Dave Alison (00:07):
Hello and welcome to the Complete Wealth Management Podcast. I'm your host, Dave Alison, and we have a great episode in store for you today. I have attorney Harley Gordon, who's a nationally recognized authority on long-term care issues. I had the opportunity to see Harley speak about a year ago, and I wish I would've met him 16 or 17 years ago when I joined the financial services industry. He was the best speaker I've ever seen on the consequences to a family when somebody goes into an extended care event. So if this is something you're thinking about for a parent of yours, or if you're approaching or already in retirement, this definitely should be and probably is something front of mind.
(00:53):
Now, Harley's been voted one of the 100 most influential people in long-term care by McKnight's Long Term Care News. He was also named one of the 10 most influential people in long term care by Senior Market Advisor.
(01:07):
But in this episode, we're not going to be talking about long term care insurance. We'll touch on it briefly, but what we're going to spend our time talking about is the true impact this has to a family. Now, Mr. Gordon's views on long-term care financing have been featured in the PBS Frontline documentary, Who Pays For Mom and Dad? He's also been featured in the Wall Street Journal, as well as CBS Evening News.
(01:35):
Harley is currently working on a consulting basis with the Massachusetts Division of Medical Assistance in order to help reform Medicaid eligibility. And in this episode we're going to talk about a lot of the good things he's seen families do, as well as the not so good things. And so again, I welcome Harley Gordon and stay tuned for this episode of the Complete Wealth Management Podcast.
(02:11):
Welcome everybody, and welcome, Harley. Again, we have a really special guest today in Harley Gordon. And Harley, I had the opportunity to see you speak, and the title of your talk was Protecting Your Most Important Asset: Your Family and Your Portfolio. And honestly, I wish I would've seen this presentation 16 years ago when I became a financial advisor because it just had such an impact on me. I've seen so many subject matter experts speak on long term care planning and healthcare planning, and they share all the data and the statistics and the risks, but the way you framed the conversation, it just blew me away. And then you also wrote a book titled The Conversation: Helping Someone You Love Plan for an Extended Care Event. So, I'd love to just start off this episode by having you talk about, number one, what you mean by an extended care event, and then following up with what this conversation is all about. So again, thanks for being here.
Harley Gordon (03:24):
Well, let's start with extended care. I found in the 35 years I've been in the business, and just to let you know, I'm an attorney who specializes in something called Medicaid Planning. For those who don't understand, Medicaid is a Federal and State partnership that pays for people with limited assets and income. And my job was to show people who had assets, sometimes substantial assets, the pause was intentional, how to transfer them so they could get on a program they weren't entitled to. How do you like that? That program was Medicaid. You might argue that that's really an awful, terrible thing to do when people with these kind of assets can pay for their care. It is an awful thing, unless it's your mother. Those are the people who came to see me, not the people who needed care, but their children.
(04:14):
I've asked them, did they have an advisor? Given their net worth. By the way, the average net worth of someone who came to see me was over a million dollars. And the answer is 25, 30% of the times they had an advisor. Did the advisor, if you know, ever have a proactive conversation with their clients about long term care? And if they knew, they said, "Yeah." And what'd your parents say? "Wasn't going to happen to me."
(04:38):
I started thinking about the expression long term care, and when you're talking to healthy people, Dave, they think you're talking about old people, dementia, nursing homes, whatever it might be, that doesn't go anywhere. In the world of trying to educate someone, you always want to make a statement that compels a client to say, "What do you mean?" So I came up with the expression extended care. Let me put it in a context for you in how I would talk to a client, if I'm an advisor.
(05:07):
Dave, I need to talk to you about a subject, that left unattended to and ever occurred, has the potential of causing serious, if not irreversible, consequences to the people you've invited into your life that you said you'd take absolute responsibly for, to protect, provide for. Now, what would a decent person say to that statement? "What do you mean," correct? And then I'd say, "Well, the subject, Dave, is extended care." What are you compelled to say? "What do you mean?"
Dave Alison (05:38):
Yep.
Harley Gordon (05:39):
Now I can continue the conversation. But Dave, what if I said to you, "Hey, Dave, hey, if you got a couple minutes, I've got to talk to you about long term care. People are aging and the more you age, more likely you're going to need care, and care is expensive, nursing up to $75,000 to begin, up to 150, 120 thousand dollars, so we need to plan and we need [inaudible 00:05:57]. Nothing happens.
