Partners Advantage Blog

Thursday, April 28, 2016

Helping Businesses Succeed in the "New Normal"

By: Bill Jackson J.D., CLU®

Things can happen quickly in the modern business world. The problem is most business owners are focused on the day-to-day activities that contribute to the bottom line. Many of these people list protecting their business, reducing its tax exposure, providing for retirement, and succession planning as key concerns, but there appears to be a disconnect between these concerns and actual planning. Some of these same businesses provide health plans and other employee benefits, but have failed to address the concerns mentioned above.

Most businesses, even those of medium-size, do not have an in-house employee focused on organizational protection, tax exposure, retirement and succession planning. Their other advisors, CPAs and Attorneys, are often generalists focused on tax returns and contract review. It is no wonder that with all of the other pressing business issues, these critical concerns go unaddressed.

Enter the financial professional, armed with specialized concepts and funding alternatives and a desire to help repair this disconnect. We are not talking about replacing the clients’ other advisors, rather we include them in the process. The financial professional can provide the impetus to consider proven alternatives and recommend appropriate funding solutions, such as:

Repurposed Entity Buy-Sell (for retirement)
Non-Equity Cross-Purchase Split Dollar Plan
Key-Person Plan Repurposed to a Deferred Compensation Retirement Plan
Focused Benefit Plan

Learn more about these solutions and how they can heal the disconnect and help business owners protect and continue their businesses in a tax-efficient manner, while carefully addressing one of our most pressing societal concerns, retirement. Read the full article: “Helping Businesses Succeed in the ‘New Normal’” by Bill Jackson, senior advanced markets consultant at Partners Advantage, which first appeared in the April Broker World magazine.

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For financial professional use only. Not for use with consumers.

* The IRS has ruled privately on several occasions that owners of an LLC are “partners” for purposes of the transfer-for-value rule PLRs 9625013 through 9625019.

Policy loans and withdrawals will reduce available cash values and death benefits, and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of un-recovered cost basis will be subject to ordinary income tax. Tax laws are subject to change.

Pursuant to IRS Circular 230, Partners Advantage Insurance Services and their representatives do not give tax or legal advice. Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.

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Thursday, April 21, 2016

Annuity Sales Continue to Climb

The sales of fixed annuities continue to climb. In the fourth quarter of 2015, the United States annuity sales totaled $61.4 billion, improving five percent compared to the prior year. In the LIMRA Secure Retirement Institute’s fourth quarter U.S. Individual Annuities Sales Survey, it also showed that fixed indexed annuities were up 32 percent at $16.1 billion.¹

Why are people choosing fixed indexed annuities to meet their long-term goals and retirement needs? Why are annuity sales continuing to grow each quarter?

Fixed indexed annuities bring interest to some consumers because they include:

Opportunity for tax-deferred growth
Guaranteed* lifetime income
Protection of premium from potential market downturns
Built-in Flexibility
Growth accumulation

Some consumers are interested in fixed indexed annuities because of these product features. It can provide useful benefits for people and offer protections against the different risks that could potentially deplete future savings. Financial professionals are also providing more education and awareness to clients so they are aware of what could happen to their principal if another market downturn took place.

As more people become aware of fixed indexed annuities, it gives a financial professional ample opportunity to share in detail about the products. It shows the importance of being transparent and ethical. Clients need to be aware of all fees, interest, and guaranteed* income payments from the start. The financial strength of the issuing insurance company is also an important factor during the decision process.

When this is done, it becomes easier to maintain a happy annuity base and continue to increase satisfied annuity clients. They are happy because informed retirement decisions are being made.

¹“LIMRA Secure Retirement Institute: Indexed Annuities Break Quarterly and Annual Sales Records,” http://www.limra.com/Posts/PR/News_Releases/LIMRA_Secure_Retirement_Institute__Indexed_Annuities_Break_Quarterly_and_Annual_Sales_Records.aspx, last accessed 3/21/16

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH CONSUMERS.

*Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank of the FDIC. A fixed indexed annuity can provide annuitization as a means to provide retirement income payments. An alternative option to annuitization could be the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.

Tax-deferred interest accumulation offers no additional value if the annuity is used to fund an IRA under current tax law; additionally, tax deferral may not be available if the owner of the annuity is not a natural person such as a corporation or certain types of trusts.

Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of principal and credited interest, and the reassurance of a death benefit for beneficiaries. Please note that in order to provide a recommendation to a client about the transfer of funds from an investment product to a fixed insurance or annuity, you must hold the proper securities registration and be currently affiliated with a broker/dealer. If you are unsure whether or not the information you are providing to a client represents general guidance or a specific recommendation to liquidate a security, please contact the individual state securities department in the states in which you conduct business.

This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Encourage your clients to consult their tax advisor or attorney.

Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of principal and credited interest, and the reassurance of a death benefit for beneficiaries.

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Monday, April 18, 2016

Patrick Amaya Joins Partners Advantage as General Counsel

Riverside, CA (April 18, 2016) – Partners Advantage President James Wong announced the appointment of Patrick Amaya as General Counsel. In this position, Amaya will serve as the company's in-house legal counsel and will direct its compliance and suitability office. His office will also provide regulatory and compliance educational programs for the company's employees and distribution network.

"In light of a continually changing and growing regulatory environment, Partners Advantage has made the strategic decision to add an in-house general counsel to enable us to be on the front edge of legal and regulatory matters," Wong stated.

Most recently, Amaya served as compliance manager at Pacific Life Insurance Company. He brings experience working in similar capacities at several other financial companies, including Merrill Lynch, MetLife and WAMU Investments. He also spent several years as a financial advisor with Morgan Stanley and Wells Fargo Investments.

Amaya is a licensed attorney and member of the California Bar. He earned his Juris Doctorate at Western State College of Law in Fullerton, CA. and also holds a bachelor's degree in business administration. He previously maintained the following licenses: FINRA Series 7, 66, 24, 4, 53, 31 and California Life and Disability.

About Partners Advantage Insurance Services

Partners Advantage Insurance Services, LLC, is among the top national insurance marketing organizations in the country with 70 associates located in offices across the United States. The company's Advantage Division is a one-stop brokerage for licensed agents and agencies throughout the United States who sell annuities, life insurance and linked benefit products. The company's Platinum and Premier Divisions work to enhance insurance marketing organizations and agencies throughout the country. The corporate headquarters for Partners Advantage is located in Riverside, CA. Regional offices are located in Huntington Beach, CA, Palm Beach, FL, Sioux City, IA, Ada, MN, Florham Park, NJ, Houston, TX and Henderson, NV. For more information about Partners Advantage, visit www.PartnersAdvantage.com.

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Thursday, April 14, 2016

How You Can Help Clients Find Financial Confidence for Retirement

The visual picture of retirement is normally laid-back days spent traveling, enjoying hobbies, and being with family and friends. The problem is many people don’t properly plan for retirement and this vision is never achieved. The other issue is companies are moving away from pension plans, so the responsibility of having enough income for retirement is landing largely on the consumer. This is where a financial professional can step in and provide options for helping build a stable financial future for their client.

One option to share with your client is the various types of annuities, as many of them can bridge the gap between money received from pensions and social security and the money needed to handle living expenses during retirement. Fixed indexed annuities can also provide guaranteed* lifetime income and have the ability to accumulate wealth for retirement. It can offer protection against certain risks that could potentially deplete a client’s future savings, as well as provide built-in flexibility in case needs change.

The clients who are able to maintain their standard of living during retirement, have assets for times they may need them, and have the potential to accumulate wealth will most likely be interested in an annuity purchase. This is why many financial professionals often feel confidence when recommending fixed indexed annuities to clients. Of course, they aren’t going to be suited for everyone, but they may be a good fit for those who:

Seek to complement other income sources, such as Social Security
Are looking to protect premium, while also seeking potential market indexed growth
Don’t already have a type of defined benefit pension plan or guaranteed* lifetime income in place
Desire a flexible plan that is adaptable to changing needs
Looking for ways to convert sums of cash from retirement plans into immediate income

While sharing about annuities, make sure to inform each client about all aspects of the product before making a purchase. Helping them make informed decisions about their future now can help them actually enjoy those hard-earned days during retirement.

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH CONSUMERS.

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Tuesday, April 12, 2016

How Does the New DOL Fiduciary Standard Impact Your Business?

