van mueller ideas exchange

2008 Top of the Table Annual Meeting October 22-25, Austin, Texas, USA

Title: Ideas Exchange Speaker(s): Van Mueller, LUTCF

Day: Wednesday, October 22, 2008

The Million Dollar Round Table® does not guarantee the accuracy of tax and legal matters and is not liable for errors and omissions. You are urged to check with professionals in your state, province or country. MDRT also suggests that you consult local insurance regulations pertaining to the use of

visual material with clients. © 2008 Million Dollar Round Table®

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MDRT – Ideas Exchange – Van Mueller, Moderator

Mark Dorfman:

Texas, thank you all for coming out here and I’d like to just take a minute to go through a

quick program overview so you can get the most out of this meeting. I noticed a couple of

people who participated in some of the earlier events. This really is all about participating;

really being a part of this meeting is what makes this meeting as great as it is. So whether you

participated in the 5K run this morning or you went out and played golf or the 5K walk as it

might have been for some, I’m glad everybody is starting to get together. Introduce yourself to

one another when you’re out there.

This is really about getting to know the other people who share the same common bonds with

you. Take advantage of these other people; these are not the typical people that you might meet

when you travel or you go on vacation. These truly are the best of the best. These are the

people who do the same kind of work you do in and out every day. And you want to take

advantage of that and you want to mingle and talk and listen to what other people have to say,

that’s the best way to get the most out of this meeting.

Later this evening we will have our welcome event which I’m told is going to be a spectacular

event down at the Colorado River. Tomorrow morning we will have workshops. The workshops

start at 6:45 a.m. The feedback that I’ve received over the past several years is that the people

who attend these workshops have great things to say about them. So if you can get up and you

can get into that meeting at 6:45 a.m., it runs for about one hour to 7:45 a.m. which still

leaves 15 minutes for a bathroom break and a cup of coffee before the main platform starts at

8 a.m.

Obviously, nobody wants to miss the main platform. We have done an amazing job of putting

together some great speakers. Tomorrow you will hear from some great speakers. The author of

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“Blue Ocean Strategy,” Chan Kim will be speaking tomorrow. We have throughout the week

some terrific speakers also I believe tomorrow on the agenda, Jerry Webman we have following

in the afternoon. Jerry Webman is the chief economist for Oppenheimer Funds. He spent over

20 years working in the bond marketplace so he’s quite aware of what’s going on, will have

some great information to share with us.

Many of you who have participated in this meeting over the years are familiar with what we

used to call the “synergy sessions.” The synergy sessions have been transformed into what we

call the “open sessions” and it’s like synergy on steroids. We have a facilitator who will do a

magnificent job of helping us to create some open dialogue; they’re like spontaneous study

group meetings. It’s truly going to be something uniquely different, not anything anybody I

believe has participated in before. Everything about it boils down to your participation. This is

not the time for you to sit back and watch what goes on. If there’s a time to get up and speak,

that will be it.

We also have some fun entertainment planned. On Thursday evening we will have buses which

will take everyone to downtown Austin and bring you back from downtown Austin unless you

stay out too late and then it will be probably a $50 taxi ride to get back; a $100 taxi ride.

Depends where you’re from, some people will get it for $50, others will be stuck paying $100.

And that’s from downtown. If you stray from town and go to one of those other places, I have

no idea what they charge to get back from there.

We also have something unique. We’ve put together an opportunity for everybody to go out and

mingle after dinner Thursday night when you’re in downtown Austin. So make your plans, go

out for dinner, have your fun and when you’re done head over to the place called Pangaea. It’s

in your welcome packet. You might have missed it; there’s a flyer and attached to the back of

the flyer is two drink tickets. If you’re not planning on going to Pangaea just give me the tickets

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and I will take care of those for you. Pangaea is a fantastic place in downtown where hopefully

many of us will get together and we’ll have a chance to relax and have a good time altogether.

Also on Friday night, we will have a denim and diamonds event. In case you haven’t read about

that, that should be a terrific evening. We’ve got some terrific music; I’m very much looking

forward to that. Our meeting concludes on Saturday and some people might want to stay in

town. Be aware there is a big football game this weekend; I think Texas is playing Oklahoma

State. I think that brings a ton of people into downtown Austin. It should make it interesting

and fun.

I personally love this event that we’re attending today called the Sales Idea Exchange. We’ve

changed the format a little bit, but we’ve kept the core, the essence of it which is Van Mueller.

