Broker World

Oxford Life

Many clients purchase annuities for the stability and safety they provide through guarantees. Two annuity options with popular, yet different guarantees are multi-year guarantee annuities (MYGAs) and guaranteed lifetime withdrawal benefit riders (GLWBs). MYGAs offer a favorable alternative for bank certificate of deposit (CD) buyers because the terms and conditions are similar, but the interest rates credited to MYGAs are often higher than CDs and the interest accumulates tax-deferred.

Oxford Life Insurance Company (Oxford Life) has introduced an annuity that combines the guaranteed interest of a MYGA with the guaranteed lifetime payout of a GLWB rider. This annuity is called the Oxford Life Income Protector and is the first five-year MYGA to offer a GLWB rider—at no additional charge.

The MYGA interest rate is guaranteed for five years and varies based on the deposit amount. Deposits from $25,000 to $250,000 are currently being credited an annual interest rate of 3 percent, and deposits from $10,000 to $24,999 are currently being credited 2.5 percent. This product is available to clients issue ages 18 to 80 and offers hardship waivers for nursing home confinement and terminal illness. In addition, 10 percent of the account value may be withdrawn annually without incurring a withdrawal charge, except during the first year when the free withdrawal amount is limited to interest.

The GLWB rider offers clients the option of guaranteed income for life and is automatically added to the MYGA at no additional charge. (Oxford Life attaches this rider automatically to the base policy only if the annuitant is an owner, unless the owner is not a natural person. If the owner is not a natural person, the annuitant will be treated as the owner for purposes of this rider. If the base policy has joint owners, Oxford Life will attach this rider only if the joint owners are spouses.)

This rider credits interest to an income account, used solely for the purpose of calculating the monthly income benefit, at a rate 5 percent greater than the base product. The current income account interest rate is 8 percent.

This product will uniquely cater to clients concerned with achieving guaranteed rates of return like those found in CDs and with outliving their retirement savings.

Roger McCarty 
1930-2011

The insurance industry has lost an icon with the passing of Roger H. McCarty, Brokers International, Ltd., on November 15. Born in Guthrie Center, IA, in 1930, Roger spent his early years farming with his father and brothers before serving his country in the United States Navy. After military service, he began his insurance career in 1955 as an agent for State Farm Mutual Insurance Company in Denver, CO, where in his first year he was named Agent of the Year and remained one of their top agents nationwide until his departure for the brokerage business in the 1960s.

Roger’s first foray into brokerage was with Oregon National Life, which later became First Farwest Insurance Company. He formed First Farwest Marketing Company to market an extensive range of insurance products, and that company became Brokers International, Ltd. Originally based in Denver, Brokers International grew from two employees to currently more than 80 under Roger’s leadership. That growth prompted a move to Lake Panorama, IA, in 1999, where the company now owns and occupies a 19,000 square foot complex on a 10-acre campus. Iowa represented a return to his roots, and Roger admired the small town atmosphere and strong work ethic.

A pioneer in the development of lead generation programs, seminar systems, online marketing systems, and product and agent training programs, Roger credited several people for his success, including his mentor, Chuck Enabit, who helped Roger get started marketing insurance products; lifelong friend and co-worker Byron Lucas; nephew Bill McCarty, Brokers International president; and son Kelly McCarty, CMO. Also contributing to the success of Brokers International is daughter Michelle Woods.

The result is a story of a small Colorado marketing company growing to become one of the nation’s largest insurance brokerage firms and annuity wholesaling powerhouses and expanding further into life brokerage with affiliate company Brokers Life Marketing Group, LLC, and into the independent full service broker/dealer and RIA space with affiliate Brokers International Financial Services, LLC. Brokers International and its affiliates now work with more than 40,000 licensed insurance professionals nationwide.

When not adding to his vast accomplishments in the brokerage industry, Roger was an avid golfer, fisherman, baseball and football fan, and enjoyed thoroughbred horse racing. Active in his community, Roger contributed to organizations like the Panora Fire Department and local schools and charities. He was instrumental in bringing the Iowa Open back to Lake Panorama National Golf Course, and Brokers International is the main event sponsor.

