How Life Insurance Professionals Can Screen Estate Planners for Better Networking

In recent articles, including “The No-Sunset Life Insurance Paradigm Shift Could be Accelerating,” I’ve recommended that life insurance professionals take a hard look at their networking with professional advisors, whom I’ll refer to as “centers of influence” (COIs). Networking, of course, isn’t just about cultivating relationships for the purpose of getting referrals. It’s also about identifying advisors whom life insurance professionals can refer their clients to for estate planning, tax compliance and planning, fiduciary services and more.

I base my recommendation on my view that as the market for estate tax planning and the associated liquidity wanes due to legislative, economic and societal forces, the influence and referral-generating capacity of some of the COIs traditionally cultivated by life insurance professionals will also wane. Life insurance professionals impacted by those forces will either have to cultivate a new and more productive crop of COIs or, shall we say, broaden the perspective of some of their COIs about the roles that life insurance can play in a comprehensive plan.

Three Preliminary Thoughts

First, whether looking for new COIs or reassessing existing relationships, life insurance professionals should be ready to know the “right” COI when they see one. With respect to seeking referrals, the right COI is one who’s technically capable, strategically positioned and philosophically inclined to bring a life insurance professional into the conversation as early as it’s appropriate to do so. With respect to making referrals, the right COI is the one who has the experience, skills and inclination to give comprehensive assistance and advice to clients in the life insurance professional’s market. I’d define “comprehensive” to mean well beyond wills, trusts, probate and taxes.

Second, I can understand that life insurance professionals might say, “Screening a prospective COI is one thing, but re-screening an existing COI is another. It could be awkward and maybe even counter-productive.” To that I would say, “I hear you. If you’re concerned about that, don’t actually submit the questions to those COIs. Just pose and answer them yourselves, based on your own experience with the given COI as though you were responding to a survey. I bet that you’ll already know the answers.”

Third, COIs whose practices are also affected by those forces may, and probably should, be starting their own reassessment of referral sources. So life insurance professionals should be ready for those COIs to artfully rephrase and put their questions right back at them. “OK”, they’ll say, “I’ve told you my story. What’s yours?”

Preparing for the Meeting

Assume that you’re a life insurance professional who’ll be meeting soon with an estate planning attorney who’s a prospective COI. You know the attorney by reputation, have heard their impressive presentations on wealth transfer planning and charitable giving and have even chatted with them at estate planning council meetings. But you’ve never worked with them. How should you prepare for the meeting?

1. Ask the attorney to send the data collection form/organizer they use with a new client. Of course, you’ll be ready to send yours if asked (which you should be). When you get the form, don’t just look for the facts and figures stuff.  Look for the soft questions as well.
2. Think about a prototypical client or two that fairly represent your clientele and your market. Then compose your questions for the attorney around the planning typically associated with those types of clients.

What to Ask … That Is the Question

Now for the questions you’ll ask the attorney and some thoughts about how to assess or react to what you might hear. Bear in mind that this is just a “starter set” of questions. In real time, in a real conversation, you’ll expand every one of these questions. And if you don’t, the attorney will do so just by virtue of the way they respond. The point is you should be ready with your follow-up questions, so that if the attorney says “this,” then you’ll ask “that.” Of course, you’ll have to be ready with follow-up responses of your own. 

1. “Tell me about your firm, your practice and your clientele.” This is just a reality check that the attorney works in the same space that you do. It can also give you an idea of the depth and breadth of the capabilities and resources that the attorney can bring to bear on a case.
2. “What type of client(s) would most benefit from working with you and why? I don’t mean just business owners, for example. I’m talking about the characteristics or “specs” of clients that are a good fit for your services.” Productive (and safe) referring is in part an exercise in matchmaking. Would this attorney be a good match for your clients?
3. “What percentage of your clients and your work come from internal referrals vs other sources? What are those other sources.” An estate planner who depends heavily on internal referrals may not be as reliable a referral source as one who doesn’t.
4. The next question, along with your follow-ups, will help you learn how the attorney thinks and works. Through a robust back-and-forth, you’ll learn if this estate planner’s approach is thoughtful, holistic and client-centric or clinical, mechanistic and no doubt, overly tax-driven. Just the way they engage you in the conversation and, of course, their body language, will speak volumes about how they talk to clients and what they’d be like to work with on a case.
   1.  “Let’s assume that I refer a couple to you for estate planning. One spouse is a business owner. The other a corporate executive. This is pretty typical for my client base these days. And, I figure that because each will have their own planning issues, we’ll be able to cover a lot of ground in our conversation.”
   2. “Before you even talk with them, I suspect that there are certain things that you’d expect to hear, meaning their objectives on one hand and, on the other, the concerns, impediments or constraints that have impeded their planning, maybe for years. Talk to me about that.”
   3. “Now you’re across the table from the clients. What probing questions would you ask to help them refine their objectives and get their concerns and planning constraints out on the table? The holistic practitioner will be delighted that you asked this question and will have a lot to say. Beyond what they say, take note of how they say it. Do they sound like an advisor and counselor or like a technician? How well would your clients relate to them?

