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7 Forces impacting clients and how you can help: the changing financial climate has created a variety of good reasons to reconnect with your client base.

There's a saying: "If you don't like the weather, just wait five minutes." The rapidly evolving economic and regulatory climate of recent years seems much the same. As a financial professional, it's up to you to get out there and help your clients secure their progress and ambitions.

Certainly, times like these are filled with changes and challenges. They're also ripe with potential if you know where to look. Consider how the shifting forecast of federal laws, rules, regulations and programs create contact opportunities and problem-solving needs.

Presented here are seven prospecting possibilities. Put them to work and enhance your reputation for consultative relationship building. Help your clients maintain firm footing during these times of financial climate change.

1 Thirsting for COLA

In 2010, for the first time in the history of the program, the Social Security Administration (SSA) provided no cost-of-living adjustment (COLA) to help retirees keep pace with inflation. While it's bad news for older Americans, it could be good news for financial professionals. We can offer a single premium immediate annuity (SPIA) with an increasing annual payout option to help address cost-of-living changes. An immediate annuity can offer income for life, as does Social Security, but a SPIA with a cost-of-living benefit guarantees an annual increase in its payout, helping the owner address rising prices each year.


2 Hail! Hail! Roth & Roll


Congress created another great way to generate interest in financial products with the 2010 Roth conversion rules. Removing the income limits on conversion eligibility opened up the market. Americans who never had the opportunity to participate in a Roth IRA before are now eligible to consider conversion. Is it right for everyone? No. But it does give financial professionals a chance to touch base with clients regarding opportunities that didn't exist previously.


3 Aye on Annuities

Congress could be a prominent annuity lead generator for you in the near future. A bill before Congress could encourage qualified plan participants to consider rolling over 401(k) plans and the like into retirement annuities. (1) The legislation would amend the Employee Retirement Income Security Act of 1974 to focus greater awareness on lifetime income retirement planning. The upshot may be 401(k) and other retirement plan sponsors adding more immediate annuities and variable annuities that have guaranteed lifetime withdrawal benefits.

4 Tax Talk


Amid record federal spending, many foresee mounting taxes. Absent any Congressional action, tax rates on both earned income and capital gains will increase next year, after current cuts expire at the end of 2010. Tax deferral may become increasingly important in the minds and checkbooks of consumers. Thus, the tax advantages of annuities (tax-deferral during accumulation, exclusion ratio applied to withdrawals, tax-free exchanges, no required distributions if nonqualified) may take on greater appeal going forward.


5 Rx for Higher Taxes

The Patient Protection and Affordable Care Act, signed in to law in March 2010, brings renewed urgency to discussion of retirement and taxes. A new 3. 8% Medicare tax on the investment income of high-income taxpayers may affect up to five million returns when the levy goes into effect in 2013. (2) Sources of investment income include rents, royalties, dividends, interest, annuity distributions, trust income and most capital gains. And unlike tax brackets, thresholds for the looming Medicare surcharge will not be indexed for inflation. As incomes rise, more taxpayers will exceed the thresholds. Again, discussion of opportunities for tax diversification likely will find eager audiences.


6 Happy Birthday Benefit!

Birthdays are always a good reason to contact prospects regarding their financial future. And every year, about three months before a wage earner's birthday, the SSA sends a personalized benefits estimate. Included in the accompanying statement is the individual's year-by-year earnings record. That's an ideal opportunity to get a client thinking about how much they've earned over the years--and how much they've saved. Use the SSA's estimate to segue into a discussion of retirement income sources and timing.

7 Optimize for April 15

This year, Tax Freedom Day arrived on April 9, a full 99 days into the calendar. According to the Tax Foundation, Americans worked up to this date simply to earn enough money to pay all of their national, state and local taxes for the year. Because it tends to fall so close to April 15, when taxpayers have recently been reminded of their sources of income and current tax obligations, Tax Freedom Day can spur conversation about managing income streams and the value of tax diversification. A tax return and its associated documentation assemble a wealth of planning points. Look at dependent needs, asset allocation, taxable interest, charitable giving, etc.


Washington Watch

Keep your eyes on the skies as conditions change. As evidenced by the Dodd-Frank Wall Street Reform and Consumer Protection Act recently passed into law, opportunities continue to multiply. Whatever comes next, it's important that financial professionals stay on top of the latest developments. Doing so brings an air of currency, credibility and transparency to retirement planning discussions. Even if these specific topics don't spur immediate action, all provide reasons to remain in touch nurturing the client-advisor relationship.


(1.) Senate Bill 2832

(2.) The Wall Street Journal, "House Seeks Tax Policy U-Turn With New Medicare Levy," March 20, 2010

By Mark Caner, MBA, AEP, ChFC, CLU, CFP

Mark E. Caner, MBA, AEP, ChFC, CLU, CFP, is the president of W&S Financial Group Distributors, Inc., the wholesale division for Western & Southern Financial Group (, based in Cincinnati. Caner possesses more than 20 years of experience in the financial services industry. He is responsible for leading the three sales channels: broker-dealers, financial institutions and independent marketing organizations/independent agents. In addition, he is responsible for marketing, product development and sales support.
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Title Annotation:2011 OUTLOOK: CLIENT CONTACT
Author:Caner, Mark
Publication:Life Insurance Selling
Date:Dec 1, 2010
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