BOK FINANCIAL REALLY DOES HAVE A DIFFERENT CULTURE

Investments & Insurance | Advisory Services | Wealth Management | Retirement Income

BISAMAGAZINE

BOK FINANCIAL

REALLY DOES

HAVE A DIFFERENT

CULTURE

Quarter 1 2015

IS IT TIME TO THROW IN THE TOWEL

ON BANK-SOLD LIFE INSURANCE?

MOON ANTICIPATES ‘ROBUST DIALOGUE’

AT BISRA’S 2015 EXECUTIVE SUMMITS

Steve Bradshaw, CEO, BOK Financial

http://www.eagle-lifeco.com

http://voya.com/

Departments:

President’s Letter ..........................4

Advisor Watch ...............................24

Compliance and Regulatory Watch .......................28

Wealth Transfer Planning ......30

News Briefs ....................................34

Ad Index ............................................36

BISA Leadership Advisory Board .............................36

Is It Time to Throw in the Towel on Bank-Sold Life Insurance?by Andrew Singer

Table of ContentsQuarter 1 Volume 24 Number 1

6

14

Moon Anticipates ‘Robust Dialogue’ at BISRA’s 2015 Executive Summitsby Andrew Singer

20

Investments & Insurance | Advisory Services | Wealth Management | Retirement Income

BISACover Story

BOK FINANCIAL REALLY DOES HAVE A DIFFERENT CULTUREby Andrew SingerPhotographer: Shane Bevel, Shane Bevel Photography LLC / Photo Coordinator: Ravitej Khalsa

BISA Magazine is now available in a new, streamlined digital format.

Visit BISA’s website www.bisanet.org to access the digital edition.

http://www.bisanet.org/

http://www.architect.metlife.com

BISAMAGAZINE

4

www.bisanet.org

Thank you to everyone who joined us at the BISA Annual Convention in Hollywood, Fla! The 2015 convention was our most highly attended annual convention ever. The dynamic roster of speakers and panelists that led thought-provoking discussions ensured attendees were well engaged and left the convention with lots of ideas to implement in the development of their programs. And as always, it was great to catch up with old friends and meet newcomers at the various networking events throughout the week. I’d like to extend a special thanks to our sponsors and members for their support at this annual event. Be sure to save the date and join us next year March 15-18, 2016, in Hollywood, Fla.

At the annual convention, BISA launched a Diversity Com-mittee under the leadership of Dave Giertz of Nationwide Financial. This is a highly discussed topic in our association and the need to diversify our workforce comes at a critical time in the maturation of our industry. A special thanks to Gi-ertz and the committee for their work in this area.

As we look ahead, there is a tremendous amount of momentum building around our innovative Executive Summits and the launch of our Performance Benchmark-ing program. In late 2014, Dr. Betty Moon joined the Bank Insurance and Securi-ties Research Associates (BISRA), our research partner, as managing director. In her role, Moon will lead our Executive Summit roundtables and will work closely with Jeff Hartney, BISA’s executive director, to leverage our exclusive, comprehen-sive research and benchmarking initiative. Moon possesses an extensive back-ground as a former program leader and has held key wealth management strategic roles throughout a distinguished career. I encourage your attendance at an upcom-ing BISRA Summit.

On a final note, I am proud to announce that Dan McCormack of U.S. Bancorp Investments has been selected as president-elect of BISA. McCormack’s term will begin in March 2016. I look forward to working closely with McCormack over the coming year in preparation for his leadership role in the association.

Sincerely,

Dan Overbey BISA President

Dan Overbey BISA President

The BISA Annual Convention was a Success

PRESIDENT’S LETTER

BISA Magazine is published quarterly by the Bank Insurance & Securities Association.

BISA DIRECTORSMichael AndersonSecurities America

Rhomes AurFirst Tennessee Bank

Brett C. BowersMidFirst Investment Services

Bob ColeBank of Oklahoma Financial

Robert CorsarieFifth Third Securities

Scott DavisEssex National Securities, LLC

Scott DixonSuntrust Investment Services

Wesley EganWells Fargo Wealth Management

Jim FujinagaPrivate Wealth Alliance

Richard R. GuerriniPNC Investments

John HoustonRaymond James

Andy Kalbaugh LPL Financial Institution Services

Michael MiroballiBMO Harris Financial Advisors

Kevin MummauCUSO Financial Services, LP

Rebecca M. NelsonTech CU

Chris RadzomCommerce Brokerage Services

Vance RichardIberia Financial Services, LLC

LeAnn RummelCetera Financial Institutions

Bruce StavaFirst Brokerage America

Douglas C. WicksKinecta Financial Management Company

BISA OFFICERSDan OverbeyPresidentAtlantic Capital Advisors

Daniel J. McCormack, President ElectU.S. Bancorp Investments, Inc.

Sam Guerrieri, Jr., Past PresidentM&T Bank, M&T Securities, Inc.

Frank A. Consalo, Vice PresidentCiti Personal Wealth

James B. Nonnengard, Vice PresidentRegions Investment Services, Inc.

Thomas N. Howe, Secretary/TreasurerWebster Investment Services

Bruce A. Hagemann, Asst. Secretary/TreasurerBBVA Securities, Inc.

BISA Magazine STAFFPUBLISHER Jeff Hartney

EDITOR-IN-CHIEFAndrew Singer

MANAGING EDITORDennis Coyle

CONTRIBUTING EDITORMarc Vosen

COPY EDITORGina Lauer

DESIGNSteve Biernacki

ADVERTISING SALESGina Valerio202.367.2343

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ROADBLOCKSFROM

TO

REFERRALSA Branch Referral Training ProgramFrom Annuity Marketing Services

WOrkBOOk

branch referral program > from roadblocks to referrals

— 4 —For internal use only. The statements contained in this document are intended to be illustrative only and are not considered required scripting.

three Reasons to Refer

Referrals benefit the customer

> Make them ________________________________________________ .

> Save them ________________________________________________ .

> Save them ________________________________________________ .

> Provide them ______________________________________________ .

> Give them peace of ________________________________________ .

Referrals benefit the bank

> Another source of ___________________________________________ .

> Enhances the __________________ between the bank and the customer.

> Improves customer __________________________________________ .

Referrals benefit You

> _________________________________________________________ .

> _________________________________________________________ .



the three Steps to Good Referrals

Build Rapport Build Rapport to Establish Trust

Building rapport is key to making a successful referral. Today’s customers prefer to do business with people they like. The most loyal customers believe their bank not only understands their needs and concerns, but also seeks to understand them on a personal level. This is why it so important to build rapport and spend time getting to know the customer’s interests, hobbies and goals.

How do we build rapport?

• Talk about things that matter

• Focus on the customer

• Be sincere, pleasant and upbeat

If you do a good job building rapport, and are sincere in your approach, customers will open up and reveal what is important to them – giving you a specific reason to make a referral.



Why Refer?

Why should we refer our bank customers to the

Financial Advisor in our branch? With all the signs

and advertising, isn’t it obvious this service is available

at the bank? Not always! We typically drive the same

road to work each day, yet we don’t notice everything

along the way. How many times have you noticed

a new sign or building and wonder how long it has

been there only to find out it has been there for

months? That’s the reason we want you to make the

extra effort to let our bank customers know there is a

Financial Advisor in our branch who may be able to

help them.

Why do people invest at the bank? _____________________________!

People trust banks. People trust the products and services they receive at the bank. And perhaps most importantly, people trust you. As bank employees, it is your obligation to make bank customers aware of all products and services available to them, not just traditional bank products. If your customers don’t know that investment products are available to them, they may look elsewhere for these services.

Why should we refer? because referrals benefit _______________________!



How to Refer

It’s one thing to understand the importance of why you should refer, but knowing how to refer

requires some thought and practice. Successful referrals call for you to earn customer trust through

their personal experience with you or the bank. This means you must spend time building rapport.

Time spent building rapport allows you to connect with the customer’s emotional and financial

needs, enabling you to understand and respond to what is most important to them. By listening and

understanding the customer’s situation, you have the opportunity to respond with a clear statement of

how the customer might be helped.

Let’s review the three steps of making a branch referral.

Build Rapport

Look and Listen

Make the Referral

Branch Referral Program From Roadblocks to Referrals

© 2013. Developed with

For inTernal use only.

PaRticiPant WoRkbook

SAleS IdeAS

FOR REGISTERED REPRESENTATIVE USE ONLY. NOT FOR USE WITH THE PUBLIC.

© 2014 Annuity Marketing Services. 07/14

Developed with©2014

NOT A NOT FDIC NOT INSURED BY ANY NOT GUARANTEED MAY GO DOWN DEPOSIT INSURED FEDERAL GOVERNMENT AGENCY BY THE BANK IN VALUE

Failure to Face the Facts about Long-Term Care What Are the Chances?Studies show that 70% of people over the age of 65 will require some long-term care services at some point in their lives.¹ Many people underestimate their chances of needing long-term care. Relatively few people either own long-term care insurance or can afford to pay for extended long-term care themselves.

Consider these Facts• The average cost of a nursing home stay in the

United States is just under $75,000 per year. • The average length of stay is three years.• That puts the uninsured risk at $225,000.

Look and Listen• People in their 40’s and 50’s and 60’s.• People who are nearing retirement.• People who want to preserve their assets for future generations.• People who talk about long-term care either for themselves or a loved one.• People who talk about remaining independent in their old age.• People who want to have a choice about their long-term care.

Make the Referral

Long-term Care Focus“ Many of my customers have expressed concerns about long-term care. One suggestion that I would make today is that you talk with (first name), the Financial Advisor here. He/She is very knowledgeable on that subject. Let me call (first name) over so that you can meet him/her.”

Retirement Focus“ Saving for retirement is an important long-term goal. The Advisor here, has helped a lot of our customers who are in your situation save and plan for their future. You should talk with him/her. He is in the office today. Let me introduce you.”

¹ U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, accessed 05-14-13²Genworth 2013 Cost of Care Study, Private Room Rate

AVERAGE DAILY NURSING HOME RATES

Florida ............................................. $191

Texas ...............................................$205

California ....................................... $280

Ohio ................................................ $215





How to Make a Referral: Money on the Sidelines Some people are just not sure what to do with their money right now. So they have been accumulating their money in savings, money market accounts or even their checking account instead of seeking professional advice.