Partners Advantage President James Wong and Senior VP of Sales & Marketing Charlie Gipple, CLU®, ChFC® are featured in a call recording discussing the recent Department of Labor Fiduciary Standard. In 30 minutes you will learn the key points on how it impacts your business:

What does the DOL Announcement mean to:

o Variable Annuity industry

o Fixed Rate Annuities, SPIAs, DIAs

o Indexed Annuity Industry

o Distribution (Agents, Broker Dealers, IMOs, Carriers)

Proposed Rule Versus Final Rule

o Final BICE Versus Proposed BICE

Implementation time-frame

o Do I need a Series 65?

o How is Partners Advantage preparing?

o Incentive Trips

o Seminars

Request immediate access to the recording:

Fill out my online form.

For financial professional use only - not for use with the public.

The third party information and opinions included in these presentations have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Partners Advantage. Although we may promote and/or recommend the services offered by these companies, financial professionals are ultimately responsible for the use of any materials or services and agree to comply with the compliance requirements of their broker/dealer and registered investment advisor, if applicable, and the insurance carriers they represent.

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Partners Advantage Announces Sales and Business Service Expansions

FOR IMMEDIATE RELEASE

Riverside, CA (April 12, 2016) – With aggressive plans in place to surpass its 2015 sales achievements of $1.3 billion in annuity business and $57 million in life insurance business, Partners Advantage Insurance Services announced its most recent staff appointments.

Robert Bisch joins Partners Advantage as its New Jersey Branch Sales Manager. He has more than 20 years' experience in the life and annuity industry. Most recently he led the New England and Mid-Atlantic life and linked benefit sales for Genworth Financial. During nearly seven years with Genworth he received multiple awards for sales leadership in the indexed universal life and linked benefit products areas.

The Partners Advantage branch in Florham Park, New Jersey, serves agencies and financial professionals in the Northeast, many of which cater to an advanced markets clientele. Bisch will manage the team at this location working directly with Partners Advantage President James Wong. He will also be responsible for opening new markets and attracting new agencies and producers to the branch.

"Rob's track record of success speaks for itself," stated Partners Advantage President James Wong. "We are pleased to bring him on board to lead this important component within our overall corporation."

In addition, the expansive Business Growth Services delivered by Partners Advantage to agencies throughout the country has been enhanced by the promotions of two veteran team members to newly created positions. Steve Paramo has been appointed to the role of Business Development Manager where he will assist Platinum agencies improve their operations. Jacque Wilkening has been appointed Relationship Manager and will be focused on delivering exceptional results to leading agencies served by Partners Advantage.

"Within our organization, we excel at bringing together education that causes sales and have a commitment to exceptional customer service," stated Gipple. "We are excited about the ways in which these new positions will allow us to enhance our service to our ever-expanding network."

About Partners Advantage Insurance Services

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Thursday, April 7, 2016

Impact of Words and Selling Permanent Life Insurance

Unlike term insurance, permanent life insurance can help someone “live more” for today, as it not only can help protect a family against life’s unknowns but it can also provide ongoing access to their money when it’s needed. However, the words you use to talk about the benefits of permanent life insurance can be crucial in whether or not you get a sale or keep a potential client from considering it in the future.

How you use your words with a potential client is talked about in an AXA Study by Maslansky and Partners called: “The New Language of Permanent Life Insurance.” They discover the language used to talk about permanent life insurance can have a huge impact.

The Phrase “Death Benefit”
For instance, when talking about the benefits of permanent life, phrases like “death benefit” or “when you die” may be used. But what does a potential client hear or perceive from those words? Some may only hear the word “death” and are reminded of their own mortality. Instead, the study showed that when language like “the financial security benefit for your family” or “when you can no longer provide for your family” was used, it had more of an impact and was more influential.

So Who Are They Protecting?
It can be tricky talking about beneficiaries, as it’s easy to sound too corporate and informal, but it could turn them off if you’re too personal. Some financial professionals have found when they describe beneficiaries with plain and simple language and used a word like “family,” the potential client was more engaged. If they were overly formal or informal, it had the potential to alienate the audience.

