Appeals Court Rules on DOL

Reuters Contributor

March 15, 2018

A divided federal appeals court on Thursday voided the U.S. Department of Labor’s “fiduciary rule,” which had been adopted in 2016 under the Obama administration to curb conflicts of interest among providers of financial advice to Americans planning for retirement. The decision is a major victory for the business and financial services industry groups that have sought to overturn the rule.

By a 2-1 vote, the 5th U.S. Circuit Court of Appeals said it found merit in several objections to the rule that were raised by business groups, including the U.S. Chamber of Commerce, and declared the rule void “in toto.”

Last year, after Donald Trump became U.S. president, the Labor Department delayed the scheduled implementation of some provisions of the rule to July 2019. The Labor Department’s rule requires brokers to put their clients’ best interests first when advising them about individual retirement accounts or 401(k) retirement plans. It is championed by consumer advocates and retirement non-profit groups, but has been staunchly opposed by the financial services sector, which argues it will make retirement advice too costly and harm lower-income retirees in particular.

Circuit Judge Edith Jones said the Labor Department acted unreasonably, arbitrarily and capriciously in expanding a 40-year-old definition of “investment advice fiduciary,” and did not deserve the deference that courts often accord federal agencies.

The long list of groups that sued the Labor Department include the U.S. Chamber of Commerce, the Financial Services Institute, the Financial Services Roundtable, the Insured Retirement Institute and the Securities Industry and Financial Markets Association.

“The court has ruled on the side of America’s retirement savers, preserving access to affordable financial advice,” the groups said in a statement. “Our organizations have long supported the development of a best interest standard of care and the Securities and Exchange Commission should now take the lead on a clear, consistent, and workable standard that does not limit choice for investors.”




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Let’s All Walk

Most of you that follow my blog know that sometimes I can get personal with my remarks. As a father of two young boys who go to school every day I have always been aware and personally affected by the  litany of school shootings that rock our American culture. In the past I have tried to take action –  writing my congressman, participating in dialogues and even writing a song to help support the Sandy Hook Promise Foundation.

But today is a new day. After the Parkland shootings students from that school have been vocal and active in calling for Congress to take action. Just recently the State of Florida passed new regulations in regards to gun laws in their state. This was in direct defiance of the NRA and their agenda and was signed by a Governor who has always been opposed to such measures. This is progress.

Now there is something you can do. You can walk. Yes, the same students who called for action after the Parkland shootings have helped to spark a national movement of protest. Students across the country are walking out of school for 17 minutes to show Congress that the problems in the schools are real and need immediate action. It has already started.

You can show your support by walking at 10am too. For 17 minutes get up from your desk and walk outside. Say hi to your neighbors who are also walking. Stand in solidarity with your co-workers as we tell Congress that this problem needs to be solved. Our kids, our children’s lives depend on this. On action.

Take a walk.

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The Proper Apology

We are going to make mistakes when dealing with and serving our clients. Who among us has not made a mistake? A mistake, especially with an important person like a client, requires an apology. In our world when we have to make an apology for an error that we made, we first try to come up with some solutions to the error so we have some positive ideas to deliver along with the bad news. We call this the “positive, negative, positive” approach. This works effectively when you are dealing with a reasonable client. But it is not always successful. I’m defining a successful apology as one that is received by the receiver as intended by the sender.

In an article written by fellow blogger Kevin Eikenberry – Kevin defines the 4+2 strategy — the four things you do during the apology conversation and the two things you do afterward. Good ideas for all of us to use.

Six Keys to Successful Apologies by Kevin Eikenberry

During the Apology Itself

1. Admit it. Too often people want to shade the situation or side step it in some way. A mistake was made. An oversight occurred. Or perhaps you did something with unintended consequences (or was unexpectedly perceived by others). Whatever the case, how the other person feels is how the other person feels. If you want the apology to be successful, you must hear their concern/anger/worry (or other emotion) and admit your role in it.

