partnersfinancial advisory board - nfp · mike james . johnny adcock . jay cavenaugh . john ellard...

PartnersFinancial Advisory Board

Jim Monteverde The Monteverde Group

Thank You

For Internal Use Only. Not For Public Distribution


Annemarie (Anne) V. Long

Chairman

R. Bruce Callahan


Jason D Prather Donald (Don) R. Payne, Jr.

James (Jim) Delamater

James (Jim) Monteverde

James (Jim) B. Hebets

Jason O’Dell

2014 New Board Members

Howard Silverman

Ben Kronish

PF/ASG Committee Chairman

Mike James Johnny Adcock Jay Cavenaugh John Ellard

Advanced Sales Committee Chairman

PF/BenefitsPartners Committee Chairman

PF Technology Committee Chairman

Product Committee Chairman

Membership Committee Chairman

Compensation Vice Chairman

Compensation Chairman

Underwriting Chairman

Governance Committee Chairman

NFP Life President

PartnersFinancial President

NFP Vice Chairman Emeritus


Committees / Chairman / Members

Governance

Howard Silverman * Chairman

Jim Monteverde *

Mike James *

Bruce Callahan * Advisor

Membership

Ben Kronish * Chairman

Johnny Adcock *

Jim Monteverde *

Jason O’Dell *

Mike James *

Ken Samuelson

Julie Schneider

John Conti

Compensation

Don Payne * Chairman

Jason O’Dell * Vice Chairman

Ben Kronish *

Mike James *

Steve Friedman

Bob Leeper

Howard Sharfman

Brian Troska

Product

Jim Hebets * Chairman

John Irvin

Bobby Trotenberg

Stuart Youngentob

Celeste Moya

Underwriting

Jason Prather * Chairman

Don Payne *

Steve Johnston

Jane Hall

Ferne Landman (Schwartz Benefit Services)

Gwen Bundy (Veracor, LLC)

Julie Pisano (Flah & Co.)

Kathy Palmer (Hill, Chesson & Woody)

Jessica Sorg (Legacy Capital Group)

* Advisory Board Member


Committees / Chairman / Members Advanced Sales

Johnny Adcock * Chairman

Jonathan Geer

Steve Hubbard

Steve Johnston

Bryan Schick

PF Technology

John Ellard * Chairman

Brian Donofry

Sean Kelly

Jay Lewis

Ken Samuelson

Aviva Sapers

Jamie Stone

Mark Grosvenor

Tom Povedano

Adnan Raja

Practice Management Tools

Peter Chung Chairman

Mark Gold

Matt Jones

Sean Kelly

Bobby Trotenberg

Matt Anderson

Eric Boester

Bruce Callahan * Advisor

PF/ Benefits Partners

Jay Cavanagh * Chairman

Bob Leeper

Cody Morgan

Tom Povedano

Eric Boester (optional)

Brian Troska (optional)

PF/ASG

Jim Delamater * Chairman

Ralph Antolino

Jim McManus

Joe Stone


Conference Planning

John Conti Chairman

Johnny Adcock *

Mike James *

Bobby Trotenberg

Steve Varley


John Irvin, Chairman

Jim Monteverde *

Bob DiMeo (non-voting member)

Kristen LeClair

PF Charitable Foundation Committees

Jim Monteverde * President

John Irvin Foundation Board Member

Jason O’Dell * Foundation Board Member

Jason Prather * Foundation Board Member

Howard Silverman * Secretary

Foundation Board


Joe Carpenter, Co-Chairman

Howard Cohen, Co-Chairman

Johnny Adcock

Todd Healy

Martin Isenberg

Paul Kronish

Rick Ledwith

Joe Stone

Grants Committee

Investments Committee




Chairman

R. Bruce Callahan


Jason D Prather Donald (Don) R. Payne, Jr.