Asked in a 2010 interview why he chose insurance marketing, Roger said, “I do what I do because of the personal satisfaction I receive from working with my employees and having the opportunity to impact them and their families in a positive way.” (Surely one big reason Brokers International was recognized as the “Number One Best Place to Work in Central Iowa” in the medium-sized company division in 2009 by Business Record magazine.) He continued, “I’ve also had the opportunity to help insurance agents from around the country become successful and help their clients by helping them build their estates and provide retirement safety. I could not imagine doing anything else. I love my company, my work, my family, and my friends. It honestly feels like I’ve been on vacation for the past 50 years.”

Industry guru Art Jetter, Art Jetter & Company, remembers Roger: “He was a dear friend and incredible influence. He was a great role model, often saying, ‘What a country. Where else could a farm boy from Guthrie Center Iowa have this kind of opportunity?’ Roger made everyone he met feel like family. I sure did. He was fun. He was creative. He looked out for family and loved that his family joined him in his business and his many adventures. While on the road, he never forgot to call Jane and tell her he loved her. He made my family his family. He was tenacious in achieving excellence, often saying, ‘A steady drip will wear away the hardest stone,’ when times looked tough. Whatever business successes I’ve had, I can attribute much to the friendship and life lessons I got from Roger. He helped me understand the concept of ‘just do it.’ A few people are just bigger than life. Roger was one of those few. Like all those who loved him, I will miss him but be thankful for the wonderful gift of memories of a man so full of life.”

I first met Roger in the early 1980s at the Colorado Life Underwriter’s convention. My first impression was that he was a very important man and that early in my career I was frankly intimidated. But within minutes Roger’s great ability to put people at ease and take a genuine interest in them won me over for life. His encouragement and friendship, particularly in those early years, has contributed greatly to my ability to form meaningful business relationships and industry-born friendships throughout my career. I remember Roger as one of the most charismatic, energetic and enthusiastic speakers and motivators I’ve ever seen and one of the warmest, most fun-loving people I’ve ever met. I will miss him, as will many. [SPH]

Resource Brokerage

Effective January 1, 2012, Blair Farwell, RHU, became president and chief executive officer of Resource Brokerage, LLC. He was formerly the firm’s vice president of health brokerage. The announcement is the final stage of a management transition that began more than 12 years ago.

Founder John Rippinger will remain active with the company, with the position of chairman of the board. He will assume the new position as senior executive of the life division of Resource Brokerage. This responsibility returns him to the foundation of his career—the development of life insurance strategies and services for customers of brokers.

Farwell joined Resource Brokerage in 1999 as manager of the group health division and eventual successor to company founder John Rippinger in ownership of the company. He expanded his role with the firm with responsibility for the individual health division.

Farwell is a 1995 graduate of Hope College (Holland, MI) with a B.A. in business administration and communications.

Resource Brokerage and/or Blair Farwell and John Rippinger are members of the Chicago Association of Insurance and Financial Advisors (CAIFA), the National Association of Independent Life Brokerage Agencies (NAILBA), the National Association of Health Underwrit­ers (NAHU), the American Association for Long Term Care Insurance, the Chicago Estate Planning Council (CEPC), the Top of the Table level of the Million Dollar Round Table (TOT–MDRT), the Society of Financial Service Professionals (FSP), the Financial Planning Association (FPA), the Association of Health Insurance Advisors (AHIA) and the Broker’s Health Insurance Network (BHINI).

AimcoR Group

National insurance marketing organization, AimcoR Group LLC, announced that John C. Ziambras, CLU, has been hired as president and CEO.

Prior to assuming his responsibilities with AimcoR, Ziambras spent a few years overseas as the chief financial and administrative officer at the American Farm School in Thessaloniki, Greece, his native land. There he oversaw the financial and administrative management of all divisions of the institution.

Before moving overseas, Ziambras’s expansive industry experience encompassed being managing director and general manager of the Depository Trust & Clearing Corporation’s (DTCC) insurance and retirement services division. Earlier, he was vice president of national accounts for Prudential Select Brokerage, and he managed the national insurance consulting practice of KPMG LLP in New York, NY. He began his business career as a registered representative and sales manager with Northwestern Mutual Life and New York Life.

Ziambras graduated from Princeton University with a degree in economics and has also served frequently as a speaker and panelist at industry conferences. He is well-known as an expert with both local and national groups associated with professional and high-net-worth individuals on personal financial planning and insurance issues.