Van has done a great job of moderating the Sales Idea Exchange and he’s back with us again

this year. I’m going to turn the mike over to Van and he’ll give you a couple of minutes. He’ll

explain to you how this whole thing works and I hope everybody gets some great ideas out of

this that you can go home with and make some good money with.

I just want to thank everybody for coming. I’m pleased that you’re here and I hope you really

get a tremendous value from this meeting. Thank you.

Van Mueller:

Let’s give a hand to our chair for this meeting. Before I get started, I want to remember a

person who really made this event for many years. I hope all of you for just a minute think

about our buddy, Sidney A. Friedman, CLU, ChFC. He’s the guy who made this; he’s the guy

who taught us how to have this particular segment of the Top of the Table meeting go forward.

He’s such a fantastic man, every time I come to this I think about him. So please remember Sid

Friedman when you think about this.

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Another thing I want to talk to you about; Mark was generous enough to allow me to talk about

something that I think is very important to this meeting. One of my favorite parts of the

meeting is the thing called the “exhibit hall,” only we don’t call it the exhibit hall anymore, we

call it our “Partners.” And because of our Partners and the generous contribution that they

have made to this meeting, you are going to be blown away by the quality of the speakers, not

only this year, but going forward. If we’re going to continue to put forth a spectacular product

for you, please go and see our Partners. You learn stuff, you get ideas, that’s where a lot of

agents are standing around all the time and you can pick up some fabulous ideas.

Before I tell you how this is going to work, I want to tell you something very important. The last

60 days changed the world forever. You are lucky, you are at this meeting at the exact right

time with the exact right people, ready to learn what you need to learn to go back and make a

difference not only in your cities, in your countries, but in this world. This world changed

forever in the last 60 days. The way we eat has changed, the way we work has changed, where

we’re going to retire if we’re going to retire, when we’re going to retire, if we’re retired and if

we’re going to be able to come back and have to go to work again; that all changed. How we

invest, where we save, who do we trust, who’s dependable, who’s not dependable. Everything

as you know it is different, that’s why a meeting like this is so spectacular and why do not

minimize how important this session is to all of you.

When you’re sitting at this table, I want you to share the best sales idea you have and at your

table then what I want you to do is I want you to pick out the person who has the best sales

idea at that table and maybe pick out the second best, in case I need to come back and get

some more. We’re going to bring you up here and we’re going to give you a towel or a DVD

holder or a cup or something to thank you for your idea. But please understand we need your

creativity, we need what you do to the best of your ability, and I’m going to give you from now

until 3:45 p.m., that’s 25 minutes to work at your table, to share your ideas and then at 3:45

p.m. I’m going to start coming and getting the best sales idea from each table and I want you to

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share and give it with all the energy you have because you are about to change the world. You

matter, you make a difference, prove it. Please get started. Thank you.

We have 45 minutes; you have two more minutes to vote. You have two more minutes and then

I want a sales idea, but I’m going to give three really good ones first.

We have 45 minutes. A couple of ground rules for this. When you send your person up here

there are some things that you can pick from as a little gift. I’m going to start by sharing a

couple of ideas with you and you need to understand this is probably one of the greatest

opportunities in the history of the world for you to be a financial professional. There’s never

been a time like this; it’s never happened before. We live in a time of uncertainty and because

of that uncertainty the only people that really can do something about it are sitting in this

room.

A couple of quick little phrases. Do you think what’s happening in our country and in our

world is going to cause income taxes to go up? Yes or no? My buddy, Ed Slott, listen to what

he said. He said you can buy your income tax rate right now two ways, a Roth IRA or cash

value life insurance. What a fabulous way to describe what we’re talking about. Listen to this

next sentence, he said taxes are on sale right now. What a great sentence. Taxes are on sale

right now.

How would you like to take your stuff from forever taxed to never taxed? Forever taxed to never

taxed? In the United States we have Roth IRA, cash value life insurance; in Canada on January

1 they’re going to have tax-free savings accounts which is actually a better version of a Roth

IRA. Fabulous opportunities.

Another thing. Information is power. I’m a psycho about Web sites. If you understand the

financial report for the United States Government just came out September 30, you want to be

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able to “wow” a prospect or a client into why the 21st century is about personal responsibility

and is it the end of the world if the government doesn’t take care of you. Is it the end of the

world if a corporation doesn’t take care of you? Is it the end of the world if a big company

doesn’t take care of you? And you know the answer, it’s no, it’s not the end of the world. The

21st century will be the time for people to be responsible and take care of themselves. And

there’s nobody better on the planet to do that than the people in this room. So I would

recommend that you go to, and there are places for you to write on your tables,

http://www.gao.gov, Government Accountability Office. And you can get the financial report of

the U.S. Government and it will tell you that by 2040 interest on the debt will be greater than

Social Security, Medicare, Medicaid and defense combined.