James (Jim) Delamater

James (Jim) Monteverde

James (Jim) B. Hebets

Jason O’Dell

2014 New Board Members

Howard Silverman

Ben Kronish

PF/ASG Committee Chairman

Mike James Johnny Adcock Jay Cavenaugh John Ellard

Advanced Sales Committee Chairman

PF/BenefitsPartners Committee Chairman

PF Technology Committee Chairman

Product Committee Chairman

Membership Committee Chairman

Compensation Vice Chairman

Compensation Chairman

Underwriting Chairman

Governance Committee Chairman

NFP Life President

PartnersFinancial President

NFP Vice Chairman Emeritus

PartnersFinancial Update

Mike James PartnersFinancial


2013 Video


Headwinds: A Look Back on 2013

Legislative Landscape

Interest Rates/ Fed Reserve

Products

Carriers


Performance of the Business

$100 million commission production

Shared Back

$6 million +

$80 million individual life insurance

25 firms moved up a tier

Launched

4 Key Initiatives Recruiting NFP 360

Windsor/Expanded Access Institutional Services



Windsor Success

64% Of Partners Firms paid for business via Windsor

Top

3 Carriers

$13.8 million In Commissions

2200+ Formal Applications

75% + of Partners Firms submitted a piece of business to Windsor (formal & informal applications)


Core Carriers

Transitioned to Windsor Expanded Platform

Transition Rules Pending Business through the end of February

New Business – March 1 via Windsor

Provisional Carrier

2014 Carriers Updates


Carrier Access


Enhanced Life Bonus Pool - Combined


Enhanced Life Bonus Pool – Example

Distribution Channel Carrier Target

Premium Production

(EFYC) PF LBP

Credit % PF LBP Credit $

PF Bonus Payout @ Level III

Total Payout Total Payout

% of Premium

Partners 972,222 875,000 100% 875,000 93,333 968,333 99.6%

Outside BGA 194,444 204,167 0% - - 204,167 105.0%

Totals 1,166,667 1,079,167 875,000 93,333 1,172,500 100.5%

Distribution Channel Carrier Target

Premium Production

(EFYC) PF LBP

Credit % PF LBP Credit $

PF Bonus Payout @ Level IV

Total Payout Total Payout

% of Premium

Variance

Partners 972,222 875,000 100% 875,000 146,222 1,021,222 105.0% 52,889

Partners 194,444 175,000 100% 175,000 20,563 195,563 100.6% (8,604)

Totals 1,166,667 1,050,000 1,050,000 166,785 1,216,785 104.3% 44,285

Current Life Bonus Pool Example

Proposed Life Bonus Pool Example

Increased Payout = 44,285

Aggregated


Enhanced Life Bonus Pool – Summary

Look back Level Set Feature

Monthly Bonus Payments w/ACH

Non-Core Weighted Aggregation

Consolidated Bonus Payout Grid


Recruiting

The Austin Team Leadership

Field Technology Underwriting

Product

Advanced Sales Marketing/ Training Business Development & Member Services

Producer Compensation

Institutional/Professional Partnerships

Kristin Bulat, JD, LLM VP, Advanced Sales Attorney

Cindy Davis, FLMI, AALU, ACS AVP, Sr. Underwriting Consultant


Recruiting

Institutional/Professional Partnerships

Business Development Leadership

Field Technology Underwriting

Product

Advanced Sales Business Development & Member Services Marketing/ Training

Producer Compensation

John Conti Vice President

Connie Windorpski Licensing Specialist

Cristen Barber Member Services Manager

Alicia Bergeron Director, Business Development

Matt Anderson AVP, Business Development

Kim Allen AVP, Business Development

Geoff Card AVP, Business Development


Tailwinds: Looking Ahead to 2014

Host Your Next Study Group Meeting in Austin!

2014 Convention – June 25-June 29 School of Excellence – May 4-6 Idea Forum – Sept. 14 – 16

Meetings and Events Business Development Estate Tax Certainty

Business Insurance Planning Income Tax Planning NEW: Foreign Nationals/International

Recruiting Success


Welcome New 2013 Members

Steve Goodman JoAnn McKenzie Eamon Walsh Matt Larmann


Welcome New 2014 Members

Jordan Katz

Sam Bennett Peter Viliesis

Tom & Zac Rose

Mayur Dalal

Jonathan Katz

Strategic Growth


Your Firm and NFP Services

Your Firm

Estate and Life

Insurance Planning

Personal Lines and

Risk Management

Asset Management

Specialty Services

Corporate Benefits and Commercial

Lines


A Great Match


Capturing Opportunity

International Insurance


Great New Opportunities International Insurance


From the Industry

Ken Samuelson


Congratulations Anne Long

New Trustee to


Carrier Executive Town Hall

Jim Morris Chairman CEO

Pacific Life Insurance Company


Carrier Executive Town Hall

Craig Bromley President

John Hancock Financial Services

Success with LTC Riders

Bobby Trotenberg The Arbor Group


Lemons or Lemonade?

