There’s a better way to do financial planning

Financial consumers can look across our industry and find a wide variety of financial planning strategies. Truth be told, there are many ways to pursue financial security. In my view, there is only one way – and it’s the comprehensive way.

Many Americans have been told that investments are a silver bullet – and that they can simply ignore life’s risks and just invest their way to financial security. Investing certainly is important, but it’s not the answer alone. To me, the invest-only approach is like driving a car without brake pedals and turn signals – you go forward, but you won’t go very far, because you’re not accounting for most of the risks on the road. That’s most Americans’ status quo, and it needs to change.

Comprehensive financial planning is so important – because it can help people to identify the obstacles ahead of them, improve their odds of success and reduce the tensions they feel in their day-to-day lives. That’s why financial plans require strategies to grow, protect and enjoy your wealth. Six in ten Americans say comprehensive financial plans are most important to achieve financial security, but only a fraction of Americans have a financial plan that includes anything more than a basic savings account. For our advisors, financial planning involves more than just meeting clients’ long-term accumulation goals; it’s about paying down loans, saving for big expenses and the lifelong protection of their income and assets used to create the lifestyle they want.

At the core, our advisors’ philosophy is to help clients address all of their financial needs, keep the plan on track, and adjust strategically as a client’s needs and goals change throughout life. They build relationships and help their clients develop specific goals, a habit of saving, a keen eye for the common financial risks in life, and a singular plan to bring it all together.

Many of our clients’ financial plans are distinctive – and more well-rounded – than others because permanent life insurance is integrated as a critical, foundational element to manage risk. Most people see permanent life insurance as a way to pay your loved ones money when you die. That safety net is critical, but that’s an oversimplified view. To me, that’s like marketing a smartphone based solely on its ability to make phone calls. Uniquely, permanent life insurance – alongside other savings, insurance and investments – can help anyone to improve their financial position at every life stage, providing both security for the people and the experiences you love and a springboard for your wealth to grow.

I want all Americans to understand what’s in it for them. Let me tell you three reasons why permanent life insurance is so essential as part of a comprehensive financial plan.

First, let’s celebrate that there are still some guarantees in life.

If you’ve been a market-watcher in the last few months, you’ve seen news about tariffs, the global economy and more drive stocks, bonds and commodities prices up and down. The markets have been volatile, and many experts expect even more volatility in the future.

If someone told you that one asset was guaranteed to grow in every economic season – no matter what the stock market did – often accessible without having to pay any taxes, would you be interested? And what if you could earn dividends on that asset each year? While dividends are subject to change and are not guaranteed, Northwestern Mutual has consistently paid policyowners like me dividends every year since 1872. It’s something I take pride in. In fact, our 2019 policyowner dividend – estimated at $5.6 billion, was the highest payout in our company’s history – we will likely top our industry by a wide margin, once again. As a long-time client myself, I fully believe this is the best way to approach financial security.

In my experience, the longer someone owns permanent life insurance, the more they believe in it. During my three decades with Northwestern Mutual, I’ve talked to thousands of advisors and policyowners and the feedback is always consistent. At first, clients are hesitant – but when the markets drop, and they see their cash value continue to grow – they’re so thankful and wishing they had bought more.

Second, let’s talk about the value of versatility.

The cash value that builds up in a permanent life insurance policy can be used for anything. As a long-time policyowner myself, I can attest to this personally. Few Americans even recognize that cash value can be accessed at any time, for any reason. In 2015, one study found that only 5% of people knew permanent life insurance could be used to help pay for college; 8% knew they could tap it for retirement income; only 23% knew it could help pay for a mortgage or reduce debts. Some of our clients have used the cash value to fund a down payment on their home. Others accessed it as collateral for a bank loan to start a small business, purchase rental properties and – on the flip side – weather tough market conditions. The protection and flexibility that permanent life insurance provides uniquely prepares our more than four million clients to feel more confident during the expected and the unexpected – during periods of challenge and opportunity alike.

Third, let’s consider the bigger financial and emotional picture.

The bottom line is this: a financial plan that accounts for financial risks offers Americans a higher probability of success than others provide. That higher level of certainty – powered by a financial plan that moves the odds in our clients’ favor – to me, is what’s required to deliver Americans the financial security they crave today. A strong financial plan that grows and protects wealth, built with a foundation of permanent life insurance, helps keep millions of our clients on steady ground, giving them comfort in any market and any scenario. Alongside investments, other insurance products and assets, permanent life insurance can significantly enhance a financial plan, providing people value whenever they need it to, and enabling Americans to live life more confidently tomorrow and today.

Of course, there are many voices and differing opinions out there. In my view, our policyowners are the proof. In a world where brand loyalty and product preferences shift with the wind, 96% of our clients stay with us year after year. Based on the data and the countless conversations I’ve had, I’ve never been more confident that we are delivering what today’s financial consumers are seeking.

Utilizing the cash values through policy loans, surrenders, or cash withdrawals will reduce the death benefit.

Not all Northwestern Mutual representatives are advisors. Only those representatives with the titles “Financial Advisor” or Wealth Management Advisor” are credentialed as NMWMC representatives to provide advisory services.