LIFE INSURANCE IS NOT SOLD! - NOT BY PROFESSIONAL FINANCIAL PRACTITIONERS

It is a professional act of client engagement through values based leadership - one on one.


Individuals insure their lives for one of two reasons.....they love someone or are financially responsible to someone.
The decision to insure is an act of exceptional character based upon a strong sense of responsibility.
In the case of creditor loans it is an obligation if it is a condition of the loan.Those who guide individuals through the process of insuring their lives are consummate leaders...one on one.
The act of persuading an individual to insure his or her life is an act of empathetic leadership.............not salesmanship.
It is a professional act of client engagement through values based leadership one on one.
As long as the industry continues to market insured products as though they are commodities we will continue to have a disconnect between the public's distorted perception of the industry as a traditional high pressure sales effort....rather than what it is ...an act of love and/or responsibility between the insured and the beneficiary or beneficiaries of the insured's coverage.

"Manufacturer"? "Wholesaler"? "Retailer"? "Professional Financial Practitioner"? - IT'S YOUR CHOICE

FYI

http://dzwicker.blogspot.com/2010/12/globe-and-mail-recently-published_24.html

Dan Zwicker
Toronto

A TALE OF 2 CONTINENTS - EUROPE AND NORTH AMERICA

Youth is Not Served in Europe's Job Market
Best and brightest in Italy and Spain sink into a malaise.

In North America the grandparents of Gen-X worked hard to provide their children  (the boomers)with a post secondary education - a key to financial independence. Gen-X like their European conterparts have inherited an economy  "in which the older generation have eaten the future of the younger ones."

Guiliano Amato
former Italian Prime Minister

LECCE, Italy - Working as an unpaid trainee lawyer, Francesca Esposito, 29 and exquisitely educated, helped win millions of euros in false disability and other lawsuits for Italy's social security administration. But one day last fall she quit, frustrated with the plight of young people in Italy today.

It galled her that even with her fluency in five languages, it was nearly impossible to land a paying job. She not only worked for free on behalf of the nation's elderly, but her efforts there did not even apply to her own pension. "It was absurd," said Ms. Esposito.


The outrage of the young has erupted, sometimes violently, on the streets of Italy and Greece in recent weeks, as students and more radical anarchists protest not only specific austerity measures in flattened economies but a rising reality in Southern Europe: People like Ms. Esposito feel increasingly shut out of their own futures. Experts warn of volatility in state finances and the broader society as the most highly educated generation in the history of the Mediterranean hits one of its worst job markets.


Politicians are slowly beginning to take notice. Italy's president, Giorgio Napolitano, devoted his year-end message on December 31 to "the pervasive malaise among young people," weeks after protests against budget cuts to the university system.


Giuliano Amato, an economist and former Italian prime minister, was even more blunt. "By now, only a few people refuse to understand that youth protests aren't a protest against the university reform, but against a general situation in which the older generations have eaten the future of the younger ones," he recently told Corriere delia Sera, Italy's largest newspaper.


Ms. Esposito was the first in her family to graduate from college. She has an Italian law degree and a master's from Germany and was an intern at the European Court of Justice in Luxembourg. It has not helped. "I have every possible certificate," Ms. Esposito said dryly. "I have everything except a death certificate."


Low growth and a corrosive lack of meritocracy have long posed challenges to finding a job in Italy, Greece, Spain and Portugal. Today, with the added austerity, more people are left fighting over fewer opportunities. Younger workers struggle to enter the labor market against older ones already occupy¬ing precious slots.


A deep malaise has set in among young people. Some protest; others move to Northern Europe or beyond. But many live in their childhood bedrooms well into adulthood because they cannot afford to move out.


"They call us the lost generation," said Coral Herrera Gomez, 33, who has a Ph.D. in humanities but still lives with her parents in Madrid because she cannot find steady work.


Experts warn of a looming demographic disaster in Southern Europe, which has among the lowest birth rates in the Western world. With pensioners living longer and young people entering the work force later - and paying less in taxes because their salaries are so low - it is only a matter of time before state coffers run dry.


Because payroll taxes and firing costs are still so high, businesses across Southern Europe are loath to hire new workers on a full-time basis, so young people are offered unpaid or low-paying internships or temporary contracts.


"This is the best-educated generation in Spanish history, and they are entering a job market in which they are underutilized," said Ignacio Fernandez Toxo, the leader of the Comisiones Obreras, one of Spain's two largest labor unions. "It is a tragedy for the country."


New austerity measures in Spain, where the unemployment rate is 20 percent, the highest in the European Union, are further narrowing employment possibilities.


In Italy, Ms. Esposito is finishing her lawyer traineeship at a private firm in Lecce. It pays little but sits better on her conscience than her unpaid work for the government. "I'm a repentant college graduate," she said. "If I had it to do over again, I wouldn't go to college and would just start working."

RACHEL DONADIO
New York Times
01 09 2011 

Lucia Magi contributed reporting from Madrid,
and Gaia Pianigiani from Rome.

