Don’t be afraid of estate planning. So long as you have a good relationship with the client, then you can bring in other advisors to help meet the client’s estate planning objectives.
Our role in estate planning is actually quite familiar to us all. We simply provide cash for future delivery when it is needed most, through the sale of life insurance to maximize client goals. You may already have a client-base in need of such a service. Virtually every client has estate planning needs, which represent an opportunity for you to expand your expertise and learn something new.
There are clients who are on the cusp of needing life insurance for estate liquidity. Couples and professionals who are in their 30s and 40s and will eventually have estates worth from $10 million to $20 million make up this category. They can purchase today the level and quantity of life insurance they need down the road.
Many other prospects have estates of $10 million, $20 million, $30 million or $40 million and really need to have liquidity coverage today. This group typically consists of individuals who own or owned businesses and have money tied up in inventory, buildings and real estate–assets that aren’t very liquid. In these situations, the best way to avoid dismantling an estate to pay estate taxes is to use life insurance. You can help.
To leverage your relationships with clients and best serve their estate planning needs, there are various outlets you can use. Seeking assistance from your agency, company, a brokerage general agency, or doing joint work with a more knowledgeable agent are all options.
I personally find it most effective to work jointly with a brokerage general agency. The agency, with an attorney on staff, takes all the information on the prospective client and develops the case. Within 48 hours, I receive a proposal branded with my company name to present to the prospective client. It’s quite efficient.
Connecting with estate planning clients
The most important and perhaps most difficult part of our business is developing strong relationships with our clients. Once agents have achieved that bond, they should be the point person for pretty much everything the client wishes to do, including estate planning. If a sound relationship is not formed from the beginning, the agent runs the risk of missing out on a great deal of revenue and potentially losing the client to an agent who can immediately make a connection and take care of all their financial needs.
One of the most vital aspects in building a solid client relationship, especially from an estate planning perspective, is trust, which usually occurs when first meeting prospective clients. They must understand that their agent is not doing business with them just to get a commission; rather, they are doing it for the benefit of the client.
Before I ever discuss money and financial issues, I like to chat about family relationships, trips we’ve taken, etc., to help them understand we’re actually peers; I have the same life experiences, problems, fears, and family life they have. We drive luxury cars, work out at the gym, discuss membership at country clubs and go to Oakland A’s baseball games.
Talking about these things during initial meetings allows clients to feel that doing business with me won’t change my lifestyle but will make them feel better about theirs. It’s really a matter of developing that level of trust. If you can’t do that, you’ll never receive business from a potential estate planning client.
It’s also important to let the client know how competent you are in your work in order to build a relationship. There is a lot of guilt by association that goes on, especially with people of high net worth. It greatly helps if we can show the client that we are already doing business with people like them–people in the same professions or similar businesses, even people they already know!
Many times, when conversations transition into financial matters, clients will fill out a form outlining what they own, what they owe, what their income is and where it’s from, what they have set aside for retirement, and so on. It’s important to explore what their money really means to them–how they use it, how they want to use it, and what it’s going to do for them.
Taking this approach suddenly shifts the idea of money being a commodity to it being a way to express what their real wants are rather than what their needs are. When I have those kinds of discussions with clients, it really changes everything.
Once you’ve established trust and that you are very good at what you do, then it’s okay to start talking about the specifics of a client’s situation. After getting the client’s financial materials, we discuss what they want to have happen when they retire. I’ll probe them about where they want to live, what they want to do, what type of relationship they have with their children and grandchildren, and how they’d like it all to work out in the future.
Thus, it’s always about much more than just the numbers. The byproduct of not being afraid to discuss estate planning is better client retention, improved relationships and greater success.