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.

And it’s not just good enough to acquire a basic understanding of living benefits. Insurance companies are changing them almost weekly and we are obligated to stay on top of every new benefit and every new upgrade. Ask yourself if you have done what it takes and gone the extra mile to incorporate the knowledge necessary to provide meaningful advice and opinions on the subject.

One of my favorite vehicles, the exchange-traded fund, had barely a paragraph of attention in the major financial publications only 10 years ago. Now they are the fastest-growing securities vehicle in the country. Major financial publications have been prompted to create entire sections just covering ETFs. As an advisor, if you don’t have a deep understanding of ETFs, their mechanics and the major players, you will again be violating the duty of care that you have to your client. I can guarantee every financial advisor that you will get a prospective client who asks you about ETFs – and if you don’t know the answer, you will fail to acquire that prospect.

The point here is that those advisors who do not seek to advance their knowledge base will quickly be dismissed as irrelevant and uncompetitive. The successful advisor over the past 10 years has been forced to reinvent his practice as our industry has experienced seismic shifts in products and strategies.

The bottom line is that we are all in the advice business. Whether you just have an insurance license and primarily sell fixed indexed annuities, or you have a Series 65 and are providing investment advice for a fee, you are still providing some form of financial advice to clients. The regulators are starting to act on this concept as well. Even if your insurance license technically is one that allows you to sell a product and not necessarily give advice, the compliance folks see advice as part of your obligation. They will want to ensure that you have the proper licensure and knowledge base when making recommendations to clients.

Since the quality of the advice we give is highly correlated with the growth and profitability of our practices, it is incumbent on each of us who truly appreciates what we do and how we impact our clients to attend continuing education classes, acquire additional licensure and meet with product wholesalers. We must dedicate ourselves to possessing the most current, sophisticated base of knowledge.