Imagine the following queries relative to your retirement planning.
by Bill Boersma
- How would you respond if your advisor, who knew your retirement plan was dependent on the continuation of stock market historical returns, led you to believe your plan was much more conservative?
- What would your reaction be if your advisor told you your retirement plan was performing better than originally assumed while the values were lower than projected?
- Would it be reasonable to expect your advisor to show you the effect on your retirement plan of even a modest reduction in return relative to your initial planning assumptions?
- Would it be reasonable to expect your advisor to relate the effect a modest increase in inflation would have on your standard of living?
- If there was a way to guarantee* your retirement income for life, even if it cost a little more, would you be interested in at least looking at what it would take?
- What would you say if your investment advisor suggested you stay 100% invested in growth securities throughout retirement, even as you’re taking distributions?
- What if your advisor told you your plan was doing great and you should stay the course when it is projecting to run out of money?
- If your investment projections were falling behind and modeling showed they wouldn’t last as long as originally expected, would you expect your advisor would let you know?
- If you got online to look at your 401(k) balance, and it was less than the sum of your contributions over the years, how much sense would it make if your advisor told you the return has been positive?
- If the expenses of your investment portfolio were 50% of everything you contributed in the first 10 years, would you expect this to be pointed out?
- If the expenses of your investment portfolio through the first 10 years were projected to exceed all of the earnings of your portfolio in the first 10 years, would you expect to be informed of this?
- What would you feel if you learned that your entire retirement plan would only work out if everything in the world stayed exactly the way it was the day you started it?
- Would you ever borrow millions of dollars to fund your retirement based on a continuation of historical S&P 500 returns on a constant basis risking you’d run out of money if you lived beyond actuarial life expectancy or not being able to repay the loans if your investments didn’t perform as they had historically?
- Would you ever bet that lending rates would stay at historically low levels indefinitely?
- What if you could take the assumed interest rate payments and put them into a bond portfolio and do just as good without any of the risk of the securities market?
These are all things I see regularly when reviewing premium financed indexed universal life (IUL) transactions. What would be unimaginable regarding securities and retirement planning are commonplace in the premium finance and IUL world.
As I often state, premium finance and IUL aren’t inherently bad. However, these insane comments above are not infrequent occurrences. I regularly work with individuals in premium finance programs subject to these farcical notions, most of which would be serious violations in the securities regulation world.
I implore you to shoot me an email or pick up the phone to discuss any premium financed insurance you or your clients are involved in.
Bill Boersma is a CLU, AEP and LIC and the founder and owner of OC Consulting Group. More information can be found at www.OC-LIC.com, or email at bill@oc-lic.com or call at 616-456-1000.
Securities offered through Valmark Securities, Inc. Member FINRA, SIPC. Investment Advisory Services offered through Valmark Advisers, Inc. a SEC Registered Investment Advisor.
OC Consulting Group and its affiliates are separate entities from Valmark Securities, Inc. and Valmark Advisers, Inc.
Guarantees are based on the claims-paying ability of the issuing company*