This next sub-set of questions is, at first blush, just about the attorney’s planning process and the breadth of their services. In reality, it’s about so much more, but I’ll let the questions speak for themselves in that regard, unless I can’t resist the urge to add my two cents.

5. “Tell me how you construct the plan. Where do you begin, what are the key component parts of the analysis. How do you sequence them, etc.?” You’ll want to hear a real process, a real methodology that says to the client, “I listened carefully to your objectives, priorities, concerns and constraints. You’ll see that the plan unfolds in a linear, intuitive fashion, noting as to each of your objectives. in order of priority, where you are now, where you want to go and how you can get there.” Plan construction, meaning the way the story is told, is absolutely, positively critical to both you and the client! In fact, right here, right now, you’re at a moment of truth, as it were. That’s for two reasons, with gusts up to 20.
   1. 1. 1. First, if the plan doesn’t cover the right things in the right order, the client is likely to be confused. and perhaps even frustrated that the attorney wasn’t listening. One thing you’ve learned to watch for is that tax minimization and, yes, the liquidity for it, should come at the tail end of the plan. That’s because you’re hard pressed to recall a single case, regardless of the type of client, where taxes were the primary impetus for or impediment to planning.
         2. Second, you also know that regardless of the type of client, the components of the plan that precede taxes frequently involve problems that clients prefer to resolve with life insurance, because life insurance can do for them what they’re not willing to do for themselves. If the attorney doesn’t wrap those typically non-testamentary and non-tax topics into the plan construction, you’ll have to reconstruct things yourself. You get the picture.

As I’ll note later when we get to life insurance, you shouldn’t jump to a negative conclusion about the attorney just because their process isn’t as linear, comprehensive and holistic as you were hoping to hear. In fact, you could be looking at a great opportunity, a truly teachable moment, if the attorney says something like, “Does what I told you work for you? Is that the kind of approach you and your clients are looking for? If not, what more would you expect?” If you hear that, you’re talking with an attorney who wants to network. You’re also talking to a good listener!

If you do get a chance to expound on your vision for what the plan should encompass, be sure to show how the areas that you would add to the attorney’s version can create opportunities for them to provide additional client service and generate additional and fees.

6. “What planning tools, calculators, software programs and other resources do you use for modeling and diagraming estate taxes, wealth transfer planning techniques, planning for large retirement accounts and charitable planned giving techniques?” Much like with today’s life insurance products, clients need more than words to understand sophisticated planning concepts. They need numbers, sometimes lots of numbers. And they need diagrams, too. You’ll want to hear that the attorney can generate those numbers and diagrams.
7. “What other departments in the firm do you typically involve in your engagements? For example, do you bring in executive benefits expertise to deal with key person retention for the business owner or options planning for the executive?”
8. “Thinking broadly about the kinds of cases you work on, what resources from outside your firm do you typically bring in or refer clients to for specialized services?”
9. “When and to what extent do you involve the client’s other advisors, including someone like me, in the construction of the plan?” If you don’t hear the words “early and often,” ask why.
10. “Beyond the basic documents, what’s in your deliverable? For example, do you provide a summary of the documents, a diagram of the plan or a memorandum of instructions for survivors?” That last item can be unbelievably valuable to a surviving spouse, for example. Don’t believe that? Just ask a surviving spouse who didn’t have one. And, here again, you should be able to describe how preparation of the memorandum of instructions will illuminate additional opportunities for client service.
11. “Do you help clients select fiduciaries? If a client wants to use corporate fiduciaries, which firms do you recommend that clients talk to these days and why?”
12. “Once the plan is presented, how do you assist with implementation?”
13. “Once the project is completed, how do stay in touch with the client, keep the client abreast of developments, etc.”

The final questions are about life insurance specifically:

14. Aside from, let’s say, liquidity to pay estate taxes or fund a buy-sell agreement, what roles do you think life insurance can play in a case?’ If the attorney doesn’t have much to say on this one, you shouldn’t necessarily be uncomfortable, yet. Pick up the conversation by talking about cases where your clients used life insurance for other than liquidity purposes and how that created new opportunities for additional work by the attorneys. See the reaction you get. You might be pleasantly surprised by the attorney’s invitation to tell them more!
15. ‘In those cases where life insurance did play more than one role, how did you integrate the life insurance into the rest of the plan so that one premium dollar served more than one objective?’ This is a great question that allows the attorney to wax technical and demonstrate creativity.  It can also be another teachable moment, with you as the student.
16. ‘What are latest trends among your clients with respect to the use, design and funding of irrevocable life insurance trusts?’ This is another topic on which the attorney can wax technical, demonstrate creativity and teach you something in the process’
17. ‘How do you like to work with an agent on a case, particularly a complicated one? What do you expect an agent to do and not to do?’ The right COI will hit this one out of the park!

As I said, this is just a starter set of questions.  I have a whole lot more on the word processor. Readers will no doubt rephrase and reshape these questions to suit their purposes, practices and, of course, the type of advisor they’re meeting with. But hopefully, I’ve given them a decent head start on a task that I believe needs to be accomplished sooner rather than later.