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Accumulation, Distribution and Legacy

An MDRT producer shares some of the secrets of his success.

By Lucretia DiSanto Jones

When Bill Nelson, LUTCF, RFC, was still in college, he answered a blind classified ad for management trainees. He thought it was to sell sporting goods and equipment. The position paid $200 per week guaranteed, and for a married college kid, that guarantee was important.

Today, 32 years later, he’s in the same industry that he entered by way of that classified ad, but he’s definitely not selling baseball gloves and field hockey sticks. He’s selling financial advice and products, and he’s wildly successful at it.

Nelson, CEO and president of Dayton, Ohio-based Nelson Financial Group, is viewed as one of the top educators in the financial services industry. A consistent member of the Million Dollar Round Table’s Top of the Table (he meets TOT production requirements every two months), Nelson’s firm provides financial education and research through in-depth seminars.

Nelson recently shared some thoughts with Advisor Today.

Striving for peak efficiency
A common goal of Nelson’s practice is to help working Americans--individuals and small-business owners alike--acquire, accumulate and retain wealth in a tax-efficient manner so they can retire with confidence and dignity.

As financial educators, what Nelson and his staff do is best described by explaining how they have been able to assist their clients.

First, they strive to help them understand their financial alternatives so they can make the best decisions for their situations. Then, they assist them in protecting their assets from tax inefficiencies that can jeopardize their chances for a comfortable retirement. They also help them discover “lazy” money and how to use it to earn a higher rate of return.

Their approach is based on three phases of financial planning: accumulation, distribution and legacy.

To Nelson, the distribution phase is the most important stage. The key to distribution is appropriate and smart planning along the way. That means keeping as much of your income in your pocket throughout your entire life, not just at retirement when the distribution occurs, he says.

Paying taxes on the seed
Unfortunately, according to Nelson, average Americans don’t retain what they should; as a result, they pay the price when they retire.

“Working Americans pay taxes on the seed, not the harvest. You don’t want to pay taxes on the seed. You want to pay taxes on the harvest,” Nelson stresses.

“The IRS will confiscate a huge percent in the end, so we’ve got to look at ways to pay fewer taxes,” he told Advisor Today. “It’s not about what you pay; it’s about what you keep.”

Nelson is careful to point out, though, that he works to identify tax-efficient strategies for his clients. “We’re talking about tax avoidance, not tax evasion. We are the wealthiest country in the world, yet we give massive amounts of money away to taxation upon retirement simply because of lack of knowledge.”

Need for proper financial education
Nelson and his team also spend a lot of time educating individuals and small-business owners, who can be especially vulnerable to lawsuits if their employees find fault with the information they receive from their employers.

“Under Department of Labor law, you must give your employees a proper financial education,” he says. “If you don’t, you can be liable. And you always have people talking to each other. One is asking: ’Why is your 401(k) better than mine? Why didn’t my employer give me a better education on all of this?’”

To avoid this, Nelson and his team demonstrate to small-business owners that there are other ways to provide benefits to their employees, protect themselves and maintain liquidity at the same time.

“I’m not saying that retirement plans are bad,” Nelson says. ”I certainly am an advocate of a 401(k) when the employer is matching the contribution. What I’m saying is that for small-business owners, there are alternatives to look at, and then you make a decision.“

Life insurance may well be one of those innovative alternatives, he adds.

The tax benefits of life insurance
“The life insurance contract has more beneficial tax codes than any other financial vehicle I’ve seen,” Nelson says. “Most people aren’t aware of the tremendous opportunities available through the functions of life insurance. It protects you in case of premature death. It can eliminate or reduce death taxes. And it can reduce income tax while you’re alive.”

Consumer education is clearly a passion for Nelson, who jokingly explains how he knows when his clients have enjoyed their retirement: “The check to the funeral home for final expenses bounces.”


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