Look and Listen• “What are the rates?” • “I really need more income.”• “I can’t remember when rates were this low.”• “ Between taxes and inflation,

I’m not making anything on this account.”• “I just don’t know what to do with this money.”

Two Steps to Making the Referral

RESTATE the referral clue that you have heard or observed. This helps your customer understand why you are referring them and keeps the tone conversational.

“I understand what you are saying about the rates and I’d like to make a suggestion.”

“ I see that you have a fairly large amount in your money market account. If that is because of the current rate environment, I’d like to make a suggestion.”

RECOMMEND your Financial Advisor.

“I recommend that you speak with (first name). He/She is the Financial Advisor here at the branch and has helped a lot of people in your situation. He/She may have some ideas for you that you have not considered before. Let me introduce you. He/She is in the branch today.”

“You should speak with (first name). He/she is our Financial Advisor here at the branch and has helped many of our customers who are in your situation. He/she is very knowledgeable about 401k rollovers and can help you understand what solutions may make sense for you. When is a good time for an appointment with him/her? He/she is in the branch on Tuesdays and Thursdays.”

Write a referral statement in your own words: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

However you decide to make the referral, make sure you say it in your own words and say it with enthusiasm!

• Large balances in liquid accounts• IRA’s in short term CDs• Leaving a 401k in a former employer’s program• Recent transfer of funds to a liquid account





Living Longer Than Planned Over the next decade, many baby boomers will reach traditional retirement age. The good news is that today’s retirees can expect to live a long time. Living longer though, means stretching savings further. Without careful planning, some people risk outliving their savings.

Look and Listen• People who express concerns over retirement planning.• People in their 30’s and 40’s who haven’t started to save for retirement yet.• People 65 and older who are already retired.• People who have an IRA rollover.• People who have received a retirement plan or IRA distribution.• People who have lost a job or taken a new job.• Baby boomer with large balances in liquid accounts.

Make the Referral

Already Retired“ People are living longer than ever and living longer means stretching your savings further. Even though you are already retired, I’d like to suggest that you meet with (first name), the Financial Advisor here at the branch. He/She has helped a lot of our customers who are in your situation. When is a good time for you to meet with him/her?”

Saving for Retirement“ Saving for retirement is an important long-term goal. The Financial Advisor in this branch has helped a lot of our customers who are in your situation with planning and advice. Let me introduce you to (first name). He/She is in the branch today.”

AGE MALE FEMALE70 88% 93%75 73% 82%80 55% 68%85 34% 49%90 16% 28%95 5% 11%

People Are Living Longer

Than Ever

Percentage of 65-year-olds surviving to age shown

Source: LIMRA International, Inc., Public Misperceptions About Retirement Security, 2014.





Sequence of Returns Risk What is Sequence of Returns Risk?You may be familiar with the term market risk — the risk that your investments may lose value. The timing of when you experience gains or losses — your sequence of returns — can create challenges for people contemplating retirement in the next few years or people who have recently retired. Here’s the problem, just when you thought you were all set, the value of your investment portfolio falls faster than you had anticipated. If you were planning on retiring soon, you may have to put those plans on hold. If you are already retired, you may run the risk of running out of money.

What Are the Choices?• Delay retirement until your investments recover.• Go back to work after retirement to close the gap.• Adjust your spending down.• Consider working with a Financial Advisor to help you develop a strategy that will help you

generate dependable long-term income.

Make the Referral

Already Retired“ I understand what you are saying about your retirement income. Many of my customers are facing the same challenge. One suggestion that I would offer today is that you talk with (first name), the Financial Advisor here at the branch. He/She has helped a lot of people in your situation and may have some good ideas for you to consider. I can set that appointment up for you. Would Tuesday or Thursday work better for you?”

Retiring in 1-5 Years“ Having a strategy that will help you generate retirement income is an important aspect of planning for retirement. I recommend that you meet with (first name), the Financial Advisor here at the branch. He/She has helped a lot of people in your situation with planning and advice. He/She is in the branch today. Let me introduce you.”

$

+193%

+52%

-1%

Retirement Date 5 Years Later

Bad Timing(1973-1977)

Good Timing

(1978-1994)

Great Timing

(1995-1998)

You need a strategy that will help you generate dependable retirement income that takes into

account the sequence of returns challenge.





InflationInflation is the rise in prices over time. During their working years people usually compensate for inflation through pay increases. But after retirement most people will not experience regular cost of living raises to help them keep pace with inflation.

What are the Choices?+ Save more during pre-retirement years.+ Work longer to prepare for retirement.+ Go back to work after retirement to make ends meet.+ Partner with a Financial Advisor to help maximize current income or help plan for

future retirement income needs.

Make the Referral

1990** 2000** 2010** Inflation (1990-2010)Bread* 69¢ 91¢ $1.36 97%Chicken* 88¢ $1.06 $1.27 44%Bananas* 43¢ 49¢ 57¢ 33%Apples* 60¢ 95¢ $1.14 90%Eggs* $1.22 98¢ $1.79 47%Ground Beef* $1.91 $1.90 $2.82 48%Gasoline* $1.04 $1.30 $2.73 163%

*Details: Bread white per pound; Chicken whole, fresh, per pound; Bananas per pound; Apples-red delicious, per pound; Eggs-grade A large, per dozen; Ground chuck 100% beef, per pound; Gasoline regular, unleaded, one gallon.

**U.S. Department of Labor, Bureau of Labor Statistics. Data range: Jan. 1990 through Jan. 2010. Washington, DC 20212

Already Retired“ Inflation is a real problem; especially if you are already retired and living on a fixed income. Many of my customers who share your concern have found that Financial Advisor here at the branch, had some good ideas to offer. He/She has helped a lot of our customers who are in your situation. When is a good time for you to meet with him/her?”

WHAT’S IN YOUR GROCERY BAG?

Saving for Retirement“ Saving for retirement is an important long-term goal. Your Financial Advisor here at the branch, has helped a lot of our customers who are in your situation with planning and advice. Let me call him/her over so that you can meet him/her.”

referraL cards

For reGisTereD rePresenTaTiVe use only. noT For use WiTH

THe PuBliC. © 2014 Cramer + associates, inc 06/14

The Keys to Making ReferralsLISTEN FOR THESE WORDS:

• Annuities • Estate Planning• Mutual Funds • Rollovers• Capital Gains • Investing• Pension Plans • IRAs• Dividends • Stocks / Bonds• Retirement Planning • Municipal Bonds• Saving (college, house, etc.) • Taxes

LOOK FOR THESE NAMES ON CHECKS:• American Funds • Merrill Lynch • Ameriprise • Morgan Stanley • Edward Jones • Putnam• Fidelity • Raymond James• Hartford • Transamerica • LPL • UBS

BE ALERT FOR THESE TRANSACTIONS:• Big deposits or withdrawals• Phone calls from rate shoppers• Deposits from Insurance companies or mutual funds• Withdrawals from high balance money market accounts• Left / Lost their job and need a rollover from pension plans• Automatic deductions to insurance companies or mututal funds• __________________________________________________• __________________________________________________• __________________________________________________

THEN SAY THIS:“I think I can help you, Mrs. Jones. Let me introduce you to

__________________, an investment Representative. She helps people just like you who are interested in looking for ways to _______________ (make more money, reduce their taxes, plan for retirement, etc.).”

!

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LOOK FOR THESE NAMES ON CHECKS:• Alliance • Merrill Lynch• American Funds • Paine Webber• Dreyfus • Putnam• Morgan Stanley / Dean Witter • Scudder• Fidelity • Smith Barney Shearson• Franklin Templeton • T. Rowe Price• ITT Hartford • Transamerica• Janus • Travelers• Kemper • Western National

BE ALERT FOR THESE TRANSACTIONS:• Big deposits or withdrawals• Phone calls from rate shoppers• Deposits from Insurance companies or mutual funds• Withdrawals from high balance money market accounts• Rollovers from pension plans• Automatic deductions to insurance companies or mututal funds



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introducing

http://www.annuitymarketing.com

6

www.bisanet.org

It took 20 years to engineer the coup,” joked Bradshaw, who was named CEO in 2013.

“

Steve Bradshaw, CEO, BOK Financial.

7

BISA Magazine

BOK FINANCIAL REALLY DOES HAVE A DIFFERENT CULTURESTEVE BRADSHAW, CEO OF THE $29 BILLION OKLAHOMA BANK, BEGAN HIS CAREER AS A FINANCIAL ADVISOR

It’s become an industry truism: If a retail brokerage program is to succeed — become truly integrat-ed within the banking organiza-tion — then it needs the support

of top bank management. Bob Cole, who runs the retail brokerage program at BOK Financial (formerly Bank of Oklahoma), acknowledges as much.

“Everyone says they have a different culture,” observed J. Robert (Bob) Cole, senior vice president, BOK Financial Advisors, but BOK Financial Corpora-

tion really does have a wealth manage-ment culture. “When it comes from the top, that makes a difference,” Cole said.

But how can he be so sure? Start with this: At the end of 2013, Steven G. Bradshaw was named CEO of BOK Financial, a top 25 bank holding com-pany that operates in 10 states. Brad-shaw began his career as a financial advisor. Indeed, he was hired by Bank of Oklahoma in 1991 specifically to build an investments program within the retail bank.

By Andrew Singer

www.bisanet.org

8

A Diversified InstitutionWith memories of the Great Recession still fresh, one tends to forget some of the earlier financial tremors in this country. In the late 1980s and early 1990s, there was a “savings and loan cri-sis” in the United States, and it wreaked economic havoc in states like Oklahoma and Texas. One institution that stum-bled was Bank of Oklahoma (Tulsa). When the 20-branch commercial bank emerged from FDIC receivership in 1990, it was purchased by George B. Kaiser, an Oklahoma oil man.

