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Building wealth vs. avoiding poverty: Getting the focus right

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We insurance and financial service professionals do not make people rich. Our primary responsibility is to prevent them from becoming poor.

Many agents and advisors struggle to find success in the industry because they begin their relationships with prospects and clients using a wrong premise. They think clients want to build wealth, but greater success will be achieved by preventing poverty. Why?

Poverty can be prevented by using guarantees. Wealth-building requires positive outcomes in uncertain circumstances. Positive events must occur that are completely out of our control.

That is why 50 percent of Americans arrive at death or retirement with nothing saved. Nothing! 75 percent arrive at death or retirement with less than $28,000. It is impossible to have a quality standard of living in retirement if you are trying to make $28,000 support 20 to 30 years of retirement. A majority of Americans will have to face that challenge.

You can use that information to get appointments by asking a few simple questions. I first ask permission to ask the questions: “Mr. and Mrs. Client, may I ask you a few questions?” When they say yes, I ask, “If you had a choice, would you want to be rich or would you want an absolute and positive guarantee you will never be poor?”

A few times they say they want to be rich. So I ask, “If I could show you a way to do that faster than you could ever dream of, when would you want to get started?” They always say now!

But 98 times out of 100 they say they want the guarantee they will never be poor. So I ask, “If I could show you a way that even if you completely ran out of money, you would never run out of income, would that be important information to know?” They always say yes!

We sell products that can do that, but Americans do not know that we sell products that guarantee lifetime income. We will not get Americans to understand what we do unless we ask them if this is what they want.

Many agents and advisors argue that my line of questioning will not bring them success. They argue that they must build wealth, achieve great returns and show their clients how smart they are.

Science and recent studies disagree. An overwhelming majority of Americans say that they are much more concerned about losing money than they are about missing out on gains.

I almost lost a long-time client — one who had been with me for 20 years — because I did not understand that important concept. We had built a $250,000 original investment to over $600,000 using safe multi-year guaranteed annuities.

I recommended putting $10,000 in a more aggressive mutual fund to make higher returns than I made him in the annuities. At the end of the year, he received a statement saying his mutual fund was now valued at $8500. I had lost $1500. He almost fired me!

I pointed out that I had made him $350,000 in his other investments. I did not understand why he was so angry about this $1500. He told me that he was more concerned with losing his hard-earned money than he was with taking any risk to make money. He added that I ever lost any of his money again he would fire me.

As I had these important conversations with other clients, I discovered that nearly all of them felt the same way. It was a tremendous learning experience.

Don’t forget: Your primary responsibility to your clients is to help make sure they will never be poor.

Read also these columns by Van Mueller:

What women planning for retirement want: income guarantees

Doing right by clients in volatile markets: 3 examples

The U.S. debt clock: an important tool for advisors

20 issues to inspire your prospects & clients to take action


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