ARE JOB BOARDS BROKEN? A PROFESSIONAL'S VIEW

This entry is taken from a weekly newsletter written by a professional recruiter designed to constructively inform its recipients on the effectiveness of the internet as a means of applying for jobs online.

The writer's identification has been deleted since the purpose of this entry is to inform but not to advertise.

"Good Monday morning,

If you've been looking for a job recently, you've discovered the ugly truth: job boards are broken. They don't work, they don't help, and they aren't getting you where you need to go. Sure it sounds nice in theory — making it so easy to apply to jobs for anybody from anywhere at any time. But the truth is that the Internet has made it too easy for anybody to apply to any job. So what happens? Everybody applies. The typical job posting on Monster or CareerBuilder can get hundreds of applications, which means talented professionals like you can't stand out from the crowd of student drivers, stand-up comics, and late-night janitors who have also lobbed in an application. And recruiters and hiring managers have discovered it as well.

Job boards are broken for them because when they have an important position to fill, and only a little bit of time to do it, they don't have hours and hours and hours to sort through all the inappropriate applications that come to them over the internet.I mean, how many folks do you know in HR with tons of extra time on their hands these days? With all of the budget cuts over the past few years, they have less time than ever for each job they're working on. Job boards are broken... and that's why we do things differently here at --------. I've been in this business for over a --------- and have crisscrossed the country speaking with job seekers. Just like the snowflakes, each one of us is unique — we've got special backgrounds, a twist on our experience, or insights that nobody else has. It's this special background, after all, that makes you so valuable to employers.

So my colleagues here at -------- and I want to make your job search strategy as attractive as you are as a professional. We want to help you emphasize what makes you a better person for the position than all the other applicants — your search should be as special as you are. Are you doing the most to make yourself stand out? Are you taking the right steps to make yourself more attractive? Is your approach on the phone, in email, in person as effective as it could be to make yourself stand apart? Are your marketing materials (your resume, your interview answers, your interview questions) designed to make you irresistible to your future employer? If not, if you're just another form to be processed, another LinkedIn profile to be stacked up, another in the long line of applicants to be weeded out... you're not making your job search as attractive as you could be.

And that's why job boards are broken... by shoe-horning you into the same cattle chute as all the other applicants, job boards fail at the essential task of highlighting your special experience and background.That's why we take a different approach to connecting job-seekers and opportunities. We have at least two human beings screen every job before we let it onto our site to ensure it pays over $----------per year in salary and bonus. And we have a team of people that reviews every job-seeker, every company, and every recruiter to ensure they are appropriate for our $----------community before they are allowed onto our site. That's why we focus on making your job search more effective through articles and advice tailored to the $--------job search, professional resume writers who know how to make you stand out, and a personal Job Search Advisor to help you get the most out of our site. Folks, we all know job boards are broken. Let's start fixing your job search today in order to make 2011 a great year for you and your family. I'll certainly be rooting for you!"
Warmest regards,

Author's note:
"I've been writing these newsletters weekly for almost ---------in order to provide you with the advice, encouragement, and assistance you need in your professional job hunt. I'll take what we've learned at --------during the week, or experiences I've had with job-seekers all over the country, and try to find a usable lesson, a valuable insight, or a helpful tip to share with you on Monday morning.

I do read your replies to this newsletter. Because of the volume of replies — typically over 1,000 per week — I'm unable to answer you personally, but one of our very qualified staff from our Job Search Support team will get back to you — most of the time within three hours or less. As I am interested in every reply I get, I'll also occasionally reach out directly by phone or by email to say thanks, or ask a question, or to see how we can solve your problem better. Thanks for reading!"

Blogger's Note:

Having interviewed 100's of candidates who are searching for Career Positions the number of interviews obtained per 100 applications sent out via the internet varies between 0.5 - 4%. The number of interviews which result in relevant offers is less than 0.5%.The impact on applicants is traumatic.This blog has been written for the same reason as the author's, namely, to help clarify the process for those who have an interest in this matter.

CONTACT

Daniel H. Zwicker, Principal
B.Sc. (Hons.) P.Eng. CFP CLU CH.F.C. CFSB
Certified Financial Planner
Chartered Life Underwriter
Chartered Financial Consultant
Chartered Financial Services Broker
Professional Engineers Ontario

Bus: 416-726-2427
Email:   dan@firstfinancialconsultinggroup.com
Linkedin:  http://www.linkedin.com/in/danzwicker

First Financial Consulting Group, Blog: http://www.dan-zwicker.blogspot.com/
Daniel H. Zwicker CFP, Blog: http://www.dzwicker.blogspot.com/: 
Beyond Risk, Blog: http://www.beyondrisk.blogspot.com

Website: http://www.firstfinancialconsultinggroup.com/

first financial consulting group
4261 Highway Seven
Suite 238
Markham, Ontario L3R 9W6

Chartered Financial Consultant
Capital Risk Management
Lifetime Sustainable Income
Strategic Wealth Management

Specialists in Advanced Life Insurance Applications and
Lifetime Sustainable Retirement Planning Solutions

New clients accepted by referral only

Financial Practitioner Designations

CH.F.C - Chartered Financial Consultant


A Chartered Financial Consultant is a financial advisor with comprehensive advanced knowledge in wealth accumulation and retirement planning. An advisor with a CH.F.C. is an expert in retirement planning and capital accumulation strategies.


