Senior Market Advisor

David Hollander, president of Liberty Group LLC in Oakland, and our regular Compliance Watch columnist, sent over some interesting information recently. The issue of "data compliance" is one subject where many advisors could (and should) become more knowledgeable.

Hollander emailed over a list of requirements and policies that advisors might want to adopt or follow. Below are the highlights:

* Have written and enforceable retention policies.
* Make sure that there is a written procedure that is followed regarding email and IM.
* Make sure there is a written procedure regarding review and approval of Web sites prior to publication.
* Store data on non-erasable, non-rewriteable media.
* Maintain a searchable index of all stored data for at least three years.
* Have readily retrievable and viewable data for up to six years, two years easily accessible.
* Consider storing data offsite and backup that data regularly.

There are some people you come across that have an innate ability to get you fired up. Just a few minutes of talking with inspirational speaker Scott Burrows over the phone recently, had that affect on me.

I almost decided to chuck the whole journalism thing and start selling products. Okay, that might be an exaggeration. I couldn’t sell umbrellas in London, but Scott does inspire. Who knows, he might have unearthed my latest attempt at the Great American Novel. He has that way about him.

Scott’s story is a novel in its own right. He played for legendary football coach Bobby Bowden at Florida State and was a ranked kick boxer, having sparred on an ESPN broadcast.

When a car accident left him paralyzed, Scott took that challenge and approached it the same way he once did the football field and the kick boxing ring – with grit.

In our phone conversation, Scott told me that in his speeches: “I talk a lot about grit. In today’s marketplace, we’re going through some difficult times, so you’ve got to be willing to grit it out. It has everything to do with reaching inside and finding the best within you. That’s what separates the winners from the rest of the world.”

Scott will be delivering the opening keynote address at Senior Market Advisor Expo 2008, August 20-22 in Orlando. Get ready to get inspired.
 

It’s been nearly a week since the Securities and Exchange Commission voted 3-0 to define equity indexed annuities as securities and I have a question to ask: Are you strapped in tight for the SEC rollercoaster?

Who knows how this will play out? Authors of the 96-page SEC report came on strong and confident in their comments last week. Opponents have told me the paper has more holes in it than a pack of Swiss cheese.

Although talk of this initiative has been bandied about for at least the last two years, our industry has been abuzz since the SEC proposal hit the public. I’ve talked with industry insiders and found a myriad of emotions and opinions — everything from elation to frustration.

Mostly, though, I’ve been hearing a lot of questions as advisors, wholesalers and carriers try to get their arms around this proposal and figure out if it will go through, and what the impact will be to their bottom line and the way they do business. One thing I have heard on a consistent basis is that indexed annuities remain a viable product and should still be sold by advisors. As one industry insider put it: "For now, it's business as usual."

Senior Market Advisor’s managing editor, Andy Stonehouse, wrote about the issue when the news broke last week. Per his findings, SEC commissioner Christopher Cox points to “abusive sales practices” as his motivation for pushing for this change regarding EIAs.

Our email’s been flooded and the phone’s been ringing off the hook from industry professionals looking for answers and possible strategies to combat the proposal. In the last few days, Web sites discussing the SEC’s plans for EIAs have cropped up, including www.sec151a.com.

Jack Marrion, Senior Market Advisor’s Annuity Advisor columnist, says securitizing annuities will “impose unnecessary costs and be anti-competitive.”

Danette Kennedy of Gorilla Compliance LLC told me she’s preparing a detailed critical analysis of the SEC report. In her early reading of it, Kennedy says she expects “an uphill battle for the SEC based on legal precedent and Supreme Court decisions on what can be regulated.”

But that’s only one side of the coin, and since releasing the report, Cox has been “unavailable for comment” when approached for additional details.

As opponents of the SEC’s decision arm themselves with counterproposals, many in the industry are left looking for answers. We want to be a conduit and sounding board for that dialogue. Let us know what you think – click here to post questions and voice your opinion. Will you be ready for the SEC effect if it does find the necessary traction?

With our editor, Daniel Williams, still holding down the fort on the last day of MDRT’s big conference in Toronto, let me, Associate Editor Andy Stonehouse, step in for a moment and get you up to date on today’s flurry of activity related to the possible regulation of equity indexed annuities.

Advisors have been burning up the phone lines today. And that’s because of news that the U.S. Securities and Exchange Commission is considering rulings which would label fixed and equity indexed annuities as registered securities – a move which could drastically change the way many of you do business. Securities licensing might be the norm.

