70.”
Another objection is, “I have plenty ofmoney to cover any costs I might have.”You can make an analogy to homeownersand auto insurance. Point out that mostpeople have home & auto insurance sothe risk of paying for a large claim istransferred to the insurance company, notinto their savings.
Making the Annuity Sale When the Prospect Doesn’t Health-Qualify
Often, when you interview the prospect,you’ll quickly learn that he or she has a
The Register • January 2008 Page 15
Critical Illness Coach Wilma G. Anderson
The timing is perfect. Your clients and prospects are ready to listen. Many of your clientspurchased a long term care policy with a 60 or 90 or 180 day Elimination period. While theywait for the LTC policy to start paying benefits, a check from the insurance company could bea lifesaver. Or, your client might be a business owner or a physician. When a heart attack orstroke happens, how will their bills or operating expenses get paid?
Having a Critical Illness Insurance policy could give them Peace of Mind. Their monthly billskeep coming. They’ve got deductibles on their health insurance, co-pays, a mortgagepayment, and/or a period of time before their DI policies start paying. Wouldn’t it be great ifyour clients received a check to spend any way they wanted to? Even better, a treatment planfrom their Doctor is NOT necessary to receive that check from the insurance company. Wow!This is why selling Critical Illness Insurance will make a real difference to both you & yourclients or prospects. Become the Agent who offers something different in your market place.
Become the Agent who offers something different in your marketplace!
CALL TODAY720 344 0312 CriticalIllnessCoach.com
Criticalillnesscoach.com Offers Carrier Appointments, Sales Training. “You can earn $70,000 every year an extra commissions and increase your client base,” Anderson said.
Happy New Year to all! Santa was nodoubt good to all of us all in December.What? Oh, yes, Christmas Day was nicebut I was talking about December 11.That was the scheduled Fed meeting inDecember. The stock market embraced alower interest rates scenario as the magicelixir. Lower rates are the marketsequivalent of the magic substance thatallows baseball players to routinely put up‘Ruthian-like’ numbers. Boo-yah! Theymight as well change the name of the Dowto the ‘Bernanke’. Everyone expects lowerrates now at every meeting. Everyoneexpects Santa to goose the markets.What? Oh yeah, I meant ‘Bernanke’.Same difference. The Fed has turned thestock market into a joke. It is like acarnival game that you know is rigged.The Carnies pick out the winners just tomake it look legit. How did we get to thispoint? How did we allow capitalism tobecome extinct in our great country? Howdid we allow our manufacturing base torelocate and dissolve jobs? What? Ohyes, the Commerce Department says weare creating 166,000 new jobs a month. Isuspect if that figure was even remotelytrue (the fact that it comes from theCommerce Department tells you that thecake has an ample icing of puremendacity), the extra jobs were created bythe government to counter the number ofmanufacturing jobs migrating to the nationof ‘out-sourcement’.
Let’s review with the Fed gun in our hand.The nineties brought innovation, job growth,and true wealth granted from the stockmarket. US companies were makingmoney and dominating the world. FormerFed Chairman Greenspan saw it as a badthing and sought to mute prosperity byconstantly squeezing the trigger on the Fedinterest rate gun. Finally, he destroyed thestock market. Click. Drawing on his vastknowledge of economics and investments,he realized his own folly and loweredinterest rates to near zero. Click. Inresponse to monetary stimulus andmonetary creationism, the lenders soughtevery mirror fogger they could find to getthirty-five signatures on a loan applicationswearing to pay back the loan. Click.Builders responded by building. Appraisersresponded by appraising ‘as necessary’.The lenders and the regulators turned ablind eye because it was good for the stockmarket. Click. The investment bankingworld saw the chance to chisel a buck fromthe newly created securitized paper thusunburdening the lenders of repaymentresponsibility and generating yet anotherinvestment product to sell. Click.
Greenspan turned the position of ‘headcon artist of the world’ over to Bernankewho quickly responded to Wall Street’sdemands by printing more money than asubprime borrower could shake a stick at.Click. Suddenly, someone had theaudacity to ask what all this junk paperwas really worth! Click. 2007 has nowseen our financial system shaken to itscore. We have flim-flamed the world intohelping us with our stock market con. Noone really knows how much garbage paperwas created and sold as an ‘investmentproduct’. In part, we don’t know becauseno one really knows what any of it is worth.I have an idea it is all worth about anothercow chip in a pasture. But never mind.The stock market must go higher at anycost. It is all we have left. Click.
Like a gun to our temple, the Fed keepspulling the trigger. One day, there will be alive round in the chamber. But thatdoesn’t stop the Fed from pulling thetrigger. Instead ofremoving the gun, theykeep trying to design ahelmet to withstandthe impending blow.Last month, I tried togive you some insightinto the world of SIVs(Structured InvestmentVehicles). This is thelatest con that the Fedhas endorsed as a wayto get rid of all the badpaper that threatensto surface on lenders’balance sheets. Thebeauty is that lenderscan start anothercolumn on theaccounting balancesheet, in addition todebits and credits (inthe legitimateaccounting world),called SIV that is notcounted in thebusiness of the lender.SIVs are ‘off balancesheet adjustments’.Click.
Aside from thehundreds of billionsthat all of our financialinstitutions are writingdown, I have to wonderabout how much extralending and moneycreation wasgenerated with the
idea of using a ‘securitized investmentvehicle’ as a collateralized asset. Whenmy son was younger, we used to play theboard game, Monopoly. On one occasion,he had encountered the bad luck ofrunning out of money. He opined that weshould get slips of paper and write dollardenominations on them and divide themup so each of us would have even moremoney so we could keep playing. Iexplained to him that that would devalueall the money and the game wouldtherefore become pointless. The wholeidea of the game was to embrace thechallenge of monetary prudence. If wewere to create some infinite pile of paperthat we assigned numbers thatrepresented money, there would no longer be a loser. There would no longerbe risk associated with real estatepurchases. You land on property — you
The Fed’s Version of ‘Russian Roulette’
continued on page 17
YUM BRANDS INC (N) YUM $37 3rd qtr. results reported 10/09/07Sales: $2.5b vs. $2.2bIncome: $270m vs. $230mEPS: $.50 vs. $.42P/E: 19 Gth: 14% Profit: 11%
This is the company that owns KFC, Pizza Hut, Taco Bell, LJS,and A&W. We all patronize their restaurants so we know whatthey are all about. Fast food at the lowest possible prices.You can see by the numbers that business is good. And, theyare growing very nicely internationally. KFC is popping up allover China. Expansion is good and the dollar translation isadding to the bottom line. And, if their business begins to fail,our government will bail them out like the mortgage industry.The chart shows a monthly downturn which is probably abuying opportunity. I would wait, however, until the stock pricemoved above $39.
Page 16 The Register • January 2008
continued from page 16 The Fed’s Version of ‘Russian Roulette’
curtain back from theWizard of Oz andfound it was just agentleman back therewith a smoke machineand a microphone.The gig is up. The put-call ratio wasactually in solid callterritory. That’s right;the calls (bet onmarket uptrend) wereoutnumbering theputs! Amazing!! Itseems that the entireinvestment world waslooking at the samemarket and thinkingthe same thing — Benwill be here soon! Andsure enough, the 13thbrought us thestrongest single dayrally in the Dow in fiveyears! The PlungeProtection Team ridesto the rescue againand we all know it!Isn’t it funny how thePPT and Bernanke stilltry and act like theydon’t exist? Do theynot think that we know who they areand what they do? Do they think they are like Batman orsomething? They arehilarious. But boy am Iglad they showed up.