CFP - Certified Financial Planner


The Certified Financial Planner designation is an internationally recognized standard for financial planning. It is granted by the Financial Planners Standards Council (FPSC). An advisor with a CFP may help you with personal financial planning and offer advice on investment products and strategies.

CLU - Chartered Life Underwriter



For more than 80 years, the CLU designation has been widely recognized as a mark of excellence in the industry. The Chartered Life Underwriter is a professional financial advisor specializing in developing effective solutions for individuals, business owners and professionals in the areas of income replacement, risk management, estate planning, and wealth transfer.




ONLINE REFERENCES:

http://www.advocis.ca/ (Advocis)
http://www.iafe.ca/ (The Institute for Advanced Financial Education)
http://www.cfp-ca.org/ (Financial Planners Standards Council)
http://www.ifbc.ca/ (Independent Financial Brokers of Canada)
http://www.peo.on.ca/ (Professional Engineers Ontario)

'Raising The Bar'

CUSTOMER RELATIONSHIP MANAGEMENT - WILL MARKETING GET THE MESSAGE?

In a growing number of organizations marketing is assuming a commanding new role -

not only executing strategy but increasinglu shaping it as well.

As these leading growth companies redfine the marketing function, they are focusing four key areas.

Few of the recent economic downturn’s many consequences are likely to prove more significant—or enduring—than the change in customer expectations.

When Accenture recently surveyed some 400 marketing executives from a wide range of companies, industries and geographies, a substantial majority agreed that the customer quest for value—getting better-quality products and improved service for less—would be lasting. Moreover, well over half of them reckoned that escalating customer requirements will change the marketing function fundamentally over the next five years.

The customer, in short, is putting marketing center stage in post-recession decision making.

In a growing number of organizations, marketing is now responsible not only for executing strategy but increasingly for shaping it as well. In some companies, marketing actually owns the growth agenda. At British Gas, for instance, chief executive Phil Bentley regards his marketing director as the company’s “chief growth officer.” And that kind of attitude promises to make marketing powerful indeed.

Yet within many organizations, the marketing function seems ill-prepared to take on such a commanding new role. Less than 12 percent of our survey participants said that they plan to devote significantly more resources to any marketing initiative in the coming year. The top three areas identified to receive significantly more resources are “streamlining all marketing processes” (11 percent); “investing in digital advertising/online presence” (9 percent); and “developing and training our marketing team” (9 percent).
In fact, most told us that they anticipate no increase at all in investments. And fewer than one in five expressed confidence that they have the skilled resources necessary for the marketing function to perform effectively.

But doing more with less (or the same) is a post-recession necessity. Leading growth companies—those that managed to increase sales revenues in the challenging environment of the past fiscal year—know this. They are more oriented toward driving profitable growth through operational efficiency, for example. What’s more, these leaders are notably more confident about their strengths in four key areas of marketing competency—operations, customer analytics, innovation and customer engagement.

Consider these facts.

Leading growth companies invested more in improving marketing ROI and in productivity initiatives like streamlined processes than those that lost revenues last year. Far more of them reported making effective use of digital marketing channels. And 59 percent said they extract and translate customer and market data into strategic insight—11 percent more than those that reported revenue losses.

Growth companies, in other words, have taken marketing to a new level of rigor. They have recognized that digital technologies and social media, and the vastly more interactive customer experience that these forces enable, have boosted the power of what we call scientific marketing.

By investing in customer data management, these leading companies are improving their marketing effectiveness. And by optimizing the data-driven insights that analytics deliver, they are engaging successfully with today’s demanding customers. Perhaps most important of all, by adopting such scientific tools and techniques, they are freeing up the marketing function to focus on what it does best—thinking creatively.
Here is a more detailed analysis of how some of the world’s savviest marketers are putting these tools and techniques to work.

Reinventing operationsInefficient marketing processes are a major headache for many of our survey participants. No surprise, then, to see that leading marketers have made their function more efficient, more effective and more scalable. For many, that has meant revamping antiquated processes—in short, reinventing operations.

A leading European financial services group, for example, found itself saddled with a marketing program originally built for direct mail that just wasn’t up to meeting the challenges of the bank’s modern, multichannel focus. So a couple of years ago, it decided to completely rebuild its marketing technology infrastructure and organization. The upshot: faster campaign cycle times, higher customer response rates to product offers and lower direct-marketing costs.

