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P&C Captive Agent Total Process Rev 05.02.2016 of 15

P&C Captive Agent Total Process

Table of Contents Door Openers: When people ask “What do you do”? ........................................................................... 2

What to say when your prospect says, “NO, I don’t have an advisor.”............................................... 2 What to say when your prospect says, “YES, I have an advisor.” ..................................................... 3

1st Appointment (P&C Captive Agent Process IFR) ............................................................................... 4 Meeting 1 Conclusion ........................................................................................................................ 9

2nd Appointment (This appointment is your opportunity to “get hired”) ................................................... 9

Process Step 1: Open-ended Questions ........................................................................................... 9 Process Step 2: Introduction to the Personal Economic Model and Circle Talk ............................. 10 Step 3: Ask for a complete financial questionnaire and schedule the next appointment................. 11 Process Step 4: Explain how you will get paid. ............................................................................... 12 Process Step 5: The second way is through referrals ..................................................................... 12

3rd Appointment (Find the Money Process Steps 6-7)......................................................................... 12 Process Step 6: Review Questionnaire ........................................................................................... 13 Process Step 7: Potential Wealth Transfer Discussions ................................................................. 13

4th Appointment (Process Steps 8-10) ................................................................................................ 14 Process Step 8: Discuss Their Ideas .............................................................................................. 14 Process Step 9: Product Discussion ............................................................................................... 15 Process Step 10: The Close ........................................................................................................... 15


Door Openers: When people ask “What do you do”?

What to say when your prospect says, “What do you do?” Your Response:

I am in the financial services business with a very unique approach.

I help people find money they are currently loosing unknowingly and unnecessarily. Prospect: How do you do that? Note: The prospect really wants to know what you are selling. You do not want to respond with product but rather the process that makes you different. Your Response:

There are only two ways to help someone financially: 1. Find better products which potentially pay higher returns often requiring increased risk. 2. Help them become more efficient by avoiding or minimizing losses.

Do you have an advisor? What to say when your prospect says, “NO, I don’t have an advisor.” Your Response:

My philosophy is that I believe there is more opportunity in helping my clients avoid losses than trying to pick winners.

There are 5 areas where people are losing money unnecessarily. o How you pay for your house, taxes, how you fund your qualified retirement plans, how

you pay for your children’s education expenses, and how you pay for major capital purchases like cars, vacations and weddings.

You asked me how I do that. The first place to begin is to help our clients answer the four toughest financial questions we all face.

Let me share the questions with you 1. Do you know what rate of return you need to earn doing what you are doing today to be

able to retire at the same standard of living you enjoy today?

Prospect: No

Your Response: Would you like to know?

Prospect: Yes 2. Do you know how much you need to be saving each year to be able to live in the future like

you live today?

Prospect: No


Prospect: Yes 3. Do you know how long you will have to work before you can retire and have your money

last to life expectancy?

Prospect: No

Response: Would you like to know?

Prospect: Yes 4. Do you know how much you will have to reduce your standard of living at retirement if you

don’t do something now?

Prospect: No

Your Response: Would you like to know that as well?

Prospect: Yes


What to say when your prospect says, “YES, I have an advisor.” Your Response:

Is your advisor helping you avoid unnecessary losses or only trying to help you pick the best places to put your money with the highest potential returns?

Prospect: They really just tell me where to put my investment dollars. Your Response:

There are only two ways to help someone financially. 1. Find better products which potentially pay higher returns often requiring increased risk. 2. Help them become more efficient by avoiding or minimizing losses.

There are 5 areas where people are losing money unnecessarily.

How you pay for your house, taxes, how you fund your qualified retirement plans, how you pay for your children’s education expenses, and how you pay for major capital purchases like cars, vacations and weddings.

You asked me how I do that. I begin by helping my clients answer the four toughest questions we all face.

Has your advisor helped you answer the four toughest financial questions we all face? Prospect: No Your Response:

Let me share the questions with you 1. Do you know what rate of return you need to earn doing what you are doing today to be


Prospect: No



you live today?

