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Distributor’s Summit Niagara Falls, Ontario June 6-7, 2012 Phillip C. Richards, CFP™, CLU, RHU Chairman, CEO North Star Resource Group Minneapolis, MN.

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Presentation on theme: "Distributor’s Summit Niagara Falls, Ontario June 6-7, 2012 Phillip C. Richards, CFP™, CLU, RHU Chairman, CEO North Star Resource Group Minneapolis, MN."— Presentation transcript:

1 Distributor’s Summit Niagara Falls, Ontario June 6-7, 2012 Phillip C. Richards, CFP™, CLU, RHU Chairman, CEO North Star Resource Group Minneapolis, MN USA

2 NORTH STAR SNAPSHOT- Growing Leaders MDRT MEMBERS = 82 COURT OF TABLE = 17 TOP OF TABLE = 10 Est. Revenue $50,000,000 Life Premium in 2009 = $25,000,000; Annuities 3M Disability Income Premium = $4,250,000 Assets under mgt. = $3,500,000,000, at 1%/year Total assets under management $ $4,750,000,000 Team members- 150; Advisors 154; Fees $711,000 Offices = 31 in 16 states; GDC = $22,000,000 est.


4 Agency Strategy C.Pinwheel Advantages 1.Enables the BEST and Biggest (above) 2.Client Oriented - Relationships vs. Transactions (Product Driven) 3.Total Financial Planning using the Pinwheel 4.Diversification of Revenue (R E A D) 5.Rainmaker – Internist (College Grads) 6.Mayo Clinic Model 7.Enables recycling of good agents who can’t prospect. 8.Attractive to College Seniors I. To Be the Best and Biggest Client Oriented, Independent Financial Resource Firm in the World.


6 Our Career vs. Advantages - 3 i’s  Independence  Income based on efforts  Impact—Service to one’s fellow human Disadvantages  Telephone (Prospecting is tough)  Unequal distribution of income (5 yr challenge)  Non-glamorous products to start L.I. Your Blood, Sweat, & Tears Our Money Independence, Income, Impact Media / Legacy 1¢ Doubled 30 days

7 Thank you Bob, Randy, George and Bill, Thank you for the beautiful bouquet of flowers. I can’t believe it has been 30 years. I can remember vividly sitting in Phil Richards office and being offered the job. Back then I was also interviewing with Proctor and Gamble. Phil said I could either be selling financial planning relationships or toilet paper, which would you prefer? Hope that gave you a smile, have a great day. Ann (C O T)

8 FIRM MISSION To be the BEST and BIGGEST “Client Centered,” Independent, Financial Resource Firm “In The World.”

9 Drivers--- Same slide as 12 earlier!! 1)Vision : Changing Lives, Forever ; SRNSCF Foundation 10% 2)Client, Customer, Company 3)Cop, Coach, Consultant 4)High Performance / No Excuse (The Painting Elephants) 5)College Recruiting (3I’s) 6)Pinwheel 7)Specialization – Joint Work 8)Professional Markets – MD’s 9)Life Based Financial Planning 10)Mentoring – GAMA, MDRT 11)Recycle Advisors 12)Quarterly Targets  North Star Year ~ June 30 th 2 nd Quarter  March Madness ~1 st Quarter  Chairman’s Challenge ~ 3 rd Quarter  December ~ Securian – MDRT4 th Quarter





14 Reasons for Elephants 1.ACRES OF DIAMONDS; ONLY 2% OF THAI’S 2.INCREDIBLY INTERESTING PHENOMENA - And, we’re hardwired to want what is unavailable, ex: Life Insurance 3. I BELIEVE YOU PEOPLE CAN DO ANYTHING –Chinese Table Tennis –Psycho-cybernetics Dr Maxwell Maltz

15 Aimee Mullins

16 Kyle Maynard Freshman year 0-35 ESPY Award Top Ten Outstanding Young Americans World record in modified bench press at 360lbs Runner up state wrestling champion, State of Georgia with 35 wins during year