Case in point:November 20 — the Dow rallied 171 pointsin the last 30 minutes of the day! The Dowopened at 12,955 and climbed to 13,107by 11 am (152 points with 60 points ofthat rally coming in the first five minutes oftrading). From there, the steady drumbeatof negative news (and most likely thePlunge Protection Team went to lunch)drew the Dow down 268 points to 12839by 3:30. Since we all know that the12,500 level from August 16 was ‘THELOW” (Do you hear a big, booming voicefrom the heavens?), I’m sure we were allsitting at our computers like we were sitting in the seat of a dragster. The lights were turning from red to yellow to finally green. Shazaam!!!! Like Christmastime with our stockings hung by thefireplace, I had some milk and cookiesprepared for Santa. In a flash he appearedwith sacks full of money and the Dow shot higher roaring up 171 pointsin half an hour — the last half hour of
the day (this movie rerun is shownpractically everyday now). Whew! I wasgetting a little worried. I did notice thatSanta looked a lot like Bernanke but who cares? The Dow was saved again! My only question is after goosingthe Dow, did Santa return to the North Poleor to the Batcave? Such is our modernmarket in the new era — controlled,contrived, manipulated, and completelyunder the power of the Plunge ProtectionTeam!! Did you just hear bugles blowing?Just as a side note, the Dow lost some 200points the very next day! Ben wasoverheard on his way back to the Batcave,“To the printing presses, Robin!” This isextraordinary market behavior.
11/28/07: The Dow rallied 331 pointshigher. Why? What does a hocus-pocusmarket need? That’s right — money. So,
buy the property. Ah, from the mind of asix-year old comes the policy of ourFederal Reserve!
Now our stock market is under the spell ofthe Fed. When we need more money, wesimply ask Santa to send some over. It isalmost like a piñata party. We are allblindfolded for risk and value purposes (sowe don’t see any of it) while we swing atthe piñata. The market has becomesomewhat of a Beñata if you will (Okay, Istole that one from a friend). Every marketslump is now marked by our casting aneye towards the Fed in search of aprocession of wheel barrows full of moneycoming down Wall Street. Whack! Sendme some money, Ben!
Most Wall Street types have joined the Fedin pronouncing the subprime fiasco as aminor nuisance. A little accountingadjustment, a little intervention, a littlemonetary injection, a little soft peddling,and a strong dose of interest ratereduction and presto — what were weworried about in the first place? As NancyPelosi mused, isn’t a weak currency goodfor us, anyway? Apparently, the fallout atthe corporate level is beginning to hit thefan. After running their firms into theground with their own complicity in thesubprime lending practice, the heads ofMerrill Lynch and Citigroup got fired. Ithink they asked for severance pay to bepaid in Euros, thank you (yeah, I got thatone from the same friend). Sadly, no oneclaims to have seen any of this coming. Ishuman intelligence de-evolutionizing?
Now, if I know the Fed is running thecountry, you know it as well as you readthis publication. Has the market finallycaught on? November 12 was a veryinteresting day. Why? For one, it was thefourth consecutive day of a drubbing thatWall Street hadn’t seen since sometime in2002. Stocks were simply gettingpounded. The big banks were declaringbillions in mortgage write downs.Corporate earnings were punk. The dollarwas experiencing the dry heaves. Oil waspushing $100 per barrel. The majorindices were on the verge of turningnegative for the year. Of course, we allknow that that is not allowed to happen inthe Bernanke era. Why do I say, “We allknow”? A quick look at the ‘put-call ratio’told me all I needed to know on theafternoon of the 12th. You would expectthe puts (bets on a further negative trendfor the markets) would be increasing. Wewere even closing in on ‘the bottom’ thatthe Dow reached on August 16. What didthe put-call ratio say? Yeah, we pulled the continued on page 18
WAL-MART STORES INC (N) WMT $472nd qtr. results reported 8/15/07Sales: $93b vs. $85bIncome: $3b vs. $2bEPS: $.76 vs. $.50P/E: 15 Gth: 26% Profit: 3%
Yep, this is the king of retailing. Wal-Mart is bigger than thenext six retailers in the US combined. Over Christmas,shoppers no doubt emptied the shelves of Wal-Marts all overthe world. A large portion of US citizens are getting poorer bythe day so that can only add to the population of Wal-Martshoppers. The stock price hasn’t done anything in about fiveyears but now may be the time to weigh in. I think the Fedneeds the retailers to be strong. After all, retail is where thebulk of our job creation emanates. These are the ‘goodpaying’ jobs that the Commerce Department brags about.Anyway, the chart appears to have a double bottom throughthe summer as Bernanke and the boys stoke the rally. Ohwell, get on board!
The Register • January 2008 Page 17
continued from page 17 The Fed’s Version of ‘Russian Roulette’
points on thisWednesday. Did Imention that durablegoods orders fell .4%for the third month ina row? Did I mentionthat home sales fellyet again pushinginventories to a 22-year high? Did Imention that nobodycares? All thatmatters is that moremoney is on the wayfrom Batman. Uh, Imean the Fed? Click.
Just one more thing.As I have beenteaching my readers,GDP in the US has tobe 3.5%. Not too hot,not too cold — simply‘Goldilocks-ish’. So,.6% in Q1, 3.8% in Q2,and 3.9% in Q3 addedup to 5.7% for Q4. As I(and all of you readersby now) expected, the CommerceDepartment ‘revised’Q3 up to 4.9%.Actually, I wasexpecting a ‘revision’to 4.6% to allow for a5% Q4. But, our newleader, Ben, does notlike round numbers.They look suspect.
Plus, 5% GDP for Q4 would be a bit strongseeing how they need to get interest ratesback to zero to help bailout their bankingfriends who loaned all of their money topeople that can’t pay it back in adesperate attempt to keep the markets inrally mode. So, now we only have to reporta 4.7% Q4 GDP to get to our prescribed3.5% annual GDP. Now you know how tocalculate GDP. So, why is everybodytalking about an economic slowdown?Maybe that is in the parallel universe ofreality. In the parallel universe of the stockmarket, the opposite data is fed in to keepthe lipstick on the pig. Click.
Even though November was a bit ugly forthe stock market, it looks like ourgovernment wanted to give us a niceChristmas by ‘fixing’ the stock markethigher. How? By freezing troublesomeadjustable rate mortgages for seven years.Nothing like a good government bailout toeliminate all risk! Will these people bebetter off in seven years than they arenow? Seven years is just seven more
years of rent and the foreclosure signshave more time to be printed. Of course,those signs will no doubt be printed inChina. Click. Good luck and may yourpockets bulge with Franklins!
UPDATE CORNER — Do you want to knowwhat drives the stock market? This is allyou need to know. From 11/29/07 IBD —front page main headline — “Fed’s KohnIgnites Stock Market Rally On Rate CutHopes”. That pushed the Dow up 2.6% onthe day. Is that it? Is the market totallydependent upon cheap money, constantFederal Reserve intervention, bailouts, anda disregard of fundamentals and reality?Coup d’Etat indeed. Nice work, Ben! Thestock market is all yours now. That’s whatI think!
Money Management Moment —Management fees should get your portfolio attention every day of the week.Commissions get your portfolio attentionwhen transactions occur. You decide.
Charts courtesy of StockCharts.com.Copyright 2007 — BMF Investments, Inc. —Reproduction in any manner withoutexpress permission is prohibited.
The views of the above are of this writer.The information herein is derived fromsources believed to be accurate and up to date.
