The No. 1 sales idea of 2014

Case study No. 2: Investing in a life-long client

Tewalt has a 100-year-old client, who has been invested for 37 years while her husband was alive, and 22 years since her husband passed away. “Before her husband passed away,” Tewalt says, “he told her that he wanted me to handle her affairs when he was gone.”

Years ago, while having lunch with this client, Tewalt asked her what she wanted to do with her money. She said she wanted to endow the maestro’s chair for the local symphony, which cost $100,000, but she didn’t feel comfortable writing a check for that amount.

He asked her, “What if we set up an account where you would be unable to get at your principle, but you would have income guaranteed for the rest of your life? And, when you die, the symphony will get the $100,000?”

Tewalt met with the president of the symphony to ask him if they would honor his client if she set up a charitable remainder trust. “My client called within a few minutes to tell me that several board members had already called her to thank her for the gift,” Tewalt recalls, “and we hadn’t actually done anything yet.  I told her, ‘I guess they liked the idea.’”

The symphony did not want to pay to have the trust documents drawn or for the ongoing trust accounting.  Twealt asked his client if she would be willing to pay for the documents and the accounting fees,” Tewalt says, but she said no.  He then called a friend whose company does tax returns for charitable trusts. “That friend called another charity who agreed to pay for the documents and the accounting for the rest of her life (she was in her 80s at the time), in return for her leaving another $25,000 in the trust to them,” Tewalt says.  “She was happy to do this, so the deal came together and everyone was happy.”

That client is about to turn 101, is living life to the fullest and loves to give, according to Tewalt. They have a standing phone meeting every Friday morning. “I love helping people reach their dreams and live lives full of meaning and purpose,”Tewalt says. “Each one is different, but each one is important.”

Case study No. 3: Working within the comfort zone

A few years ago, Tewalt worked with a married couple who were both public service employees and had pensions and maybe $250,000 of investable assets at the time. “They asked about a Roth conversation a couple of years ago when they were all the rage,” Tewalt says. They looked hard at the numbers to determine how long it would take them to recover from the tax implications. “They wound up not being comfortable making the switch,” Tewalt says, “but continued to grumble politely about having to take RMDs and put them in the bank at less than 1 percent interest.”

In response to their concerns, Tewalt suggested using the RMDs to purchase life insurance, so that they could enhance their financial legacy to their children. “It’s just all about doing what feels comfortable to them,” he says. “When we opened up the conversation we looked at everything. We also talked about long-term care insurance. We finally selected a second-to-die hybrid life insurance policy that would provide long-term care insurance for them based on the death benefit of the policy for the rest of their lives. It’s kind of a unique product, but it’s what they settled on,” he says.

“Over the years we had used annuities, life insurance and a little bit of the market, but because their income was strong due to the pensions, we didn’t have to take much risk. Now, when they pass away, they are going to leave about $1.6 million to their kids,” he adds, “and most of that is going to be income-tax free.”

“On the day that I delivered the policy to them and they walked out of the office, the woman turned around and said, ‘Are you aware that it has taken us a year and a half to reach this decision?’ But what I like to do is to get clients to have an encounter with the situation we’re dealing with,” Tewalt says. “I want them to have the ‘aha!’ moment.”