Kaiser’s vision was for a more diversi-fied financial institution, one not so dependent on credit-related income. This meant Bank of Oklahoma would be active in areas beyond traditional lending and deposit-taking — activities like capital markets and asset man-agement, private banking and stock brokerage, and foreign exchange trad-ing and hedging for energy producers, among others — not the usual fare for an Oklahoma depository institution.

An Independent Retail Brokerage ShopSoon after buying the bank, Kaiser also purchased a seven-person local retail brokerage shop associated with LPL (then Linsco Private Ledger). It was run by Bradshaw (mentioned ear-lier) and Scott Grauer. Their mandate: to build a retail brokerage business within the bank. Over the next 25 years, Bank of Oklahoma, renamed BOK Financial, would become a $29 billion (assets) institution with diversi-fied income streams. Bradshaw and Grauer, who started in retail invest-ments, would be become BOK Finan-cial’s CEO (Bradshaw), and EVP and head of wealth management (Grauer). (George B. Kaiser remained chairman of the board and majority shareholder of BOK Financial.)

Not since Kerry Killinger became CEO of Washington Mutual could we recall another instance where a former stockbroker became the CEO of a major bank. “It took 20 years to engineer the coup,” Bradshaw joked in a recent interview with BISA

Magazine. (He became chief executive Jan. 1, 2014, replacing long-time CEO Stan Lybarger, who retired.)

Given their nontraditional back-grounds, did Bradshaw and Grauer encounter resistance along the way?

“There was some healthy skepticism,” Bradshaw said. BOK was still viewed as a “dyed-in-the-wool commercial bank” in some quarters. But there was a critical difference: The princi-pal owner (Kaiser) and CEO Lyba-rger were strong advocates of what Bradshaw and Grauer were trying to achieve: build a different, recession-proof kind of organization, one that had a strong fee-income component. (The ratio of fee income to interest-related income is about 50/50 today, high for a regional bank).

“It required a commitment that didn’t waver at the top,” Bradshaw recalled. He knows all too well how resent-ments can bubble up, especially dur-ing tough times. At such instances, one often hears grumbling. “Suddenly, ‘Those brokers are making too much

“ ”Everyone says they have a different culture,” observed Cole, “but BOK Financial Corporation really does have a wealth management culture.From left to right: J. Robert (Bob) Cole, senior vice president, BOK Financial Advisors; Steve G. Bradshaw, CEO, BOK Financial; and Scott Grauer, EVP and head of wealth management, BOK Financial.

“

BISA Magazine

9

money.’” recalls Bradshaw. People say things like “The profits are driving home at night!” and so on.

Kaiser, the owner/entrepreneur, pro-vided some insulation.

A ‘Bolder View’They never really went the typical an-nuity and mutual funds route, in any event. They had a “bolder view,” Brad-shaw said. They wanted to compete with the wirehouses on their terms; selling products like municipal bonds. In any event, an institution coming out of receivership had to worry about dis-intermediation; annuity sales wouldn’t have helped there.

Many of the elements were already in place. Formed by oil men in the early 1900s, Bank of Oklahoma acquired trust powers in 1918, one of the first banks west of the Mississippi River with such powers. (It’s sometimes forgotten that Tulsa held the nickname “Oil Capital of the World” in the early 1900s.) They have had a fee-based asset-management business since 1949. Product diversification “was not entirely foreign to the DNA of the organization,” Grauer said. The DNA may have been somewhat diluted over the years, “but it was still there.”

Still, it took a long time to gather all the parts under one umbrella, which is how Bradshaw spent some years at the bank. One recalls that bank brokerage businesses in general were “very siloed and isolated in the 1990s,” Bradshaw noted.

[After becoming president of BancOklahoma Investment Center and BOSC, Inc., the bank’s broker/dealer, Bradshaw served as senior vice president/private financial services manager responsible for a sales, marketing and support unit comprised of private banking, personal trust and estates, retail brokerage, insurance services, fiduciary tax, real estate, and minerals management. He has served in a number of roles, “ultimately having oversight of every function of the bank at some point,” according to the company’s website.]

Grauer, who joked that he has had “one boss” in his career — “who is 88” (Bradshaw is actually in his 50s), and “Who is Steve?” — did not come from a retail sales background. Unlike Brad-shaw, who started working in the early 1980s for INVEST in Oklahoma thrift institutions when he was in his early 20s, Grauer came from the clearing side of the brokerage business. So he was excited for the chance to come and sell in Tulsa (he had been based in St. Louis) when Bradshaw offered the opportunity.

At the bank, it eventually became Grauer’s task to bring together all the components of brokerage: trading, in-stitutional, trust, retail, etc., This is what he’s dedicated most of his professional career to, i.e., building a full-service wealth management division.

“Steve couldn’t shake me,” Grauer quipped.

In addition to serving as CEO of the broker/dealer, BOSC, Grauer is to-day responsible for all the company’s wealth management business lines in all markets, including Institutional Wealth, The Private Bank and Inter-national Banking. He also serves as chairman of both of the company’s registered investment advisers, Cavanal Hill Investment Management and The Milestone Group.

BOK needed to be more than just a client’s lender, or a client’s financial advisor, or a client’s trust officer; but rather all of the above, in Grauer’s view. The bank had to satisfy as many relationships as possible. Thus, boost-ing the number of relationships per client became an important goal and a key metric in judging success.

An ‘Agnostic’ Sales ForceIn addition to bringing together the dis-parate product and service areas under a single leadership, they also had to create a sales force that was “agnostic.” It didn’t matter who sold someone something, as long as the client is well served.

“It’s an easy thing to say, a difficult thing to do,” Bradshaw said. It requires a lot of work. You have to change the compensation. You have to change the

training. You have to bring the different components of wealth management un-der a single leadership, “and you never declare victory,” he added.

One sign of success: They were able to grow assets, even during the Great Recession. Today, BOK Financial has nearly $50 billion in assets under management or in custody (not to be confused with its $29 billion in balance-sheet assets); big numbers for a regional bank. In any given year, the wealth management division can contribute as much as 20 percent of net income to the organization.

At present, BOK Financial has 85 financial advisors (FAs) who work with individuals (as opposed to institu-tions), Cole said. Most are based in the branches, covering between one and five branches each. But they also have 20 to 22 advisors who work with pri-vate bankers, receiving referrals from private and commercial bankers and working with higher net worth (HNW) individuals (though branch bankers work with HNW clients, too, at times).

“We don’t draw a line in the sand,” said Cole; no “silly rules” about hand-ing off clients when assets under management (AUM) exceed a certain number. “We don’t do that.”

Also, “we encourage teams.” If the FA has a sizable relationship with a cli-ent, but has no expertise in a certain area that is of interest to that client, then that FA will “partner with some-one who does … One plus one equals more than two.”

BOK has advisors, too, who work with 401(k) institutional clients, helping with rollovers and educating participants on their options, among other things. These advisors represent “physical boots on the ground.” They can travel to companies to make presentations, for instance. BOSC, Inc., the broker/dealer, operates investment centers associated with each of BOK Financial Corporation’s bank subsidiaries: Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Colorado State Bank and Trust, Bank of Kansas City, Bank of Oklahoma and Bank of Texas.

They also have “wealth advisors” or “book brokers,” who generate referrals

BOK’s 85 financial advisors generated 30 percent more revenue in 2014 than they did in 2013; they earned 55 percent more in 2014 than in 2012.

from their own books of business, not from the branches; that is, they don’t receive bank referrals and they don’t work in the branches. They do work on bank-owned property, however. BOK Financial owns a building in downtown Denver, for instance. A bank branch is located on the ground floor, but the wealth advisor has an office on the building’s 10th floor.

“They work under our brand” if not actu-ally in their retail branches, Cole noted.

No LBE ProgramThere is no licensed bank employee (LBE) program at BOK. That doesn’t mean there may not be one in the future. The bank has “never settled for the status quo,” said Cole, “and as things change, we change.” So they could eventually add an LBE program. Cole is a director of the Bank Insurance & Securities Association (BISA). For some years, BOK was absent from BISA activities, he noted, “but now we’re back in a big way…Wealth management is a huge part of our organization.”

Recent numbers have been strong. BOK’s 85 financial advisors generated 30 percent more revenue in 2014 than they did in 2013; they produced 55 percent more revenue in 2014 than in 2012. Where does BOK find its finan-

10www.bisanet.org

cial advisors? Wirehouses? Independent brokerage firms? Bank competitors?

“All of the above,” answered Cole. They will find a place for a talented advisor somewhere within the organization. It could be in the branches. It could be working with private bankers. It could be as a wealth advisor, working with 401(k) plans.

Cole prefers to hire advisors with advisory licenses, but they don’t have to have them in order to be hired (though they would be expected to get them soon).

More Managed Money?Given the prominence of wealth management at BOK Financial, it may seem surprising that the retail program has a relatively low share of fee-based business. Nor are they likely to lean on brokers to generate more. They don’t want to prescribe any kind of product or service. Rather, “we want the client to dictate what they need. We’ll never say [to an advisor]: ‘You have to have 45 percent of your business in man-aged money,’” said Cole.

The fee-based business is less than 10 percent of retail brokerage program revenues at present. (It’s about 50 per-cent among the 20 to 22 advisors who work with private bank clients.) It will

probably never be 50 percent on the retail side, Cole acknowledged.

That said, they recently revamped their platform, introducing more competitive mutual fund and exchange-traded fund (ETF) wraps and a more competitive SMA (separately management account) offering, Cole said.

Cole would like to do more on the managed money side in 2015. Again, it’s not appropriate, in his view, to set a goal, even a modest one, like the 20 percent to 25 percent average in many retail bank programs today, “but I would like to see it trending up.”

Overall, Cole is looking for 12 per-cent to 13 percent program growth in 2015. Part of that could be achieved by adding financial advisors. BOK has a presence in Denver, for instance, but not much in Boulder, Colo., beyond a single bank branch. So maybe they recruit a broker with a $10 million or $20 million or $30 million book of business in the Boulder area, and then supplement that broker’s existing busi-ness with referrals from the bank. That, at any rate, is the sort of scenario that Cole could envision.

Selling Municipal BondsWhat sort of products do they sell on the retail brokerage side? Mutual funds

Scott Grauer, EVP and head of wealth management, BOK Financial.