Allianz Life

Allianz Life Insurance Company of North America (Allianz Life) has named Walter White, CLU, president and CEO, effective January 1, 2012. White succeeds Gary C. Bhojwani, who became chairman of Allianz Life and assumed responsibility for the U.S. insurance operations of Allianz on the board of management of Allianz SE, Munich.

White joined Allianz Life in 2009 as chief administrative officer, responsible for compliance, information technology, operations and suitability. Prior to joining Allianz Life, he was president of Woodbury Financial Services (Hartford Life’s independent broker/dealer). He led the formation of Woodbury Financial after Hartford Life purchased Fortis Financial Group in 2001. Before joining Fortis, White was president of MONY Brokerage, the MONY Group’s life insurance brokerage subsidiary.

White holds a Bachelor of Arts degree from Yale University and an MBA from The Wharton School at the University of Pennsylvania.

In recent months, a significant amount of media ink has been devoted to examining the ethics of various compensation models within the financial services industry. While certain compensation models frequently get a bad rap, it is important to note that each model has both advantages and potential ethical challenges.

Assets Under Management Model (AUM)
AUM is touted as a “conflict-free” compensation model since it aligns the interests of the professional with the interests of the client. The financial service professional’s compensation increases (or decreases) in proportion to the growth (or losses) in the client’s account. Since the advisor is compensated solely on the basis of account performance clients can be more confident that their advisor is only recommending financial products or strategies which are in their best interest.

AUM can bolster client confidence by not only aligning the interests of the client and the advisor, but also by removing the perception of a conflict of interest. To the extent that the AUM model increases confidence in the integrity of the financial advisor, this is an advantage.

But this model also creates ethical challenges. While the client’s assets remain in the account under management by the advisor, the interests of the advisor and the client are neatly parallel. However, these interests may diverge when clients choose to move assets out of their accounts.

Since fee-based advisors are compensated on the basis of the assets they manage, fee-based advisors have an interest in maintaining (and increasing) the total amount managed for the client. Additionally, since compensation is tied to the growth of the client’s account, it is subject to fluctuations that are not entirely within the control of the professional. Thus, rather than compensating professionals on the basis of their expertise and skills, advisors may be rewarded excessively in times of economic prosperity and penalized harshly in times of downturn and recession.

Flat-Fee Model
Under a flat-fee model (also referred to as a retainer) an amount is agreed upon by the advisor and client. This amount is usually based on the client’s net worth rather than the value of the portfolio and is paid in quarterly installments.

An advantage of the flat-fee model is that since the compensation is tied specifically to the perceived value of the advice provided (and not to the quantity of products sold or the performance of particular investments), it is possible for the advisor to be more objective in his recommendations. Because the advisor is compensated based on the net worth of the client and not on the basis of the portfolio, the interests of the advisor and the client remain more closely aligned in a variety of circumstances.

As was the case in the AUM model, the alignment of interests may make clients more comfortable with the recommendations of their financial advisors and encourage the trust and confidence, which is essential to a profitable and productive relationship.

Like each of the models under consideration, however, the flat-fee model raises a unique set of potential difficulties. A problem found with attorneys, who also use the flat-fee model (retainers) is shirking. Individuals who “shirk” do only the minimum amount of work necessary to maintain the relationship. The hypothesis is that since the advisor’s compensation is not tied explicitly to the products sold or portfolio growth, the advisor may not be incentivized to aggressively pursue growth opportunities that are in the best interest of their clients.

Commission-Based Model
The commission-based model is the original form of compensation for many financial services providers. The main objection to the commission-based models is that the interest of the professional and the firm/issuing company may be contrary to the interests of the client. The fact that the client may not be aware of the advisor’s other obligations can exacerbate this misalignment.

Within this model, professionals materially benefit from selling products with a higher commission, and there can be little material motivation to recommend products that are in the best interest of clients. Additionally, this model can tempt practitioners to engage in “churning,” a practice that involves originating empty transactions solely to generate additional commissions or meet production goals.

Yet the commission-based model has important advantages. The first is that it creates a system of motivated practitioners incentivized to market “hard-to-sell” products. Particularly in the life insurance industry, it is often difficult to convince potential clients of the benefits of purchasing adequate insurance coverage, even though the possession of such coverage is good for both the individual and society. Moreover, the mere existence of a conflict of interest certainly does not mean that practitioners will exploit these conflicts in order to materially benefit themselves at the expense of their clients.