(05:58):
And so what I learned to do is to phrase this conversation from a series of risks to an individual who, by the way, I have to tell you this, they deeply believe it's not going to happen, to a series of consequences to those people who were invited others into their lives and said they would make an absolute commitment to provide for and take care of. Now, anytime you talk to a person, in particular a man, and you bring them back why they got married in the first place, and they'll tell you it's to provide and protect for someone, anything that threatens that commitment is something they'll listen to.
(06:36):
We talk to people in terms of consequences, not risk. That explains why I use extended care and that gets into this concept, which you heard me talk about, is that you can't threaten people with statistics and cost of care. It just doesn't work because they think you're doing it for one reason, to sell a product. But if a person deeply believes that the risk is not there, then it makes sense to them that there are no consequences to others. Therefore, why am I having this conversation? But when you take the risk out and bring people back to why they got in the business of having a family, that's something they're interested in listening to. That was really the crux, as you know, of the presentation I made.
Dave Alison (07:21):
Yeah, and bring up a great point. We have a diverse group of clients. I have some clients that are in their thirties and forties, and their parents are still alive, and maybe the client in their thirties and forties has done well financially, but their parents have a more modest retirement nest egg. One of the concerns of the child is, what happens if mom or dad have some sort of health event, need some sort of care, whether it's in-home care, or they're caring for each other, or they need nursing home. And then we have the other end of the spectrum where we have a lot of clients in their sixties and seventies and even eighties, and of course, I think if there's one thing COVID taught us is you want to try to avoid a nursing home if at all possible. They think about, how do I leverage my assets for that healthcare that traditional Medicare doesn't cover? You're spot on with your thought there.
Harley Gordon (08:17):
I want to take this from two approaches, I think it would be very helpful to the audience. One is an advisor or a lawyer talking to a client in their fifties, sixties, or seventies, and ask him a simple question. So Dave, if you ever needed care, I can't imagine you'd want your children involved with this? Now, what would a decent person say to that thought?
Dave Alison (08:40):
No.
Harley Gordon (08:41):
Right. Do you know what we teach people to say? Pause intentional, by the way. Tell me what choice they'll have. Did that get your attention? So, when you have an advisor talking to a client in their thirties or forties, here's what we suggest the advisor say to the client, "Do you worry about your parents, Tom?" And a decent child will say, what? "Yeah, they're in their sixties and seventies."
(09:09):
Next question, tell me what happens to you? Tell me what happens to your wife? Tell me what happens to your children, and tell me what happened to your relationship with your siblings if your mother or father ever need care of an extended period of years? I'll bet your dollars to donuts, and donuts aren't very good for you, but they'll say, "I'm thinking about it," or "I went through it." You see how you approach the subject? You see? Because it impacts their life, their relationship with their spouse, their children, their business, and their siblings.
(09:47):
Let me tell you this, if a client ever needs care of an extended period of years, like the sun comes up in the east in the morning, I will tell you there's a very good possibility the children will never talk to each other again. That's a consequence. And when you start talking to people like that, well the client says, "Well, what if I don't need care?" Here's what I tell them, "Did I say you would?"
(10:12):
You see, Tom, you're looking at this as a risk to you. This is the conversation about a series of consequences to them. These people that you've sworn to protect. When you put it in those terms, they start thinking, wait a second, the risk to me, I still think is zero. But now this advisor's talking about the consequences and I'm starting to understand how serious they are, and that is what motivates people to take action. Consequences, not the risk.
(10:41):
By the way, if risk motivated people start to not drink and drive, no one would drink and drive. Do you know when they start drinking and driving? When they pay the consequences, whether it's jail or whatever it might be. That's how we approach the whole subject. If the guy says, "Look, I'm not going to a nursing home." You know what I tell him? You're absolutely right, but what if I don't live a long life? Never said you would. What if I don't need care? Never said you would. But let's look what happens to, to, to, others that you have a responsibility to if you did. That's a lovely way of approaching it, it's not threatening, and I've found when I've used it that clients come up to me and say, "I really have to think about it differently." That's the whole approach of the presentation.