Now we’ve got to stop kidding ourselves and we’ve got to stop listening to politicians who don’t

have a clue what they’re talking about. I’m not a particular fan of any Democrat or Republican

right now and I hope there’s a bunch of you in this room because you ought to be ashamed of

yourselves. The idiots that we’re voting for do not get it, the only people in the world that get it

are sitting in this room and you need to get in front of as many people as you can, as quickly

as you can, they need your help.

Another site you can go to, www.truthin2008.org. There are hundreds of articles there for you.

Another place, the Peter G. Peterson Foundation. The executive officer is David Walker, former

Comptroller General of the United States, former head of the GAO of the United States. Another

site for you guys, Grandfather Economic Report. Just type those in, you’ll be astonished the

amount of information that you can get at your fingertips immediately. And my final one,

http://www.cbo.gov, Congressional Budget Office.

And please, in your other countries, I also do this in Canada. Statistics Canada you can go to

their Web site and you can get tons of information. In England you can go to the United

Kingdom and you get information from the government. Listen to me, if it’s from the

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government, it is compliant and it is copyright protected. That means you can share it with

anybody you want, there is no copyright infringement of government information. So instead of

listening to politicians who can’t get even a sentence correct, you could be able to show them

the exact math, the exact information and you can help prospects and clients take control of

their lives. You can clap.

Now, what we’re going to do is we’re going to have our first idea and I’ve chosen my friend from

Canada. Come up and share your first idea. There’s a microphone up here, please say your

name, where you’re from. And let’s give him a hand because he’s a first time attendee. Are you

going to come back next year? Every year from now on. Share your idea, say your name.

Good evening, I’m Francis D’Costa. This is my first time at Top of the Table. I’ve done five

times Court of the Table but this is the meeting I was looking forward to.

When I first started selling insurance, what I did was I told the manager who took me out, I

said, I have to buy my insurance policy first, and that’s how I started and today I said before I

can get your ideas, I will give my idea first.

The idea is very simple. I ask my client, would you like to pay for your insurance policy cost or

would you rather have the government pay for it? And the answers I get are ridiculous,

sometimes they say, is there such a thing as that, the government pays for insurance? I say

yes, would you like me to do that, and I show them the idea.

I said let’s say, I’m pretty sure you can’t read this, but you’ll understand the concept. Let’s say

you had $10,000 sitting in the bank and you made $1,000 interest, at 10 percent round

figures. Two things will happen to this $1,000. One, it will be taxed and the other part will go

back in your savings. Let’s say $500, 50 percent is taxed, goes back in your savings. Now if the

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same $10,000 were sitting in an insurance policy at the same rate of return $1,000, two things

will happen over here, there will be the cost of insurance and there will be a savings factor.

Let’s say $500 is your cost of insurance, $500 is your savings. Then I flip the page and I ask

them this very important question. Would you prefer to pay taxes to the government or would

you rather pay a cost which will benefit your family? And guess what, 100 out of 100 will say

yes, I’d rather pay cost for family. Then I look at them and say now look at this logically. By not

paying the tax, isn’t the government paying for your insurance? And they say I never thought of

that. And this way you can sell every guy a permanent policy. Thank you.

Van Mueller: Okay, next table. Donovan, let’s give him a big hand.

I’m Donovan D. Wagner, Bismarck, North Dakota. This is fairly simple. I started using this

about six months ago and I’ll tell you, it’s made me more money than ever. What I’m going after

here is CD or money market money. I’m just going to pretend here for a minute that the

individual has $500,000 in the bank. The key question to ask, Mr. or Mrs. Client, is that leave

on money or live on money? So I write it in here, is this leave on or live on and hopefully they

say leave on. They’ll ask what do you mean? I say, well are you living on this $500,000, are you

drawing money out of this? They’ll say no, and then I’ll say well it’s leave on money, you want

to leave it on to your grandchildren or your children then, is that correct? They say yes. So

you’re not living on the money. They say no. Okay, we’ll cross that out.

I said how about if we took this $500,000 and we put it in a cash house that would

immediately grow it to about $3 million. Would you like that? They say is that possible? This is

to leave on, right? Yes. And by the way, what I’m doing is putting it into a single premium

whole life or a single premium guaranteed universal life product.