Commission-based compensation systems are not “one-size-fits-all.” Commission-based models can be structured to reward different behaviors and priorities.

Finally, a commission-based compensation system allows consumers to purchase the level of advice they believe they need from the financial services professional. Some clients may only be looking for a broker to execute their trades or provide access to foreign markets and are not looking for comprehensive financial planning. The commission-based model creates options for these consumers to act in their own interest.

Compensation for financial services professionals continues to be a hotly debated and contentious issue. Financial services professionals committed to doing business in accordance with the highest ethical principles should always bear in mind that whatever form of compensation they receive, they are obligated to always act in the best interest of the client.

A Group of Second and Third Generation Brokerage General Agents Helping Each Other Succeed in a Tough Business

Depending on which statistics you read, today the average age of an insurance producer is somewhere in the mid to late fifties. Another statistic we are constantly reminded  of is that the number of individuals entering the insurance business has drastically decreased during the last decade. The major concern for many in the industry is how to recruit and retain successful young insurance marketers.

In the wholesale brokerage market, one of the best sources for  recruiting the young is looking to the next generation—the sons and daughters of successful agency owners!

Members of the TYGERS are an excellent example of successful young BGAs. Each of the nine members has inherited his enthusiasm for the insurance business from his family, and most joined the family business as soon as they finished school.

Fifteen years ago, after spending time together each year at the annual NAILBA meetings, these young men decided to form a group. Initially they were looking for an excuse to get together a couple of times a year for a short meeting and to play golf as much as possible. They decided to call themselves the TYGERS, which at the time stood for “The Young Guns Early Retirement Society.”

As the years progressed, their meetings started to put more emphasis on the business aspect and, they say, “the business sessions are the most valuable component of our meetings today.”

They all roll their eyes now at their naiveté and say that if they were forming the group today it would be TOGWBWFS—the old guys who’ll be working forever society.

Let’s meet the TYGERS and hear what they have to say about the complex industry they all share.

Paul (P.J.) Doyle, Jr., LUTCF, is a graduate of the University of Southern Mississippi. He joined his father, Paul Doyle, Sr., at Crisis Management Agency in 1990. In 1997, the agency merged with the Harrison James Group, where P.J. was a partner and regional brokerage manager.

In 2002, P.J. and long-time business partner Angie Dean opened up a CPS affiliate office, CPS/Gulf States Brokerage, LLC, where he serves as principal/owner. In 2008, CPS/Gulf States Brokerage merged with Crisis Management Agency.

P.J. has been an active member of the TYGERS, Mississippi and Alabama NAIFA, Society of Financial Service Professionals and Rotary International (he is a Paul Harris Fellow). P.J. served in the U.S. Army from 1982-84.

John W. Felton, IV, started working at Tennessee Brokerage Agency in 1986. After graduating from The University of Tennessee in 1988, he became a marketing specialist for Manhattan Life Insurance Company in Cincinnati, OH. When Man­hattan Life was sold in 1989, he moved back to Knoxville and became a marketing manager at Tennessee Brokerage Agency. When his father, William Felton, retired in 1996, he was named president. Felton’s sister, Karen, is also in the family business.

Felton has served on many local and state insurance association boards as well as local civic and social organizations. He is currently a member of the board of directors of LIFE Foundation, past chairman of the National Association of Independent Life Brokerage Agencies (NAILBA), past president of the National Association of Insurance and Financial Advisors (NAIFA)–Knoxville, and past president of TYGERS.

Parks LaMarche is president of CPS/Integrated Marketing and Insurance Services (CPS/IMIS). He founded CPS/Integrated Marketing with his father, Daniel L. LaMarche, Jr., in 1986.

LaMarche is a long-time member of the National Association of Independent Life Brokerage Agencies (NAILBA) and served on the board of directors from 2006 to 2008. He also served as co-chairman of the membership committee. He is a charter member and immediate past president of the NAILBA Charitable Foundation, and has served on its board of directors since 2007. He is also a member of NAIFA and NAHU.

LaMarche earned a BS degree in business administration from Colorado State University in Fort Collins, CO.