The emphasis at this point, however, is on “considering.” SEC rulings did not, miraculously, change or come into effect overnight – this is Washington, we must remember – but the potential for those previously unlicensed products to suddenly take on a new and much more regulated status is definitely a possibility.

Before everyone goes into panic mode, let’s look at some of the facts – and the timelines involved.

All of the hubbub stems from Wednesday’s SEC hearing, where the commissioners, in a 3-0 vote, proposed a new rule – known as 151A – which would move EIAs into the securities realm.

The new ruling would use two benchmark tests to determine if a financial product is in fact a security, with some arguably vague language at their core:

1. “The amounts payable are calculated in whole or in part by reference to a security or a group of securities or an index, and
2. “The amounts payable by the insurer are more likely than not to exceed the amounts guaranteed under the contract.”

In news reports on the hearing, SEC chairman Christopher Cox says his motivation for pushing the changes go back to his frequently-made assertions that the products are being inappropriately sold through abusive sales practices.

SEC commissioner Paul Atkins went even further, saying that sales are often made with no eye to suitability: “A few rotten apples have given a bad name to the industry as a whole.”

What’s the process from here, and what can you do about it? The language of the proposed rule will be opened for public comment, until Sept. 10 – followed by a more deliberations and a vote.

Your best resource to monitor those proceedings is the SEC itself: visit www.sec.gov, where news, timing, comments and the full text of the proposed ruling can be found.

Should the rulings be adopted, there would be a one-year period before compliance – and new securities licensing – would come into effect.

As we say, the changes are Washington talk at this point. But we would encourage you to do the following as the issue is definitely on the table, and part of a looming, industry-wide move towards potential regulation.

• Stay informed. A good source, set to go live in the next day or so, is www.SEC151A.com, a neutral site set up to explain the changes, offer avenues for commentary and help guide advisors in the next steps. NAFA is also an excellent resource; they’ve planned their own site, www.151AForum.com, to discuss the issue and provide solutions and strategies.
• Consider the kind of business you do want to pursue, should changes go ahead. Planning for the future will help you keep one step ahead.

And … please feel free to use our own Web site as a forum to discuss your concerns, your plans and your hopes as changes like these and others continue to take place in the industry. We welcome your comments and hope we can reflect the rather significant changes taking place.

The Senior Market Advisor staff met yesterday for what we call Vision Day. We meet like this once a year to take stock of what we're doing well, see where there's room for improvement and plan for the year ahead. This year's meeting included an additional subtext: We're in the midst of a redesign of our publication that will hit the streets beginning with our September issue. 

The meeting brought together people from all walks of life within our organization--editorial, publishing, sales, marketing, art direction, eMedia, technology and the like.

To us editorial and art folk, some of the best buzz words and phrases were not in our everyday vocabulary -- blue ocean strategy, mapping taxonomy and emotional page rate, just to name a few. But it was good to see, for a day, how the other parts of our publication think and strategize.

I liken it to the philosophy that you learn best, have your most creative moments, by stepping outside your comfort zone and mixing it up with a diverse group of thinkers, people who come to an idea or a project from a variety of backgrounds.

It was around the seventh hour of our meeting (or maybe it was during the happy hour celebration following) that I had a vision...

As part of our redesign, we've been working closely with a research group to figure out the best way to tweak the magazine. It was during this moment of reflection yesterday that I remembered something the research company had said about our magazine: "don't screw it up!"

All of the research we've received has pointed to one, consistent theme: our readers like the magazine. They appreciate the job we're doing, the content and the presentation. So, "don't screw it up."

We threw out dozens and dozens of ideas at the meeting, some we'll be incorporating into the redesign, others we'll hold back, for now.

I don't want to give away too many secrets about our plans, but we believe you'll be pleased with the results. And don't expect anything too far from our traditional look and feel. Think of it as a spa makeover as opposed to radical, reconstructive surgery.

Look for more details about our redesign over the coming months. if you have any suggestions about what you'd like to see in the magazine, let us hear from you.

It's June, the halfway point of the year, a time to take stock of where you are in your sales goals and a good chance to take a deep breath and map out how you intend to finish the year with a bang.

I get a lot of books in the mail, many of them provide the impetus for some of our best stories. Identity Branding Revisted -- Creating Prospect Attraction by Robert E. Krumroy is not a new book, but one that just made it to my desk.

