Thought leadership

How to Ensure You’re Ignored By Clients – By Marlōn Hall

Jargon is commonly defined as “words or expressions used by a particular profession or group and are difficult for others to understand.”

401k, jargon, communication, fees, costs
Marlōn Hall

Fee” is one of the words that falls into that category. The healthcare industry employs a fee-for-service model. Most hotels and restaurants in the U.S. charge a service fee, often in lieu of tipping. And airline passengers routinely get hit with a number of service fees, including for checked or oversized baggage.

The problem with using fee to describe these added charges is that the word implies there is no exchange of value.

Consider these two scenarios and the different reactions to the words fee and cost:

Scenario 1:

On your way home from work, you stop at a convenience store to pick up a gallon of milk and a loaf of bread. The label on the shelf below each item says $2.50. You grab the milk and bread, and head for the register to check out. After the cashier swipes the items and the total appears on the electronic display screen in front of you, the cashier says, “That will be a $5.00 fee.” You would probably think, “Why would I pay a fee to buy groceries?”

Scenario 2:

On your way home from work, you stop at a gas station to fill up your pickup truck. As you stand at the pump, watching the price dial click higher and higher, you wistfully think to yourself, “I remember the good old days when I paid less than $50.00 for a tank of gas!” But you realize that you’re not going anywhere on an empty tank and accept the fact that today it costs $50.00 to fill up.

Connecting value to services

When you analyze the two scenarios above, it’s clear that using the word “fee” separates an item from its value. Likewise, using the word “cost” does the opposite.

Cost implies that the consumer is getting something of value in exchange for the money, even when that something—such as an idea—is intangible.

As financial services professionals, we know that the word fee is prevalent in our industry. There are fee schedules, fee-based advisors, fee this and fee that. It’s ubiquitous.

To be sure, jargon is an integral component of any industry culture—and ours is no different. Yet, even when jargon is detrimental to our business, we continue to use it.

Here’s an example:

Banks now must account for “fee waivers” as line items on their balance sheets due to growing customer demand for them.

Indeed, more and more people are requesting that fees be waived because they don’t connect the value of a service provided by the bank to the money that’s deducted from their accounts in exchange for the service.

If bank employees were trained to refer to overdraft fees and stop payment fees as costs rather than fees, there likely would be a significant reduction in fee waivers, because customers typically don’t request costs to be waived.

They aren’t asking for something for free. Rather, they are simply asking that the bank not take their money and provide no value in exchange.

Purging fees

Clearly, jargon can get in the way of effective communication and undermine your efforts. Even so, like most financial professionals, you probably use a fee schedule in your business.

But understand that fee is a powerful word—often not in a good way—and our industry has long been blind to its negative connotation. For this reason, I’d advise you to consider replacing fee with cost in all your documents outlining services that will be delivered in exchange for money.

In your cost schedule, describe in detail the value or service being provided for its cost.

Bottom line, if you want your clients to reject what you’re recommending and ignore the value you’re seeking to provide, using the word fee is a perfect way to accomplish this.

On the other hand, if you want your clients to earnestly consider what you’re proposing and appreciate the value you’re striving to deliver, using the word cost can help facilitate that positive response and hopefully sow the seeds of a long and mutually beneficial relationship.

Marlōn Hall, CFSis a Regional Vice President with Jackson National Life Distributors LLC, where he works primarily with Financial Advisors and Financial Institutions in the Midwest. The married father of three began his financial services career at a family-owned bank in the Mountain West.  

Posted by lavalin in Thought leadership, 0 comments

Estate Planning

Times like these require focus and reflection and some soul-searching.  It causes us to reassess and re-evaluate our priorities.  In this pandemic, we have been forced to adjust our current lifestyles and embrace the unthinkable.  Things that we took for granted, such as having dinner with friends have been curtailed which can take a negative impact on our psyche.  Humans are naturally social creatures and in this age of social distancing, it has challenged our resilience and adaptability and creativity.  We find ourselves in a daily struggle juggling work, home life, homeschooling, and the unpleasant struggle of going on a scavenger hunt for necessities like cleaning supplies and food. Not to mention handling our finances and possibly caring for a family member be it in our home or from afar.

