College Funding market

[scagnt83]

There are way too many "programs" for "college funding" out there. Most are just another "program" that pitches life insurance... and often they are not calling it life insurance until they get to the end or even until they get to the app.

Most parents arent even funding their retirement adequately. Very few are actually saving a sufficient amount to fund their child's college.

The ones that are saving enough, usually have way too many assets for any type of "EFC reduction plan".

Most people interested in these "programs" can only afford $100-$200 per year. All that is going to fund is community college.

I would never advise an agent to spend money or time going after this market.

 

[Bankman]

Going on three years ago I attended a workshop for one of the best known college planning firms, which I prefer to keep anonymous. I had other work commitments at the time, so I held off on getting involved in college planning. However, I did enroll my high school age kid in the program (call that kid "Kim"). Kim used the ACT/SAT test prep included in the program, and improved his composite test score by over 25%. That test improvement was the difference in his being accepted into a very selective college and receiving some additional grants and scholarships that don't have to be repaid. The bottom line: enrolling Kim in that college planning program was well worth the money, just for the SAT improvement alone.

So about six months ago I decided to include college planning in my own practice, thinking that Kim's great result would be a perfect testimonial. But I have yet to have any success. I have mailed over 10,000 pieces inviting parents to free workshops or for individual no-cost, no-risk meetings. The mailings were done by a highly reputable firm. The response from parents? Zero, not one family responded. My sense is that these days most people just disregard direct mail. Also, all the college planning firms say that there is little competition in this market. NOT TRUE - in my metro area alone there are at least 25 other firms doing college planning.

I'm going to try referral marketing to get clients, because the college planning firm I'm involved with really does offer a worthy service, not just re-positioning of assets to generate commissions from insurance sales. But don't kid yourself: college planning is a very tough market to succeed in because the vast majority of parents think they can do everything necessary themselves (they can't, at least not well) and they don't want to pay fees for professional services. Friendly advice to everyone - think twice and more about getting into college planning. The odds of success are heavily against you.

 

[pfg1]

Bankman.... yep the front end is great and thats what most families want. They don't necessarily want a financial advisor per se.
I never did direct mail, I used my relationships and was able to put people in the seats. A couple times had over 20 couples. Very little conversion to anything that put $ in my pocket.

I think in most cases, the college funding marketing firms are the only ones making much money.

 

[Brian Anderson]

Might want to reach out to Kerry Wallingford, CLU, ChFC, RICP, who I know has experienced success in the college planning market. Or at least check out her website (2nd link below) which has some good info on how her firm's college planning process works.
https://insurance-forums.com/life-i...ing-retirement-how-one-advisor-helps-clients/

Start Planning for College Today - About College Planning Services Seattle | Wallingford Financial

 

[old rookie]

Thanks to all who have responded. Brian, I read your reference to Kerry Wallington when I first joined the forum and was one of the reasons why my interest in college funding and planning peaked. I am new in the business(less than 2 years), wasted time with a MLM marketing group chasing down mortgage protection leads and after finding the college funding as a possible niche market, I got excited. Reason for my excitement: I prefer doing business in my office and with prospects facing an immediate need vs selling plans for future needs. After spending 40+ years selling IT equipment and services, I decided to make a change. Insurance and financial services seemed like a no brainer for me(my age and silver hair might just be an asset). I am aware of the cost of college after sending my two sons through 7 years of college each. I am past the age of retirement but still want to work. I spoke with DHK on the phone and he was very helpful. I will reach out to Kerry
Wallington and try to get some info from her. Thanks again.

 

[Allen Trent]

Might want to reach out to Kerry Wallingford, CLU, ChFC, RICP, who I know has experienced success in the college planning market. Or at least check out her website (2nd link below) which has some good info on how her firm's college planning process works.
https://insurance-forums.com/life-i...ing-retirement-how-one-advisor-helps-clients/

Start Planning for College Today - About College Planning Services Seattle | Wallingford Financial

A lot in the article talks about retirement planning, financial planning, max funding of 401k, Roth. In addition, the name of her business & agency involves "Financial", but it doesn't ever mention insurance. If she or anyone planning to give the appearance they are holistically advising on financial & retirement holds nothing more than a life insurance license, they may be practicing in securities advice without proper registrations. especially when they are giving recommendations as to how a person should invest, how much & into what types of plans.

Again, I am huge proponent of people helping parents & students with their college applications, financial aid, grants & scholarships. I am also a huge believer in life insurance & permanent life insurance. But if marketing literature, websites, magazine articles & even prime time news interviews fail to remotely give the impression that the goal is to sell life insurance, it is completely disingenuous & in some cases may be breaking securities regulations.

