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  1. 1. theVol. 7 No. 9 • September 2006 Official IARFC Publication Stephanie, Steve and Jarod Bailey H. B. Financial Resources Family Values, Business Success Serving Financial Advisors Worldwide
  2. 2. IARFC P R E S E N T S THE EIGHTH ANNUALFinancial Advisors Forum May 15 – 17, 2007 Finding Security in an Uncertain World Bally’s Hotel Las Vegas
  3. 3. in this issue 2 Register Letters Financial Planning Building 3 Interview: Stephen Bailey 2507 North Verity Parkway H. B. Financial Resources — Family Values, Business Success P.O. Box 42506 Financial Planning Family Makes Transition Middletown, OH 45042-0506 800 532 9060 • Fax 513 424 5752 6 IARFC Calendar of Events BOARD OF DIRECTORS 6 From the Chairman’s Desk Edwin P. Morrow, Chairman & CEO by Ed Morrow CLU, ChFC, CFP®, CEP, RFC® 9 A Clear Conscience Never Fears Midnight Knocking! Judith Fisette-Losz, Executive Director by Peter E. Liu Lester W. Anderson 11 Using Client Newsletters to Turn On the Powers of Influence MBA, RFC® by Lisbeth Wiley Chapman H. Stephen Bailey, President LUTCF, CEBA, CEP, CSA, RFC® 12 IARFC Financial Advisors Forum 2006 — Manila Philippines by Ralph Liew Jeffrey Chiew DBA, CLU, ChFC, CFP®, RFC® 13 Planning Your Fall Campaign for LTC Sales What You Should Know About Direct Mail To Make It Work Vernon D. Gwynne CFP®, RFC® by Wilma G. Anderson Derek D. Klock 16 Consumer Focus MBA, RFC® The National Financial Literacy Commision by Paul Richard Edward J. Ledford CLU, RFC® 17 Are You Pursuing the Wrong Market? by Ed Morrow Constance O. Luttrell RFC® 20 Compliance-Friendly Marketing Ruth Lytton Lessons Learned From Rogue Brokers MS, Ph.D., RFC® by Katherine Vessenes James McCarty, Secretary CLU, RHU, LUTCF, RFC® 22 8 “Fast-Track” Success Steps That Leave You Acting Like Sherlock Holmes Burnett Marus, Treasurer by Phil Calandra RFC® Rosilyn H. Overton MS, CFP®, RFC® IARFC Financial Advisors Forum Las Vegas, Nevada May 15-17 Ruben Ruiz Mark Your Calendar Now! ChFC, CLU, MSFS, CSA, RFC® Michael Zmistowski RFC® The Register (ISSN 1556-4045) is published monthly by the International Association of Registered _________________________________ Financial Consultants, Financial Planning Building, 2507 North Verity Parkway, P.O. Box 42506, Middletown, Ohio 45042, ©2006. It includes articles and advice on technical subjects, economic Wendy M. Kennedy, Editorial Coordinator events, regulatory actions and practice management. The IARFC makes no claim as to accuracy and does not guarantee or endorse any product or service advertised or featured. Articles, comments and letters are welcomed by e-mail to: Stephanie Langster, Administrative Assistant Application to Mail at Periodicals Postage Rates is Pending at Mansfield, Ohio 44901. POSTMASTER: Send address changes to: The Register, P.O. Box 42506, Middletown, Ohio 45042.The Register • September 2006 Page 1
  4. 4. Register Letters We welcome your comments, suggestions and ideas. INTERNATIONAL Please direct correspondence to: IARFC COORDINATORS Letters may be edited for length and clarity. Jeffrey Chiew Asia ChairTo the Editor: of the highly thought of professional. DBA, CLU, ChFC, CFP®, RFC® Without this form of advertising the JeffreyChiew@yahoo.comGood Ethics Don’t Make for Good Copy people of the entire world would think Liang Tien Lung about us in the same negative light as it China Development Organization (IMM)Just last week an article was posted does about the headline grabbing RFC®nation-wide about a group of brokers individuals that break the rules.filing false insurance claims intended However, we must also expose ourselves Ralph Liewto get their clients (or potential clients) to the media in an effort to show our Philippines Chairout of paying certain brokerage constituency that our practice models RFC®commissions. But how many articles are worthy of praise and that are kilhk@myjaring.netdetail how many millions of hours of practitioners are ethical, forthright Tony Balmori“ethics” training registered people. But we must also be cautious in Executive Assistantrepresentatives collectively participate our approach, as an astute member of tonybalmori@iarfcphils.orgin each year. the IARFC board of directors recently pointed-out, over emphasizing ethics can Jerry Tan Singapore ChairAnother article smeared the trucking also send the wrong message. CIAM, CMFA, RFC®industry about how many needless jerry@iarfcsg.orgfatalities “big rigs” cause each year on Much has been publicized aboutAmerica’s highways. Yet rare are the whether or not the financial planning Zhu Xu Longarticles about the many truckers who industry is a profession — with the China Chair, Shanghaireceive awards each year for driving definition of a profession being “a group RFC®250,000, 500,000, or even 1,000,000 of highly educated/trained people that iarfc-cn@immadviser.cnmiles without an at-fault accident. are governed by a set of rules-ethics.” Actually the definition of a society is Samuel W. K. Yung, MH Chair, Hong Kong and MacaoIn the opening lines of the movie Coyote what really should be applied here. CFP®, MFP, FChFP, CMFA, CIAM, RFC®Ugly, John Goodman’s character states, Derived from the Latin word societas“Oh look, four people murdered in The meaning a “friendly association with Dr. Teresa SoCity last night,” during a conversation he others,” it has today come to mean a Advisor, Hong Kong and Macaois having with his daughter about the group of people who agree to abide by a PhD, MFP, FChFP, CMFA, CIAM, RFC®perils of moving to New York City. He certain set of rules or behaviors. This director@iarfc-hk.orgthen comments that “shouldn’t that interdependent community then works Allan Wanheadline read ‘millions survive night in for the good of all who belong. The long RFC®The City.’” Even the character that he is and short of it is that all members of a admin@iarfc-hk.orgplaying recognizes that any situation can society must have the same ethicalbe made to sound better or worse than standards and agree to abide by them. Ng Jyi Weiit really is. Malaysia Chair This agreement can take many shapes ChFC, CFP®, RFC®It is all about framing. But in the world — oaths, codes of conduct, mission news, it is about attracting readership statements, etc., but how do we, as a Aidil Akbar Madjidor viewership. In a quick scan of 31 profession, ensure compliance with Indonesia Chairinternational “headlines” proffered by these agreements. Unfortunately, no MBA, RFC®, 18 of them mentioned either matter how hard we try — we can’t — not akbar@pavillioncapital.comthe death or wounding of people and 100%. Ultimately accountability is up to Lisa Soemartoanother four mentioned the battles in the individual financial professional. MA, RFC®Iraq, Afghanistan, or Lebanon. In the But, what we can do is laude, promote, lisa@pavillion.comU.S. news section there were articles and recognize those in the industry who,about the “killing spree” in Indiana, by all standards, uphold the values and Jeffrey Chenabout arresting foreign born students, principles we all hold so dear. Taiwan Chairand about a hospitalized anti-war RFC®demonstrator. So, what this journalistic To change the news is never easy, face says is that death and conflict it — conflict sells. I would just love to Preecha Swasdpeeramakes for good copy. one day read a national headline that Thailand Chair reads “$60 billion changed hands today MPA, MM, RFC®With all of the ugly, wrongful, despicable on the New York Stock Exchange contact@iarfcthailand.orgacts that make up the news, how can without a single incidence ofthe message that most brokers, truckers, malfeasance.” But I’m afraid for now Demetre Katsabekisand people make good, law-abiding, that just would not make for good copy. Greece Chairethical decisions? Word-of-mouth MBA, Ph.D, RFC®advertising for most of us in the financial Derek D. Klock, RFC® vie@otenet.grservices industry has been the hallmark Blacksburg, VAPage 2 The Register • September 2006