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make up a big portion. Municipal bonds are also big: “A huge portion of our business,” Cole said. BOK Financial is the No. 1 underwriter of municipal bonds in Oklahoma, and a good chunk of its business is distributed through the retail brokerage unit. Unit invest-ment trust (UIT) sales are also substan-tial. They sell more variable annuities than fixed annuities — $115 million for the former versus $55 million for the latter in the past year. This figure is not surprising given the continued low interest rate environment and the fact that BOK does not have a platform program, which usually boosts fixed annuity output.

When asked about life insurance, Cole said, “Life insurance is a challenge for us.” BOK has no internal life insurance specialists. In 2015, they will revamp how they offer the product. They will reduce the number of general agencies (GAs) with whom they work, winnow-ing the list down to one or two. They hope to become a “big player” for the remaining GAs.

That said, life insurance is “not as big a part of the business as we would like it to be.” After all, “It’s hard to be an expert in everything.” It’s tough enough for financial advisors to master investments. Insurance also has a long sales cycle, which makes some FAs uncomfortable.

Even so, Cole expects to do more life business, especially as they further

integrate financial planning into their activities. In the end, life insurance “is not a sale, it’s a need that is uncov-ered,” Cole said.

Hiring New Branch-Based BrokersWhat about recruiting new brokers: Is it different for a bank-owned brokerage? Are there certain “red flags” to look for? A candidate, if hired, should not expect that 100 percent of his or her activity will come from bank referrals, Cole said. “That’s impossible.” An advisor who “expects to be spoon fed won’t be successful.”

On the other hand, he doesn’t want advisors who only want to do their own thing, who don’t want to be held accountable.

A “unique skill set” is required for a bank-based broker, Cole added. They have to be a “good teacher: A wholesal-er to the branch folks,” in essence. But they also need the drive and the initia-tive to generate their own referrals and also bring referrals back to the bank.

Continuous ImprovementWhen CEO Bradshaw was asked what he looked for when he was hiring ad-visors for the retail bank program, he said people who are able and willing

to work with other parts of the organi-zation and not just as recipients (i.e., not just drawing referrals).

“Hired guns don’t work well here,” Bradshaw said. They are looking for people who are willing to collaborate.

It’s a matter of continuous improve-ment. “We do a better job of identi-fying people today than we did five years ago,” Bradshaw said. And it’s not just in Grauer’s area (i.e., wealth management). They are looking for collaborative types generally, even when it comes to the back office.

They favor the Mayo Clinic model — collegial, cooperative and staff teamwork with true multi-specialty integration. Assemble a group of experts to deal with an issue. The experts won’t be the same group in every case, either; the idea is to have people with different perspectives. This approach doesn’t always work, and when it fails, it can be ugly, Bradshaw recounted. “But when it works well, it is beautiful.” ▲

Andrew Singer is editor-in-chief of BISA Magazine. He has been writing about the financial services industry since 1985 and is the managing director of Singer Publications based

in New York City. He can be reached at [email protected].

“We want the client to dictate what they need. We’ll never say [to an advisor that] you have to have 45 percent of your business in managed money,” Cole said.

From left to right: J. Robert (Bob) Cole, senior vice president, BOK Financial Advisors; and Steve G. Bradshaw, CEO, BOK Financial.

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By Andrew Singer

Is It Time to Throw in the Towel on Bank-Sold Life Insurance?

FEATURE STORY

Frank BerkowitzBob Mittel Marc Vosen

Is It Time to Throw in the Towel on Bank-Sold Life Insurance?

Maybe the whole bank insurance paradigm needs to be rethought. “Banks have not been successful in market-

ing life insurance products,” said Marc A. Vosen, president and CEO of Key Investment Services, the retail invest-ments unit of KeyBank (Cleveland), even though the industry has been talk-ing about it for the past 10 years and longer. “The needle hasn’t moved.”

“If you look at life sales in banks and you strip away single premium whole life insurance (SPWL)” — just an annu-ity with a death benefit, in the view of many — “and you strip away instant-issue term life,” then the share of pro-gram revenues from what is left (i.e., recurring life insurance) “is less than 1 percent, which is terrible,” Vosen said.

“Investment professionals are not insurance professionals,” Vosen stated. “They don’t want to be insurance pro-fessionals, and they don’t know how to be insurance producers.”

Needle Hasn’t MovedLife insurance began gaining traction in retail bank investment programs about 10 years ago, according to consultant Frank Berkowitz, but in the past two years, it has stalled; indeed, it began de-clining, according to recent Bank Insur-ance and Securities Research Associates (BISRA) numbers. That is disturbing, according to Berkowitz, who conjectures that many institutions are giving up.

The needle hasn’t moved? “That is a very fair statement,” answered Berkowitz, who used to run the investments and insurance program at Astoria Federal Savings and Loan (New York), where he was considered one of the more successful life insurance practitioners.

Overall, “you can’t argue with the numbers,” agreed Robert J. Mittel, vice president at Prudential. That said, “We do see results among some depository institutions that have committed to best practices.” Insurance now accounts for 20 percent or more of brokerage pro-gram revenues at institutions like First Tennessee, First Niagara and Astoria Federal; and this goes beyond SPWL and instant-issue term life, Mittel said. These are institutions that have been at it for some years, he added; 18 years or more in some cases.

Berkowitz isn’t quite willing to give up, either. Banks cannot lose sight of the big picture. Banks want to become their clients’ trusted advisor, after all, “but if we go through that whole [fi-nancial planning] process, and identify needs, and if we’re not also doing life insurance, then we’re doing that client a disservice.”

“Financial advisors are often kicking and screaming about life insurance,” added Berkowitz, “but you have to make them do it, because it’s the right thing for the customer.”

Licensed bank employees (LBEs) can sell inexpensive life insurance policies,

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and for the really low-cost term life insurance, direct mail or the Internet works well, Berkowitz opined. For higher ticket items, the LBEs can refer to financial advisors (FAs). But “You have to make them [the financial advi-sors] take the medicine,” Berkowitz said. No financial plan is complete, repeats Berkowitz, unless you have a conversation about life insurance.

Vosen isn’t convinced. The banks “were sold a bill of goods,” i.e., that life insur-ance sales, unlike annuities, wouldn’t disintermediate deposits. (And that is true, up to a point.) That was the justification for setting up life insurance distribution programs in bank branches years ago. In any event, disintermedia-tion is no longer an issue with annui-ties. But banks are still trying to sell life insurance, with little to show for it.

“What does a 50-year-old need?” Vosen asked. “Do they really need cash value

Banks have not been successful in marketing life insurance products,” said Vosen, even though the industry has been talking about it for the last 10 years. “The needle hasn’t moved.

FEATURE STORY

life insurance?” No. They just need something to provide for their family if they die prematurely. Low-cost term life insurance will work just fine.

Look at the numbers, he suggested. The first-year premium for a $1 mil-lion term life insurance policy might be $1,000 for a 40-year-old male. That means the bank’s gross commission for selling the policy could be on the or-der of $800. The financial advisor, for his or her part, might get 40 percent of

that gross commission, or $320, added to his or her grid.

With whole life insurance, by compari-son, the commission to the bank could be $20,000, and the FA’s cut would be $8,000, or thereabouts. Meanwhile, the insurance company is underwriting a $1 million risk in both cases, whether it be whole life or term life. With $1 million at stake, they have to be very careful. The upshot: The underwriting process takes a long time and typi-cally involves taking blood and urine samples, among other intrusions. “Un-derwriting is a pain in the butt,” Vosen commented. It can take weeks to get an answer.

No FA will willingly go through this process to make $320, Vosen added.

“You can make it [insurance] part of their goal,” he continued, but are you really going to fire a $600,000 or

$700,000 producer because he or she is not selling insurance? No.

Not all life insurance is meant to protect a family against premature death of its principal breadwinner. There are other, more complicated uses for life insurance, such as to fund a buy/sell agreement or to set up a non-qualified deferred com-pensation plan or for “key person” insur-ance (also called “key man” insurance).

“That’s where you need whole life or universal life insurance,” Vosen said.

But in those cases a bank is better off partnering with a brokerage general agency (BGA), in his view. In such instances, “You make referrals part of their [FAs’] goal.”

No retail investments program man-ager is going to fire a $500,000 or $600,000 producer for failing to sell life insurance?

“That’s right,” Berkowitz responded, “but you can twist the tourniquet a little.” That star advisor won’t sell life insurance? Then he or she won’t be invited to participate in the bank’s an-nual recognition reward trip to Hawaii, either. There are perks that can be denied if an advisor refuses or fails to sell life insurance.

And it’s not just the “stick” that can be brandished. There’s also the carrot. You can raise advisors’ grid payout 50, 60 basis points if they meet their life insurance goals, for instance, suggested Berkowitz.

In 2012, Berkowitz’s last year at Astoria Federal, 24 percent of total investment program revenue came from life insur-ance sales. (Admittedly, 70 percent of that was SPWL, but that’s where you have to start, in Berkowitz’s view.) Between one-third and one-half of that life revenue was from Astoria’s platform program; smaller ticket sales, but those nickels and dimes eventually add up to real money.

Life insurance has to be structured as a separate business line, with separate goals so people know that life insur-ance is important, Berkowitz said. And you need incentive programs that are team based.

Even in Berkowitz’s Astoria program, where the bank’s 50 FAs averaged $70,000 in annual gross dealer conces-sion (GDC) from life insurance alone in 2012, not much was being done in recurring premium life insurance. But the top third of the FA force was reaping $125,000 annually in GDC from life insurance, and his LBEs were grossing more than $27,000 each in GDC from life insurance.

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And even if 70 percent was from SPWL, that isn’t all bad. SPWL, in Berkowitz’s view, is the catalyst. It gets people excited about life insurance. It’s a great way to start a life insurance conversation with a bank client. Eventually, it can lead to permanent life insurance.

In Praise of LBEsBerkowitz sings the praises of platform programs generally. What are banks going to do with their platform personnel, after all, as floor traffic continues to decline in bank branches? Give your platform people a few weeks of training in life insurance, he proposed. It will give them a way to augment their low salaries and also teach them selling techniques that have applica-tions beyond life insurance.

