Podcast Center
Video Center
Webcasts
Resource Center
Events
January 15, 2013 at 10:34 PM
Did you hear the collective groan coming from two types of advisors when the fiscal cliff deal (FCD)was passed by Congress? Which advisors? Life insurance agents and attorneys.
Why would both of these groups bemoan or be upset at the FCD? Simple. For insurance agents, the need for millions of Americans to buy life insurance to pay for estate tax planning just disappeared. For attorneys, there are millions fewer who need “advanced” estate planning, and many will think they no longer need any estate planning.
Yep, when Congress codified the approximately $5-plus million per person estate tax exemption, panic, fear, anger and other emotions came over many insurance agents and attorneys. The practical consequence of the FCD being passed is that advisors who focus on helping clients with estate taxes are going to make less money.
Replacing lost income
If you agree that the FCD will cost advisors income, the question that then needs to be answered is how do these types of advisors replace that income? Let me give you my list.
1. Medicaid planning — There are 7,000 seniors turning 65 every day. There are literally millions of clients in need of proper Medicaid planning. What’s better is that very few advisors (including estate planning attorneys) know how to give proper advice. What’s equally as good is that there can be significant money for advisors and attorneys when helping clients with Medicaid planning. In short, there is a huge opportunity to grow your business and earn more money by learning Medicaid planning.
2. Become an IAR — I’ve been telling advisors for nearly eight months that if they don’t get an IAR (investment advisor representative) designation, they are making a mistake for two reasons. First, state laws are changing to require a securities license if you want to sell fixed indexed annuities and equity indexed universal life. It is best to be prepared for the legal changes that will inevitably come to your state. Second, when under the right registered investment advisor that can teach/mentor you on how to pick up millions of dollars under management, you can create a substantial and reccurring revenue stream.
3. Buy/sell planning — Over the next 10–20 years, there will be more privately held business transitions to new owners than at any time in our country’s history. The great thing about buy/sell planning is that life insurance is almost always a component, and attorneys can help clients understand this (which is nice). The opportunity in this area is huge because, like Medicaid planning, few advisors know how to give proper advice to clients who are looking to sell a business.