Barry M. Ferguson, RFC® is the Presidentand founder of BMF Investments, Inc. anindependent SEC registered InvestmentAdvisory fee-based money managementfirm located in Charlotte, North Carolina.Barry has more than a decade’s worth ofexperience in the financial servicesindustry. He has a diverse backgroundranging from financial software consultantto registered representative of investmentproducts to President of an InvestmentAdvisory firm. His strong technologybackground has been beneficial in today’s‘information age’ market.
Contact: 704 545 [email protected]
the Fed went to work. Fed member Kohnmet investors at the start of trading andsaid, “Uncertainties about the economicoutlook are unusually high right now.” Hecalled for a ‘nimble’ Fed policy and inreference to the subprime mess said, “Weshould not hold the economy hostage toteach a small segment of the population alesson.” That spells ‘rate cut’. Yippee!!Also, an Arab investor ‘infused’ Citigroup by buying 7.5 billion of the bank. Whew! I really thought they were in trouble. Oh well — at least the rest of the worldcontinues to buy our debt and buy ourfinancials. What’s next — our farm landsand rivers? How desperate are we?
From the same day, Fed President CharlesProsser (a non-voting member) said,“Arbitrarily lowering interest rates orproviding liquidity to the market does notprovide the answers that the marketseeks.” He was interrupted several timesby workers pushing wheel barrows full ofmoney past the podium on the way to theNYSE. ‘Over-ruled, Sir!!’ So we rallied 331
VECTOR GROUP LTD (N) VGR $222nd qtr. results reported 8/7/07Sales: $140m vs. $113mIncome: $21m vs. minus $3mEPS: $.34 vs. minus $.05P/E: 17 Gth: 390% Profit: 15%
This is the fifth largest tobacco company in the US. Tobacco isgood. It is profitable and addictive. Plus, as the ‘economycontinues to show strength’, more of us may take up smokingso we can curb the pangs of hunger brought about by the ever-escalating price of groceries that are getting harder and harderto afford. Vector has a nice dividend to boot. Additionally, theyare a 50% owner of the largest retail real estate broker ingreater New York. Don’t worry about the menacing bearishhead and shoulders pattern. If you buy the stock and it dips,just call up Bernanke and ask him to bail out Vector!
Page 18 The Register • January 2008
Barry M. Ferguson, RFC®
The first Congress of the €uropeanFinancial Planning Association (€FPA) wasopened by IARFC Chairman and CEO, EdMorrow, who led the Practice ManagementComponent of the two day event inBarcelona, Spain, on November 22 and23, 2007. His presentation focused onHow to Close the Ethical ClientEngagement and the practicemanagement and software issues that thispresents in all countries.
An Asset Allocation and Pre-RetirementCase Study was presented by Prof. Dr.Emiel Van Brookhoven, Chairman of €FPA Belgium.
€FPA members and partners representEurope’s only functioning transnationalnetwork for financial consultancystandards and professional qualificationsand the largest with over 15,000examined Members. €FPA designseducation, skill, competence andexamination matrices; codifies ethicalbehavior standardizes the industry’scontinuing professional educationrequirements and is a moral force forcustomers of financial services.
The two-day conference focused on theEvolution of the Financial Services Sectorin a Changing European Union andinitiated a dialogue on the increasingly
important professions of financial advising.Keynote speakers undertook a criticalanalysis of the ‘State of the Art’ incompetence, training and practice —juxtaposed against increasing national andEuropean regulation. As the concept ofthe single market for financial servicescomes closer to reality and as Europeanlegislation increasingly impacts financialadvisory professionals, sector stakeholdersgather to determine what futurechallenges and opportunities await.
Guide Ravoet, the General Secretary of theEuropean Banking Federation,representing 31 national bankingassociations, 5,000 banks and employing1.5% of all employees of the EuropeanUnion, set the stage for the global postureof the congress. MiFID — the Markets inFinancial Instruments Directive — cameinto effect on 1 November 2007, replacingthe Investment Services Directive (ISD).MiFID extends the coverage of the ISD andintroduces new and more extensiverequirements that firms and Advisors willhave to adapt to, in particular for theirconduct of business and internalorganization. Working with the EuropeanCommission to ensure that the FinancialServices Sector is prepared for andaccepts the changes brought about by thenew legislation is supported by the variousassociations, including EBF, €FPA, andIARFC. All national and Europeanstakeholders are attempting to fullyharmonize the rules within their respectivespheres of influence to increase cross-border competition and efficiency.
Soledad Nuñez, Director General forTreasury and Financial Policy, from theSpanish Ministry of Economy discussedhow MiFID will alter the ways thatinstitutions and financial markets willintegrate, harmonize and increase theprotection of investors. Spain is movingswiftly to adopt the Regulations that willenable Spanish citizens to acquireinvestment products developed elsewherein the European market of 31 countries.For example there are two new regulations,one dealing with MTF investment advice —by financial advisors and consultants. Theadvisor’s advice to the client must bedelivered properly and identified as aprimary service, not an ancillary service.
The Ministry sees advice as separate fromselling, although a consumer might clearly
request either advice — or a productpurchase — Spain will soon recognize andapprove financial advisors and offer rulesof conduct.
John O’Sullivan, CEO of CambridgeProfessional development and MichaelFawcett, CEO of €FPA reviewed theEuropean Commission €FA project onEstablishing Competencies for FinancialAdvisors that is being developed under aspecial “Leonardo Da Vinci” grant.
An outstanding presentation on aging andfinancial challenges was delivered byFreddy van den Spiegel, Chief Economistand Director of Public Affairs, Fortis Group.Practice Management revolution wasreviewed by Richard Klipin, CEO of theAustralian Association of Financial Advisors.
Thirteen breakout sessions and paneldiscussions presented by financial leadersin sixteen countries rounded out a very fulland exciting first €FPA Congress.
Over 15,000 practitioners are certifiedwith the €FPA; Europe’s largest financialservices standard setting and certificationbody. Through this conference, €FPA gavevoice to the challenges and opportunitiesthat are presented to the sector at thiscritical time. High-level speakers from themost influential financial servicesinstitutions and policy making bodies inEurope and around the world presented acomprehensive overview of the financialadvisory sector in Europe and aboard.Attendees from 19 countries received areal opportunity to improve their practicemanagement skills, attitudes, and abilities:while all delegates came to betterunderstand the emerging state of the artin financial advice.
Ed Morrow is the chairman and chiefexecutive of the IARFC and he speaksfrequently at professional conferences ontopics related to his practice experience —and enabling financial advisors to increasetheir sales production and client services,by building their practices througheffective client relationship management.He first used computers in ‘70 and he hasauthored seven computer programs and21 operation manuals.
Contact: 800 666 1656 ext. [email protected]
Morrow Addresses €FPA Initial Congress
The Register • January 2008 Page 19
Ed Morrow, CLU, ChFC, CFP®, CEP, RFC®
“I’ll be in New York City tomorrow. Can yoube there by two in the afternoon?” Thanksto great men like Loren Dunton, VernonGwynne, Ed Morrow and Jerry Reiter, thiswas the seventh time (during past years)that I had contact with one of the world’swealthiest men. This “rich guy” wanted todiscuss something with me and hire mefor an important, highly influential, andsuper-sensitive, financial related, writingproject. I felt very humble, considering themany qualified people available. He had adetective investigate me and learned ofmy reputation as a person who protectsthe confidentiality of my clients!