Berkowitz’s top LBEs eventually became a “farm team” for Astoria’s financial advisor program. Introduction of life insurance to the platform didn’t happen overnight. It took eight to nine years before the pro-gram was fully realized. Eventually, every new platform banker was told when hired that he or she was expected to secure their insurance license within 30 days and expected to actually begin selling life insurance within one year.

“Most of this stuff is just education,” Berkowitz said.

Mittel, too, sees some promise in plat-form programs, particularly if institu-tions are embracing new technology. Some are now doing more with mil-lennials, for instance, “putting them in the driver’s seat” when it comes to life insurance. This means allowing them to self-purchase life insurance, i.e., to buy it online where they are not pressured by a salesperson.

Better Underwriting Technology Could HelpTechnology is still a stumbling block. In Europe, where bancassurance took hold years ago, automated underwriting systems often reduce the life insur-ance underwriting process to a mere 15 minutes, according to Ebix Exchange’s Michael Standard and LIMRA’s Pat Leary, in a recent white paper. Banks in the United States, on the other hand, use a 50-year-old manual process which can take two weeks to four months to process. The United States is stuck on an antiquated process that takes too much time and presents an obstacle to increased sales.

“Consider the fact that fewer than one in four financial institutions in the United States have overcome — to at least some degree — the obstacle of a lack of a simple process in their challenge in

selling life insurance; no bank feels they have completely overcome the obstacle,” they write, citing a 2014 BISRA study.1 By comparison, the majority of Great Britain’s major banks have implemented automated life insurance systems for their financial advisors and bank clients.

Could the bancassurrance model work in the United States? Yes, according to Standard. “It’s doable here, and yes, it would make a big difference with bank-sold life insurance,” he said.

The big obstacle: “The [United States] carriers don’t understand the bank en-vironment,” Standard said. Their captive agents are used to a three or four week (or longer) sales cycle. But bank-based reps, most of whom have (stock) broker-age backgrounds, are often less patient.

“I was a bank rep for 15 years,” recalled Standard, now a bank channel specialist with Ebix Exchange, “and if I had to wait two to four months to get a life insur-ance policy through the pipeline just to make $40, why would I waste my time?”

Straight through processing (STP), as practiced in Europe, could change that. In Great Britain, HSBC and Lloyds are doing 65 percent to 75 percent of their total UK life insurance business through retail bank branch systems. And their premiums are sometimes 10-15 percent higher than their competitors.

1 2014 BISRA-LIMRA Bank Life Insurance Programs Study, 2014.

FEATURE STORY

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Why would bank customers buy their policies through the bank, then? “Be-cause it’s easier (for customers) even though the premiums are higher,” Stan-dard said. In the majority of cases, UK carriers are not taking fluids — they are using medical records alone — so it takes less than 15 minutes for most clients to be approved for a fully un-derwritten life insurance policy.

Don’t overlook the convenience factor. It’s immense, according to Standard.

Replacing IncomeTechnology has been a stumbling block, agreed Mittel. Predictive analytics holds some promise. If insurers can use Big Data to assess mortality risks (as opposed to drawing blood and urine sample), Mittel can easily see instant issue policies rising from a $250,000 face amount (the current maximum) to $500,000 and even $1 million in the not-too-distant future. That could make a big difference.

“It makes it easier for banks and bank reps to engage customers,” Mittel said. More specifically, “it’s a way to make the income replacement model work.”

The income replacement model? Insur-ance has traditionally been written to replace some loss, like a car or a house. But what about the loss of one’s income? Mittel participated in a recent BISRA roundtable where there was “lots of talk about insuring your income,” he recounts. A million dollar instant-issue term life policy could be a game changer, he suggested.

Vosen, for his part, is heading off in another direction.

Partner with a BGA if you want to get into this business, Vosen advised. Your financial advisors can feed referrals to the BGA, which can do everything from the point of sale to the closing. The banks may get nervous about this, but it’s no different than referring a client to an attorney or a CPA.

Financial advisors are often kicking and screaming about life insurance,” said Berkowitz, “but you have to make them do it, because it’s the right thing for the customer.

Key is now working on such a partner-ship, Vosen said: a separate BGA unit to which private bankers, trust officers and FAs send their referrals. Term life, meanwhile, can be sold through web-sites, mobile apps, things that custom-ers do on their own; though the bank points them in the right direction.

Berkowitz is less sanguine. Pass on referrals to BGAs? “Why pass up the opportunity?” he asked. “Do you really want to give your clients to someone else?” Does an FA really want to pass the commission on to an outside broker?

Consequences for Not Doing ItMittel was asked the following: What about the argument that no FA with a stock brokerage background is going to willingly go through the hassle of selling a life insurance policy that nets him/her only $300 or $400 in commis-sion? “But there’s a consequence to not doing it,” he answered. How can you do financial planning without life in-surance? “Financial planning includes an insurance component.” If bank brokerage programs are really seri-ous about taking a holistic approach to their customers, they must inevita-bly come to grips with life insurance, he suggested.

Berkowitz, for his part, remains posi-tive. That said, building life insurance within a financial institution “is a com-mitment,” something that isn’t always forthcoming these days. “We’re in a world of instant gratification,” he com-mented. Astoria Federal built a suc-cessful life insurance sales program, but it took a long time. “It took five to six years to get it to the point where it was significant.”

“I’m personally very optimistic,” he continued, “because I don’t think this is rocket science.” And you can’t do a financial plan for a client “without

talking about life insurance,” so banks really can’t escape life insurance if they’re serious about becoming that trusted advisor.

But it is a process, and it does take time, Berkowitz added. It requires support from within the bank, “from the top down.” But it can be done. ▲



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Moon Anticipates ‘Robust Dialogue’ at BISRA’s 2015 Executive Summits

FEATURE STORY

A trip to a resort can’t be the main event; rather, the goal has to be increased knowledge: ‘Am I going to learn something new?’” — Dr. Betty Moon“

By Andrew Singer

It’s a tremendous opportunity and a bit of a homecoming,” said Dr. Betty Moon on her new role as managing director of Bank Insurance and Securities

Research Associates (BISRA), which includes co-hosting 10 executive sum-mits this year with BISA.

Years ago, when Moon ran National City Bank’s retail brokerage program, she joined her peers at informal roundtables to discuss best practices and share concerns.

That was a long time ago, however, she noted, and not exactly like today’s summits. These days, “you have to keep pace…you have to bring in more information, quality research and thought leadership.”

As Moon and others would no doubt be quick to acknowledge, industry roundtables — BISRA prefers to call them “executive summits” — have become a relatively big business since Moon and her Ohio peers first gathered some years back. Attendees expect more now.

“These are very busy people,” noted Jeff Hartney, executive director of BISA. “They have a lot of demands on their time.” To spend a day or two out of the office, away from their busi-nesses, the meeting “has to really be valuable.” A successful roundtable, in his view, allows executives to commu-nicate with their peers and learn how they can better manage their business-es on a day-by-day basis.

Ten BISRA summits are scheduled for 2015. The events are attended typically by 20 to 30 executives from a range of banks, as well as four to five sponsors, who provide funding.

More CompetitiveAs noted, roundtables have assumed a larger profile in the bank broker-age industry in recent years, and the business has gotten competitive. What makes BISRA’s summits different?

“The sheer breadth of the research that we can bring is unmatched,” Hartney said. Both LIMRA and BISA are nonprofit organizations whose sole missions are to serve their members, he added.

“Other roundtables are run by capable people, but I’ve been in the trenches,” added Moon, who has worked for a number of different banks, includ-ing PNC and Bank of America, in a range of roles such as training, sales management and wealth management. As mentioned, she also ran National City Bank’s retail brokerage program for a number of years. She has first-hand experience of the pressures that executives feel.

That said, there is always room for improvement. Moon recently distrib-uted a survey to 650 people who have participated in past BISRA summits. What did they like about the events? What can be improved upon?

Roughly speaking, you want some-thing big enough so that you get ro-bust dialogue, but not so large so that you lose the intimacy of the setting, Moon said.

The summits can further be enhanced by BISRA’s long-anticipated bench-marking data. (BISRA, established in 2012, is a collaboration between BISA and LIMRA for “the purpose of provid-ing in-depth research and business intelligence in the banking and credit union space.”) Hartney speaks of bringing the research to life, to make

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it actionable at the roundtables. This is actual data, not self-reported survey material, he emphasizes.

Moving ahead, Moon would like to get some thought leadership into the summits, offer some new perspectives. They could bring in, for instance, the head of a large bank’s wealth management division or an expert in client segmentation.

Retirement is another timely topic. Peo-ple are living longer, and retirement is stretching to lengths never imagined by previous generations, noted Moon, “but our culture hasn’t come to terms with it.” Financial advisors are on the front line, however, and they need to learn more about the new paradigm of retire-ment. Organizations like LIMRA’s Secure Retirement Institute could be a resource, a conduit for some “new voices.”

A Younger GenerationMoon, too, is intrigued by Generation Y, and the challenge of drawing more emerging leaders from that younger demographic to the summits. Research has shown that Gen Yers want to be part of something greater than them-

BISRA Executive Summit Schedule • Program Management Best Practices Executive Summit on April 15- 16,

in Atlanta

• Client Segmentation Executive Summit on May 21-22, in Boston, Mass.

• Product Management Executive Summit on Sept. 16-17, in Atlanta

• CEO Leadership Executive Summit on Oct. 7-8, in Atlanta

• Operations and Technology Executive Summit on Oct. 28-29, in New Orleans, La.

• Mass Market Executive Summit on Nov. 18-19, in Dallas, Texas

• Bank Life Executive Summit on Dec. 9-10, in Fort Lauderdale, Fla.

selves and their careers. Again, that is another reason these gatherings have to be more than a fun event, more than a party. A trip to a resort can’t be the main event; rather, the goal has to be increased knowledge: “Am I going to learn something new?”