By centralizing its decision making and automating its processes, the group also gave its marketing executives more time to focus on strategic issues—a top goal for most of our survey respondents. And more efficient operations are the key as well to an outcome deemed equally desirable for most of those we polled—better coordination between marketing and other parts of the organization, including the C-suite.
Sometimes, reinventing operations puts marketing directly at the center of strategy formulation. One global food company, for instance, has been implementing a complete makeover of the marketing function. Designed to sweep out inefficient practices and make marketing central to business strategy, the project has put the function at the heart of such key areas of decision making as the sustainability and financing of supply strategy across the company’s three core markets. Meanwhile, the company’s brand managers have become virtual CEOs of their respective categories—an empowerment that has significantly raised marketing’s game at the organization.

Customer analytics

To be sure, marketing’s core challenge remains understanding the customer. And today’s customers can be extraordinarily difficult to fathom—not least because they are so demographically diverse and their preferences are constantly shifting.

Marketers need to keep track not only of who their customers are but also who wants what and why. Most organizations are drowning in customer data of all kinds. But not many are using it to their advantage. Leading organizations, however, have harnessed the power of analytics to deal with all that data efficiently and effectively. Indeed, Accenture research shows that high-performance businesses are five times more likely than low performers to use analytics strategically.

The data-driven insights that analytics deliver are critical to identifying the sweet spots that power profitable growth. By using descriptive analytics to segment customers accurately, for example, companies can gain detailed insights into what each segment really wants and values.

Witness how Foxsports.com is using a new web analytics tool to deepen its understanding of who visits its popular site and how different sorts of visitors use the site at different times. The company’s goal: to optimize site content and target advertising more effectively.

Predictive analytics, meanwhile, dig deeper still, allowing marketers to more accurately anticipate shifts in customer behavior—and alter their value propositions accordingly. At Sephora, for instance, the analytics team has leveraged the predictive insights from multi-channel direct-response marketing, including direct mail, email and in-store communications, to help give the French beauty and personal products retailer one of the most loyal customer bases in its industry.
Insight into innovationLeading companies are also adept at turning the insights that analytics deliver into action through more relevant and thus more profitable innovations. In fact, they formalize the process of insight management, turning innovation through marketing insight into a proactive and targeted process—one that is sustainable over time.

More often than not, this involves enhancing existing offerings to make them more relevant to specific customer segments. Consider, for example, how patiently analyzing the data about local sensibilities enabled Procter & Gamble to develop a more subtly fragranced version of its Febreze air freshener, which Japanese women had found cloying. Or how Kraft Foods has captured the attention of Hispanic consumers in North America—a rapidly growing customer segment. The company responded to what analytics revealed about this segment’s preferences by setting up Comida y Familia magazine and the ComidaKraft.com website, offering Latina cooks bespoke recipes and other information about how to use Kraft products in ethnic meals.
For its part, Batteries Plus, one of the largest such retail and B2B chains in the United States, has leveraged predictive analytics to track failed customer searches and offer shoppers what they are looking for, both online and in-store. And StubHub, the world’s leading online ticket market-place, is using its email marketing channel to address the problem of customers abandoning their virtual shopping carts when they can’t immediately find all that they’re looking for. By integrating real-time analytics data with a recommendation engine, StubHub has been able to target customers who abandon their carts with relevant email offers—and boost revenue per email by an astonishing 2,500 percent.

Customer engagement

A customer-led growth strategy will hinge on the ability to generate long-term relationships with those customers. And marketing organizations that deliver highly relevant experiences consistently—across multiple channels—will achieve customer engagement and secure customer loyalty.
For many, creating a dialogue with customers through social media has become the name of the game. Virgin America, for example, has galvanized (in part, by offering the incentive of a free flight) a Twitter following so loyal that when newcomers tweet to ask if they should fly the airline, fans commonly close the sale. Book publisher HarperCollins, meanwhile, has sought to create a community of interest with young readers—and aspiring writers—by recently launching inkpop, the first interactive writing platform for teens that is backed by a major US publisher.

The marketing executives we surveyed all indicated that innovation and analytics were among their top priorities. These tools enable predictive management of the brand experience through all the operational processes that influence today’s value-seeking consumers’ interactions with the enterprise. And the most successful marketers are actively using them in response to constantly escalating customer requirements.
Yet more than 70 percent of our survey respondents also cited the ongoing importance to successful marketing of in-person contact with frontline employees. Investment in people, in other words, remains crucial. And so does the support of senior leadership—especially if marketing is to fulfill its strategic destiny at the heart of the business.

Sidebar 1

Sephora: Leveraging the power of customer analyticsSince opening its first store in France more than 40 years ago, Sephora has revolutionized the global beauty business. The company’s predominantly female customers are allowed to experiment with Sephora’s huge product assortment and learn about cosmetics in a no-sales-pressure environment—something that more traditional outlets deny them.
Small wonder, then, that the Sephora name—an amalgam of sephos, the ancient Greek word for pretty, and the Biblical name Zipporah (Moses’ wife, who was known for her beauty)—is now synonymous with fun, high-quality cosmetics shopping for women in more than 20 countries.
Personal attention is central to Sephora’s success, and the company’s marketing team takes a multichannel approach to delivering it. Sales consultants trained in skincare, haircare, makeup, fragrance and general beauty know-how are on hand to help in the stores. Email and web marketing, via Sephora.com and Facebook, reinforce and continue the personal attention that customers receive in Sephora’s distinctively designed stores.

