Thursday, August 27, 2015

Build Your Referral Strategy with Four Simple Steps

As with any business building approach, it’s important to have a plan in place to collect data and make the best use of the information.  In the case of referrals, we recommend four key steps to building a strategy that works for you. The four steps include:

1. Identify your target market
2. Build your referral network
3. Develop your value proposition
4. Create an advocacy network

1. Identify Your Target Market
Reaching the most qualified candidates of your customer base requires recognizing and classifying your target market. A target market should:
Represent whom you serve best and therefore wish to serve most. It’s where you do your best work.
Be specific. The more specific you are about describing your target marketplace, the more gravity and opportunities you will create. Specifics should include:
       o Industry
       o Profession
       o Market segment
       o Niche, geography
       o Demographic
As soon as you can get down to the specifics, it’s much easier to figure out from a networking mindset where you might go, what you might say and with whom you might want to meet.

2. Build Your Referral Network
Tips for Building Your Network:
You need to make it easy for people to understand how you add value to their lives and be able to communicate this value to them.
The key to spreading an accurate and intriguing message about your practice is to develop a clear and compelling value proposition that is easily translatable to a client’s language.
Word of mouth is a powerful tool for building your business, and the right words are essential to obtaining it.

3. Develop Your Value Proposition
Identifying the benefits you feel your product, services and practice provide are as simple as making a list that includes the following:
You want to thoroughly understand the challenges your clients are trying to solve.
Break down all the knowledge and support your clients will need to solve these problems.
Think about which tools they may need, which decisions they have to make, and what skills and competencies they require.
The final step is writing the value proposition statement. It should address what market you are targeting, what product or service you are delivering, how you are delivering it, and why.

4. Referrals from Business Partners – Create an Advocacy Network
The key to gaining quality referrals is building a strong network. A good exercise is to:
Create a list of ten or more different job types that would support your business.
Then set a goal to connect with ten people in each of these categories.
It can be online or in person, but make a point of getting to know them, their skills and the type of clients that they prefer.

For those clients who provide a valuable referral, be sure to take the time to thank that person, preferably with a handwritten note. Giving referrals is a very generous gesture on their part and you need to show your appreciation and gratitude.

For financial professional use only.  Not for use with the public.

This article is being provided as a service to you. Please note that the information and opinions included are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Partners Advantage Insurance Services. Financial Professionals should ensure they continue to follow the current policies on the use of any advertising, third-party materials and/or social media as required by your broker/dealer and/or the carriers that you represent.


Thursday, August 20, 2015

Pitfalls to Avoid and Helpful Tips for Advertising Social Security Seminars

Most likely, you spend considerable time and energy creating promotional material for your agency. You want that attractive information to draw prospects into your seminars. While creating these advertising pieces, remember complete disclosure is a necessity, as this will keep state regulators from darkening the door to your business.
Some key things to remember when promoting or advertising a seminar is:
  • Be upfront and inform the audience that you are a licensed insurance agent, a registered representative or both. 
  • Tell them that insurance and annuity products may be discussed or offered for sale either at the seminar or in a follow-up meeting. 
  • Don’t exaggerate in your materials, provide misleading claims, or pressure the consumer into making an immediate decision. Any reference in any material that suggests the endorsement or involvement of any regulatory or governmental agency is prohibited as outlined in Section 1140 of the Social Security Act. 
When it comes to Social Security benefit-related advertising, remember these points: 
  • Avoid a bait and switch scenario. The recipient should be clear as to who is hosting the seminar (insurance agent, registered rep, etc.) and that it’s not sponsored or endorsed by the Social Security Administration or any governmental agency.
  • Avoid scare tactics or language that creates unnecessary urgency.
  • Each piece of advertising must stand on its own. Subsequent material used after a consumer responds to a lead mailer also needs to address an insurance product aspect.   This includes envelopes as well. 
  • Choose appropriate imagery. 
  • Lead generation pieces should have material statements displayed prominently.  Disclosures must not be hidden.
  • Materials should not be marked “for educational purposes only.”  Remember, the end goal is an insurance sale. 
  • Depending on the content of your material, it may require a subject matter expert review.
  • Check with each state you do business in for any state specific required disclosures.
Before sending out any advertising materials, have your carrier compliance department review it. In the past, “generic” advertising was not required to have compliance approval from your insurance carriers, but even this is changing.

