Message
to Financial Advisors… You have a great opportunity to
really help your prospects to weather this last financial storm.
They need and want our help to achieve the financial security
they’ve been dreaming about and deserve. Aren’t fixed and indexed
annuities a way for us to give these middle income families the
safety, guarantees and growth they are looking for?
"...my
finest personal production year ever"
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Where Should
You Be
In recent years, you have not been able to pick up a newspaper, or magazine that doesn’t have an article touting the benefits of investing in mutual funds.
While the first mutual fund was invented back in the 1930s, they didn’t really become popular until the great bull market of 1982 to 2000. Since then, mutual funds have been pushed by many financial advisors as “the only way to invest!” Almost everyone has owned mutual funds at some point, if only through their company 401k or personal IRA. Many people still own mutual funds in spite of the recent stock market declines and the current scandals surrounding the investment industry.
In the past 50 years, mutual funds have gone from an $18 billion also-ran in the financial-services industry to a $12 trillion titan. Mutual Funds now enjoy an unchallenged position of leadership, with 90 million US investors.
Most of the growth of mutual funds is attributed to introduction of the 401(k) and other qualified plans during the past two decades. Today, 10% of household financial assets are invested in 401(k) and Individual Retirement Accounts (IRAs), up from 6 percent in 1990, and mutual funds manage 47 percent of those assets. Households also have invested in mutual funds outside of qualified plans. Mutual funds manage $4.4 trillion of assets that households hold in those taxable accounts.
And, it’s no wonder mutual funds became so popular in the 80’s and 90’s, when the media and investment houses were reporting huge unprecedented returns, in the US stock market. In the 80’s the S&P 500 Index (the benchmark everyone compares to) went from 107.94 to 353.40. That’s an average annual return of 12.59% over those 10 years.
In the 90’s, we had one of the best times in the history for the U.S. stock market. The S&P 500 Index went from 353.40 to 1469.25. That’s a staggering total return of 347% in just 10 years, or an average annual return of 15.31%.
Now compare that to the lack luster years of the 60’s and 70’s:
In the 60’s the S&P 500 Index went from 59.89 to 92.06. That’s an average annual return of 4.39% over those 10 years.
In the 70’s the S&P 500 Index went from 92.06 to 107.94. That’s an average annual return of only 1.60% per year, over those 10 years.
If you had actually received annual returns comparable to those of the S&P 500 Index during those 40 years (1960 though 2000) you would have averaged 8.33% per year.
However, when you consider that most mutual funds won’t even come close to matching the S&P 500 Index over 30 or 40 years, and then you subtract the annual fees, it gives you an entirely different view of the validity and benefits of investing in mutual funds.
So, even if you were lucky enough to find a mutual fund that had a total return comparable to that of the S&P 500 Index over the past 40 years, your net return after expenses would only be 4.28%. (8.33-4.05) Remember, you’ll pay those expenses each year, whether your investment makes money or not.
To fully understand the impact of expenses… Glorianne Stromberg, a financial services expert was quoted as saying "Every 1% you pay in fees or charges will reduce your capital by about 20% over 25 years. That could mean the difference between being comfortably well off and struggling to make ends meet."
As an example, at 10% per year, a $10,000 investment compounded over fifty years would yield $1,170,000. The same investment compounded at only 8% would yield just $470,000. That is a whopping sixty-percent difference amounting to $700,000.
And, we haven’t even considered that from the beginning of 2000 through 2008, the S&P 500 Index has gone down from 1,469.25 to 903.25. That’s a total loss of (-38.53%)… or average annual loss of (-5.90%) over those 8 years. Overall, the average mutual fund plunged 30 percent in 2008, and many didn't fare as well as the S&P 500 index, which fell 38 percent for its worst year since 1937.
If you add in the last 8 years, the average return for the S&P 500 Index over the past 48 years is only 5.82%. Now, subtract the average expenses of 4.05% and your net return is only 1.77%. And, that’s only if you were lucky enough to have found a mutual fund that performed as well as the S&P 500 Index over those 48 years.
What’s your chance of you having picked a mutual fund that performed as well as the S&P 500 Index?
Since 1960, the mutual fund industry has grown from 160 funds and $18 billion in assets under management to today where there are over 8,000 stock mutual funds with combined assets of $12.356 trillion. During the 1990s, 55% of equity funds failed, almost four times the 14% failure rate of the 1960s.
Most people tend to pick a mutual funds based on recent performance history. When do you think a mutual fund company decides to advertise a specific fund - just after a bad period or a great period? Of course, they advertise a fund just after it has had a great return and typically, just as it’s about to cool off. These hot funds historically do very poorly after their best period. After studying mutual fund performance figures over a 20 year period, I have found that over the subsequent 3, 5, and 10 year periods, a whopping 80% of these “star” funds performed worse than the average similar fund.
Unfortunately, according to the folks at the Motley Fool, only 10 of the ten thousand actively managed mutual funds available today, managed to consistently beat the S&P 500 Index over the past ten years. Remember, history tells us that very few, if any, of these top performing mutual funds will manage to beat the S&P 500 Index in the next 10 years.