And customer analytics—the key to identifying individual tastes and preferences, and to keeping pace with them—play a critical role in securing customer loyalty. Indeed, Sephora has one of the savviest and most sophisticated customer relationship management programs to be found in any industry.
Customer analytics are fundamental, for example, to the success of Sephora’s customer rewards program, Beauty Insider.

The loyalty program gives customers a compelling reason to provide the retailer with basic personal information by combining rewards, like discounts, samples and invitations to store events, with relevance—personalized beauty advice. A client’s online profile might reveal that her principal skincare concern is dryness, for instance, and her purchase history both online and in-store reveals a preference for organic products. In this case, Sephora’s direct-response marketing strategy gets straight to work, letting her know about the launch of a new and especially appropriate moisturizer, or even offering it as a gift.
This finely tuned ability to view a single customer over time and across different touchpoints has paid off handsomely. Sephora’s survey response rate is one of the highest in the retail industry. What’s more, Sephora has increased its profits from recurring operations and boosted revenues in all its markets—despite the economic downturn.

Sidebar 2

HarperCollins: Engaging teens with an interactive dialogueHarperCollins Publishers is no slouch when it comes to digital marketing. The New York-based trade publisher was the first in the industry to digitize its content, for example. And by responding to mounting consumer demand for online services with the creation of a global digital warehouse, HarperCollins has generated additional business growth opportunities with interactive initiatives, including Book Army, an online book recommendation site, and Authonomy, which invites aspiring writers to submit their work online and readers to review it.
The company’s latest digital initiative is probably the most ambitious yet. Inkpop is the first interactive writing platform by and for teens that is backed by a major US publisher; it enables writers to reach teens and also allows teens to publish their works, tapping directly into one of the most robust and fast-growing categories in publishing—teen fiction.

The site combines user-generated content, community publishing and social networking—the sine qua non for young consumers—and its attractions for literary-minded teens are compelling. Inkpop not only connects writers with readers; it also gives them feedback from a select group of HarperCollins editors who review the site’s top five monthly selections, and provide feedback and mentorship opportunities. In some cases, they may also consider the work for publication.

Any teenager 13 or older can submit their creations. And more than 10,000 have done so since the site’s soft launch in November 2009.

HarperCollins, meanwhile, gets direct, deep insights into what these lucrative young consumers care about, as well as the chance to build brand awareness for its authors and forthcoming books. Indeed, the success of inkpop has persuaded HarperCollins to enhance the site’s capabilities. The publisher plans to add other formats, including photography, video and artwork—all creative endeavors that young people seem keen to share.

About the Authors

Nick X. Smith is global managing director of Accenture Marketing Transformation. He has more than 20 years’ experience helping companies create value through effective marketing and sales initiatives. Previously, Mr. Smith was the director of marketing and strategy for British Gas; head of group marketing for UK bank Alliance and Leicester; and managing director at watchmaker Sekonda. Mr. Smith, who is based in London, is a fellow and former chairman of the Marketing Society.

Paul F. Nunes, is the executive director of research at Accenture’s Institute for High Performance in Boston. His work has appeared regularly in Harvard Business Review and in numerous other publications, including the Wall Street Journal. He is also the coauthor of Mass Affluence: 7 New Rules of Marketing to Today’s Consumers (Harvard Business School Press, 2004). In addition, Mr. Nunes is the senior contributing editor for Outlook

Michael Malinowski, a manager in Accenture Research, and

Shelby Prichard, a consultant in Accenture Strategy, contributed to this article.

Accenture
October 2010

MGA association unveils project to address rising compliance demands

An association for managing general agencies is developing a four-phase solution intended to help its members deal with proliferating compliance demands. Peter Lamarche, President of the Canadian Association of Independent Life Brokerage Agencies (CAILBA) and President of Blonde and Little Financial Services, presented the project for the first time publicly to an audience at the Insurance and Investments Convention held Nov. 9 in Montreal.

In the last couple of years, MGAs have had to deal with numerous new compliance demands such as the Privacy Act, the National Do Not Call List, anti-money laundering rules, disclosure requirements and more, explained Mr. Lamarche. As well, regulators are expected to soon release a national paper on MGAs.
And, insurers are stepping up the pressure with verifications of MGAs’ compliance policies and procedures, Mr. Lamarche added. “The insurers now are coming along and starting to conduct audits, surveys, changes of contracts.”

In addition, “the proliferation of litigation that the insurance side of the business is now seeing” is also making compliance a front-burner issue for MGAs. “Up until recent years, litigation seemed to be limited to the securities side. But we’re seeing more and more of that,” he explained.