  5. 5. Interview: Stephen BaileyH. B. Financial Resources — Family Values, Business Success Financial Planning Family Makes TransitionThe president of the IARFC has been They fostered and groomed many of the matured adults. After my father sharedH. Stephen Bailey of Charlotte, North current financial planners. The old Life the problems that he had with financialCarolina since 2005. He has served on Underwriter Training council combined a advisors, I felt I needed to be in this areathe association’s board since 1994. He is modest amount of education with training of financial planning.involved in all of the projects of the IARFC and practical sales assignments. Manyand works closely with the CEO Ed Morrow. great producers owe their success today Our office is located in a Williamsburg styleSteve maintains a very successful practice to the old LUTC program. building that is very accessible for myas HB Financial and has been fortunate to clients to come to and once they get insidebring both his daughter Stephanie and son Were you successful at first? we have made it feel very comfortable.Jarod into the practice. What influenced you the most? Our clients have remarked that they feel like they are entering someone’s home. IWe asked Steve Bailey, when and where I had served as President of the Student never sit behind my desk when I meet withhe first entered financial services: Body of my College, so I felt that selling clients. We meet at a table where we can life insurance would be a snap. Well, share coffee, soft drinks and refreshmentsI had been working in the area of leasing after two months of friends crossing the and I always sit in my rocking chair. Wetrucks and truck trailers and finance street to get away from me, I found out often serve Moonpies with RC Colas, aleasing for ten years. During this period the comments my GA made about trying common snack in our part ofthe interest rates rose and the company I to make a living by selling to all my the country that manywas working for went into chapter 11 friends had some sense. remember from childhood orbankruptcy. I was “loaned” to the young adulthood. Formanagement consulting firm of Booze So I started offering Home Life’s newcomers it provides aAllen and Hamilton during the bankruptcy. “Planned Estates Program” and had great introduction!I was a liaison to explain in accounting good success for 14terms how truck leasing operated. I got years calling on older, For the past several years I haveinterested in how the principals of trucking more established hosted a weekly Radio programcorporations were able to pull so much persons. I qualified at 9:30 AM every Saturday, andmoney out of the corporation by using for Million Dollar this has helped establish ourpension plan and life insurance programs. Round Table for 12 reputation and make years. The first two us seemWhen the leasing company was finally years of making the “accessible.”liquidated I needed a job so I went to work MDRT, I could not Listeners are invitedwith Home Life of New York selling life afford to go to the to call in with theirinsurance to small companies like those I meetings, because questions and thehad been calling on. Then I started selling to young radio show doesoffering small defined pension plans for couples and business secure new clientscompanies with older owners. owners meant low premiums. who call in to the office. The mainWhat was your educational background? What were your major obstacles? value has been that it creates instantSeeking a career as a pilot or aeronautical Current cash flow was a problem but my recognition when some otherengineer, I attended Embry Riddle Air GA backed me by giving me a draw approach is made.University (now in Daytona Beach). I was against commission and he consideredable to do some flying and studied both the deferred first year commissions After writing articles for a senior focusedAerospace Engineering. After transferring as well as the renewals. That evened out newspaper for three years I decided that Ito Southwood College I completed a the cash flow, but it didn’t really address could take the articles and turn them intoBusiness Degree. the issue of how to get new high-caliber a book. We have just published the first clients. I still had problems getting into edition of “Dollar$ense, A Book forI enjoyed Home Life of New York because the Charlotte “good old boys” group since Matured Adults” which is being sold andthe General Agent, Ernest Barry, was known I was from another part of the State. So I also given out to get feed back as well asin insurance circles as having an unusually joined the Jaycees and became a very corrections. We hope to have a revisedkeen understanding of the life insurance active member in their various projects and updated version of the bookcontract and its advanced uses. Ernest becoming President of the local chapter published later this year.Barry, Sr. had been a general agent for and State Vice President. I started gettingHome Life and now his son was following in referrals from attorneys and CPAs. What are you enjoying most about thishis foot steps. Ernest, Jr. was a Phi Beta position?Kappa, so I felt I would get the best training Tell us about your current practicein the Industry and I was not disappointed. or position: Due to stress, my physician suggested that I take up golf. So several years ago IIt is too bad the life insurance industry I have a practice where I am doing what Ihas discontinued its training programs. enjoy most, and that is working with continued on page 4The Register • September 2006 Page 3
  6. 6. continued from page 3 Interview: HB Financialstarted playing nine holes at lunch time, Registered Financial Consultants be law and daughter, Rob and Robinfour days a week. I think my blood positioning themselves? Rodermund. I was impressed that thispressure may have increased! But I least was a family company much like theI have the time to have some fun. I play Baby Boomers have arrived better situation with Home Life where severalregularly with a group of retired Charlotte educated that any generation than has generations of the Barry family hadbusinessmen. They’ve become good come before them. We must be able to participated in the business.friends, and great centers of influence. offer them practical knowledge so they will be able to understand the issues. What was unique about Roy Henry’sWhat are your major frustrations? But, because they really can’t do-it- vision as the founder of FFP? yourself we must learn how to inspire theirI can’t get people to understand how confidence in retaining our services. Roy was one of the most visionary peoplemuch a Registered Financial Consultant in the industry. He introduced newcan help them. The advice, service and Where will the economy be moving in the concepts, tax strategies, etc. to theproducts we deliver are essential to their next 3-5 years, and what should financial profession. He was the first to introducefinancial comfort and independence. Our advisors be doing NOW? money management to the smallersociety grows more complex every year business. His advanced ideas placedand the likelihood of a consumer Our economy has changed with economic him at the top of his profession.developing and implementing a personal events in 2000, and as result of 9/11 He served as president of the plan, without professional help, and now with the challenges of steadily Roy’s son-in-law and daughter kept FFPis pretty rare. increasing oil prices. The Far East will play together after Roy’s departure until a new a greater role in a world wide economy, not board and president could take over.What attracted you initially to the IARFC? just in cheap manufacturing, but in all They both continue to play a major role in types of services. We will see changes the company.I wanted to be a part of an organization occur at an even more rapid pace then wethat had room for all types of financial have already seen in the past. The company has recently changedthoughts and would not dictate to its hands, how is that working for themembers. We welcome all designations What will be the impact of technology members?and the board has made a consistent on the practices of financial advisors?effort to welcome professional It is too soon to tell. We will get an updatepractitioners with a variety of backgrounds The practice of financial planning will be and have an opportunity to discuss that atand work styles. I ‘m proud of the fact less labor intensive in terms of plan FFP’s meeting in St. Louis in September.that the IARFC is not dictating how an production. However, we are alreadyadvisor should practice, but that he or growing more dependent on Passing the Batonshe should do so on an effective and communications through our computers.ethical basis. Computers will be how we learn, how we H. Stephen Bailey