2. Own it. An apology with a “but” in it, isn’t very successful is it? “I understand what you are saying, but that wasn’t my fault.” Not much ownership here! Even worse is when we try to switch the blame back to the other party! “Well if you would have … then we wouldn’t have this problem. There is no room for blame in a successful apology.

Maybe someone else played a role in it too. Maybe another department messed something up too. If part of the outcome was your responsibility, or you could have influenced it, own it. In an organizational setting, remember that you are the face of the organization to the Customer in that moment. Even if it wasn’t “you” personally, it was the collective “we” of the organization. When you take ownership, it changes the perception of the other person instantly and significantly.

3. Mean it. If you don’t get this part right, you have very little hope for your apology. A successful apology requires you to be genuine and authentic. “I’m sorry” may be the words, but they must be true. Be very clear in your own mind about this before you even start.

4. Fix it. Sometimes there is no next step, but there will always be the chance to ask the other person what the resolution is. So whether there is a next step after the apology or not, there is always the question to ask to find out. The question itself will vary based on the context and the situation, but it all comes down to this — now that we are here, what can I do to make it right to fix it or what can I do differently next time?

Remember that the fix will be most effective when the other person has input into it. Find out what they want now. If you can deliver that, great (if you can deliver even more, make a mental note of that and deliver it — this is called creating delight!). If you can’t deliver that exactly, work with the other party through conversation to determine what you can do and how that will work for them.

Remember too that this “fix it” part of the conversation might be the most important part. Your earnestness in wanting to find a solution or resolution is very powerful (and “proves” that you mean all the words).

After the Conversation

1. Deliver on it. Once you have determined with the help of the other person what to do next, the apology conversation is over. Now the rubber meets the road. If a fix has been determined, now it is time to deliver on that fix. Send the new product. Write the letter. Refund the money. Whatever the fix is, the apology can’t be successful until you have done what you have promised.

2. Learn from it. We all say we have learned from our mistakes. So, remember to do that in these cases. What does this situation teach you to do or not do in the future? What steps could you put in place to keep this situation from occurring again? What processes might need to be changed? While these insights may come to you through this process, make sure you take action on these too.

Mistakes will happen. The apology is critical to the long term cost of those mistakes.

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No is Short For Next Opportunity

Read a great book on the plane last week. Martin Limbeck is a sales trainer and author of “No Is Short For Next Opportunity.” His ideas reminded me of what I learned from one of my mentors. The most powerful words a great salesmen has in his repertoire is “next.” Don’t let the “no’s” get you down. If you are doing the right thing the next opportunity is right around the corner.

Limbeck has some other great ideas to share. Here are three of his tips for sealing the deal:

  1. Stand by what you sell: You have to believe in your product or company.
  2. Set goals every day for future prospects: To succeed, be sure your sales funnel is never empty. Make it a habit, like brushing your teeth.
  3. Prepare for anything: Write answers to every question or objection a potential client could dream up. Writing them down will help you commit them to memory.
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Take a Look at the Numbers

Like most business owners, looking at the “numbers” is an important part of my daily activity. And the numbers can mean many different things. For us it could be the applications submitted, placed and pending. Or it could mean the commissions and overrides that come in each day. But in the end- it truly is all about the numbers.

Numbers may not be your best friend if you went into business for passion or creativity. Numbers need to become your best friend to stay in business for the long haul. Your business budget and accounting system should show you a full picture of what’s happening underneath the hood. It gives you insight to what aspects of your business are the most profitable and much more. Here’s why you need to review your financials regularly:

Stop Doing What’s Not Working

One of the top benefits of doing a business financial temperature check frequently is having the foresight to not waste time on areas that aren’t doing well. The end of the year is often the time where we circle back to recap the whole year before making changes.

The problem with this approach is that you could miss out on opportunities during the year. Check to see which jobs and clients are paying you the most money and think of ways to do more of those tasks. Consider putting an end to certain services that take up a lot of your time but don’t make a lot of money.