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And this money would pass on at your death federally tax-free. Would that interest you even

more? And they say yes. And then what I’ll do is I’ll show them an internal rate of return. I

won’t even show them the illustration, I’ll just show them the internal rate of return on the

death benefit. Showing them this is a 60-year-old. I’m saying $500,000 in this example that

would give them $3 million. In 20 years the internal rate of return on that $500,000 at age 80

is still about eight percent return, federally tax-free. Does that interest you?

If they don’t want to get rid of the whole $500,000, where this works also is if you have a

variable annuity or a fixed annuity, how many of these people have variable annuities or fixed

annuities that they want to leave on, they’re not living on it, they want to leave it on. I say, how

about if we take five percent out of that asset, that VA or that fixed annuity and that will give

you, let’s say, $1.5 million cash house to pass on to your family federally tax-free or to your

grandchildren federally tax-free. And it works for me.

Van Mueller. I want to add on that. In the United States, I don’t know how it is in other

countries, but there is going to be some great pressure on life insurance to stay free from being

income taxed the internal buildup and even believe it or not, they’re talking about putting a

cap on the death benefit. So it is very important, sense of urgency that you get people involved

in these products now because the government is going to need huge amounts of money going

forward and they will be able to justify higher taxes and taking away the benefits of many of

the products that we sell. Get people involved in this as fast as you can

I’m going over to a monster table over here, and I’m very anxious. With all the all-stars at this

table, they picked you. Give me a sales idea.

Mark C. Smigelski, Toledo, Ohio. I was a junior in college and I met John Savage and that

changed my life forever. I started at the Savage Agency when I was a senior in college and I’m

still there today. One thing John always taught was to take complicated ideas and make them

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simple. Take good analogies where you get people in the audience to go or your client to go

north and south with their head and you’ve made the sale.

One of the ideas I have today, obviously from Toledo, Ohio. we’re in the automotive area. and I

talk to the client about everything is changing rapidly, and look at the automotive industry.

What have they done? Five, 10 years ago you bought a car, did you have airbags? Maybe not.

Did you have antilock brakes? Maybe not. Today you go buy a car on the lot, it has airbags and

antilock brakes.

Well, guess what? The financial services business has done the same thing with their products.

What I’m referring to is a variable annuity. There are now guarantees or there’s financial safety

guards to the products that you can offer your clients which are guaranteed for income.

I’ll be in a meeting with a couple, maybe they’re retiring, they have a 401(k) and I talk about

the benefits of a guaranteed income benefit. And they’ll say to me, well, how can they do this?

What is this going to cost me? And being from Ohio, a lot of people from Ohio travel to Florida,

vacation in Florida sometime in their life and generally when they’re in their 50s or 60s they

understand the State of Florida. If you’ve ever been down there, around the Tampa area they

call it the Sunshine Skyway. There are two huge bridges that go over and connect a causeway.

I look at them and I say, picture yourself approaching these two bridges and what we’re talking

about is the cost. One bridge on the left you can cross it for $2.50. The bridge on the right is

$3.25. The difference between the two is the $2.50 bridge you can cross but it has no

guardrails, you’re on your own. Someone comes from the other way and hits you, you’re done.

You’re off the bridge, life is over. Your financial picture is over.

You could pick the bridge for $3.25 that has the guardrails and no matter what happens, I can

guarantee you income for the rest of your life. And a lot of what you guys are doing right now is

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what I see in their clients’ heads. At that point you know the sale is made, you shut up, you

sign the paperwork and move forward. Thank you.

Van Mueller. Again, a very simple idea. I bet he’s selling a gazillion dollars of annuities doing it.

That’s what you have to do. Fabulous, take a complex idea and make it simple. I love it. I

promise you when I go home, on the very first customer I talk to, I’m going to use that example.

That’s how you get something out of this meeting. Introduce yourself.

Good afternoon, I’m Alan Keifer, Houston, Texas. This is what I use in the senior marketplace.

I use this with people 70 years old and older, twice a year now, I pick over the last year the six

best cheerleading kinds of clients that I’ve got. I try to focus on couples and I call the couple

and I try to talk to the wife if I can. I ask her help in setting up a surprise birthday party for the

husband. I also do this for the wife on occasion. But I ask that they bring four to seven couples

that are their best friends. I pay for the meal. It’s all about having fun and everybody wants to

know who set it up and why doesn’t their financial advisor do that? It turns into people calling

me for appointments, they know who I am, and they know that I did it just as gratification for

somebody placing their trust in me to be their trusted advisor.

Van Mueller. Lou, your table. Send me up your best person. Extra hand, first time attendee.