was joined by his acquire most of our information, and how daughter Stephanie and his son Jarod.What would you personally like to see we communicate with our clients. They sat down with us for a frankthe association accomplish within the discussion regarding their plans as theynext five years? What three things would you advise prepare to face that challenge of the IARFC to concentrate on to have transition of a family business.I am anxious for us to launch the RFC® the greatest impact during the nextcourse here in the United Sates matching three years? Steve, you have been very successful atmany of the features that are working so doing something many financial plannerseffectively for us offshore. I would like to see the association dream of — bringing your family into the increase its visibility through public business. According to the 2003-2004This industry has hundreds of thousand of relations. For example, we can use Public Annual Report of the Family Businesspersons calling themselves “financial Service Announcements to let the public Center of the University of Wisconsin-planners” but they cannot build a know that there are more than two Madison the greatest part of America’sfinancial plan. They have studied financial organizations. Perhaps we can wealth lies in family owned businesses.academic subjects with the view of soon be putting advertising in financial The report states, “Today over 80% of thepassing examinations — not learning how publications to help with membership businesses in the United States are familyto serve their customers. recruitment. The launch of our own owned including nearly one-third of the financial courses will be a major boost to Fortune 500 companies... . FamilyWhat I guess I’d like to see is something our already successful membership businesses account for 70% of all new jobakin to the original LUTC classes. growth. They all work hand in hand. creation, 60% of nation’s employment,Acquiring knowledge was important, but and 50% of the GDP.”learning how to apply it with customers What prompted you to leave Home Life?was critical. The requirement of the The Raymond Institute, American Familyproduction of an actual plan as part of the The company was bought out. Business Survey 2003 reported that 88%curriculum will be an important benefit to of family businesses said the family wouldall new RFC® course graduates. Why did you select First Financial continue to control the firm in five years. Planners? One of the survey’s conclusions was thatWhat do you think will be the major “Family businesses face the dauntingtrends in the financial services field in I was at Yale University for an IARFCthe next five years — and how should meeting when I met Roy Henry, his son-in- continued on page 5Page 4 The Register • September 2006
  7. 7. continued from page 4 Interview: HB Financialchallenge to incorporate the next (series 7 and 66, 24) and insurance (life, analytical. Both relate well with ourgeneration. Only 3 in 10 are successfully accident and health) and became a RFC®. clients and in meeting their needs.passed on to the next generation.” Jarod: Steve and I have always had a great Jarod: Steve brings experience,What was your original vision for your relationship. In fact, he coached my soccer knowledge. Stephanie brings a woman’spractice? What do you envision now? team and we eventually competed in perspective to financial planning. England. I had always wanted to work withSteve: To develop a one stop shop my father but he wanted me to get my work Stephanie: Working toward a commonfinancial practice for matured adults. experience somewhere else. After Mars goal. Steve has experience, I provideAt various times we have had CPAs, Hill College, I joined Mutual of Omaha. insight, and Jarod has fresh ideas.attorneys, etc. maintain office space Steve offered me a chance to join him. Iin our building, but we have found it took a brief hiatus to attend computer Discuss family values and how theymore advantageous to develop school so I would be able to integrate new relate to business values.strategic alliances with those sorts technologies into the business. I am aof professionals and work closely licensed mortgage broker in addition to my Steve: The family values we share andtogether with them for our mutual insurance license and am now studying for that my wife and I imparted to ourclients’ best interests. We now refer our my securities licenses. children are our business values. I wouldclients to their offices as needed. With not choose an investment for any of mythe inclusion of my children into the What are the benefits/disadvantages of clients that I would not if in the samepractice the vision has expanded to meet having family members in the business? circumstances choose for myself.the needs of my existing clients’ childrenand other younger investors. It is more Steve: There is a great deal of pride and Jarod: We were raised by the Golden Rulecritical now than ever before that satisfaction that comes when one’s of “Do unto others as you would haveindividuals begin to plan for their children embrace the same values and them do unto you.” In business weretirement at an early age. want to become part of the firm. The love practice “Do for others what you would do and respect we share for one another for yourself.”What are your plans for the future allows us to work through anydirection of the company? disagreements we might have. Stephanie: One and the same, “Choose investments for our clients that we wouldJarod: Growth toward a more versatile Jarod: Benefits include trust, loyalty, only choose for ourselves.” Our parentsfinancial planning firm communication. Disadvantages occur in gave us a foundation and basis to work communication when we sometimes take with others.Stephanie: To grow our individual client for granted that we are all on the samebase while continuing on the foundation wavelength. Steve, you have often said “Failure toSteve has built. plan is a plan for failure.” What is your Stephanie: Seeing each other everyday is transition plan? What is being done toThe focus of your practice has been on a blessing but it can sometimes be very implement that plan? Do you have amatured adults. Has bringing your tough working so closely with family written succession plan in place?children into the firm broadened your members. It is important to make sureclient base to include younger clients, others feel included. It is also difficult to Steve: Whoa! I am not ready to be puti.e. Generation X, the Echo Boomers, separate business from family matters. out to pasture yet. While I am building aand Generation Y? vacation/retirement home in the Do you feel that your son and mountains of North Carolina and will beSteve: Yes, not only have they reached daughter share your same passion splitting my time between there and myout to younger investors they have helped and commitment to the business? home and office in Charlotte, I will still beus provide a bridge from my existing What direction do you see them taking meeting with my clients. I will be taking aclients to their children. the firm? less active role in the daily operation of the firm. Over the past few years,How did this come about? Steve: Yes. They both basically grew up Stephanie and Jarod have worked with around the business coming in to help our business manager to gain anSteve: Stephanie and Jarod often came during the summers and on weekends. understanding of the business side of ourto the office when they were children and They will continue the mission of the firm operation and I have included them inhelped with preparing mailings, filing and but will certainly have to adapt to meetings with our vendors and clients soother office tasks. While I always hoped changing technologies and markets. they could become acquainted and learnthat they would eventually join me in the what is expected of them. And theybusiness, I encouraged them to follow What strengths do family members have been busy building their own clienttheir own dreams. bring to the business? What base. We do have a written transition responsibilities do they now hold and plan in place and a timeline forStephanie: I got a degree in early what will their future responsibilities? implementation that will allow me to takeelementary education and taught for an increasingly less active role while3 years before deciding that I needed a Steve: Jarod trained as a certified Stephanie and Jarod become more activechange. Steve invited me to come on Microsoft Systems engineer and that has in the business eventually takingboard with the mortgage company and I been particularly helpful in implementing over the operation of the firm.became a licensed mortgage broker. technology into our business. And he is aEventually I became licensed in securities natural salesman. Stephanie is very continued on page 8The Register • September 2006 Page 5