David B. Lea, III, is partner and vice president of brokerage at Broker’s Service Marketing Group and has been in the insurance industry since 1992. He worked at First Colony Life before joining his father at Brokers’ Service Marketing Group in 1993. Dave’s area of expertise is product analysis. He works closely with brokers on case design. Dave’s brother and fellow TYGER, Jason, and sisters Deborah Ross and Jeanne Hunt are also in the family business.

Lea is an associate member of the National and Rhode Island Societies of Financial Service Professionals and the National and Rhode Island Societies of Financial Advisors. He served as president of TYGERS, has been on the board of the National Association of Independent Life Brokerage Agencies (NAILBA) and is past president of the NAILBA Charitable Foundation. He is a licensed insurance agent and is NASD registered.

Jason Lea, CFP, is executive vice president at Brokers’ Service Marketing Group. He joined his father, David Lea, Jr., brother Dave Lea, III, and sisters Deborah Ross and Jeanne Hunt in the family business in 2000 and leads the company’s sales team. He graduated from Davidson College in May 1999 with a BS degree in economics.

Prior to joining Brokers’ Service Marketing Group, Jason Lea was employed by MFS Investment Management. He is past president of the Rhode Island Society of Financial Service Professionals and is a member of the Financial Planning Association of Rhode Island, the Rhode Island Estate Planning Council, and Boston Estate Planning Council. Jason Lea has served as president of the TYGERS. He is FINRA registered series 6 and 63.

Seixas “Chad” Milner, III, is the fifth generation of his family to be in the insurance business; he joined The Milner Group nine years ago. His great-grandfather Willis J. Milner, Jr., founded the company; his grandfather Seixas Groves Milner took over the agency in 1960, and his father Seixas “Chip” Milner, Jr., is currently CEO. There are six other members of the Milner family, representing two generations, who are currently part of the business as well.

Chad Milner is now the annuity director and vice president of The Milner Group.

Milner has been recognized by NAIFA–Atlanta as one of its 2011 Top Advisors Under 40. He has received the accreditations of Certified Senior Advisor, Certified Annuity Advisor, and Certified Annuity Specialist. He is currently working toward his masters in financial services through the Institute of Business and Finance.

Douglas A. Mishkin, a third generation insurance professional, is president and CEO of Algren Associates, Inc. Algren Associates was founded in 1960 and is one of the oldest brokerage general agencies in the United States.

Although Mishkin entered the family industry, he chose a different career path from his father and grandfather, who owned a large multiline and benefits firm. He started his career as an agent with MassMutual Financial Group and The Guardian Life Insurance Company. In 1993, he moved to the independent brokerage industry by joining Bufkin, Hefferon & Siegel, a brokerage general agency in Manhattan, as their brokerage manager. He was offered the opportunity to join Algren Associates in 1997 and, in 2001, was named president of the agency. In 2006, the title of CEO was added when Algren’s founder, Sydney Dickerman, retired.

Mishkin was 2008 chairman of the National Association of Independent Life Brokerage Agencies (NAILBA), previously serving as a board member for seven years and as chair of its membership committee. In addition to his NAILBA involvement, Mishkin is also an active member of NAIFA, LifeMark Partners, SUB-Centers, Professional Life Advisors Network (PLAN), MDRT, and TYGERS. Beginning in 2012, Mishkin will sit on the board of directors of the LIFE Foundation.

Mishkin is a graduate of Franklin & Marshall College in Pennsylvania, where he earned a bachelor’s degree in business management.

Jeffrey Mooers joined H.D. Mooers and Company in 1990, joining his uncle, Douglas Mooers, and his father, Donald Mooers. He is the third generation of Mooers in the insurance business; his grandfather, Hal Mooers, founded the agency in 1937.

After graduating from the University of California at Davis, Mooers started in the marketing department and in 2000 was named president of H.D. Mooers and Company.

Mooers is active in the National Asso­ciation of Independent Life Brokerage Agen­cies, and has chaired both the marketing and strategic communications committees. He is president-elect of his local NAIFA chapter and founder of the TYGERS. He is a member of the Marketing Alliance.

Luke Ramsey grew up in the independent brokerage business. His father, Walter “Jiggs” Ramsey, started The ASA Group in 1977. Luke joined The ASA Group in 1999 after he graduated from The University of Arkansas, where he earned his degree in marketing.