I began as a poor, bashful, skinny kid, inthe poverty stricken coal mining region ofWest Kentucky. All the coal producingoperations had been “mined out” aroundMadisonville, by the time I was born. Mycoal miner father, turned pipe-fitter,struggled to feed his family. My early lifewas one of faded second-hand clothes,eating baloney, corn bread and pintobeans, being ignored or insecure, and,well, you get the idea…
In high school I could not get anythingpublished in the school paper. I wasn’tpopular enough. Yet I’ve gone on tobecome an editor and meet, theninterview, famous generals, worldstatesmen, religious leaders, primeministers, movie stars, corporate CEO’s,and others. The others include Nazi warcriminals (including Albert Spear) famousmadams, WWII concentration campsurvivors, prisoners, famous moviedirectors, police detectives, districtattorneys, private investigators, famoussports coaches, famous writers, MissAmerica, and so-on.
By the grace of God this humble kid wentfrom a boy who could not afford to eat inthe elementary school cafeteria to a guywho has eaten at Buckingham Palace, theWhite House, with the King of Thailand,and others. At one time I would have felttoo inferior to even walk into Tavern OnThe Green at the edge of Central Park.
In more recent years, five Congressmenvisited my house to discuss various topics. My calls to the White House are usually returned by the Chief of Staffand on occasion have been returned bythe President(s).
I’ve spoken at the London Chamber of Commerce, to classes at Oxford,Cambridge, Harvard, and a few additionalplaces. I’ve interviewed His Holiness theDali Lama, Bill Gates, Warren Buffett, TedTurner, and other big-biz “names.” Fewjournalist, editors, or media advocates, atany level, can accurately claim this.Readers have trusted me enough to sendme their family member’s suicide notes,tell me about their child’s drug addiction,their fear of a government that is takingaway the citizen’s rights and freedoms,Wall Street pirates that are hugelyrewarded, their marital problems, plusother concerns.
This is all quite a long way from beingembarrassed about my clothes and feelingso inferior that I didn’t want to get on therural school bus. I was ashamed to beseen when I went to the movies to see RoyRogers or Lash Larue. I waited until themovie started and the theater was darkbefore going up to the ticket window.
Early in life I discovered that I had theability to usually get through to the topperson in charge, or any famous person,and quickly earn their trust or confidence.I learned that most people can’t do this. I“come on” to most types of people as anon-threatening and bumbling JamesStewart or Colombo-type. Then overmonths I gradually switch to a likeable butimpatient, world-weary, and slightly cynicalguy who can get the job done even ifcircumstances are difficult. Contacts andclients both sense my loyalty. Peopledecide quickly if they can trust you or not.Otherwise you may never gain their trust.Or you may need years of effort to try andearn their trust. In the final analysis yourreputation is really all you have. Lots ofpeople have similar knowledge andabilities. Getting the sale is first a matterof are you trustworthy and likeable — thisenables you to be hired.
Roy Rogers (Leonard Sly, the cowboyactor) was my hero when I was a kid. So Iwrote to Rogers and he phoned me back.Years later he hired me to help him makea come-back. Another B-movie cowboyactor Lash Larue (my other childhoodhero) often visited me during his manyyears of career and mental decline.Colonel Tom Parker discussed publicitystunts for Elvis Presley with me. Parker
hired me when I was barely out of myteens and the contact began because Iwanted to pick his brain. W. ClementStone used to phone me frequently, beforeand after I worked for him. He too wasone of the world’s wealthiest men. I readThe Power of Positive Thinking as a youngadult in England, then began a life-longfriendship with Norman Vincent Peale whoalso later hired me for writing projects.
Most of these famous and successfulpeople rather quickly concluded that I wasworth bothering with — even when I wasonly a poor hick. Year-after-year Iwondered, “How can they respect what Isay when they are so powerful, famous,and wealthy?” Famous people Iinterviewed hired me to write their platformpresentations, revise their marketingcommunications plans, ghost write theirbooks, enhance their persona, obtaingreater targeted media exposures, etc.
People kept telling me that I had a gift.But they were not sure what the gift was —I could make people comfortable, quicklyearn trust, establish lasting relationshipswith famous people, protect theirconfidences, help them regain theirdesired image, and I could enablefinancial planners to effectively create,establish, or maintain their desired imageswithin their target markets — on a limitedbudget. Eventually I realized that I couldmake a person famous if they had anadequate budget. Or I could help themstay on top, or make a come-back.
My hillbilly relatives never believed I didthis type of work until they saw manypictures of me with famous people. Or,unless they were in my office when TVpersonality Steve Allen, or Shakespearianactor Michael York, or comedian PhyllisDiller, or film actor Peter O’Toole, oranother “name” called. Relativesrecognized only the show-biz “names” butnot the “financial names.” My relativesnever considered what I do as “real work”like driving a coal or lumber truck, orworking in a mine or at a sawmill. Andthey never respected me as having any“important talent.” My kin-folk wereimpressed the most when I briefly datedactress Sandra Dee (only twice) after herdivorce from singer Bobby Darin.
Cato Comments —The World’s Wealthiest Private Investor
Called Me Recently and Said...
continued on page 21
Page 20 The Register • January 2008
You Have To Make It Happen!
Little would have been possible for mehad I not been given a chance.
My first opportunity was made possible bythe US Air Force. Once given anopportunity I tried to create a biggeropportunity. After I joined the Air Force (Icouldn’t afford college) I manipulated myjob skill and training from aircraftmechanic (I didn’t want to do that.) to basenewspaper editor (I wanted to do that.) Igot the Air Force to send me to Oxford. Asan Air Force newspaper editor I quicklyfound myself in a job without experience orqualifications. I was a Southern kid in themilitary who knew nothing but had tobegin by interviewing Air Force generals. Ionce interviewed the great Curtis E. LeMaycommander of the Strategic Air Command.I called General LeMay in the states and“told” him to come to our little air base inEngland. I didn’t know that I was notsupposed to do that. The Great Generalcame! Back then I didn’t realize that theability to make things happen was avaluable skill. I only knew that you have tomake it happen — this is still true.
As a young civilian I was simply lucky tofind myself in the right place at the righttime. Dunton asked me to try to promotehis new concept of financial planning on ashoe string budget that was almost nobudget at all. At first I didn’t think this was possible. Loren Dunton gave me pep talks. Years later I gave Loren peptalks. Vernon Gwynne assured me, “Youcan do it Wally.” I grew-up with financialplanning from the beginning of thisspecialty discipline.
The four greatest financial planningleaders: Loren Dunton, Vernon Gwynne,Ed Morrow and Jerry Reiter, all took achance on me. Talk about luck! Theyeach gave me an opportunity. All of thesemen were realistic and none expected ordemanded instant spectacular results.How could I fail being aligned with suchgreat men? Each enabled me to grow andadvance. They would pick me up when Istumbled or screwed-up. Each had aninfectious love for financial planning. Andeach wanted planners to succeed and beprotected. Ed Morrow brought Loren’sexact original concept back with theInternational Association of RegisteredFinancial Consultants (IARFC). With theFinancial Advisors Legal Association(FaLegal), Jerry Reiter made it possible forplanners to finally be adequately protected
from any lawsuits and from regulatorychallenges or problems.
Since its inception, I promoted (in themedia) the understanding of financialplanning that lead to acceptance of this“new” profession. Success wasaccomplished by a continuous series ofexposures in different media. Successwas obtained by executing a plan (overtime) that included individual projects likearranging for Loren Dunton to be invited tothe White House, interviews withPresidents of the United States aboutfinancial planning (I give them details sothey could comment.), getting famouspeople to join what was then the IAFP,obtaining desired speaking engagementsfor key people, ghosting books and actingas a literary agent by placing the volumeswith legit major publishers, getting Lorenchosen (by USA Today) as “One ofAmerica’s most influential money men,”and having Loren selected as “FinancialMan of the Year” by Money magazine,booking Loren and others on network TVprograms, and so-on.