  8. 8. From the Chairman’s Desk... Graduation Malaysia. I have just attended the 2006 Graduation Ceremony for new RFCs in Kuala Lumpur, held in the Grand Ballroom of the Shangri-La hotel. For those Americans who have never been to Malaysia, this capitol city is the home of the twin Petronas Towers — until recently the world’s tallest office buildings. Downtown K.L. is easily reached from the new airport — with access by car and by express train which is swift, silent and very accommodating. The graduation was beautifully presented, under the leadership of our Malaysia chair, Ng Jyi Wei, RFC®. Dr. Jeffrey Chiew, the greater Asia chair for IARFC, and I presented certificates to all the attendees, followed by group photos and a lavish reception. The first four graduates received special distinction awards as having furnished the highest quality comprehensive personal financial plans. Where the IARFC will be represented: A handsomely printed graduation booklet, with the gold RFC® key on the cover, listed the latest 140 recipients of the RFC® designation. Actually, there will likely be more L.IRT — 19th Annual Conference graduates before the end of this year as enrollment continues for the next two September 9-12, 2006 classes. The current graduates, who completed the course and examinations, were Mumbai, India all required to submit a comprehensive plan — in English, which is the predominant business language of Malaysia. The RFC® curriculum has been translated into IARFC Cruise/Conference Mandarin and classes will also be offered in the city of Penang. Eventually the September 16-23, 2006 “Fall Foliage” curriculum will also be translated into Bahassa, the native language of Malaysia. Through New England and Canada The ceremony was opened by the Scotch Band from a local High School. It seemed Life School like a great kick-off as these uniformed musicians in their colorful green kilted October 3-7, 2006 Dayton, OH uniforms, bag piped and drummed into the ballroom, followed in procession by the RFC faculty. All of the 140 graduates were in cap and gown for the ceremonial MDRT Top of Table presentation of their RFC certificates delivered by me, and a gold RFC lapel pin October 18-21, 2006 Palm Desert, CA presented by Dr. Chiew. Naturally, each of these presentations was photographed Million Dollar Marketing Workshop several times — in addition to small group photos of associates from many of the November 6-7, 2006, Minneapolis offices. And of course there was a master group photo of all the gowned graduates, the faculty, association leaders, Dr. Chiew and myself. Life School November 28 – December 2, 2006 About 250 family members were in the audience to watch their spouse, dad or mom Dayton, OH receive recognition for their educational achievement — and of course this generated the opportunity for many more photos with faculty and family members. In Asia IARFC Accelerated Course program speakers are generally given very handsome corsages, but when donning December 5-8, 2006 Brunei our red and gold ribbed black gowns, we had to remove the beautiful flowers. We passed one on to a beautiful young girl in attendance to witness her mother’s IARFC Fast Start Workshop graduation. She laughed, smiled very widely, and ran away to show off her personal December 15-17, 2006 Singapore corsage to some of the other kids. Heckerling Estate Conference There was obvious pride showing in the eyes of these graduates — many of whom January, 2007, Orlando mentioned to me that their RFC® studies had already increased their business effectiveness and their personal income. APfinSA Conference April 13-15, 2007, Taipei A New Member Benefit. In my remarks to the assembled graduates I briefly IARFC Financial Advisors Forum demonstrated to the audience a new PowerPoint presentation that has been May 15-17, 2007, Bally’s Las Vegas developed to help them offer their planning services to prospective clients. It included presentation suggestions and a complete script. Some elements had been MDRT Annual Meeting specially converted to Malaysia and the Ringit, rather than to the U.S. dollar. To my June 10-13, 2007, Denver knowledge this is the first time a group of financial planning course completers has ever been equipped with a client presentation and script. This will enable them to International Dragon Awards instantly offer comprehensive planning and charge a fee for the extensive services. August 11-13, 2007 The graduates will also receive a fast track guide in electronic format containing all IARFC Cruise/Conference — Alaska the correspondence tools (letters, agendas, charts, forms, checklists, articles and August 17-24, 2007 procedures) How to Start Your Financial Planning Practice. Vancouver, BC to Anchorage To Join us at an IARFC Exhibit Booth continued on page 7 contact: Director@IARFC.orgPage 6 The Register • September 2006
  9. 9. continued from page 6 Chairman’s Desk Fall 2006 Malaysia CE Event. Later this Maythachaivut, RFC®. There are now 130 where over a thousand have completed year the Malaysian IARFC will hold a RFCs in Thailand, and soon there will be a the course, examination and case plan full-day workshop for the approximately few more, since some have not yet preparation process. Courses continue in 650 RFC® members, that will also be submitted satisfactory comprehensive four cities, and there will doubtless be attended by government regulators and financial plans — a course requirement. some additional private classes sponsored company CEOs and compliance officers. by major institutions. Presenters will include a variety of Following the translation of the new financial professionals — and all the RFC® PowerPoint marketing presentation, there China RFC Forum. A three-hour financial members will pick up their CD-ROM will be a brief training session in Bangkok, planning session, Achieving Success in a containing the PowerPoint, Word and Excel and also in Chiang Mai in the north. The Competitive World, was presented in files. Each can print the user guide, seventh RFC® course was started in late English to about 400 RFCs. Bill Moore, checklists and scripts, and then edit the August and there are plans to offer some RFC® of Kinder Brothers International text to suit their operation and market. company-sponsored classes and a session spoke on “Managing Your Practice, Your in the city of Had Yai in the south. Staff and Your Agents.” Stephen 2007 Malaysia Forum. In the fall of next Rothschild, RFC® who is the current year — perhaps in September, there are Worldwide Chinese Life Insurance president of the Million Dollar Round plans to hold a two-day RFC® Forum for Congress. The sixth bi-annual event was Table, spoke on “Positioning and the members and prospective members — held in the central China city of Chengdu — Psychology of the Sale.” with an attendance goal of 2,500. This a sprawling community of 11 million. will be a similar format to Dr. Chiew’s There were 6,400 Chinese speaking My topic was, “Preparing for the Evolution previous Worldwide Financial Planning agents from more than 17 countries. The in Financial Services” and I had an Forums that had attendance approaching four day event was held in the new Century opportunity to briefly review the new 3,000 — which was the introduction and City convention area. The attendees marketing presentation — which will launch of the RFC® movement in Malaysia. stayed in a newly opened luxury Holiday certainly result in additional RFC® Since the program will be presented in Inn, as the first guests in the new hotel. enrollment. We easily secured volunteers English, financial advisors will be to convert the materials into Chinese for welcomed from across the globe. The WCLIC was the first event held in the use in Taiwan, China and Hong Kong. new convention area — occupying about Graduation Thailand. I feel like I’m one fourth of the giant facility. The The audience was very enthusiastic. We