Ramsey has worked in various roles at The ASA Group over the years. Currently, he is senior marketing director and enjoys working closely with agents to build their agencies. He specializes in trust services, advanced underwriting, large case design, impaired risk underwriting, CASE negotiation, sales and operations.

Ramsey has served on the National Association of Independent Life Brokerage Agencies (NAILBA) membership advisory council. Also, he has planned life marketing training schools for BRAMCO and is past president of the TYGERS. He is an active member of The Plan Group, which focuses on distribution through wirehouses.

While each member of the TYGERS has an impressive heritage in the wholesale brokerage business, they bristle when someone mentions that fact. Without a doubt they are proud of their family accomplishments, but they view themselves “as a great group of friends who do the same thing for a living—we are not big or powerful, or even all that smart. We do have a common goal—to help each other.”

Alan Palmer
All members of the TYGERS were adamant about mentioning their late friend and one of the founding members, Alan Palmer, who was president of The Palmer Agency for only five years, from 1998 until his untimely death in 2003.

An active member of several professional associations, Palmer served on the board of the National Association of Independent Life Brokerage Agencies (NAILBA) and was vice president and marketing chairman of the NAILBA Charitable Foundation. He was also involved in NAIFA and the Georgia Health Underwriters Association, and had served as president of Life Leaders of Georgia.

Palmer’s work on behalf of charities was tireless. To honor his memory, the TYGERS take great pride in what they do for the Alan Palmer Scholarship Fund, given to a rising sophomore at Oxford College of Emory University.

Speaking for the group, Jeff Mooers said, “While we are all very close, Alan was at the TYGERS core. What made him so beloved was his sense of humor, his generous compliments, his sincerity, his sarcasm, his caring, his friendship, his big hugs. We all miss him terribly. Personally, I would say he was my best friend of the TYGERS; and I’m willing to bet most, if not all of us feel the same way. We all miss him terribly.”

“Today, Myra Palmer, Alan’s sister, is leading the agency admirably. The Palmer Agency—and Alan’s legacy—remain very close to us all. Our biggest point of pride is raising money for AP’s scholarship fund.”

Support and Friendship
When each was asked how the TYGERS helped them personally, the collective response was that they rely on each other’s advice on how to solve problems and create opportunities.

Luke Ramsey said, “Many of the TYGERS have been in my exact situation and have vital input about the struggles of growing a successful agency.”

Jason Lea agreed, “The most powerful aspect for me has been the common bond we all share—growing a small business in a family environment.”

John Felton added, “While we are all technically competitors, we truly want to help each other succeed. I know that each of the TYGERS has my best interests at heart.”

Dave Lea mentioned that he met most of the TYGERS at the first NAILBA meeting he attended. “Today,” he said, “I can ask these guys anything and get answers immediately.”

Jeff Mooers said, “I sometimes wonder if the TYGERS have helped me more with business, or with life in general—it may well be the latter. From a business standpoint we discuss everything from best practices all the way down to pricing for overnight mail delivery…The TYGERS provides a fantastic sounding board—I don’t do much without getting their input.”

P.J. Doyle added, “The TYGERS are home base for me; we help each other gain a better perspective of what is going on in the industry.”

Doug Mishkin added, “I agree, the TYGERS provides a great forum for getting ideas to help grow my business. And, of course, we do have some fun getting together.”

Parks LaMarche concluded, “Drawing upon the collective experience of such a close group of friends has enabled each of us to grow so that we can better meet the needs of our brokers with a best practices philosophy.”

How the Business Has Changed
When asked how the insurance business has changed since they entered it, the group gave varying answers. But the majority mentioned increased competition. Here are some of the responses:

P.J. Doyle: “Business has spread out…we used to fight for company contracts and work hard with the few we had. Today, nearly everybody has contracts with all the companies.”

Dave Lea: “I agree with P.J., business has spread out. It used to be that BGAs worked in their area of the country and the companies’ contracts assigned a certain territory. With increased competition, those territorial lines blurred and, now, we must be prepared to conduct business across the country.”

Luke Ramsey: “The introduction of guaranteed universal life contracts and improved technology has allowed many new BGAs to enter the marketplace. This increased competition has made us re-evaluate business models and processes to maximize our efficiency and focus.”

