Financial Needs Analysis - FNA by Barkathfin.com
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AGENDA TAB OF ORIGINAL FNA
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FNA TAB
Sample - original FNA doc
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NOTES TAB
| 1) Educate the client to the point they understand and leave it to them to make their decision and respect their decision | ||
| 2) It is not more about what to say, it is more about what you "listen" from them | ||
| 3) When you ask the Right Questions, they will close by themselves | ||
| 4) It is not about the sales, it is about educating my clients, this should be your mindset when you sit with them | ||
| 5) Results are not in our control… Improvement is in your control | ||
| 6) Let it be more interactive because People love to buy and hate to be sold | ||
| 7) Focus more on how you can educate them… Don't use fancy Vocabulary | ||
| 8) We are adding value to clients, products and myself… I am educating them to be "Certain during Uncertain Times" | ||
| 9) In some places, please use the verbiage exactly, closing ratio will go from low to high | ||
| 10) I want to earn their Business, and I want to earn their trust. Keep it simple but effective. Never lose your professionalism | ||
| First Page | ||
| When was the last time you figured out to do the Financial Responsibility towards your Family? They may say never… | ||
| Now Draw the X-Curve and focus on the left-hand side | ||
| There is a formula for everything in the Financial Industry | ||
| The Formula here is "DIME" | ||
| 1) "D" Stands for "Debt" like your credit card, personal loans, car payments, student loans | ||
| 2) "I"R stands for "Income Replacement". If something happens to a person, leave behind kids, wife | ||
| If $250K between wife and husband, 10 times of the salary i.e., $250,000 * 10 = $2,500,000 ($2.5M) | ||
| 3) "M" stands for Mortgage… How much Mortgage Left, let's say $600K | ||
| 4) "E" stands for Education of Kids… Like $200K for each Kid, so it is $400K for both kids | ||
| Total Responsibility=> $2.5MM +$600K+$400K=$3.5MM. $500K Assets => $3.5MM-$500K=$3 MM | ||
| We go to the office every day to make money to home so we can take care of "D", "I", "M", & "E" (DIME) | ||
| What if we go to work one day and never come back… This $3 MM Responsibility will fall under whose responsibility? | ||
| It will fall under the spouse. This 3 Million Transfer from your Shoulder to the Spouse Shoulder. | ||
| No one Knows how much time is left... Do you Agree? Nothing comes Announced… | ||
| Note: We are adding value to clients, products and myself… I am educating them to be Certain during Uncertain Times | ||
| I educate my clients H&W, one should transfer the responsibility from Spouse to a tool called as "Life Insurance" | ||
| We talk about peace of mind, sleep well at night etc., like "Be Certain during Uncertain times" and this is what Life Insurance does. | ||
| What if I die soon? Cheapest to the Best. Combination of Term & IUL | ||
| Note: Please use the verbiage exactly, closing ratio will go from low to high | ||
| How many of you think it is a sales presentation or Education Presentation | ||
| I want to earn their Business and I want to earn their trust. Keep it simple but effective | ||
| Second Page | ||
| A FINANCIAL HOUSE | ||
| When you Build your house, what you will build First… The roof or the Foundation!!! Oh! The Foundation | ||
| When I look at your FNA H&W, I see reverse triangle | ||
| 1) Investments at base, Debts, Emergency Funds, Protection at the top | ||
| I see from FNA, you have a single family house, 401(k) Max Out etc., | ||
| Not having enough Investments is "OK" | ||
| Not having enough "Emergency Funds" is "OK" | ||
| Having "Some Debts" is also "OK" | ||
| But not having "Enough Protection" is "Not OK" | ||
| Third Page | ||
| H&W, do you know how many Tax Brackets we have in USA? => When they say "No". Let me educate you… | ||
| (When they say more "Yes" or "No" to the questions we ask, they close by themselves | ||
| H&W, Is one vehicle better than the other vehicle… The answer is "No" | ||
| It is a tax diversification and we need all the vehicles | ||
| Now Ask them the right question… | ||
| H&W, you may have heard for million times by now, not to put all eggs in one basket | ||
| But when I see your FNA, I see all the 401(k), IRA, etc., you are putting them in one Bucket | ||
| How can we diversify your portfolio… | ||
| Don't bash 401(k), any investment they have or any company. Never lose your professionalism | ||
| Let's put 20-30% of your Savings in the Last Bucket i.e., Tax Advantage Bucket | ||
| The other 70-80% you need to find a place where you want to put your savings in to work… | ||
| When you put 20-30% into these solutions, it will protect your 100% of the Assets | ||
| Important! Do not change these below numbers, just say what is written | ||
| If you earn $1 interest from Cash Value Life Insurance, you will save 30 cents of Tax amount | ||
| If you earn $1 interest from 401(k), 1099, W2 etc., you will pay 30 cents of Taxes… hopefully Taxes will not go up in future | ||
| In every other investment, where you gain $1 you end up paying 30 cents in Taxes and it is huge, do you agree? | ||
