Americans Need Advice | May 2002 ViewPoint

Americans Need Advice
(ViewPoint)

Back \| E-mail to a Friend \| Print

Arthur D. Kraus, CLU, ChFC, NAIFA CEO

In 1999 the association changed its name from NALU to NAIFA. Concurrent with the name change was the approval of our current logo -- the blue triangle, which represents the financial-planning pyramid. The logo emphasizes that our association was heavily involved in financial planning decades before some other associations even existed.

Symbolizing NAIFA with the pyramid emphasizes that our customers need advice and support on many levels. In your mind's eye, divide it with three horizontal lines. The base, the foundation of financial planning, is risk management. Experience has taught us that most people fail to accomplish their financial dreams because they don't prepare for the unexpected and rarely develop a habit of saving early enough in their lives.

Risk management includes protection against dying too soon, getting sick or hurt and not having adequate health insurance or a continuous living income. It also includes setbacks created by property and casualty losses. Any of these contingencies can destroy financial dreams.

The next level of the pyramid is investments. Once a risk safety net has been provided, proactive investing using time-tested portfolio theories helps clients achieve their dreams. Prudent management can help flatten risk and improve returns.

The third level includes all of those planning techniques required for judicious money management for the wealthy: charitable planning, estate planning, executive compensation and so on.

We all know that the pyramid is wide at the bottom and slim at the top. This indicates that all Americans need the benefits of risk management. Fewer Americans qualify for the proactive investment management on the next level, as 401(k)s, IRAs, and other popular, qualified retirement programs erode much of their disposable assets. That doesn't mean they don't need help in properly investing those sums, but they will have to acquire that advice on a low- or no-cost basis.

Any attempt to restrict our citizens from receiving financial advice by licensed professionals is an error. We need more people in our profession to help this huge underserved market.

"One profession, one designation" doesn't ring true with me. Different customers need different services. If someone wanted a comprehensive financial plan, a CFP, LUTCF or ChFC can provide expertise. Others with experience might give great advice as well. There are many other people who want to protect their families with an appropriate amount of life insurance or save regularly through a retirement plan or mutual fund. We don't have enough practitioners to take care of all of those people.

Wherever you serve in the pyramid, people need you. The products and services offered by the financial services industry are badly needed by everyone. Should you have a particular niche in which you work, do it well and be proud of your work. Tell your clients exactly what you do, and do it for them. Don't cloak your services in a label that doesn't fit.

We have thousands of members who help Americans every day. Some have designations, some are studying for them and some don't feel the need to continue further studies in their markets. But they are all licensed, and they all have expertise. Their level of expertise will help them seek the right level of client.

Don't misunderstand. We are neutral on designations, but we are steadfast on ethics. The two concepts can be exclusive.

Go to www.naifa.org to discover how NAIFA can help you achieve -- at whatever place you serve in the pyramid. And thanks for helping the clients you serve.

A 40-year veteran of life insurance sales, financial services and field management, Art Kraus is CEO of the National Association of Insurance and Financial Advisors (NAIFA).

Top | Back | E-mail to a Friend | Print

If you are not receiving your magazine or need to change your address,
please contact membersupport@naifa.org.

For comments on articles on this website contact mleyes@naifa.org.

Americans Need Advice (ViewPoint)

Americans Need Advice
(ViewPoint)