Official IARFC Publication IN THIS ISSUE IARFC · Scott D. Torosian, RFC®, MI Julian B. Yap,...

Official IARFC Publicationwww.IARFC.org

IARFCIARFCINTERNATIONAL ASSOCIATION OF

REGISTERED FINANCIAL CONSULTANTS

IN THIS ISSUEAre You Really Listening?

Best Practices Considerations for Qualified Accounts

IARFC Ethics Approval Program

The Importance of a Defined Process

Volume 17 No 5 September-October 2016

Do the Right Thing, the Right Way, at the Right TimeJames J. Ciennik, Sr. James J. Ciennik, III

At Money Concepts we understand these points and more because we were built by Entrepreneurs with a “Mindset To Grow”

What do you look for in a Business Partner?

Consider:

Stability

MAKE THE MOVE, THE RIGHT MOVEIndependence Resources Leadership

Money Concepts International Inc.All �ecurities �rough Money Concepts Capital Corp. | Member FINRA��IPC

11440 North Jog Road | Palm Beach Gardens, FL 33418 | www.moneyconcepts.com

To Learn More Call or Email Allen Porter(561) 847-2113 | [email protected]

Founded in 1979. Today 40% of our advisors have placed their trust in us for 20+ years

Be the owner and President of your own business

Independence that does not compromise the resources and support you deserve

Leadership team with an average of 19 years commited to a shared vision with our advisors

Explore what a true business partner can do for you!

The Register | September-October 2016 Page 1

www.IARFC.org/Register 1046 Summit Drive

Middletown, OH 45042-0506 800.532.9060

Editor-in-Chief Wendy M. Kennedy

[email protected]

Editor Susan M. Cappa [email protected]

Editorial Advisory Committee

Peter J. D’Arruda, RFC®

Michelle Blair, RFC®

The Register is published by the International Association of

Registered Financial Consultants ©2016, It includes articles and advice on technical

subjects, economic events, regulatory actions and practice management.

The IARFC makes no claim as to accuracy and does not guarantee or endorse any

product or service that may be advertised or featured.

Articles, comments and letters are

welcomed by email to: Wendy M. Kennedy

[email protected]

Periodicals Postage Paid at Mansfield, Ohio. POSTMASTER: Send address changes to:

P.O. Box 42506, Middletown, Ohio 45042-0506

SSN 1556-4045

AdvertiseThe Register reaches 4,000

financial professionals every issue. Register advertising

is an easy and cost-effective way to promote your company’s products and service to this

dedicated audience. To advertise contact:

309.483.6467 [email protected]

www.iarfc.org



Chairman, H. Stephen Bailey, LUTCF, CEBA, CEP, CSA, RFC®

CEO, Edwin P. Morrow, CLU, ChFC, RFC®

Vice Chairman, Nicholas A. Royer, RFC®

President, Peter J. D’Arruda, RFC®

Treasurer, Jon M. Rogers, Ph.D., CLU, ChFC, RFC®

Secretary, Michelle Blair, RFC®

DOMESTIC BOARD OF DIRECTORS

Operations Manager, Charlotte Isbell

Membership Services, Amy Primeau

Membership Services, Vicki Caplinger

Editorial Coordinator, Wendy M. Kennedy

Public Relations, Susan M. Cappa

IARFC US OFFICE ASSOCIATE TEAM

China — www.iarfc.cn

Hong Kong — www.iarfc-hk.org

India — www.iarfcindia.org

Indonesia — www.iarfcindonesia.com

Philippines — www.iarfcphils.org

Taiwan — www.iarfc.org.tw

INTERNATIONAL WEBSITES

Asia Chair, Jeffrey Chiew, DBA, CLU, ChFC, CFP®, RFC®

China Development Organization (IMM)(China, Hong Kong, Macao & Taiwan), Liang Tien Lung, RFC®

Australia and New Zealand Chair, George Flack, CFP®, FIPA, AFAIM, RFC®

Bermuda Chair, Antony Francis, RFC®

China Chair, Kai Tu Yuan, RFC®

Hong Kong and Macau Honorary Chair, Samuel W. K. Yung, MH, CFP®, MFP, FChFP, RFC®

Hong Kong and Macao, Chair, Teresa So, Ph.D., MFP, RFP, FChFP, RFC®

INTERNATIONAL LEADERS

India Deputy Chair, Vijay S. Wadagbalkar, RFC®

Indonesia Chair, Aidil Akbar Madjid, MBA, RFC®

Malaysia Chair, Ng Jyi Vei, ChFC, CFP®, RFC®

Pakistan Chair, Zahid Khan, RFC®

Philippines Chair, Ralph Liew, RFC®

Taiwan Chair, Richard Wu, RFC®

Trinidad Chair, Inshan Meahjohn, RFC®

Director, Isabel J. Cooper, MBA, RFC®

Director, James B. Moss, CEP®, RFC®

Director, Angie D. Trandai, CFP®, RFC®

Director, Mayo M. Woodward, CRPC®, RFC®

The Register | September-October 2016

D o m e s t i c M e m b e r s

Johanna Alter Wilson, RFC®, NJDianna L. Bandemer, RFC®, MITony Brazeal, RFC®, TXPhilip J. Carbine, RFC®, NJBrad L. Cast, RFC®, GARobert M. Eastmann, RFC®, FLChristopher Gure, RFA®, NCRamin Hashemi, RFC®, TXMark Heffington, RFC®, COTerry D. Higdon, RFC®, KYMark T. Houston, RFC®, NEFrank V. Hynes, RFC®, ILLabel Kaufman, RFC®, NJDavid A. Lawrence, RFC®, PARon M. Levine, RFC®, TXDavid A. Lorenzo, RFC®, GAHoward R. Mattson, RFC®, NJKay Lynn Mayhue, RFC®, GAMelissa M. Meyer, RFC®, AZChristopher O. Morris, RFC®, GAMichael Norris, RFC®, LAA. Wayne Potter, RFC®, CACusmore L. Simon, RFC®, CTCourtney Skeen, RFC®, NYJohn W. Stewart, RFC®, UTScott D. Torosian, RFC®, MIJulian B. Yap, RFC®, CA

N e w I A R F C M e m b e r sI n t e r n a t i o n a l M e m b e r s

China 1,141Hong Kong/Macau 58Taiwan 71

M e m b e r s W h o R e c o m m e n d e d M e m b e r s Harvey Alter, RFC®

David Blackston, RFC®

Diane Brewer, RFC®

Mark Kemp, RFC®

Justin Martin, RFC®

Susan Simon, RFC®

Mark Vosika, RFC®

William Watson, RFC®

Randy Yeomans, RFC®

R e f e r re r o f t h e M o n t h R e c o g n i t i o n M a r k K e m p, R F C ®

In MemoriamIn reverence, we would like to remember our passing member(s):

Corwin S. Freeman, Jr., RFC®, Gilberts, IL

Salvatore Zimbardi, RFC®, Port Washington, NY

Join the IARFC on LinkedIn

Contact [email protected] for assistance with IARFC LinkedIn

Like us at Facebook.com

Contact [email protected] for assistance with IARFC Facebook

IARFC Blog: http://iarfc.org/iarfc-blog

Contact [email protected] for assistance with IARFC Blog

2016September

Board of Directors phone conference September 27, 2016

December

Board of Directors phone conference December 13, 2016

2017

March

Board of Directors March 14 – 15, 2017 Charlotte, NC

July

CE @ SEA™ Lower Mississippi River July 1 – 8, 2017American Cruise Lines — onboard the America

Events Calendar


Chairman’s Desk 5 Moving Forward

By H. Stephen Bailey

On the Path to Accreditation 7 MRFC Exam Fee

By Amy Primeau

Marketing Unplugged 12 10 commandments of Financial Planning

By Bryce Sanders

IARFC Ethics Approval Program 14 Are You Ethics Approved?

Consumer Focus 30 Finding the Right Financial Advice By Peter D’Arruda

To Comment or Not To Comment… 34 It’s All About Them, Not Us

By Nicholas A. Royer

1 IARFC Domestic and International Directors

2 New IARFC Members

2 Events Calendar

4 From the Editor

6 Register Round Up & Members In the News

D e p a r t m e n t s

I n T h i s I S S U E Volume 17 No. 5

C o v e r S t o r yRegister Cover: James J. Ciennik, Sr. James J. Ciennik, III 24 Do the Right Thing,

the Right Way,

at the Right Time

C o l u m n s

F e a t u r e sAre You Really Listening? 8 By Michelle Blair

Best Practices Considerations for Qualified Accounts 10 By Michael Tove

Every Client Needs Long-Term Care Insurance! 16 By Christopher Hill

When Life Throws You a Curveball 19 By Paul Mallett

The Importance of Following a Defined Process 21 By Nicolas A. Pologeorgis

The Discovery Meeting 23 By Ronald L. Hendren




In our search for content for the Register magazine, we have continued to ask our members for their expert advice on their success in the Register Round Up section. When asking these direct questions the responses often are tried-and-true “secrets” like hard work, perseverance and having the right attitude, habits and process. They often go in depth with a mission to help make a positive difference in the lives of their clients. We hope you take advantage of these tips on how to build and succeed in your mission to help your clients. IARFC members don’t wait for the economy to get better or for the market to become less volatile. They plow through thick and thin, knowing that “lucky breaks” often happen when there does not seem to be much luck floating around. Seeing opportunities where other see challenges, they do whatever it takes to support their vision and forge ahead. Start sharing what works and what doesn’t work for you in our next issue, send us your response to Register Round Up question.

How do you stay in touch with your clients? Are regular, meaningful communications still a foundation to build relationships? Do you send a personalized notes? (p. 5)

What we are looking for are several sentences, although more are welcome. This may entice you to submit a short article on the current proposed Register Round Up question. These questions are sent out via email, contact us to join the list: [email protected].

Wendy M. Kennedy, Editor-in-Chiefthe Register

F r o m t h e E D I T O R M e m b e r s I n t h e N e w s

The IARFC has just completed a successful CE@SEA™ program convened before our Viking cruise on the Rhine River. Held in Basel, Switzerland. The single day program highlighted presentations from eight experienced financial consultants on timely and informative practice management topics. Presenters included:

5 Steps to a More Profitable Practice by Stephen A. Stack, RFC®

Transitioning to a Fee Based Model by Dominique Vercaemert, RFC®

Could the Government Become Your Largest Heir? by Thomas Thorson, RFC®

ETFs are to Mutual Funds like Smartphones are to Rotary Phones by Rosilyn Overton, RFC®

The Retirement Income Puzzle by Thomas Doncaster, RFC®

Best Techniques to Grow Your Practice by Noel Milner, RFC®

Three of the Nine Solutions to the IRA Tax Trap by Jordan P. Gates

“Our CE@SEA™ programs are an attractive educational addition to these traveling events,” said Chairman H. Stephen Bailey. “We hope that members and guests will enjoy the next program as we plan for 2017.”

