George “Chip” Van Dusen IV is the President and CEO of Diversified Brokerage Services. Chip is a current board member of AALU, where he serves as Chair of the Government Affairs Committee. He recently served as Chair of the National Association of Independent Life Brokerage Agencies (NAILBA), and is heavily involved in a number of other ways throughout the life insurance industry. This gives him a unique perspective on carrier and industry happenings and how they can affect advisors and their business.
As any business owner knows, each new year presents an opportunity to look back on what was accomplished during the previous 12 months and, more importantly, look to the future, identify goals, and plan out the direction the company will take.
2019 was a big year, both for DBS and for the insurance industry as a whole. As we came to year end, there were some significant changes as a result of the carriers having to adopt principles-based reserving and the new 2017 CSO table. Because of this, there were a number of product changes during the last four to five months of the year, with some products being discontinued and others changing quite dramatically.
DBS recognized this as an important opportunity to raise advisor and consumer awareness, educate and develop a strategic plan. Our plan literally started back in January with intense communication to all of our distribution partners. We then followed up with education and specific communication on when products were going to be changing in order for advisors to make the best recommendations to their clients. The result was an unprecedented amount of pending business in the 4th quarter. We saw a large number of advisors recognize the opportunity to offer their clients products with features and pricing that would no longer exist after 12/31/2019.
I am pleased to report that our team at DBS worked tirelessly to see these cases to fruition as there really was “No Tomorrow.” I am so proud of our team and the value DBS provides advisors each and every day, but this was exceptional. It is not often or easy to execute on these kinds of significant changes we all faced but this just goes to show the benefit of working with a brokerage general agency that has a good understanding of what is happening industry-wide.
As we move into 2020, we are certainly seeing a bit of a reset to the industry. There’s still the potential for some change from a pricing perspective. I also feel we are going to see more new products coming before an eventual settling as carriers figure out how to be creative as they become more comfortable and familiar with the regulatory and legislative environment.
In general, our economy is doing well, in spite of the fact that the political environment continues to be a firestorm. Obviously, as we move throughout the year, we’ll be watching how the presidential election unfolds and we will of course see that dominating the news as potential candidates rise and fall. Depending on who succeeds in November, we will likely see first year changes by the incoming president. Market reactions to leadership changes are hard to predict, but there are typically policy changes to taxes and regulations, all of which can affect life insurance sales.
One of the biggest surprises I think we’ll see is a kind of “Back to the Future” as various products and solutions come back into favor and advisors explore different strategies. We’re doing more business cases than we’ve done in the last five years, so we’re fortunate to have an amazing advanced planning attorney on our team. This positions us uniquely well to help our advisors take advantage of some of the techniques and tools in that space.
Finally, we saw the passing of the Setting Every Community Up for Retirement Enhancement (SECURE) Act as part of the government appropriations bill for 2020. Signed December 20, 2019, this could be one of the most impactful pieces of retirement legislation in years. This is a huge positive for savers; however, there are potentially disastrous consequences for heirs with the elimination of the stretch IRA, or the ability to “stretch” RMDs over a long period of time. One of the best fixes to this problem is life insurance, giving advisors a real opportunity in the area of estate planning. Advisors should take advantage of this and review their clients’ qualified plans, ensure their beneficiary designations are appropriate, and make sure they’re set up properly under the new regulations.
As a board member of AALU, and Chair of the Government Affairs Committee, I have been in a unique position to be on the front lines as discussions occur and changes unfold. As I’m in Washington and keeping my eye on what’s happening, I’m continuing to lobby on behalf of our profession and all the great work that advisors do for their clients. No doubt hopefully everyone has heard about our merger with GAMA International, so we are continuing to move toward the ultimate goal of one voice for the profession with exciting things to come for 2020.
The good news is that no matter what happens, DBS is well prepared for whatever lies ahead. We’ve got a fantastic team, all of whom have incredible knowledge of our carriers and products. They know what to watch for, how to interpret various changes, and can predict what will happen next. To that end, thank you for your continued business, and we look forward to working together in the coming year, driving toward our mutual success.
All the best in 2020!