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Financial Planning Month-October

October is Financial Planning Month

The purpose of an annual review is to make sure your clients remain focused on their goals and adjust accordingly. But every now and then, a client will call you mid-year asking to change something carefully prepared for them. You know what I’m talking about. A client you have known for a while. A reasonable man or woman. They come in and say they just heard about this great product on TV. They really want it. You stare at them, stone-faced. It came out of the blue. You are familiar with that product. You know it is not for them. But they are enthused about it. More importantly, they demand the product! What do you do?

Don’t Panic!

The most important thing to remember is: Don’t panic! It is the rare client that has a decent understanding of what we sell. It is a rarer client that is competent on it. That’s okay! Advertising is meant to get people excited about something and inquire about getting it. But they hired us for a reason. We are there to make sure people do what is in their best interests, even if they don’t understand that yet. It is never fun to tell someone who trusts your advice that they are barking up the wrong tree. But they come to us for just that reason. Fortunately, it will not be hard to get this message across.

Remind Them of What Is Important

Revisit your goals for why the coverage they have was taken out. Are they saving for retirement? Funding a child’s education? Protecting their family from a disaster? A business catastrophe? Either they came to you or you went to them and originally they understood why they chose to work with you to protect themselves. Always remind them why they chose to do what they did in the first place.

Find Out What Changed

Here’s the meat part of the conversation. Find out what changed. Was there a change in the family? Business situation? Financial situation? Any number of things could prompt something out of the blue like this. However, an unfortunate fact of living today is it was simply this came up as an advertisement which brought about a question they never knew to ask. They come to you for the answer.

Take their concern seriously

We always believe that if a client takes the time to contact us with a question then it is serious enough to warrant our attention. No matter what it is, if it has to do with the business of insurance, no matter how off the wall, we treat it as if they were coming in and asking us the most important question of their lives. Listen attentively, ask follow-up questions. Write it down. And if you genuinely do not know what they’re asking about, do research and get back to them.

Time for the Pros and Cons

Advertising has convinced your client they are not getting everything they could. Time to go over the pros and cons of what they’d get vs what they’ll give up. In my case, I am a broker, so it is part of my job as I see it to have as many quality varieties of my product as I can. In my case, it is very easy to pull out the advertised product or get my hands on a summary of their benefits. But you might not have that flexibility. In that case, make sure you know what you bring to the table and have those discussions ready. Costs, projections, realistic scenarios. Can your clients live with those changes?

In my case, I’m a Medicare-related health insurance broker. Most of my career, the discussion has been centered around the medical costs of a product called a Medicare Supplement vs medical costs of a Medicare Advantage plan. But this last year, the public has been overcome with commercials about dental coverage additions given on one of those types of plans. A great deal of my time has been spent this year acknowledging the importance of coverage of dental insurance while reminding them they are potentially altering the coverage of insurance which would fully pay a bill if they have a heart attack, cancer, or a broken hip in favor of free teeth cleanings at only selected network dental providers. In each of these talks, I have made sure to review the costs and benefits of what they have while going over potential new costs on their medical benefits if they make that change. In general, almost all make the decision not to proceed any further. Although some do, and I am fortunate to be in a position to make that change for them if they so desire.

But this doesn’t just apply to my business. How many clients have called in because they saw an ad for getting half a million dollars in term life insurance for $29 when they’re paying $250 a month for dividend-paying Whole Life with you? Or a client is watching an investing “news” show saying it is a great time to buy a particular fund and they are on the phone with you the next day wanting to alter a retirement portfolio perfectly balanced for their needs? The purpose of advertising is to get clients to think about the advertiser’s product, and in that, commercials today are doing a spectacular job. But your job is to bring your client back down to earth and remind them of what is important. Doing it effectively and in a respectful manner is the hallmark of a respected advisor and what differentiates us from our competition.

Elie Harriett, ChHC, a loyal NAIFA member since 2004, is Co-Owner at Classic Insurance & Financial Services Co. in Mansfield, OH.

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