Subsequently, it brings me to our topic of discussion which is planning for “if something should happen” and in particular a Living Will or Advanced Directive.  At 30 years old, this is the last thing on your mind or should be.  Regretfully, in the age of Covid-19, it is a very unfortunate but real possibility.  I recently read an article where a doctor on a COVID-19 unit had 55 patients and only one of those patients had an advanced directive.  Most of us put this off for as long as possible and think this is something that should be done or considered when you are about to retire or in retirement.  We often think, that since we are in good health, it can wait, or I have time.  Our current environment has placed a new perspective on this growing reality.  This is even more so imperative in the African American community as COVID-19 is disproportionately negatively affecting us at alarming rates. Not only are we contracting the virus but dying from the virus.  We need to do everything we can to protect ourselves, our health, and our family. 

So, let us look at one of the tools that can be utilized to protect your assets and relief some of the burdens of being a caregiver for a family member. We will briefly review some of the basic components of an estate plan which can consist of all of these or just some key parts.  The importance is to have something tangible instead of nothing at all. The major components of an Estate Planning may include a Revocable Living Trust and/or a Last Will and Testament, a Durable Power of Attorney, a Durable Medical Power of Attorney and a Living Will or Advanced Directive. 

What is an estate plan? Simply put, it is a road map on how to distribute our assets and designating the power of attorneys for finance and medical care.  I dare say that the power of attorneys are the most important aspects of the plan.

All of us know with certainty that we will not get out of this world alive so why not make it easy for your family? Imagine clinging to life and having your family to make the excruciating decision of whether to prolong the inevitable or to allow nature to take its course.  As horrible as it sounds, numerous families have been faced with this devasting decision during this pandemic, making matters worse, it has been from afar.

The components are as follows:

Living Trust – a document that specifically outlines your wishes on the distribution of your assets.  Most people opt for a revocable living trust as it can be amended, change, and/or dissolved during your lifetime.  One of the more beneficial aspects of the living trust is that it is essentially designed to avoid probate court.  Probate court may not always be avoided but it most cases it should be.

Last Will – this document similar to a trust, states how you would like your assets distributed to your designated beneficiaries after death. Having a will does not automatically mandate probate and it varies based upon state laws and the types of assets and the size of your estate.  One of the primary functions of probate is the transfer of certain assets like real estate.  A property in the name of a decedent cannot be transferred to another person in most cases without probate as they can no longer alive to sign over that asset.

Durable Power of Attorney – gives the appointed agent authority to make financial decisions such as banking, investments on behalf of the principal.  The durable POA continues to be valid even if the principal becomes incapacitated.  Keep in mind that if a general power of attorney is created it is invalidated once the grantor becomes incapacitated. Subsequently, both become ineffective upon the principal’s death.

Durable Medial Power of Attorney – like the durable POA, it gives the agent/representative authority to make medical decisions for the grantor if they become incapacitated in some form.  The powers are usually broad but can be limited or revoked if the grantor is competent.  It is, however, void upon the principal’s death. This can be temporary, for example if the person was in an accident and unable to speak or permanent if the person is suffering from dementia.

Living Will – also known as an advanced directive is a document that provides specific instructions given by the principal on how to handle their medical care if there are in an unresponsive state or on life support.  This is not to be confused with the Medical POA; it can be used in conjunction with that document.  This is specific to end of life situations, comas, etc. and states for example, how pain management is to be administered, if you want to be resuscitated, organ donation instructions.  It is immensely helpful and useful to not only health care professionals but to your family as to what your instructions are.  The personal representative is executing instructions on your behalf and not their own. Although, you may have written directions, unseen situations may occur.  Therefore, carefully consideration must be exercised during the selection of your advocate as they have to be trustworthy and competent to discuss your medical condition and carry out your wishes.

Posted by lavalin in Thought leadership, 0 comments