My name is William T. Stokes, IV, CLU, MSFS. I’m from Graham, North Carolina where we

make crackers. This idea deserves a little background that’s special to this room. The idea has

its roots in attending Round Table meetings probably 18 to 20 years ago. I would go with a

dear friend in Myrtle Beach, South Carolina and we would always room together. And we would

get back to the room in the afternoon and share what we had learned, what we had been

exposed to and Buddy kept coming back and telling me about this little fellow from Augusta,

Georgia who was turning in some tremendous and hard to believe production numbers and he

was doing it with senior workshops or seminars. Now this was in the early 80s.

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So Buddy and I were invited to come over to Augusta one night and we rode over to see Mr.

W.W. Buzz Hankinson, CLU, CFP. We sat in the back row at a Ramada Inn and were just

flabbergasted to see 65 to 70 folks who had responded to a newspaper ad and Buzz did his

thing.

Well, Buddy and I did what we probably were destined to do. And that was we spent the next

two years talking about getting into the seminar business. Well I got tired of my friend Buddy

always kicking my backside hard with production so I got off the bench and decided it’s time to

do these things.

Well, the sales idea today is the result of doing 80 to 90 of those over 5 to 6 years that were

very good to us. We captured a lot of assets. As to the sales idea, the profile of my typical client

is now in their early to mid-70s. So about this time of year we are having the discussion of the

dreaded old RMD, in the states the required minimum distribution. Now this was prior to the

recent market downturn but the consistent objection we got year after year and after year was,

damn, I just don’t want to have to do this. I don’t want the money. I don’t need the money,

would like to leave it alone but Tommy you say we’ve got to do it, our accountant says we’ve got

to do it, so we’re going to do it.

When I heard the objections, I would usually follow it up with well, what are you going to do

with the money? Now I know my folks well enough to ask that question. And the majority

would say, well I’m just going to go down here to the bank, savings and loan, stick it in, buy

myself a CD, might take momma on a little trip or give it to the grandchildren. I said well,

perhaps we need to talk about how we can take some of this money and create a special

account that will provide the income taxes to either your wife or your kids to pay the tab on all

this qualified money at some point. Or, to magnify the amount of dollars in your plan. And they

didn’t really know what we were talking about but we were in a discussion of life insurance.

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The question came from my table, what about insurability issues? Well, being a good old life

insurance person, when you have this discussion you ask questions, and you keep your mouth

shut. And I would do a little program to determine insurability issues. So we might have a

discussion on an individual life policy, behind door number two: a joint life discussion, or door

number three: let’s insure one of the children. That’s how it works and it’s really a layup.

The last comment, we never, never, never go after 100 percent of the required distribution

amount; I usually take about half of it because we want to leave the folks enough money to pay

the tax and to have a little pocket money. But it’s fun and it’s consistent. Thank ya’ll.

Van Mueller. Isn’t he a fabulous speaker? You should hire him to come and speak at your local

National Association of Insurance and Financial Advisors (NAIFA) meetings. I think he’d do a

great job. Carolyn, invite your person from your table please. Somebody come on up here, a

first time attendee.

I’m Jerome E. Paul, CLU, ChFC. I’m from Pasadena, California. And I’m pleased to be a first-

time qualifier and be here with you. We work many markets. One of the markets we work are

higher income individuals in the United States, some here permanently as U.S. citizens, some

are foreign nationals here temporarily. Those in their middle years and beyond with some

disposable income will respond very quickly and very easily why don’t you defer taxes on it,

push it forward. We all know that. And in the United States there’s a whole variety of plans and

programs with all sorts of acronyms and initials to do that all the way from 412(i) to IRA and

everything else.

Now, we all know the benefits of an IRA, tax-free set aside, tax deferred growth. Terrific.

Challenge. The IRS does have a new bill and you’re going to pay it on withdrawal. Contrast with

a Roth IRA, same tax deferred growth, no tax deferred set aside. Tax deferred income, no

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required minimum distributions and you can deed it forward, transferring the tax-free income

capacity to heirs.

Challenge. How do you get from a regular old IRA to a Roth IRA, and starting in 2010 the

income limit on making that change goes away? You’re still stuck with a tax bill. It is a taxable

event.

Here’s what we talk to them about. Set up a program if you’re looking at a 40 to 60-year-old, 7

to 12 years of duration, money purchase approach, set aside funds for a certain number of

years, accumulated in a qualified plan environment. At that point you’re going to convert it to

an IRA and convert the regular IRA to a Roth IRA and that’s a taxable event. Where do you get

the money?

