“And Here’s I Sold That BIG CASE” – Part 5

Top Producers Share the Secrets Behind Their Hard Won Cases

THE LORE OF THE INSURANCE business is strewn with tales about big insurance cases that fizzled. But some professionals have a far more compelling story to tell: how they landed a really big case despite client uncertainty, complex needs and wants, and very long timelines. Following are examples from advisors who have successfully landed big cases in life insurance, annuities or estate planning. These stories are rich with detail about working with high-net-worth clientele. They show clients who don’t want to plan, others who object and quibble, and still others who don’t want to spend a dime, not even on themselves. They showcase advisors who overcame hurdles with patience, perseverance and sensitivity to each client’s unique circumstances, needs and emotions. The strategies vary from case to case, but most share a few common threads. The big case experts work with, and through, other professionals in the community who serve high-net-worth clients; listen to what the client wants and what the client’s other advisors are saying and then address the underlying need; don’t pander to the clients; do educate the clients; and work on the case for a long time, sometimes as long as a year or more. Each advisor agrees that big cases are complex. It is their job to pull the pieces together into an orderly and effective solution.

A referral network is important in estate-planning cases, notes Gregory B. Gagne. So is the advisor’s willingness to educate older clients on how to spend money. He points to his largest case as an example. The referral was made by a CPA who was seeking assistance for a 78-year-old woman with a total estate valued at $5 million. The CPA was in Gagne’s professional network and was also on the client’s personal advisory team. Those connections helped, he says. The case details: The CPA and woman brought Gagne in for a consultation and after one hour, the woman decided to hire him to orchestrate and consolidate her holdings. The woman’s various investments were becoming a “monthly nightmare,” he explains. She had 15 custodians managing different investments, and it was difficult for her to monitor all the paperwork. As he looked into the case, he realized that, if the woman’s accounts were not updated, the estate would create immense problems for her heirs. Examples were probate problems, major income tax liability issues due to the qualified retirement accounts, and probably federal and state estate tax issues. In addition, he learned that the client had problems with spending money on herself. This was despite the fact that she wanted to travel and was healthy enough to do so. She seemed to be “paralyzed” by the loss of her spouse nearly a decade earlier, Gagne says. She lived only on her Social Security checks, the required minimum distributions (RMDs) from her IRA and a pension. “She thought she could not afford to spend more for fear she would run out of money,” he says. His response was first to prepare a cash flow model so the client would know how much she could spend each year, including allocations for vacations and home improvements. “Once she realized that she could spend some money for extras,” Gagne says, “she was like a kid in a candy store. She even prepared a bucket list and planned to wipe it out.” The spending money came from her qualified assets. (She was in a low tax bracket, he points out.) Estate planning came next. If there was money left over from her IRA with withdrawals, the decision was to use it to fund a Roth IRA for the benefit of the kids (who were included in the entire planning process) and to reduce her future RMDs. Also, money that was in a family trust was used to purchase a $1 million single life universal life policy on the woman, “to replenish every penny she was spending now,” he says. Other parts of the plan included revamping her investment portfolio and reducing the number of custodians to three. Plus, more work is still ahead, such as making decisions about the woman’s three variable annuities and deciding how to fund her longterm care. This work takes time, in this case nine months, but Gagne says, “It’s a process, not a procedure. We’re methodical and careful.” Also, when clients have never done real planning before, as in this case, time must be allowed for the client’s education. “Some clients who have been savers all their lives don’t know how to spend. They need to learn to strike a balance.” In this scenario, Gagne concludes, it took an advisor to convince the woman that she could spend and still maximize estate transfer.

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