Lastly, this is an important rule of thumb when creating your seminar advertising: The client needs to know WHAT they are buying, and FROM WHOM they are buying it.

If you have any questions about this, please reach out to the compliance and suitability team at Partners Advantage and your key carriers with your questions. We are here to help!

For financial professional use only. Not for use with consumers.

This communication is designed to provide general information on the subjects covered.  It is not, however, intended to provide specific legal advice. Please note that Partners Advantage and its representatives do not give legal advice.  It is your responsibility to check the laws and regulations of each state in which you do business to ensure you are in compliance with the specific requirements of those states. You are encouraged to consult an attorney for guidance on your own situation. 

Producers should follow the approval requirements of the carriers they represent and their broker/dealer and registered investment adviser, if applicable. 

Not affiliated with the U.S. government or a governmental agency.


Wednesday, August 19, 2015

Changing Family Dynamics Create New Financial Needs

Families today come in so many shapes and sizes that there is no longer a single definition of what constitutes a "Modern Family". Changing family dynamics create new financial needs.

An extremely important component of owning a life insurance policy is periodically reviewing the coverage to make sure you are addressing your client's current needs. When doing your yearly client reviews, here are a few things to consider:

Family: A generation or two ago, many Americans defined "family" as a mom, dad, and their kids. Today, modern families come in many shapes and sizes. You can provide your clients insights on how to better understand their specific insurance needs for their type of family, whether it be a:
    • Traditional Family
    • Multi-Generational Family
    • Single-Parent Family
    • Same-sex Family
    • Blended Family
    • Older Parent with young children
  • Death of a Spouse: Many women will be solely responsible for their finances at some point in their lives. A financial checklist for the recently widowed can be a great first step to help:
    • Get your client organized
    • Working with an Insurance Professional and an attorney identifying their insurance needs, Social Security, retirement and taxes
  • Divorce: Along with the emotional impact, divorce can present other challenges and questions like, how to manage your financial future?  Letting your client know that they are not alone and that you can share helpful strategies to help them build their financial future by providing the following:
    • Financial Checklist for recently divorced Women
    • Beneficiary Review guide
    • Personal inventory worksheet
The Platinum Service Team can provide you with consumer approved brochures and policy review letter templates to facilitate your yearly client reviews. Contact them at  888-251-5525, Ext. 411.

For Financial Professional Use Only.

This material is intended for educational purposes only and is not intended to serve as the basis for any investment or purchasing decision.  Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Encourage your clients to consult their tax advisor or attorney.


Thursday, August 13, 2015

Referrals: A Telling Indicator of Success

Anthony Morris, a renowned international speaker and practice development coach working exclusively in financial services, made a powerful statement recently: “Beyond the first one hundred cases, a financial professional should be running a pure referral business. The only way to make this transition is to invest a fixed percentage of your monthly and per-transaction revenue in enhancing a client’s experience of your business and personal style of engagement.”

Morris knows about relationships and referrals. Not only is he a renowned speaker but also, his organization – Top Advisor Program, has conducted coaching programs on five continents embraced by over 100 international companies.

The insurance industry, as you well know, is a business of relationships – relationships with your clients, relationships with your colleagues and relationships with members of your community. Growing your business and endorsing your personal and business brand (one in the same in this industry!) involve many aspects of promotion. One of the most powerful means of promoting your services and yourself is through word of mouth and referrals.

A Telling Indicator of Success
The most telling indicator of a practice’s growth potential is the propensity of its customers to refer its services to friends and family. In today’s world, especially a predominately virtual one, consumers can read reviews about countless products, services and businesses. Typically, those who have a positive and memorable experience with an individual proprietor or business want to share it. Conversely, if a consumer has a negative encounter, many times they will vent about it as well. Among consumers, 83% are willing to refer after a positive experience – yet only 29% actually do.1  Because of this, it’s important to have a plan in place to collect referrals and make the best use of them.

What Constitutes a Referral?
One of the most important factors before putting a strategy in place is having a clear definition of the word referral.  A referral is not simply a name, it should go beyond that. A referral is a specific individual who is already in your target market and who is introduced to you.

The end result? A prospect within your focused niche is more likely to be a great match for your practice.