All of these factors have made it “painfully evident” that MGAs must have formal compliance regimes, but such regimes take time and money to build and maintain, which would be onerous for many MGAs. To help its members, CAILBA asked itself “why would we do this individually?” Mr. Lamarche said. As a result, last month, CAILBA’s board passed an initiative to build what it calls CAILBA’s Compliance Toolbox.

This toolbox will be a service provided to CAILBA’s 50 members, which represent about 75 to 80% of all production from the independent channel. Broken down into four phases, this project will, in
Phase one - supply MGA members with a generic set of compliance documents, policies and procedures that MGAs can use for all compliance and diligence issues.
“The idea was, in the simplest terms, if you were a modest or small sized MGA you simply take these forms, these contracts, plug your corporate name in, identify who your officers are, adopt all the recommendations in the procedures manual to implement these things, and you would have a very strong foundation and basis for building your own internal compliance module,” Mr. Lamarche explained.

He says the Compliance Toolbox could save CAILBA members a great deal of money. “If you were to build this from the ground up as an individual MGA, excluding the cost of compliance officers or systems, you’d probably be looking at a cost of $50,000 to $100,000 just to put these things together.” There will be no cost for CAILBA members to access the compliance materials beyond their usual membership fees. The scheduled launch of this phase of the project is spring 2011.

Mr. Lamarche adds that large MGAs generally already have compliance regimes in place, but they are still backing CAILBA’s project since they see a value in it as a benchmark that they can use to compare their own systems.

Phase two of the project is to provide ongoing compliance consultation support and customization of a firm’s compliance regime.

Phase three will involve maintaining and updating the Compliance Toolbox information. And,

Phase four would be aimed at developing a “CAILBA Accredited Compliance Standard.”

If CAILBA can successfully develop its project to this point, Mr. Lamarche says MGAs may be able to leverage compliance accreditation with insurers for better services, faster turnaround times, fewer audits, and perhaps more compensation. Agents would also value working with an MGA that held such accreditation, he said.
Mr. Lamarche says CAILBA’s approach to the compliance issue is all about managing business risk. “We may not like the changes we need to make. We may not enjoy it. We may not like the litigation and the liability…but we better respond to it.” He added that MGAs should respond from a perspective of managing business risk because, “if you have ever been involved in anything relative to a compliance-related client complaint or litigation, you know those costs come right off your bottom line.”

Impact on advisors

Why would advisors care about this project? Mr. Lamarche says that when it comes to compliance, advisors and their MGAs are in it together. “There is vicarious responsibility and liability between advisors and their distributors. If you are with a distributor who is poorly organized and doesn’t have processes and procedures in place…you should be concerned.”

Mr. Lamarche added that it is natural for MGAs and advisors to resist the increasing burden of compliance, but he recommends they don’t hold back on putting necessary procedures in place. “I’m going to suggest that you really should take a look at how you’re doing your business and if you were sued tomorrow or challenged tomorrow on your practices, would they stand up to the test of a third party?”

Insurer audits

Mr. Lamarche also revealed that CAILBA is working on another project to make life easier for MGAs who have recently been inundated with compliance-related surveys from multiple insurers.
“Ourselves, in consultation with the Canadian Life and Health Insurance Association (CLHIA), are now working on a draft of a common survey audit that all of the insurance companies would subscribe to.” The goal of this project is to allow MGAs to complete one survey which would then be available to all the insurance companies with which they do business.

Donna Glasgow
The Insurance Journal
November - December 2010

BABY BOOMERS RETIRING WITH DEBT BURDEN

Born in an era of prosperity, the baby boomer generation has always gone after what it wanted - whether it's been luxury homes, cars, vacations or launching their own businesses.
They've been big spenders and have been comfortable acquiring debt. And two recent surveys have found that that many Canadian boomers are carrying debt with them into retirement.

A Royal Bank of Canada poll conducted in March by Ipsos Reid found that four out of 10 Canadians over age 50 have retired with some form of debt and 22% entered retirement with a mortgage on their primary residence. And an Investors Group online survey conducted by Harris Decima this spring found that 62% of its respondents planned to carry debt into retirement.

"Many boomers delayed parenthood until later in life and may still be educating children when they are retired," says Lee Anne Davies, RBC's head of retirement strategies in Toronto.

Mortgage debt

The Investors Group survey also found that the median mortgage balance among retired mortgage-holders is $82,000.
"This came as a surprise to us," says Peter Veselinovich, the company's Winnipeg-based Vice President, banking and mortgage operations. "While an $82,000 mortgage may only mean a monthly mortgage payment of $400 or so and is cheaper than paying rent, is that mortgage just one part of your client's debt?"
Debt is not necessarily bad, Ms. Davies notes. "A home can be an important part of the client's investment portfolio," she says, "especially now when home prices are high."

