A Broker’s Perspective: Ensure Your Voice

Regardless of your personal political philosophy, 2012 is becoming a very complex period for long-range planning of

any kind. The outcome of the presidential and congressional elections will certainly have some kind of impact on the way we do business in the future.

There are several key tax issues that will affect long-range planning at the moment and will be determined by election results. At the end of the year, the tax cuts passed in 2001 and 2003 will expire, with the estate tax reverting back to its 2001 exemption levels ($1 million exemption and 55 percent tax rate). Furthermore, because Congress cannot agree on spending cuts that were part of increasing the debt limit back in August 2011, we will see significant cuts to the federal budget that will leave Congress looking for new sources of revenue.

Complicating matters further, the Securities and Exchange Commission (SEC) is currently considering a rule that would change the standards of care to which we are held when selling products. Should we, as brokers, have a fiduciary responsibility to our customers when selling a product in the same manner as a financial advisor providing advice to a client? These issues directly impact brokerage, and we must assert ourselves as business people and determine who has the greatest knowledge of our profession and who does not. Among other issues, there is little doubt that the economy will become increasingly complicated as those running for election and those in office seek their own voice and power in helping solve our nation’s problems.

Your trade associations have the resources to help you get involved. Imagine if you could determine which individuals in government serve on the committees that control or seek to influence your business. Then consider how helpful it would be for you to be able to have access to those individuals. Certainly, you would not always be completely successful in changing someone’s mind or point of view, but it would be a lot better than resigning yourself to not having any influence or control over your business.

The key here is to inform and educate those who may need to know more about our profession and your point of view. The best way to access high-level decision makers is through your association’s grassroots advocacy efforts and political action committee (PAC).

Consider that 2012 is shaping up to be one of the most critical election seasons in history! The U.S. economy (along with most of the rest of the world, it seems) requires special attention from a group that will include a bumper crop of new representatives. While most of them will share good intentions (although vastly different philosophies), this group will need education on the important issues about our profession. At the same time, you need to be aware that virtually every other specialty group and trade association will be concerned about gaining a similarly high access opportunity for their issues. Essentially, we are competing with a great many other interests for access and influence.

The first step in seeking access is to be fully informed about the issues that threaten to destabilize the strength and unique status important to those of us representing the financial services industry. For that reason, each major trade association should have a government relations committee that acts as a monitor on all government activities and issues that are most important to us and the public we serve.

I have purposely avoided any partisan comments as they tend to divide this subject in different camps and the overall importance of maintaining a high level of vigilance and cohesion is far too important for that. Regardless of your specific philosophy, get involved in your trade association’s advocacy efforts and support of its PAC.

Keep in mind that no trade group will support you, your business and your profession more directly than your own. Of course, in my case, as an insurance distributor (or wholesaler) operating a life brokerage, absolutely no one and no organization can possibly look after me and my affairs better than the National Association of Independent Life Brokerage Agencies (NAILBA)! While that choice is clear, I maintain relations and membership in other organizations, such as the National Association of Insurance and Financial Advisors (NAIFA—for the insurance producer), the Association of Advanced Life Underwriting (AALU—for those more focused on advanced underwriting issues), the Million Dollar Round Table (MDRT—for high-level producers), and The American Council of Life Insurers (ACLI—representing the insurance companies that create our products).

The more involvement you maintain, the more you can influence the strength and stability of your profession. For your benefit and those that you care about, become involved and take pride in helping your trade association achieve the level of informed support and access that will result in your profession being as strong as it needs to be in the face of the many challenges that are now on the horizon.

by GARY S. DWORKIN CLU, RHU for the May 2012 issue of Broker World Magazine.

Gary is founder and president of Dworkin Associates, Inc. (DAI), with offices in Rochester, NH and Naples, FL.

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