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What are the effects to the advisor?

A fresh approach that works for the client will get attention and respect. Who said a wealthy individual must gift enough annual premium and purchase at risk death benefit equal to his estate tax liability? The life insurance industry of course! Understand that there is no way to eliminate the current estate tax (excluding the 2010 tax anomaly) except to give the entire taxable estate to charity. Life insurance is usually sold as a packaged concept of somehow making the estate tax go away as many sales tactics infer, but it doesn’t. It is merely purchasing dollars needed to pay the estate tax, and sometimes at a great cost. Rather than copying this same tired traditional sales strategies of the past, an advisor in today’s marketplace who can introduce to a client or prospective client such a unique self insuring concept combined with a methodology to analyze and manage it and a product to fund it, will gather a great number of new clients and drastically increase the assets under management easily and quickly with only a small number of wealthy clients. What about advisor compensation? Advisors generally assume that an asset based product generates less compensation, especially in the first year. That is only true when comparing the same premiums. To compare compensation in developing a self insurance fund, the advisor must compare the compensation of selling a life insurance policy versus compensation to manage the self insurance fund. Let us use an example of a $3 million liquidity need and compare the 2 resulting comps:

• Selling a $3 million life policy:
  • Chance of success is low
    • Since the advisor is recommending the same thing everyone else is recommending or has recommended, the probability of making the sale may be greatly reduced because of competition
    • The advisor makes the life insurance sale while competing with everyone else trying to sell the same type of policy using the same strategies with very little way to really determine which policy is best.
  • If successful in the sales process:
    • The annual life policy premium is assumed to be = $40,000
    • The one time commission = $30,000 (1st year only)
• Management the $3 million self insurance fund:
  • Chance of success increases dramatically using a unique concept:
    • the probability of making the sale will not depend on the relationship with the client.
    • The advisor is providing a service not being provided by the competition.
    • The client may save significant amounts of money he had no chance of saving before.
    • Eliminating a client’s current life insurance premiums will drastically increase the chance of success with that client and also obtaining new clients previously unattainable.
    • Easily gathering new clients and new assets will be the norm, not the exception, even when the client thinks he is perfectly happy with all his existing planning and products.
    • Using the FutureSystemTM, anyone with an existing life insurance program is a viable prospect who would not be a prospective client otherwise. With The FutureSystemTM, everyone is a prospect no matter what they currently own, how long they have had it, or who are their advisors.
  • If the Self Insurance Conceot is adopted:
    • Current life insurance premium may be reduced to zero.
    • Compensation for managing the $3 million self insurance fund = $30,000 (not just the 1st year but EVERY year)
    • The client is satisfied and happy that the advisor informed him of a different approach he has never seen before and is more likely to refer that advisor to others. People like to show others how smart they are in discovering something new.
    • The client may like move other assets under management to the advisor.