Our group of attendees included members and non-members: Jay Bailey, James W. Barnett, Joanne Barnett, Thomas G. Doncaster, Alice Doncaster, Roger L. Francis, Tina Taylor-Francis, Jordan P. Gates, Gerald Ginwright, Shirley Ginwright, Kevin J. Gray, Mardiros Hatsakorzian, Suzanne C. Hock, Jeffrey B. Kelvin, Noel I. H. Milner, Ene Milner, Edwin P. Morrow, Maggie Morrow, Marion Morrow, Rosilyn H. Overton, Jon Rogers, Jeanette Rogers, Stephen A. Stack, Anne A. Stack, Tina Taylor-Francis, Thomas K. Thorson, Theresa J. Thorson, Heather D. Tucker, Dominique G.H. Vercaemert, Karen M. Vercaemert, Elaine Wilco, Michael F. Baumann, Robin Baumann, Howard Chunn, Pat Chunn

Keep us informed on your recent accomplishments. Have you added staff, certifications, seminars, celebrated an anniversary in the business? Send a brief description and a print-quality photo when available to [email protected].

I A R F C C E @ S E A ™ R h i n e G e t a w a y — J u l y 1 6 - 2 3 , 2 0 1 6

Register Statement of Circulation

Our next issue will ask this question:

How do you stay in touch with your clients? Are regular, meaningful communications still a foundation to build relationships? Do you send a personalized notes?

What we are looking for are several sentences, although more are welcome. This may entice you to submit a short article on the current proposed Register Round Up question. These questions are sent out via email, contact us to join the list: [email protected]

Q: How do you get a client to buy into your Financial Planning Process?

A: Timing is Everything — Tax Efficient Distributions. At a time when taxes are on the rise, it’s especially important for clients to understand and implement tax-efficient methods of distribution so that when clients take funds out of their accounts at retirement, they’re able to keep as much of that money as possible. That’s critical for ensuring that clients do not outlive their assets in retirement or fall short of funds if they need to pay for their own long-term care. Yet in the years leading up to retirement, many financial consultants are so intently focused on accumulating money that they neglect the distribution side of the equation.

At our firm we bridge this knowledge gap by partnering with CPAs and tax attorneys to hold educational seminars for prospects and clients. We also work closely with these professionals to develop customized methods and plans for mitigating the effects of taxation during distribution, which helps us to safeguard the longevity of our clients’ assets.

Perhaps the single most important thing for consultants to know about developing these plans is the critical importance of timing. The sooner you develop these plans, the better. We had one client come to us from another firm at age 64 with the intention of retiring at 65. Due to the timing and tax limitations, he was forced to take larger distributions from his accounts than is optimal. We determined that if he had come

to us at age 55 and correctly repositioned his assets for tax-efficient distribution, he could have saved hundreds of thousands of dollars to use in retirement.

Every client’s financial circumstances are unique, but we use the same general strategy for developing a tax-efficient distribution plan for each. To start, we take a snapshot of where the client is currently. A client’s assets are typically divided into three buckets: a bucket in which distributions are taxed, which includes 401(k)s; a tax-deferred bucket, which includes mutual funds, stocks and taxed capital; and finally a tax-free bucket, which includes Roth IRAs. Then, ideally between the ages of 55 and 66, we systematically reallocate those assets from the taxed and tax-deferred buckets to the tax-free bucket.

This process is not without its challenges. It used to be that people would work for the same company for 50 years, and retire with a defined benefit pension plan and Social Security. Today, with 401(k)s and changes in the law, there is more flexibility but also significantly more complexity. Fortunately, if your firm invests the time and resources to develop expertise in this area, it is undeniably valuable to clients, and you will likely increase revenue as a result.

Michael Cice, RFC®

Newton, PA

IARFC Members and Financial Industry Experts were asked for their insight and advice on issues facing consultants in today’s economy.

Note: Responses are printed in no particular order.

R o u n d U p


What was true back then for Franklin, remains true today. This sentiment applies to our recent adventure in Middletown for the IARFC Team – The MOVE. The IARFC Operations Manager, Charlotte Isbell and I have become best phone buddies during the past number of months as problems and decisions arose. The logistics in just the move of our small office at times were challenging.

The ReasonBasically, our location on Verity Parkway had served the Association well for over 15 years. Workspaces and employees do become inefficient and complacent over time and the IARFC Board felt like we wanted to give our employees a more dynamic working environment — more suited to the Association and the members that we represent. I am happy to report that the Team Members have responded with gusto and worked diligently at making their new suite of offices a coordinated yet individual workplace. They put many hours into painting, organizing offices and general office décor. Something that impresses me about this core group — TEAMWORK!

I personally can only say that at HB Financial, we have made four different moves in the past twenty-five years and every time we made a change, it changed our outlook. It made us look like we were moving towards the future. Everything is bright. Everything is new. Sometimes, the longer you stay in a place, the more you can stagnate. Moving gave us a better thinking process and positive work attitude.

At this point, I have to give particular praise to our Operations Manager, Charlotte Isbell. The responsibility of managing a move is very daunting. It takes a tenacious person to think of all the details, formulate the plan, make the phone calls, monitor the process along the way and most important – respond to the inevitable snafus. She handled the tasks-at-hand smoothly and efficiently.

So in deference to Ben, we are changing constantly and certainly nowhere near finished revamping the IARFC. On to the next…

Director/Team Member CommunicationOur new move and location brings changes

in communication with the Board Members and the IARFC Team. Due to the fact that we no longer have conference space and the desire to keep things interesting, the Board of Directors Annual Meeting will be held at different venues each year. The first being at the Charlotte Motor Speedway Club in Charlotte, NC.

Then to keep the Board cohesive, we have scheduled quarterly one hour Board Meetings. These are facilitated by the Team Members through GoToMeeting. The players are the same, the motivation is the same, the goals and mission are the same. The dialogue is improved and positive.

To keep the Board Directors connected to the Team Members, I have assigned each Team Member a Director to contact on a monthly basis. These meetings have a dual purpose: (1) it keeps the Director connected to what is going on at the Association Headquarters, and (2) it allows the Director to update the Team Member on financial professional trends out in the field. The goal is the exchange of information and brainstorm ideas to make your Association more vibrant and relevant.

Dunton Award RecipientDr. Jerry Mason of Cedar City, Utah is our 2016 winner of the Loren Dunton Memorial Award. He is an outstanding person and

From the

Chairman’s Desk…promoter of financial planning on the collegiate and business level – promoting the financial services industry to young adults. At all ages he has touched everybody’s heart and mind in this profession. And a plus – he knew Loren Dunton personally. You will be seeing related stories and pictures of him receiving his award in subsequent Registers.

CE @ SEA™ for 2017We are going to continue the cruising for 2017 but with a different twist. It will be a domestic Riverboat Cruise down the Mississippi to experience Americana via our own “Mark Twain” journey. It is my understanding that the domestic cruise will be easier to deduct and of course more convenient to fly to the port of embarkation. A relaxed pace, a constant view of the shore, with plenty of history and riverlore makes it a unique trip.

My AppreciationI end with my appreciation once again to the Team Members and Board Directors for working diligently to support these recent major changes. In the spirit of Mr. Franklin, I say… Onward and Forward!

H. Stephen Bailey, “Steve” Bailey, CEBA, LUTCF, CEP®, RFC® started HB Financial almost 30 years ago after already having a life insurance career. Steve is an elected member of the IARFC Board. He is also the 2010 recipient of the prestigious Loren Dunton Memorial Award. When not working with his clients you will find Steve on a golf course, spending time with his grandson or traveling with his wife, Bobbi.

Contact: [email protected] www.iarfc.org

H. Stephen Bailey, CEBA, LUTCF, CEP®, RFC®

Page 6 The Register | September-October 2016

When you’re finished changing, you’re finished.

– Benjamin Franklin


group issued the MRFC designation when it is available.

This is your chance to help your Association, and to help yourself. I am sure everyone can think of how they would spend an extra $240. Put $240 in your pocket and get in on the ground floor of this exciting opportunity!

Amy Primeau studied Communications at Hanover College, graduating in 1998. At the IARFC, Amy handles all aspects of membership.

Contact: [email protected]

To allow us to gather enough data for our psychometrician to review the exam and essentially set the bell curve, the Board has authorized that FOR A LIMITED TIME, you can take the exam for $60. You will still have to pay the application fee of $100, as well as any membership dues; but the exam will only cost you $60.

Think of other exams you have taken in the industry: either for a particular license or for another designation. How much have you spent on study materials? I would venture to guess it was well over $60.

I have talked with people who have already taken the MRFC Exam. Almost everyone took it “cold”, without studying. Some have taken it as a way to test their skills and see how much they remember from their college and/or early days. It can also serve as a great way to find out what you don’t know, and where you might need to refresh your education.

The exam cost will increase to $300 upon approval of the accreditation application by the NCCA. Those who pass the exam prior to the accreditation will be the first

For the past few months, the IARFC Team has spoken to numerous members and prospects about the MRFC designation. For the most part, we are getting asked the same questions. How long is the exam? What types of questions are on the exam? Is it proctored? What are the costs? Where do I purchase the study materials?

When the topic of study materials comes up, I can feel people questioning my sanity. I’m asking you to go and spend up to three hours of your time, taking a test for which there are currently no formal study materials. We have a list of reference materials that were used to create the exam, and the Exam Blueprint which tells what topics are covered on the exam. We are diligently working on a study guide, but it will take some time to develop.

In the meantime, I’m asking people to consider the exam as a practice exam. It will give you a feel for what the exam is like, in real testing conditions. The best thing that could happen is you will pass and won’t have to repeat the exam!

At the quarterly Board of Directors meeting in June, the Board of Directors authorized a temporary price reduction of the MRFC Exam Fee.

Amy Primeau

FOR A LIMITED TIME, you can take the exam for $60.

On The Path to AccreditationMRFC Exam Fee


Are You Really Listening?progress updates, reminder calls of items that need to be addressed and other administrative tasks. Your clients will appreciate the full team approach and see that each person in your office is there to assist them in getting their objectives met.

Next MeetingAlways address the question that started the topic in the first place. This reminds the client that you are aware of why they are back to your office and that you are ready to focus the issue at hand. Your clients will be relieved of the pressure of having to restate their reason for the appointment and also feel that you are well prepared.

As professionals, you have learned the techniques to help a client relax and feel at ease. Now is the time to put that into place and approach things in your own special way. SummaryPaying close attention to all the signals that a client is giving, be they verbal, written, or in body language, is extremely important to continuing a professional relationship built on trust and understanding. This will make your job easier and put your client in the frame of mind that you are there to help and understand their needs, wants, and goals.

Michelle K. Blair, RFC® is an office administrator specializing in management and relationship building. She is a Board member of the IARFC as well as the Secretary of the Financial Planning Association, Long Island Chapter. Michelle devotes quite a bit of time to promoting professional and personal growth in the industry.