A mortgage on a residence can also be an effective strategy to manage a client's finances, especially when interest rates are low. "The client may take out a mortgage to leverage his other investments," Mr. Veselinovich says.
But the availability of credit has been a problem for many boomers. They grew up with credit and debit cards - a lot of cards, in some cases. Credit products are convenient, and a necessity for renting vehicles, making online purchases and hotel reservations. Handled correctly, they can be very helpful, says Nick Paratheras, a financial planner with BMO Bank of Montreal in Montreal. "You get a grace period to pay for your purchase and they may allow you to accumulate loyalty points. The trick is to pay off the card every month."

They're also viewed by some as a safety net in case of unforeseen expenses. The RBC survey found that 28% of retirees have acquired more credit products after retirement; 12% have done so to have a safety net in case of unexpected expenses; and another 6% have done so to meet unforeseen expenses.

"Expenses you never counted on can arise," Ms. Davies says. "A roof may need to be repaired or a furnace may need to be replaced. And our poll found that one in five retirees spends more than $1,000 a month on prescription drugs."
The problem is credit and debit cards can lead to impulse spending. Clients who get carried away with credit should restrict themselves to using a certain amount of cash to develop spending discipline, Mr. Paratheras says. "If they take out, say, $1,000 every month for food, gas and entertainment, when that's gone that will be the end of their spending for the month."
And developing spending discipline will definitely be an asset in retirement, Mr. Veselinovich adds, "when many of us will have less disposable income."

Clients approaching retirement need to have a clear understanding of their spending patterns, Ms. Davies says. "Have them add up their living and entertainment expenses, and see what the difference is between these costs and their take-home pay."

She also suggests clients "test drive" their retirement. "If they anticipate they'll be living on less income when they retire, have them try living on a set amount for a month. If they find that's not possible, have them look at making other changes. Maybe they don't need a large home anymore."
And if they're not commuting to work everyday, they may not need a new car every few years, Mr. Veselinovich adds.

It's never too late for clients to get a handle on debt that can erode their retirement funds. Mr. Veselinovich recommends having your clients organize the credit cards they hold from those with the highest interest rates to the lowest, and start paying off and then eliminating the higher-cost ones, such as department store cards.
Mr. Paratheras believes in aggressively paying off a home mortgage with bi-weekly and lump-sum payments.

Unexpected expenses

And obtaining a low-rate line of credit to be used in the case of emergencies will ease the minds of clients who worry about unexpected expenses cropping up.

Ms. Davies notes that retirees worry about the many things they can't control, such as tax hikes, eating into their retirement income. "This is where a financial advisor can help clients with strategies to minimize the client's tax hit, such as not taking too much income in any one year. If income is needed for a renovation or a new vehicle, that should be taken out over two different tax years - in December and January - to avoid getting into a higher tax bracket."

Inflation is another real concern for retirees, Mr. Paratheras says. The boomers' projected longevity not only means more years over which they'll have to stretch their dollars, but it may also mean rising costs in their later years when they may need specialized housing and care. "Right now a seniors' residence in Montreal costs about $4,000 a month," he says. "With greater demand in coming years, what will it cost then?"

He recommends that advisors factor in a 3% jump in inflation every year in projecting client' needs into the future. "And we're looking at lifespans as long as 95 years."

That's why, he says, it's never too late to start reducing expenses, such as the cost of carrying debt. Even small expenses, such as bank fees, add up. He suggests having your client review his bank fees and, instead of running up perhaps $25 a month in a la carte fees, signing for specialized set-fee plans suited to his needs.
"And it's never too late to add to savings," he adds. "If a client has $1,000 of income coming in, I may ask him to live on $800 and put $200 aside."

The compounding effect of savings works to your clients' advantage, Ms. Veselinovich adds, "in the same way that the compounding effect of debt works against them."

Rosemary McCracken
The Insurance Journal
June/July 2010

ON ROAD TO RECOVERY, PAST ADVERSITY PROVIDES A MAP

Dear All: An article has been posted to: http://www.nytimes.com/2011/01/04/health/04mind.html?_r=1&ref=health

New research suggests that resilience may have at least as much to do with how often people have faced adversity in past as it does with who they are — their personality, their genes, for example — or what they’re facing now. That is, the number of life blows a person has taken may affect his or her mental toughness more than any other factor.

“Frequency makes a difference: that is the message,” said Roxane Cohen Silver, a psychologist at the University of California, Irvine. “Each negative event a person faces leads to an attempt to cope, which forces people to learn about their own capabilities, about their support networks — to learn who their real friends are. That kind of learning, we think, is extremely valuable for subsequent coping,” up to a point.

In a study appearing in the current issue of The Journal of Personality and Social Psychology, Dr. Cohen Silver, E. Alison Holman, also of the University of California, Irvine, and Mark D. Seery, of the State University at Buffalo, followed nearly 2,000 adults for several years, monitoring their mental well-being with online surveys. The participants, a diverse cross section of Americans between the ages of 18 and 101, listed all of the upsetting life events they had experienced before entering the study and any new ones that hit along the way. These included divorce, the death of a friend or parent, a serious illness, and being in a natural disaster.