becoming a citizen of Thailand — or at plenary sessions in the morning had an were also a bit keyed up, since just outside least a part of the family. The August incredible staging, resembling the gates of the International Exposition was a 200 foot 2005 International Dragon Awards were the Forbidden City, and 8 giant TV screens long, 60 foot high display wall featuring held in Chiang Mai, Thailand, which was a allowed all the attendees to see the 8 foot photos of all the speakers. Two full stirring event produced by IMM speakers clearly. Breakout sessions were pages in the colorful 116 page Congress International, based in Taiwan and headed in the nearby International exposition magazine were devoted to our session. up by our greater China chair, Liang Tien center, a very futuristic structure. The Additional RFCs who were among the Lung, RFC®. Following the IDA we had a entire complex of meeting facilities, speakers included Samuel Yung of Hong grand opening of the RFC® courses in hotels, apartments and shopping malls Kong and Frank Vuong, who is based in Thailand, with the cooperative effort of the will accommodate over a quarter of a both the U.S. and Asia. Thai Life Underwriters Association. million people, and will be completed within two years. The buildings are Closing Congress Speaker. Mehdi Then in February I presented twice at the magnificent artistically shaped glass and Fakharzadeh, RFC®, who had been the MDRT Experience in Bangkok which was steel towers, nestled in a park setting with closing presenter at the first event, held in attended by 7,500 Asians, and we had a ponds, gardens and canals. 1996 in Taipei, was again the closing CE session and graduation for the earliest speaker in Chengdu. Mehdi was RFC® graduates. In June we held another Most of the sessions were held in translated for the audience, and he training session in Bangkok at the Royal Chinese, including the presentation of was a tremendous hit, just as he was Sports Club. In August we had another full the Golden, Silver and Bronze Dragon at this year’s Financial Advisors Forum day training session where the new advisor awards for over 750 leading producers. in Middletown. PowerPoint presentation was introduced. Simultaneously with the WCLIC there 22 of the new RFCs signed up to help with was a CEO Forum for the top executives Shanghai and Guangzhou. Following the the translation of the presentation, the of all the life insurance companies in Congress in Chengdu, Mehdi and Sigrun, script, and all the supporting documents. Asia. These executives mingled with Stephen and Debbie and I joined a few the agents in the morning, and in the other attendees on a four day cruise down The following day we had a gowned afternoon had separate sessions where the Yangtze River culminating at the graduation ceremony for the fifth and sixth they shared problems and opportunities enormous Three Gorges Dam — the largest classes. There were 35 present for the unique to company expansion and earth moving project in modern times. I formal ceremony at the Siam product development. went on to Shanghai to meet with InterContinental Hotel. The session was company leaders and RFC® members. opened by Mr. Vachara Impitaks, Director At one of the general sessions Liang Tien Then I traveled to Guangzhou (formerly of Life Insurance Office, Department of Lung and I presented the Loren Dunton known as Canton) and there met company Insurance, Ministry of Commerce. There Award to Jeffrey Chen, RFC® of Taiwan. leaders and RFC® members. were also comments by Thai Life Jeffrey has been responsible for the Underwriters president, Chanvit expansion of financial planning in Taiwan, continued on page 8The Register • September 2006 Page 7
  10. 10. continued from page 5 Interview continued from page 6 Chairman’s DeskHow will this benefit your clients? Afterwards I flew through Hong Kong to Meanwhile, as the tempers in the debate Taipei, since the Peoples Republic of continue to grow, the FPA is persisting inSteve: This will allow for a smooth China does not allow direct flights from the its lawsuit against the so-called “Merrilltransition, make our clients aware that mainland to the Republic of China, better Lynch rule” adopted by the SEC. The FPAtheir interests will continue to be well known as Taiwan. My hotel was close to has also issued public statements takinglooked after, and most importantly make the IMM offices, in the long shadow of issue with many of the provisions of theour clients feel secure and comfortable Taipei 101 — the new tallest office building CFP Board’s proposals. On the other handknowing that there will be a continuity. in the world (until the topping out of the Jin NAPFA thinks the new proposed standards Mao Tower in Shanghai). In addition to don’t go far enough.Jarod: Allows us to offer our clients more meeting with company officials and a CEoptions. We work together as a team to event attended by about 400 RFC® Other Standards. Meanwhile the ISOmeet the needs of the clients without the members, we had a press session with the 22222 covering the practice of personalstigma of competing for business. Economic Daily — Taiwan’s leading financial planning has been adopted by financial paper. This publication has the respected international body, and itStephanie: Steve has made a point to devoted a lot of space to the RFC® courses addresses many aspects of financialintroduce us to existing clients and have and CE events, making RFC® by far the advisor conduct — without creating theus sit in on appointments so that the most recognized financial designation heat of the increased legal liability and theclients know that we are here to help in Taiwan. encouragement to plaintiff attorneysthem too. seeking someone to sue. Continued Expansion. The RFC® coursesWhat is unique or different about and programs are now under Another group, IFFSA, the Internationalyour practice? consideration in other countries, and we Federation of Financial Standards will have more to report on in a later issue. Associations also wants to weigh in —Steve: My own practice was traditionally representing the interests of thefocused on the matured adult. As Standards and Ethics. This issue is consumer, the practitioners andStephanie and Jarod have grown their heating up again, with the new proposals the institutions.practices within the firm, we find that we of the CFP Board of Standards, andare meeting the needs of younger articles in many magazines. They are not Where does the IARFC stand? Weinvestors, many of them the children of being well received by the wire house solidly re-affirm our Code of Ethics, whichmy own clients. The practice extends brokerage firms and the independent we feel is quite adequate. It is clearlyacross the generations. financial services broker dealers. One key understood by the consumer, and the issue is that of “fiduciary.” The CFP Board, advisor. We see no need for all thisJarod: The relationships we build with led by many fee-only practitioners, wants conflict, especially if it does, as Sarah Ballour clients. planners to clearly be identified as Teslik (CEO of the CFP Board and a former fiduciaries. Most brokerage firms do not. regulatory attorney) has indicated the newStephanie: We are independent and proposals will do:accessible. Some have proposed an “opting out” approach where the financial planner Create a standard against which aWhat advice would you give to would insert a clause into the client (CFP) financial planner can be sued.other RFCs who may be considering agreement that indicates he is not a We don’t need to aggravate the currentinviting family members into the firm “fiduciary” and will not be under obligation regulatory and legal environment, which isor transferring the firm to the to place his client’s interest above his own. already bad enough. Most of thenext generation? But many advisors do not want to do so. damages that have been done to The broker dealers feel that this “fiduciary consumers and investors have been doneSteve: Be sure that they are genuinely status” is an expansion of their liability by crooks, not by persons waveringinterested in the business. That they which until now has generally been between what is perceived by some asunderstand your mission, share your limited by arbitration. And some feel that right and what is “mostly right” orvision and want to continue to serve the binding arbitration is not