By Caroline A. Banks, FPFS

The world is dreadfully underinsured. Too many financial advisors have become simply wealth managers, not realizing that insurance is the foundation of a financial plan. It’s crucial we make sure that this foundation is strong enough to support clients financially, no matter what happens.

My own company received a critical illness payout when my husband, who was both the finance and IT director, was ill. Those funds enabled my company to function. Most importantly, it meant I could reduce my time at work for several weeks without any thought of what the cost would be.

Ensuring adequate coverage

With longevity on the increase and cancer now hitting one in two of us, critical illness insurance is an important part of what I recommend to clients. We know what we can plan for, but we still don’t know what will go wrong.

What if clients say they can’t afford more insurance?

Sometimes, we think clients can’t afford all the coverage they should have, and we hesitate to recommend they spend more on insurance. One of the things I realized after joining MDRT, though, was that my clients needed to take out far more coverage than I probably suggested to them in the first place. I also try to put the cost of the premiums in perspective for my clients by telling them if they gave up buying one coffee a day, that money could go toward protecting their family. It’s so very important and was a huge part of getting me to Top of the Table. Also, if you revisit those clients, you may find that what they couldn’t afford a few years ago, they can afford now as their situation may have changed.

What about clients who have insurance through work?

Oftentimes, people feel they have enough insurance coverage through their job. Not many people today, though, will have a 40-year career with one employer. They may not get coverage when they move on to a different role. And I always say, “You don’t own that. You rent it while you’re in that job.”

Furthermore, take care of yourself and your family. It’s so important that as financial advisors we’re doing what we tell our clients to do and that our families are protected.

Caroline Banks, of London, England, UK, is a 36-year MDRT member and MDRT Past President. See more of Banks’ perspective in the video, mdrt.org/path-to-top-of-the-table. Contact her at cbanksmdrt@gmail.com.

Going global: How serving expats boosts business

By Fred Fouad Belman, FLMI, ACS

The world population is becoming increasingly global and mobile — from immigrants to expatriates to digital nomads who work anywhere with Wi-Fi.

Because I live in Lebanon, a country with a population base of about 4.5 million (although census numbers vary), the expat population has allowed me to increase the number of clients I can help. There are anywhere from 8 million to 18 million Lebanese living outside of Lebanon, including 6 million living in Brazil.

Understanding the market

I was born and raised in Orlando, Florida, USA, and moved to Beirut when I was 27. So, expats are a client base I understand. I learned that the Lebanese living abroad like dealing with someone in their home country because they may plan to go back there to retire.

In my practice, we also serve people in Lebanon of other nationalities. My 1,300 clients come from 15 different nationalities. Part of serving the expat market means working with international insurance companies based offshore in Cayman Islands; the Isle of Man; Hong Kong, China; and Bermuda. Furthermore, it’s crucial to understand different taxation systems and different cultures. When I need information about the different taxation systems in other countries, I’ll work with other MDRT members, including members who collaborate with tax and accounting firms in the country where I need advice. Many of the jurisdictions where we have clients, though, do not tax expats.

Planning for expats

I have a team of 14 financial advisors and three support staff. In general, expats have the same needs as a person living in their own country. Having said that, there is also a special need that expats have but usually are unaware of.

Since we deal with a lot of C-suite executives, many have stock option plans with their companies and many own assets in the U.S. When these assets are based in the U.S. and the client is not a U.S. citizen, there is an inheritance tax due under IRS Form-706NA whereby the client’s beneficiaries would be liable for up to a 40% tax on any assets over $60,000. We help expats structure the assets in such a way to legally avoid having the beneficiaries be subject to this tax.

Finding the market

If you want to work with the expat market and do cross-border planning, you can make connections through expat groups in places such as LinkedIn and Facebook. Furthermore, expats make friends with other expats in their communities. Once they trust you, they start referring you to their expat friends.

I’ve really grown as a financial advisor working with the expat market. We’re all part of a global community. It’s our future.

Fred Belman, of Beirut, Lebanon, is a 16-year MDRT member. See more about this topic from Belman in mdrt.org/grow-expat-business. Contact him at mcbelman@gmail.com.