My advice to you: Become really good at something.

Financial advisory work, with its various licenses, has become similar to health care in one respect. By the very nature of health care, practitioners have been forced through the centuries to become specialists.

It’s interesting to discover a neurologist knows nothing about podiatry. After all, aren’t we talking about health care? Sure. But when I had ingrown toenails, I didn’t go to a neurologist. I went to a podiatrist. He solved the problem.

Thirty years later, I drove by his office. His shingle is still out, and he is still a podiatrist. Apparently his profession is serving his clients well.

Why aren’t more agents becoming specialists? One answer is we keep looking over the fence at the greener pasture. We are bombarded by wholesalers and marketing organizations that promise easier profits, bigger profits and less work. I remember a writer of the 70s named Erma Bombeck. She wrote an article titled “The Grass is Greener Over the Septic Tank.” The title tells it all. There is usually a reason the grass is greener elsewhere — it’s probably because it’s being fertilized. Magnificent promises usually aren’t as great as promised and there is almost always a catch.

Many years ago, I was impressed with an agent named Joe Gandolfo. He sold term insurance. That’s all he sold. He had an interesting philosophy. He found clients who felt that term insurance was a great product. He found clients in abundance. He also found clients who had a need for large term insurance policies. Joe made a very fine living selling term insurance. Can you do well just selling annuities, life insurance or any other single product line? Sure you can! How about asset-based long-term care insurance? Of course! How about Medicare supplements? You bet! Concentrating in one product line produces results.

Let’s take an example. There are several annuity products on the market that are excellent for use with an IRA. Most clients are not happy with the requirement they must take distribution on their IRA at age 70 1/2. With very low interest rates and no desire for risk, the IRA will most likely be reduced over time.

The painful process of paying taxes, for many people, is unpalatable. An annuity with a guaranteed death benefit annual increase can help to mitigate the tax loss at the death of the IRA owner. This takes some of the sting out of the required minimum distribution and the tax consequences to follow. Your client can potentially leave the entire original IRA to a spouse or other beneficiary even after the RMD has taken place for years.

Another solution is to “wash” the tax out of the IRA using flexible premium annuities. The client deposits the IRA into a fixed annuity paying say 3.5 percent interest (fixed). The client then withdraws a small amount from that annuity each year. That amount should be calculated to not break the ceiling to the next tax bracket. The client pays taxes in his or her current tax bracket. The client deposits the remaining after-tax amount into another flexible premium annuity as a Roth IRA. The newly tax “washed” money will now grow at 3.5 percent tax-free. Column 1; the IRA goes down over time. Column 2; the Roth IRA grows over time. The balance shifts to nontaxable and we have a happy client. By the way, we are paid twice on the same money, so we are also happy agents.

A bonus for the client and agent is the fact that we are looking out for the client’s best interest. This one idea alone, as a specialist and expert in a narrowly focused practice can create great marketing opportunities and referrals.

There are many other products and concepts available that make you an expert. When you know more than anyone else about a subject and solutions to problems, people will want your services. When they are very satisfied with your solutions, they will also refer others who have the same problems to solve.

See also:

DOL fiduciary rule will change financial advice

Why clients fire their financial advisors

These female clients love their financial advisors

 

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