Tips from the top

Explaining early withdrawal fees Explaining early withdrawal fees Recommending that clients borrow rather than withdraw from their universal life policies to avoid reducing exemption room Educating clients about the difference between a policy’s value and accessible value Recommending products with free, unlimited transfers between investment products since portfolios set up today won’t be appropriate down […]

By Kate McCaffery | June 1, 2006 | Last updated on June 1, 2006
3 min read
  • Explaining early withdrawal fees
  • Recommending that clients borrow rather than withdraw from their universal life policies to avoid reducing exemption room
  • Educating clients about the difference between a policy’s value and accessible value
  • Recommending products with free, unlimited transfers between investment products since portfolios set up today won’t be appropriate down the road
  • Doing the work to crystallize a client’s adjusted cost base when the opportunity arises

    These are all ways “To be seen as a trusts advisor rather than a policy peddler with illustrations.” To help reach this goal, Wouters recommends dealing with fewer variables — policies with no surrender charges or transfer charges, guaranteed expenses and costs, and unconditional, fully guaranteed bonuses. “When you forget to tell your client that the insurance is guaranteed (or that there are no fees or penalties), is that client going to sue you? Deal with simplicity,” he says.

    Also, be careful about the words actually being used with clients — products are creditor protected, but not creditor proof, he point out. Exact numbers in illustrations are powerful but also incorrect virtually the day after they’re printed and expectations and assumptions change.

    With so many moving targets — personal and business needs, life expectancies, rates of return, Wouters says “having to defend yourself is not a matter of if, it’s a matter of when. You might get to pick the place,” he says, but eventually all advisors will need to defend the work they do to the client, the client’s family or the client’s lawyer.

    To compete, he says advisors should work to move away from the salesperson/prospect relationship to the professional/client relationship model. “Professionals gather the facts, ask probing questions and make a diagnosis. Prescription without diagnosis is malpractice,” he says. “Recommend actions and solutions and periodically review these to make sure they’re still appropriate.”

    Filed by Kate McCaffery, Advisor.ca, kate.mccaffery@advisor.rogers.com

    (06/01/06)

    Kate McCaffery

    • Explaining early withdrawal fees
    • Recommending that clients borrow rather than withdraw from their universal life policies to avoid reducing exemption room
    • Educating clients about the difference between a policy’s value and accessible value
    • Recommending products with free, unlimited transfers between investment products since portfolios set up today won’t be appropriate down the road
    • Doing the work to crystallize a client’s adjusted cost base when the opportunity arises

    These are all ways “To be seen as a trusts advisor rather than a policy peddler with illustrations.” To help reach this goal, Wouters recommends dealing with fewer variables — policies with no surrender charges or transfer charges, guaranteed expenses and costs, and unconditional, fully guaranteed bonuses. “When you forget to tell your client that the insurance is guaranteed (or that there are no fees or penalties), is that client going to sue you? Deal with simplicity,” he says.

    Also, be careful about the words actually being used with clients — products are creditor protected, but not creditor proof, he point out. Exact numbers in illustrations are powerful but also incorrect virtually the day after they’re printed and expectations and assumptions change.

    With so many moving targets — personal and business needs, life expectancies, rates of return, Wouters says “having to defend yourself is not a matter of if, it’s a matter of when. You might get to pick the place,” he says, but eventually all advisors will need to defend the work they do to the client, the client’s family or the client’s lawyer.

    To compete, he says advisors should work to move away from the salesperson/prospect relationship to the professional/client relationship model. “Professionals gather the facts, ask probing questions and make a diagnosis. Prescription without diagnosis is malpractice,” he says. “Recommend actions and solutions and periodically review these to make sure they’re still appropriate.”

    Filed by Kate McCaffery, Advisor.ca, kate.mccaffery@advisor.rogers.com

    (06/01/06)