Doug’s Story
My story in the financial services industry actually starts when I was fired. (What a way to start). In 1972, I had graduated from a mid-western university and had just moved to South Florida with my wife and 1-year-old son. I worked as a manager in a retail store and about 1-½ years later, we were blessed with another son. As the calendar moved to late 1974, the country was reeling from the effects of the oil embargo and a severe recession. The firm I was working for decided to downsize and I was one of the causalities. Upon awakening the day after that terrible event, I was sobered by the facts that we were in the middle of the 1974 recession, I was unemployed, and I did not know a whole lot of people. In addition, insurance was the only industry hiring and paying a salary. Fortunately, I found a position as a sales rep with a mid-sized life insurance company with a modest monthly compensation. Even though I had never dreamed I would be in the financial services industry, I was out of options. I needed to earn a living to support my wife and my two young sons.
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An event took place shortly after I had started that crystallized my life for as long as I will live. Three months into my new career, a client I had just written and placed a small life insurance contract, suddenly died. While I was saddened by the loss of a good friend and client, I processed the claim and thought that in a couple of weeks, her husband, the beneficiary, would have the proceeds from the death benefit. That's when I learned about the "fine print". Even though all the required underwriting had taken place, the life insurance company started underwriting that contract again and took three months to pay the claim. They could have taken up to six months or even denied the claim and waited for the client to sue. I saw the power of life insurance and the miracle money it can create. I also saw the power of financial companies. They wrote the rules and called all the shots. As a result, I did became very systematic about explaining the ins and outs of life insurance contracts and companies.
As the years went by, my insurance practice grew and I started adding additional areas of insurance like car and homeowners coverage. Eventually, my wife joined our firm to help with the client needs and concerns. A second event that helped me understand my industry happened in 1988. I met a man that had developed what is still the most efficient financial planning system I have ever come across. He taught me how an economy really works and how to take those accepted economic principles down to the client level.
What the financial institutions were doing was creating massive amounts of wealth for themselves by following common accepted economic principles of a capitalistic economy. These rules they employed were not exactly what they taught their clients to do. You see, they own all the big buildings and we own the mortgages. Once I was able to communicate these commonly accepted economic principles my clients were able to realize and begin to believe that they might actually succeed and get ahead.
However, guess who didn't like it? You got it, the financial institutions I was representing. God certainly had his hand on my career because, once again, one of those seminal events happened. One of my automobile insurance clients, sadly enough, had his son killed in an auto accident. The other driver was poorly insured and so, legally, my client turned in a claim against our contract for the underinsured motorist benefit. Every record I had, every record the insurance company had indicated the client was entitled to a $50,000 payout. The adjustor assigned to handle the claim said there was only $25,000 of coverage exists and fought the client for almost 6 months, so much so that the client had to hire an attorney. I'll never forget the deposition I had to give. It was clear that the client, in all his grief, was entitled to the $50,000. Well, eventually the company paid the entire claim. But the client was put through added pain and suffering in order to fight this offered settlement. I later discover that this was not an uncommon practice. Why do you think these companies might do this? The reason is fairly easy to comprehend once you know the practice might happen. You see, the insurance companies were able to hold on to the funds longer, even if they ended up paying the claim, and thereby, continuing to earn modest amounts of interest.