17 Kyle Maynard No Excuses! 17

18 Author Geoff Colvin estimated that 2006 Olympic Skating Gold medalist Shizuka Arakawa fell on her derriere 20,000 times! “Landing on your butt 20,000 times is where great performance comes from”. from “BOUNCE”, by Matthew Syed p.86

19 Y O U R W O R L D T O D AY; LAMP 1995 T BURNS DO MOREDO IT BETTERDO IT FOR LESS GLOBAL COMPETITION INFORMATION INTERNET TRUTH/ CONSUMERISM STRESS LAMP 1995 GEN X A.Q. Revenues reducing, expense, technology and regulation costs increasing. Need for scale increasing rapidly.

20 Change… 1940 Top Problems Reported by Teachers in 1940 1990 Top Problems Reported by Teachers in 1990  Talking out of turn  Making noise  Running in the halls  Cutting in line  Dress code violations  Lingering  Chewing gum  Drug abuse  Alcohol abuse  Pregnancy  Suicide  Rape  Robbery  Assault Ruts-Habits Goals-Bike

21 Change is certain------------Growth is optional! Years for media to reach 50 million audience –Radio38 years –Television13 years –Internet4 years –Facebook2 years Less than 100 of S&P 500 existed in 1957

22 Timeless Lessons from Maury 1. Positive Attitude ONLY IN OUR CONTROL 2. BHAG’s – Big Hairy Audacious Goals 3. Activity Solved All Problems NEED FOR SCALE 4. Integrity wins the day ETHICS 5. Practice makes perfect – drill, drill, drill; SCRIPTS 6. Inspect what you expect; expect only what you inspect. (Checklist Manifesto) 7. Empowerment – Forget the paper, Recycle People. Manage things, lead people. (Grow Leaders) 8. The Miracle of Life Insurance. REPEAT-REPEAT

23 Strategy #X – Vision, Mission, Strategies, Tactics The Power of a Vision Vision without action is but a dream. Action without vision is treading water. Vision with action, can change the world. M Meade Michelin Helen Keller Lily pad Priest

24 Strategy #X – Vision, Mission, Strategies, Examples of Vision: Cargill - To improve the standard of living around the world Wal-Mart - To give ordinary folk the chance to buy the same things as rich people Disney - To make people happy Mayo - The best interest of the patient is the ONLY interest to be considered Mary Kay - Create unlimited opportunities for women. Merck - Medicine is for the people not the profits. (Japan - TB) Servicemaster

25 ChangingLives,Forever. North Star Resource Group Our VISION..

26 Titles or Testimonies Rest in Peace?...And What Do You Want On Your Tombstone? “Begin with the End in Mind.” —Covey

27 Managers, MGA’s and Home Office He/She Grew People Organic Growth

28 The Religion of Life Insurance She saved Lives Physician He saved Souls Clergyperson He/She Changed Lives Life Based Financial Advisor YOU!!

29 Titles or Testimonies Dr. Tony Compolo LAMP and MDRT platforms Do you want a title or a testimony? What ’s your legacy? Changing Lives Forever with Life Ins

30 With the stroke of pen and ink, you instantly create an Explosion of Money at Precisely the Right instant… when it’s needed When everyone is showing up to pay respects, your advisors are showing up to pay cash

31 CHANGING LIVES, FOREVER Companies spared, jobs saved Kids allowed to stay in their same neighborhoods, schools, homes and playgrounds and churches Surviving parents able to be full-time when kids need them most …all because your advisors/brokers were there!