It's a good read in general, but there's one chapter in particular I found interesting as well as appropriate for this time of year.

The chapter is titled, "A Mid-Year Review for Sales Professionals." The chapter is longer than what I want to cover in this space, but I'll give you a few of the highlights.

1) First, ask yourself a simple question: are you satisfied with your first half results?

2) In efforts to better meet your goals for the rest of the year, develop a "weekly checkpoint for the one or two priority activities that you must accomplish in order to meet your financial goals. Write down when this occurs, or should occur, and specify what activity you are measuring."

3) A third item Krumroy points to is "commit to completing a courageous act every day before 10 am... The courageous act must always be a revenue producing activity." That activity might be calling a potential client or account you've so far put on the backburner.

Those are just a few pointers from the book, but I hope it gets you thinking about what you need to do to make the year a great success. Good luck in hitting your goals.

Okay, so long term care isn’t one of those polarizing topics that send voters scurrying to the booth. I haven’t seen a great deal of talk about it in the national media, but, as you might suspect, the three remaining candidates for the Oval Office have opinions on the subject. Obama,  Clinton, and McCain have all weighed in on the subject.

While LTC may not be at the top of their respective platforms, David G. Stevenson believes it should be. Penning an article for The New England Journal of Medicine, Stevenson believes the issue “has all the makings of a great campaign topic.”

Stevenson writes that long term care, “affects a large portion of the population, it is expensive (it currently accounts for about 10 percent of all health care costs), and it requires a unique partnership between government and citizens. Moreover, a range of constituencies perceive the current long-term care system as seriously broken. It exposes people who need services to considerable financial risk, and it too often relies on an institutional model of care that is at odds with consumer preferences.”

What are your thoughts on the subject? Is there anything the candidates should be saying about LTC that they’re not or is it just one more subject that won’t be broached until it’s swallowed us up in its costs?

I had lunch with a successful advisor yesterday and the subject of conferences came up. Our annual conference, Senior Market Advisor Expo, is August 20-22 this year in Orlando, and this advisor hadn't yet signed up.

I wanted to know why.

He set his fork down and thought about the question for a while.

"I may have to get back to you on that one," he said.  He picked up his fork again, but before he could take a bite, he said one word: "Time."

"What's that?" I asked.    

"Time," he repeated. "Any time I'm away from the office, I'm away from my clients, away from making money."

This was an interesting insight for me. I've come most recently from covering commercial real estate, an industry where the brokers are conference-crazy. As a reporter, I covered around 25 conferences a year. I saw many of the same faces from conference to conference.

Part of their attendance was due to hearing the latest industry information first hand; part of if was networking, getting your name and face out there; but a big part of it was the opportunity to do deals.

In your line of work, what brings you to conferences or, if you miss an event, what's the chief reason you stay away?

Suitability remains a key part to this industry's platform and in many regards "the" key way in which it's perceived by the outside world.

So, the key question to ask is: Are you suitable yet?

If you want questions answered to see if your practice is suitable, post it here and either myself or the community will do our best to answer your needs.

With that in mind, what would you like to see in the way of content that would boost your ethical bottom line?

Also, if you have guidelines in place feel free to share those here.

I look forward to hearing your thoughts on the subject.

Hello and welcome to the new Website for Senior Market Advisor. We're excited about this latest endeavor and believe it will be a true meeting place for the SMA editorial staff and you, our readers.

The print publication will always be our first love and Senior Market Advisor Expo that opportunity, once a year, to gather under one roof, seeing old friends and making new ones. But the Web site is immediate, a sounding board where we can interact, communicating our thoughts and needs.

Currently, you're in the Editor's Blog, where I'll provide frequent updates and insights on the industry and wait for your responses.

As you navigate the page, you'll also find areas for Breaking News, Video and Audio Spotlights and our popular eNewsletter, Senior Market Advisor Extra. Also included will be our print publication online, Web extras and a Poll of the Month.

Our highlights on the site now include a video interview with fitness guru Jack Lalanne and Matthew Rettick and podcasts with Allianz CEO Gary Bhojwani and South Carolina advisor Angela Sloan. In our news section you will find our response to the Dateline NBC piece as well as articles on cross-selling and the "sandwich generation."

You will be vital to the success of this page. Your input, your feedback, will be the engine that drives www.seniormarketadvisor.com so let us know what you think.

Enjoy!