Contact: 516.639.5078 [email protected]

RespondDo not interrupt them as they attempt to answer your question to their best ability. Let them completely finish their thoughts. Your response and reply, whether it be verbal or nonverbal, lets them see how deeply you were paying attention to something that is important to them. Most clients find it difficult to express their emotions and concerns until the relationship has grown to the point of trust. Once a client is ready to open up to you, your response is as important to them as the topic itself.

ActionDon’t say things that you can’t live up to. Take action in the appropriate time frame and keep the client in the loop with the progress each step of the way. They may or may not understand the process you are going through to get them from point A to point B, but they will truly appreciate your efforts in keeping them informed.

Follow UpFollow up is just as important as the initial meeting. If you wait for the client to contact you, it is too late. Here is where your office staff can assist you by setting up appointments, making phone calls with the

Every morning when you walk into work, you automatically say “good morning” or “how are you?”. But…do you ever wait around for an answer? It is a statement or a question that is so commonplace that no one even listens for the response. The same goes for your conversations with a client or prospect. It is critical to hear what they say and listen to the words and meaning. Some people would answer “how are you?” with “fine”, but in reality they are not…it is just an automatic reply. When you ask a client a generic question, you expect a generic answer, but wait…you may be surprised to find out that they really have something to say.

ListenAlways listen intently to what others are saying while trying to understand the reason they answered your question the way they did. Be respectful of someone’s feelings and respond appropriately. Some clients need more hand holding than others, but as a relationship professional, you already know that. It is the confidence and trust that a client has in you that keeps your business relationship alive and well. Maintaining that trust by really listening to all they have to say and not just hearing words, shows them that they really do matter to you.

When you ask a client a generic question, you expect a generic answer, but wait…you may be surprised to find out that they really have something to say.

Michelle Blair, RFC®

On Wednesday, April 6, 2016, the United States Department of Labor (DOL) issued a new set of rules governing advice by financial professionals relating to qualified retirement money (IRA, 401(k), etc.).

Central to this rule is the notion that advisors must work in the best interest of their clients rather than their own. Essentially, this “Best Practices” approach is meant to ensure that the interests of a retiree are held above all others. While this seems a very reasonable concept, the law as written is fraught with problems and internal contradictions, and is being challenged in court. Nonetheless, until it is changed or repealed, it is the law of the land.

Central to the DOL Rule is the preservation and growth of qualified retirement accounts (IRAs, 401(k) plans, etc.) for retirees. Specifically, achieving a Best Practices result should focus on three specific goals:

1. Maintaining sufficient return to offset or exceed the schedule of Required Minimum Distributions (RMDs) throughout the average life expectancy of a retiree (from the IRS life tables, ages 70-86).

2. Minimizing account volatility.

3. Reducing the RMDs (operative words here being “required minimum”) without sacrificing the opportunity to take more than the required minimum if desired.

Minimum Required ReturnA retiree starting RMDs at age 70, living to the “official” (IRS life table) life expectancy of 86, requires an average annual return of just under 5%. If that person lives to age 90, the return necessary to offset the RMDs climbs to nearly 5.3% per year. However, it’s not enough to compute raw average return. Return without consideration to volatility is only half the picture. In order for a return of 5% to offset the schedule of RMDs, that assumes a constant return of 5%. Unfortunately, when an account is subjected to volatility, the bigger the swings from high to low, the more average return is needed to offset the RMD schedule. It’s math. This is another reason why market exposure is not beneficial to the long-term sustainability of an IRA facing RMDs. Thus,


Best Practices Considerations for Qualified Accounts

unless one can find a level, guaranteed real return of 5.3% (through age 90), a more realistic minimum required return would be closer to 5.5% without significant market volatility and 6.0% or more per year with it.

Reducing VolatilityThe compounding benefit of dollar-cost averaging — making regular contributions to purchase new shares — is well documented. However, the exact reverse occurs when an account facing RMD withdrawals is exposed to volatility (the swings in value from positive to negative). For example, assume a $100,000 IRA with 4% RMD ($4000). After the RMD, the account, now worth $96,000, must experience 4.17% growth to regain the initial $100,000 (note 4% growth on $96,000 is only $99,840). But RMDs are calculated on last year’s value, subtracted from the current. This means if the markets fall, the RMD is not recalculated and the previous RMD must be subtracted from the lesser account value. For example, suppose markets fall 25%. That same $4000 RMD is subtracted from the new account value of $75,000 (net RMD of 5.33%), further reducing the account to $71,000. To recover the initial $100,000, a one-year return of 40.85% is required. In short, an IRA facing RMDs cannot be exposed to market risk. Even portfolio diversification cannot reduce “Systematic Risk” (the risk associated with broad market collapses), as occurred repeatedly between 2000 and 2016.

Minimizing RMDsAt first blush this seems impossible. The table of RMDs, published by the Internal Revenue Service (IRS), offers no variance. However, a unique crediting strategy offered by some members of the insurance industry through Fixed Index Annuities (FIAs) actually provides a way to accomplish just this.

As an overview, FIAs credit growth through an indirect measurement to market indexes. While annuity owners get to participate in the upside movement of markets with interest credits because there is no actual market investment, they have no market loss exposure.

Right away, this strategy provides an obvious way to reduce volatility. But a quirk of math with crediting strategies used by some carriers, offers more. This occurs when the carrier tracks market values daily but credits (locks in) less often than annually (e.g., 2 or 3 years). In other words, the accounts simultaneously reflect two different values: a “real time” value from daily tracking and an “official” value at the point of lock-in. Thus, while daily tracked “real time” values may fluctuate, they cannot fall below the previous locked in values and thus, cannot lose from their previous “official” value. With rising markets, each new lock-in resets the “official” value higher but only on the policy’s anniversary (lock-in) date.

Under this situation, in the “odd years” when real time values have not locked in, the real


time value can be higher than the previous locked in value (but never lower). However, the IRS only regards the “locked in” value for calculating RMDs. Therefore, the “odd year” RMDs come out against a lesser value than actual “real time”. This means the mandatory withdrawn amounts are smaller than they would otherwise be, including account reduction from the previous RMD, which while growing in real time is not being reported until the next lock in. This differential creates a “saw-tooth” pattern of RMDs.

Graph 1 Illustrates how a biannual reset strategy would fare against a traditional account of identical return. Note how the “saw-tooth” pattern of RMDs in the annuity (red) results in less mandatory withdrawal in the “odd” years compared with that required under a more traditional account strategy (blue). The difference is the undistributed amount that remains in the account, continues to compound through time and results in a greater total return to the account.

Graph 2 Illustrates the resulting benefit to the account from this phenomenon. While actual results will vary based on many variables, given an assumed constant return of about 6% from age 70 through 90, this “saw-toothing” results in a net average savings of about 2% per year and more than 4.2% increased total return in the account. Mathematically, the differences between the saw-tooth and traditional strategies proportionally increase with greater market volatility.

If more than the RMD is desired, that may be taken but when the RMD is not needed, being able to conserve even a little of it (and thereby not pay taxes on that portion) results in a significant long-term benefit.

The result of these three attributes is to increase the total return and minimize risk to an IRA after RMDs have begun. Considering the principal objective of the Best Practices ruling is to maximize total benefit for a client, it’s difficult to imagine how any other strategy might be superior.

Michael Tove, Ph.D., CEP, RFC® is a practicing Certified Estate Planner and Registered Financial Consultant with more than 20 years experience. A MDRT Top of the Table member, he owns the independent insurance planning agency AIN Services, based out of Cary, NC.


Source: www.dol.gov/ProtectYourSavings/FactSheet.htm

Graph 1

Scheduled RMDs

Biannual ResetTraditional

70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90Age

Graph 2

Residual Account Value

70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90Age

Biannual ResetTraditional

the low hanging fruit in the hopes of doing some quick business. The plan is the foundation stone of a long term relationship. The plan should be customized as much as possible. This might cost the client more in fees, but they should be able to see the value, especially if they have special needs children or are caring for aging relatives.

2. Thou Shalt Not Enter Data Onto a Screen. Every client feels their

situation is unique. They can get cookie cutter solutions by completing a financial plan online, often at little or no cost. When

meeting with your prospect, ask questions and write their responses down on the yellow pad in your lap. Don’t read questions off a form and fill in the blanks. Even worse, don’t ask the client to fill out the form themselves while you check emails.

3. Remember to Keep Holy the Review Process. Your client

gathered account statements. They dug out data on retirement plans and Social Security benefits. They invested valuable time. Reviewing the plan should not be done over the phone. It’s done in person with both

Simple is better. When Moses came down from Mount Sinai, he brought Ten

Commandments and read them to the Israelites. Suppose there were ten commandments (with a little “t” and a little “c”) applying specifically to the financial planning process.

1. The Plan is Paramount. When meeting with a prospect and

transforming them into a client, the first step is to get to know them better, learn their dreams and aspirations, then develop a plan to help them get there. We don’t go after

commandments of

Financial Planning

Marketing Unplugged

10



the liability of always needing a positive rate of growth. However, if the client has a few back-to-back good years, the “family index” can be recalculated, delivering a lower rate of growth needed going forward. This allows the client to take less risk as they get older.

9. Thou Shalt Not Promise or Guarantee Anything. The plan

doesn’t achieve the client’s goals on its own. What if the client ignored parts or failed to annually add funds as the plan required? You help the client make progress towards their goals. You can’t promise they will reach them. This is an area where the “Monte Carlo Analysis” is useful. You are able to talk in percentage likelihood terms they will reach their goals. Different market conditions can affect those percentages.

10. Thou Shalt Not Forget to Ask For More Assets. Clients often have

assets held away. It’s estimated about 25% of Americans have retirement plan assets still held at a previous employer. Although you can include them in your planning and portfolio review process as “assets held away”, it’s easier on both you and the client if those assets are brought into the firm. You might ask if they have friends who would benefit from a comprehensive financial planning process too.

We don’t need to stop at ten commandments, but these cover the basics. Using a comprehensive financial planning process is a great way to differentiate yourself.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book “Captivating the Wealthy Investor” is available on Amazon.


Bryce M. Sanders

parties present if the relationship is in joint names. Allow plenty of time. Be thorough. Check on accuracy of information and their understanding by saying: “Does this make sense to you?”

4. Honor and Identify the Issues Uncovered. Your client was

agreeable to the financial planning process. The plan has identified several issues. They may not be able to achieve their retirement goals considering their current investments and asset allocation. You might suggest an alternative investment strategy consistent with their level of risk tolerance. Even if they don’t accept your advice immediately, you have still uncovered a problem. That problem isn’t going away. It requires attention.

5. Thou Shalt Not Kill or Overwhelm the Client. The plan addresses

all aspects of the client’s life. This might include retirement, long term care, estate planning and college education for their grandchildren. Don’t attempt to solve every problem in one meeting. The client might lose confidence. Address the major ones first. Schedule follow-up meetings to work though different aspects of the plan.

6. Thou Shalt Not Quit After the Easy Parts. The plan identified

insurance and investment related issues. You have the expertise and products to address these needs. This rings the cash register. The plan also identified areas outside your areas of expertise. Perhaps estate planning requires setting up trusts and transferring in assets. You need to refer them to qualified experts.