Usually someone in this station already has life insurance and if they don’t you can easily

convince them of the need for it. If for no other reason than charitable purposes or

grandchildren purposes or a lot of other things. Part of the set aside annually go towards

buying life insurance, and guess what you can do with life insurance in the 7th to 12th

duration? You can make a tax-free withdrawal. What do you do with that? Well, you pay the

tax bill with that.

So now you’ve taken all this money, moved it forward with the exception of that which is going

into the life insurance portion, moved it forward on a tax-favored basis, converted it to a tax-

free basis, no required minimum distribution and shifted the tax-free income forward to future

generations. You can manipulate the allocation between insurance and set aside to suit the

client, you can do asset allocation with all the variety of products and programs that we have,

all the way from very conservative to very aggressive, and suit the clients’ risk tolerance and

outlook. That’s our idea. I don’t have any numbers for you, but it works.

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Van Mueller. If I can quick expand upon that. One of the things that’s really neat about Roth

IRA, when you’re talking to anybody who has money, is you never name the spouse the

beneficiary of a Roth IRA. You name a child or a grandchild and the reason you do that is

because now you can move money using the stretch provision that can be used for generations

to come, income tax-free. And you say to the wife, we’re not going to disinherit you, we’re going

to use life insurance, we’re not going to use that nasty old pension plan, we’re going to give you

this tax-free life insurance. You know how we’re going to pay for it? We’re going to pay for it out

of the children’s inheritance. That’s how you do it and you’d be amazed at how many people

buy into a process like that. And you’ve got to listen. The sale is saying that you can transfer

money to the children or grandchildren using the stretch provisions. Rich people don’t believe

there’s any way that you can pass on tax-free income. It’s powerful beyond imagination.

Michael, will you send up a person from your table. First time attendee. Say your name and

share your idea please.

My name is Lewis D. Jacobs, CLU, ChFC. I’m from Boston, Massachusetts. This is more of a

marketing idea rather than a face-to-face sales idea. The concept was target marketing. I

wanted to have a practice where my name preceded me in the marketplace so that when I did

call somebody or contacted them, they would already know who I was.

It revolved around a two-phase approach. First, one was the use of certified letters. What we

did was I had a secretary that used to love to read the local newspaper. My market was

restaurants so she would go through the restaurant news called “Cheap Eats” and take the

names of the owners and restaurants out of that. We also joined the restaurant association and

we get a list of all the new members. Then we would write this letter, it was a form letter with

three bullet points in it. And all that changed was really the first sentence, like, “We saw you in

the Globe, or welcome to the MRA.”

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And we sent 10 letters out a week, certified, return receipt. When all 10 signature cards came

back, she would put the phone numbers on them and I’d call them. Ninety-nine times out of

100, I would get to the owner. Actually 100 percent of the time I’d get to the owner. If the

keeper asked me what it was about, I would just say the certified letter and the owner came on.

Now, one time a guy blew up at me. How dare you send me a certified letter, and I figured he

must be getting bill collectors so it wasn’t a good prospect to begin with.

The second part of this was, I formed a tip club. I found the number one property and casualty

broker for restaurant, the number one business consultant, the number one marketing person,

operations guy. And we had seven or eight guys and we’d get together for breakfast once a

month and just share with each other who was opening businesses, who were the good people,

who were the bad people. And we would refer each other into the businesses. It worked so well

that I stopped doing it. And we’ve all done that. We did it for 10 years and I haven’t had to

make a phone call for a prospect in the last 12 years. They call us.

Van Mueller. Jan, send me somebody from your table. R. Jan Pinney, CLU, CPCU, from

California. California needs a lot of extra applause, they’re going through a lot of grief right

now.

California is great, we’re having a great time. Business is good. My idea since we’re from

California, we call opium. Our prospects are young, healthy, wealthy business owners that

understand leverage and don’t have a problem with a little bit of risk. This is really a great sale

and our biggest problem is that some of these folks because they’re young, can’t qualify for all

the insurance we put on them.

We recently had a case that was supposed to be $2 million of premium a year for five years and

it generated $60 million of death benefit. We couldn’t justify that so we took and instead set it

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up to be $1 million a year for 10 years and ended up with $30 to 35 million of death benefit

which he could qualify for.

Essentially what we do is we use traditional premium financing. We’ve created some

proprietary software that we can plug in numbers to and various products and various

assumptions and with that we show a person a way to pay themselves for it, to accumulate

money that is sheltered.

An example, we just closed this case last week, it was a $3 million target case. The thing that

we did with it was this gentleman was a builder in California, having tough times. But he had

$6 million of cash. Where did the cash come from if he was having such a hard time? He made

a lot of money the year before last and the year before that. So with all this tax refund that he

got, he wanted to shelter it to make sure that nobody was coming after it just in case things

continued to go downhill. So we set that as a collateral for a $15 million loan which really

prioritizes that as an asset that nobody else can touch because it’s a priority for the loan.

