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Conducting Business Virtually

How to Stay Connected While Social Distancing

As social interaction is restricted over the coming weeks, we must rethink how we conduct business. Face-to-face meetings are no longer an option, yet clients still want to be reassured of your commitment to them and their financial objectives, particularly during such uncertainty.

Thankfully, meaningful and thorough business can be carried out remotely through virtual meeting platforms. Although the basic framework of in-person and online meetings are the same, there are distinct preparations you should make prior to setting a virtual appointment.

The Three Myths of Annuities

Three Myths of Annuities

In today’s customizable, satisfaction-guaranteed world, it’s no surprise that investors, too, want it all. They expect retirement solutions that provide guaranteed income, while still insulating them from downside risk.

There is a solution that offers both: annuities. But even though annuities are one of the only vehicles that deliver income and risk mitigation, surprisingly only 42% of financial advisors recommend them as part of retirement and income plans. Misconceptions or outdated views on annuities may be keeping advisors from offering the financial stability their clients need. Dispelling the most common annuity myths is the first step in remedying this.

MYTH 1: Consumers hate annuities

Truth: Although some clients may not fully know the benefits of annuities, or hold outdated, incorrect opinions, a growing number are becoming educated and are choosing to add fixed indexed annuities (FIAs) to their retirement plans. In fact, recent annuity sales are shattering previous records. According to the LIMRA Secure Retirement Institute, FIA sales were $20 billion in the second quarter of 2019, 14 percent higher than prior year results.1 Indexed annuity sales are expected to grow by double digits to about $96 billion by the end of 2023, a 38 percent gain over 2018.2 Those who understand the benefits FIAs can provide — income protection and stability with little or no maintenance — are not surprised.

What are the Living Benefits of Life Insurance?

You already know the most common reason to buy life insurance—to financially help those that are left behind. But did you know that life insurance can also provide benefits during your lifetime? By purchasing a cash-value life insurance policy, you can better manage your money for what matters most: a greater quality of life for you and your family.

Tax laws change. What may be a favorable tax environment now may look completely different when you retire. But in a cash-value life insurance policy, savings accumulate tax-advantaged, helping to diversify your retirement income’s taxation, ultimately preserving more of your hard-earned money.

And, as more of us are living longer, there may be a greater need to access your cash-value policy’s death benefit for medical reasons, a decision that may help protect your assets from depletion in the event of a chronic or critical illness.

This video illustrates how carving out savings today for a cash-value life insurance policy may help protect your income in the future. Download and share this video and encourage friends and family to make an appointment with a life insurance advisor for more detail.

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The Many Shades of “Maybe”

The Many Shades of Maybe

Clients fall into the psychological traps of investing all the time. They stick to old ideas and protect earlier choices, even those that aren’t financially beneficial. They follow the herd mentality, investing in the latest, hottest product without concern for how it may fit into their broader financial plan. Or they may hold as truth the advice of a friend or family member whose financial goals don’t match their own.

These restrictive mind-sets can be exacerbated by immediate access to online advice, whether sound or not. Prospective clients can search infinite opinions on a product or topic, weigh pros and cons, and—after a dash of intuition—make a decision, all before even meeting with you.

Even during a meeting, these mind traps may lead clients to say “no” before they’ve fully considered the option you’re offering. That’s because individuals are programmed for financial survival before financial growth, instinctively trying to stock and preserve.

Heins Woller-Anger Scholarship

HCF Heins Woller Anger Scholarship

HighCap Financial is always proud of the integrity, generosity, and consideration that our advisors exhibit not only with their clients, but with their communities. A prime example is Erv Woller who, along with his partner Bob Anger, have funded the Heins Woller-Anger Scholarship for 30 years through the University of Wisconsin-Madison’s (UW-Madison) School of Business. The goal of the scholarship is to not only promote the industry by providing financial assistance to select students in the Risk and Insurance Department, but also to honor the late Richard Heins, a former UW-Madison Risk Management professor whose passion for risk management was infectious.

Erv, who was a student of Dick Heins while at UW-Madison, is still impacted by the professor’s intelligence, dynamism, and desire to attract others to the industry. According to Erv, “Dick was prolific, impressive, and extremely charismatic. He was department chair, had a PhD, a LLB, an MBA, CPA, and a CPCU. Before UW, he taught at UCLA, and later became Chief Executive Officer at Cuna Mutual in Madison. He even co-authored the risk management textbook we used at UW-Madison.”

Dick was instrumental in growing UW-Madison’s Risk and Insurance Department. “He was a salesman. He brought in a lot of kids that might not have decided to go into our industry had it not been for Dick selling them on the fact that insurance is a good industry to be in and a very noble calling. That was the impetus behind honoring Dick with a scholarship.”

Long-Term Care: The Good, the Bad, and the Necessary

Advisor with couple

Long-term care (LTC) is probably one of the most important and perhaps sensitive discussions you can have with your clients. There are so many variables—your client’s actual vs. estimated longevity, current vs. future health, current vs. future lifestyle—each of which change the equation. But it’s also the emotion that’s attached to the discussion; every one of your clients knows they will eventually pass away, but thinking about how, when, and in what way always brings some consternation and even avoidance.

The approaches that you as an advisor can take to this sensitive topic are also numerous. Should you present clients with a total lump-sum amount, based on their current health and predicted longevity, calling attention via sticker shock? Should you narrow focus to smaller, near-term, known costs? Or, should you consider dividing their retirement into three main categories—active years, moderately active years and non-active years1—to soften the conversation? Regardless of your approach, one thing is certain: longevity and LTC should be discussed with all clients, especially those aged 50 or older, as part of a holistic and proactive retirement plan.

Managing Long-Term Care Risk for High Net Worth Clients

Managing LTC Risk for HNWC

Why would you recommend that clients with millions of dollars in invested assets spend money on a long-term care plan? Because it helps remove the risk from their portfolio.

With affluent clients, it’s not whether they can afford to pay for potential long-term care needs. But is it an expense they want to incur at an unpredictable time in their lives?

Long-term care concerns are similar no matter your clients’ net worth.

  • They may equate long-term care with a stay in nursing homes. In fact, 76 percent of long-term care insurance claims begin with home care or in assisted living facilities.¹
  • Another factor to consider is that long-term care is just that – long-term. About one-third (34 percent) of LTC insurance claims last at least two years and 13 percent last more than five.²
  • Active baby boomers may expect to remain healthy throughout retirement, but Americans turning 65 face a nearly 70-percent chance of needing long-term care services in their lifetime.²
Sources:  ¹ American Association for Long-Term Care Insurance; ² U.S. Health and Human Services Department

Self-Insuring Is Self-Funding

High net worth clients don’t have the affordability objection. But their mindset may be “If the time comes, we’ll pay for it ourselves.” That perspective could have an adverse effect on their portfolios if and when they do need long-term care.

Ask your clients if they believe another downturn in the market could happen. There’s also the likelihood that they could experience an unexpected health event. There’s simply no guarantee that their need for care would come at a time that’s either convenient to them or to the performance of their portfolio.

It may make sense to concentrate on insuring affluent clients’ investments with product solutions that can minimize their risk of absorbing the entire cost of care.

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