For many years now, retirement planning has been a topic explored by the consumer-oriented financial press. Whether you pick up a weekly newsmagazine, a daily paper, or take a quick look at a news website, you’re almost certain to find a discussion – or an alarming alert – about the challenges of retiring today.
These reports used to be considered newsworthy because of the sheer number of people who were quickly approaching retirement age. Now days – since 2008 or so – the stories are more pertinent because the economic downturn has proved to people that many of us are simply unprepared for a life without a steady work-related income.
But the consumer financial press cannot be counted on to give the real picture of today’s retirement planning challenges and opportunities. I do believe that the advisors who are specialists in this market can, though, and that’s why I recently discussed retirement planning with two of the best producers in the business: Gregory B. Gagne, ChFC, managing member of Affinity Investment Group, LLC, in Exeter, N.H., and Wayne D. Minich, CLU, ChFC, president of Applied Financial Concepts, Inc., and Wayne D. Minich & Co., Inc., in Richfield, Ohio.
‘Study the issues retirees face and learn about distribution planning’
I began the discussion by asking both gentlemen for a little background on how they came to focus so much of their professional attention on the retirement planning area, and what advice might they give a producer who is looking to expand his or her market to include retirement planning as a specialty.
Mr. Gagne told me, “I made the decision to specialize back in 1996 after seeking guidance from Million Dollar Round Table (MDRT) members who were doing very well. They advised me that, in order to really grow, I should stop being all things to all people and pick a focus. I looked over my book of business, reviewed the cases I truly had the most fun writing, and I discovered that those I most enjoyed also were those that seemed to produce the largest revenues. The result of that analysis was the decision to focus on working in the retirement planning area.”
Mr. Gagne continued, “The advice I would give to any producer who wants to get into this market is to study the issues that retirees face and learn about distribution planning. Most advisors are good at helping clients accumulate, but very few know how to help them ‘decumulate’ should they live too long, die too soon, or need long-term care services along the way. With more than 10,000 people turning 60 every day, the need is huge and there are not enough advisors available to service the growing demand. This places any advisor in what I call the ‘sweet spot’ for decades to come.”
For Mr. Minich, the focus on retirement planning began with the broader focus on his target clients – business owners. “From the early years of my career, I have focused on doing financial planning for business owners,” he told me. “Part of the process involves projecting the amount of income the client will need, adjusted for inflation, throughout retirement. The client’s income needs and longevity assumptions enable us to calculate, when combined with anticipated income streams such as Social Security, the estimated amount the client will need to accumulate to generate the desired retirement income. This provides the ‘bull’s-eye’ of the asset accumulation target for which we are aiming. A retirement plan or plans usually are, for the business owner, the most tax-efficient and effective way of accumulating the needed assets. I suggest that learning a process to help the business owner accumulate the needed assets is one very effective method for including retirement planning in one’s practice.”
Mr. Minich continued, “A key component is learning about the implementation of customized retirement plan options such as cross-tested profit-sharing plans and cash balance pensions. These tools are methods by which a practitioner may differentiate his or her approach from others competing for business.”
• Editor’s Note: Part II of this interview will be posted on Thursday, Aug. 14, and will include responses to questions including: how they combat media annuity criticism in their own retirement planning discussions; how to handle the issue of Social Security benefits in retirement planning discussions; and their primary concerns and reasons for optimism in the retirement planning market.
• Next page: “I show them how they will run out of money”
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