by John Darer CLU ChFC CSSC
"Technological convergence" refers to a trend where some technologies having distinct functionalities evolve to technologies that overlap, i.e. multiple products come together to form one product, with the advantages of each initial component. Some would say that there has been an industry convergence...in what Patrick Hindert refers to as "overlapping markets": structured settlements, factoring, special needs planning and life settlements.
- Is it just a marketing gimmick or is there really a convergence?
- If there is, is it a new concept? Could this convergence be represented by a series of only 4 overlapping Venn Diagrams or is it more like a full compass rose?
The core competencies of a Chartered Financial Consultant are embodied in these 8 courses that one must pass to earn the ChFC designation.
HS 300 Financial Planning: Process and Environment*
HS 311 Fundamentals of Insurance Planning
HS 321 Income Taxation
HS 326 Planning for Retirement Needs
HS 328 Investments
HS 330 Fundamentals of Estate Planning
Elective Courses (Choose Two)
HS 322 The Financial System in the Economy
HS 334 Estate Planning Applications
HS 352 Financial Decisions for Retirement
The core competencies of a Chartered Life Underwriter are embodied in these 8 courses that one must pass to earn the CLU designation.
Required Core Courses (5):
HS 311 Fundamentals of Insurance Planning
HS 323 Individual Life Insurance
HS 324 Life Insurance Law
HS 330 Fundamentals of Estate Planning
HS 331 Planning for Business Owners and Professionals
Elective Courses (select 3):
HS 300 Financial Planning: Process and Environment
HS 313 Individual Health Insurance
HS 321 Income Taxation
HS 325 Group Benefits
HS 326 Planning for Retirement Needs
HS 328 Investments
HS 334 Estate Planning Applications
The core competencies of a Chartered Advisor in Senior Living (CASL) are embodied in these 5 courses that one must pass to earn the CASL designation.
Five Required Courses
HS 350 Understanding the Older Client
HS 351 Health and Long-Term Care Financing for Seniors
HS 352 Financial Decisions for Retirement
HS 328 Investments
HS 330 Fundamentals of Estate Planning
With some rounding off with supplementary materials, each of these courses and fields of study could be considered to be essential core competency for a structured settlement broker or settlement planner. In an ideal world, the team approach is central to both the financial planning process and the settlement planning process. Settlement planners and financial planners aspire to play the role of the "quarterback" who reads the defensive line, initiates the play, and coordinates the implementation of the team's action plan. For non sports fans, consider the role of conductor in an orchestra and how he or she is able to coordinate, direct and adjust the different sections of an orchestra at different times within a performance, to bring the masterpieces of the 18th or 19th century to the 21st century.
There is substantial overlap between financial and settlement planning. Some would posit that one is a segue from another. While so much focus has been placed (by the "factoring vig takers" and Hindert) on "the secondary market", opportunities exist on the financial planning side that are being completely missed by structured settlement brokers and settlement planners. An overlap in this direction would be both logical and not controversial.
Not every claimant is chronically or catastrophically injured requiring round the clock care, needs a special needs trust or a Medicare set aside trust and has a primary goal of capital preservation. What do YOU have to offer them?
- How can settlement planners and financial planners help their clients get their affairs in order?
- What primary and ancillary products and services can they offer?
- What products and services do they know about beyond those associated with their immediate core competency? In one of my early blogs I questioned why one major structured settlement firm stated on its website something to the effect that it would not sell any other product (but structured settlements).
Convergence reduces the marketing costs of the factoring industry. To the degree that relationships can be formed with the creation side, a factoring company does not have to invest gobs of money on advertising, one factor (pun intended) that lowers the company's acquisition costs. But how does the concept map theory of Hindert (as fed to NASP at its 2006 annual meeting) benefit the structured settlement broker or settlement planner or their industry. Does it help them create more structured settlements? Obviously not since the industry's premium is flat and the universal annoyance of lawyers and the general public with factoring ads, in particular JG Wentworth, is on the verge of going postal. If all you know (and can articulate you know) is structured settlements and factoring, how does it benefit the tort victim or his/her attorney and what is the perception?
In my opinion the focus of Hindert's concept is off center. There are more important concepts that deserve a position closer to the core while the factoring position in the knowledge "compass rose" needs to go out to ENE as opposed to N, E, S or W. Instead of focusing on the secondary market, members of the structured settlement and settlement planning industry should consider what other products and services and value they can offer that is more closely aligned to the core. Many of the same insurance companies, trust companies and other suppliers in the structured settlement industry already offer the products and tools that can be used to go in this direction. TO BE CONTINUED
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