We then put the policy in an Irrevocable Life Insurance Trust (ILIT), probably a defective ILET,

but he doesn’t need to make that choice until he starts drawing money out of it. We wanted to

avoid all tax challenges of any kind from anybody. So with our software, we built the cases so

at 15 years and one day, we have an exit strategy where all the money that he borrowed, the

$15 million, is paid off with pretty realistic assumptions. Particularly in the market as low as it

is today, they’re probably way low assumptions. But with realistic assumptions he has an

additional $15 million at the end of the 15 year period. He had to put his $6 million aside

which he didn’t want to have creditors have access to anyway, he spent someplace between

$4.5 to $6 million of the $6 million depending on what interest rates do.

The referrals that we’re getting from this are unbelievable. We’re getting them from banks, the

case we closed last week was from a bank, they’ve given us three others. We have 13 cases just

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like this in line right now. We’re getting them from CPAs and attorneys and from other agents

that typically will use a very high cash value, indexed, UL product with a lower commission,

but even at 25 percent of $3 million it’s a nice payday.

Van Mueller. Jan, thank you. That’s another thing I want to tell you. If you’re looking around,

there’s a lot of people in this room that aren’t getting a chance to share an idea. I’m telling you,

find the Jan Pinneys, find the E. Dennis Zahrbock, CLU, CFP, find the Michael P. Corry,

CLU, find the William M. Upson’s ChFC, CLU find the Jimmy Jacobs, find those people and

sit with them at this meeting. Have breakfast with them, sit with them at lunch. Find a way to

spend some time with them and you’ll leave here better off. You really will. Mark, send me your

person. A first time attendee. Look at this.

My name is Edwin W. Thauer, Jr. CLU, ChFC, I’m from Grand Rapids, Michigan. My idea is

pretty simple and it’s probably something you’ve all heard before but especially in this

marketplace we’re in with all the ups and downs and today again the down of the market, I just

am looking at my client list, my prospect list, my entire book of business for everybody who is

over 59½ and just promoting inservice withdrawals and almost every company does allow it.

Most plans do. And then just going in and showing them how they can roll it over to an IRA,

they can still contribute and get their match and whatever as they’re still working at their jobs.

I’ve done it with business owners.

I just had a business owner who is retiring in a few months. He did it a year ago and he has

$30,000 more in his plan this year and I talked to him even Monday and he wants to add that

to his rollover from last year.

But just to give them the guarantees that now can come with living benefit riders that come

with variable annuities, they can stay in the market and they have a good insurance company

backing and guaranteeing their income flow for the rest of their lives. Most of the people that

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have qualified plans, that’s the intent of the money is to be in income when they retire. So we

can now guarantee that.

Van Mueller. Mark J. Hanna, CLU, ChFC, send up from your table. This is last year’s chair of

Top of the Table.

Mark Hanna from Walnut Creek, California.

Thanks, I’m going to give you an idea that we work with in the corporate marketplace. I believe

this would be transferrable to most countries with some adjustments for tax rules and

regulations. I’ll explain it in the U.S. using the U.S. rules but you can adjust it.

One of the things that I’ve learned is that I want to be lazy, I want people to come to me; I don’t

want to have to go seek them out. So it’s much easier to make a single sale to a corporate

decision maker who has control over and access to tens or hundreds of executives who might

be interested in a plan. We’re also finding that employees are attracted and have been trained

to contribute a minimum contribution tied to whatever the employer is going to match. And

quite often my friends and colleagues will be marketing insurance solutions to corporate

officers for their key people expecting the company to pay the entire premium.

What we recommend the client to do is to set aside a matching formula for their selected

employees and we happen to work in a corporate marketplace with international employees, so

we use this as a global personal pension solution.

We call it the Roth Mirror in the United States. We call it other things in other countries. We

essentially use variable universal life insurance products with a matching formula so that the

employee who might be contributing to in the U.S. a 401(k) plan and expecting a 25 cent or a

40 cent match on the dollar, would get a comparable match in this plan, so it becomes a layer

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on top of the 401(k) or company provided pension if there is one. There are no limits. We

market it as a Roth Mirror. There is a lot of talk about Roth IRA but we use variable universal

life insurance (VUL) products. We use products that have the similar kinds of income

protections that some of the annuities that many of you are selling, so you have minimum

income streams coming out. So you have the benefit of the market performance with a

minimum retirement income on a tax-free basis. When you model those against qualified

retirement plans, normal pension plans, the internal rate of return when you strip taxes out

usually smokes the retirement plan.

