Why should you be chosen over other financial advisors?

the prospect will choose you because:

• you represent the biggest insurance company?
• you have the most comprehensive coverage with the least cost.?
• the investment funds you offer are the top performing funds in its class?

Selling life insurance is difficult if we consider the number of agents calling on the same prospect, because of this competition, it may have evolved into a "product contest", when agents compete against each other based on product merits and benefits, force selling it to the prospect without considering whether it is needed or not.

While these 3 points are quite valid and could contribute to your business, these are not sustainable over the long term. First, another company may overtake yours in terms of industry rankings, Second, products are created continuously, any advantage your product currently have might be overshadowed by a newer product tomorrow. Third, fund performance fluctuates, and not all securities move in the same direction all the time, the best performing fund today can be the worst if market condition changes, which it constantly does.

3 traits that advisors should have to remain competitive and be chosen:

1. Relevance - Keeping yourself updated with the latest trends in financial advisory, be it market knowledge or better ways to help clients achieve their financial goals, since the financial market is always evolving, we should constantly learn so we can give our clients timely and relevant advice.

2. Empathy - Clients don't need everything that we offer, some would be useful, but most would be redundant, clients may also not be in a position to buy any new product at this time, let's respect that and not force the client to a situation when they have to "reject" us.

3. Always! the client's best interest - You are one case away from qualifying to that incentive trip ending today, the prospect is having second thoughts and would like more time to consider, what do you do? 

All the best my friends!

Feel free to ask questions in the comments section

#acgadvice

Are VULs really better than bank deposits?

 

The staple pitch among financial advisors is comparing the "rates of return" of a savings account with the projected returns of a VUL, how the low interest rate of a savings account is not overcoming the negative effects of inflation over time leading to significant losses in purchasing power.

While data has shown the outperformance of funds over a savings account, this must be presented in the proper context.

First is that the nature of the returns is not comparable.

A savings account is categorized as a "lending" type of vehicle, that by depositing the money in a bank, we are effectively lending the money to the bank in return for compensation in the form of interest. This rate is normally fixed and the funds are withdrawable anytime.

The liquidity (withdrawable anytime) of a savings account is the reason why rates are normally very low.

A VUL (or mutual funds/UIT) is categorized as "owning" vehicles, that money invested is replaced by ownership (units/share) in the fund at the price the investment is made, for example funds are invested in ABC equity fund selling for Php 2/unit, a Php 10K investment will now be converted to 5,000 units of the fund (Php10k/Php2/unit) assuming zero transaction costs (entry fees, COI, etc), how much the returns would be going forward will be dependent on how the fund is invested. So if the fund is an equity fund (predominantly invested in the stock market), the price of the fund will be how the stock market behaves going forward.

If the market goes up, the price of the fund will follow resulting in some gains for the investor, but if the market went down, the price of the fund will also drop. The best way to handle this volatility (ups and downs) is to hold on to it for longer periods of time.

It is not withdrawable anytime because to cash in, you have to sell your ownership (units/shares) at the prevailing price, which could be lower than your purchase price.

Having said these, are VULs better than bank deposits?

It really depends on the timing and intent of your investment decision.

• If your current excess funds are meant to act as buffer for any income shortfall, you need liquidity so a savings account is better.
• If your current excess funds are meant to finance a "financial goal" happening years into the future, then a fund (whether a VUL, MF or UIT) may be a better option.

All the best my friends!

#acgadvice