Hell Tell You Where The Income Specialists Are

To The Editor:

In her March 3 column, Linda Koco asks, “Where are the Income Specialists? I think the answer is “they are keeping a low profile” because of regulatory issues.

There are a number of us out here who have the expertise, but have shied away from specialization. Nevertheless, some income planning is getting done as part of our general practice.

In the old days (circa 1970) when career shops dominated the agency scene, just about every agent was trained in the basics of Settlement Options, including Life Income, Life & 10YC, Refund Life option, etc. (My first sales track was geared to retirement income.)

Industry educational programs, such as LUTC and CLU went a step beyond. Chartered Life Underwriters were trained to understand that old age was one of the economic hazards against which we should insure and to think in terms of how much life income a policys cash value would provide the owner, along with his other income assets. We would develop a “program” which estimated the clients Social Security, employer pension, plus the annuitization of the cash values from his whole life.

In this brave new world, much of that methodology became old-fashioned. During the past two decades we have all seen an overreliance on equity values. Old-fashioned pensions fell out of favor, and 401(k) plans dominated the scene. If we spoke of retirement income from life insurance or annuities, it was in the context of systematic withdrawal plans, which did not guarantee income for life. Immediate life annuities were looked upon with contempt, because everybody thought they could do better in the market. The “termites” continue to twist our whole life, which should be respected as a vital foundation piece. The irony is that whole life has performed better than about anything else during this bear market.

And, somewhere along the way, we got overregulated. Lately, those of us who are SEC-licensed get the feeling we can hardly breathe without consulting our Compliance Officer. Agents are cautioned not to “give investment advice” to our clients who have 401(k) accounts. And, above all, dont hold yourself out to be some kind of fee-based income specialist unless you become a RIA. Heaven forbid!

The result of all this is that many professionals have simply “hunkered down” and are behaving like mere product pushers. If you “think out of the box,” or use your professional training, you may be subject to discipline. Most of us who have professional designations resent being called to task over the “suitability” of our work by someone who knows far less than we. And, trust me on this one, most home offices are populated by people with far less knowledge than many of their experienced field agents.

Finally, we have to put up with the criticism from the Jane Bryan Quinns that “annuities are evil when used in qualified plans.”

Where are the Income Specialists? Many of us have the credentials, and The American College is turning out more! We quietly take care of our own clients (at least the ones we can keep away from the stockbrokers). We well understand the daunting choices faced by a person contemplating retirement. But there arent enough of us, and few want to specialize and take a high profile. Not unless theres some easing up on the regulatory environment.

P.S. Turtles are looking better than jackrabbits these days.

Milton Jones, CLU, ChFC, LUTCF

Via e-mail


Reproduced from National Underwriter Edition, March 17, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.