The transparent advisor

On April 13, 2008, Dateline NBC aired a special report titled “Tricks of the Trade.” Based on the popular “To Catch a Predator” series, the episode set up a sting operation with a biased motive — to entrap and document annuity advisors giving out unsuitable advice to seniors.

Let’s face it, for years the mainstream media has targeted advisors who do the wrong thing, particularly those who treat seniors and their nest eggs improperly. But having Dateline NBC air a show on bad-apple advisors, well, that put a big bulls-eye on the back of everyone selling “safe” products.

See our infographic: CSI: Bad advisor edition

The telecast didn’t make a dramatic and immediate impact. There were no Prohibition-era FBI tactics with G-Men kicking down doors and dragging annuity advisors to a jail cell. Just the same, advisors and the insurance industry took notice of the telecast and its aftermath. The counterattack to such an affront to the industry was a simple one: do the right thing. How to do that, however, is not always as easy as merely talking about it.

One advisor’s reaction

Sean Lee is a young advisor today and was an even younger one when the Dateline piece aired. Like many advisors, he spent that Sunday night at home glued to the TV, waiting to see what the episode would uncover.

“I couldn’t watch the entire show because it made me sick,” says Lee, president and founder of Murray, Utah-based SPL Financial, Inc.

“Seeing how so called ‘advisors’ were taking advantage of people that trusted them with their life savings…Those savings were being put into products that were sold to them under false pretenses and may or may not have been in their best interest. That’s what made it so hard for me to watch.”

But, like many advisors, he watched, at least some of it. He felt an obligation and a curiosity about what might transpire. At the time, Lee was really getting his feet wet in the industry and that’s not the type of exposure you want for your business. But the telecast had a lasting effect on how he viewed his practice and profession.

At the time, he was just growing his business and some of his clients had questions regarding the show. Lee says he met the questions head on. He talked in detail about what happened to the families in the show, why it happened, and why it wouldn’t happen with his clients.

“I made the decision during that period that no matter what happened there would never be a time where our values, ethics and how we plan would be compromised,” says Lee. “The families we work with have spent a lifetime accumulating the assets they have, and they deserve to have the very best plan for their situation.”

Moneyball

Lee is a former baseball player, and he looks at his planning practice in sports terms. “I was an outfielder and a pitcher, and I hit one homerun in the entire 24 years that I played baseball, and that was an inside the park homerun,” Lee says.

You see, he’s a singles and doubles guy, and he’s OK with that. “The big power hitters strike out a lot,” Lee says. “And I equate the markets to power hitters. They hit a lot of homeruns, but they strike out a lot, too.”

Lee says that many of his clients have $1 million-plus in assets and many more have $500,000-plus. But there are other prospects, families, who have worked hard all their lives, with maybe $200,000 in assets, and they’re not getting the planning opportunities they need.

“A lot of marketing is geared toward the $500,000-or-more families, but I’ve found there are a lot of families out there with maybe $170,000, and nobody’s ever sat down and helped them develop a financial plan.”

The plan, of filling in those niches that maybe too many advisors feel is not worth their time, is paying off for Lee.

In 2012, he submitted $6.5 million in annuities. This year, he’s on pace to ramp that up to around $15 million. He also said he’s set to hit around $13 million in managed money. The goal was to have $20 million in assets for 2013, and Lee might be looking at $28 million.

The efficiency expert

Much of that success is owed to how Lee is wired. “I tell a lot of people I’m an engineer stuck in an advisor’s body or an advisor stuck in an engineer’s body.” However it goes for Lee, it’s safe to say he’s organized and very processed-driven, much more so than most advisors out there.

When he began his practice, he took time, lots of time, in the planning phase of how he wanted to shepherd prospects through the process of becoming clients. “When someone steps in our office for the first time there is a breakout of tasks from that initial introduction all the way to when someone becomes a ‘family’ we represent.” (Lee refers to all of his clients as family, a term he’s doggedly stubborn to stray from.)

He says he set up the processes so nothing falls through the cracks. If he says he’ll contact someone in four weeks, it’s in his system and the contact takes place.

But more importantly, he says, it’s an accountability tool. “So, only way for things to not get done around here would be for the team to say: ‘Screw it! I’m not going to do it!’ ”

See also: An advisor’s code of ethics

Otherwise, the process runs a client through each step of the way. For his CRM (Client Relationship Management) Lee uses Redtail Technology–it lays out when to contact someone, when to follow up with material, even when to check in and simply make sure they’re happy with the relationship.

“In all, families (there’s that word again) hear from us 72 times a year,” Lee says. They receive a weekly newsletter and various phone calls and emails. It’s all set up in the system Lee created to make things run smoothly. Those 72 touches may seem like a lot, but Lee wants clients to know their money is taken care of and that he’s looking out for their best interest.

At any time, he says, consumers can call or come in. “If the market gets beat up a little bit we’ve already got our team of money managers working on that. Their income is going to be secure because we’ve already planned and have that taken care of in an annuity.”

A land where transparency is king

“My mother was a schoolteacher and she taught me that if you do things right, you’re going to be OK,” Lee says. “When she worked with kids she would teach them those true fundamentals of life and I brought that into my practice.”

He says advisors can do things one of two ways. “You can do things the wrong way and bring in families and make a lot of money short term. But long term it will blow up in your face. I’ve seen that happen here locally.”