Even though Moon and Hartney will co-host the summits, they expect to bring in guest speakers along the way, as well as co-moderators at certain times, including BISA officers and directors. Hartney speaks about a recent CEO summit in Las Vegas that

FEATURE STORY

was co-moderated by two former BISA presidents, Marc Vosen and Sam Guerrieri, Jr., a format that proved “very successful.”

Asked about the key to putting on a successful summit, Moon answered, “It will always be about networking,” about developing relationships. It’s also about having fun, “but it has to be more than a fun setting; it has to be about content and the critical busi-ness issues of the day.”

The summits take into account the experience level of the senior executives in the bank brokerage industry, the great majority of whom grew up in the business: They began as financial advisors, later went into sales management or training and eventually ascended to senior leadership. They already know all the tactics, Moon said. BISRA can help them grasp the bigger picture. “We can help them continue to take a bird’s eye view of the industry.” ▲



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Research has shown that the Gen Yers ‘want to be part of something greater than themselves and their careers.’

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ADVISOR WATCH

When advisors are searching for ways to build their practices, adopting several simple strat-

egies can be more productive than taking a giant leap. Often the best tips come from advisors themselves. Who can more easily gauge what’s working and what’s not in their bank or credit union investments program?

What are some of those little things? Write notes to clients when you have five minutes free: It will make a lasting impression on them and could lead to more introductions. Conduct client sur-veys to glean insights on what they like or don’t like about your practice. It also lets them know you care about what they think and will give you valuable ideas for improvement. If you work in a team atmosphere, find out each person’s strengths and make that part of their role. The list goes on.

In no particular order, here are five ideas from advisors that have helped them achieve business success:

Earn a Professional DesignationRaymond Beloin, a senior financial con-sultant at Webster Investment Services (Webster Bank) in Bristol, Conn., acted on the recommendation of a supervi-sor at Prudential early on in his career to embrace life-long learning and earn professional designations in his profes-sion. In the financial services industry, it is important to keep up on changing rules and regulations. “The best way to understand those things is to continu-ously study,” said Beloin, who has been an advisor for 20 years.

Beloin’s first coursework was the Life Underwriting Training Council pro-

gram, which he went through in late 1980s and early 1990s. “It was taught by peers, so I got to learn things about the industry from people who were practicing every day,” he said.

From there, Beloin earned his Char-tered Financial Consultant (ChFC) and Chartered Life Underwriter (CLU) des-ignations. Four years ago, he earned his Certified Financial Planner (CFP) mark. Most recently, he received his Certified Employee Benefit Specialist (CEBS) designation through a program at The Wharton School at the Univer-sity of Pennsylvania.

In addition to the knowledge gained, Beloin finds the designations add credence to one’s digital footprint. His LinkedIn profile shows his various designations as well as background and work experience, and he knows people are taking notice.

Five Simple Strategies for SuccessAdvisors Share Tips on Boosting BusinessBy Gina Lauer

Raymond BeloinAdam Serr

“I am definitely getting feedback, particularly from prospective clients,” Beloin said. “People are coming in and saying: ‘You were referred to me. I looked you up on LinkedIn and was impressed by your resume. I’d like to sit down and talk to you about XYZ.”

Adam Serr, CFP, ChFC, a financial advi-sor who has worked for 14 years at East Idaho Investment Services (East Idaho Credit Union) in Twin Falls, Idaho, agrees that earning professional designations is a valuable investment. “Earning a professional designation separates you from your competition,” he said, “and instead of being a prod-uct pusher or a salesman, you are a licensed professional.”

A lot of advisors do not pursue CFP certification because “it costs money, it’s hard, it takes time,” Serr said. “But honestly, my production nearly doubled the first year with the CFP.”

But the biggest benefit, he believes, is that “it creates a level of confidence I think your client can feel and recognize.”

Start With C SharesWhen a credit union member is tired of meager interest rates on products such as CDs but reticent about investing long-term, Serr has found that C share funds can be a viable answer. His sug-

gestion comes with a caveat, however; C share funds are not appropriate for everyone, particularly those looking for long-term investments. “C share is designed to be, by nature, more of a short-term strategy,” he noted.

That said, “It’s an idea that works well for some situations, but in our institution, it works well in lots of situations.” Serr has found that certain C share funds can be a good way to ease investors into the stock and bond markets. “I’ll say, ‘I’ve got an investment that allows you to get in at no upfront cost, and you’re only committed for a year.’” Serr uses what he calls two home run recommendations: a C share multi-sector bond fund and a C-share bal-anced income fund. The funds are “simple products with simple cost structures.”

What generally happens after a year? “I can’t say 100 percent, but I would say they have stayed the course because they see that dividend coming every month,” he said.

Serr uses a three-bucket approach with clients when talking about investing:

1. A short-term bucket is used for “emergency” money, which is held in an insured credit union account;

2. A medium-term bucket is where they can invest in something that can grow better, but has some risk. This would hold the C share fund; and

3. A long-term bucket is for retirement accounts such as 401(k)s, IRAs and Roth IRAs.

Make Appointments AutomaticIt is a simple concept, but one that should not be ignored: When clients come in for the first time or for a regu-lar appointment, be sure to automati-cally give them a date for their next meeting. That gives you a “constant source of activity,” Beloin said. He equates it to going to the dentist. You always go home with a card for your next appointment. This will prompt a reminder call, and if the originally scheduled appointment isn’t doable, a new date and time is selected.

Amy Roxin, a financial advisor with First Niagara Investment Services in its Rochester, N.Y., location, said in the first week in January she printed out all her managed money accounts and made sure everyone was on the calendar for 2015.

“What I do is set an expectation with the client on our first meeting because some people want to meet once a month and others say, ‘Call me in a year,’” said Roxin, who has 20 years of experience as an advisor. Even if she contacts a client for a meeting and they decide to wait until a later date, “at

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ADVISOR WATCH

least you are touching base with them on a regular basis and being proactive instead of reactive.”

Beloin has a similar system. “Everyone with a fee-based advisor account has to meet with me at least once a year,” he noted. If they want to meet more often, say quarterly or semi-annually, that is scheduled in advance as well. “Spend as much time as possible in front of your clients,” he emphasized.

Designate Branch Coordinators for the ProgramSerr covers 10 branches at East Idaho Credit Union, encompassing a large rural area. How does he coordinate activity and appointments at all these branches? He designates a branch co-ordinator in each one. The coordinator is an employee, such as a teller or lead teller, whose role is to “champion” the investments program at the branch lev-el. “They’re like our cheerleaders,” Serr noted. They set appointments for the ad-visor, make reminder calls, promote and manage contests, manager referrals and payouts, and oversee marketing at the branch level. They are not paid a higher salary, but Serr said “we give them money on their birthday, we give them a Christmas gift and we do a couple of one-day training (sessions) each year where we give them a gift card. So we’re doing nice things, plus they get paid for referrals they give us,” he added. The referral fee is $20. “It’s definitely been a great model that we’ve used to be suc-cessful at a branch level.”

Build Strong Relationships with Clients and Branch StaffEvery time Roxin meets with a client, “I try to find out more and more and more about what makes them tick and what’s really important to them.” Get to know whatever it is they really love, she said, be it grandchildren or a pet. “Make sure you make them feel special.”

Roxin remembers being taken aback by a comment made by a woman as she and her husband were leaving her office and saying goodbye. “The woman looks at her husband and said, ‘That wasn’t so bad.’” Roxin was surprised, thinking: “Wait a minute, were you not looking forward to coming here?” But then it dawned on her that people really do get fearful when it comes to talking about money, which may be a subject they think they don’t know enough about.

That’s why Roxin focuses her attention on making people feel comfortable, “and making sure their experience when they come to see me is a good one.” That ties into getting them to talk about what’s important to them. The goal is to get them to want to come see you and talk to you openly.

Roxin, by way of example, said she met with a client she hadn’t seen for a year, but remembered that the man had shown her a photo of his grand-daughter, Emma. When he came into her office, she said: “How’s Emma doing? I bet she’s so big now.” The client was surprised. “How did you remember her name?” he asked.

According to Raymond Beloin, when clients come in for the first time or for a regular appointment, be sure to automatically give them a date for their next meeting.

It is tiny things like that, Roxin said, that can make a difference in your business, “as long as you take good notes and you care, you genuinely care.” Building that rapport with a client also leads them to sharing details about their financial life, she added.

Advisors need to build connections with branch staff as well, if they want to keep the referral pipeline flowing. “We spend a lot of time developing relationships with our staff,” Serr said. “You can have a great advisor, but if he doesn’t know how to connect with the staff, doesn’t really care about them or relate to young men and women between 20 and 22 [years old], those referrals will go way down.”

Beloin concurred, “There’s a trust that’s required for those referrals.” Branch staff, such as personal bankers and tell-ers, are “almost like clients to me, and I have to treat them a certain way to get them to respond positively to what it is we’re trying to get them to do.”

Serr recalled the greatest compliment he received from a credit union man-ager who told a client, “Adam cares.” ▲

Editor’s note: The advisors in the article were panelists in a session on “Getting to the Next Level: Working Toward Your Second Comma” at LPL Financial’s Focus14 conference last summer. They provided additional informa-tion in subsequent interviews with BISA Maga-zine. All institutions mentioned in this article use LPL as a third-party marketing firm.

Gina Lauer is a contribut-ing editor of BISA Maga-zine. She can be reached at [email protected].

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COMPLIANCE & REGULATORY WATCH

On Jan. 6, the Financial Industry Regulatory Authority (FINRA) re-leased its 10th annual Regulatory and Examina-

tion Priorities Letter, detailing areas of examination focus for 2015, recurring challenges faced by firms and potential risks impacting broker-dealers.

FINRA’s 2015 exam priorities largely coincide with priorities that were an-nounced in 2014. One of the primary focuses in both the 2014 and 2015

examination priorities is interest rate sensitive securities, ostensibly because the market anticipates — as it has for more than a year now — the impact of rising rates as a result of a change in Federal Reserve policy. FINRA’s concern, however, chiefly lies with the types of disclosures made by broker-dealers and registered representatives when recom-mending interest rate sensitive securi-ties. This year, FINRA examiners will review concentrated positions of interest rate sensitive products and firms’ efforts to educate their sales force and cus-

tomer base regarding these securities. FINRA will likely review products such as long-duration fixed income securi-ties, high yield bonds, mortgage-backed securities and bond funds composed of interest-rate securities.