Traditional LTC Underwriting


Options

Self Insure

Linked benefit annuity

Linked benefit life insurance

Single premium life/long term care insurance combination

Individual long term care insurance


Two Real Life Solutions…


1. The LTC Decline

Couple: male 77 female 67

He is declined, she is approved

She was approved-he was declined, but REALLY wanted the coverage

John Hancock issued combo with $400,000 UL with 2% LTC rider standard


1. The LTC Decline continued

LTC claim submitted and approved 10 months later

Claim pays $8,000/month for 20 months

Client dies eventually

Widow receives check for $240,000


2. Maximizing Asset Protection

Couple: Male 64 Female 63

Paying $44,000 annual premium on $5.25MM of Joint Life

Cash value of joint life: $430,000

A core carrier was able to deliver the $5.25MM at $30,000/year after the §1035 Exchange


2. Maximizing Asset Protection continued

Clients value LTC but resist “waste”

Propose Life/LTC combo to shield $1.1MM in assets from erosion in case of LTC claim

Life insurance protected $5.25MM in assets

Combo plan protects $6.25MM in assets

Taking Full Advantage of Your Relationships

Joe Carpenter NFP Executive Benefits

Jim Delay Fulcrum Partners

Matt Fones Boone, Brandon, Johnston & Evans

The Perfect Storm

Douglas L. Dombey Southwest Financial Group


The small Estate Planning Market has virtually disappeared.

The Perfect Storm


Since 2008, Corporations have learned to manage their overhead more effectively.

The economy has rebounded significantly in the last 5 years.

Corporations are more profitable today because of the ability to manage their overhead.

Increased profitability provides significant tax planning opportunities.

The Perfect Storm


Income Type

Maximum Marginal Tax Rate

Maximum Marginal Tax

Rate

New Medicare Hospital Insurance

tax (HI tax)*

New Net Investment Income Tax (other than

earned income)*

Combined Maximum Marginal Tax Rate

Net Percentage Increase

Current Law (Pre-1/1/13) (Post-12/31/12) (Post-12/31/12) (Post-12/31/12) (Post-12/31/12) (2013 vs. 2012)

Wages and S/E income > $250,000 (MFJ)/>$200,000 (Single) 35% 39.6% 0.9%** N/A 40.5% 15.7%

Long-Term Capital Gain — Maximum Rate*** 15% 20% N/A 3.8% 23.8% 58.67%

Qualified Dividends 15% 39.6% N/A 3.8% 43.4% 189.33%

Passive Interest, Rents, Royalties, Other 35% 39.6% N/A 3.8% 43.4% 24%

Flowthrough Income — Active Trade/Business 35% 39.6% N/A N/A 39.6% 13.14%

Flowthrough Income — Passive Trade/Business 35% 39.6% N/A 3.8% 43.4% 24%

*Health Care Reform Increases > $250,000 (MFJ) > $200,000 (Single)

>$125,000 (MFS) N/A

0.9% tax on earned income

and 3.8% tax on investment

income

Source: CPA2 Biz, Inc. article dated August 23, 2012 by Blake E. Christian, CPA

2013 tax changes require thorough year-end tax planning


Current Law (expiring 12/31/2012)

New Law (effective 1/1/2013)

Maximum tax rate on ordinary income* 35% 39.6%

Additional Medicare tax on net investment income N/A 3.8%

Total: Maximum rate on investment income 35% 43.4%

Net percentage increase in rates (2013 vs. 2012) 24.0%

* Wage and self-employment income over certain thresholds will be subject to an additional 0.9% Medicare tax after 2012

With the probable increase in individual tax rates, the use of C-corporations for a portion of business operations should be reconsidered in the overall tax planning process.

Source: CPA2 Biz, Inc. article dated November 29, 2012 by Blake E. Christian, CPA

C-Corporations back in vogue?