7. Thou Shalt Not Refer All Business to Your Brother In Law. When your

client needs qualified experts, it can be disastrous if you only give them one name. If anything blows up when they are working with the other person, the blame comes right back to you. You referred them. Give them at least three options for each expert skill, preferably by handing over a business card for each expert you name. Now they can interview the candidates and choose the best fit.

8. Thou Shalt Not Lock the Plan in a Drawer. The plan is a living

document. Progress towards goals should be measured at least annually. If the plan has utilized a “family index” or internal rate of return they need to hit their targets, you can measure progress towards that number. This gets away from measuring progress vs. stock market averages. It has

IARFC’s CAREER CENTER atcareers.iarfc.orgJOB SEEKERS,YOUR NEXTFinancial PlanningCAREER OPPORTUNITYCOULD BE CLOSERTHAN YOU THINK.

Job Seeker Benefits• Access to high quality, relevant job postings.

No more wading through postings that aren’t applicable to your expertise.

• Personalizedjobalerts notify you of relevant job opportunities.

• Careermanagement – you have complete control over your passive or active job search. Upload multiple resumes and cover letters, add notes on employers and communicate anonymously with employers.

• Anonymousresumebank protects your confidential information. Your resume will be displayed for employers to view EXCEPT your identity and contact information which will remain confidential until you are ready to reveal it.

• Value-addedbenefits of career coaching, resume services, education/training, articles and advice, resume critique, resume writing and career assessment test services.

POWERED BY

IARFC Ethics Approval Program

The Association has created an Ethics Approved

Renewal Program designed to promote

adherence to our Code of Ethics. This

program scrutinizes the practice history

of each member and will award

recognition to those who serve the

public’s interest when dealing with their

financial future.

“This is an effort towards increased

transparency,” explained Chairman H. Stephen

Bailey. “The public is more educated than ever and

needs assurance of the background of their financial

professional and their adherence to a Code of Ethics.”

Effective Immediately

The IARFC Team will be reviewing all membership renewals

when submitted to the Association. They will be checking

FINRA records, state licensing records and even conducting an

internet search of each member’s name.

Members will need to have a clean record for the preceding

five (5) years in order to qualify for the Ethics Approved

Renewal. Those who qualify will receive an embossed seal

stating they are “Ethics Approved” with the year of the review.

This is in effect for two years. And should be placed on your

RFC® certificate for prominent display.

It is our hope that this process will not only elevate our ability

to provide the public with a pool of qualified Financial

Consultants, but will also help increase the level of confidence

and trust that your clients have in you as their Registered

Financial Consultant.

Vice Chairman Nicholas Royer, weighed in on the significance

of this transparency. “In my opinion, the RFC® designation is the

Gold Standard in the industry. Our members who

hold the RFC® are the top financial consultants

available, and they’ve proven it through the

strenuous qualifications necessary to get

this designation. With all the changes in

the financial world in the last few years,

this additional attention to ethics will raise

the bar once again and help ensure to

everyone that the financial professionals

who carry the RFC® designation are truly the

best of the best.”

When it is time to renew and you are approved, look for your

new seal in the mail along with practice management ideas on

how best to market your elevated status.

Contact: 800.532.9060

[email protected]

www.iarfc.org

Now thruAug 2017

2018Even Year

2019Odd Year

2020Even Year

AllRenewals

RenewalsDue

RenewalsDue

RenewalsDue

Checked �rst year

then everyotheryear

FebruaryAprilJune

AugustOctober

December

JanuaryMarch

MayJuly

SeptemberNovember

FebruaryAprilJune

AugustOctober

December

ETHICS RENEWAL Check Schedule

Are You Ethics Approved?



Visit the IARFC store for these valuable branding tools

www.IARFC.org/Store or contact 800.532.9060, [email protected]

Brand Your Ethics Approved Status

Set yourself apart from other consultants

• Affix your Ethics Approved Seal to your framed RFC® Certificate

• Send an IARFC Ethics Approved media release to your contacts

• Order business cards with the Ethics Approved Seal

• Place digitized Seal on your website in a prominent position

• Mention this program in client newsletters

• Order additional Ethics Approved Seals as a visual reminder

• Display the IARFC Code of Ethics plaque in office

• Put a link to the IARFC Code of Ethics on your website



IARFC Code of Ethics

Ethics Approved

truth. Medicare does not cover the majority of expenses that are typically associated with LTC.

LTC is a chronic illness that requires custodial care. In the overwhelming majority of cases, the type of chronic care most people need falls under the definition of custodial care.

Note: As long as you have the potential for improvement, Health insurance, HMO’s, and Medicare pay for treatment of acute medical conditions, and for approved rehabilitative therapy.

However, they pay nothing, or very little, for custodial services needed when the most common chronic conditions occur and are unlikely to improve such as: debilitating arthritis, Alzheimer’s, post-stroke custodial care, coronary insufficiency, etc.

So once your condition is considered chronic, and you remain stable with no

As financial professionals, arguably the most important part of our job is protecting our clients against large losses. Many financial professionals protect clients through wealth management, life and disability insurance, and estate planning.

However, I have found Long-Term Care (LTC) insurance is something every client needs — yet very few actually own. I have also found that every financial professional is aware of exponentially growing cost and need for LTC insurance — yet very few proactively integrate this as a standard and routine part of their practice.

Long-Term-Care Simply DefinedFor starters, it is important for us to help our clients truly understand what LTC really is, and how it is defined.

In its simplest form, LTC is defined as the assistance needed when someone is unable to care for themselves due to chronic illness, physical injury, cognitive (mental) impairment, or frailty.

Healthcare professionals, health insurance providers, HMO’s, and Medicare classify this type of care as custodial care, as opposed to acute or rehabilitative care. The focus of LTC is on assistance with the normal activities of daily living.

These normal activities of daily living include:• Gettingaroundinsideandoutsideof

the home.• Bathing,dressing,toileting,personal

hygiene, and eating.• Assistanceneededwiththeassociated

activities of daily living, such as using the telephone, preparing meals, paying bills, shopping, transportation, and housekeeping.

• Helpwithactivitiesnecessarytoremainat home, participating in an adult day care program, residing in an assisted living center or receiving skilled care in a nursing facility.

Medicare Does Not Include LTC CostsMany people think Medicare pays for LTC expenses. Nothing could be further from the

demonstrable improvement, you must pay out of pocket for the daily assistance for custodial care.

Therefore, if our clients are incapacitated from a chronic medical condition, the real costs are for care or assistance connected to their daily functioning.

Who Needs Long-Term-Care?By no means am I a LTC expert or specialist. However, I have gone through a high level of training to earn the Certified Long-Term Care Specialist designation. I have also spent a great deal of time extensively researching this all-important topic. Most importantly, I have experienced the devastating (and often irreparable) financial, physical, and emotional damages that usually accompany LTC with my clients and my personal family.

Having said that, here is exactly what I tell every client when discussing LTC:1. It is my strong opinion that every

Every Client Needs Long-Term Care Insurance!


3. Given my experience, research, and calculations, “the most timely and affordable age range to buy LTC is 55-65 years old.”

As you get closer to age 65+, there are several key factors that affect LTC prices, which can often make them cost prohibitive:• Life Expectancy and Need – at age

your life expectancy reaches a pivotal point of decrease while at the same time your probability of needing LTC begins to increase substantially.

• Health Conditions — most people at age 65 usually being to experience serious health conditions that increase LTC policy prices or in many cases disqualify them from purchasing a policy.

Why Don’t More Of Our Clients Own LTC?There is a wide variety of reasons most of our clients don’t take the necessary proactive steps to inquire about and own LTC insurance:• Denial – The harsh reality is most clients

don’t want to talk about or even believe this kind of thing can happen to them. They can’t fathom the thought, possibility, or probability they will actually need a professional to help them with some of life’s most basic activities.

• Cost and Price — Many clients would be shocked to know today’s actual monthly or annual cost for someone who needs LTC. More importantly, they are unaware of how much these costs will exponentially increase in the future. Furthermore, they have no idea how affordable it is to purchase a LTC policy that will pay for this type of care – both now and in the future.

• Fear and Complexity – For many clients, LTC insurance is perceived as complicated, sophisticated, and intimidating. Many view LTC as a complex product that is very difficult to understand. They are uncertain about when to buy it, how much it costs, how to apply, which companies are best, and what kind of policy fits them best. This is especially true considering there are so many LTC policy options and details to choose from.

• Credible Person — Most people don’t know a credible person to turn to for LTC. What they are searching for, and what they deserve, is someone they can trust. Someone who can give them the information and education they need without the pressure or fear of being “sold” and without feeling “obligated” to make a decision or buy something.

• Affordability — The truth is, if LTC was free, every one of our clients would own it. However, our clients rarely take the time to consult with financial

married couple must own life insurance.2. It is also my strong opinion that every senior must own LTC insurance.

Although studies and statistics vary, what you will find is that approximately 85% of our clients will need at least one year of LTC. Very few people die unexpectedly, and quickly. The large majority of people experience a chronic condition that requires at least one year of LTC-qualifying custodial care.

Three Reasons Every Client Needs LTCIn almost every case, our clients should own LTC to guard against three worst-case scenarios:1. Being removed from their home and

“forced” into a nursing home.2. Being a burden to their family and/or

loved ones.3. Spending all of their money on LTC-

related costs and expenses thus disinheriting their family.

What Is The Best Age To Buy LTC?Obviously there is no way of knowing who will actually need LTC insurance in the future. Although the cost of LTC varies from state to state, the average cost of a full-time, professional LTC facility ranges from $6,000-$12,000 per month. That’s about $100,000 per year!

So here’s some food for thought. If these are the approximate LTC costs today, just imagine what these numbers will be in the next 10-20 years? This is exactly why I tell my clients that purchasing LTC insurance “can either be a small mistake or a big one.”

To help determine the best age to buy LTC, below are some valuable facts, considerations, and guidelines:

1. The longer you wait, the higher the price. There are two reasons why. First, regardless of your health condition, LTC prices always increase with age. Second, the older you get, the less healthy your body becomes.

2. LTC costs are virtually guaranteed to increase when you factor in the following:• Theexponentiallyincreasingnumberof

people who will be needing but unable to afford LTC in the decades ahead. The fact that every insurance carrier (and the Government) grossly miscalculated, underestimated, and underpriced LTC costs and expenses.

• Yearsago,manyinsurancecompaniesoffered LTC insurance. Today, only a handful of the strongest and most credible carriers offer LTC policies.

professionals like us. The reason this is so important is because our job is not just to help them design and find the most affordable policy from the best company but most importantly show them how to fit something into their budget.

• Misperception, Misunderstanding, and Misinformation — An overwhelming number of people falsely believe they are already covered by their health insurance, HMO, Medicare, or Medicare Supplement. One of the biggest misunderstandings about LTC is the false hope and expectation that the government will provide for their care. What many fail to realize is that, before the government will provide you any help, you must spend all of your own money…sell all your own assets…and ultimately reach the point where you are completely impoverished. In other words, the only time you are eligible for government assistance is when the worst-case scenario occurs — you qualify as “financially indigent” aka flat broke.

