This $400k IRA mistake doesn’t have to be your client’s mistake!

Leonard Smith recently reminded me of the basic sales presentation I learned more than 30 years ago and while I have deviated to differing degrees over the years I have kept the time tested presentation the same. Leonard Smith’s recent story reminds me why I have stuck to this basic presentation, I’ll tell you who Leonard Smith is but let me lay out the simple presentation I learned years ago to help you catch why Leonard Smith’s story brings the value of this presentation home.

So you have an appointment with a prospect, we’ll do a typically senior profile client, husband turning 65 in five months from the appointment date, he will be retiring from the company he has worked at for the last 25 years, his wife is 62, she works part time and will continue to do so when her husband retires, they own their own home with a small mortgage left, less than $50k, he will get social security, a pension from work, he’s not sure about his health benefits from work, they are healthy yet take a couple of medications. They have two grown kids, one lives’ close, the other out of town, each kid is married and together they have 5 grandkids.  This is the wife’s only marriage, it is his second, the first only lasting 4 years when he was in his late 20’s, he has life insurance from work equal to his pay, he has a small, 25k term policy that will end when he is 70 and his wife has a small policy they took out when the kids were small.

You ask for them to have all their insurance plans out for you to review when you arrive, everything, life, health, work   benefits, ancillary plans, car insurance, and any insurance plan they are paying for or use to pay for. After taking a few minutes (less than 30 minutes most of the time) you get with them. On a legal pad or portable white board (use to carry one in my briefcase) you draw out this simple chart:

In each block you ask “When you get sick or have a medical problem, who do you usually go to?” The answer of course is a doctor, you then ask the doctor’s name and write it in the block, if they don’t have a specific doctor then you write in “Doctor”, you repeat the question for dentist and either the person who does their taxes or if they do their own taxes who they would see if they have a legal problem, either write that name in or write “Lawyer”. Now in the final block you write the first name of all the different agents on all the different policies you have reviewed, this is one of the reasons you want all the policies they have, there is another, more important reason also, we’ll get to that.

Then you say “First I want to thank you for having all your policies for me to take a few minutes to review. After reviewing them I have a couple of concerns I wanted to present to you, it looks like in the areas that are most important to you, the areas that affect you and  your family you have a professional handle things for you, if you get sick or hurt you go to [doctors name, or state doctor], if you have a dental problem you go to [state dentist name or state dentist] and to make sure you don’t have a problem with the IRS you have your taxes done by [or if they do their own taxes you state if they had a legal problem they seek the advice of then state the lawyer’s name or state lawyer], does that look true to you?” They will answer “yes” because the answers you have written down are theirs not yours.

Then you point to the first names you have written in the last block and say “yet in the areas that could have the most devastating financial impact on you and your family, that could affect your ability to pass on the estate you have worked so hard to create you don’t seem to have one professional you depend on, does that seem true?”

At this point you draw a circle around all the agents names, when they look at each other and say yes or they never thought about that you then say as you draw that circle around those agents names “I’m here to apply for that job, is that ok with you?”

You have now taken the mantle of creditability of their doctor, dentist, tax expert or lawyer and put it on your shoulders. When they say yes you can apply for that job as the person they trust to advise them on these important matters you now give them three things for free.

You tell them you reviewed the policies they provided and three things jumped out at you. So here are the three things I have always looked for and rarely did not find, beneficiary wording on all policies, policies where they may be or are paying for duplicate coverage or will be paying for duplicated coverage and do they have a current, executed will/trust.