consistent with “sometimes best.”best interests of your clients and their “fiduciary status.”own. But also encourage their ideas on Have you done your research? If youhow you can improve. Liability expansion is the primary issue to want more reading on this debate, I would many advisors and brokers. It is pretty be happy to send you by e-mail about 90Jarod: It is important to have a good well accepted that an independent RIA is a pages that have been published. Perhapsfamily foundation in order to work fiduciary, just as is a trustee. But the big you’d like to find out what your brokertogether. It can be difficult working with issue is: “How does this expand the dealer thinks. Or your attorney….family and separating family and business liability and restrict the business practicesmatters. for the 80-90% of the financial advisors Do you have an opinion? This is an who sell insurance or securities in addition important issue to all financial advisors.Stephanie: Communicate! Share with to delivering plans and advice?” Someyour clients that you have a plan in place brokerage firms have been heard to say We would love to quote your views into continue to meet their needs and (off the record so far) that they will not the next issue of Register — or reprintconcerns regarding their investments and permit their reps to execute anything or anything your parent or affiliatedcommunicate to employees and other claim any status (designation) that makes companies feels would positivelyreps what the plan is and how it will affect them a fiduciary. contribute to this discussion.them and company operations.Page 8 The Register • September 2006
  11. 11. A Clear Conscience Never Fears Midnight Knocking! related to our field of expertise, putting not according to rigid rules and our clients’ interests first, and complying regulations, but rather, we will be guided with statutory requirements and ethical by a conscience. We will be guided by standards. It is time to be more reflective expertise and mature judgment because because I believe the issue confronting this is what is expected by society of the our industry, and is at the root of our relevant professional.” struggle — particularly in Asia, is for financial planning to be recognized and Application to all Members. There is a accepted as a high level profession. collective ethic that guides professionals, whether it be medicine, law or accounting. The basis of much of the criticism And financial planning should be in the about financial planners can be best same category. Therefore, if financial encapsulated in a simple question: planning is going to develop as a highly Do financial planners have a conscience? respected profession, we should be guided This notion is usually raised within the accordingly. If we are successful in Peter E. Liu, OAM, RFC® context of conflicts of interest or some articulating this to society, the net result other similar type of issue. But, will be that the investing public will be essentially, that is really the central willing to place their trust and confidenceA profession is a calling, vocation, pursuit question: Is there the presence or the in us. Otherwise, we deserve to be treatedor occupation that requires extensive absence of a conscience among financial by the legislators as a business, withtraining and the study, investigation, planners within the fledgling financial inflexible rules and regulations.research, command and mastery of planning industry in Asia and other partsspecialized and complete knowledge. A of the world?profession typically has a professional “Therefore, I put it to you thatgoverning body, code of ethics, and Ed Morrow, recognized as one of the financial planning professionalsstringent process for certification and fathers of financial planning in the USAlicensing. Some examples of recognized commented during one of his frequent do need a conscience.”professions are law, dentistry, medicine, visits to our part of the world: “Integrity isthe military, accounting, engineering and a thing that should come from within andthe clergy. not something that is mandated by laws.” What is a Conscience? A conscience is defined as the knowledge or the feelingWhat is a Professional? Classically, there General Omar Bradley once lamented: about right and wrong. It is a power. It iswere only three professions: ministry, “The world has achieved brilliance without a principle. It is a compulsion. And, whenmedicine and law. These three conscience. Ours is a world of nuclear a conscience becomes an attitude, itprofessions each adhere to a specific giants and ethical infants.” Unfortunately, motivates individuals to act positively.code of ethics, and members are required the quick-fix cure for what is perceived to From a financial planning perspective,to swear some form of oath to uphold the be the absence of a conscience is usually when it is suggested that our industrycode of ethics, therefore professing to a more legislative and regulatory professionals need a conscience, what ishigher standard of accountability. In amendments. Rules, Codes of Conduct, being suggested is that financial planningaddition, these noble professions provide Guidelines, Laws and Regulations are professionals need a prevailing attitudeand demand extensive training in the suitable mechanisms to control the for good, that is, the good of our clients’meaning, value, and significance of its conduct of business enterprises — but interests!particular oath in the practice of the they are not entirely suitable guides for aprofession. With the rapid rise of profession. Knowledge Base. A conscience connectstechnology and occupational us with the accumulated wisdom of thespecialization in the 19th century, other Standards of Conduct. Professionals ages and the wisdom of the heart. In fact,bodies began to claim professional status, traditionally conduct their activities with it is our inner guidance system, whichlike teachers, nurses and architects, just independence and without intervention. prompts us to sense when we act or evento name a few. They apply their skills and expertise contemplate acting in a manner that is guided by a conscience and not contrary to pillars of professionalThere is one commonality among necessarily by rules and regulations. In principles. It also is productive of a senseprofessionals and that is, “No individual fact, medical practitioners, members of of self-worth, accomplishment andever attained excellence in any one art or the legal fraternity and accountants have satisfaction in the knowledge that we haveprofession without having passed through an implied understanding with society and our unique talents and skill-sets and in thethe slow, rigorous and painful process of say: “Let us apply our skills and let us fundamental importance of our, together with comprehensive and take care of your needs. Let us performextensive preparation.” our work on your behalf for a fee. And, in The Honorable Judge David E. Ashton- return for this privilege, you can trust us.” Lewis made a profound observation whenOur Profession. Comprehensive financial he said: The traditional basis of theplanning is a very demanding discipline in In other words: “If you give us authority to professional/client relationship is that ofterms of achieving the constant objectives practice our skills and apply our expertise, a Fiduciary nature. This simply places theof exceeding clients’ expectations, we will cure the sick, defend you in courtkeeping fully up-to-date with all matters or manage your finances. We will do this continued on page 10The Register • September 2006 Page 9