For financial professional use only.  Not for use with the public.
This article is being provided as a service to you. Please note that the information and opinions included are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Partners Advantage Insurance Services. Financial Professionals should ensure they continue to follow the current policies on the use of any advertising, third-party materials and/or social media as required by your broker/dealer and/or the carriers that you represent.

17 Surprising Stats about Customer Referral Programs. 2014.


Thursday, August 6, 2015

A Cure for Estate Planning Apathy

Since the last round of tax changes in 2013 many advisors, product providers, and tax professionals have shied away from the topic of estate planning. With a unified gift and estate exemption of $5,430,000 for each spouse which is portable, we are in an environment where Federal Estate may not be an issue unless the client’s net worth exceeds $10,860,000.  There are relatively few potential clients whose net worth exceeds this amount. However, there are an abundance of clients with smaller estates. Today they are largely being underserviced when it comes to legacy or estate planning. Is that a problem? Yes it is.

The first problem is that there are ten highly populated states where state estate taxes kick in at very low levels of net worth and produce tax rates up to 16%*. In these states it would be advisable that clients actively plan, using techniques like credit shelter trusts to appropriately divide the estate. It might also be in their best interest to have adequate life insurance to help offset the impact of these state estate taxes.  So in these states and several others that have either inheritance taxes or more moderate estate taxes like Illinois, estate planning is nothing to be apathetic about.

Even in states where there are no transfer costs there is a great need for planning. Many smaller estates, say in the $1M to $5M range, may own assets that are not liquid. These assets could include real estate, business interests, or other non-liquid assets. Division of these assets at death or sale in a down market, like was experienced in 2008, could produce significant loss. Life insurance coverage can certainly protect against this type of loss.

Carry costs, the cost of maintaining assets at the time of death, might also require significant capital. A typical example of this type of cost would be an apartment complex that is due for major repairs at the time of death. Another example could be the ownership of a business interest that needs capital at the time of death in order to keep going. These costs are often overlooked in planning for more modest estates but demonstrate a real need for securely funded plans.

Lastly, many of these more modest but affluent estates believe that they will be able to leave a substantial legacy to their loved ones or their favorite charity. For estates valued under $3M studies show* that the assets will be depleted during the retirement period. So, if that is the case, then these families who want to leave a legacy will need to plan for it with the help of life insurance solutions.
The benefits that only our industry can offer, like cash value life insurance, provide a robust set of added benefits. Benefits like tax deferred growth. This feature is particularly important in today’s higher tax environment. Couple this feature with the ability to generate a tax free income stream during retirement and you have a product that can also address the need for retirement income in a tax efficient manner. Tax free estate liquidity, tax free retirement income, tax deferred growth, this sounds like a product ideally suited to meeting the needs of affluent clients.

*ING Direct Study updated March 22, 2011 and originally published March 11, 2010 - See more at: 

Guarantees are backed by the Financial Strength and claims-paying ability of issuing company.

The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Partners Advantage does not provide legal or tax advice. Partners Advantage cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Partners Advantage does not assume any obligation to inform you of any subsequent changes in the tax law or other factors that could affect the information contained herein. Partners Advantage makes no warranties with regard to such information or results obtained by its use. Partners Advantage disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.

For financial professional use only.

Thursday, July 30, 2015

How Seniors are Spending Their Money

Experts are wondering if retirees are going to be able to make ends meet or could possibly even outlive their retirement savings.  Plus, fewer seniors have guaranteed incomes to provide financial security during retirement years and more of them are carrying debt.

This is disturbing news to many financial professionals, especially when they compare data from the Bureau of Labor Statistics’ Consumer Expenditure Survey and the Federal Reserve of Consumer Finances. One discovers that expenditures of today’s seniors and those of twenty years ago have grown less than one percent a year, but the allocation of spending on services and goods has changed significantly.

