PRESENT
Educate the client on their Present Position Model in order for them to discover that staying where they are in their financial life will not work.
Goal
Underscore the Value of the Leap Model
Revisit the value and benefits of using the Leap Model, following the Leap process and applying the principles in the Leap Model Rulebook.
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Objective
Present Client’s Present Position Model
Present and verify the client’s Present Position Model and cash flow. Educate them on Protection Internal Design to visualize problems, untapped resources, and overall concerns with their current financial strategies.
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Objective
Develop an Action Plan
Develop a tactical plan and assign responsibility for making corrective changes to empower the client to take action.
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3
Objective
Introduce First Financial Strategy
Propose at a high-level your first financial strategy recommendation if time allows.
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Objective
Schedule Next Meeting(s)
Schedule next meeting(s) to reconcile action plans and discuss first the financial strategy in detail.
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Objective
Send Meeting Summary
Follow-up with the client by sending a detailed summary of results and expectations of your meeting.
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6
Objective
Key Tools
Materials
Questionnaire (Completed)
Underscore the Value of the Leap Model
During the Present Position Meeting, your first step is to first quickly review the takeaways from the prior meeting. In this case, this is your opportunity to begin the meeting by revisiting the value of the Leap Model and process as discussed in your prior intro meeting.
Keep in mind, 2-3 weeks may have gone by since you’ve had your initial intro meeting with the client. Taking a few minutes to set expectations, restate your value proposition and the benefits of Leap, as well as to learn what the client would like to accomplish during the meeting, will help to ensure that everyone is on the same page and fully engaged.
A compelling way to get things started and to underscore the value of the Leap Model and process may sound like:
What we are going to do today is go through your Present Position Model. Before we dive into the specifics of your model, I thought it would be helpful to provide some additional context to the method and principles that are the framework of our process. We refer to it as the LEAP Model Rulebook.
For this discussion, it is suggested that you utilize the Leap Model Rulebook presentation located in the Financial Stories section of the online Leap software. The “Intro” and “The Leap Model” sections of the presentation make for a great recap of what was discussed Intro Meeting.
In the Rulebook section, dialogue for each rule may sound like:
Click + to expand each section.
Rule 1: Full Replacement Protection
Rule 1: Full Replacement Protection
Every asset you own should be protected for its full value. If your home is worth $500K, you would never insure it against fire for $250K just because you don’t really NEED a house that nice and could get by with an apartment. Our approach is quite simple, if something is worth insuring it should be insured for what it is worth. Does that make sense?
Rule 2: Save 15% of Your Earned Income
Rule 2: Save 15% of Your Earned Income
All money is either current consumption or deferred future consumption. Your ability to generate income is what provides for your current lifestyle. Retirement is simply living a lifestyle with income generated from your assets versus your generating wages. Proper cash flow management (not budgeting in the traditional sense) is paramount to being successful financially.
Rule 3: Build Liquidity
Rule 3: Build Liquidity
Proper liquidity (6 months’ worth of your income) is not just for unforeseen events, but also for having capital positioned to take advantage of opportunities along the way.
Rule 4: Avoid Compounding Taxable Interest
Rule 4: Avoid Compounding Taxable Interest
There are taxes that are necessary and then there are taxes that are voluntary. In our experience, clients don’t want to pay unnecessary, and avoidable taxes. We will address this in greater detail in future meetings.
Rule 5: Contributions to Retirement Accounts
Rule 5: Contributions to Retirement Accounts
Investing in these investments is a very long-term commitment with very little control (with the exception of investment choices), along the way. Tax deferral has a bell curve benefit that must be closely monitored. There must be a plan to get the money out as efficiently as it is put in.
Rules 6-9:
Rules 6-9:
We will address these in more detail as we deep dive into various financial strategies in future meetings.
Finally, in the Retirement Position section of the presentation you can reiterate to your clients that by following the rules of the Leap Model they can help create a more enjoyable and successful retirement. After providing the client with this brief recap of the Leap Model, process, summary of the rules and what an “ideal” retirement position looks like, it’s time to transition presenting the client with the Present Position Model.
Present Client’s Present Position Model
You will be presenting the client’s complete financial position in “Macro” for the very first time. As a result, this will provide your client the opportunity to verify for themselves potential errors and omissions, and uncoordinated and non-integrated results of their financial decisions up to this point.