The recent dismal performance of mutual funds' has contributed to the anguish of most retirement investors who saw a slump in their 401Ks that will probably prolong their working lives. And, with the losses in the retirement accounts, many retirees are being forced to go back to work. Disappointment understandably runs deep among investors who together have $9.4 trillion in U.S. mutual funds.
Warren Buffet, the world’s greatest investor, said it best; "I would not invest in mutual funds, but if I did, I would choose an index fund. For most small investors who don't have time to research individual companies, cheap index funds are the best way to invest in the stock market."
First, an Index Mutual Fund is much cheaper to run than a typical actively managed mutual fund, because they track a target benchmark, rather than constantly buying and selling securities in an attempt to outperform the market. Thus index funds generally have lower advisory fees, operating expenses, and trading costs than actively managed funds. Once you eliminate those analysts' salaries, an index fund can cut its costs tremendously and those savings can be passed along to investors in the form of higher returns.
Second, Index Mutual Funds perform better than most actively managed funds. During the 1990s, in one of the best times in history for the market, the S&P 500 Index provided an annualized return of 17.3%, (including reinvestment of dividends and capital gains) compared with just 13.9% for the average equity mutual fund. During the 1990s, the total shortfall between actively managed mutual funds and the market as measured by the S&P 500 Index was a whopping 3.4% per year. And, that doesn’t take into account the expense ratios, fees and loads in those funds, which would bring the return down to 9.85%. And that is in one of the best times in history for the stock market!
In more recent history, only 4% of diversified US stock mutual funds have beaten the performance of the S&P 500 Index, over the past 10 years ending in 2007.
Of course, investing in an index mutual fund guarantees that you'll never outperform the overall market.
So, where should you be investing your money? Where would you have fared better with your investments over the past 28 years? $100,000 Invested On Dec. 31, 1980 In A Hypothetical S&P Index Mutual Fund…
(That probably would have outperformed
all actively managed mutual funds)
$100,000 Invested On Dec. 31, 1980 In A Hypothetical Index Annuity
Would Be Worth
Approximately - $553,263 (They do not charge management fees and they are 100% tax-efficient)
$100,000 Invested On Dec. 31, 1980 In A Typical Deferred Annuity Would Be Worth Approximately - $583,162 (Based On An Average Of 6.5% Interest During The Past 28 Years) (They do not charge management fees and they are 100% tax-efficient)
Who knows what the future will bring. Will the stock market continue to deteriorate? Probably. Will interest rates start to climb? Who knows? One thing for sure, most average middle-income families can’t afford to lose what little money they’ve saved.
So, with all the risks and fees involved, do you really belong in mutual funds?
By Lew and Jeremy Nason 'The 9 Out Of 10 Guys'
_____________________________________
Zig Ziglar
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Sales Tips... Expand Your Business Though Your Current Clients
1) It
is important to ask your clients if they know anyone else who may
have a need for your services. It is helpful if you can get a
testimonial letter rather than simply saying, "Bill Jones of
‘Retirement Resource Management’ sent me." Always ask your clients
for permission to use them as a reference.
2) Sell
more of the same. If, during your annual review, you see that your
clients have the capacity to buy more of your product, suggest that
they buy more. Under no circumstances, however, should you try to
sell them more if they don't need it.
3) Sell
them additional products or services. Again, if you see a need,
offer a new products/services to your present customers. If they
like your original product, they'll listen to your ideas about
expanding into other products. 4) Upgrade your clients. If a client originally bought term insurance, you may be able to upgrade it to a higher priced, higher quality permanent life product.
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Success Tips… "Every one of us, unconsciously, works out a personal philosophy of life, by which we are guided, inspired, and corrected, as time goes on. It is this philosophy by which we measure out our days, and by which we advertise to all about us the man, or woman, that we are. . . .
It takes but a brief time to scent the life philosophy of anyone. It is defined in the conversation, in the look of the eye, and in the general mien of the person. It has no hiding place.
It's
like the perfume of the flower - unseen, but known almost instantly.
It is the possession of the successful, and the happy. And it can be
greatly embellished by the absorption of ideas and experiences of
the useful of this earth."
If you want to improve your attitude, sales and income in 2009 visit our
And Read One Hour
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Prospecting Update…
Get Well Known
If you want to make it much easier to attract the ‘Right Prospects’, set appointments and close sales, then spend a little time to get well known in your local community as someone who cares and is the expert in their field! It will pay big dividends!
Here are some simple ideas?
If you want to generate more sales leads and set more appointments, then you can’t hide your light under a bushel basket.
And Read One Hour
“Acting
on a good idea is better |
Real Advisor Testimonials
"Lew and
Jeremy, Again....thank you for everything.... I feel so much better
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$30,000/mo. each month in 2009! Thanks to you guys, I know it's
going to happen. Have a great day!"
"Lew is one
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get down to the basics of human communications and needs selling."
"You have
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coaching service for insurance/annuity agents."
"Thanks Again and please, Keep On, Keeping On (what you are
doing)!"