32 Passion Ecclesiastes 9:10 “Whatever your hand finds to do, do it with all your might (for in the grave, where you are going, there is neither working nor planning nor knowledge nor wisdom)”

33 NS SWOT Analysis Threats Commissions are illegal Fiduciary standard Major companies change Tax law changes Worst Case Scenario SLSC 2009

34 2010 Business Model --8 Threat Responses Problem- commission compression, first and renewal 1. Blue Ocean Exercise Disability Income Focus 2. Disability Income website, 11 Companies, females 3. ATLAS- Asset To Liability Allocation System 4. FPRC - transformation to fees, use of “Laser Fiche” 5. Brokerage The Marketing Alliance, Penn Mutual, Unify 6. AUM, $500,000,000 in 2011, $5,000,000,000 by 2014 7. NHSCA - National High School Coaches Association 8. Recruiting to Medical Markets, 31 offices/16 states

35 REVENUE ENHANCEMENT AND DIVERSIFICATION R E A D INITIATIVE Reduce from 74% to 49%- 5yr Revenue Enhancement And Diversification

36 Ten Strategies to Sustainable Success Be A The HONEYBEE; GROW HONEYBEES How to Work Less and Earn More, And have More Fun I.Never ask for names – give them II.Billable hours, delegate the rest III.Script Everything, 20 second elevator speech, telephone script, “Give Names” talk; Script all questions IV.Vertical referred leads & more V.State Farm letters VI.Working smarter, not harder VII.Hoard what you love, hire what you loathe VIII.Partnership power, adoption, survivorship IX Pareto Rule – Focus on the top 20%; Bottom 20%-God’s Humor X Vision, Mission, Strategies, Tactics, Southwest Airlines Slide 10

37 The Relationship is Clear* MDRTTime 19%58 Hours CourtTime 48%54 Hours Top of TableTime 53%51 Hours Face to Face TimeHours Worked “It’s Not About Working Harder. It’s About Working Smarter” *MDRT Study Keep the planes in the air (Marketing Asst Program)

38 Strategy # I – Never ASK for Names; GIVE Them 1.Know what organization your client is part of 2.Obtain list of as many names in the organization (Directory-Lobby, INTERNET, Company Directories. SOCIAL MEDIA MAKES EASY 3.Place list of 20 or so names before client. 4.“I will be calling these people; which do you know (K) or know well (KW). Please mark”. 5.“If any of them ask me, do you mind if I tell them I work for you?”

39 Strategy # II – Working Smarter, Not Harder Time is the problem for the sole practitioner Delegation, Mentoring and Scale are the solutions Your uniqueness is thru the “Miracle of Life Insurance” THE 2% Rule - Hard to Easy vs Easy to Hard Vision, Mission Goals, and Execution using strategies, systems, sub-systems tactics, procedures, and checklists

40 Strategy # III - SCRIPT Everything Script Everything-Purpose 20 Second Elevator Speech Telephone Script fatal disjunctive “Give Names” Talk Scripts for Admin/Market asst Nominator talk(if you use one) Script QUESTIONS for interview

41 Strategy IV – Vertical Referred Leads & More THE HONEYBEE State Farm Letters (Clients and Orphans) Before we hang up… Vertical Referred Leads Magic Word (Respect) Don’t ask for Referrals, Give Them I’m a life planner who specializes in finance Do you have enough confidence in your agent to allow me to give you a FREE second opinion. Cold Calls, 20,000 rejections needed to succeed

42 Strategy # V – State Farm Letters – Client Life Benefits Letter As a service to our clients, we are contacting you to ensure you have adequate life insurance coverage. Our records show that you have $1,000,000 of life protection in force. This will provide $6600 per month to your family in the event of your untimely death. Is $6600 per month enough for your family to live on? If you have more coverage than our records indicate, please let us know so we can update our records. If this amount is correct but you feel it may be insufficient to cover your risks, please call us and we will set up a time to review your needs and develop a solution. I can be reached at «AdvisorPhoneBus». Best regards, DAVID GREY, Advisor

43 Strategy # VI – Working Smarter, Not Harder Term Insurance Sell Term (The Aaron story) –Lock in the client / convert the policy in the future. Use conversion credits as a reason to review current coverage. YRT is best! Negative Mortality Curve

44 Strategy # VI – Working Smarter, not Harder Negative Mortality Cost 1,000,000 24,000 – Additive PX = 17,520 Eclipse 6,480 = 8.47%8.76 Age50 51 71 76 80 30 Yr. Elite Term Cost:Reasons: $6,480/Yr. – 30 Yr. Term Net amount at risk decreases Thinking Mutual Funds Using additive premium only Inside tax free build-up