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Validation of your client’s present position is the key to converting them into a long-term client. Clients will see unnecessary risk, incorrect or inadequate coverages, and excessive and unnecessary costs as well as a series of decisions that have been made out of context. An efficient way to introduce and orient the client to their Present Position Model, as well as to review expectations, may sound like:
We have taken all of the information that you provided us and reconstructed it on one page. As you can see, we have listed both of you with your correct ages as well as your children. Other background information is noted along the left side of the model as well as a breakdown of your current debt. The numbers directly to the left of the drawers denote annual premiums or contributions being made and the numbers inside the drawers denote coverage amounts or account balances. We will break these down in more detail as we walk through your model.
Feel free to make any notes as we walk through the model. This is for you to document any to-dos that result from our discussion today. We will also be sending out a summary letter of our meeting to make sure we are clear on what is being addressed and to make sure we don’t miss anything.
As I mentioned, from this moment forward, we are on your timeline. If you are receiving value from our meeting and want to continue, great. If you do not feel you are receiving benefit, just let me know.
We are going to start at the top and work our way down. I will walk through what is in each drawer and confirm that the information is correct. Along the way, I’ll highlight potential problems and we’ll discuss possible ways to make improvements. Some concerns can be fixed right away, and other things will need a little more time and can be handled incrementally. I will leave it up to you what should be addressed or not.
Let’s begin with the Protection component in the upper right of your model. As you recall in our previous meeting this is the most important component of the Leap Model and achieving full replacement protection is critical in guarding against unforeseen risks and events which can dramatically erode your wealth.
Go through each component and drawer of the model confirming coverages, holdings and debt, as well as addressing concerns when warranted and determining the appropriate plan of action at this stage of the process. To help guide you in identifying problems that typically exist, refer to the Common Problems by Component/Drawers in the navigation bar, in the tools menu.
Tips & Considerations – Client Cues & Information
Only refer clients to the properly licensed professional to address issues during the review of the client’s Present Position Model.
Help to educate the client to prioritize protecting their assets and saving appropriately while staying out of debt.
The majority of your time in discussing the client’s model should be spent on the Protection and Savings components.
Provide your clients with a clear and concise method to address any deficiencies and manage them appropriately.
No analysis or advice may be given for products that you are not licensed to sell.
Leap’s approach to protecting assets and managing savings/cash flow is very different than the financial advisory and budgeting tactics presently being utilized in the industry today. Our approach is much more like that of a business owner. A business cannot function without strategic protection of their assets and proper cash flow management.
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Protection Internal Design
When analyzing and sharing insights involving the Protection component of the client’s Present Position Model which Leap refers to as Protection Internal Design, it’s important to convey to the client that a properly designed protection component, drawers P1 to P9, is a higher priority before any savings and investments are fully developed.
The Protection Internal Design review verifies the financial products and documents that a client owns or doesn’t own in the Protection component.
Reinforce to the client that a properly positioned Protection component maximizes the protection of their assets, income, and life.
Move through the Protection component one drawer at a time.
The Protection Internal Design review typically uncovers situations where protection is largely inadequate.
Always have the client’s financial documents with you.
Your objective is to help the client understand the importance of ensuring the protection for the full economic replacement value such as liability, health, disability, and life during their working years as well as continuing to have optimal coverage throughout their retirement.
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As you complete the review of the Protection component, introducing the need for protecting the full economic replacement value may sound like:
The last element of Protection component is Life Insurance (P9). Life insurance can become part of your will, bequeathing to heirs the future earnings you may have created if not prevented by a premature death. In retirement and after, it can serve as an effective instrument to help assure that your financial goals are realized both before and after death. These funds may be essential to your family in the event of your premature passing and can create additional protection and wealth while you are still alive.
We all make money decision. Part of those money decisions are for the security of our family which is often the protection of our assets, income, and economic life value. Our Family Security analysis assumes that every risk in life may occur and so we seek to protect your assets, income, and life value to their full replacement value – which as we talked about earlier is Rule 1 in the Leap Model Rulebook – Full Replacement Protection.
Let’s walk through our Family Security analysis together using the data that you have already provided to me in the Questionnaire.
In your preparation for the Present Position Meeting and the Protection Internal Design conversation, pull the necessary information from the client’s completed Questionnaire and financial documents and save it as a new scenario in the Family Security Story. You can then walk through each screen of the story with the client’s data already pre-populated. If you do not have such data ahead of time, gather the data from the client and add it to the story as you take them through each screen.
After completing the Family Security Story with the client, you can wrap-up the Protection component by saying:
Okay, now that we have walked through this analysis and have determined an estimate for your full replacement protection, let’s go back and look at drawer P9 in your Protection component. Given the coverage you currently have, would you want to have all of the protection, part of it or none of it?
