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Is Your Practice Like a Simple Game of Checkers or Comprehensive Like Chess?

The Board May Look the Same, But It's Not the Same Game

Mesa 6/29/2019 10:00:00 AM

There’s no debate among gamers that chess is more difficult than checkers. Likewise, metaphors can generally convey truths and concepts sometimes better than traditional planning models. Here’s a little episode from my childhood that may help you discover the business you’re really in.

One day our dorm matron, Sister Lucette, brought out a board with 64 alternating colored squares. She didn’t describe it as a checkerboard or a chess board, just a board. She told us that this board represented the universe. She paused and then quipped this pithy platitude, “There are only so many moves on the checkerboard that once you’ve learned them, that’s it.”

Ok a checkerboard. Got it. She placed two sets of different colored checkers on the checkerboard, twelve for each side and then began addressing the rules of engagement and the goal of winning the game. It didn’t take long to realize that crossing the board to be crowned king was the ultimate expression of adolescent testosterone as we all shouted, “King me!” Often, we’d play checkers during our daily free time and before bed.

After several months, Sister Lucette brought out another board with 64 alternate-colored squares. It looked the same as the checkboard, but this time she called it a chessboard and showed little pieces that appeared to be miniature statuettes of saints. Upon close examination, they were little Medieval statutes representing different levels of status. I quickly realized how the queen held the real power. The powerful phrase of “King me,” quickly gave way to “God save the queen!”

Playing chess versus checkers in your business
The vast majority of annuity and life insurance agents that are in the retirement space are income strategists, not comprehensive retirement planners. And, a great percentage of security licensed and RIAs are asset gatherers, not comprehensive retirement planners. Very few from either group expand beyond their niches. When your moniker in the marketplace promotes income strategies, you’re playing checkers. When you advertise yourself as an asset manager, you’re playing checkers. But, when you position yourself online and in your community as a full comprehensive planner, you’re advertising yourself as a chess player.

The public doesn’t perceive the difference between a single solution purveyor and a financial professional offering a comprehensive retirement plan. Of course, these sales approaches are anything but a retirement plan. It’s simply a one-off strategy, generally uncorrelated with the rest of a client’s retirement. As an example, an asset gatherer should be concerned about the tax consequences of a trade as it affects Social Security benefits. Just as a lifetime annuity producer should care about asset liquidity and not just income you can’t outlive? Both financial professionals are playing checkers, but their uncoordinated moves are affecting other areas of a retirement plan.

A case in point: At a seminar a 65-year-old attendee exclaimed in the meeting that he was ecstatic about dumping his $1,000 a month high deductible plan and getting on Medicare for $135.50 a month. But he didn’t realize until he met with us that his high income would be means tested over the prior two years and his monthly Medicare bill would be $961 a month for both him and his wife for the next two years. His tax accountant didn’t mention it. His asset manager didn’t bring it up. His insurance agent didn’t say anything. His estate tax attorney didn’t warn him. All these financial professionals were acting in their own areas of expertise. The attendee was infuriated. Had he known these consequences two years earlier, he could have deferred his unnecessary income into the future and spread it over time, thus escaping the punitive premiums of Medicare means testing.

It takes time to learn how to successfully play chess. It’s more than simply learning the operation of individual pieces. It’s learning coordinated strategies and tactics. The same is true of comprehensive retirement planning. It may be time to put away the checkers and replace them with the big boy pieces.

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    Mesa, Arizona 85201
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