I retain a burning desire to help financialplanners and financial planning to berespected and valued. The greatestnegative influence on your general imagetoday results from the few clowns whoharm you and make your work moredifficult to accomplish in your marketplace.
For many years I have worked for financialplanners. I am most proud that I haveplayed, or still play, a key role in their big-time success. But, I have met a fewclowns during these years — jerks whocalled themselves financial planners — justas you have encountered some clowns. Ihave only been swindled by one plannerduring all this time. He was a guy in NewYork who likes to snow ski.
The “wealthiest private investor,” whom I mentioned in the first paragraph of this article, is worth seventeen billiondollars. That’s his money, not thecombined money of all his many individual investors. He is a stickler forprivacy and security. He has over 100employees who help him “manage hismoney.” And he has offices in sevencountries and now resides outside theUSA. He refuses to use financial planners.Of course, I felt a moral obligation to urgehim to benefit from the services offinancial planners. Once more I tried tomake the case for financial planning. Hefeels that, under current “Bush Law,”
planners can no longer provide him withfinancial privacy.
My heart and my “bread and butter” are inpromoting financial professionals. This isalways exciting. I never know how high wecan go. The biggest problem I encounterin promoting financial planners is that afew of them still try to tell me what to do.They presume they are specialists inmedia advocacy and they believe theyknow best. They do not believe I knowwhat I am doing. Or they believe that Iwant to do “meaningless things” thatwould not be effective for them. They wantto become the leader in their marketwithin a few months. They often haveunrealistic expectations because they haveno real experience with effective imagebuilding or media advocacy. They insistthat I immediately tell their prospects(through media exposures) to “Turn over allof your money to me.” Or, “I will reviewyour annuity holdings and tell you what todo.” Or, “I am the greatest financialplanner serving bla, bla, bla.” Their own“name-building” efforts are mostlyineffective, occasionally even shameful,and some times costly in several ways, butsuch planners are rather hopeless anddestined to remain as they are.The big achievers in any field know that adesired image results from an ongoingseries of various types of mediaexposures. These are usually exposuresthat are positive but not of greatsignificance individually. The real“names” understand that their entireimage is created by the sum of its partsover time, all contained in a flexible planthat is executed, and they do notmicromanage this. They realize that thebody of their “image” work results in theireventual ongoing pay-offs.
The advisor with the failed image, incontrast, directs everything because hefeels he knows better or is more focusedand targeted. He wants to immediatelymake great claims and pronouncements,determine the creative content, revise andcontrol almost all aspects of everything,changes directions, dictates withabsolutes, and does most of his or herown writing. They do not merchandise theirresults. They do not know how to createopportunities for media exposures, or howto create additional opportunities fromtheir media results, or how to recognizeand exploit new opportunities using theirmedia results. Many do not achieve anymedia results. Those types most always
continued from page 20 Cato Comments
The Register • January 2008 Page 21
continued on page 22
fail to obtain their desired marketingresults. They simply end-up exaggeratingor not being accurate, or not doing muchof anything. Most of them remainoblivious to these realities. They meanwell, but they remain their own worstenemy.
When your clients provide you with all theirinformation and unload all their goals anddreams — you then develop a plan forthem. You know that if they will just followyour recommendations their financialfuture will be much brighter.
When You Hire an Expert Then Take the Advice
Sooner or later you will decide to hire apublic relations consultant or a mediaadvisor. When you do so — please taketheir advice. Don’t second guess them.You know what will work for your financialclients — and your media consultant willknow what works for you in your marketplace with your desired clientele.
My greatest handicap is my near-inabilityto be formal or official with anyone. Some people perceive this as a weaknessor reflective of a lack of polish orsophistication. The more famous people I meet and work for, the lessscared, nervous, or impressed I become. I am now very comfortable during a one-on-one with any type of celebrity, orfinancial planner — so far. I have foundonly a few planners to be problematic.Others also find the same planners to berather problematic.
Loren Dunton Told Me, “Shine The Shoes Of As Many
Financial Planners As Possible!”
In the beginning Loren told me, “I’ve seencountless people who became editors of
financial magazines and many of themquickly turned into egomaniacs. Theysoon start promoting themselves in theirown magazines — their own ideas,opinions, and thoughts. But it’s not their magazines. The magazines shouldbelong to the readers.” I was editor of the first financial planning magazine,Financial Planner, created and publishedby Loren Dunton.
Some people who edit financial magazines for only two or three years, start calling themselves “a legend,”or “an icon,” or “a thought leader, or “a guru.” The editor assignment is not a well-paying job but their sense of self-importance becomes very high. Possibly editors compensatethemselves with a self delusion of high importance.
Last week another member of the“Richest Men in the World Club” called mefrom Dubai (in the United Arab Emirate).He’s worth more money than QueenElizabeth and he is a member of anotherroyal family. I’ve been working in hisbehalf for about a year now. I can arguewith him because he respects me andlistens. Boy, have I come a long way —thanks to my experiences with somefamous people and some very nicefinancial planners.
I am most indebted to the financialplanners with discipline and knowledge who work hard in theirmarketplace for the benefit of their clients. These are the people who impress me. These are the people Irespect most. I am very proud of allplanners with class. Hal Chorneyremains my hero among financialprofessionals. Hal went to prison for allfinancial advisors and to protect thefinancial privacy of his clients. After Hal
became a martyr he became a heroamong financial planners. Hal was a close associate of Loren Dunton.
Loren suggested that I attempt to stayhumble and appreciative, by actuallyshining the shoes of any financial planner Imet. “Remember where you came from.Don’t ever forget who makes your workpossible,” Loren admonished me.
For over three years I took a large shoe shining cart with me to mostconventions I attended and to manyindustry gatherings. I shined a lot ofshoes. The black shoes shined thequickest and the best. But I began to feel that I was investing far too much time shining shoes and not enough timeon networking or covering assignments.Also, I sensed that many of the plannersthought I was an idiot.
I stopped shining their shoes, but I remain well aware that my “wonderfulexperiences” would not be possible if notfor the collective financial planners of theworld. I identify with their concerns, andunderstand their marketing objectives, andrelate to their problems. There arepowerful institutional interests that wantall independent planners out-of-business.I worry about their progress toward thisobjective. I will forever be indebted toeach good planner.
If I don’t die while running through anairport, or from frustration in a taxi from anairport, I will eventually retire, and thenmaybe go back to shining the shoes offinancial planners. Long after this articleis forgotten, you may see me some daywhen I am an elderly man, at a planner’sgathering, and I will be shining their shoes.I can never fully repay my debt to myfriends and colleagues in the financialplanning industry.
continued from page 21 Cato Comments
Forrest Wallace Cato, RFMA, RFC® is a senior fellow in Financial Planning Media Advocacy at theJamal Al-Habtoor School of Business in Dubai (United Arab Emirate). He is a former Editor ofFinancial Planning and Trusts & Estates magazines. He presents The Cato Award during theannual IARFC International Convention. He is an award-winning author, op-ed writer, critic,essayist, sales researcher, and International Editor of Advisers magazine in China.) Cato wrote theIntroduction to the classic book, How To Sell Your Way Through Life by Napoleon Hill, author of theall-time best selling motivational book Think And Grow Rich. He presents The Cato Award at theIARFC Forum and writes a column for the international Advisers magazine. As a media advocatehe helps financial advisors receive the local publicity they deserve by promoting and publishingtheir services in an effective manner. Cato polished his education at Oxford University in England,but you’d never guess it from his southern drawl.