  12. 12. continued from page 9 Clear Conscienceclient’s interests before that of the principle of self-provision rather than required to do each and every day,professional. If one is able to do that, Government handouts. The quid-pro-quo absolutely without exception.then money, closing the deal, personal is that the personal tax rates are muchsuccess, being right, looking good and lower than where generous social welfare The greatest battles we fight are in thebeing the best have no place. benefits are available. The net result is silent cavities, crevices, caves and that people typically have a higher level of chambers of our own souls. The goodAre We a Profession or Occupation? A surplus investable funds and, therefore, news is that according to ancient Chineseprofession has been defined as, An need professional advice to ensure that wisdom: A clear conscience never fearsoccupation, which is pursued largely for they can maintain their lifestyle standards midnight knocking.others and not merely one’s self. It is an and meet the excessively high costs ofoccupation for which the amount of medical care and tertiary education longfinancial profit is not the accepted after their earned incomes have ceased.measure of success. Once the publicidentifies these characteristics about any Retirement Issues. Retiring earlier and Peter E. Liu, OAM, MBA, Grad. Dip.profession, then the public will be willing living longer is clearly problematic when it Corporate & Institutional Fundsto trust its practitioners. Unfortunately, comes to adhering to the principle of self- Management, Certified Investmentsome sections of the media have been provision. As Albert Einstein said: “The Management Analyst CIMA (Ret), F Fin,creating suspicion sometimes justified significant problems we face cannot be RFC®, JP. Peter was awarded the Medaland at other times — perceived. As long solved by the same level of thinking that of the Order of Australia in the Queen’sas that suspicion exists, we have created them.” Birthday Honors List in 1993, for hissignificant problems because suspicion is meritorious services to Business,a ruthless destroyer — a powerful Abraham Maslow, one of the founding Commerce and to the Chinese Communityterminator of trust and carcinogen to fathers of modern psychology and in Australia. He has served as a foundingcredibility. A conscience is the best humanistic theory developed a father and National President of the IAFPweapon we have in our fight to have our “needs hierarchy” in which he identified (Australia) — now the FPA Australia andactivities accepted as a true profession. “self-actualization” as the pinnacle of was the Chair responsible for the human experience. However, in his introduction of tertiary standards, code ofWoodrow Wilson, first the president sunset years, he revised his original ethics and disciplinary body for financialof Princeton University and later the theory and acknowledged that this planning professionals in Australia. He28th President of the United States of pinnacle point was not “self-actualization” has been involved in corporateAmerica, gave some instructive advice but rather “self-transcendence.” In management and securities throughoutto professionals when he said: “You are other words, existing for a purpose higher Asia, currently based in Hong Kong.not here merely to make a living. You than one’s self. That is precisely what Phone: 852 9026 1183are here in order to enable the world financial planning professionals are E-mail: lausifu@netvigator.comto live more amply, with greater vision,with a finer spirit of hope andachievement. You are here to enrichthe world, and you impoverish yourselfif you forget the errand.”The quality of your professional life, thefinancial solutions, products, andassociated services that you offer, dependon what happens in the space betweenstimulus and response. The raw nerveendings of a conscience keep fit andproper professionals far away from anypotential conflict of interest.Where Are We Headed? As I travelextensively throughout the Asia-Pacificregion, I am constantly impressed with thequality of financial planning professionalsand the members of the IARFC. They arepro-active, exceptionally hardworking,competent, and caring individuals totallydedicated to making a difference. Thepositive influence of their advice oftenextends beyond retirement to multi-generational wealth transfer.In this part of the world, there is anincreasingly important role for financialplanning professionals because Asiansociety is based on the time-honoredPage 10 The Register • September 2006
  13. 13. Using Client Newsletter to Turn On the Powers of Influence point you make in your newsletter. Be expertise in front of those centers of sure to tell the reporter why the story is influence who can steer business to you. important to his or her audience and why Strategic use of a good newsletter will you are an expert on the topic. help you build your practice through reputation, referrals and revenues. Be prepared when your client newsletter generates an in-coming call from a Lisbeth Wiley Chapman of Ink&Air delivers reporter. Always offer any resources you clients and assets to investment advisory think would more fully answer a reporter’s and financial services firms through a question. If you can point the reporter to blend of media and web communications a professional colleague who can also strategies. She is the author of Get speak to the story idea, by all means do Media Smart! Build Your Reputation, that as well, after checking with that Referrals & Revenues With Media colleague. Such media referrals to your Marketing. Lisbeth has been a featured colleagues who are in the right position to speaker at the IARFC Financial Advisors Lisbeth Wiley Chapman send business to your practice can help to Forum. For more information you may establish you as a serious expert in contact Beth at: 508 479 1033 or visit your field. www.InkAir.comMany advisors spend a great deal of timeand attention publishing newsletters for Almost every publication these days has atheir clients. Whether it is printed and web site where you can get contactmailed, or you send an e-mail with a link information to develop your media list. Call for Papersto your web site, a client newsletter is a Most publications also have a webtime-tested and useful mechanism for publication that accepts material,staying in touch with clients. Newsletters particularly articles you may write yourselfcan be used in a variety of ways: or have “ghosted” that is, written for you. Reviews, and practitioner The articles must not be self-serving in insights on the assessment and• Calm down the market volatility jitters any way, but must meet the requirements measurement of financial risk• Announce “Client Appreciation” events of service journalism. Make certain your tolerance for a special issue• Give a heads up to changes in articles provide information not readily technology that may impact the client available anywhere else, and they must• Allow you to feature your firm’s cover a topic thoroughly, with referrals to charitable efforts in the community further resources on the same topic. IARFC Quarterly Educational Publication• Arouse interest in seminar attendance• Increase Top of Mind Awareness The client newsletter discussion would not be complete without examining the idea John Grable, Ph.D., EditorYet, a newsletter has a valuable additional of an e-newsletter that is sent only via the 318 Justin Hall, FSHSfunction. It can be used to stay in touch Internet. It can go to existing clients or Kansas State Universitywith a select group of opinion makers by prospects as well as to your centers of Manhattan, KS 66506 Phone: 785 532 1486adding nothing except customized influence. Don’t hesitate to consider an e- E-mail: jgrable@KSU.edutransmittal slips attached to the front of newsletter. It is simpler for your practice,newsletters that are mailed, or to the much less expensive, and just as easy fore-mail message you send. your clients to forward or send to their Get Involved: We welcome the friends. An e-newsletter can be updated submission of articles from IARFCConsider sending your customized on your website, and archived there as practitioners. This is a great way tonewsletter regularly to the referral sources well for any “stealth” visitors who might contribute to the profession.for your practice — estate planning want more of your in-depth thinking.attorneys, insurance professionals, and Professional Articles: The JournalCPAs. Invite those colleagues to “guest” a An e-newsletter can include a question is seeking articles by practitionerscolumn in your newsletter. Volunteer to and answer column from its readers. that may deal with the application“guest” a column in their newsletters or When a subject comes up that requires a of financial planning techniques,for their web site. different expertise from your own, you marketing and practice management. have an excellent opportunity to contact These are expected to be very highWhen appropriate, mail or e-mail a copy of your influential colleagues to ask them to level papers or articles.your client newsletter to the editors and participate in answering the question forreporters of appropriate publications. your column. There is an old saying that Publicity Opportunities: Naturally, weDon’t think narrowly here! Think of all the “nothing happens outside a relationship.” encourage published authors to advisenational publications whose audiences both their clients and the media ofshould know that you are expert in Get Media Smart! Take advantage of their being published by sending aspecific areas. Attach a letter to the each and every opportunity to use your press release.reporter, focusing on one story idea or newsletter efforts to drive your name andThe Register • September 2006 Page 11