Prospect: No




Prospect: No




Prospect: No


Prospect: Yes Your Response:

I would like to meet you at Starbucks for 15 minutes one day next week and buy you a cup of coffee. I can give you the answers to those questions and see if what I do is what you are looking for in an advisor.

What time and day would work best for you next week?


1st Appointment (P&C Captive Agent Process IFR) Note: The goal of the first appointment is to get the second appointment. You are looking for the five areas of Wealth Transfers and a way to discuss them briefly.

Thank you for your business, we know you have a choice in insurance. I want you know we appreciate having you as our client.

o As we get started, do you have any specific insurance questions for me?

I want you to know that I approach insurance probably different than others you may have discussed insurance with before today.

When talking about Insurance I believe you buy insurance for the big things and self-insurance for the small things.

The primary reason to purchase insurance is to protect against those things that can happen over which we have no control. These losses can jeopardize your Current Lifestyle and the assets you are saving for your Future lifestyle in retirement.

Note: The PEM model allows you to illustrate these two positions easily should you wish to use it here to illustrate this point. Just a simple look at the model with no other explanation necessary other than current and future lifestyle.

The truth is that if someone or something can take what you have away, it is not really yours.

There are eight areas of protection we want to cover with you today. In our discussion today, want to make sure you have the coverages you want and the right amount.

Note: You can click on Current Lifestyle and then Lifestyle to illustrate these eight areas on using the PEM model or use a copy of the model with protection illustrated. In addition should you wish you can ask your client to prioritize the eight in the order of importance to them and illustrate the shield of protection on the areas they have covered with you.

You currently have (two) of them with us your AUTO and HOME-OWNERINS. o Let’s begin with a quick overview of what you have with us now. o In addition to the first two, we have just discussed there are three areas of protection

specifically related to health insurance.

The first of those is your MAJOR MEDICAL coverage. o Most people carry health insurance through work. o Where do you have yours? o As it relates to health insurance, higher deductibles generate lower premiums. o If you have a low deductible you are locked in to paying higher premiums. o Remember the insurance carrier is in the business of making money. o If you have a high deductible and do not use the coverage this year you get to keep the

additional premium that would have gone to the insurance company with a lower deductible.

o While it is possible that in the future a claim could cost you more out of pocket that year you get to keep control of your money in the years you do not have a claim.

o It makes little sense to give your money to the insurance company before it is necessary.

o How do you feel about you controlling your money rather than the insurance carriers?


Another critical area of protection related to your health is DISABILITY. Should you become disabled and can’t work; disability coverage can replace the income lost.

o Some employers offer the ability to purchase this protection through work. o Does your company offer this benefit? o Do you have it? o Do you know the benefits of your policy?

The third health related area is LONG TERM CARE and it is usually one that many people miss.

o A serious long term illness can deplete your lifetime of savings and investments leaving your spouse with little assets to carry them through their life expectancy.

o Long-term care is more affordable the younger you are and the benefits can offset the rising cost of nursing care where social security and Medicare are inadequate.

o Do you currently have Long Term Care coverage in force today? o Is this a form of coverage you have thought about in the past? o Do you have any personal experience with a loved one requiring Long Term Care?

LIFE INSURANCE is certainly a major area of protection and the foundation to a solid financial plan. It plays a very important role in that it is the only form of protection that will guarantee that what you want to happen will happen even in the event you are not here to see it happen.

o How much coverage do you have in place today? o Do you have any life insurance coverage provided through your employer? o What do you expect the life insurance you have in force today to do? o There are basically two categories of life insurance, short term and long term:

o Short term insurance is nothing more than protection. It provides death protection if you die and provides nothing if you don’t, much like your car insurance. It is the least expensive initially and is more like renting insurance and is called term insurance. Only 1.2% of all term policies in force ever pay a claim and expire or are cancelled long before life expectancy. Short term insurance or term insurance provides protection for a short period of time and is usually purchased to bridge a current shortfall should the unexpected happen before life expectancy.

o Long term insurance provides death protection as well as a safe place to accumulate money on a tax deferred basis and tax free distribution at death. It also can also relieve financial pressure in your life by giving you access to capital during the accumulation period which you can use for your kid’s education expenses, major capital purchases like cars as well as savings to supplement your retirement.