Contact: 770 516 9395, [email protected], www.CatoMakesYouFamous.comForrest Wallace CatoRFMA, RFC®
Page 22 The Register • January 2008
David Stitt, CLU, ChFC, CEP, CFP®, RFC® ofFinancial Planning Consultants recently wasadvised of the successful review of the PlanBuilder comprehensive financial planningsoftware by the Financial Industry RegulatoryAuthority (FINRA).
FINRA was created in July 2007 byconsolidating NASD and the memberregulation, enforcement and arbitration rolesof the New York Stock Exchange. Theorganization is dedicated to investorprotection and market integrity througheffective and efficient regulation andcomplimentary compliance and technology-based services.
FINRA oversees 5,100 brokerage firms, about174,000 branch offices and more than675,000 registered securitiesrepresentatives. One of their roles is to reviewcomputer software programs used with thepublic to ensure the software is consistentwith applicable standards for communicatingwith the public. Stitt said, “Plan Builder wasreviewed in 1999 and as a result we madechanges to six reports to bring the softwareinto compliance with what were then theNASD requirements.
“Since that time, Plan Builder has beenenhanced, improved and features added, so itwas time to again have the system reviewed.FINRA returned this filing with no objectionson the first submission. That is quite a feat;almost everyone can find something they donot like about anything. They however gave usa clean bill of health immediately.”
Plan Builder is part of the Builder Suite. Itwas first introduced as LifeGoals bySuccessful Money Management Seminars,stressing its commitment to helpingconsumers reach the important financialgoals of their life, including education,retirement, survivor income, disability income,long-term care and estate planning. Later,Plan Builder was acquired by CCH who addedpowerful Monte Carlo simulation featurespowered by Crystal Ball.
According to Stitt, “Good software is always inan evolution, adding features, simplifying dataentry, strengthening the reports andshortening the plan preparation cycle. Forexample, a major delay in producing planshas always been the initial data entry. ThePlan Builder now offers an alternative,Financial Notebook, which the consumeruses to enter family and financial informationand provide it back to the financial advisor bydisk or e-mail.”
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David Stitt, CLU, ChFC, CEP, CFP®, RFC®
Financial Planning Consultants
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The Register • January 2008 Page 23
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from us. What wecan control is ouractivities. Thisbusiness is anumbers game, plainand simple. If youknow your numbers,you can project, justthe way the actuariesdo, what your incomewill be for the year.You may not knowexactly who will buy,but if you have a bigenough sample, youwill be able to predictyour income.
What you need to know
1. How manymeetings does ittake to close thesale? Dependingon your market, itmay be two, three,or even more.
2. How much timedo you spend inyour averagemeeting? Thatfigure lets youknow how manymeetings you canhandle in any oneweek.
3. What is youraverage incomeper case?Surprisingly, many people do not knowthis basic number.
4. What is your closing ratio? We knownot everyone will buy from you. Thequestion is what percentage of thetime do they follow yourrecommendations?
Here’s how this formula would play out ifyou wanted to be a million-dollar advisor:
The Million Dollar Closing Ratio FormulaBy Katherine Vessenes, JD, CFP®, RFC®
We have all heard this advice: “If youwant to make more money, you mustlearn to manage your time.” After manyyears in the market place, I have come tothe conclusion this is just anotherbusiness myth.
The truth? It is impossible to managetime. The Good Lord invented time. Hecreated the minutes and hours, the daysand the weeks. He can manage time.Anybody else who tries to do this is askingfor His job — and despite the bennies,that’s really more work than most of uswant to take on.
A wrongheaded approach
Recently, I saw the kind of trouble this myth begets in action at a largebroker/dealer. The company was trying to get production up — a common enough goal.
And the senior management had a fairlycommon solution — the bigwigs pulled upeach branch for discussion, and theyslapped a production growth factor on itfor the next year. No consultation with thebranch manager. No scientificmethodology. They just pointed at abranch and decreed it would increaseproduction by 25%, 30%, or in somecases, even more. I call this the “magicwand” approach. (And unless you have areal magic wand, it won’t work.)
It was all I could do to keep from laughing.After all, if the managers of thesebranches had any idea how to increaseproduction by 25%, they would havealready done it. Giving them a timeframewas not going to change anything. It’s alot like looking at a bald head and telling itto grow hair by next week. It would if itcould, but it does not know how.
Getting it right
So, we can’t control our hair growth, that’sagreed. But we also cannot control timeand we cannot control our production,because we do not know who will buy continued on page 25Page 24 The Register • January 2008
Forget about managing your time as the key to financial success. That myth will get you nowhere. Instead, you’ve got tomanage this simple formula to hit your marks. This is a quick must-read for advisors and managers alike.
Let’s say you have a closing ratio of 80%,your average income per case is $4,500,and it takes two meetings to close thesale. If you had eight first-meetingappointments per week and seven closingappointments, that would come to 15face-to-face meetings per week. If you didthis for 40 weeks out of the year, youwould have 280 closing meetings.
continued from page 24 Compliance-Friendly Marketing
That was all they had to focus on: 24 phone calls this week, or about fivephone calls per day. If the advisor madefive phone calls per day that led to eightfirst meetings, which led to seven closingmeetings, which led to 80% buyinginvestments yielding $4,500 incommissions and fees, then that personwould automatically get to $1 million inannual income.
Instead of keeping the branchaccountable to some falsely createdproduction goals, we suggested keepingthe advisors accountable to somethingthey could control: their activities.
The advisors’ weekly meeting with the branch manager went like this: “Did you make your five phone calls per day?” If they did that, they knew they had a million-dollar advisor on theirhands. If they did not, the branchmanager simply needed to ask, “Whynot.?” Any advisor that did not make thephone calls and get the necessaryappointments would be asked to leaveunless his or her production was at acertain level.
Parting recap: Only try to control what you can control — your activities. If you do that successfully, your productionwill follow.
Katherine Vessenes, JD, CFP®, RFC®, is a nationally known author and speaker, focusing on sales, marketing,compliance and practice managementissues for broker/dealers and advisors.Order her latest book: Building aMultimillion Dollar Practice.
Contact: 952 401 [email protected]
Assuming your closing ratio is 80% of 280,then 224 clients would buy investmentsthat would average $4,500 in fees andcommissions, totaling $1,008,000!
Obviously, if you see yourself as a$500,000 advisor, just cut the numbersin half. If your commission are more percase, then adjust the formula accordingly.
My point is that when you control your activities, your production willnaturally follow.
Back to the Case in Point
The best thing my broker/dealer clientcould have done to increase productionwas not to wave the magic wand at itsbranches, but to set up a program thatreinforced activities. This particular firmwas known for using the telephone —dialing for dollars. We suggested thatinstead of selling a stock over the phone,advisors should “sell” an appointment fora face-to-face meeting.
Once they knew it took three phone callsto get an appointment, they just neededto run through the math: If they wantedeach advisor to have eight newappointments next week, then they wouldhave to make 24 phone calls this week toset them up.
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The Register • January 2008 Page 25
Katherine Vessenes, JD, CFP®, RFC®
Pay-Per-Click Internet advertisingcontinues to be a fast growing marketingtactic for several reasons. It’s a way tovery quickly get sales orders and businessleads, it’s measurable, and it WORKS.Google AdWords is the largest and mostsuccessful of these programs, and is amajor reason that Google is one of themost successful companies in the worldtoday. All of the major search engines,such as Yahoo and MSN also offer Pay-Per-Click programs.
