The unexpected Gift of Social Distancing

Brian HuffThe age of social distancing has given me an unexpected gift. I’ve found that I actually have some extra time on my (very clean) hands every day. Aside from the home schooling (math is my strong suit), there’s nothing new that’s been added to my plate. I do mostly the same old work I used to do 30 miles from where I live. So the commute accounts for at least an hour.

And there are some things I used to do every day that I can no longer do. We don’t do wet signatures now. We can’t. Faxing, printing, mailing—All of that tedium is gone from my work life. Some days were worse than others.

In any event, we’ve pivoted to digital signatures, and it’s mostly painless. That might buy me another 30 minutes or so.

Less of Everything Face to Face

The IARs of the RIA firms I work with are telling me mostly the same thing: social distancing has limited what they can do in a given day. It has freed them up to do other things. Important things. Face-to-face client meetings? Gone. Networking events? Gone. Local professional organization forums? Deferred.

With markets going wild in March and mostly volatile now, there have been client calls. More volume than usual, maybe. Most clients understand there’s not much to be done right now. Selling is probably not an option. And unless they had some cash on the sidelines there’s probably not a lot of buying to be done, even if they had the stomach for it.

When folks are hurting, and nervous, it can feel disempowering to lack some lever to pull. Sitting tight? Holding on seems passive, though we know it’s the right thing to do. So what can you do with some of this unexpected additional time?

The Three Things

1. Help Clients with Insurance Reviews

Most of the advisors we work with don’t have insurance licenses. Understandably, many have never reviewed clients’ insurance policies.

Insurance is an integral part of client financial plan design and offering the service to review client insurance policies and ongoing needs sets fee-only advisors apart. Many simply don’t know how to do it, or where to start. We can help with that.

Here’s what we’ll do:

  1. Determine if your clients are under-insured or over-insured
  2. Help choose the right kind of insurance for specific needs
  3. Determine how much insurance they need
  4. Identify life changes that signal new coverage needs

The Insured Retirement Institute found that 20% of all policy reviews uncover an unknown insurance need. Now would be a good time to shore up client insurance needs. All we need is for you to reach out to your clients and get statements or in-force illustrations of their insurance policies.

2. Review Client Annuities

When you have clients with annuities that have become house accounts at some broker dealer…Maybe you’ve transitioned to a fee-based practice and you recommended that annuity, or maybe you have clients who were sold annuities by former advisors or brokers. And maybe you’ve been putting off doing anything with them.

Maybe you’re not sure what you even can do. This is where we can step in. Broadly, we’re looking to do one of these two things:

  1. 1035 Exchange the old, (probably expensive) annuity into a low-cost, no-load annuity to improve accumulation, liquidity, and possibly some of the features.
  2. Move that old annuity to our broker-dealer so that it doesn’t remain a house account for some junior rep to poach.

To get started, just get in touch with your client or clients. Get their annuity statements and give us a call. Here’s what we’re looking for:

  • Fees and expenses. The average M&E charge for a variable annuity is something like 1.35%. We may be able to locate a solution that can help save up to 70% on internal fees.
  • Liquidity. Many advisory annuities don’t charge surrender fees. If your client’s current annuity is in surrender, we’ll probably recommend that they keep the policy, but we can move it to our broker-dealer if you’re looking for a safe haven. The good news is there’s no transaction, and we can often help you connect the annuity to your portfolio management software.
  • Riders, features and benefits. Some annuities are sold with features folks don’t need. Maybe it’s an income benefit, or some other death benefit that wouldn’t benefit them much. Sometimes these riders are valuable. Annuities purchased prior to the 2008 financial crisis may have some really great features. We’ll help you sort that out and make a recommendation.

Call your RetireOne Relationship Manager at (877) 575-2742 to learn more. We can also tap our deep bench of partner experts if your clients have more complex issues. Tax attorneys, trust experts—we have them at our disposal.

3. Wash Your Hands

Often.