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Playing for Keeps

Here’s one expert's take on the many challenges facing advisors today.

By Stephan R. Leimberg, J.D.

I’m often asked to speak on the threats and challenges to—and opportunities in—the life insurance community. I see seven key challenges that must be addressed to keep your practice strong and growing:

Challenge 1: Keeping up
The challenge is not just information overload it’s understanding underload. The speed of tax law, economic environment, technology and product change—and changing information—is growing at a constantly accelerating pace.

For example, expect a return of the Bingaman proposal—which would turn all or a portion of otherwise tax-free COLI death proceeds into ordinary income if a corporation holds insurance after an employee leaves.

This is just one example of how legislative activity can effect your business. To keep up with these changes, you must be constantly informed and active in the political process. Reading the financial press, subscribing to an independent email news service such as LISI ( or subscribing to a legislative-focused newsletter like NAIFA Frontline is a great way to know how the government is influencing your bottom line.

Challenge 2: Keeping ethical
This challenge is what I call “ethics on empty” or the seduction of the easy sale. It’s easier than ever to succumb to the lure of the bleeding edge big-commission idea.

What could be more exciting than to market a sure-fire way to spin straw into gold? “Thanks to me, your life insurance is now tax deductible, the commissions are gigantic and your family gets richer—but you pay no gift tax! What could be better?” Nothing! Until, of course, your client is audited.

If you are going to be doing innovative planning, here are five things to consider:

  1. Check regularly for pending and recent legislation, cases and rulings that might adversely impact on the idea.
  2. Read articles to see if respected authorities in journals are criticizing—or adopting—the concept.
  3. Check to see if reputable law firms refused to issue favorable opinion letters or if respected attorneys, CPAs or your peers have trouble with the idea.
  4. Do you, or others, have to sign a confidentiality agreement? If so, that’s a bad sign.
  5. Check to see if one or more respected insurers declined to market the idea because of tax uncertainty or other problems.

Challenge 3: Keeping creative
The challenge is to break out of the circle that’s keeping you from the next plateau, and working harder isn’t the answer. The solution is to ask yourself two questions every week: “Why am I doing things this way?” and “What if I did things differently?” Don't be afraid to take considered risks with respect to your business and your business operation, or even enter new markets.

Create the systems and checklists you need to stay on top of troublesome issues and correct problems when they arise.

Challenge 4: Keeping diversified
If you base your financial success in just one area—say on marketing estate liquidity sales or 419A(f)(6) plans—and that rug is pulled out from under you, you are in trouble. This warning is especially important with respect to tax-deduction or tax-savings-based planning, which is now a creature of political whim and will.

The solution is to always position yourself so you can reallocate your resources quickly. Don’t allow your entire practice to rest on one pillar, because if that pillar is knocked down, the entire business could fall.

Challenge 5: Keeping focused
Between the situation in Iraq, continually escalating terrorist threats, the fluctuating and unsteady stock market and tax law changes, there is a real risk you could lose your focus, then your direction and, finally, your momentum.

Find out what your strengths are and keep focused on them. Think, plan and act for the long term. Stop living your life as an ad lib and take a weekend a year and really plan out what you should be doing and the most time- and cost-effective way to accomplish your goals.

Challenge 6: Keeping your staff focused
The danger is that staff can see themselves as just nine-to-five hired help—and if so—that’s the kind of work you’ll get out of them. The solution is to change the mindset of every member of your team, especially office managers and clerical staff. Create a new culture. They must all know how important your mission is, and you need to make them aware that planning and action (rather than just reaction) is the key to your—and therefore their—success and financial security.

Challenge 7: Keeping in front of your targeted market
The greatest threat to a highly successful producer is complacency and arrogance. Many top producers think they don’t need to grow, they don’t need new clients and they don’t need to take better care of—and have more contact with—the clients they have. And they all too often don’t fire the clients—or demote the clients—who are eating up their time or creating aggravation, which takes a heavy emotional toll. The solution is to identify the clients you want to keep and attract, then increase and customize your interaction with them.

Stephan R. Leimberg, J.D., is CEO of Leimberg Information Services Inc., an email and database service providing information and commentary on tax cases, rulings and legislation for financial services professionals. You may contact him through his website or


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