But we don’t use it to replace the retirement plan, we layer it on top of. We use VUL products

with high cash value accumulation rates so the employee doesn’t see this as a big insurance

sale. Sometimes you take income as a producer over several years rather than upfront, but it

actually creates a nice recurring stream of revenue, please aren’t baling out of it because you’re

putting in protections for downside markets like here, minimum performance riders, lifetime

income riders on the VUL product.

What we’re finding is that in a corporate marketplace whether it’s a company with 10

employees or 10,000 employees there are always a small select group of employees that need

more than what the company’s provided retirement benefits might be, and we craft the specific

rules of the country we’re in to tweak those benefits to provide those as discretionary,

discriminatory, supplemental, partially employer paid in the United States, we use a 162 bonus

structure so the match is bonus not the contribution to the plan. So we’re bonusing the match

out on the paycheck not the entire premium the employee is paying. Most of the premium is

fully portable, fully vested and it’s funded adequately that if the employee leaves in a couple of

years they can take it with them with no ongoing contributions if they have to. But it’s also

portable for the super ex-patriot, the mobile multi-national employee who is moving around the

world and may want to continue to fund that regardless of the geography they happen to be

finding themselves in at that moment in time. That’s the idea.

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Van Mueller. Buy the CD. He sat and explained this to me a couple of times. It’s very exciting. I

have time for only two more ideas. Dale introduce yourself.

I’m Dale W. Martin, CLU, ChFC, from the great state of Minnesota. Mine is a very simple idea.

A lot of times people fall in love with stocks and right now they’re not in love with them

anymore. So let’s say you’ve got a client who has a $1 million stock holding and it’s selling at

$20 a share right now and they’re not too crazy about it. They have 50,000 shares let’s say.

Well, all you can do is take the stock and you sell it. It’s leave on money. I wrote that down,

thank you.

So you take the leave on money of $1 million and you end up with $850,000 after you pay the

capital gains tax on it. Take the $850,000, a 60-year-old couple can buy a $5 million second to

die. That stock that’s selling at $20 a share has to sell at $100 a share at life expectancy. So

now you just made that $20 a share, $100 a share. And it’s leave on money. Very simple.

Van Mueller. Fabulous. The privilege of the person running the meeting. I’m going to call on

somebody special to give the last sales idea in a moment and then when he’s done giving the

sales idea, then I’m going to have the chair Mark come up and say a quick goodbye. Tell you

what’s going to happen the rest of the evening and we’ll go from there. I’m sorry, this is me and

I hope you all agree with me, but we have a treasure in this room. And you can’t have a

meeting like this without bringing him up to speak. Tony Gordon would you please come up

here and share an idea. This is one of the giants. Tony Gordon everybody.

Tony Gordon. Thank you very much. I thought I’d share a sales idea that would apply to any

country, not just here to the United States. None of us really have enough referrals, do we?

Usually, we don’t have enough referrals because we don’t ask enough. In fact probably most of

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our clients don’t even know that we would value referrals because we just never got around to

asking because the time wasn’t quite right and we didn’t feel quite comfortable.

So I would suggest that we’re probably all in contact with our clients by mail. Well, I asked one

of my colleagues here and said how many times is your client going to receive something in

writing from you in the first year? He said 10 times. I would suggest we’re all in touch with our

clients a few times a year, it might be a report, it might be by letter, it might be an evaluation of

their investments, whatever.

So I would suggest that every time a letter goes out from your office or some kind of newsletter,

it carries with it a P.S. that says something like this: “We received many compliments over the

years from happy clients but the greatest compliment is when our clients introduce their

friends, family or business colleagues to our firm. Please be aware how much we appreciate

these referrals and we can assure you they will be treated with the same confidence and care

we give to all of our clients.”

Now can you imagine if 10 times a year, once a year, however often it is that you actually write

something or send something to one of your clients, you remind them that you would welcome

and value their referrals. Then after two or three or four years you might actually end up with

an awful lot of clients who know you want referrals and they might start sending them to you.

Van Mueller. Isn’t he amazing? Tony Gordon everybody. And now please will you please bring

up a big hand for this year’s Top of the Table, Mark Dorfman. He’s put together a fantastic

meeting for all of you. And I thank you all for participating in this.

Mark Dorfman: Thank you everyone for contributing to this event. Continue contributing. I

wish for each and every one of you a very successful meeting. I will see you at the welcome

event. Have a good day.

van mueller ideas exchange

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