45 Strategy # VI – Working Smarter, Not Harder - Disability Insurance (READ) Sell DI –A plan is incomplete without disability insurance. –A disability is living death; –Ability Insurance- It enables one to keep one’s dignity when good health ends. –Renewals (READ)


47 Female Anesthesiologist Comparison

48 Female Attorney

49 Strategy # VIII – Partnership, Power… Meet on your Turf Conduct 80% or more meetings at your office. –More productive –See more people –In control. No-shows, no problem, keep working. –Fewer disruptions –No show, no problem –Weed out less serious prospects who won’t come in You go to your medical clinic to see your physician. Why should it be any different in our business?

50 Strategy # X – Vision, Mission, Strategies Vision, ex. Changing Lives, forever Mission, ex. Court of Table Strategies. See Southwest Airlines Tactics- See Southwest Airlines

51 Southwest Airline’s Unique Strategy VISION Democratize flying – Poor fly same as Rich: VISION Fast 15 Minute Turnarounds (Notice All The Systems) 1.Planes flying longer than rivals 2.Frequent departures with fewer aircraft 3.No meals 4.No assigned seats 5.No interline baggage checking 6.No first class 7.Warm weather and uncongested airports 8.Automatic gate ticketing/Bypasses travel agents/commissions 9.Pilots experience all pieces of process and pay own training 10.Standardized fleet of ONLY 737’s. Efficiency

52 Southwest Airline’s Unique Strategy At Southwest everything matters –Southwest strategy involves a whole system of activities, not a collection of detached parts –Southwest’s competitive advantage comes from the way its activities fit and reinforce one another (EMyth Orchestration) –FIT locks out imitators by creating a chain that is as strong as its STRONGEST Link Stock 300% - 1990 Productivity 2xEE 1973 Profitability Largest by 2010

53 53 Level 5 Servant Leader MGA/BGA (figgs) TEACH Values (Vision) Edge (Tough Calls) Ideas (Strategies) Mission (Energize Others To Act) Client Comes First One Stop Financial Supermarket Advisor is Customer Rainmaker Pinwheel Cop, Coach, Consultant College Recruiting Recycling People Medical & Small Business Cross Selling Ideas MDRT/GAMA Strategic Commitment to Excellence Mars Group Accountability Mission Written Goals Deliverables Accountability Coach or Coax Our Way or Highway 1)Teach 2)Grow Leaders 3)Higher Moral Plane

54 Strategy # IX – Pareto Rules Transformation & Integration to a Financial Planning Platform 1.Affluent dislike details on asset gathering and expenses 2.A good in-time plan in infinitely better than a perfect too-late plan. (2 week cliff) 3.Get pre-approvals, and avoid compliance killing the sale 4.Your best prospect is a client 5.Sell advice and not product, Relationships not commodities 6.20% of fee quotes must be turned down. 1-1; 2-4; 3-9 7.Service 1st; Service last; Service always.(10 yrs. Ago 8.Affluent people require 2 things; Trust and Expertise

55 Strategy # VI – Working Smarter, Not Harder Strategic Questions 1.If I ran a competing firm, how would I beat me/us? What would Jack Welsh do? 2. If you cannot say what you do in 25 seconds or less, don’t fix your script, fix your practice! 1.What is keeping you from getting your practice to the next level? Be Specific, write it down. Are you doing things right, or the right things?

56 Everything you need…. costs more over time Asset To Liability Allocation System ATLAS #3 Nick Murray Y O Y O 56

57 Inflation… the silent killer 57

58 ATLAS creates a logical portfolio…...reflecting the sum total of the parts. ATLAS #3 58

59 Reasons for Scale - (Revenue and Expense Sharing Arrangements) Exit Strategy Family Time Consanguinity Idea Factory (Next slide on cost of insurance) Cost Saving Reductions H.R., Specialists, Office Management, Receptionist, Technology Aggregated Compensation at the Margin

60 Cost of $100,000 Life to 100 Life to 121 Male age 45 idea factory 1965 $3799 3.8% 1975 $3363 1985 $2650 1995 $2107 2005 $1392 1.4% Best Available ~ Preferred Non-Smoking From 3.8% to 1.4% of Death Benefit in 40 yrs.