This column will discuss a brief recent history of the U.S. interest rate environ-ment, the potential impact of an interest rate hike on interest rate sensitive prod-ucts and what firms should be doing to educate their sales force and customer base regarding the effects of increasing interest rates.

A Brief Recent History of the Interest Rate EnvironmentFrom May to December 2013, the bond market experienced a large sell off. That major sell off was in part prompted by Fed Chairman Ben Bernanke’s May 2013 announcement that the Federal Reserve would soon begin tapering quantitative easing. In response, investors sold more than $60 billion worth of bond mutual funds the following month. The 10-year Treasury yield rose from 1.6 percent in May to 3 percent by September 2013. In total, investors pulled a record $72 billion from bond funds in 2013. Due in part, however, to reduced forecasts for growth in the global economy, interest rates fell again and remained consistent-ly low throughout 2014.

The Impact of Rising Interest Rates on Interest Rate Sensitive ProductsThe elimination of stimulus from the Federal Reserve can be expected to cause long-term interest rates to rise. A rising interest rate environment may in turn lead to a decrease in the value of long-duration bond funds and a flight to shorter duration products.

FINRA discussed this scenario in its 2014 Examination Priorities Letter,

Is This the Year That Interest Rates Finally Rise?FINRA’s Focus on Interest Rate Sensitive Securities For 2015By George D. Sullivan and Jonathan R. Cyprys

reminding the public that long-duration bond fund managers may be forced to sell underlying bonds at discounted rates in rising interest rate environ-ments. This lack of demand for long duration products may cause fund man-agers to sell lower duration instruments, in turn, causing the price of bonds to decline. FINRA also noted that long-duration bond exchange-traded fund (ETFs) and corporates also may experi-ence similar declines.

Both the 2014 and 2015 Examina-tion Priorities Letters also noted that Mortgage-Backed Securities could ex-perience a substantial decrease in value should long-term interest rates rise because of a decrease in the number of individual mortgage holders who exercise a prepayment option. FINRA cautioned that a decrease in the num-ber of mortgage holders could lead to an extension of the average mortgage time limit within the pool at a rate that investors will find unattractive. This lack of demand could cause downward pricing pressure as well.

What Firms Should Be DoingFirms should use FINRA’s Notice to Members as a guideline to educate their sale forces on disclosures related to in-terest rate sensitive products. Notices to Members (NTMs) 04-30 and 08-81 pro-vide firms with an outline of a suggest-

ed educational curriculum. Educational brochures, videos, explanatory memo-randa and webinars are all appropriate means of training.

• Step 1: The financial advisor (FA) should understand the bond and bond fund’s type, term, yield, timing of interest payments, callable and redeemable circumstances, collateral, and costs and fees.

• Step 2: Using reasonable diligence, the FA should analyze the customer’s profile. A customer’s profile is com-prised of investment objectives and experience, age, other investments, investment horizon, risk tolerance and sophistication among others. These factors will help the FA estab-lish whether there is a reasonable basis to recommend the product to the customer.

• Step 3: Present a fair and balanced picture of the risks, costs and ben-efits of the bond fund to the inves-tor. A balanced picture will ensure that statements are not misleading while considering the nature of the audience.

Firms should routinely review their ongo-ing supervision and surveillance. Firms should employ a supervisory program concerning reasonable basis suitability prior to offering interest rate sensitive products. Training supervisory person-nel is a critical step to recognizing issues with interest-rate sensitive product issues.

Lastly, firms should make sure that their customers understand the terms, conditions, risks and rewards of each interest rate sensitive instrument’s price/net asset value (NAV) fluctuation, interest rate, inflation impact, duration, liquidity characteristics, default and credit risks, expenses, costs and fees.

FINRA’s Investor Alert dated March 2013, titled “Duration – What an Inter-est Rate Hike Could do to Your Bond Portfolio,” guides investors through the characteristics of duration risk and en-courages them to review a bond fund’s fact sheet and/or a bond’s holding statistics, which contain the duration number, prior to purchasing the fixed income product.

ConclusionFirms should be proactive and vigilant in their implementation of training and education concerning interest rate sen-sitive products. It is also important that firms review and revise (if necessary) any internal policies and procedures that relate to interest rate sensitive products. While economists and market professionals continue to debate when rates will eventually rise, firms should undertake to educate and prepare their sales force and customer base regard-ing the consequences of a rising inter-est rate environment. ▲

George D. Sullivan is a shareholder in the New York Office of Greenberg Traurig, LLP. Sullivan focuses his practice on representing financial institutions and individuals

in securities enforcement and regulatory matters, complex commercial litigation, securities litigation and arbitration, internal corporate investigations and broker-dealer compliance issues.

Jonathan R. Cyprys is an associate in the White Plains Office of Greenberg Traurig, LLP.

Firms should be proactive and vigilant in their implementation of training and education concerning interest rate sensitive products. It is also important that firms review and revise (if necessary) any internal policies and procedures that relate to interest rate sensitive products.

29

BISA Magazine

WEALTH TRANSFER PLANNING

If banks are truly to become their clients’ “trusted financial adviser,” they need to be com-petent in wealth transfer plan-ning. With an aging population, and baby boomers retiring

in record numbers, financial advisers must, at a minimum, be familiar with the principles of successful wealth transfer planning, including business wealth transfers.

Why Planning is ImportantThere is clearly a disconnect between the belief of today’s family business owners and reality. According to the Family Business Research Institute, 88 percent of current family business own-ers believe the same family or families will control their business five years from now. However, succession statistics

When the Wealth to be Transferred is a Family BusinessBy Karl Bareither

undermine this belief. In reality, only about 30 percent of family owned busi-nesses survive into the second genera-tion. Only 12 percent are still viable into the third generation and only about 3 percent of all family businesses operate into the fourth generation and beyond.

Business owner-centric plans are fre-quently secretive and often only shared with family members after the owner’s death. This setup results in unnecessary court costs and huge legal fees because of the differences in objectives between active business heirs and passive heirs. The reason many business families fail in successfully passing on their wealth is because of family issues, not busi-ness issues. Unfortunately, advisers are trained to deal only with business issues—not family concerns—and both are necessary to successfully pass wealth on to future generations.

The Importance of Open Family CommunicationNot involving the family can create ill feelings that continue well beyond the death of the business owner. Dur-ing a break in a seminar sponsored collectively by several banks regard-ing family business succession, I was approached by an attendee from Wyoming. I’ll refer to him as John. With tears running down his cheeks, John shared his story with me. His parents owned a large, very successful ranch. John was one of five siblings, the only one that had chosen to work on the ranch with his father. “One day, John got up enough nerve to ask his father about the future of the business if something were to happen to him. The father assured him not to worry. He had a plan in place and everything would be fine.”

30

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FIGURE 1

In time, the father died and the land was owned in joint tenancy with his mother. The revocable living trust that had been created had not included the real estate. When his mother died, John was shocked to learn that his mom left all the property equally to all the children. The other siblings had no interest in maintaining the family ranch and decided to sell the ranch so they would have cash to do with it as they individually chose. John was not in a position to buy them out. So his many years of hard work, and the years his own son had put into the ranch, were all lost. The family business did not make it to the next generation because of lack of effec-tive planning. John finished telling his story by saying, “If you can’t trust your own father, who can you trust?”

All too often, poor family communication stands in the way of successful business wealth transfers. When wealth transfer advice is fragmented in terms of financial, legal and tax concerns, the unfortunate results are often misinformation, mistrust and failure to meet the objectives of all. In many cases, family wealth transfer planning is treated as a private matter concerning only the senior generation. Often there’s a feeling that “it is our money to do with as we please.” The desire to avoid family disputes over how the wealth will be divided can also be a factor. When a significant portion of the family’s wealth lies in a family owned business, planning in secret presents serious potential for harm. It is true that those who own the business should decide how business should be distributed, but the business owner can make more informed decisions if they are willing to engage the heirs during the planning process rather than making the discovery following death.

Working with a Wealth Transfer Specialist A trained wealth transfer special-ist (WTS) is an adviser who has the technical skills and abilities to transi-

tion from the traditional transaction

planning approach to a consultative

fee-based process planning model

that is driven by relationships. Using a

holistic approach, the WTS involves all

family members in the planning along

with family trusted advisers. The three

phases of planning model include: Ex-

amining the current plan, developing

a new plan and presenting the new

plan at a family retreat (see Figure 1).

Each phase has very specific steps that

guide the WTS and assures the family

business owner that no stone will be

left unturned in reviewing, designing

and implementing the new plan.

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BISA Magazine

The Family RetreatA key part of the succession planning process is the family retreat. The family retreat is structured to guide the family through an open and honest commu-nication process that leads to agree-ment on the details of the new wealth transfer plan. The WTS begins by ask-ing each individual to respond to three questions, including.

1. What are your expectations for the retreat?

2. What do you admire most about your family and business?

3. What changes would you like to see?

It is important for WTS to encourage the family to be willing to share with others their answers to these important questions before presenting the new plan. These questions and responses set the stage for the presentation of the new wealth transfer plan.

The objective is to give everyone the op-portunity to explore concerns about the plan through constructive dialogue. The WTS reviews the current plan, taking time to establish a positive environment conducive to effective family dialogue. Family members should be encouraged to express their true feelings through honest, open communication while un-derstanding the need for give and take. The goal is to have all family members understand what would have happened

to the business and other family wealth under the existing arrangement had the current owner died. This exercise underscores the need for a new plan. This entire experience encourages fam-ily members to participate in asking questions, commenting on differences they are willing to express and assur-ing attendees that their concerns and expectations are being sought in estab-lishing a meaningful dialog. Once family members understand the “big picture,” the WTS asks for general agreement on the new plan design and asks if there is a need for additional explanation. In the end, the input the owner receives from family members helps him or her make more informed decisions, resulting in a much greater chance of family agree-ment. Hence, everyone will be satisfied that the new plan makes sense and is the best direction for the future.