| When you put 20-30% of you savings in these vehicles, you will save 30 cents on every dollar you warn… | ||
| Fourth Page | ||
| Mr. Client, what is your current age => Let's say he says 50 | ||
| Mr. Client, when you would like to Retire, at what age… Let's say he says 60 | ||
| Full Life Expectance is 85-90 years | ||
| 50 ---------------60 -----------------------85 | ||
| Second Question, ask him, why 60? Like why you want to retire at 60? | ||
| There is a good news and a Bad News.. Which one you want to hear first | ||
| The Bad news Mr. Client, it is 10 years | ||
| Good News is Age is nothing to do with the Retirement… | ||
| Increase the cash flow, if you know someone… | ||
| Till now "Accumulation" is Kiran, but after that "Distribution" is King | ||
| I create sense of Emergency to earn more… What is more important? | ||
| Neither "Income" is King, Neither "Wealth" is King, "Income Increment" is King | ||
| Are we growing in the age faster than we think => They say "Yes" | ||
| Are the kids growing faster than we think => They say "Yes" | ||
| Are the parents growing faster than we think => They say "Yes" | ||
| Is losing money an option Mr. & Mrs. H&W => They say "No" | ||
| H&W, Do you want your kids to take care of you financially when needed or do you want your money to take care of you | ||
| Earn the Right to earn the Business and their Trust, everyone is "Presold" | ||
| The early you start, less you need. The later you start, more you need. | ||
| Reverse Compounding: H&W, the most common people if I invest in S&P I will get best return, but it may not always be right | ||
| Term | Permanent - Protection | Permanent - Accumulation |
| Temporary or only good for certain number of years | Primary Purpose is for Life Insurance Benefits | Primary Purpose is to Grow the Money |
| Money you put is like "Car/Home" Insurance | The Premium is in between Term & Acc IUL | DB is kept low to reduce the Premiums |
| If there are no claims, there is no return of premium or benefits | Many Benefits in One Single Policy | Critical Illness ADB Free Rider |
| Critical Illness Accelerated DB Free Rider Included | Return of Premium at the Policy year 25 | Chronic Illness ADB Free Rider |
| Chronic Illness Accelerated DB Free Rider Included | Critical Illness Accelerated DB Free Rider | Terminal Illness ADB Free Rider |
| Terminal Illness Accelerated DB Free Rider Included | Chronic Illness Accelerated DB Free Rider | Cash Value Growth |
| Cheapest of all Life Insurances policies available | Terminal Illness Accelerated DB Free Rider | Expensive than Term, Protector |
| Only 1%-2% of all Term Policies are claimed for DB | Cash Value Growth | Suitable for Young Parents, Juvenile |
| Term is like Renting a House, you never own it | You can add LTC Rider if needed | You can add LTC Rider if needed |
| Permanent is more like owning a House, stay with you | Protection IUL is in between Term and Acc. IUL | Mainly used for Edu & Retirement |
| Cheapest, Level Term Premium, Immediate Estate | Medium | Expensive |
| No Cash value i.e., No Return of Premium | Cash Value exists but may not be more | Mainly used for Distributions |
| Convertibility option before age 70 or up to Term Period | Return of Premium | Cash Value Growth if funded correctly |
| Convertibility (Term to Perm Conversion) | LTC can be added as Rider for few providers | LTC can be added as a Rider |
| Ex: Initial Term Coverage: $1,000,000 at the age of 40 | If you have more money to pay, | If you have more money to pay, |
| You can Convert all or portion of the Coverage | pay early so you can stop in 10-15Y | pay early so you can stop in 10-15Y |
| Example: $300K is converted to Perm at the age 45 | Some of the money will go for Cost of Insurance, | Some of the money will go for COI |
| 700K will continue as Term and the premium is prorated for Term | But most of it will go in Accumulation Account | But most of the premium paid above |
| $400K is converted to Perm at the age 48 (Attained age) | when you pay more than the Target Premium | TP will go in Accumulation Account |
| $300K will continue as Term and the premium is prorated for Term | when you pay more than the TP. | |
| Remaining $300K is converted to Perm at the age 52 | Protector Plan is best for the people who don’t | Accumulator Plan is best for those |
| No Term after this, but Client has 1 Million Permanent Coverage | want to pay more, but get all benefits of a L.I. | who want to pay more for Edu, R.P. |
| Whole Life | Variable Life | Indexed Universal Life |
| Nokia Phone | Blackberry | Smart Phone |
| Mainly used for Phone calls, may be small Text Messages | Check email, Respond to Texts, Calls etc., | Everything you can do today on Smart Phones |
| 500000 | Grows using the Stock Market | Grows using the Stock Market |
| Best part of WL | Best part of WL | |
| Fixed Rate Growth | Best part of VL | Best part of VL |
| 0 Floor Protection | 0 Floor Protection | |
| 12000 | Upward potential using Cap/Par Strategies | Upward potential using Cap/Par |
| 7000 CV, 5000 Costs | Down market protection | Down market protection |
| Universal Policy -> Flexible Premiums, DB | Universal Policy -> Flexible Premiums | |
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