Giving you the right track to run on

A fortnightly pearl of wisdom to fast track your success

CHRISISM #1 - Overcoming The Price Barrier

13 October 2015

The 3 simple questions can be asked at the superannuation or retirement planning part of the Fact Find and they are as follows:

1) "What percentage of your income is currently being allocated to securing your income for after your working life?” This is an accurate description of what superannuation is designed to do, and the answer for most employees will be 9.5%.

2) "Out of interest, what percentage of your income is currently being allocated towards securing your income for during your working life?” This is an accurate description of what their personal protection package will be designed to do, and for most people the answer will be 0% and for others it will be considerably less than 9.5%.

3) "Tell me, which of these income streams is more important to you right now — after your working life (i.e. down the track some way) or during your working life (i.e. right now)?” The answer for everyone will be “during my working life".

I then inform my client that, over the last 12 months, my new protection clients have deemed it appropriate to allocate somewhere between 4% and 5% towards securing their income for during their working life and I ask "Do you think that might be an appropriate allocation of funds on your part?” i.e. putting half of the amount towards the more important income stream than you are putting towards the less important stream!

Having sown the seeds of the percentage concept this early on, then every time the ugly spectre of cost rears its head, you can revert to the percentage concept and bring all of your other clients back to the table — this is called peer group pressure and it is very effective.

Using the percentage concept instead of focusing on the dollars and cents has made a huge difference in getting bigger premiums over the line in my risk advice business and it becomes even more powerful when your client has embraced the concept of” 100% income replacement” as the cornerstone of their personal protection package — but that "Chrisism" is for another day!

The Risk Workshop by Chris Unwin

Are you a financial adviser who would like all of your clients to have appropriate types and levels of personal protection? But perhaps you feel you need a more structured and client friendly engagement process?