• Necessary Conversations — One of the most unfortunate reasons many of our clients don’t own the protection afforded by LTC insurance is because we, as their entrusted financial professionals, are not proactively initiating this necessary conversation often enough and soon enough.

It’s Only Too Soon…Until It’s Too Late As financial professionals, we know most of our clients hate the thought of buying and even worse needing LTC insurance. This can be evidenced by the fact that even though many of our clients are young and healthy, rarely do they proactively reach out to us and say something like; “I know I am going to need LTC insurance in the future, so I’d like to talk to you about a policy.”

What this means is that too many financial professionals are overlooking, ignoring, avoiding, or postponing the necessary LTC insurance conversation. In doing so, this increases the probability of our clients developing a medical condition, having an accident, and/or becoming uninsurable. No matter how much money our clients have, nobody can purchase a LTC policy once they acquire certain high-risk medical conditions, or if they have already reached a place where they need LTC. Furthermore, the longer we wait, the older our clients become, and the greater the probability LTC becomes unaffordable.

Sadly, my experience over the past 30 years is that when someone approaches me about things like Funeral or Burial insurance


or LTC insurance, they are almost always older in age, poor in health, and attempting to acquire these kinds of insurances at a time of need when they either cannot qualify for it or cannot afford it.

A Win-Win Opportunity My sincere hope is this article helps illustrate two extremely important realities. First, when it comes to LTC insurance, we have a job, duty, and obligation to proactively address this all-important topic with our clients. Second, we have a tremendous opportunity to provide our clients with some much-needed protection. In doing so, this can only strengthen our relationships, value, and practice.

As financial professionals, rarely can we use the word “guarantee”. But there are several guarantees we can discuss with every client; their age will increase; their health will decrease; their need for LTC will increase.

Having said that, it cannot be too soon to have this necessary LTC conversation with our clients…but it can be too late.

Christopher P. Hill, RFC®, is the President of Wealth and Income Group LLC, with multiple branch offices in Virginia. Chris began his 28-year career in the financial services industry by spending his summers as a college intern for a major stockbrokerage firm. After graduating college with a B.S. in Finance, he spent over a decade working with the Senior Portfolio Manager of a leading money management firm. In 2001 Chris formed his own company with a primary focus on wealth management.

Contact: 540.685.4321 [email protected] www.wealthandincome.com

Christopher P. Hill, RFC®

Securities offered through O.N. Equity Sales Company Member FINRA/SIPC. Investment Advisory services offered through ON Investment Management Company.

Renew your Membership RFC®•RFA®•General Member•Staff Associate



IARFC, P.O. Box 506, Middletown, OH 45042 © 2016 IARFC

At the IARFC, we are proudly committed to educating the public on the value of choosing you as a their financial consultant. Your membership ensures that the message of engaging an ethical and educated professional is front and center. Renew your membership and keep our mission strong. H. Stephen Bailey

CEBA, LUTCF, CEP®, RFC® IARFC Chairman

IARFC Renew Your MembershipEDUCATION • EXPERIENCE •INTEGRIT Y



Contact the [email protected] or 800.532.9060


We’ve all been told at some point that life is tough. As much as we know and understand that, it still catches us by surprise when something bad happens. Just when you think things couldn’t be better, you’re knocked back by the unexpected.

For some, it’s the loss of a big client or a key staff member. For others, it might be an unwanted divorce or an unexpected illness. Maybe it’s the realization that things just are not working in your business.

We’d all like to think we are in full control of our situation, but sometimes life just throws us a curveball… a painful setback. When it happens, it can really knock the wind out of you. It can leave you feeling betrayed, angry, even depressed.

It can throw off your whole game.

So how do you fight off that curveball? How do you keep your head in the game and position yourself for a legendary comeback win?

Ironically, you do it much like you would a real-life curveball:

See and recognize the pitch.Accept your situation for what it is. Identify it as a temporary setback. Take a little time to mourn the loss, but then prepare to move on. The comfort of blame and anger can be addictive and debilitating. Let it go, and get ready to swing.

Stay back and let the ball come to you.Stay in the moment. Slow down and breathe. Fight the urge to swing wildly, and put yourself in a more reflective and strategic state of mind. A more thoughtful and deliberate approach will help you see additional opportunities and develop creative solutions. Let the situation develop in front of you, and navigate through it in a more resourceful state of mind.

Don’t change your swing.These are the situations when your integrity and character are really put to the test. It’s incredibly tempting to overswing and do things you normally wouldn’t. Don’t get caught in that trap. If adjustments to your approach are in order, do so, but stay true to your beliefs and core values.

Prepare yourself mentally.Visualize what life will be like after you get through this challenge. Imagine yourself hitting the ball squarely and driving it right up the middle of the field for a base hit. Let go of ego, and don’t take things personally. More often than not, the problem isn’t you anyway. Shift your thinking away from trying to understand the problem, and start thinking about how you will solve it.

Seek coaching.You are not alone. You have people that care about you. Lean on them to help you sort through things and develop your action plan. It’s tempting to try to tackle things yourself, but it’s remarkable how those who

care about you will rally around you to help in any way they can. If your challenge is something friends or family can’t help with, find someone else that can help, even if you have to pay for it.

It takes time and practice.Like most things, the more curveballs thrown at you, the better you become at hitting them. Nobody wants to deal with more bad stuff than they have to, but you can take steps to better prepare yourself. Take batting practice on the little things. If you learn how to overcome little, irritating setbacks, you’ll be better positioned to handle the big ones. Focus on what you can control. Learn a new skill. Meet new people. Set new goals. Take action.

Curveballs can be tough to deal with, but they don’t have to define you or determine your ultimate success. It may feel like the end of the world, but it’s not. You have the skills to deal with anything life throws at you. You’re genetically programmed for survival. That curveball may be just the catalyst you need to take action and move forward to the next step on your journey to success.

Your next swing could be your best swing. Knock it outta the park.

Paul Mallett, RFA®, is Senior Vice-President and Chief Operating Officer of Postema Marketing Group, a nationally-recognized independent marketing organization providing product support and business consulting services for independent advisors. Paul is a regular blogger and contributor to a variety of industry publications and social media platforms.


Paul Mallett, RFA®

When Life Throws You a Curveball

“When life throws you a curveball, it’s the opportunity of a lifetime to knock it out of the park.”— Unknown


Planning Process, the financial professionals as well as the clients. No matter if a financial professional provides products and services in one specific area or multiple areas (insurance, investments, retirement, estate planning etc), both themselves and the clients enjoy a number of benefits generated by a defined and established process. Streamlining and standardization of the process serves as a solid base for both the consultant and the client, providing stability, reliability, consistency, and adherence to a Code of Ethics. The results in efficiency, effectiveness, professional behavior and maximum performance on the part of the consultant with the ultimate goal of ensuring optimal results for clients.

How does a well-defined, standardized and streamlined process combine with each consultant’s individual personality traits and characteristics in serving the client to the best of their ability? It has been well-documented that social/soft skills and bedside manner is extremely important in any aspect of one’s life — much more at a consultant capacity serving clients. Success in life is in proportion to one’s education, experience and social skills, which are often taken for granted.

Has anyone ever experienced a “professional” with poor social skills, which turns off patients, customers or clients? Someone who talks more than listens to the

Financial planning is part of financial management and as a process it identifies goals, policies, procedures to meet specific objectives — both quantitative as well as qualitative in nature. The Financial Planning Process consists of seven steps (Establish the client relationship, Gather data, Analyze the data, Develop recommendations, Communicate recommendations, Implement recommendations and Monitor the plan). These steps serve as a guide by any Financial Professional engaged in Financial Planning providing financial products and services to clients.

Clients tend to seek professionals who combine both experience and have strong qualifications obtained through continuous education (CEs) as well as holding various professional certifications and designations well-known in the field of financial services.

Financial Planning is both a product and a service. As such, it comprises two components:

1. The education and experience of the financial professional.

2. The consultant’s values, perspectives and personality traits which have a direct impact on the client.

Although each consultant uses their own personality–based individualized approach to financial planning, what most professionals share in common is the use of a defined process when providing financial services. So what is the importance of following such a process?

A well-mapped out, standardized and streamlined process provides various benefits to all involved in the Financial

The Importance of Following a Defined Process

In conjunction with the incorporated uniqueness each financial consultant instills in the process to

best serve client needs.



client’s needs, goals etc? One would think that those skills are taught in an early age or at school or college years yet there is a number of graduates who obtain a job yet they can’t hold on to it due to poor soft skills. Educators experience this daily in classrooms when trying to instill content knowledge and soft skills to students in preparation for the labor market upon graduation. People in numerous daily transactions also often experience the lack of good social skills at various capacities. Ever walked in a store and no clerk or salesperson pays attention to you or acknowledges your presence?

A standardized Financial Planning Process can also assist consultants to improve or enhance those skills required for success by providing a solid base and a springboard to conduct their business. The process assists consultants to understand and honor dress and decorum standards (professional attire and behavior), acceptable forms of social interaction, making small talk, reading body language, express feelings and opinions etc.

It is the combination of a well-defined, established, standardized and streamlined process in conjunction with good social skills that are instrumental in the success of a financial professional at a consultant capacity serving client needs and improving people’s lives. After all, isn’t that the main reason we enter this business?

Nicolas A. Pologeorgis, Ph.D., CFEI, LUTCF has been a financial planner for over 30 years and also an educator and academic for the last 22 years. He has taught in various colleges and Universities, authored numerous articles, one book and in the process of completing two more in the fields of accounting, business, economics and financial planning. Nicholas served on the MRFC Certification Board.


Nicolas A. Pologeorgis, Ph.D., CFEI, LUTCF

A well mapped informational flow for a successful and lasting relationship between You and Your Clients/Prospect.

Explaining the Financial Planning Process



All financial consultants use a planning process. But what does that mean to the consumer?

The IARFC has a new trifold brochure The Financial Planning Process product number (SG107)that clarifies expectations and sets a roadmap to financial success. It is directed to the consumer, written in an easy-to-understand, organized manner.

The brochure defines:• Whyuseaprocess• Thebenefits• Thestepstofollow• Thefinancialareasitaddresses

The information is adaptable to any practice. It is generic, yet specific enough to guide the consumer through the essence of Financial Planning.

Order your IARFC brochures at: www.IARFC.org/Store

or call 800.532.9060, [email protected]

they want to continue the financial process with you and you will decide if you want to take them on as a client. Either way, it will be time well spent for both.

Ronald L. Hendren, RFC®, is an president and co-owner of Hendren Financial Services, LLC. Ron is a registered IAR in MO and registered to sell securities in MO and IL. A graduate of the American College, Ron provides clear, easily understood explanations of financial products and services to his clients.


