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Now Enrolling for another Year One Program!
Unsure if The 401k Coach Program is the right fit for you?
Replay our webcast to learn more about what thousands of other advisors have discovered during our Year One Program about building a Successful Retirement Plan Practice.
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Reserve your seat now!!!
Session 1 & 2 (Chicago):
November 29th & 30th, 2012
Session 3 (via webcast):
February 6th 2013
Session 4 (Chicago):
April 12th, 2013
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How Do You Do Special?
In last month's newsletter, I asked the question: "How do you so special?" My question prompted David Hill, Managing Partner at Riverstone Financial Advisors and Year One Coach Member, to write about his experience:
"I have a long time client that is going through the early stages of dementia. He has three sons and I work with two of them. This past weekend was the "weekend" to move dad into the assisted living facility.
Dad had lost his love of his life and soul mate 23 years ago and has been living by himself ever since. I knew this was going to be a huge transition to say the least. My client is very independent and Italian to boot. I asked my staff if sending over an edible arrangement would be something my client might enjoy?
They all agreed and so we sent for delivery on Saturday.
As blessing would have it, within five minutes of moving in all the furniture, a knock on the door was heard. The Edible Arrangement guy was there with the fresh delivery. It was spot on and [the arrangement]didn't last 15 minutes.
I received a call this morning from the youngest son who couldn't stop thanking me for such a nice gesture and the perfect timing. It meant a tremendous amount to dad. That's my "Special" for the day."
David C. Hill
Managing Partner
Riverstone Financial Advisors
Email Charlie about How You Do Special!
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Charlie Epstein, CLU, ChFC, AIF® is the founder of The 401k Coach Program, which offers expert training for financial professionals to develop the skills, systems and processes necessary to excel in the 401(k) industry and facilitate successful retirement outcomes for plan sponsors and participants. Charlie has frequently been named to 401kWire's Top 100 Most Influential People in the 401(k) Industry List and Top 300 Most Influential DC Advisor List and was named to the Legg Mason Retirement Advisory Council. |
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Greetings!
 Recently, we hosted a webinar on how advisors can use the Cash Balance option to optimize a retirement plan design.
In the past 3 weeks, I have provided 5 Cash Balance proposals to business owner clients and prospects. All of them were looking to accelerate their savings for retirement and reduce current taxes. This tells me a few positive things are in motion. First, the economy is turning; second, profits are up; and third, high net worth earners are worried that the administration is going to raise their taxes-soon!
Now is the time to start having the Cash Balance and Capitalization Conversation with your existing clients and new prospects. A Cash Balance Plan, even if they don't establish one today, is a great differentiator from the "fiduciary/408(b)(2) conversation everyone is now having.
My article below describes Cash Balance Plans and some suggestions on how you might start prospecting to suitable companies.
Warmest Regards,
Charlie Epstein, The 401k Coach®
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Cash Balance Plans Present Opportunities for Advisors
Now that the tax season is coming to a close, take the time to meet with your CPA referral sources and ask if they work with any
business owners who paid a substantial amount towards taxes this past year and that may benefit from a closer look at their retirement plan design. A Cash Balance Plan may be the answer for those who want to defer taxes and greatly increase their retirement savings.
What is the Cash Balance Plan?
The Cash Balance Plan was created in the mid-1980s. As a hybrid plan, cash balance is considered a defined benefit plan for tax purposes, but like a defined contribution plan, its balances can be paid out or rolled over. The accounts are similar to those found in 401(k) and profit sharing plans. The Cash Balance Plan is a "qualified plan" and is eligible for tax deferral and creditor protection under ERISA.
Why Choose a Cash Balance Plan?
Depending on age, an individual can contribute as much as $22,000 per year to their 401(k). When combined with a profit sharing plan, this amount can increase up to $54,500 per year. Cash Balance Plans can add over $200,000 per year to retirement savings (depending on age). Because taxes on contributions are deferred, the investment grows tax-free. Interest on the money is also not taxed. The money is only taxed upon distribution.
Who are good candidates for Cash Balance Plans?
Those earning in excess of $250,000 per year, are in need of additional tax savings, those who may have taken a financial hit in the past few years and are hoping to "catch up" before age 65 are all great candidates for the Cash Balance Plan. The Cash Balance Plan offers optimal tax savings compared to 401(k) and profit sharing plans and their lower allowed contribution levels.
Medical, dental, legal and other professional services practices are usually ideal Cash Balance Plan candidates, but these plans may be appropriate for any business with consistent cash flow and demonstrated profits. Businesses already contributing three percent or more to employees' accounts should also consider the Cash Balance Plan.
During this next quarter, make a point to ask your current plan sponsors if they are in need of greater tax deferrals and increased retirement savings and talk to your CPA referral sources about their clients in need of tax savings. Cash Balance Plans are a great way for business owners to rapidly grow retirement funds while enjoying many tax advantages and a great way for you to grow your retirement plan AUM.
Additional resources:
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Using the Right Words
at the Right Time
No matter how prepared you are for the final meeting, it can be difficult to determine what you should emphasize most on. Should you exhibit the extensiveness of your financial knowledge or should you stick to the "client-first philosophy?"
At the ASPPA 401(k) Summit 2012, Invesco Van Kampen consulting director Gary DeMoss highlighted the words that were most helpful in closing the deal at a final presentation. Founded in 1935, Invesco employs more than 600 investment professionals and operates in 20 countries.
In their research, Invesco found that the following words or phrases resulted in positive responses from plan sponsors:
- diversified
- strategy
- navigate
- risk managed
- long-term
- traditional
- reliability
The company also found that using a client-centered approach was more successful in closing the deal. Plan sponsors valued advisors who were well prepared and focused their presentations on the benefits of their strategies for employees. The use of financial jargon, on the other hand, was off-putting. DeMoss recommended that advisors should concentrate on investment performance while stressing the advantages of their investment process for employees.
If you are having trouble when it comes to closing the deal, try changing up your language in the final meeting presentation. The difference between a "yes" and a "no" may be only a few words away!
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How the Great Recession Has Changed Retirement
SunAmerica released a sequel to its 2001 survey, "Re-Visioning Retirement." The 2011 study, "Retirement Re-Set," looks at how much has changed in the retirement industry and how the Great Recession has affected the way Americans live, work, save and invest. Some of the key findings include:
- Many people are postponing retirement.
- Fewer people are able to be happy and financially secure in retirement.
- More people want financial education in high schools, in workplaces, etc.
- More people age 55+ list financial peace of mind as their first goal of retirement over accumulating wealth.
Other findings reflect the desire of many investors (65 percent) to place their money in investments that are guaranteed not to lose money. There is also a growing concern over the taxes associated with retirement. The Great Recession has certainly changed the face of retirement. By reviewing these findings, you can devise strategies that reflect your own clients' experiences and desires. For more information on how investors view retirement, you can view the key findings or read the complete study.
Be sure to read, Paychecks for Life: How to Turn Your 401(k) into a Paycheck for Life Manufacturing Company, on how you can talk to plan participants about retirement security and financial peace of mind.
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Take Your Business to the Next Level
Don't delay in creating a more successful 401(k) practice for yourself. Speak to a 401k Coach team member to learn more about the tools, systems and processes we provide that help you bring your business to the next level.
What are you waiting for?
Toll Free: (877)932-6236 x7
info@The401kCoach.com www.The401kCoach.com |
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