Don't fall into this trap...

My daughter takes the school bus. And this year, each morning there’s Emmett and his mom come join us at the end of the laneway. And my wife Ashley usually picks up our daughter at the end of the day with Emmett’s mom.

It’s nice to have another family join us, especially since they live a few doors down.

But, I must tell you, things almost took a drastic turn the other day.

My wife was out waiting for our daughter at the end of the day and the blizzard we just got hit with was roaring up. And there was Emmett’s mom waiting for him, but she had a dog with her. We learnt later that it was Emmett’s mom’s sister's dog, and she decided to take it out. How nice of her!

But, things were about to take a drastic change.

Ashley (my wife) had her back turned because the wind was so furious and all of a sudden she didn’t see Emmett’s mom or the dog. Where had they gone?

And as she turned, she sees the husky charging across a busy street into the ditch on the other side with Emmett’s mom running across traffic, cars narrowly missing her going after this dog. The wind was howling, the sky was black, visibility was low and people were angry being that its January – cold and dark.

If it was me, I’d have said my goodbyes to that dog. Good luck to y’a Sir! I’ve heard too many stories of people being hit these days. I know simply crossing the road seems like a game of Russian Roulette.

The point is, in the blink of an eye, this woman could have been a goner. A has been. Not a here and now.

The lesson here is don’t bring Huskies out. Just kidding. I don’t know what the lesson is, other than to say life happens. Be careful out there.

This is all to say that I think we get all wrapped up into what were doing that we don’t realize about those around us. Emmett’s mom clearly wasn’t thinking about these cars hitting her, but simply getting the dog back under her control.

And this leads to a meeting I had earlier this week with a business owner. Suffice to say, this guy had a pretty good business (series of businesses actually) worth more than $10M. His accountant told him he had a $3M tax bill and so he explored insurance to get it done.

He got a quote from another institution (not me) for the insurance and was flabbergasted on the price. I think it came to about $150,000 per year of insurance premium.

Now, I know you might be thinking: that’s probably the cost.

And, you’re right. But, I don’t think he was prepared to see the cost. I don’t think he expected it to be so expensive. Even know this guy is worth 10s of millions. It’s still likely more money than he’s every paid for anything in his life.

And so when I met him. I wasn’t interested in talking about insurance at all. I wanted to understand him and his business. I wanted to know where all of this was going.

And so he told me his whole life story. He had a number of businesses that were not only very profitable, but were in industries that were going to experience great growth for years to come.

He also told me he had more money than he needed.

He told me he has kids, some in the business and some not.

And, so I told him that in all likelihoods, he should explore an estate freeze.

What’s that he asked?

And so I told him.

And then I told him that the $3M tax bill could likely be reduced with a “wasting freeze”.

What’s that he asked?

And, so I told him.

And then he told me he wanted to split his estate equally between the 3 kids.

And, I told him you need to treat the kids fairly in the equalization, but not necessarily equal.

What does that mean?

And so we talked about all of these things.

What an estate freeze is, what a wasting freeze is, how to distribute his estate in the best manner. We were just talking. Ideas.

And, he was moving accountants. So, I provided all these discussions points in written detail, along with a list of financial stuff I need (T slips, corporate financials, wills, etc).

And after all of this, you know what he said:

The other guy didn’t explain any of this to me.

Then I told him the value of insurance and in particular corporate insurance:

Pennies on the dollar and the CDA credit. Again, he knew nothing about any of this.

He was heading on vacation and I told him to get me all of this stuff and we’ll meet when he gets back.

Let me ask you this. When he sees his future tax bill and estate equalization between the 3 kids, we will likely be showing him a premium in excess of $150,000 per year, but this time he’ll know exactly “why” he should take it.

Because it will solve all his issues, taxes and distribution of the estate. But, this time he’ll understand why we are doing it and is a partner along the way.

I’m not presenting insurance, I’m definitely not talking about product features. It’s 100% about him.

And he gets it. At least so far.

And much like my neighbour who runs across the road without looking at oncoming traffic, I think we all fall into this trap sometimes.

Because we see so many clients and are always talking about insurance, we sometimes forget that those whom we serve may not yet be at our level. We need to take them slowly.

The minute I met this guy, I knew the answer pretty much. Maybe not exactly, but pretty close. He has a $3M liability and what better answer than an insurance policy.

But, he needs to be along for the ride as well. But, then I realized there is so much more when we factor in taxes and distribution.

This is simply a reminder to you. Slow down. Bring the clients along. You’ll win business from your competitors. And your client will be eager to buy.

Until next week,
Andrew