Now we know. The recession ended in November 2001.

That word comes to us courtesy of the National Bureau of Economic Research, the Cambridge, Mass., nonprofit economic research organization whose economic calls are widely accepted.

This July 17 pronouncement may surprise you, given that your own business has not yet picked up. Given that you know plenty of people who, as the U.S. Bureau of Labor Statistics puts it, are unemployed and available for work. Given that many insurers you know are looking to sell off books of business or even their entire business.

Nevertheless, this is the situation in which the country finds itself. It is a time of mixed signals in the economy.

The NBER itself recognized this in its formal statement. The committee, it said, “did not conclude that economic conditions since March 2001 have been favorable or that the economy has returned to operating at normal capacity.” Rather, it said its finding recognized only that “the recession ended and a recovery began” in November 2001.

For a financial advisor, this raises several questions: Should I discuss the NBER determination with clients? What about the new unemployment, Consumer Price Index, Gross Domestic Product and similar figures? If so, in what context should this discussion occur? Will such changes affect client needs and goals, and will financial plans need to be adjusted accordingly?

Some of the larger insurance companies have economists and other experts on staff who regularly analyze economic trends. If you are lucky, the company may make some of their interpretations available to you via bulletins, Web site updates or perhaps sales training addendums. If you are not so lucky, you–and your clients–will be on your own.

What, then, to do? Use resources at your disposal to stay abreast of economic changes. Check newspapers, financial media, financial broadcasts, professional meetings and programs, educational courses, and the like.

It wouldnt hurt to spend some time on the Internet, either. The Web site of the NBER (www.nber.org) is worth a visit. So is the U.S. Bureau Labor Statistics (www.bls.gov). (See box on this page for a sample of the “latest numbers” table that BLS has on its home page.) Or, just surf the financial sites.

Then, after youve digested some of this material, think about your clients and how they may be reacting to the various bits of financial news they are picking up.

Because you are a professional, you have deeper and broader knowledge on these subjects than many of the people you serve. Therefore, why not develop ways to bring what you know (and what you have just learned) to your clients in value-enhancing ways?

Perhaps develop a strategy for addressing what you believe to be the primary economic issues that concern your clients (or clusters of clients). Assess the factors that will help them think through plans, both short and long term, in view of their changing needs, objectives and risk tolerance. And, of course, broach product and service solutions as appropriate.

If unemployment remains a concern in your area, even though national unemployment rates are starting to drop, then review how clients can access policy loan and withdrawal features. (One recently unemployed businesswoman recently told me she was thinking of canceling her variable annuity to get at the values. She was surprised to learn that she had other options!)

Alternatively, you can check out whether an immediate annuity might be more helpful.

If inflation is a prevalent concern, then review the cost-of-living features in your products that address this issue. (Yes, inflation has been low in recent months, but you will likely have clients who know from experience that inflation rises and falls and who want protection from its erosive impact.)

What if global competition is affecting people in your area? Tech experts, for example, might lose business or even jobs to overseas competitors, thus decimating health benefits, retirement savings programs, and other financial plans and protections. Business owners may need to refocus, with all the financial retooling that entails. Once again, look for workable strategies. Short-term medical insurance might help the techie, for instance. A restructured financial plan might help the business owner.

Many advisors have been strategizing throughout the recession, so doing this now may seem pointless.

It is not pointless, however. A lot of the earlier work focused on streamlining processes in the shop, stepping up marketing and increasing client handholding, all designed to weather the down part of the business cycle. Now, with the Dow starting to rise and the CPI and GDP both inching up, a hint of change is in the air. Now, a different approach may be needed.

This could be the time to anticipate the next wave of client needs. It could be the time to ensure you have access to products and services that will respond to the new needs. And it is definitely the time to check in with providers, to see what they have on tap.

If you are unsure about the direction of the economy and its impact on your practice, you are not alone. But some information from NBER might help you think it through. “Economic activity is typically below normal in the early stages of an expansion, and sometimes remains so well into the expansion,” it said.

My read? Its time to negotiate the waters of mixed signals.


Reproduced from National Underwriter Life & Health/Financial Services Edition, August 4, 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.