What do GATE principles, asset allocation, charitable lead trusts, long term care insurance and teamwork all have in common? The easy answer is they were all topics of educational workshops at the National Association of Insurance and Financial Advisors annual convention held in Las Vegas last month.
The more informed response is that they are also key components of the successful advisors professional growth and development strategy.
Professional development starts with mental preparation, according to Roger Seip, co-founder and director of Training for Freedom Speakers & Trainers, Madison, Wis. During a workshop titled "How to have your best year every year," Seip outlined his four GATE principles: goal-setting, attitude, thankfulness and education.
Goals, Seip noted, should be meaningful to the individual, specific and measurable, the "right size" (i.e., attainable), written down and reviewed. He added that a sense of humorbeing able to laugh at yourself with others and at negative situationsis "a top management tool" for the second and third principles: maintaining a positive attitude and thankfulness ("counting your blessings").
Concluding his presentation, Seip emphasized the importance of continuing education.
"Advisors must systematically invest in themselves," he said. "Education is critical."
Asset allocation should be part of their curriculum, said Paul Reavis, a registered representative for OneAmerica Securities Inc., Gaithersburg, Md., during a workshop on the topic. He noted that although asset allocation modeling is built into most financial needs analysis software, many producers dont understand how the modeling works. Reavis talk (one of several that NAIFA offers as part of its "Programs in a Box" seminar series) aimed to instruct advisors in the methodology so they could more knowledgeably explain its principles and concepts to clients.
"If you approach two elevators, the first having a single strong cable and the other three strong cables, you obviously would choose the second for safety reasons," he said. "Thats asset allocation."
"Theres a correct place for people to be, and its not chasing the market," he added.
One challenge with such modeling, said Reavis, is to know when to rebalance assets. A recommendation that calls for evenly distributing a clients portfolio between equities and bonds may be sound as a long-term strategy, as the two investments tend to counteract one another. But how frequently should one shift assets from stocks to bonds during a prolonged bull market to maintain the desired 50/50 ratio?
The answer, said Reavis, is open to debate. He added that the right allocation of assets will depend less on the advisors choice of software than in understanding how the application arrives at its recommendations.