Or, none of the above: A subset of the participants, 194, reported that they had experienced not one of the fairly comprehensive list of 37 events on the survey. “We wondered: Who are these people who have managed to go through life with nothing bad happening to them?” Dr. Cohen Silver said. “Are they hyper-conscientious? Socially isolated? Just young? Or otherwise unique?” They weren’t, the researchers found. Stranger still, they were not the most satisfied with their lives. Their sense of well-being was about the same, on average, as people who had suffered up to a dozen memorable blows.

Lawrence Ian Geller
For Advisors Only
01/06/2010

THE CASE FOR FINANCIAL LITERACY

Financial education makes sense at home and school, survey finds

Parents and schools should take the lead in educating kids on financial literacy, says a survey conducted for the Canadian Institute of Char­tered Accountants.

But governments and the finan­cial services industry itself also need to step up and make sure to­day's youth learn basic money smarts, the telephone survey of more than 1,000 Canadians found.

"We're all very busy people, we have a lot on our plate and (financial literacy) is just one of those things that has fallen by the wayside:" said Nicholas Cheung, a senior official with the Canadian Institute of Chartered Accountants.

"It also comes from learning from parents" - but many parents say they feel ill-equipped to teach their children, he added.

The survey, conducted by Harris Decima last summer, found that 85 per cent of those contacted believe schools should teach money management, and 98 per cent said par­ents should.

However, while 78 per cent of par­ents have tried to, most don't feel they succeeded, it also found.

Next fall, the Ontario government will add money management issues to the curriculum in several subject areas starting in Grade 4.

"The focus will be on helping stu­dents develop critical money-man­agement skills and will include ... concepts of income, money, earn­ing, saving, spending, investing, budgeting, credit and borrowing, risks and rewards:' said Mike Feen­stra, spokesperson for Education Minister Leona Dombrowsky.

Cheung says financial literacy is a lifelong learning process. "Saving money for a new baby, whether to buy or rent a home, or save for re­tirement - financial literacy has to be throughout your life!"

The survey was conducted last June and July, and is considered accurate to plus or minus 31 per­centage points, 19 times out of 20.

Kristen Rushowy,
Education Reporter
Toronto Star
01/06/2010

MOST CANADIANS DON'T PLAN TO RETIRE: SURVEY

What used to be called retirement will be just another day at the office for more than a third of Canadians, who say they'll need to keep working to pay the bills, a survey suggests.

The survey conducted by Harris/Decima on behalf of Scotiabank indicates nearly 70 per cent of Canadians plan to work after retirement.

People cited different reasons for staying in the workforce. Seventy-two per cent said they want to remain mentally active, and 57 per cent want to stay socially active. Thirty-eight per cent of those surveyed said they'll be working out of financial necessity.

Five per cent of respondents said they are counting on a lottery win to see them through their retirement years.

Three-quarters of those who plan to retire fully from the workforce said they have been saving for about 15 years. More than half of these people said they have saved less than $20,000 in the past five years."

While there's no magic number that Canadians should be aiming for when saving for retirement, it's important that Canadians are realistic about how they plan to spend their retirement and how much it will cost," said Gillian Riley of Scotiabank.

The Harris/Decima poll consisted of 1,011 online surveys completed between Oct. 14 and 25, the results of which were then weighted by region, age and gender. The results do not have a traditional "margin of error" because respondents were drawn from a pool of existing Harris/Decima panel members and thus not based on a probability sample.

Harris/Decima poll
10/14/2010 and 10/25/2010
Reported by CBC.ca
01/04/2011

Advocis Promotes the Value of Financial Advice Submission to the Task Force on Financial Literacy

Submission to the Task Force on Financial Literacy

In May 2010, Advocis made its submission to the Task Force on Financial Literacy in response to its consultation document - Leveraging Excellence­ Charting a course of action to strengthen financial literacy in Canada - stressing the importance of financial advice to Canadians.

A central theme in the submission was the importance of the 'value of advice': There was a focus on ensuring consumers reap the benefits of competition and choice in financial services, and on the importance of the relationship between financial advisors and their clients.

Having a solid relationship with an accredited financial advisor helps bring financial education to a client, and helps people plan for everything from purchasing a first home to arranging for the protection of their families from those unpleasant life events that can cause financial ruin. The trust that defines the advisor-client relationship helps
families deal with real life events at various stages of their life cycle.

Advocis members believe strongly in Canadians' need for improved financial literacy, and assist
in the ongoing financial education of Canadians. Advocis' submission recommends that any initiative arising out ofthe consultation process should leverage off existing relationships existing between advisors and their clients.

Advocis' President and CEO, Greg Pollock, who was appointed to the Task Force on Financiql Literacy by Canada's Minister of Finance, the Honourable Jim Flaherty, along with other members of .•• the Task Force, are reviewing the submissions received and will prepare a report

From:

Advocis Advisor Voice
Spring 2010 Edition