If you work with a couple you will soon discover the dominant mate. You need to listen to both but it won’t take you long to know the decision maker. You may have two people in front of you but it is one that will decide if you’re the person they want to work with. Remember, this is not a “selling” appointment, it is an information gathering opportunity.

After you obtain the client’s information ask what they want from you. Do they want an analysis of their current financial situation, do they want specific recommendations or do they want both. A number of “blue collar” workers have large 401(k) retirement plans but they don’t know how to proceed at retirement.

Be truthful in everything you do or tell the prospect. You need to let them know about your practice, what companies you work with, what options they can look forward to, and the costs they can expect. Be upfront about commissions and fees they may encounter with choices they make. With the upcoming DOL requirements it will be important to disclose all the facts on possible investments.

Thus you have your “discovery” meeting. At the conclusion the prospect will discover if

When you go to a doctor you are weighed, vitals taken and usually examined by a nurse who will ask a lot of questions about your current condition. It’s only by obtaining medical information that the doctor will be able to diagnose you and prescribe a cure or remedy.

As financial consultants we are asked to provide a financial remedy for our clients as they contemplate retirement, ask about paying off expenses or need advice on other financial matters. With a new prospect I rely on a “discovery” session to obtain the information I need to help them with their financial decisions.

A discovery meeting allows a client or clients to discover information about you, the consultant, and also is a great way to get information on them. Start out by getting the basics…correct spelling of their name(s), address, dates of birth, children, places they work and ask about their investment experience. What are they invested in and how was that investment or investments chosen. Then, listen. It seems simple enough but many consultants don’t hear what a client is really saying. Don’t totally control the conversation. I was told once (or more times) that we have two ears and one mouth. We should listen twice as much as we talk.

Ronald L. Hendren, RFC®

The Register | March-April 2016 Page 23

James J. Ciennik, III, RFC®

James J. Ciennik, Sr., RFC®

© John Juretich, JR Photography


Profile Interview

Ciennik Financial Group (CFG) and their legacy of 3 generations is our cover story this month. Their 95 years of existence seemingly qualifies them as experts on the Financial Planning Process, which is our editorial theme this month for the Register.

Grandfather James J. Ciennik — a Polish immigrant who passed away in 1954 started in the insurance, real estate and building business in 1921. Those were the days when “Grandpa” stored the facts and figures in his head — the rudimentary starting block of a financial process.

Son James J. Ciennik Senior — joined the firm in 1954 on the insurance side and later transitioned into financial services. At his urging, the “details” in grandpa’s head developed into a more formal process. More progress, but still James the son remembers when an insurance contract was one page — a far cry from 18 page documents written today.

Grandson James J. Ciennik, III — the last piece of this generational family puzzle is a 36-year veteran of the financial services industry and a 33 year “Life Member” of the MDRT. He is the past president of the National Association of Insurance and Financial Advisors – MI, and recent recipient of the coveted E.H.(Bill) Meyers Jr. Memorial Award for outstanding service to the profession and community.

As a side note and true to family genes, great grandson James J. Ciennik, IV, though not connected to the practice directly, is making his way in financial services as a CPA & Senior Consultant/Audit for Deloitte & Touche-USA.

Do the Right Thing, the Right Way, at the Right Time

James J. Ciennik, Sr., RFC®

James J. Ciennik, III, RFC®


if any of them looked promising. I did not hesitate to let him know about the Alexander Hamilton opportunity. He was extremely proud and asked me what I was going to do. I thought about the times that my dad included me on business trips and client meetings; where I realized how much people respected and liked my father – it was impressive. There was a long pause and I replied…dad do you want me to come to work with you?

I understood later why my dad was hesitant to influence or pressure me about joining the family firm. He could not compete with the offer from Alexander Hamilton. He could not guarantee me success. I also realized that as a father, he did not want to see me fail. Well… you know how the story ended.

Learn From Experience The unexpected death of grandpa Ciennik and not having a will or trust or a succession plan in place helped James Senior to understand the importance for insurance covering the family as well as proper planning. At Ciennik Financial Group, Inc. they review their succession plan annually and encourage clients to do the same.

James III — Our experience in this area has been invaluable to us and our business owner clients. So it has been quite natural for us to discuss this subject comfortably with them. Many business owners ignore or delay this critical financial objective. However, together we make it a priority and will meet regularly on the subject until it is addressed and implemented. We share with them the business continuation arrangement we have at CFG, Inc. and how this same type of document can preserve their business and/or financially take care of their families.

Replacing Grandpa’s Financial Retrieving SystemThe Financial Planning Process has changed since the days that Grandpa Ciennik had the “details in his head”. Years ago a financial plan was not a big issue. The core principles have remained the same since the 1920s though … creating enough assets to meet all of clients’ financial goals.

James Senior – People’s individual needs drove our business and that was mainly home mortgage protection and disability coverage to protect their income. People were not as concerned about their retirement as they were concerned about working and protecting their family. Complete planning is now part of our annual review process now. We work closely with our client to develop their plan. Then

Through Two Viewpoints Thus comprises the major players of the Ciennik Financial Group Inc. To call the office and try to get to the correct Ciennik is sometimes confusing. For clarity, we refer to them as James Senior and James III.

Legacy DefinedFor both James Senior and James III, legacy is defined as a long term investment in clients and meeting their needs consistently. Years of their dedication have built generational commitments, which speak to the heart of their practice. They appreciate that their clients are truly their greatest assets. For the high quality of the services performed, clients tend to stay which gives the Cienniks the opportunity to work with the next generation.

James III – For me, it has been a wonderful rewarding and terrific journey taking CFG, Inc. 36 years into the third generation. My dad and I have made many memories and have delivered on many promises to our clients.

Getting Into the Family BusinessAs a young man, James II admired his father in business. However, grandpa James passed away suddenly in 1954 with no succession plan in place and no will. The company had to go through Probate. Senior never pressured his son, James III into coming into the family business. But, as a

kid there were only two things James III ever wanted to be: a professional baseball player or work with his dad in the Financial Services Industry.

James Senior – A decision had to be made to keep the business going or sell it. Fortunately, we had a staff of people who wanted to continue. Thankfully, a year was granted to complete the various licensing exams and the companies granted time for the Agency to comply and continue in business. In 1962, we got involved with Life, Health and Disability insurance - a natural clientele progression with the marketing of real estate and building homes. House calls were the norm and additional leads came from new home purchases and babies being born. As families grew, so did the need to protect mortgages, life, and income. The business grew by being there, meeting with the people and then meeting the people’s needs.

James III – When I graduated from Western Michigan University in 1980 with a Bachelor’s Degree in Business Administration and a double minor in Finance and Insurance, I was offered a position with Alexander Hamilton along with a $30k salary, pension, company car and healthcare benefits. Wow! I was excited! Before accepting, I needed to call my dad for his opinion. During our conversation, he asked how all the interviews were going and


year after year we fine tune their plan — moving forward toward their financial goals.

James III – The products today have obviously greatly improved to help meet these needs. However, today with pension plans no longer being made available to employees, college costs rising to ridiculous levels and a Social Security system that will most likely look different in the future, we have refocused our practice to address these issues to the extent that my Grandfather never would have imagined.

Fundamentally the Same, Yet DifferentBoth Cienniks work together as a team to develop long-term relationships. Their focus is still in building long term trusting relationships. Several educational meetings are involved and after measured thought and research, solutions are offered and prepared for implementation.

James Senior – Through the review process, each client is individually analyzed and assessed. Then after careful review, are offered solutions based on their needs and goals.

James III – What has been different in the past couple of years is I have had the opportunity to work with my children’s friends who are now graduating from college. This has been an eye opener and an exciting experience for me. This generation will not have the pension plans that their grandparents and parents may have had. Social Security will look a whole lot different and they will have school debt to deal with making them unique and very different from generations of the past. It is a challenge I look forward to solving with them.

The Backbone of Three Generations of Success Clients appreciate how much the Cienniks care about their consultant/client relationships.

James Senior – Client loyalty builds through relationships. We lose clients because of death but we retain their business through the family and their needs at that time. Our clients are loyal and value the service we provide. We tend to pick up additional family members through our relationships with them.

James III – We value our clients’ trust and we will always work hard to earn it. Our clients are wonderful people and have let us know on several occasions how much they appreciate what we do for them and the

James III – The insurance industry offers financial services dealing with major human issues like keeping a business or family going after a premature death, offering retirement income options that cannot be outlived, protecting income if someone becomes disabled and providing a legacy when people die. With the core of the financial services industry being made up of the above issues, I feel making the insurance license part of the educational component of the RFC® designation is appropriate.

another step forward in preserving our client’s trust.

Family DynamicsWhat the Cienniks have learned in business over all these years is perseverance, calmness, and the willingness to change. These traits have work pretty well in their father and son relationship.

James Senior and James III – We have been together in business for 36 years and the process is demanding. Working together,

time we spend with them. Most importantly, they know how much we care.

The RFC® Inclusion of Insurance LicenseRecently the IARFC has changed its educational requirements to include the insurance license.

James Senior – Insurance is the backbone of our business. We need to handle products that provide solutions to our clients’ needs. It only makes sense that we both be licensed as Registered Financial Consultants as well as Licensed Insurance Counselors. We are involved in annual compliance and extensive training conferences.

Becoming a Master Registered Financial Consultant

James Senior – An accredited designation is a major asset to any Financial Consultant. An additional level of education is always a good idea.

James III – With the general public continually wondering who they can trust in our industry, the IARFC has always been about serving professional consultants who help their clients wisely spend, save, invest, insure and plan for the future in order to achieve financial independence and peace of mind. This additional accreditation level is


helping others, remaining patient and calm in the storm has brought us closer and helped us develop a team. We have built strong relationships with each other as well as whomever we are dealing with. Just as our clients depend on us, we depend on each other.

Giving BackAs professionals, Financial Consultants have the ability to make a tremendous impact on clients’ futures.

James Senior and James III – We feel it is only natural to give back to the community that has embraced us over the past 95 years. Our careers have been all about the people we serve. It is not about how we can enrich ourselves but how we can fulfill ourselves.

If Grandpa Ciennik Could Weigh InJames Senior – Grandpa Ciennik has been gone 62 years and the business is very different. Since

1954 it has changed from a property insurance agency to a life, health, and securities business. We began marketing and providing securities services in 1969; which eventually evolved into Ciennik Financial Group, Inc. Grandpa would not recognize the business as it is today but I do believe he would be proud and somehow is.

James III – Grandpa Ciennik was a pioneer then and I believe he would be one today eagerly addressing the concerns of his clients in this new age of financial planning. The human issues of his time are still the human issues of today: living too long, dying too soon and being disabled along the way. However, the financial instruments we have available to us today are a little more fine-tuned than what he had to work with. My Grandfather would be proud that through the generations we are still providing our clients financial independence, preserving dignity and creating legacies for their families and businesses as well.


Grandpa Ciennik would say keep doing the right thing, the right way,

at the right time, and continue to live a life of significance.

Grandfather James J. Ciennik in 1928.

Grandfather James J. Ciennik with son James J. Ciennik, Sr. in 1953.