An area closely related to your life insurance protection is WILLS and TRUSTS. o Do you have a valid will? o When was it updated last? o Do you have minor children? o Who are the primary and contingent beneficiaries on your life insurance policies?

The final area of protection we need to discuss is your LIABILITY COVERAGE which relates to your auto insurance. It is the most the most important protection you can own to protect both your current and future lifestyles. Without this coverage and the proper amount your financial future is at risk and very uncertain.

o You have Liability coverage for two reasons: 1. One is a moral and ethical obligation to restore someone you have harmed; and 2. The other is to protect your assets from someone suing you and taking them to pay

for a loss for which you are responsible.


Without the proper coverage everything you have and are saving for your future is at risk. o Let’s say you or someone in your driving family get into an accident and injure or kill a

surgeon. o How much do you think their spouse and children are going to need to make up for their

income loss? o What about the loss of their lifetime capital potential? o They are going to hire a personal injury attorney and sue you for their loss and without

protection you may lose everything you have worked your entire life to acquire.

In order for me to give you a professional recommendation on the proper amount of liability coverage I need to know a little bit about where your money is today and what you want protected.

Note: This is a good time to introduce the left-hand side of the PEM model. As your client tells you the amounts they have in each tank write it down in that area.

One of our largest expenses is in our house. Many people also see their house as their largest investment.

o What is your house worth today? o Approximately what is your current mortgage balance? o Do you have a thirty year loan or shorter period loan? o Do you know the interest rate? If no what is your approximate monthly payment? o Do you ever make extra principal payments?

Let’s talk about your savings and investments. o Let’s first look at what you have in the yellow tank, the investment tank.

About how much do you have accumulated currently for retirement? Are you contributing to a 401K or pension account? Do you get a match from your employer? Are you contributing more than the company match? Have you ever thought about the ramifications of having the lion share of your

money tied up under government control? o Contributions to these types of accounts do not save taxes they defer or a better word

may be POSTPONE your taxes. Do you believe taxes will be higher or lower in the future? Have you done any retirement projections to see where you are today?

On a scale of 1-10 how do you feel you are doing in accumulating the assets you will need in the future to live like you live today adjusted for inflation?

Note: If your client responds with any number other than 10 you respond with the four toughest financial questions.

The best way to determine if you are ready financially is to answer the four toughest financial questions we all face. 1. Do you know what rate of return you need to earn doing what you are doing today to be


Prospect: No



you live today?


Prospect: No




Prospect: No




Prospect: No


Prospect: Yes

It has been my experience that many people move blindly toward their financial future. Throwing money in this account and that account with no realistic idea of whether or not what they are doing is going to get them where they want to be.

I won’t take the time to answer those questions for you today because I know that is not why you came in today but I would like to briefly tell you what it is that I do that makes me unique as a financial services professional.

Many advisors would have a conversation with you that goes something like this… o How much money do you have saved and invested today? o Where is it? o I can help you do better.

In most situations for them to do better they are going to offer you different products than the ones you have today promising better returns which often require more risk.

Our unique philosophy is that we believe there is more opportunity for us to serve our clients by helping them avoid the losses than merely looking for opportunities with potentially higher returns.

There are three types of money we want all our clients to know about. They are Accumulated money, Lifestyle money and Transferred money.

o Accumulated dollars are dollars that you have and are currently saving to meet your future lifestyle goals. This is where most advisors spend the majority of their time and energy.

o Next are lifestyle dollars which relate to things like the type of house you live in, where you vacation and the type of car you drive. I don’t know about you but if you are like me the last thing you want to talk about is reducing your current lifestyle to get your finances in order.

o The last area is transferred dollars and this is what makes what I do for my clients unique. These are dollars that you may be losing unknowingly and unnecessarily. I help people identify dollars they could be losing and bring those dollars back to the table to help them solidify their financial future without having to change their current standard of living.