Pacific Indexed Performer LT³

⁴Mr. Client, Age 45, $2,105,000 Death Benefit, $100,000 Annual Contribution For 5 Years

Year Annual Funding

Deductible Contribution By Corporation

W-2 to Executive

Net Cost in 40% Tax Bracket

1 100,000 100,000

62,829

25,132

2 100,000 100,000

62,039

24,816

3 100,000 100,000

64,969

25,988

4 100,000 100,000

66,319

26,528

5 100,000 100,000

67,799

27,120 500,000 323,955 129,582

Annual Income Tax-Free Retirement Distribution⁵ 103,925

Annual Taxable Equivalent* 173,208

(Age 65-84) 20 X Years

Total 20-Years Tax-Free Retirement Distributions⁵ 2,078,500

Total 20-Years Taxable Equivalent 3,464,167

*Taxable equivalent from a Qualified Plan in a 40% Tax Bracket

Attributes And benefits of a Section 79 Plan¹

Deductible To Corporation

Reduced Taxable Income To Participant

Tax-Deferred Growth

Tax-Free Life Insurance Policy Distributions for Supplemental Retirement Income⁵

In Some States It Is An Asset Protected Vehicle²


Results in Numbers

Over the last 5 years, SFG has provided plan administration for 423 Section 79 Plans. Representing a total target premium of $42,653,849.


¹ Tax-free income assumes, among other things; (1) withdrawals do not exceed tax basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC §§ 7702(f)(7)(B), 7702A. And policy withdrawals, loans and interest will reduce policy values and may reduce benefits. ² State law may provide life insurance and annuities with certain asset protection benefits. As a general rule, a debtor may not transfer property with the intent to avoid debt due to his creditors. The laws governing asset protection, however, are complex and the consequences of poor planning may be both civil and criminal penalties. Anyone contemplating an asset protection plan should not undertake such without the advice of legal counsel. Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product availability and features may vary by state. Insurance products and their guarantees, including optional benefits and any fixed subaccount crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency or their affiliates from which this product is purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Pacific Life Insurance Company's Home Office is located in Newport Beach, CA. Southwest Financial Group, Inc. is a Third Party Administrator and is not an affiliated company of Pacific Life Insurance Company. Over time, the policy's actual non-guaranteed elements and perhaps your actual use of the policy's options, are likely to vary from the assumptions used in this illustration. For these reasons, actual policy performance will either be more or less favorable than shown in this illustration. Please refer to the Basic Illustration for guaranteed values and other important information. This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

Disclosures from Slide 6


¹Taxable income to participants in a Sec. 79 Permanent Benefit plan is comprised of two parts: (1) the life insurance benefit; and (2) the permanent benefit. Calculation of taxable income is not performed by Pacific Life, and is not a part of any sales material or illustration prepared by Pacific Life. Taxable income calculations are typically performed by independent third party administrators based on their understanding of the Sec. 79 regulations. Pacific Life makes no representation as to the appropriateness of these taxable income calculations. You should obtain whatever advice you deem necessary and appropriate form your independent tax and legal counsel as to the reasonableness of those calculations performed by such third parties. ²This example is based on the purchase of a Pacific Life Insurance Company's Pacific Indexed Performer LT (Form #P11PIP / ICC11 P11PIP), Indexed Universal life insurance product with 100% of the accumulated value allocated to the Fixed indexed account in year 1, then 100% reallocated to the High Par 5 Year indexed account from years 2-5, and lastly 100% reallocated to the 1 Year High Par. An annual premium of $100,000 for 5 years and a $2,105,000 death benefit (with the initial Base of $1,471,825 and ARTR of $633,175) for a Male age 45 in the Preferred Non-Smoker underwriting class with an assumed crediting rate of 4.90% (guaranteed rate 2%) in year 1, 7.50% (guaranteed rate 0%) in years 2-5, and 7.50% (guaranteed rate 0%) in years 6+. Death Benefit Option B years 1-5, Option A years 6+. Policy distributions start at insured age 65 and continue to age 84. Premier Living Benefits Rider (Form # R12CII or ICC12 R12CII) has been purchased with the policy - known in the contract as the Accelerated Living Death Benefit Rider. Form number based on state in which policy is issued. Clients should be shown policy illustrations with and without rider to help show the rider's impact on the policy's value. Non-guaranteed elements are not guaranteed by definition. As such, Pacific Life Insurance Company reserves the right to change or modify any non-guaranteed element. This right to change non-guaranteed elements is not limited to a specific time or reason. Indexed universal life insurance does not directly participate in any stock or equity investments. Indexed Universal Life Insurance generally requires additional premium payments after the initial premium. If either no premiums are paid, or subsequent premiums are insufficient to continue coverage, it is possible that coverage will expire. Overloan Protection Rider (Form #R08OLP) has been purchased with the policy. Riders will likely incur additional charges and are subject to state availability, restrictions and limitations. ³Any discussion of tax free policy distributions assumes the following: (1) withdrawals do not exceed basis (generally, premiums paid less prior withdrawals); (2) policy remains in force until death; (3) withdrawals taken during the first 15 policy years do not occur at the time of, or during the two years prior to, any reduction in benefits; and (4) the policy does not become a modified endowment contract. See IRC Section 7702A. Any policy withdrawals, loans and loan interest will reduce policy values and may reduce benefits. In the case of a Section 79 plan, basis may be less than premiums paid and generally be limited to amounts that were included in income during the period the life insurance was under the Section 79 Plan plus premiums paid if any after the policy is no longer under the Section 79 Plan. This would result in greater amounts of income as a result of distributions from the policy in excess of this lower basis.