Both Parks LaMarche and Jason Lea say that technology has changed the industry—information travels faster today. Lea added, “Our industry is still way behind others—we still use paper for many things. Our agency is focusing on making our entire operation paperless.”

John Felton: “Brokerage is much more prevalent and widely accepted, which is good. However, we need to become more accountable to the insurance industry and help find ways to bolster the buyers’ confidence.”

Doug Mishkin: “The players have changed; we are now doing significant production with carriers that were traditionally captive. In addition, there are new distribution channels, such as banks and broker/dealers, that have created new opportunities but require different business strategies.”

Jeff Mooers: “While the details of our business are different—more complicated—we still have exactly the same goal: to find secure solutions for our clients. Our business is still based on relationships. Without a doubt our margins are leaner today and we have to be able to do more with less, but the purpose remains the same.”

Conflict and Succession
Issues in a Family Business
Succession is a necessary part of any business, particularly when multiple generations of one family are involved in one business. It is only natural that conflicts and misunderstandings occur, making it very difficult to separate business issues from family issues.

The TYGERS have all faced these issues, and following are some suggestions they have for dealing with them.

Luke Ramsey says that it is important to “make sure that you keep your family as the number one priority, giving each member a chance to explore his different business style.”

Jason Lea added, “Accountability for all family members is a must. You simply can’t run a business fairly without holding everyone to the same standards. If family members are not required to be productive, the morale of your whole team of employees is affected.”

P.J. Doyle says that “everyone must be ‘on the same page’ as far as communications are concerned. Everyone must clearly understand what is expected of them, and those expectations must be realistic.”

Dave Lea and Doug Mishkin agreed that the younger generation must gain the respect of everyone in the agency and stay focused on building the agency’s legacy. Mishkin also said, “At the same time, the ‘next generation’ needs to be given the opportunity to be in a leadership role prior to a transition.”

In terms of setting up a succession plan, the group’s conclusions were: Seek the services of an unbiased third party—someone who can take emotion out of the equation—and set up a formal agreement with the intent known by all. Make sure that everyone’s goals and wishes are considered before setting up an actual plan of action. Finally, setting a transition date is of utmost importance—do not leave it open-ended.

This great group of friends have come of age in the wholesale brokerage business during a time of transition. The issues facing small business entrepreneurs today are tougher—the margins are slimmer, the competition is fierce, and the economy is shaky.

The TYGERS have learned many important lessons from each other. They have put ego aside and banded together as brothers, helping each other survive. Now that’s what wholesale brokerage is all about!

P.J. Doyle can be reached at CPS/Gulf States Brokerage, 3207 Magnolia Street, #306, Pascagoula, MS 39567. Telephone: 228-762-1600. Email: pdoyle@cpsinsurance.com.

John Felton can be reached at Tennessee Brokerage Agency, PO Box 11767, Knoxville, TN 37939. Telephone: 865-588-9555. Email: jfelton@tba.com.

Parks LaMarche can be reached at CPS/Integrated Marketing & Insurance Services, 8447 Miramar Mall, San Diego, CA 92121. Telephone: 858-220-7301. Email: parks@cpsimis.com.

Dave and Jason Lea can be reached at Brokers’ Service Marketing Group, 500 South Main Street, Providence, RI 02903. Telephone: 401-751-9400. Email: dave@bsmg.com and jason@bsmg.com.

Chad Milner can be reached at The Milner Group, 833 Hurricane Shoals Road, Lawrenceville, GA 30043. Telephone: 678-252-1788. Email: chad@milnergroup.com.

Doug Mishkin can be reached at Algren Associates, Inc., 212 West 35 Street, Fifth Floor, New York, NY 10001. Telephone: 212-594-9890. Email: doug@algren.com.

Jeff Mooers can be reached at H.D. Mooers & Company, 3688 Mt. Diablo Boulevard, Lafayette, CA 94549. Telephone: 925-283-7310. Email: jeffm@hdmooers.com.

Luke Ramsey can be reached at The ASA Group, 111807 Hinson Road, Little Rock, AR 72212. Telephone: 501-224-7739. Email: lramsey@theasagroup.com.