There are basically five (5) areas where people are losing money unknowingly and unnecessarily.

1. How they pay for their house 2. Taxes 3. How they fund their qualified retirement accounts like 401(k), IRA, SEP plans. 4. How they will pay for college and education expenses for their children. 5. Major capital purchases: Things you can’t pay for in full with monthly cash flow.


Note: These are things you can talk about if your client is interested and is looking to go deeper. Below are a few things to say in each area to get them thinking. Your purpose here is not to give any answers but set hooks to get them to schedule the next meeting where you will have time to discuss them in depth.

1. House a. When you pay extra on your house does the value go up? b. Do your payments go down? c. Can you easily get to the money if you need it? d. What will your children do with it when you are gone? e. Do you think one of your children will want to live in the house? f. If so will they have the money to pay off the others without selling the house? g. If there were a more efficient way to pay off your house than what you are doing today

would you want to know about it? 2. Taxes

a. Do people pay more taxes than required? b. Why do you think that is so? c. Compound interest creates? Increasing tax liability d. Are you interested in legally reducing your current taxes?

3. What Qualified Plans do? a. What do you like about your qualified plan? b. Do they save taxes? c. Can you think of a better word for defer? postpone d. Do you get a match on your contributions? e. What benefits do you get for contributions above the match? f. Do you think taxes are going up or down?

4. College education funding a. What is the best thing about a 529 plan?

i. After-tax money, ii. Tax deferred growth iii. Tax free if used for college expenses

b. What’s the worst thing about 529 plans? i. You must use the money for education or pay tax ii. You have to drain the tank iii. You can’t put the money back for your future

5. Major capital purchases (cars weddings) a. Would you like to know the most efficient way to buy anything? b. Did you know you finance everything you buy? c. Did you know that paying cash is self- financing? d. Do you like being in control or out of control of your money?


Meeting 1 Conclusion

Helping my clients find the money by avoiding the losses in these areas is what it is that makes what I do unique.

If anything we talked about today sounds like something you might want to learn a little more about I think there are some areas I could really be of service to you.

What I would like to suggest is that we schedule a short 45 minute follow-up appointment.

During the first 15 minutes of our next visit, I would like to ask you a few questions about your past financial experience and what you are currently doing today and then I will explain exactly how I may be able to help you increase your financial potential by minimizing unnecessary losses and finding money you could be losing unknowingly and unnecessarily. At our next meeting I will give you the answers to the four toughest financial questions I mentioned earlier and help you determine if what I do meets with what you are looking for.

How does that sound?

Great, let’s schedule our next time to get together.

2nd Appointment (This appointment is your opportunity to “get hired”)

Process Step 1: Open-ended Questions

Process Step 2: Introduce the Personal Economic Model & Tell “what you do” with the Circle of Talk

Process Step 3: Financial Questionnaires

Process Step 4: How you get paid

Process Step 5: Who you want to see in a referral Process Step 1: Open-ended Questions

1. What are you currently doing in the area financial planning for you future? 2. What do you like most about what you are currently doing? 3. What don’t like about your current financial position? 4. What would you like to see enhanced or improved? 5. Describe the ideal financial plan and the ideal financial plan? 6. What’s been your past experience with financial planning? 7. What would you ideally like to accomplish with your financial Strategy? 8. Tell me about your decision making process? 9. What keeps you up at night? 10. When it comes to my money, the only thing I really care about is…


Process Step 2: Introduction to the Personal Economic Model and Circle Talk

I would like to start our conversation with a picture that frames everything that you and I do financially.

I call it the Personal Economic Model and it will provide a visual platform for us to discuss your personal situation.

Note: Show picture of the model.

As you look at this picture, what do you see? Note: Allow them to comment, they probably will not understand it until you illustrate and provide context.

This model is a visual representation of the flow of money.