Securities and advisory services offered through LPL Financail, Member FINRA/SIPC.


In an industry where most firms offer the same laundry list of services, we believe our ability to

listen is the most important business development tool we offer. It’s how we learn your vision for the future of your practice—so we can help you make it happen.

Go ahead. Test our listening skills at 720.509.2447, or see our extensive laundry list at ceteraadvisors.com.

Cetera Advisors LLC, Member FINRA/SIPC 4600 S. Syracuse Street, Suite 600, Denver, CO 80237

© 2016 Cetera Advisors LLC 16-0078 03/16

technology

client-ready communications

practice management

professional development

wealth management

turnkey marketing programs

compliance oversight

financial assistance

conferences

interactive websites

customizable materials

thought leadership

recruiting assistance

succession planning

investment research

asset management

negotiated third-party discounts

portfolio construction

social media tools

electronic workflow

due diligence

insurance


Lustig, a Czechoslovakian, would book passage on ocean liners sailing between Paris and New York City and run his “money printing machine” scam. Fluent in both English and French, he would allow others to observe him working the machine, but complaining about it. It seems that the darn thing printed perfect $100 bills, but it took way too long — around six hours to print one bill. Sensing huge profits, some rich fool would buy the machine from him, usually for amounts of $30,000 or more. The machine would print $100 bills for the next day or so, until the cruise ended. Then, with Lustig long gone, it would produce only blank paper. The $100 bills Lustig’s machine had dispensed earlier were real $100 bills,

and the machine had been set to run out of them once Lustig disappeared.

Lustig’s biggest con, the one involving the Eiffel Tower, took place in 1925. It was in the newspapers that year that Paris was having problems maintaining all the steel on the Eiffel Tower. Lustig took this opportunity to begin impersonating an official of the Paris government seeking bids from scrap metal dealers. Alas, the grand tower would have to be dismantled and sold to the highest bidder. He had his marks come, one at a time, to bid on the tower and, of course, produce a large cash deposit. By the time the defrauded businessmen figured out what had happened, the slick-talking

Finding the Right Financial Advice

Lustig was nowhere to be found, and the joke was on them.

While Lustig takes the top spot for cunning and cleverness, Madoff tops them all when it comes to volume. His Ponzi scheme was responsible for bilking $50 billion from trusting clients who had enjoyed their sweet returns too much to ask questions…until it was too late. Fortunately for us, the types of fraud that Madoff pulled off, as infamous as they may be, are actually quite rare. The vast majority of agencies, firms and advisors are honest, ethical and very few investors will ever experience any type of fraud in their lifetime. That having been said, however, I still urge those of you reading this to use caution when it comes to money matters, and keep an eye on your assets, regardless of where they are invested. It just makes good sense to do so.

Preventing FraudThese are several simple steps we can take that will protect us from financial fraud. Many of them are so simple that you may do a double take. But it will make you a better steward of your financial affairs.

Open your statements and look at them. You would be amazed at the number of people I encounter who tell me they don’t like opening their account statements. This is especially true during times of market volatility when statements from brokerage houses and account custodians may contain bad news.

“I’m afraid to open them,” said one woman, who said she just puts them in order of postmark with a rubber band around them and opens the one she gets at the end of the year.

How are you going to know if there has been any unwarranted activity in your accounts if you don’t look at them?

Review your statements. After opening your statements, review them promptly. Look at the balance first. If it is lower, seek to understand why it is lower. If you don’t understand your statement, call the bank, custodian, or brokerage firm, and ask questions until you do understand. Keep a file on each account and organize your statements by month, and then keep a separate hanging folder for each year.

Look for unexplained checks or bank transfers, unauthorized debits or credit card purchases you don’t think you made. We sometimes give access to our accounts without knowing it.

Consumer Focus

“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.” – Warren Buffett

If you don’t understand your investments, get a second opinion. Ask questions until you understand.

If it sounds too good to be true it probably is. If you are promised returns that no one else seems to be getting on their investments that is a huge red flag. Get a second opinion from other professionals, such as CPAs, attorneys, or a knowledgeable family member or family friend as a sounding board. If you are not comfortable with the explanation you are receiving, contact a knowledgeable, trusted professional for assistance.

Never make checks payable to an individual. Unless you are paying a handyman for household repairs, or the people who mow the lawn for you, never make checks payable, or give large sums of cash to an individual. If a business transaction is legitimate, the check will always be made to a company, custodian, brokerage firm, insurance company or bank, not an advisor or an advisory firm. The exception to this is when the advice is understood to be offered in exchange for a fee and that understanding is made up front.

Peter J. “Coach Pete” D’Arruda, RFC®, CTC, is a Financial and Tax Coach. He is host of the nationally syndicated weekly radio show, The Financial Safari, as well as the author of four books, including “Fine Print Fiasco”, “Financial Safari, 7 Financial Baby Steps” and “Have you been talking to Financial Aliens?” Themes of these easy readers include helping others avoid being taken advantage of and translating financial jargon for any layperson.

Contact: 919.657.4201pete@capitalfinancialusa.comwww.capitalfinancialusa.com


Peter J. “Coach Pete” D’Arruda, CTC, RFC®

Do:√ Open your bill and look at it. Report any unauthorized

charges right away, both by telephone and by email or letter.

√ Keep copies of all correspondence regarding disputed charges until the matter is resolved.

√ When you are at a cash register using your card, don’t let the card out of your sight, and get it back as quickly as possible.

√ Save all receipts. Compare them with what’s on the monthly statement.

√ Sign the back of your cards, and put your picture on them if that service is available.

√ Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place.

√ Destroy all carbons immediately.

√ Draw a line through any blank spaces above the total. Don’t draw a zero, which could easily be altered.

Don’t√ Leave credit cards lying around. Either activate them, or

cut them up.

√ Lend your card to anyone.

√ Ever sign a blank receipt. It’s like signing a blank check.

√ Give out your account number over the phone unless you’re doing business with a company you’re sure of.

√ Write your account number on the outside of an envelope.

Credit Card Fraud is on the rise. Here are some practical DOs and DON’Ts:

If you use a computer, get online access and compare your paper statement with what you see online. It is not unheard of for those handling accounts to create fake paper statements to cover up fraud. Comparing the online statements with the paper statements is an easy way to detect this.

Call and verify. If all does not seem well with your account, call the custodian, bank, insurance company or brokerage firm from which your statements originate, and ask them to verify the balance and explain any discrepancy to your satisfaction. Even if there is no problem, it is a good idea to do this once a year.

Consumer Focus articles are available to IARFC members. You may view and reprint Consumer Focus articles at: iarfc.org/consumer_articles.asp


The Award is made, in honor of the founder of the financial planning profession, Loren Dunton, to a person who has made a substantial contribution to the financial services profession and/or the financial interests of the public. Generally regarded as the father of financial planning, Dunton organized financial professionals in the late sixties.

With their help he created the financial planning movement — including the formation of associations, magazines, colleges, university programs and foundations. Some persons believed that “planning” was totally separate from the “sale” of insurance and investment products, but Dunton always recognized that they were but different roots of the common tree, and that products are necessary elements in the implementation of the financial plan.

Dunton was able to use his experiences to frankly explain what all of us now recognize. Having been a successful businessman, although never a financial advisor, his comments were obviously from the heart. Dunton realized and publicly espoused that salesmanship be taught by the managers and trainers of the financial services industry, and that the ethical sale of financial products and the delivery of competent advice is a very noble calling.

Criteria for the Dunton Award

Candidates must hold a professional designation (i.e. ChFC, CFP®, CLU, RFC®, CPA/PFS, CEBS, MSFS, MSFM or Doctoral degree) and must have disseminated their comments by having been widely published on financial topics in articles, journals, books, etc. They must have provided outstanding personal service or leadership in the financial services industry. Nominees must have participated in some aspect of financial education, to the public or to other members of the profession.

Candidates must have demonstrated effectiveness in carrying the message of responsible financial stewardship to the public, and naturally they will have high ethical and professional standards. Their career must be a support of Loren’s mission, “to help people do a better job of spending, saving, investing, insuring and planning for the future, in order to achieve financial independence.

2017 Nomination Committee(2010 Recipient), H. Steven Bailey, LUTCF, CEBA, CEP, CSA, RFC®

(2014 Recipient), Lester W. Anderson, MBA, RFC®

(2006 Recipient), Bill Carter, CFP®, ChFC, CLU, RFC®

(2005 Recipient), Ed Morrow, CLU, ChFC, RFC®

(2016 Recipient), Jerry Mason, Ph.D.

(2015 Recipient), Jon M. Rogers, Ph.D., CLU, ChFC, RFC®

In 1969 Loren Dunton convened a group of financial professionals in Chicago and founded an industry of outstanding service and commitment. From this event and from Loren’s leadership and interactivity with many persons now in the IARFC, such as Vernon Gwynne and Ed Morrow, would come an educational institution, the College for Financial Planning, and the personal financial planning curricula now taught on over one hundred campuses.

As the first editor of Financial Planning magazine Loren helped to publicize an emerging profession, bringing various practitioners together to a common cause, sharing practice and marketing techniques and promoting ethical conduct. That respected magazine has continued, contributing to the profession for thirty years.

Two associations came initially from this effort, the International Association for Financial Planning and after the first class of Certified Financial Planners graduated in 1973, the Institute of Certified Financial Planners. These organizations have since merged to become the Financial Planning Association. Using Loren’s model, more than forty countries have formed similar organizations.

Loren continued to promote the value of the financial advisor as a professional whose quest for knowledge should never cease. He authored seven books that have helped to shape the careers and services of financial advisors. Loren’s commitment to these principles was evidenced in the Institute for Consumer Financial Education that he nurtured for many years, and which earned a Presidential Citation for public service. It is in Loren’s tradition of recognizing the value of professional advice and service that the IARFC presents the Loren Dunton Memorial Award to persons who have made a significant contribution to the financial services profession and to the public.

The Loren Dunton Memorial AwardCall for Nominations

The Register | July-August 2016

2017 Loren Dunton Memorial AwardNominees for the

You may use this form to nominate a recipient for the Loren Dunton Memorial Award, presented annually to a person who has made significant contributions to the financial services profession and to the public. This form may be supplemented with additional information of your choosing. Nominations close on November 30, 2016

Nominee Name: _____________________________________________________________________________________ Nickname: _____________________

Address: ___________________________________________________________________________________________________________________

Phone and email: ___________________________________________________________________________________________________________

Professional designations: ____________________________________________________________________________________________________

Current position/title: ________________________________________________________________________________________________________

Firm/organization/institution: __________________________________________________________________________________________________

Positions of responsibility in associations, etc: _____________________________________________________________________________________

___________________________________________________________________________________________________________________________

How has this person benefited the general public? ________________________________________________________________________________

___________________________________________________________________________________________________________________________

How has this person benefited the profession? ___________________________________________________________________________________

___________________________________________________________________________________________________________________________

Publishing credentials: _______________________________________________________________________________________________________

___________________________________________________________________________________________________________________________

Speaking and/or teaching credentials: __________________________________________________________________________________________

___________________________________________________________________________________________________________________________

Nominator

Name: ______________________________________________________________________________________ Nickname: ____________________

Address: ___________________________________________________________________________________________________________________

Phone and email: ___________________________________________________________________________________________________________

Mail this form to:IARFC Loren Dunton Award Committeec/o staff liaison, Wendy KennedyInternational Association of Registered Financial ConsultantsP.O. Box 506Middletown, OH 45042


on their money. What I tell people is that no matter who is in office, it makes sense to hope for the best but plan for the worst. We should plan for a future of lower benefits in the form of cuts in Social Security and even their pensions. We should also plan for a future of higher taxes and higher inflation.

