Anyone Know of - Chartered Federal Employee Benefits Consultant

[URDRWHO]

Now on with the story.................

I'll define the players (fake names to protect the innocent) --

• My friend shall be called Tommy
• The company with the designation, name on the booklet – The Doctor Who Group
• The company supplying the life insurance – Insurance R us

In the presentation Tommy remembered the person saying “where else can you get a guaranteed 5.5% return on your money?

Yesterday I received a very impressive looking bound booklet from Tommy. In total the booklet was @ 70 pages. The front of the booklet first part of the booklet shows that it was prepared by The Doctor Who Group who is a Chartered Federal Employee Benefits Consultant.

The first 3o plus pages illustrate: Civil Service Retirment System, Federal Employees Retirment System (FERS), Federal Employees Health Program (FEHB), Long Term Care (LTC) Social Security System benefits and the Thrift Savings Program (TSP). There are illustrated tables / charts included but in reality the information is already available to Tommy. The difference is that someone produced a nice booklet for Tommy. The two disclaimer pagers are equal to a full page length.

Who pays for the nice booklet that was prepared by the Chartered Federal Employee Benefits Consultant? I don't think Tommy paid them anything. Soooooo where does the money come from to keep the lights in the office on?

There are two parts to this process, they have two different company names both with different physical addresses:

1. The Chartered Federal Employee Benefits Consultant – The Doctor Who Group
2. A separate entity, the life insurance sales organization - Insurance R us
None of the entities involved display any designation on paper such as CLU, ChFC, CFP, etc.

On to the meat of the story...........

It is at this point that I think I know where Tommy got confused about the safe income percentage. On the asset strategy page there is an illustrated assumption of withdrawing 4.5% a year from his assets, including a withdraw figure. I guess withdrawing 4.5% a year from your own assets is pretty darn safe. More disclosure on the page: “ Income from assets is not guaranteed, could be more or less, etc.....”

Next I wondered how The Doctor Who Group got the Federal information about Tommy's Thrift Savings Plan balance? At this time it is an unknown.

The asset page strategy from The Doctor Who Group shows:

Take a lump out of the TSP and split it between two different single premium annuities. One is a fixed annuity and one is a variable annuity. One thing I have not found is the prospectus for the variable annuity or the name of the person that is designated / licensed to sell the variable annuity.

So I move on...........
The Suvivorship Whole Life illustration is not part of the bound booklet and was created by Insurance R us.

What are the goals that Tommy wants from the SWL? He wants to create a $400,000 life estate for his kids using life insurance.

The illustrated premium is over $7,000 a year, it is a valid illustration with all the notices of dividends not guaranteed, etc.

So does this SWL illustration meet Tommy's goal. The death benefit under the non-guaranteed side reaches $400,000 (including paid up additions) in year 21 and under the guaranteed side ...well the guaranteed death benefit never reaches his goal because it stays at the base face.

But hey.....people are never to look at that nasty, stupid, ugly guaranteed side because the insurance company has paid high dividends in the past million years. Right? I mean, isn't it the reason that the agent took his pen and put big circles around the non-guaranteed total cash value / total death benefit side of the ledger? Forget about how our E&O carriers warn about marking up illustrations and I guess we all like paying high E&O premiums?

So we move on...............
Then we arrive at the end where there is a whole life illustration on the husband only. It is bound in the booklet and was created by Insurance R us. It is a base policy face amount that is under $200,000, premium is over $7,000 a year and the policy's non-guaranteed death benefit reaches $400,000 in year 32. Ah we now see the benefit of having another insured and especially if the other one is female.

Looking at all the stuff thrown at Tommy I can see how he could get confused about what is or isn't guaranteed, annuity discussion or life insurance discussion. His goal of leaving $400,000 in life insurance to his children is not guaranteed.

All the disclaimers are there, all the legal illustrations are there but how many people read all the legal jargon. They only remember what they think they heard in the presentation. I remember once hearing an actuary say that looking at illustrations is like looking at a fun house mirror—they show you something but not a truly accurate picture.

I give it five stars for a unique way to create a niche market but it just isn't something I would embrace. I am an insurance sales guy, take it for what it is worth and I'm not going to pretend to be doing something else for you when in reality all I am doing is a life insurance sales presentation.

Professional Designation - ChFEBC - FINRA

“16 modules (self study or two-day classroom course) Examination Type Designation exam: two-hour exam (proctored, closed book)”

I guess there are ways to get around some qualification requirements -
If an applicant does not meet the criteria above there is an alternative way to qualify.

If you are in a Human Resources capacity, with the Federal Government, you may obtain the designation without meeting the requirements above.

Courses

Marketing organizations can and will pay a lot of money to people who know where to place certain words that will leave a mark on the brain of the listener. In my 30 years I've seen some very, very good presentations that could have sold ice to the Eskimos.