Position A for most of us would be to have enough money put away in the SAVINGS and INVESTMENT tanks during our working years so that our future lifestyle looks much like our current lifestyle.

Note: Accumulators want to know will they have enough; clients closer to retirement want to know how long what they have accumulated will last.

In our last meeting we focused our attention on protection illustrated on the right hand side of the model.

Note: Click on Current Lifestyle and then Standard of Living to show Protection.

You want to have the proper protection in place to make sure that your current standard of living is protected and you do not have to rob from your future lifestyle in the event of a loss.

To accomplish your goals it is clear you will need to have a plan and a well thought out strategy to make it happen. It makes little sense to accumulate assets without protecting them. Remember what you have is not really yours if someone or some event can take it away.

On the left hand side you see a large tank, which represents all the money that you will earn during your entire lifetime. This tank is large to represent the amount of money you will earn during your lifetime but no money actually resides in this tank.

The natural flow of your money is through the monthly cash flow tube into the tax filter. Did you put this on your financial system? No, it was bolted on by the state and local governments where they take a large portion of your earnings and lifetime capital potential.

Once the government has taken what they desire what is left is available for you to pump up the future lifestyle tube into your savings and investment tanks or allow it to pass through to your current lifestyle to be consumed.

o What sticks out at you about the savings and investment tanks?

The Safe tank has a cap which represents that money in this tank can’t be lost. You will notice that the Risk tank has no cap representing the fact that money in this tank can evaporate or be lost.

o What do you have currently in the Safe Tank? o What do you have in the Risk Tank?


Notes:

Make sure that if it is from the first appointment or from these questions that you restate what you hear and understand what they are doing.

Share your personally story.

Example personally story:

Let me tell you about my past and what has brought me to this point.

I have been working in the financial services industry for the last decade.

I want to provide the highest level of knowledge and expertise to my clients so I sought out one of the top financial coaches in the financial services industry and partnered with him about 4 years ago. He has been personally mentoring me since then.

In addition I have access to the most powerful financial tools available today to better communicate with you the financial concepts and strategies that can help you minimize your losses and maximize your potential.

I would like to share with you what I do and what makes what I do unique. Notes:

This is the Circle Talk presentation

Finish Circle Talk by showing the Savings required in RRON on screen 13 making sure you ask the three important questions (below).

Three Important Questions: 1. When you see how much you need to be saving what is going on in your mind? 2. Assuming I can help you find money you are currently losing will you save it? 3. On a scale of one to ten how does what I do meet with what you are looking for?

Step 3: Ask for a complete financial questionnaire and schedule the next appointment

What I will need you to do for our next meeting, so I can begin looking for money you could be losing unknowingly and unnecessarily, is for you to fill out this short questionnaire that will help me get a snap shot of your current financial picture and see exactly where your money is currently.

I would like to have you bring this back for our next meeting. Note: Walk through the questionnaire with them and highlight what you need and why each section is important.

Bring in your tax returns and SS and defined benefits.


Note: Share Doctor Analogy.

Doctor Analogy: In order to recommend the right prescription I am going to need to know everything you are doing currently. The more I know about what you are doing the better I will be able to serve you and identify solutions specifically for you.

I also would like you to complete a 10 minute online questionnaire that will ask you 24 questions and provide you and me information on your strengths in these four areas.

o How you problem solve o How you process information o How you manage change o How you implement strategies

The better I know you the better I will be able to serve you. Not only will this help me get to know you better but it may also help you better understand one another by helping you identify one another’s strengths.

o Would you be willing to take that questionnaire as well? o Great what is your email address and I will send each of you a code to take this before

our next visit?

Next Steps – during our next meeting I want you to plan on a couple hours. It is going to go fast because we are going to be talking about your money and your future.

Note: Schedule appointment Process Step 4: Explain how you will get paid.

Before you go let me tell you how I get paid.

I get paid in two ways.

The companies that manufacture the “clubs” or financial products you will need to help you reach your financial goals will pay me; you will never pay me directly.

o Do you have any problems with me being compensated this way?

