Knowledge is power. We’ve all heard this old adage and I’m sure most unanimously agree with its message. With “knowledge” as our theme, the most important idea as it relates to our industry is turning knowledge into profits.
Don’t get me wrong – I find a lot of merit in having a broad range of knowledge on multiple topics. I can rattle off a plethora of interesting yet totally meaningless facts. The problem with such knowledge overload is that in almost every instance it does not translate into actual dollars and cents.
I am fortunate enough to have cultivated relationships with literally hundreds of advisors all over the country. While I respect everyone for their own unique attributes, I must admit it amazes me how little knowledge so many of my colleagues have in key aspects of our industry. This is troubling because we work in an industry that is built on advice – advice that is derived directly from experience, facts, intelligence and, of course, knowledge.
The timely topic of income planning can serve as a great example. Because of the demographic dynamics, namely the boomer generation, and issues like the viability of Social Security, income planning has emerged as a hot planning area. It has inspired software programs that help compute the probability of a client outliving his money and proprietary strategies meant to ensure that will not happen, as well as living benefit riders in annuity products with multiple varieties.
Successful advisors need to understand the area of income planning thoroughly. Just five short years ago, this concept did not even formally exist as a “specialty” planning area.
An advisor who is not on a constant quest to stay up to date may have no timely knowledge in an area where some advisors are now building entire practices. For example, if you don’t understand how living benefit riders work within annuities, then your competition has a huge edge over you.