July 24, 2007

Chemistry and Credentials

I am always doing that which I cannot do, in order that I may learn how to do it.
--- Pablo Picasso

Most of the advisors I meet are "old" (46+ this year, 47+ next year,...). It's a pleasure to meet younger advisors in their 20s and 30s. Such contagious energy and enthusiasm. Such promise.

How can younger advisors succeed in today's competitive world? Chemistry is certainly an important part of selling. So are credentials.

Which Ones?
Credentials are really brands. Here's what I've encountered among advisors: ASC, BA, BSc, CA, CFP, CGA, CMA, CH.FC, CIM, CLU, CMA, EPC, FCIA, FCSI , FLMI, FSA, LL.B., MA, MBA, MSc, PFP, RHU, TEP. That's quite a list. Some of designations are explained on the Advocis website and the Riscario wiki.

What are the most common designations? For advisors in the lower end market (annual premium under $10,000), the answer is "none" (no designation at all). In the affluent market, I see CFPs and CLUs. Is there a lesson here?

More important than the designation is what you become while earning it.

Best Path
Here's the best path for newer advisors, a CFP followed by a CLU.

The CFP (Certified Financial Planner) establishes credibility and looks like the entry level designation for serious new advisors. At Fanshawe College in my hometown of London, Ontario offers a program to prepare students for their CFP examination. Other colleges may too.

The CLU (Chartered Life Underwriter) builds and demonstrates your expertise.

For additional specialization and differentiation, there may be value in
  • RHU (Registered Health Underwriter): since Canadians are worried about critical illness, disability income and long term care
  • EPC (Elder Planning Counsellor): since Canadians are aging and those age 55+ have unique needs
At some point, stop. Business card have only so much space.
How is education supposed to make me feel smarter? Besides, every time I learn something new, it pushes some old stuff out of my brain. Remember when I took that home winemaking course, and I forgot how to drive? --- Homer Simpson
Why Now?
The best time to earn credentials is shortly after graduating from college or university, while you're working. You'll still have the discipline to study. Your employer may pay for your courses and pay you more upon completion.

There's an added bonus. When you're studying, you don't have time to spend. So you can build up a financial nest egg at the same time.

July 17, 2007

How Accountants Feel About Insured Tax Strategies

Americans like to make money; Canadians like to audit it. I know no other country where accountants have a higher social and moral status. --- Northrop Frye
In financial services, accountants are the most trusted financial advisors. In today's specialized world, few accountants understand the many creative ways that life insurance can be used to reduce the financial risks --- including overpaying taxes. So our proposals don't get endorsed. Our clients (and theirs) lose.

Here are thoughts from recent discussions with accountants.

What Accountants Say
At 13 letters, 'life insurance' is the longest 4-letter word. There are many negative connotations. Since advisors are paid on commission, there's automatic skepticism about the solutions. Whose best interest is being served?

Accountants see themselves as professionals. They worked hard to get their accreditation. They want to deal with other professionals. Advisors who lack credible designations (e.g., CFP or CLU) face tougher challenges.
His card says 'executive' but it mumbles 'just a salesman'.
--- Jane Siberry, Extra Executives
When the words 'tax' and 'insurance' are used in the same sentence, the client's turn to their accountants for advice.
My money goes to my agent, then to my accountant and from him to the tax man. --- Glenda Jackson (actress)
Clients want aggressive recommendations. Accountants acknowledge this. But they're busy and learning about insured tax strategies takes time.

As we know from Investing 101, with risk comes reward. When asked to endorse insurance strategies, accountants face risk but where is their reward? So what is their incentive for taking the risk?

The Result
For insurance tax strategies --- directly or indirectly --- accountants often find it's safer and easier to say "no". Which is what their clients probably expected.

July 9, 2007


“We’re here to put a dent in the universe. Otherwise why else even be here?” --- Steve Jobs
What can we learn about giving great client presentations from Steve Jobs of Apple? BusinessWeek shares five lessons.
  1. Build Tension
  2. Stick To One Theme Per Slide
  3. Add Pizzazz To Your Delivery
  4. Practice
  5. Be Honest and Show Enthusiasm
Yes, consumer products like the iPhone and iPod are different from insurance policies. And we're not Jobs. Let's look at a couple of the lessons in more detail.

One Theme Per Slide
Would you argue this suggestion? Yet this is rarely done. Many times
  • the fonts are too small to read from the back of the room
  • the fonts, colours and graphics don't project well under some lighting conditions
  • there's too much information crammed onto the slide
  • the content is bullet point after bullet point with no visual stimulation
  • there are columns of figures that are too small and it isn't clear what to focus on
Often, the slides have two conflicting goals. They are the speaker notes and the audience's handouts. As your notes, they can have more information than the audience needs to see and not enough for them to use for future reference.

There's a solution for presentations you're likely to repeat
  • use the overlooked PowerPoint presenter view so you see speaker notes and other controls on your screen and the audience sees only the presentation slides
  • design handouts which are different from the slides (useful for other situations too; shows attention to detail which helps set you apart)
Many a presentation lacks passion. Maybe we think this makes us more professional than "salesy"? The delivery is usually competent but not very compelling. If selling is a transfer of enthusiasm, aren't we hurting ourselves by using less energy?


July 4, 2007

My Second Anniversary In The Field

Now the years are rolling by me,
they are rockin' even me.
I am older than I once was,
and younger than I'll be.
That's not unusual. No, it isn't strange.
After changes upon changes,
we are more or less the same.
--- Simon and Garfunkel, The Boxer
It's my second anniversary of working in the field. That's after spending 21 years in "ivory towers" of various insurance and consulting companies.

Actuary, Individual Insurance
National Life of Canada officially disappeared into Industrial Alliance Insurance and Financial Services on June 30, 2005. I'd been at NL for 14 years. Goodbye to a corner office with a magnificent view north to Queen's Park. Goodbye to my 10 staff, the entire Marketing Actuarial department. Goodbye to product design, pricing, reinsurance, illustration systems, SaveTax websites, disaster recovery plans, Standards of Sound Business Practice, budgeting, performance appraisals. Goodbye.

Watching a company crumble is traumatic, especially as friends and colleagues were terminated. My cabinets were filled with files on the dozens of life and health products I'd created, marketed and supported since joining National Life in 1991. I threw nearly everything away. Those accomplishments meant nothing now. Processes died after years of kaizen (continuous improvement).

I used to be a key decision maker. I had tremendous authority. I had considerable leeway to experiment. I had many ideas. I had trust. I had influence.
If I am what I have and what I have is lost, who am I?
For 10 years, I'd reported directly to the Senior Vice President & Chief Actuary who reported to the President. Naturally, my aspirations were to continue climbing further up but the company disappeared. My ladder lead nowhere.

I like change for the sake of change. I've been an agent of change. Even so, times were traumatic. Luckily time heals and memories fade.
He carries the reminders of every glove that laid him down or cut him 'til he cried out in his anger and his shame, "I am leaving, I am leaving" but the fighter still remains. --- The Boxer
You may not be at the right place. You may not be at the right time. However, you can be the right person.

As my old world collapsed, a new opportunity emerged: a need for advanced marketing support in the field. I had no sales experience, but I had many portable skills, learned quickly and had deep knowledge of the high-end market from a head office perspective. Being an actuary was a definite advantage, a source of instant credibility.

Director of Advanced Marketing
On July 1, 2005, I became Director of Advanced Marketing, supporting National Accounts, Special Markets and later MGAs too. I'm glad. My life is much richer.