Lincoln Financial Distributors

Lincoln Financial Distributors (LFD), the wholesale distribution subsidiary of Lincoln Financial Group, has named Tom Tooley, CLU, ChFC, head of insurance solutions distribution. He will be responsible for leading distribution of Lincoln’s life insurance and executive benefits businesses.

Tooley brings more than 30 years of experience and a successful track record across all aspects of the life insurance industry. Prior to joining Lincoln as national sales manager, independent planner channel in 2010, he was with Hartford. Tooley holds a BA from the University of Massachusetts at Amherst, as well as holding all relevant FINRA registrations
 

Securian

Securian has introduced the Ovation Lifetime Income variable annuity rider, which offers guaranteed income and many growth opportunities. The Ovation rider can be added, for an additional cost, to Securian’s MultiOption variable annuity, underwritten by Minnesota Life Insurance Company.

When clients purchase Ovation, after the benefit date (the later of the contract anniversary following a client’s 59th birthday or the date this benefit is added to the contract), they add the ability to receive guaranteed income for life with withdrawals that can continue regardless of fund performance or contract value. Additionally, any increases in the benefit base and the guaranteed annual income are locked in each year. As long as annual withdrawals stay within the allowed guidelines, clients never lose those gains and the guaranteed annual income never drops because of a down market.

Ovation Lifetime Income provides four opportunities to grow guaranteed income, some even in times of poor market performance: (1) On each contract anniversary, if the contract value has risen, Ovation provides an automatic reset to lock in market gains for the benefit base. (2) For each year clients postpone withdrawals—up to 10 years—the benefit base rises six percent if it would provide more growth than a reset. (3) On the tenth year after Ovation is purchased (or the contract anniversary following the client’s 70th birthday, whichever is later) if there have been no withdrawals since the benefit purchase, the benefit base is raised to 200 percent of the initial benefit base and additional purchase payments made in the first year. And 100 percent of any purchase payments made after the first year are also added to the benefit base. (4) Initial guaranteed annual income is based on the client’s age when the benefit is added. The higher the age, the higher the percentage; from 4.5 to 6.5 percent.

To protect income for both spouses, clients can add Ovation Lifetime Income as a joint benefit at time of purchase.

Ovation establishes a benefit base for calculating guaranteed annual income. The benefit base provides no minimum contract value or investment return, is not available for withdrawal, and is subject to a $5 million maximum. All withdrawals reduce the contract value, the benefit base, and the value of any death benefits. Withdrawals exceeding allowed guidelines or taken before the benefit date may have a negative effect on Ovation’s guarantees.

Ovation may not be cancelled and requires use of an approved asset allo­cation strategy. It is an optional living benefit available for an additional cost in MultiOption Advisor B Class and Extra variable annuities based on state approval. Guarantees are based on the financial strength and claims paying ability of Minnesota Life. The guarantees have no bearing on the performance of the variable investment options.

American General

American General Life Companies (American General) has introduced the AG Lifetime Income Builder, a new living benefit rider available on selected fixed index annuity contracts and available to those age 55 and older.

Structured to provide future guaranteed lifetime income, the rider features an income base that is guaranteed to grow at no less than six percent compounded annually for up to 20 years, and a guaranteed lifetime income stream guaranteed to grow at no less than two percent per year if the income base is allowed to accumulate for at least 10 years and no excess withdrawals are taken.

The rider is an option on the following single premium index annuities: AG Vision­Maximizer, AG Horizon Index 9 and 12, AG Global Bonus, and AG VisionAdvantage 7 and 9.

At contract issue, the income base is equal to the annuity value, including any applicable premium bonus. The income base used to generate future income is guaranteed to grow at six percent compounded annually. Called the roll-up rate, it increases the income base until the earliest of these three events: the 20th contract anniversary, the date the client begins the income withdrawal phase, or the contract anniversary on or immediately following the client’s 90th birthday.

Each anniversary during both the growth and income withdrawal phases, if the annuity value is greater than the income base, the income base is “stepped up” to equal the annuity value. If the client allows the income base to accumulate for 10 years or more, before beginning the income withdrawal phase, the client’s lifetime income withdrawal payments will increase by an additional two percent compounded annually each year.

There is an additional cost for this rider, and the client can turn lifetime income withdrawals on or off at any time, take less than the calculated amount or surrender the contract and receive the guaranteed withdrawal value.