When Jim Tewalt submitted his top sales idea to the first-annual Retirement Advisor survey, he provided a strikingly simple response: “Here’s a novel idea: think. Don’t just follow the herd, trying to find ways to make another sale. Think about how to point out and help solve problems for your clients.”
While the top financial advisors are typically judged by the amount of assets they have under management, Tewalt, CFP®, co-owner of Estate Planning Services, Inc. in Glendale, Ariz., holds himself to a different standard: He judges success by the quality of his work and doing what’s truly best for the client, even if it requires doing extra work or is not necessarily the best for his own financial gain. “Stradivarius didn’t produce a lot of violins,” Tewalt points out, “but the ones he did produce are in high demand today, because of the quality.”
“Handling a difficult appointment is a lot like riding a horse,” says Tewalt, who spends his spare time participating in western reenactments and riding his horse in parades. “Although I definitely have my own fears, the horse could easily panic and get us both hurt. I must control my fears and stay steady and focused.”
What really ropes in the referrals for Tewalt is word-of-mouth about his genuine respect for clients’ wishes. “It’s our job to bring up the problem to the client and say, ‘OK, how do you want to solve it? What’s your comfort zone here?’ And then,” and this is what Tewalt stresses is the most important part, “we help them make a good decision without putting any pressure on them.”
If he can bring his clients to their own epiphanies about a certain product, then he feels he has done his job. Here are just a handful of case studies displaying his sales idea in action.
Case study No. 1: A court case brings in more business
Several years ago, Tewalt was asked to work on a structured settlement case in which the lawyer assumed a single premium immediate annuity would be used. “As long as the insurance company gives us about 4 percent, I’m happy,” Tewalt recalls the attorney saying.
“I told the attorney I would at least look at doing a managed portfolio where you are invested for income,” Tewalt says. “We could generate 4 percent out of that without touching the principle. If we did the SPIA, the client would not get any money to speak of in terms of interest. And if they needed the cash at any point, they would have to go out on the market and fill that stream of income — and you know they’re going to take a hit if they try and do that.”
Tewalt explained to the attorney that if they used stocks that have paid dividends for long periods of time and built a portfolio with income-generating securities, then they could keep the principle while still generating about 4 percent. “That way we’ve got money coming in,” adds Tewalt, “not as much as if we were paying out the principle every month, but we would have the principle available if the client needed it.”
The attorney asked Tewalt if he would be willing to explain this advice to the judge over the phone during the court meeting. “I said I’d do even better than that,” Tewalt says. “I told him I would come with him. He put me on stand, and I told the judge everything I suggested.”
The judge approved, and after the meeting, the attorney pulled Tewalt aside to compliment him on his testimony. “’Most of the time, when I put [financial planners] on the stand, you’re all charts and graphs, and I can’t get you to shut up,’” Tewalt recalls the attorney saying. “’This was just really simple. I get about two or three cases like this on average every month. Would you like to do more?’ To which I said, ‘Heck yes.’”
“It’s just doing what’s right for the client,” Tewalt says. “I thought of it from a standpoint of ‘What would I want?’ I would want more income and I would want access to my principle. So why not do it that way?”
Case study No. 2: Investing in a life-long client
Tewalt has a 100-year-old client, who has been invested for 37 years while her husband was alive, and 22 years since her husband passed away. “Before her husband passed away,” Tewalt says, “he told her that he wanted me to handle her affairs when he was gone.”
Years ago, while having lunch with this client, Tewalt asked her what she wanted to do with her money. She said she wanted to endow the maestro’s chair for the local symphony, which cost $100,000, but she didn’t feel comfortable writing a check for that amount.
He asked her, “What if we set up an account where you would be unable to get at your principle, but you would have income guaranteed for the rest of your life? And, when you die, the symphony will get the $100,000?”
Tewalt met with the president of the symphony to ask him if they would honor his client if she set up a charitable remainder trust. “My client called within a few minutes to tell me that several board members had already called her to thank her for the gift,” Tewalt recalls, “and we hadn’t actually done anything yet. I told her, ‘I guess they liked the idea.’”
The symphony did not want to pay to have the trust documents drawn or for the ongoing trust accounting. Twealt asked his client if she would be willing to pay for the documents and the accounting fees,” Tewalt says, but she said no. He then called a friend whose company does tax returns for charitable trusts. “That friend called another charity who agreed to pay for the documents and the accounting for the rest of her life (she was in her 80s at the time), in return for her leaving another $25,000 in the trust to them,” Tewalt says. “She was happy to do this, so the deal came together and everyone was happy.”
That client is about to turn 101, is living life to the fullest and loves to give, according to Tewalt. They have a standing phone meeting every Friday morning. “I love helping people reach their dreams and live lives full of meaning and purpose,”Tewalt says. “Each one is different, but each one is important.”
Case study No. 3: Working within the comfort zone
A few years ago, Tewalt worked with a married couple who were both public service employees and had pensions and maybe $250,000 of investable assets at the time. “They asked about a Roth conversation a couple of years ago when they were all the rage,” Tewalt says. They looked hard at the numbers to determine how long it would take them to recover from the tax implications. “They wound up not being comfortable making the switch,” Tewalt says, “but continued to grumble politely about having to take RMDs and put them in the bank at less than 1 percent interest.”
In response to their concerns, Tewalt suggested using the RMDs to purchase life insurance, so that they could enhance their financial legacy to their children. “It’s just all about doing what feels comfortable to them,” he says. “When we opened up the conversation we looked at everything. We also talked about long-term care insurance. We finally selected a second-to-die hybrid life insurance policy that would provide long-term care insurance for them based on the death benefit of the policy for the rest of their lives. It’s kind of a unique product, but it’s what they settled on,” he says.
“Over the years we had used annuities, life insurance and a little bit of the market, but because their income was strong due to the pensions, we didn’t have to take much risk. Now, when they pass away, they are going to leave about $1.6 million to their kids,” he adds, “and most of that is going to be income-tax free.”
“On the day that I delivered the policy to them and they walked out of the office, the woman turned around and said, ‘Are you aware that it has taken us a year and a half to reach this decision?’ But what I like to do is to get clients to have an encounter with the situation we’re dealing with,” Tewalt says. “I want them to have the ‘aha!’ moment.”