How the Fastest-Growing RIAs Earn More Referrals

How the Fastest-Growing RIAs Earn More Referrals

You probably know that we’re based out of Omaha, a city that’s home to the College World Series, some of the nation’s greatest college football fans, and an award-winning zoo. My family buys a pass to the zoo every year and it is worth every dime.

One of the greatest features of our pass is that we can add on our relatives and nanny at a discounted rate. That’s a pretty simple idea that I’m sure you’ve encountered before, but have you thought about how you can use it in your practice?

One way this could apply to the advisory world would be to bundle extended family and friends AUM for fee breaks. Such a simple idea, right? While it could be really complex when it comes to fee billing, companies like Orion have done the heavy lifting for you in this area. Talk to your portfolio accounting software provider to see if they can handle it for you.

This approach could come in many forms, for instance:

That’s the kind of referral that doesn’t require much work on your part, and it’s a huge motivator for your clients to tell their loved ones about you.

It’s also the kind of situation that moves the needle for intergenerational wealth transfers. Keeping the money in the family means keeping it all with you. You can help your clients begin the conversation with their children about money just by offering consolidated fee structures.

Related: How Betterment Can Drive Advisors to Do Better

While it’s a simple idea, the real question for many advisors might be a logistical one. If you’re currently using Orion’s portfolio accounting system, there’s a simple way to associate households for billing. If you’re not sure how, just use their online chat to get in touch with their billing team.

What do your fee structures currently look like? Are you offering this or something like it to your clients? I’d love to hear how it’s going.

Jud Mackrill
Digital Marketing
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Jud Mackrill serves as the Cofounder of Mineral. At Mineral, his focus is helping investment advisory businesses focus on growing digitally through full-scale design, brand de ... Click for full bio

Advisors Play a Critical Role in Educating Overwhelmed Clients About What They Will Need to Retire

Advisors Play a Critical Role in Educating Overwhelmed Clients About What They Will Need to Retire

When it comes to getting information about retirement planning, it is the best of times, it is the worst of times.

At its best, there is information, calculators and products available at the click of a mouse. At its worst, the information overload has created mental gridlock for many clients about what they need to do to plan for their inevitable futures.

Consider these results from a survey of 1,300 investors and 400 financial professionals conducted by Jackson National Life Insurance Co. and the Insured Retirement Institute that are prime evidence of the “failure to plan” crisis in America:

  • 47 percent of consumers over age 65 said Social Security is their most significant source of income;
  • Nearly four in ten consumers aged 25-to-34 years believe Social Security will provide them with sufficient income during retirement; and
  • Nearly one-third of advisors report having three or more clients exhaust their investable assets, most often due to overspending or higher-than-expected medical costs in retirement.

If ever there was a time to educate consumers, it is now, a moment when so many need not just information, but a real plan to pay for their retirement. Consider the implications of the decline of the defined benefit pension plan that covered 28 percent of private workers in 1980 but by 2014 was held by only to two percent. To supplement their Social Security benefits, they are confronted with options from an array of products that include IRAs (Roth and SEP), 401ks, annuities and life insurance.

The Jackson National survey showed how misunderstood these products are. For instance, the survey found that less than half of the respondents understood that annuities can provide guaranteed lifetime income. Almost the same amount believed that IRAs come with guarantees and 26 percent thought mutual funds provided guaranteed income.

With so few workers able to access guaranteed income beyond Social Security in retirement, finding ways to create guaranteed income are becoming critical. To confirm that, the survey found that 90 percent of the respondents are interested in guaranteed incomes. Given the state of most of the respondents’ retirement funds, there is a disconnect here with major implications for our industry and the clients we serve.

Related: The Answer to Your Clients' Long-Term Care May Be Their Life Insurance

Annuities and life insurance stand out as products that can fill this need. And, when advisors describe their attributes, consumers express strong interest in them. In the case of annuities, this is a major issue: the survey found that almost half of their clients considered annuities to be too expensive and six in ten had negative perceptions of them as an investment. They only changed their minds when they didn’t know the investment being described was an annuity.

In life insurance, it’s another difficult story. The 2016 Conning Life Settlements, Secondary Annuities, and Structured Settlements report estimated that on an annual basis $185 billion of death benefits owned by seniors will likely lapse or surrender without owners considering their options that can include the secondary market that can give them cash when they need it. We have found many seniors who have been paying life insurance premiums for years, but have no idea how it can be used to pay for their post-retirement needs.

Clearly, there is a need for our industry to educate our clients about the products they are considering and what their end-results will be. Failing to help them understand their options in a retirement that cannot solely depend on Social Security will only result in a lot of angry clients looking for someone to blame.

Chris Orestis
Investing in Life
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Chris Orestis, Executive Vice President of GWG Life (, is an over 20-year veteran of the insurance and long-term care industries and is nationally recognized a ... Click for full bio