PPC Definition
Pay-Per-Click simply means that an adappears on a search results page, or on aweb page based on the words that wereused in a search query. If someone clickson that ad, the advertiser’s account ischarged a specific amount for that click,ranging from a few cents to several dollarsor more.
When companies set up their PPCprograms, they decide their daily budgets, the keywords that will triggertheir ads, and the click bid amount foreach ad — what they are willing to pay foreach click. They also must prepare theads and web pages to which the clicks aredirected, of course. Financial advisorsmight choose to direct the clicks right to awebsite home page, or to the sign uppage for a specific offer.
If you have an IARFC website, you can setup the Response Form, built into the site’sfunctionality, with the same informationas your Google ad, and direct the clicks tothat page on your site.
Ad Positions on the Page
With Google AdWords, the small adsappear along the right side and at the
very top of the searchresults page. Their relativeposition ranking is based onseveral factors such as theclick bid amount, relevancy ofthe ad (keywords that areincluded), and the success of the adbased on its click through rate. An adthat is paying a higher click bid might be lower on the page than one with a lower bid if it isn’t getting as good a click through rate.
When ads appear on relevant websites, they might be positioned along the sides or at the bottoms ofpages. With AdWords, you can choosewhether your ads will appear on “Content” sites, those with similarkeywords and content related to your ad. This may seem like a good idea, but the click through rates and sales conversions in those cases are so much lower than on the searchengine pages that many businesses turn off that option.
Perfect for Local Search Marketing
When setting up a Pay-Per-Click account,such as Google AdWords, you indicate the geographic region in which your ads are to appear. You can select states, cities, a certain region, or aspecific mile radius from an address.Your daily budget determines thefrequency that your ads will appear,scattered throughout the day.
It’s a good idea to test the program by starting small. After the $5.00activation fee, the minimum bid perkeyword might be as low as $0.01 insome programs, though it’s best to startat least at $0.05. A daily campaignmaximum of $1 or $2 should give yousome results to begin testing the program. Google will suggest a dailycampaign budget as you proceed through the AdWords set up process,which is good to do if possible, though not required. You can cancel or change it at any time as you begin to see results.
Campaigns, Ad Groups and Keywords
Within each Campaign that you set up,you can create Ad Groups with severalshort ads that Google will rotate. You should limit the keywords andphrases within each Ad Group to aboutthree or four because you want thekeywords to be in the ad copy. You
will get instant data onwhich of the ads is performing the best, and can
continue to test and refine them,
and delete the poorest performers.
It is very important that your ads alwaysinclude your keywords. And it’s evenbetter to include your exact keywords inthe title for best positioning. Wheneverpossible, the third line of copy in the adshould be a call-to-action. Examples are“Get free report now,” and “Order now forfree guide.”
Google AdWords Activation Steps
Go to www.adwords.google.com. You canclick on “Sign-up Demo” if you want topreview the sign up process. Then “Clickto begin” when you are ready, and you willbe walked through the process.
It is impossible to cover, in this limitedspace, everything you should know to getthe full benefits of Google AdWords andother Pay-Per-Click programs. Books andcountless articles have been written onthis topic. But there’s nothing as usefulas giving it a try.
As you set up your ads, and begin viewing the statistics and results, you’llunderstand how this powerful tool works.Of course, you always have the option tooutsource this task.
Before doing so, try to gain a general ideaof how it works, so that you are betterprepared to negotiate with vendors whooffer the set up and management ofthese types of programs.
Sylvia Todor is the Marketing Director forFinancial Visions, an IARFC technologypartner that creates affordable, high-content websites. To view the websiteservice that hundreds of RFCs are usingto connect with prospects and clients,visit www.iarfcwebsites.com.
Contact: 800 593 9228 [email protected]
Sylvia Todor
Page 26 The Register • January 2008
Get Leads Quick with Pay-Per-Click — Online Ads
I’ve always felt that advisors use thewrong metric to measure success.Usually you hear advisors at conferencesboasting about the assets they haveunder management. They beam as theywhisper loudly that they may soon attainthat key benchmark of, 100, or 500million, or even a billion dollars.
Many advisors are also proud of therelationships they have developed. The new friends made. However, advisors don’t talk about it, it’s not theway ‘real’ business people measuresuccess. And yet, the clients talk aboutthe relationship. I know because Iinterview clients for my research.
Your clients tell me how important you are to them. They know you are aprofessional but they also value you as a friend. They remember you visited in the hospital more often thentheir brother-in-law.
Almost every financial magazine ranks the top advisors in the country. And one of the key factors is assets undermanagement. When I become editor of afinancial magazine, I am going to publisha list of the advisors who have made themost lasting friendships.
To be nominated you need to be able toanswer these questions about yourclient/friends:
1. Culinary likes and dislikes:
• How does he/she like pizza? (Extracredit if you know the name of hisfavorite pizzeria)
• Peanut butter: chunky or smooth?
2. Sports: What position did your clientplay in Little League?
3. Business: The name of that jerk thatfired when he or she was 30.
4. Miscellaneous: His or her nickname ingrade school.
For the top prize and to get your pictureon the magazine cover you’ll need toprove that when you call your friend forlunch you make the call and not yoursecretary. Let me explain:
I have a friend from elementary school who is one of those Park Avelawyers. Years ago he was nice enough to call when he had heard that I had lost my job. Now that is a true friend, correct? Well not exactly. He ruined it by having hissecretary place the call to me. After she connected with me, she asked me tohold while my high priced lawyer friendpicked up the phone.
“Hi Hesh,” Said the high powered lawyer.
“I’m sorry to hear that you broke yourhand.” I answered.
“Huh?” was his articulate response.
“I assume that is why you had yoursecretary call. Your fingers must bebroken and you can’t dial the phone.” I answered jokingly.
The truth was I wasn’t really joking. I know I was expecting too much. I should have been happy that he calledand was concerned about me. But... it just made it sound like a business calland not a friend call.
I’ve set the bar real high. Call as a friendand still be able to conduct business. If you think it might be easier to hit that100 million under management mark.You’re right.
As an experienced journalist, Heshpassionately believes that a properlycrafted bio or marketing profile will causea prospective client to be sufficientlyattracted to read it, and to feel, “I’d like to meet this person.” If you would likeHesh to help you prepare a similarbiography for you, or to assist you withwriting assignments that will help you inyour market.
Contact: 412 421 [email protected]
Business Mirrors LifeBeyond “How’s the Family”
The Register • January 2008 Page 27
Hesh Reinfeld
The big news here in Ban Wang Pheum,Thailand is the concert they held on thelarge open lot which usually houses the “Monday Vanishing Market” justaround the corner on the main highway. I could not believe it! It was a show on a par with anything I have ever seen in Las Vegas or on Broadway. They set up a huge stage like they have at rock concerts in the US. It was just for one night.
In addition to a very large orchestra theyhad a cast of about 100 singers anddancers plus a half-dozen comedians andMC’s. The music! The lighting! Thesound! The costumes! The energy! Thechoreography! The singing! The specialeffects! The colors! (bluest blues, reddestreds, purplest purples, goldest golds, well,you get the picture). Who would think thatsuch a production would come here toBan Wang Pheum in the middle ofnowhere (population about 2,000) tostage such a show?