Today, we are so inundated with news twenty-four hours a day, seven days a week that people can easily become concerned and confused. These emotions can make it easy to make emotional financial decisions. A good financial plan can help prevent this from happening. If you do not have a plan, you are always flying by the seat of your pants. If you have a plan that can handle good and sour markets, then just stick with the plan. The road should be less bumpy no matter what Washington or Wall Street throws at you, as my dad so often says.

An airplane never takes off before it files its flight plan, but once that plane is up in the air, the pilot might alter that flight plan if a storm appears so it goes around it and not through it. The same thing with your financial plan. You need to build a plan so you can take off into retirement, but that plan will need to be changed and altered as you move through life. I find that talking about

Asking a lot of questions and trying to put myself in their shoes has helped me handle these sensitive topics. I try to remind them that as we sit at this conference table today, we don’t want to plan for how we are today, but for how things could be in the future. So it is important to bring up some tough topics because if we don’t address these things now, it could really hurt us in the future. For example, no one wants to talk about losing their spouse, but many times this is something on their minds that is tough for a client to talk about. Obviously talking about the death of a spouse is not the highlight of any meeting, but good financial planning is all about having a course of action for those rainy days. The focus is always on identifying what matters to them and coming up with simple solutions.

There are also times when some controversial topics come up, especially now that our political climate and the world around us has become more polarizing than ever before. We want our client family to know there is not anything that we cannot talk about. If it is important to them, then it is important to us. One thing that has come up over the past several years is fear revolving around the state of the country and the effect politics and the government will have

When a person or couple comes into our office for the very first time, usually they have either heard us during our weekly radio show, come to one of our live events, or are a referral from an existing member of our client family. There usually has been something we have said or something they have seen that has made them want to drive in to see us. So we try to find out what that is. What is the concern that they have? What is the worry that is keeping them up at night? So we start the conversation by asking what did they hear that made them want to come in today.

Another great question is, “How can we help you?” This usually starts the conversation with the focus on what’s important to them and allows us to learn about what is really on their mind. Our initial visits are all about them, not about us. Many times this can lead to some very sensitive discussion. For the most part, the people we meet with are usually between the ages of 50-70, and we are talking about a retirement savings that took them maybe 40-50 years to create. This is their first time having to plan for retirement; however, this is something we do every day. I often have to keep myself in check and make sure I remember that although I’ve done this before, they have not. The best way to do this is to be 100% present during the meeting.

To Comment or Not To Comment…

Sometimes financial consultants can find themselves in “sensitive” situations when visiting with someone for the very first time. This could be in the area of politics, a difference in philosophies on life, or possibly just a lack of compatibility. When meeting together for the very first time, it is important to know how to handle these situations so you can get to the heart of the matter and determine if you both are a “fit” for each other. Our IARFC Board Members have a lot of experience connecting with clients, and this article may give you some insight into how to handle some of these situations.

Interview for the IARFC

It’s All About Them, Not Us

down the road they wanted to travel. As the song from Kenny Rogers goes, “Know when to hold them, know when to fold them, know when to walk away, and know when to run.”

We can learn a lot during our initial visit by just asking questions and listening. In coaching and mentoring with a lot of financial consultants over the last 16 years, I can tell you that most of them just talk too much during their meetings. I feel that you can find some incredible insight into helping someone by asking better questions. I wrote a Register article about this a few months ago. It’s always best to ask questions and really listen to the answers. This is how you truly find out what the purpose is of a person’s money, and this gives you the direction you need to design the best solution.

One last important point, many times people will come in asking me to give them a “Rule of Thumb” for this and a “Rule of Thumb” for that. We just did an entire radio show about the myth of the Rule of Thumb. Not every rule applies to every person and sometimes the best answer is, “It depends, we will do a little research and make a decision based on what the math tells us, not our emotions.” There is no grey area when it comes to math, so I let the numbers prove the point.

the process and what we will do together with them in the future really helps alleviate concerns that can pop up.

However, there are times when we find that we just are not a fit for the person we are meeting with during an initial visit. We are not a fit for everyone by any stretch of the imagination, and that is fine. We tell people that when we partner with a new client it is a relationship that is going to last 30-40 years, and I want to make sure that we are compatible with our investment philosophy and views on why we do things the way we do them. It’s just not good business to be all things to everyone and try to force them into our world. One of the reasons why we receive the number of referrals that we do is because we build lifelong relationships based on trust. It’s hard to do that if you force people to do things they don’t want to do.

We can also run into situations where someone doesn’t want to take our advice, or maybe we built a retirement plan for them and then they change that plan on their own. I had a sixty-five year-old client who had $500,000 that we built a plan around to last his life. One year into the plan he took a $250,000 withdrawal to buy a few vehicles. Although we suggested against it because it would put him in high danger of running out of money during retirement, he did it anyway. As a fiduciary I am trying to do what’s in the best interest of that person, and our firm has over 92 years of combined experience in doing this. If someone doesn’t want to follow our solutions and we know that by them doing so puts them in financial danger, then we certainly don’t want to help them fail, and we just are not a fit for each other. We are a mature firm, and over the years we have learned that not everyone can or should be a client of our firm.

Unfortunately, this means that sometimes we have to tell people that we do not believe we are a fit for each other. After our first visit, I will tell people that I will get together with the team to look over their situation. If we are a fit, then we will give them a call back to let them know that. If they are not a fit, we will let them know that as well. One time I had a seventy year-old husband tell me that he wanted to invest all of his money in one particular company stock. This stock had an incredible amount of risk. His wife was against it, and they got into a disagreement. He didn’t want to follow the recommendations I made since I did not agree with him sinking the family nest egg in one volatile stock. So I made it very easy for him and told him that our philosophies did not seem to match, and it did not appear that we would be a good fit to help them

Nicholas Royer, RFC®


Nicholas Royer, RFC® is Vice Chairman on the Board of the IARFC and President of Group 10 Financial, LLC with offices in Orlando, Cincinnati, and Peoria. Nick and his father Jerry co-host their radio show on numerous radio stations. Nick also is a regular financial commentator on NBC and ABC news networks. Nick was nominated as a Top Leader Under 40 Years Old and was awarded the 5-Star Professional Wealth Manager for 2014, 2015 & 2016.

Contact: 800.245.0546nickroyer@group10financial.comwww.group10financial.com

Investment Advisory Services offered by Brookstone Capital Management, LLC, an SEC Registered Investment Advisor

Culturally Vibrant, Historically Rich, Environmentally Diverse… The Lure of the Mississippi

2017 CE @ SEA™ Mississippi River Cruise

and fascinating to explore. For this reason, the IARFC is planning your 2017 journey on the lower leg of the Mississippi.

Embarkation starts at Memphis and ends in New Orleans. Stepping aboard the paddle wheeler America means traversing through the muddy colored looking glass into a world where culture, history and natural surroundings constantly change and delight. From specialty ribs in Memphis to the creole dishes of New Orleans, your voyage will treat you to food samplings of the regions. Tours along the way of historical importance brings to life accounts of Civil War battles and westward expansion only read about in history books. The riverbanks are an ever changing canvas of natural beauty — with enchanting vistas around each bend.

Vacation cruising brings up images of ocean liners while escaping stress and island hopping. People choose exotic destinations, with warm Caribbean waters and constant entertainment diversions. Or it could mean European waterways with medieval castles, quaint centuries old villages and scenic vistas.

In reality, the lure of discovery and adventure is right in our own country — waiting for you to experience it.

The Mississippi River looms in our history books and at times the nightly news as a geographical location or perhaps an occasional historical occurrence but hardly touted as the hidden treasure it truly is. There is no waterway more significant to the western development of the United States. Imagine the days of no roads or railways for navigation. You can then understand the intent of major cities to locate on inland rivers and cater to the new settlers expanding westward. Thus, developed the important role of the rivers.

This vibrant artery of America still remains the largest river in commerce, volume and drainage. It is the backbone of our country

“The Mississippi Valley is as reposeful as a dreamland,

nothing worldly about it… nothing to hang a fret or

worry upon.”

— Mark Twain, Life on the Mississippi

™

It is a trip of relaxation, a time for guests to reconnect with bygone days. It is a combination of the old South meets state-of-the-art steamboat where you experience all that a modern day conveyance has to offer at a leisurely, relaxing pace. Explore the U.S. — truly a piece of Americana to be experienced by the turning of the paddlewheel.

Join us on theIARFC 2017 CE @ SEA™, July 1-8American Cruise Lines, Lower Mississippi, on board the America paddlewheeler

Contact Kimberly 800.814.6880 x 661 (mention the IARFC)




Mis

siss

ippi

Riv

er

TunicaHelena

Greenville

Vicksburg

Natchez

OakAlley

St. FrancisvilleBaton Rouge

NewOrleans

Memphis

LOUISIANA

MISSISSIPPI

ARKANSAS

TENNESSEE

Celebrate the birth of our nation on the mighty Mississippi with American Cruise Lines, and explore one of the most

aboard America

Independence Day on the Mississippi River

* Certain restrictions apply. Ship, schedule, and itinerary subject to change. 081016

CRUISE INFORMATION• Dates: July 1, 2017 - July 8, 2017

• Itinerary: Lower Mississippi River(Memphis – New Orleans)

• Ship: America

• Deposit of $500 per person must be received by December 31, 2016

• Single, double, and tripleoccupancy available

YOUR CRUISE INCLUDES:• Pre-cruise hotel packages

• Featured shore excursions

• All meals served in an open seating dining room

• Nightly cocktail hours

• Wine and beer at lunch and dinner

• World-class onboard entertainment and lectures from riverlorians

Prices Starting from $3,995 Per Person*

Join us on the 2017 CE @ SEA™

American Cruise Lines, Lower

Mississippi, on board the

America paddlewheeler

Contact Kimberly 800.814.6880 x 661

™



P.O. Box 42506 Middletown, Ohio 45042



Join the IARFCMembership Door Opens for Life Insurance Professionals

www.iarfc.org 800.532.9060



Official IARFC Publication IN THIS ISSUE IARFC · Scott D. Torosian, RFC®, MI Julian B. Yap,...

Documents

Transcript of Official IARFC Publication IN THIS ISSUE IARFC · Scott D. Torosian, RFC®, MI Julian B. Yap,...