The Phrase “Cash Value”
When talking to clients about cash value in permanent life insurance, use the word “access” rather than “loans.” The AXA study showed it’s best to avoid talking about cash value as a “loan” at all. Since it’s the client’s money in the policy, they don’t think they should be charged if they need to use it, which is what the word “loan” implies to them. When you focus on access, you make it clear they can get to it if needed, without signaling that there may be a fee.

These are just a few examples of how the language used can impact a client’s perspective on permanent life insurance. The goal is to use words that keep them in the conversation, so they can “live more” for today but also save for the future. However a financial professional must be careful to not oversell its importance, because it could turn a potential client off from further conversation. Because to them, it’s not a must-have – at least not yet.

Contact the Partners Advantage Life Brokerage Team for complete assistance:

888-251-5525, Ext. 704

(Exp. 8/17)
Source: AXA “White Paper: The New Language of Permanent Life Insurance,” https://us.axa.com/email-attachments/w/lif/2015/154700.pdf, last accessed 3/21/16.

For financial professional use only.

Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy's account value and death benefit. Assuming a policy is not a Modified Endowment Contract (MEC), withdrawals are taxed only to the ex that they exceed the policy owner's cost basis in the policy and usually loans are free from current federal taxation. A policy loan could result in tax consequences if the policy lapses or is surrendered while a loan is outstanding. Distributions from MECs are subject to federal income tax to the extent of the gain in the policy and taxable distributions are subject to a 10% additional tax prior to age 59½, with certain exceptions.

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Wednesday, April 6, 2016

Post DOL Fiduciary Standard, Robo-Advisors Versus Real Advisors

By: Charlie Gipple, CLU,^® ChFC^®- Senior VP of Sales & Marketing, Partners Advantage

This is an excerpt to the full whitepaper by Charlie Gipple: "What Robo-Advisors CanNOT Do That You Can An Introduction to Behavioral Finance"

Whether we are talking about life insurance sales, annuity sales or investment sales, one thing is undisputable, MONEY IS EMOTIONAL. I believe financial professionals can never be replaced, because “robo-advisors” cannot adequately help manage the clients’ emotions and behaviors! Here's some insights into why.

Traditional Finance is what we have been taught. Traditional Finance would lead one to believe that helping our clients is more of a science than an art. This is the mathematically and scientifically fun stuff you read in the textbooks, such as efficient market hypothesis, correlation coefficients, charts, graphs, standard deviations, alpha, beta, and of course, the big one, Modern Portfolio Theory.

The Emotional Tail Wags the Rational Dog

Traditional Finance is the thought that what we doing financial services is more of a science than an art. I am a fan of “Traditional Finance,” and I have studied it a lot as I have a finance degree, two designations and four securities licenses. What does all of that mean, however? It means absolutely nothing, unless I can also help my clients with their behavior as well. Nothing else matters if investors’ behavior gets the best of them.

Furthermore, at the level of your client, these errors in their minds, in turn, can harm the success of a retirement and/or insurance portfolio. In other words, you as an agent/advisor can lay out a perfectly sound mathematical and scientific argument for your clients to either take action (buy insurance, for example) or not take action (buy and hold), but, if they have a “bias” in their mind that completely cancels out your rational argument, you are spitting in the wind.

In a world where supply and demand drives the price of multiple types of traded instruments up or down, when investors commit errors in thinking/judgment, the prices on these “traded instruments” tend to be different than what they would have been in an error-free environment. This is because the decisions of investors, whether rational or not, are what drive the prices of “investments” up and down. Bubbles and discounts do happen and have happened. The “rational models” have failed.

Therefore, you have this proliferation of behavioral finance. This is “the study of how finance is affected

by psychology. It attempts to understand a and explain how human emotions influence investors in their decision-making process.”

Now, why is behavioral finance a “new thing”? Why has it only been around for a couple of decades? Why have many agents never heard of behavioral finance? If it is so important now, then how have we lived without it for all this time? In other words, what is the paradigm shift that has taken place where behavioral finance should now be introduced into your practice when it was never a thought in previous years?

Find out more in the full, 14-page whitepaper by Charlie Gipple: "What Robo-Advisors CanNOT Do That You Can An Introduction to Behavioral Finance" Fill out the form below to request the full whitepaper or call Partners Advantage direct at 888-251-5525, Ext. 700.