Time to sit down and have a beer with my friend to see what he truly wants to do.

Hm?

"- The recent Saver Act passed by the U.S. Congress encourages the government to link competent professionals like you with federal employees to help them make decisions about their retirement. Becoming well-versed in their benefit programs will help you make this connection."

 

[DHK]

Is there a question in all of this?

Or are you just ranting on the ChFEBC?

 

[URDRWHO]

Ah....the title of the thread Anyone Know of - Chartered Federal Employee Benefits Consultant. Since I had not heard of them I was wondering if anyone else heard of them.

Ranting on them? I guess if selling a guy insurance that doesn't meet his insurance goals could be ranted upon.

Preparing a booklet that is so darn confusing could be a point for ranting.

In 1984 my first job with an insurance agency had one of those canned presentations. I was stupid and new. It was a great presentation and my closing rate was in the ninety percentile. It was at that time that I learned how a well developed, expensive to create, marketing presentation can make sales. It only lasted a month because the GA ran off with commissions. It was also a learning experience to only get paid commissions from insurance companies, not an agency. From then on I always had direct pay from the ins. companies.

Soon after I figured out that even though it was legal, it was ethically wrong. It was wrapped around a certain Union, going out to see Union members, saying how the Union wanted us to help their members reach financial goals, etc., etc.,etc. As part of the deal I had to join the Union and always wear my Union pin. I was new, being a newbie, listening to what the GA told me and selling life insurance as an investment.

So I had the cloak of helper and a great canned presentation. Man did I make some money in that month.

But really, the Union could have cared less about helping the members, the Agency was taking Union bosses out to expensive lunches, wine and dine events., etc. In exchange the Union sent advertising to members, we got the return postcards and ran the leads. Oh and as part of the deal each new applicant got a Will. It was a pre-printed Will that the agency bought hundreds of.

Back in those days there were even insurance companies that had marketing ads showing how to use the cash build-up to help with early pay off your mortgage.

I guess it is all just marketing. Today you will get your butt in a ringer if you sell life ins as an investment. I was a stupid 30 something and I look back and think how naive.

So yep, I rant a bit when I see some marketing that I don't consider to be walking the broad road. We don't need anymore Neasham cases to tarnish our image.

Case law makes it harder on everyone that walks the broad road.

"The Florida Bar v. Doherty,1 the Florida Supreme Court disbarred an attorney for attempting to sell annuities to an elderly client without notifying the client in writing that the attorney would receive a commission in the transaction.

Although many of us would never broker the sale of annuities to our clients—especially after the Glenn Neasham affair!2 — The Doherty decision reminds us that there’s a broad range of activities that may require written disclosure and written consent under the ethical rules governing business transactions with clients. "

Is there a question in all of this?

Or are you just ranting on the ChFEBC?

 

[DHK]

A designation does not make someone ethical. It doesn't even make someone KNOWLEDGEABLE (unfortunately). An organization offering designations doesn't mean that the organization is ethical. That's one reason why you look for accreditations to help ensure that the designation is held to a higher standard.

The only organizations that are accredited educational institutions are the College for Financial Planning and The American College. That doesn't mean that other designations aren't worthwhile, but that they aren't from educational institutions. (CFA is the gold standard of investment credentials, for example.)

I have heard of ChFEBC... but I had no experience with the issuing organization or with anyone who had earned it. A designation doesn't make someone an expert... but it sure does look impressive to have multiple sets of initials after one's name.

However, if he is presenting himself as an expert, and giving incomplete, or inaccurate recommendations... he can be exposing himself to E&O claims: https://www.youtube.com/watch?v=8naJmCd-swo&list=UUDiiDoKppNGo7sTEjY9r_kg

 

[URDRWHO]

Agreed. Alphabets behind the name have raised a lot of concern for the governing government agencies.

A designation does not make someone ethical. It doesn't even make someone KNOWLEDGEABLE (unfortunately). An organization offering designations doesn't mean that the organization is ethical. That's one reason why you look for accreditations to help ensure that the designation is held to a higher standard.

The only organizations that are accredited educational institutions are the College for Financial Planning and The American College. That doesn't mean that other designations aren't worthwhile, but that they aren't from educational institutions. (CFA is the gold standard of investment credentials, for example.)

I have heard of ChFEBC... but I had no experience with the issuing organization or with anyone who had earned it. A designation doesn't make someone an expert... but it sure does look impressive to have multiple sets of initials after one's name.

However, if he is presenting himself as an expert, and giving incomplete, or inaccurate recommendations... he can be exposing himself to E&O claims: https://www.youtube.com/watch?v=8naJmCd-swo&list=UUDiiDoKppNGo7sTEjY9r_kg