Process Step 5: The second way is through referrals

If I can help you accomplish the goals you have expressed to me today will you have any problems referring people just like you that can benefit from what I do?

I have appreciated working with you in the past on your Protection and I am excited about working with you on your total financial picture and will begin by helping you find money that you could be losing unknowingly and unnecessarily to build a more solid financial future.

3rd Appointment (Find the Money Process Steps 6-7) Note: Take time and care going through the questionnaire. First priority is for you to find out about them. Second is to find the money.

I would like begin today by walking through the questionnaire and review your current financial picture.

o Before I begin is there anything on your mind from our last meeting you would like to discuss?

In addition to what you are doing I want you to share with me why you are doing what you are doing.


Process Step 6: Review Questionnaire Note: Identify Wealth Transfers as you review. Do not discuss any until you have fully completed the review and then know their thinking behind each of their financial decisions.

Potential Wealth Transfers you are looking for during your review. a) Family Status b) Occupation/Income/Future Expectations c) Real Estate/Mortgages d) Savings and Taxable Investments e) Cash Value Life Insurance f) Qualified Retirement Accounts (IRA, 401k, SEP, Pension, etc. g) Defined Benefits (Corporate benefit plans, Social Security) h) Protection (You covered these in your IFR review) i) Installment loans j) Credit cards, Store charges, checking credit lines k) Future expenses or Income /College/Wedding/Inheritance

Note: Once your review is complete decide on one or two of the areas where your client is the least efficient or transferring the most money away. Go to the appropriate tool to discuss the financial strategy and get a response to any change in their past thinking to the new information received. Process Step 7: Potential Wealth Transfer Discussions

Mortgage: Mortgage Master o 15 year mortgage o Lower interest rate than current loan o Prepaying Principal o Equity and non-deductible debt o House is a current lifestyle expense and is not in savings or investment tank (PEM) o Note: never cash out equity for any financial product purchase.

Savings and Taxable Investments: Private Reserve/Tax Master o Compound interest in taxable account/Tax Master o Liquidity Use and Control o Lack of Benefits/Benefits List/PEM

Cash Value Life Insurance: 10 Minute Lesson/Private Reserve Strategy o Minimum funded o Insufficient Coverage/Needs vs Wants o Access to Capital/Private Reserve o Policy loans/Private Reserve/PEM

Borrow against not from Structured vs non-structured loans


Qualified Retirement Accounts: Qualified Plans/PEM o Qualified plans do two things o Postpone not Defer o Check story o No match with contribution o Contributions over and above the company match o Debt and contributions to qualified plans o No Access to capital o 100% government control o Future Tax rate vs current tax rate

College Costs o Best thing about 529 plans o Worst thing about 529 plans o Benefits

Major Capital Purchases: PEM o Installment Loans o Opportunity Cost o No deductions o Pay Cash for Finance/Private Reserve o Debt/Private Reserve

Notes:

Review the Confidential Questionnaire asking who, what, where and how questions.

As you review remember you are identifying in your own mind the potential losses you see to review

At your next meeting you will determine which type of close you will use to move your client to action.

4th Appointment (Process Steps 8-10)

Today we are going to discuss where to put the money that we identified during our last session.

Note: Discuss any questions or concerns about last session and get a buy in that they want to move forward discussing other options for the money found. Process Step 8: Discuss Their Ideas Note: Make sure you ask them if they have any thoughts on where they would like to put the money found before moving on to Step 9.


Process Step 9: Product Discussion

Notes:

Now you are going to discuss the benefits and reasons why you are suggesting the particular product you are recommending.

When you are going to recommend permanent life insurance use these tools. o Private reserve strategy o Needs vs Wants o 10 Minute lesson

Process Step 10: The Close Notes: There are two types of closes:

Conceptual Close o Client understands the strategy suggested and agrees with the suggested product

recommendation. o Complete applications

Validation Close o Utilize the Spending Game to provide documentation on present projection compared to

the revised projection. o Complete applications

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