  14. 14. IARFC Financial Advisors Forum 2006 Manila Philippines was ever taught in the Philippines and Ed to 60 RFC® graduates who were dressed Morrow did not waste any time sharing his in the caps and togas for the graduation vast experiences with the eager students. ceremony. IARFC Philippines holds So much of the knowledge was new and regular RFC® courses for the financial and never heard of in the Philippines. With insurance industries in Metro Manila and such enlightenment, the Philippines RFCs Cebu areas. are ahead of the competition, an edge that is very much appreciated with many Ralph Liew, RFC®, IARFC Chair for the thanks to the efforts and contributions of Philippines, who has also been our ever energetic Chairman who has instrumental in the development of the been responsible for the fast RFC® growth RFC® courses in Thailand, as well as the rate of membership in Asia. new E-Learning Academy that was recently accepted by the Malaysia In the evening, a separate event was Insurance Institute. Contact Ralph Liew organized to award the RFC® certificates by e-mailing him at: Ralph Liew, RFC®IARFC Philippines held its Forum and RFCs MariettaGraduation on 8th July 2006 in an Gorrez, Galeinternational hotel in Makati City in the Gaddi andPhilippines. The Forum was organized by EvangelineIARFC Philippines, as part of its Josephcommitment to provide continuingeducation especially for RFC® members inthe Philippines. The speaker for theForum was Ed Morrow, Chairman andChief Executive Officer of IARFC, who flewall the way to the Philippines to deliver Ralph Liew chattingsingle handedly a one-day workshop on along withthe subject of “How to Start a Financial Sunlife’s CEO Ms.Planning Practice.” A total of 58 Esther Tan duringparticipants attended the Forum. They the forum breakwere delighted with the 55 pages ofdocumentation on the subject. Itcontained educational notes, financialplanning flow charts, sample lettersand practices accumulated over manyyears by Ed.The highlight of the event was thepresence of the Insurance Commissioner,the Honorable M/s Evengeline C.Escobillo FASP, FLMI, accompanied by hertwo executive staff members and M/sEsther C. Tan, FLMI, CLU, ChFC, Chairmanof Sun Life Financial. This also causedexcitement among participants who tookthe opportunity to pose for photographs Insular Life’s RFC Club members took a photo shot with Ed Morrow and Ralph Liewwith the Commissioner. The RFCIt is a sure sign of the interest of the memberregulators and insurance CEOs on the participationsubject of Financial Planning which isrelatively new in the Philippines. Financialplanning education and the RFC®designation were officially introduced intothe country by Jeffrey Chiew two and halfyears ago. Since then it has created amuch needed awareness for personalfinancial planning in the industry.This is the first time that such a subjectPage 12 The Register • September 2006
  15. 15. Planning Your Fall Campaign for LTC Sales What You Should Know About Direct Mail To Make It Work you want to accomplish. You can collect instead of a third party so you can lead pieces from other organizations and respond fast while the prospects still point out the things that you like and remember sending the card to you. dislike. This helps the creative staff in the agency know your preferences for A simple direct mail strategy boosts language, motivation, offers, etc. Prepare response a lot. Have the mailing company a short, written profile of the desired imprint the name and address of each client you are trying to attract: age range, recipient on the return card, as well as on affluence, income, occupation, location, the outside of the folded lead piece. special interests. Then, when prospects send the card back directly to your office, they just have to fill When I went through this exercise, we in their ages and phone number. Make it wound up with three variants. The as easy as possible for the prospect to background colors, the signatures (Wilma respond! G. Anderson, W.G. Anderson, or Wilma Wilma G. Anderson, RFC® Anderson), and the artwork were different I tested another lead piece offered to for each lead piece they created. We test- agents, which was made available by a marketed all three, sending each piece major insurance company. It lookedWith the passage of no-call laws, some three times to specific zip codes, spaced great, but prospects had to do more work.agents and advisors are struggling with six weeks apart, and gauged the They had to fill in their name, address andhow to develop qualified LTC leads for response. phone number on the response card.their financial practice. Since you can’t do Results? It got less than a 1% response.telemarketing anymore, what can you do? Surprisingly, the lead pieces all pulled the same response rate, and after the first Another trick is to have your lead piecesOne answer is Direct Mail. People get three months, we got a 2.5% to 3.5% mailed from another state. It soundtons of direct mail that they mostly ignore. response rate — the percentage of strange, but this really does increase theTo succeed in this area, your direct mail recipients who mailed back the return response.package must be so compelling and postcard. This is quite high, as a 1% rateattention-getting that prospects will is considered quite acceptable. These Targeting Your Market — the Mailingrespond by calling or writing to You. lead pieces still get the same response List. Now that you have a great leadWhen they contact you first, you can rate, even though the market is now piece, you’ll need a first-rate mailing list.legally call them back because then you crowded with direct mailings about LTC Your list criteria must match the productare not considered to be a telemarketer. insurance. One of the secrets to my own or service you are selling. direct mail campaign has been theLet’s look at how you can make direct consistency of mailings to the same zip Middle-income Americans 60 to 74 yearsmail pay. While this article focuses on codes for the past 10 years. I buy a new old are the best prospects for long-term-marketing long-term-care insurance to mailing list every quarter to capture the care insurance. For younger people, long-your marketplace, the same principles can names of those who have turned 60, and term care seems like a more distantwork for selling the other products or those who have recently moved into the concern. But people 60 or better areselling your advisory services. zip codes I prefer to work in. starting to see their health change. They also know friends and family membersCreating Compelling Direct Mail for Building Response who have become less vigorous. They seeLTCI. You can use an off-the-shelf direct-mail package to market LTCI or you can The response mechanism is crucial. You continued on page 14start from scratch and create your own have to have an easydirect-mail package. If you go the latter way for people toroute, look for an advertising agency with respond and get ina track record in healthcare direct mail. touch with you. A tear-(An ad agency’s experience in print and off postcard makes itbroadcast advertising doesn’t necessarily easy.carry over into healthcare direct mail.)Ask the agency if it has done direct mail The aimed at LTCIfor healthcare clients like hospitals or postage-paid cardinsurance companies, especially should ask for theorganizations that target senior citizens. recipients’ birth datesAn experienced agency should know what and phone numbersworks best in your marketplace to get the and offer to do a freeattention of retirees. comparative analysis of LTCI policies. HaveGive the creative director, copywriter and the card sent backdesigner at the agency guidance on what directly to your officeThe Register • September 2006 Page 13