General admission was 40 baht (about$1.20 US). It played to a full house from8 PM till about 3 in the morning. I leftabout 11:30 PM after the mainproduction numbers were over. Sadly, I didnot think to bring my camera and captureit on digital. They also had a couple ofclever skits, one about Michael Jacksonand the other about spiderman. I enjoyedboth even though I could not understandhardly a word they spoke… especially thespiderman skit where they had about 35“spidermen” crawling all over the stage.I’d love to bring this show to the US! Itwas quite exotic. Kind of comparable tothe Irish “Riverdance” show, exceptdefinitely SE Asian.
In other news, I forgot to check all thepockets in my Dockers cargo pants and
the laundry lady put it through the washer without checking either. Result: I am temporarily without a phone.Update — 2 days later: Just got back fromthe phone shop. My phone works PERFECTLY! After a full wash and spin cycle, then a full tumble dry inthe dryer! WOW! Nokia makes one tough cellphone!
Fall is really in the air! It has beendownright cool in the morning and ofcourse no one has any heating in theirhomes here so that an early morningshower with tepid warm water under low pressure was no great way to start my day. It must have been down in the50’s but not having a thermometer, I canonly guess.
All the rice fields have turned yellow andthe harvest is now well underway. Thereis a huge dependency on rice as thestaple food here. Everyone has their ownfield and is actively at work cutting andthreshing their rice to provide them for thecoming year. Most of the harvest is fortheir own consumption, but enough isgrown for a huge export with several largerice mills in the district.
Another big event recently was the festivalof Loy Katron, on the full moon ofSaturday, the 24th. It’s a major holidayhere in Thailand, kind of like Valentine’sday in the US, but much bigger. We hadquite a ceremony here in Ban WangPheum with a huge parade during the day, then a big concert at the park withnative singing and dancing at nighthighlighted by everyone sending a candle-lit flower basket out in the villagelake. Quite a sight! Perhaps over athousand candle-lit little flower-raftsfloating around in the lake.
Cedar Key Jack
Contact: [email protected]
A Message from the Founder
Jack Gargan, RFC®
Page 28 The Register • January 2008
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James Investment Research, Inc., is an independent investment firm and is not affiliated with any parent organization. James Investment Research, Inc. has prepared and presented this report in compliance with the Global Investment performance Standards (GIPS). The compostie’s inception date is 12/31/83. No segments of balanced portfolios are included. The James Equity Composite Performance included the equity bank pooled retirement funds under our management from 1984 (composite inception) through 1991. Performance from 1992 includes representative equity tax exempt funds not restricted by market capitalization plus any equity bank pooled retirement funds. As of September 30, 2007, the Equity Composite consisted of 7 accounts totaling $58.1 million, which was 2.7% of all assets under James’ management of $2,175.0 million. No alterations of composites have occured due to changes in personnel or other reasons. Performance results are total returns and include cash. The returns are time weighted. Gross and net performance results are total returns after custodial/brokerage fees and trading expenses. Gross of fee returns are presented before management fees; net of fee returns are calculated by deducting the quarterly management fee as charged to the clients at that time. Current fees may be higher, which if they had been in place at that time, would lower the net of fee performance. The current quarterly fee schedule is 0.3125% of the asset value of the first $1,000,000 and 0.125% of the asset value of the balance of the fund. These terms may be negotiated, according to the firm’s ADV. To receive a complete list and description of James Investment Research, Inc’s. composites, a presentation that adheres to the GIPS standards, and/or policies for calculating and reporting returns, contact Jeff Battles at 1-888-426-7640. Data from 1992 through 2001 was reviewed by Ernst & Young. Subsequent year’s quarterly performances were reviewed by Clark, Schaefer, Hackett & Co. No promise of future performance or profitability should be inferred from this data. The benchmark for this product is 50% S&P 500 and 50% Russell 2000. The Russell 3000 is being provided as supplemental information due to client requests. All returns are in U.S. dollars. The dispersion of annual returns is measured by the standard deviation across asset-weighted portfolio returns represented within the composite for the full year. The dispersion (S) for the quarter ending September 30, 2007 was 1.08%. S =
* Since Inception 12/31/83-9/30/07 ** Blend 50% S&P 500/50% Russell 2000 *** Supplemental ****3rd quarter is not annualized
NOTFDICINSUREDMAYLOSEVALUENOBANKGUARANTEE
$0
$5
$10
$15
$20
$25
5Yr. 10 Yr. SI*
17.2
0
11.2
86.9
8
14.2
711
.6214
.43
1Yr.
22.4
0
17.95
3Q****1Yr5Yr10YrSI* JIR Equity- Gross of Fees -1.34% +17.95% +22.40% +11.28% +14.27%
JIR Equity - Net of Fees -1.46% +17.31% +21.72% +10.65% +13.66%
Equity Blend ** -0.53% +14.43% +17.20% +6.98% +11.62%
Russell 3000*** +1.55% +16.53% +16.19% +6.82% +9.64%
For More Information Contact:Jeff Battles, Director of [email protected]
James Equity Style 97 98 99 00 01 02 03 04 05 06Annual GOF Returns % 16.71 12.72 12.40 3.77 -0.62 -14.13 33.47 28.68 23.97 13.01Annual NOF Returns % 16.14 12.08 11.78 3.16 -1.20 -14.64 32.70 27.96 23.29 12.40 Equity Blend** 27.98 12.10 20.61 -6.03 -4.64 -21.21 37.82 14.63 4.80 17.29Russell 3000*** 31.77 24.13 20.89 -7.46 -11.46 -21.55 31.04 11.95 6.14 15.71Annual Composite Dispersion % 2.73 0.00 4.52 8.21 1.26 2.49 1.88 2.36 3.80 0.63
Investment Strategy & ProcessThe James Equity Style invests in stocks of all sizes, small, mid, and large cap stocks. JIR also has a disciplined value approach to investing.
JIR’s proprietary model is an important tool in the search for securities using a database of over 8,500 stocks. JIR looks for those stocks with the strongest combination of Value, Neglect, and Management Confidence traits.
Relative Value – investing in securities which have relatively low ratios such as price to book and price to earnings.
Neglect – finding stocks which are overlooked by Wall Street analysts or underrepresented in institutional portfolios.
Management Confidence – looking for companies where the managers are showing confidence by buying stock in their own company.
Fundamental analysis is then used to seek out the most promising candidates which show excellent intrinsic value.
Product Info
Composite Statistics (as of 9/30/07)Benchmark Index ...............Equity Blend** Average # of Holdings .......................... 100Assets ........................................ $58.1 millionWeighted Market Cap ..........$28.9 billionPrice/Earnings ......................................... 15.2Price/Book .................................................. 2.7Target Allocation ..................95% Equities 5% Cash
Top Ten Holdings (as of 7/31/07)
Exxon Mobil Corp ............................ 2.8%Merck & Co Inc....................................2.4%Energen Corp .......................................2.4%Paccar Inc ...............................................2.3%Manpower Inc .....................................2.3%Edison International .........................2.3%McDonald’s Corp ...............................2.2%The Men’s Warehouse......................2.0%Valero Energy Corp ..........................2.0%Hess Corp .............................................. 1.8%Total ....................................................... 22.5%
Investment ObjectiveThe James Equity Style seeks to provide long-term capital appreciation and outperform the Equity Blend Benchmark.
James Equity vs Equity Blend** (Annual Returns Ending 9/30/07)
Sector Diversification
As a % of total equities as of 9/30/07
Consumer Staples 9%
Basic Materials 11%
Technology 15%
Industrial 12%
Financials 9%
Energy 14%
Consumer Cyclical 12%
Utilities 12%
Health Care 6%
James Equity GOF
Equity Blend**
∑Wi[Ri-WtMEAN(R)]2
3Q.07Equity Style
James Investment Research, Inc.
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