income-protectionIn the sports world, there is a lifelong debate about what wins championships – offense or defense.  The NFL’s old view was that a strong defense wins it all.  In recent years that’s been challenged by prolific scoring teams. Regardless, we don’t hear anyone saying that either offense or defense should be completely abandoned. All teams have both offense and defense even though one side of the ball might be favored in the draft or overall team emphasis.  Can you imagine a team with no offense or no defense? Unthinkable! At the very least, you’ve got to give the players some time off the field to catch their breath. These basics apply to all team sports and at all levels of competition.

Many financial planners today seem to be focused exclusively on playing offense – helping their client’s grow their investment portfolios and retirement plans while neglecting to provide a strong defense to protect against the “risks” of life.  While it’s easy to understand how this might happen – a less complicated client relationship, much less paperwork, and no declines or insurance underwriting hassles – it doesn’t mean that it’s best for the client.

When the financial plan is developed, what steps are taken to address the risks of life; those everyday occurrences that require a strong defense to prevent collapse of the personal balance sheet?  If you live too long – Long-term care costs overwhelm a lifetime of saving and investing. If you die too soon– what good is an 8% return when death strikes before your peak earning years and you leave your family financially stranded?  And what happens when you become sick or hurt and your income stream ends or is significantly reduced?  Even if you have money to pay the bills on a temporary basis, how long will it last and doesn’t that erode your asset base?   Retirement plan contributions become a thing of the past, including lost employer matching, and a regular investment program will likely be impossible!

We understand that the financial planner’s job is to carefully fact-find, and then develop a plan consistent with the client’s goals, expectations and resources, to be implemented, monitored and adjusted over time.  So as a planner, don’t ignore the significant risks of life (and health) and focus only on offense, accumulating assets and wealth for your clients.  If you lack the product understanding to correctly protect your clients, contact us.  We offer uncommon expertise in income protection. If you have chosen to be a fee-only planner and lack the licensing to offer risk protection products, contact us.  We work with outstanding producers throughout the country who can assist your clients with the defensive side of their financial plan, protecting their risk. 

A recent study by the Council for Disability Awareness found that 78% of consumers believe their risk of being disabled for at least three months during their career is 1 in 25, or less.  The actual odds are 1 in 4 (for a 20 year old experiencing a disability for at least three months during their career). 

Is it time to approach your financial planning clients with a more balanced approach that includes both offense and defense?

Download our Wealth Preservation Plan to learn more about presenting income protection products to your clients.

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