ImplementationThe family members understand how the plan will be implemented, and the owner makes the final decision. Once there is agreement to the new plan, the WTS contacts trusted advisers to implement it and monitors to make sure that all functions are completed in an orderly and timely manner.

CelebrateThe completion of the family retreat and agreement to implement the new plan is often cause for celebration. This special event should recognize all the time and effort devoted to the planning process. Developing a plan that satisfies all family members and assures continued suc-cess of the family business is no small

accomplishment. Instead of secrecy and disharmony, the family enjoys open, hon-est communication and enhanced family relationships. Instead of suspicion and jealousy, there is mutual respect. Instead of competition among family members, there is a sense of cooperation. At last, family and business life is in balance.

The WTS encourages the family to plan periodic family gatherings to keep everyone up to date on the progress of the plan and to discuss changes in the tax law, family and business. Planning is a journey, not a destination.

It is clear how this process benefits the business and the family. There are also benefits for the bank, including enhanced client relationships. Family businesses are more likely to survive business succession (while maintaining their current bank relationship). Banks are often able to offer additional ser-vices such as providing greater use of corporate trust services and increased quality commercial loans.

Banks will also increase their ability to provide additional “personal” plan-ning services to other family members. This provides opportunities to increase bank revenue by offering fee-based consulting planning services and life insurance sales. These services can dis-tinguish banks from their competition.

As advisers, we must do better by assisting family members to encour-age open communication regarding their succession plan. We also need to learn new skills that move us beyond a traditional transaction only approach. Successful wealth transfer planning is simply a key part of the holistic fee-based consulting process. ▲

Karl Bareither is a wealth transfer specialist and independent financial adviser. He is the author of two books regarding succession planning and is owner and founder of

the FBR System, which trains advisers to become wealth transfer specialists. For more information about FBR System, visit www.fbrsystem.com.

As advisers, we must do better by assisting family members to encourage open communication regarding their succession plan.

32

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BEHIND EVERY GREAT INVESTMENT PROGRAM IS AN EVEN BETTER PARTNERSHIP.

There’s a difference between a good investment program and a great

one: compatibility. Outstanding resources and comprehensive offer-

ings are important of course, but it’s the relationship between you

and your broker/dealer that makes those services truly powerful. And

building a powerful relationship with your institution is our � rst priority.

You have a strong business and an even stronger vision for its future.

We offer deep resources and even deeper commitment. Together, we’ll

do more than build a good investment program – we’ll build a great one.

There’s strength in numbers: yours and ours.

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FINANCIAL INSTITUTIONS DIVISION

©2014 Raymond James Financial Services, Inc., member FINRA/SIPC Raymond James® is a registered trademark of Raymond James Financial, Inc. 14-PCGAC-0562 CM 7/14

http://www.realbrokerageatrj.com

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NEWS BRIEFS

Live Long and Prosper? Insurance Might Help

Many heading deep into retirement with relatively stable health fear outliv-ing their nest egg. Longevity insurance addresses that concern, although it is a complicated product that need to be exam-ined closely. Part of the appeal of these poli-cies is that they hedge a bet on life expectan-cy. People commonly underestimate how long they are going to live — and do not prepare for it financially — and longevity insurance will provide income in their remaining years. Yet insurance for an extended life span can be costly. As with any life or health insurance product, a person will pay more for these policies the longer he or she waits to buy them. Most of the longevity annuities pay nothing to beneficiaries if you die before you reach the age to receive payments. One exception is a cash refund annuity, which has a clause that says if the policy holder dies before the annuity payments received equal the annuity payments made, the insurance company will pay the difference to the beneficiary. There are other ways of addressing the cost of longevity. One alternative to buying private insurance is to delay filing for Social Security benefits until age 70. That will ensure the highest possible retirement payment and perhaps cover a short-fall from one’s retirement fund. Another possibility is to purchase long-term care insurance to cover nursing home expenses and ensure that one’s portfolio can cover cash needs in later years — if the long-term care insurance premiums are affordable.

— New York Times (03/12/15) Wasik, John

Share of 401(k) Loans Drop in 2014

Retirement plan loan activity nudged down for most of last year, contribution levels dropped ever-so-slightly and withdrawals inched up just a smidge, the Investment Company Institute said in its latest report. The report, based on trends in 25 million participant accounts at employer-based defined contribution plans from January through September 2014, offered mostly good news. For starters, the percentage of participants with outstanding loans, 18 percent, was down a tad from where it was for year-end 2013, when it was 18.2 percent. The less-good news: compared with year-end 2008, when just 15.3 percent had such loans, it’s still up considerably. Elsewhere, the percent-age of participants who had stopped making contributions to their plans was said to be a “negligible share,” just 2.7 percent. On the other hand, that share has been on a slow upward trend since 2012, when it stood at 2.1 percent for the same three quarters. The worst news in the report, relatively speaking: the percentage of those taking withdrawals was up last year to 3.1 percent.

— BenefitsPro (02/11/15) Satter, Marlene

Alternatives Make Push for Retirement Accounts

Alternative fund managers are getting a boost from a movement among retirement plan advisers to use more open-architecture and custom target date funds (TDFs), according to interviews with managers and advisers who work in the sector. “Liquid” alternatives have to overcome many of the same challenges to get into TDFs that they do in normal portfolios, say analysts. Few of the funds have long track records, for one. But experts say some of the hurdles are more magnified. While price is a concern to all investors, the retirement-plan marketplace is particularly fee conscious.

— InvestmentNews (03/11/15) Hunnicutt, Trevor

Funds Working Harder to Increase Participant Contributions

Executives are taking steps to encourage participants already covered by defined contribution plans to contribute more money, more often through automatic features, according to results of the Pensions & Investments annual survey of the largest U.S. retirement plans. Among plans that responded to questions about auto features, 46 of 82 DC plans said they offered auto enrollment during the 12 months ended September 30, compared to 40 of 81 plans the year prior. In the latest survey, 28 of 79 plans said they offered auto escalation, compared to 23 of 77 in the previous survey.

— Pensions & Investments (02/09/15) Steyer, Robert

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AD INDEX

Ad Index

ACA Compliance Group.......................... 25

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Annuity Marketing Services .....................5

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Bank Insurance & Securities Association .................................................. 11

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CUNA Brokerage Services, Inc. ................ 13

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Eagle Life Insurance Co. ............. Inside Front Cover

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Great American Life Insurance Co. ............. Inside Back Cover

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Infinex Financial Group .......................... 27

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Jackson National Life Insurance .......................... Back Cover

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MetLife .............................................................3

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Principal Financial Group ...................... 35

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Raymond James ......................................... 33

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The New York Life Clear Income Fixed Annuity ................. 17

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Vantis Life Insurance Co. ....................... 23

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VOYA Financial (ING) ..................................1

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BISA Leadership Advisory Board

Frank Consalo, ChairmanCiti Personal Wealth

Keith BurgerAIG Financial Distributors

Randy GabrielsonAllianz Life Insurance Company

Jon ZalesAXA Distributors, Inc.

Dean BorghCarey Financial, LLC

LeAnn RummelCetera Financial Institutions

Kevin MummauCUSO Financial Services, LP

Tom PelloweDividend Capital

Scott DavisEssex National Securities, LLC

Mary Beth DvorakFirst Trust Portfolios

Brenda GemplerForethought Financial Distributors

Gina M. RiepelFranklin Square Capital Partners

Eric TaylorGenworth Financial

Scott BeshanyInCapital

Tori BullenJackson National Life Insurance Co.

Martin PowellLincoln Financial Distributors

Arthur OsmondLPL Financial Institution Services

Matt DiGangiMassMutual

Gerard NigroMetLife Investors

Amanda SmithNational Financial, a Fidelity Investments Company

Mark MerrittNationwide

Tim BonnacciNavian Capital

Andrew CapaccioNew York Life / MainStay Investments

Randy ReynoldsPershing, a BNY Mellon Company

Steven PlumpPIMCO

Steve BeckerPrincipal Financial Group

Michael KorthausProtective Life Insurance Co.

Wayne ChopusPrudential Annuities

Bob MittelPrudential Life

John HoustonRaymond James Financial Services

Nory GonzalezRealty Capital Securities, LLC

Michael AndersonSecurities America

Dave ByrnesSecurity Benefit Group

Chelle ChaseSymetra Financial

Tony IanniOneAmerica - Care Solutions

Tracy FraserTransAmerica

http://greatamericanannuityfi.com

Not FDIC/NCUA insured • May lose value • Not bank/CU guaranteed Not a deposit • Not insured by any federal agency

CMV10409AA 06/14

Before investing, investors should carefully consider the investment objectives, risks, charges and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses, which are contained in the same document, provide this and other important information. Please contact the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.Variable annuities are long-term, tax-deferred investments designed for retirement, involve risks and may lose value. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn before age 59½. Jackson is the marketing name for Jackson National Life Insurance Company® (Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York). Jackson National Life Distributors LLC.

At Jackson®, strong leadership combined with our Long-term Smart® philosophy enabled us to thrive instead of

merely survive this past decade—one of the worst in our economy’s history. And that means that we’ve never taken

our attention off of what we think matters most—our advisors. Providing investment freedom, new technologies,

educational opportunities, and the support needed to achieve your business goals will always be our priority.

Looking for a smart, capable partner? Call 800/406-5653 today.

National ratings and rankings do not include Jackson of NY.1 LIMRA International U.S. Individual Annuities Sales Survey Fourth Quarter 2013 YTD. Jackson ranked first in total annuity sales out of 60 participating companies that provided LIMRA with quarterly data during 2013.

2 Ratings current as of 3/31/14. Financial strength ratings do not apply to the principal amount or investment performance of the separate account or underlying investments of variable products.

3 Service Quality Measurement (SQM), 2013.

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EXPERIENCE CAN MAKE.

Numbers that Inspire Confidence

• America’s leading annuity writer—ranked first in total annuity sales for 2013.1

• Unchanged financial strength ratings for 10 years straight.2

• Recipient of 70 awards firm-wide for call center world-class service3, marketing,

and community involvement in 2013 alone.

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Documents

BOK FINANCIAL REALLY DOES HAVE A DIFFERENT CULTURE