‘Probe and disturb’ viewed as key to one firm’s tactics

Nobody ever accused companies that push annuities on older Americans of being subtle.
MAR 26, 2007
NEW YORK — Nobody ever accused companies that push annuities on older Americans of being subtle. “Assume you are selling to: A 12-year-old who is blind yet smart,” is how a training manual for Brokers’ Choice of America, an insurance marketing company in Centennial, Colo., instructs advisers to approach the elderly attending its seminars, according to the Massachusetts Securities Division. In the “One Call One Close” manual, “associates” for Brokers’ Choice of America are instructed to “probe and disturb” attendees by asking them questions that eventually lead them to reveal their financial fears. “Probe, then disturb, then enhance the problem!” the manual states, according to the Massachusetts regulator. “Remember, they’ll change when you hit their fear, anger and greed buttons,” the training manual states, according to the securities division. While the Massachusetts regulator hasn’t charged Brokers’ Choice of America with wrongdoing, it has released excerpts of the company’s training manual to highlight the need for more scrutiny of advisers who hold themselves out as experts in the field of financial planning for the elderly. According to a statement from Tyrone Clark, president and owner of Brokers’ Choice, the “One Call One Close” manual was discontinued “many years ago, circa 1999. It was an early draft of an attempted sales manual, which was scrapped entirely for other materials.” The Massachusetts document, Mr. Clark said, “holds Brokers’ Choice of America up to unfair, inaccurate and damaging scrutiny.” According to the regulator, Brokers’ Choice of America trainees “are taught to intentionally terrify” seminar attendees. The company, the Massachusetts document states, “instructs advisers to relay stories of the Great Depression and ask seniors if they recall what happened to people who had money in the banks during that time” without mentioning the Federal Deposit Insurance Corp. protection that protects bank deposits today. If an older individual is willing to do business with one of BCA’s agents, they are instructed, according to the Massachusetts regulator, to say: “While we are waiting for the monies in your CD to be transferred to the insurance company … I would like to ask that you not mention a word about this to your kids.” Brokers’ Choice of America isn’t alone in aggressively marketing financial products and services that target older Americans. On the website of Piece of Pie Strategic Coaching Inc., a financial services marketing company in Rochester, Minn., founder Michael Kaselnak touts his “unique marketing system for selling financial products and services to seniors.” The concept behind Piece of Pie’s “workshops,” according to the website, “is simple: Inform seniors about investment concepts that their present financial advisor has more than likely overlooked or failed to explain.” This tactic, the company promises, allows salespeople who use the workshop to “begin a relationship that in a short time makes the prospect feel uncomfortable discussing any financial matters with their current advisor.” Piece of Pie’s “system,” according to the website, is a “3 meeting process” that begins after a prospect has attended a workshop that is “scripted to a word.” Among the objectives of the first meeting is to “separate [the prospect] from their current advisor.” At the second meeting, the adviser is instructed to show the prospect “all the things their present advisor has either forgotten or ignored.” At the end of the second meeting, the website states, “the client is usually mortified 100% of the time. They would like to move right then … but if you do, they will change their mind. Patience is the key.” Potential objections of clients, such as “liquidity, safety and surrender charges” won’t be a problem after the third meeting, according to the Piece of Pie website. “You ask [clients] questions to help them understand that in their particular situation, your solution is perfect,” it states. The Piece of Pie system was used by Michael DelMonico to convince older clients that he was “acting in their interests more than other advisors and then, once trust ha[d] been obtained, to sell annuities to his clients,” according to Massachusetts regulators. This month, the Massachusetts Securities Division, in an administrative complaint, accused Mr. DelMonico of Lynnfield, Mass., of engaging in “a wide range of dishonest and unethical practices.” Once the sales were made, state regulators said, Mr. DelMonico shared the commissions with Piece of Pie and ECA Marketing Inc., an insurance wholesaler based in Eden Prairie, Minn. As of last week, Mr. DelMonico’s testimonial for Piece of Pie was still on the company’s website. Mr. Kaselnak declined to be interviewed.

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