Disclosures from Slide 6 cont’d

A Different Perspective on Cross Selling Ted Zouzounis, CLU NFP


My job this afternoon is to broaden your view

of the value of cross selling and most importantly give you some

simple ideas on how to integrate it into your practice.

A Different Perspective on Cross Selling


Remember, most of the ideas I have likely came from somebody else,

but, I don’t remember who…



Originality is usually plagiarism of something

unfamiliar.



We’re all problem solvers... so why not share a philosophy that demands Multi-disciplinary resources and perspective

Because in many situations it is a superior way to obtain optimal results.



There are books now that encourage us not to say what we do, but to first explain why we do it.



Why Things are very complicated today. Years ago it use to be that you could go to your CPA for just about anything.

Now, unless you have more than one financial service professional weighing in on a specific problem, you may not come up with the best solution. Not necessarily a bad solution, but perhaps not the best solution.

A multi-disciplinary firm (or organization-NFP) provides opportunities for integrated decisions, and a combination of multiple planning tools from different disciplines to obtain optimal results.

There is a risk in making financial decisions in a vacuum. Context and perspective are critical to making sound long term decisions.

Everything you do in one area affects another.



In this rapidly changing environment it is more important to know where to find the answer then to try and have every answer. NFP offers you the ability to say I know how to find the answer or can help forecast trends.

Early knowledge is power, therefore, Expert proactive advice is invaluable.

Why A Different Perspective on Cross Selling


We are client-centric

Ours is an entrepreneurial focus

We hold ourselves to a high standard

We deliver innovative solutions

We are market leaders

NFP Philosophy


Solution Mindset

Advice Orientation

Solution Sharing

With a national presence of NFP, we have the innovation and support of a large national organization, while we are able to bring our clients the personal attention and responsive service of a small boutique firm. Our team of experienced long-term employees offer a continuity of service that larger organizations often fail to deliver.

Culture


Checklist of action items to “nudge” you in the direction of cross selling without big changes Most of us get referrals from advisors, and when you come down to it, if any of you get in front of a prospect that's in your target market, you're going to be successful way more times than you're not.

• Cross sell a prospect - not a client

• Invite a specialist to spend 1–1½ days in your area. Take him around to advisors/clients.

• Go out on appointments with an associate that has a different discipline or vice versa.

• Schedule a seminar far in advance (in a different area) and invite everyone you meet.

• Be open… it’s fun.



We are NOT trying to be all things to all people.

BUT

We want to be some more things to the right people!



Business Development Specialists


Theodore J. Zouzounis, CLU NFP CA Insurance Services, Inc.

3470 Mt. Diablo Blvd., Suite A100 / Lafayette, CA 94549 O (925) 297-6142 / F (925) 282-3227

www.nfp.com/nfpca / [email protected]


A New Market with Foreign Nationals

Lee Churchill CSI Consulting

Amanda Zukowski NFP


A Successful Case The Demand Exists

• Identifying the opportunity • Foreign Nationals • U.S. Citizens with substantial foreign assets

• Referral Sources with International Clientele • Developing the right team • Working with NFP

Premium Financing • Assigning Foreign Collateral • Working with NFP

Case Success • Foreign National • Foreign Assets – navigating financial underwriting • International tax issues • Premium Financing


PartnersFinancial Charitable Foundation Update

John Irvin Bruce Callahan


CONVENTION VIDEO


2015 Convention Qualifications 2015 Convention June 24-28 The Fairmont Banff Springs in Banff, Canada How to Qualify $550,000 in convention credit for 12 months starting Jan 1, 2014 2015 Callahan Qualifier June 22-23 Alberta, Canada How to Qualify $1,500,000 in core life business for 12 months starting Jan 1, 2014

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