In most situations, the client will respond positively by wanting to increase their protection. Subsequently, you can support the decision to increase their protection by saying:
Okay, in order to increase your protection, we would first need to submit an application for life insurance for this chosen amount.
If the client asks about the type of coverage and the cost. You can say:
Once we find out how much you will qualify for, we can determine the type and cost of this coverage.
Key Guidelines When Presenting Client’s Present Position Model
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With practice, you’ll develop your own rhythm for how best to present a Present Position Model to a client, but in the meantime, here are five important guidelines to remember:
Acknowledge the client’s efforts to-date and gather their feedback on their present position. Then begin to address problems, potential concerns and identify areas of opportunities.
Lead with Positives
Getting a sense from your client about how they perceive their current financial situation can provide important insights on what to focus on initially.
Ask for Feedback
Educate the client of the importance of protection. Everything in your client’s financial life hinges on proper protection. Be cautious of overwhelming the client with too much education too soon.
Power of Protection
Discuss things your client might not want to change. For example, someone might have an inherited account or asset that holds sentimental value that they may be unwilling to use for any recommended strategy.
What’s Off Limits?
Be aware of time. This meeting is all about setting the stage for what comes next. Be respectful of your client’s time. 90 minutes should suffice for the Present Position Meeting.
Stay on Track
Develop an Action Plan
After you have taken the client through each component and drawer of their model and received their feedback, it’s now time to develop a tactical plan and assign the responsibility for making corrective changes based on what has been discussed.
To-Do List
Keep a running “to-do” list with a series of action items and responsibilities for both you and the client coming out of the meeting. These “to-dos” should be created as a result of a using the Problem & Resource Identification Worksheet while comparing the facts of the client’s Present Position Model to the standards established by the Leap Model Rulebook.
Macro Manager
Most action items from this meeting will fall within the Protection component of the model. Remind your client to seek advice from properly licensed professionals and to keep you involved. Your role as the client’s Macro Manager is the coordination of the work they implement with their other financial professionals; attorney, banker, realtor, accountant, auto and home agent, etc.
Process
By identifying areas of the client’s model that may have errors, omissions, or deficiencies, you set yourself apart as a unique financial professional who can help them identify substantial opportunities of improvement in a clear and organized process. This means more engagement, progress, and achievement that the client can see.
Introduce First Financial Strategy
In the Present Position Meeting, it’s important to remember that the client has been presented with a lot of information to process and consider. You should be sensitive not to overwhelm the client with too much information and to-dos at this stage in the Leap Process.
The objective should be to present the client with an overview of a financial strategy that will resonate with them, so they continue to move forward in the Leap Process. In the next Strategy Meeting, you will dive deeper into the details of your proposed strategy and share any associated financial product information with the client.
The key to introducing which financial strategy, or money move, to start with will emerge largely from your case design experience, personal advisory techniques and, most importantly, how the client has been reacting to what you have discussed and shared with them up to this point.
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Introduce a Strategy...
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That will be the least threatening to the client.
You’re confident about and you are able to present effectively to the client.
That the client recognizes as having a significant positive impact on their model.
If you have done everything correctly up to this point you may focus their attention on, at a minimum, placing the client’s economic life value, 15-20 times income, in convertible term insurance and implementing improvements to their cash flow management.
Schedule Next Meeting(s)
Schedule a firm next meeting or a series of meetings, depending on the conversation, to discuss with the client in greater detail the financial strategy that was introduced. If the review of the client’s Present Position Model and overview of a recommended strategy/solution are performed correctly, not only will the client be willing to commit the time to participate in the next meeting or set of meetings, they will want to!
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Be sure to make a firm appointment for next meeting by saying:
Let’s go ahead and schedule a time next week to review the financial strategy in greater detail. In the meantime, I’ll coordinate with you to begin the life insurance application process.
Under no circumstances should you leave this Present Position Meeting without a commitment from the client to move forward in the process and a date and time for the next meeting confirmed in both of your calendars.
Send Meeting Summary
The objective of a meeting summary letter or email is to document the results and expectations of your Present Position Meeting along with the corresponding action items with the client. Documenting your meetings is not only compliance friendly, it is an invaluable practice management tool and helps to create a long-term and productive client relationship.
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Design Success Factors​​​
Always begin with a summary of your previous meeting
Be prepared and organize all necessary materials prior to your meeting
Have a full understanding & ability to discuss each drawer of the Protection Component
In every meeting, schedule a firm date for your next meeting
Send your client a Present Position Meeting Summary