Does Kerry Wallingford hold active securities registrations? Directly from the article you linked to. It is a sales script, not an educational technique & those without securities registrations would be walking a very fine line:

“We’ve got to walk through slowly what they’re doing with their money and where it is first. Often times I find clients who are max-funding their 401(k), putting money into a Roth,while building no capital that is liquid or even potentially available to help with college. So the first place I have to start is by educating the client on the advantages and disadvantages what they’re doing with their money,” Wallingford says.

Then she goes through the process of educating the client on what whole life insurance is and what it does. Here’s one example of an educational technique she uses:

If I said to you, “you can choose to pay $200 for $1 million of life insurance or $20,000, what would you pay?” Of course they say $200. My next question is if I can design investment utopia, let’s talk about what we want our investment to do:

 

[pfg1]

The college funding market is definitely one that people need help in. BUT, many don't think they should have to pay for the info. There are alot of tire kickers, but that's ok. If you offer full service fee based college planning like my friend does you can do well. I know a couple other people personally on the west coast that have done well also, they too use a full service (pay a fee to be my client) model and do more on the front end than they do actual financial business. If you charge a fee, at least you are getting paid for your time.

 

[DHK]

In addition, the name of her business & agency involves "Financial", but it doesn't ever mention insurance. If she or anyone planning to give the appearance they are holistically advising on financial & retirement holds nothing more than a life insurance license, they may be practicing in securities advice without proper registrations. especially when they are giving recommendations as to how a person should invest, how much & into what types of plans.

Insurance is a solution to financial problems. My own website is "DHK" Insurance and Financial Solutions... but I have no securities registrations.

You can be a comprehensive planner with just a life insurance license - aside from making any buying, selling, holding, or analysis of securities holdings. One can always present an alternative to their securities portfolio, but you cannot call it a "recommendation". (Subject to local state laws - as was said in another thread that in Arkansas - ALL transfers from securities portfolios to fixed insurance products is deemed to be investment advice, so follow your state laws.)

Those who are investment advisers - who are subject to the investment advisers act of 1940 - have really confused many people into believing that THEY are the only ones who can do "financial planning". It's just not true - as long as you stay within your licensing authority and don't practice legal, tax, or investment advice without proper engagement agreements and licensing.

The vast majority of agents at the Top of the Table... have separate legal entities and charge fees for their services - even including making insurance recommendations. (They most often do a commission-offset of the fee.)

This one is with Marvin Feldman. There are other MDRT Top of the Table and past-presidents giving presentations on that channel. Almost all of them are charging fees and doing advanced planning - regardless of whether they are talking about securities or not.

 

[DHK]

Does Kerry Wallingford hold active securities registrations?

If you look her up on brokercheck, you'd see that she held licenses for 23 years, but let them expire.

 

[DHK]

A lot in the article talks about retirement planning, financial planning, max funding of 401k, Roth. In addition, the name of her business & agency involves "Financial", but it doesn't ever mention insurance. If she or anyone planning to give the appearance they are holistically advising on financial & retirement holds nothing more than a life insurance license, they may be practicing in securities advice without proper registrations. especially when they are giving recommendations as to how a person should invest, how much & into what types of plans.

Again, I am huge proponent of people helping parents & students with their college applications, financial aid, grants & scholarships. I am also a huge believer in life insurance & permanent life insurance. But if marketing literature, websites, magazine articles & even prime time news interviews fail to remotely give the impression that the goal is to sell life insurance, it is completely disingenuous & in some cases may be breaking securities regulations.

Does Kerry Wallingford hold active securities registrations? Directly from the article you linked to. It is a sales script, not an educational technique & those without securities registrations would be walking a very fine line:

“We’ve got to walk through slowly what they’re doing with their money and where it is first. Often times I find clients who are max-funding their 401(k), putting money into a Roth,while building no capital that is liquid or even potentially available to help with college. So the first place I have to start is by educating the client on the advantages and disadvantages what they’re doing with their money,” Wallingford says.

Then she goes through the process of educating the client on what whole life insurance is and what it does. Here’s one example of an educational technique she uses:

If I said to you, “you can choose to pay $200 for $1 million of life insurance or $20,000, what would you pay?” Of course they say $200. My next question is if I can design investment utopia, let’s talk about what we want our investment to do:

It's not a "fine line" at all. I do this ALL the time.

It's funny how life agents believe that all they are supposed to know... is life insurance. Nope. I know far more about finance to give advice over - as long as I'm not giving advice on their securities holdings, I'm fine.