62 Cash Flow from Your Career Agent Contract 713 Contract Income SourcesWhile After LivingDeath Individual Life & Health First Year CommissionsPAIDPAID* Vested Renewal CommissionsPAIDPAID Renewal CommissionsPAID X BonusesPAID X Service FeesPAID X Agent Expense Allowance (AEA)PAID X Group First Year CommissionsPAID X Renewal CommissionsPAID X BonusesPAID X Service FeesPAID X Referral FeesPAID X

63 Cash Flow from Your Career Agent Contract Agent Contract 713 Contract Income SourcesWhile After LivingDeath PPN First Year CommissionsPAIDPAID* Renewal CommissionsPAID X BonusesPAID X Expense AllowancesPAID X Retirement Services First Year CommissionsPAIDPAID** Renewal CommissionsPAID X OAS FeesPAID X BonusesPAID X Service FeesPAID X Referral FeesPAID X

64 Cash Flow from Your Career Agent Contract-BGA or often in brokerage While After LivingDeath SECURITIES First Year CommissionsPAIDPAID*** TrailersPAID X BonusesPAID X FeesPAID X *Excludes variable product commissions **If Security Builder or 401(k) product within first year, commissions will be paid. No other products are vested. ***Commissions processed prior to death will be paid. Commission processed on or after date of death not paid.

65 Keep What You Love, Hire What You Loathe Phil Richards 1.Visionary 2.Growing Leaders 3.Industry Relations 4.Institutional Memory 5.Strategic Planning 6.Selection 7.Recruiting 8.Marketing 9.Management 10.Supervision 11.Legal 12.Human Resources 13.Meeting Coordinator 14.Employee Benefits 15.Client Relation Management 16.Compliance 17.Accounting 18.Financials 19.Technology 20. Detailed Paperwork 21.Sales #26 on your bookmark

66 21 Key Functions of an Agent Shaun McDuffee – Perennial Top of the Table 1.Marketing – Dinner Presentations 2.Sales/Selling the Plan 3.Strategic Planning Developing Marketing Plan(s) 4.Setting & Reviewing Goals 5.Annual Client Reviews 6.Tracking Activity 7.Teleconferences 8.Gathering Referrals 9.Follow-Up Emails/Notes 10.Case Preparation 11.Proactive Check-in Emails Proactive Servicing 12.Answering Questions 13.Continuing Ed/Stay Current 14.Cold Prospecting for Dinners 15.Setting/Rescheduling Meetings 16.Meet w/Staff & Assistants 17.Office Administrative Duties 18.Client Servicing – Return Emails/Calls 19.Compliance Related Duties – Reviews 20.Completing/Processing Apps 21.Placing Stock & Mutual Fund Trades

67 Be Creative HONEYBEE examples Cold Calls —20,000 to Succeed Before we hang up… Vertical Referred Leads ; secret word Never ask for referrals, give them Elevator Talk, I BUY LIFE INSURANCE I’m a Life Planner who specializes in Finances Do you have enough confidence in your advisor to allow me to give you a FREE second opinion?

68 Strategy # I – Never ASK for Names; GIVE Them 1.Know what organization your client is part of 2.Obtain list of as many names in the organization (Directory-Lobby, INTERNET, Company Directories. 3.Place list of 20 or so names before client. 4.“I will be calling these people; which do you know (K) or know well (KW). Please mark”. 5.“If any of them ask me, do you mind if I tell them I work for you?”

69 LAW of 72 – Not the interest % one. Behavioral Psychology What is not executed in 72 hours is lost. “If you know and you do not act, you do not know.” —Chinese Proverb

70 The Good Life Live where you want… With the people you love… Doing the right thing… ON PURPOSE. (Our Business)


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