Some of the reasons are:
  • More seniors are carrying mortgages and having to spend more of their expenditures on interest payments. 
  • Overall housing expenses (including maintenance, property taxes, insurance and mortgage interest) are the largest category of expenditures for seniors.
  • Healthcare is a rising expense. These expenditures include out-of-pocket costs for physician visits, treatments and lab tests, medical equipment, prescription and over-the-counter drugs and supplemental insurance premiums, but exclude Medicare Part B premiums. 
  • Seniors expenditures increasingly reflect their hobbies, as they are spending more on hobbies and non-essentials than they did in 1990. 
  • Money is spent on miscellaneous entertainment, including exercise equipment, photography equipment, campers, boats and other motorized recreational vehicles, and electronic video games.
  • Pets and hobbies is a growing category. It also includes expenses for pets and pet supplies, but also toys, games, tricycles and playground equipment.
  • Seniors aren’t giving up their cars and are driving longer.
  • The other issue is seniors have more credit card debt than ever before. Some of the growth in purchases is taking place with the use of credit cards. 

With all of this information, it shows that today’s seniors vary on how they spend their money.

Although discretionary and recreational purchases have increased, today's seniors are taking on debt in the form of credit cards and mortgages. Besides this, with the low interest rates on savings and a tax policy that subsidizes consumption over saving, seniors don’t have a lot of incentive to save.

Financial professionals can use this information to help their clients prepare for the future, so they are ready for retirement years and won’t have to worry about running out of money. It means providing information on the best products available and giving seniors a reason to save.

“How Are Seniors Spending Their Money?,”, last accessed 7-8-15

Financial Professional Use Only.  Not for use with the public.

This material is intended for educational purposes only and is not intended to serve as the basis for any investment or purchasing decision. Pursuant to IRS Circular 230, Partners Advantage Insurance Services and their representatives do not give tax or legal advice. Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.


Thursday, July 23, 2015

Underwriting and the Producer's Responsibility During the Life of the Contract

An excerpt of an article by Partners Advantage VP of Underwriting Lisa Morris
First published in the July 2015 issue of Broker World magazine

Clients and their beneficiaries rely on products like life insurance to replace lost income upon their death, and if one party isn’t forthright in providing information or if items have been submitted incorrectly, there can be severe consequences.

The problem is most clients and some producers don’t understand the difference between mortality risk assessment and clinical medicine assessment. So, when an applicant’s medical history isn’t fully disclosed, future issues can appear. As a result, there is a misconception that once the policy is in-force, the financial professional’s involvement with that policy is complete.  This isn’t necessarily true.

It is extremely important for the financial professional to conduct thorough field underwriting, as well as clarify and gather all possible information. Even the smallest of details can have a significant impact at claim time. Underwriters rely on the financial professional to complete detailed field underwriting. But what if this doesn’t happen?

Throughout the underwriting process, carriers have a number of internal checks and balances in place to make sure the information being provided by the financial professional and client are factual. The majority of the time, the items provided and the items discovered are the same. However, there are times when the information doesn’t match.

Another misconception is that mismatched information only happens at the time of application. However, it can take place at any time during the contract’s life. If information has been discovered to be incorrect or purposely left out this could result in the claim being denied on the basis of misrepresentation. A producer doesn’t want to be in the center of a claim fight as a result of incomplete field underwriting.

Misrepresentation or errors discovered later in the contract’s life isn’t usually because of the applicant as they simply answer the questions given by the producer. Most of the time, it’s because the financial professional took it upon themselves to decide what details were important. This can stem from the producer creating unrealistic expectations of the client in order to close the deal or because he or she is in a rush to get the policy placed. If inaccurate information or an error has been discovered, carrier underwriting departments leave decisions or cancellation or rescission to the legal department. A producer trying to fix a mistake may not be able to do anything.

When information isn’t detailed, complete or clear at the time of application, there can be strong legal ramifications. These problems can happen not just at claim time, but at any time during the life of the policy. This shows the importance of a producer providing accurate and complete information. It’s better to take your time and be correct rather than hurry the process along, otherwise severe consequences can take place that totally contradict the purpose of life insurance protection.

For Financial Professional Use Only

Partners Advantage Insurance Services and their representatives do not give tax or legal advice. The material in this article is provided for informational purposes only and should not be construed as tax or legal advice. Discussions of the various planning strategies and issues are based on our understanding of the applicable federal income, gift, and estate tax laws in effect at the time of publication. However, these laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Partners Advantage’s interpretations. Additionally, the information presented here does not consider the impact of applicable state laws upon clients and prospects. Guarantees and benefits are based on the claims-paying ability of the issuing insurance company. Keep in mind that most life insurance policies require health underwriting and, in some cases, financial underwriting.