"I have
combed through your website and read almost every page and want to
say thank you! The information has helped big time, my production is
up 65% over last year already."
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All this plus, four big bonuses!!!
Four Days
With The Famous This intensive one-of-a-kind 4-day '2009' Financial Planning Process Course will be offered for you in Atlanta, February 16-19, 2009. Your primary instructor will be the acclaimed financial planning industry leader Ed Morrow, CLU, ChFC, CFP, CEP, RFC.
Yes, you will receive one-on-one time with Ed Morrow!
Ed has trained thousands of highly successful financial advisors in the USA, China, and in the Pacific-Rim countries. Loren Dunton, the founder of financial planning, insisted, “I consider Ed Morrow to be the co-founder of financial planning. Ed Morrow has done more for this profession than anyone. His influence on the evolution of our specialty discipline is truly enormous.”
Charles “Tremendous” Jones proclaimed, “Ed Morrow is the only authentic financial planning legend.”
Finally you are going to acquire the fast-track training and most effective systems that will empower you by changing your image, plus enable you to add more on-going revenue sources for your improved practice. You deserve this.
Learn From Wally Cato How You
Can Get Publicity Worth Only at this event will you also learn Instant Image Building Techniques - from the financial planning industry’s most successful media advocate, Forrest Wallace Cato. For almost 30-years, Cato created a unique body of works by promoting the images of such now-famous names as W. Clement Stone, Charles Tremendous Jones, Napoleon Hill, Robert H. Schuller, Norman Vincent Peale, and others whom you will learn about. You can also learn the techniques and strategies Cato uses.
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Detailed Image-Building Guides will be provided for you to use when you return to your office. Q&A interaction will prevail. Cato is former Editor of Financial Planning Magazine and Trusts & Estates: The Journal of Wealth Management. Presently Cato is International Editor of Advisor Magazine in China. Cato has interviewed five Presidents of the United States.
Jeremy & Lew Nason Will Reveal Their Unique Secrets to Closing 9-Out-Of-10 Sales! From the founders of the Insurance Pro Shop you will also learn:
Lew and Jeremy
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"possibly the most
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They will be offering two special surprise bonuses for attendees...
Lew Nason, RFC, RTIA, FMM, LUTC Graduate, with his sons Jeremy Nason, RFC, FMM and Will Nason, RFA, FMM are the creators of the Insurance Pro Shop™, the 'First Affordable, Full Service Insurance Marketing and Sales Resource for Today's Financial Services Professional' and Found Money Management™ a strategy dedicated to helping middle Income families to "Live Debt Free and Truly Wealthy."
Bonus Feature Number Three:
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You
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Well, that's it for this weeks Insurance Marketing and Sales Tips Mastery Newsletter. I hope you found the information interesting and helpful in your efforts to grow your business.
Lew and Jeremy Nason
P.S. Do you have a friend or associate who is struggling in this business and needs help? Why not tell them about our Web site or better yet, forward this newsletter to them. They'll thank you!
© 2009, Lew Nason, RTIA, RFC, LUTC Graduate - All rights reserved and the creators of the Found Money Management™ Advanced Life Insurance Sales System the most endorsed and successful Life Insurance prospecting and sales system available for today’s insurance professional! Lew has been helping agents and advisors to achieve long-term success in financial services industry for over two decades. His unique perspective, on how to truly help clients, has enabled scores of agents and advisors reach the top levels of their profession. Visit his web site at http://www.insuranceproshop.com/ or call 877-297-4608.
Helping Insurance Agents and Financial Advisors create endless
www.insuranceproshop.com |
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Forrest
Wallace Cato,
RFMA, RFC, CRR, CPC,
is the legendary media advocate for the financial
services industry. He has served as editor of Financial Planning, Trusts & Estates, Financial Services Advisor, and
Fraternal Monitor magazines. He is an editor at Advisor magazine
in China. He has co-authored or ghost written seven books appearing
on the The New York Times best-seller list. Cato has achieved the
placement of over 3,500 articles by or about financial advisors and
famous motivational trainers (i.e., Zig Ziglar, Norman Vincent
Peale, Napoleon Hill, Robert Schuller, Norman G. Levine, Edwin P.
Morrow, etc.). He has spoken before the National Press Club, the
Publicity Club of New York, The American Bankers Association and
other groups. 
Edwin
P. Morrow, CLU, ChFC,
CFP®, CEP, RFC®,
Chairman & CEO of IARFC, is a frequent
speaker and writer on practice management and technology for such
organizations as the FPA, MDRT, NAIFA, SFSP, Insurance Pro Shop and
IARFC. He has
published over 500 articles and three books: The
Complete Millennium Preparation Guide, Computerizing Your Financial Planning Practice, and Personal
Coaching for Financial Advisors. He has lectured on
financial planning, practice management and marketing in Britain,
Canada, Australia, Malaysia, Hong Kong, China, Taiwan, Thailand,
Indonesia and Philippines, and has been responsible for getting the
many financial planning courses established in Asian countries.
Jennifer
Lowery,
Senior
Marketing Consultant, 
Created
especially for 
