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Simplifying the complex

Robert L. Avery II, CLU, ChFC

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You could certainly presents clients with pages and pages of information. Is that the best way to communicate your value, though, especially if it will only make clients more confused? Avery explains how a one-page financial plan and a simple contrast between two hypothetical jobs can help simplify decisions for clients.

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What I have noticed more and more over the years is how much paper we need to have clients see and sign. Our compliance departments and underwriters want all the t’s crossed and the i’s dotted. This is good for us—it protects us from lawsuits and provides disclosure. However, have you ever had a client look at you after you’ve gone through your fact finding, research, and a proposal fit for an accountant or a lawyer with that deer in the headlights look? Moreover, have you had clients come in with some other planner’s plan that they just spent thousands of dollars on and ask, “What is this trying to tell me?” At this point, I usually say, “It’s telling you that you need to save more and insure more in order to protect your family and retirement. And I can help!”

Next, if you have done a bit of an investigation on your clients or prospects, you know a fair amount about them: where they live, where they work, their position, maybe their marital status, children, and so on. After you have gathered all this information and more, you can now proceed to give them the one-page financial plan.

I say, “Mr. Prospect/Client, I am going to offer you two jobs. They both have the same hours, the same duties, the same work conditions, and even the same boss!” (At this point, I draw a horizontal line and then a small vertical line. [visual])

I say, “Job A pays you $100,000/year, and Job B pays you $85,000/year.” Then, I ask them a very telling question: “Which job do you want?” If the client says Job A, you know you are dealing with a very smart individual. If the answer is Job B, you may wish to reevaluate your relationship with this person.

Anyway, I continue with “I’m sorry, but this wasn’t a fair question. I forgot to tell you, you only get the $100,000 while you are well and working. However, if you are sick or injured, Job A pays you nothing and Job B pays you $66,000 in disability income, but that is not a reason to jump to Job B. But wait, there’s more.” (I continue to write numbers above and below the lines, putting zeros on the line of Job A.) “If you should die, Job A pays you nothing, but Job B pays your family $500,000 in life insurance. But wait, there’s more! If your children want to go to college, Job A pays nothing toward their education and Job B will provide $45,000. But wait, there’s still more! If you make it to retirement, Job A pays you nothing in retirement, and guess what? Yes, Job B will pay you $25,000/year for 10 years in retirement. Now which job would you like?”

Hopefully, the client likes Job B, and you can start filling out the reams of paperwork or, better yet, have your staff fill them out. Of course, you have to do your due diligence and work out the numbers before your presentation. Job B numbers will change, both in the starting salary and/or the results, based on age, health, number of children, assumed rate of return, and so on. Would this work for older couples? You bet. Just change the focus to either long-term care or passing on a legacy. Will they buy the whole plan? Who knows, but at least you have laid it out in an understandable and comprehensive visual.


Robert L. Avery, CLU, ChFC, is a 33-year MDRT member with three Court of the Table honors. He has served as president of both NAIFA–Denver and NAIFA–Colorado. He has served MDRT in various leadership roles, including the Divisional Vice President for PGA in 2011, and as Trustee of the MDRT Foundation.


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