Keep Tabs on Your Cash Flow Before it Gets Ugly

You shouldn’t be waiting weeks or months to collect on invoices. One day you’ll wake up with a sad-looking bank balance and realize that you’re having a serious cash flow problem. Setting a weekly appointment to check your financials can give you the reminder you need to follow up on outstanding invoices. You can even hire a virtual assistant to help you send and collect on invoices so you can keep cash flowing properly.

Double Check Accuracy of Recurring Expenses

Business expenses these days are a lot like personal expenses. You sign up to put them on your card and the monthly transactions happen automatically.

When was the last time you reviewed your recurring bills to make sure they’re correct?

If you haven’t in a while, make sure your service agreements are matching up to what you’re currently paying. I caught a price discrepancy last week after comparing a recurring business charge with my plan. I was unaware I was being overcharged for about a month. Dig into the details because there may be money to save.

Look Beyond Revenue to Measure Your Success

You read a lot from business owners about revenue. We talked about expenses above, but I want to take home the fact that revenue is only part of the story. The full story should include a comparison of the expenses that are incurred to earn the money you do. Put plainly; your goal shouldn’t only be to increase your revenue. You may feel great about reaching your goal of earning $10,000 in one month, but if you spent $8,000 on ads and other operating expenses to earn it that variable needs to be considered closely.

Expenses can grow as your business grows so make sure that you’re bringing in enough profit to meet your own goals. Review the products and services that you invest in routinely. Ask yourself whether or not each of your business expenses are valuable. It’s true you may need to spend money to make money, but be smart with where you’re spending this money.

Final Word

Looking at your business finances with a critical eye doesn’t have to give you a heart attack each time. You can only hide from what’s going on financially for so long before it will impact your ability to perform and pay your bills.

Business accounting is more than just sending and receiving invoices. The overall picture needs your attention as well. Thankfully, once you start committing to regular financial check-ins it gets less scary.

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Preparing for Retirement

Most Working Americans Are Not Prepared For Retirement

Today, many Americans are stressed about retiring. Most of them are not taking the proper steps to prepare financially. According to recent research by the Employee Benefits Research Institute, most Americans who report feeling stressed about retiring also report feeling financially insecure. In their study, the researchers found that 30 percent of participants felt stressed either emotionally or mentally in relation to retirement preparation. Another 30 percent said that they were worried about finances during their workday. About 50 percent of the workers who reported feeling stressed said that they would likely be more productive at work if they did not spend so much time worrying.

About 50 percent of all survey participants said that health care or financial planning programs would benefit their productivity levels. However, most workers did not report taking steps to seek such services. About 60 percent of all survey participants said that they had done some planning and saving for retirement. Only 40 percent reported trying to calculate an accurate amount of money needed during retirement. Some participants also spent time calculating how much money they would need from Social Security in the future to survive. About 35 percent of workers had calculated their estimated living expenses during retirement.

When asked about seeking help from a financial adviser, only about 20 percent of participants said that they had spoken with a professional regarding retirement planning. Approximately 10 percent reported already having a formal plan that was feasible and realistic. Researchers pointed out the importance of working with a financial planner. Also, they emphasized that people can do many things on their own for free such as calculating Social Security income. Also, people can review their expenses on their own and speak with a financial planner about estimating realistic future costs.

After interviewing both workers and retirees, EBRI researchers said that retirees were more likely to report feeling confident about their savings and income. Over 80 percent of those who were already retired reported feeling comfortable. About 60 percent of those who felt confident said that they were very sure of having future income that they would not outlive. In contrast, less than 20 percent of workers who were surveyed felt confident about having enough money to live on during retirement. Savings incentives such as contribution matching were noted as important considerations by the researchers. They recommended that employers offer education about retirement saving, provide attractive plans and encourage participation in multiple ways.

We can help! We have programs that can get you started in the workplace environment. To learn more about helping workers save for retirement give us a call.

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