Dave Alison (11:31):
Absolutely, and I think you make a good point there. So often, I'll say, as a man, we think that we're never going to need it. Or if we are, I saw a statistic, and you probably have the accurate numbers, but it was something like 80 plus percent of females pass away as a widow. And so the reality of it is, if a man gets sick first, the spouse is the caretaker. Can you talk about what your experience has been, or the consequences to a spouse when they have to become a caretaker? And not just the financial consequences, but just in life in general. Because if somebody hasn't experienced this in their own family, I mean, until I experienced this, or saw it in our own family, it was really hard to actually comprehend the magnitude of these consequences.
Harley Gordon (12:30):
Let me bring you back to something you said. Decent men cannot see themselves as being unavailable, ever. Now you think about why someone buys life insurance when they get married, and they've taken the responsibility of a spouse and a child. Life insurance is a physical manifestation of an absolute commitment. That income from that lump sum of funds is an extension of this person's commitment to the family. Think about it. Men cannot see themselves not being available to take care of their families at any point. Men also deeply believe that they're going to pass away before their wives, which is why they make plans to make sure, financially, that a spouse never has to turn to the children and ask for help. This is how we approach the subject. Now, I'm not familiar with your situation, was it a mom, dad or uncle or aunt or something?
Dave Alison (13:40):
Father and his wife, second marriage.
Harley Gordon (13:43):
Okay. I'll talk about second marriages in a second, but tell me, if you don't mind, how you felt seeing this person who was so important in your life, start to fail. You see how I choke up? Because my father needed care. I can tell you this, you are not there, you're 30, 40, 50 years earlier, and you see this person who brought you into this life, who now needs your care. That's very, very difficult for a child to comprehend. And by the way, then there are children who don't give a rats behind.
(14:35):
There are five children. Do you know what you've done as a mother and father? You've condemned them to sit in a room with no windows and no doors, and no way out, to fight and argue and bicker about who's going to take care of, where should you be taken care of, and who's going to pay. And by the way, of the five, only four are in, one's out. You know what he says? He can kiss my behind. That happens. That's the emotional connection that I try and make with people. For someone your age, to see your father decline, and hopefully you had a good relationship with him.
Dave Alison (15:16):
In this case, it's not him, it's his spouse, has dementia. He's-
Harley Gordon (15:20):
Look what it does to him.
Dave Alison (15:21):
He's turned into the caretaker.
Harley Gordon (15:24):
Here's what I'm sure he said to you, "It's none of your business. I'll take care of it." See? That's what guys do. You may or may not have been crazy about her, but this is a good opportunity to talk about second marriages if you want. You want to take a moment about that?
Dave Alison (15:38):
Sure.
Harley Gordon (15:39):
I'm in a second marriage. By the way, these pauses are intentional. Speaking about which, do you know when people listen to you? When you don't talk. They stop listening to you when all you do is talk. I'm in a second marriage. My wife has four children, I have three. Her kids, watch, really? That's high praise in second marriages. They tolerate me for one reason, I'm good to their mother. Cut.
(16:13):
Are they interested in my opinion about anything, including the weather? No. Now watch what happens. You know why you laugh? Because it's true. See, right now, watch what happens. Let's play this out. And by the way, for the people seeing this, if you're a guy, you need to have someone say to you, "Let's play that out." Men don't play things out, women do. Women worry about things that haven't happened yet, and if there's nothing to worry about, they'll find something. Guys, okay, well let's play this out. I'm in a second marriage. She has four children, her name is Susan. I have three children. I need care. I'll tell you this, that providing care to someone who's chronically ill will likely make a healthy caregiver chronically ill. So my wife starts to fail from taking care of me. Sound familiar?
Dave Alison (17:07):
I want you to say that one more time for anyone who missed that, because I think that's incredibly important.
Harley Gordon (17:12):
Providing care to someone who's chronically ill makes healthy caregivers chronically ill. Because extended care is a 24/7 absolute commitment because a person is so frail and so fragile that they're not safe. Ladies and gentlemen of the jury, extended care is a safety issue, pure and simple.
(17:35):
Now, Susan starts to fail, taking care of me. What do her kids think about their mother starting to fail, taking care of someone, not their father. They're starting to think, where the hell are his kids? All right? Then it creates something called kaboomski, which is legalese for, fill in the blanks. Okay? Now, I've done okay financially, my wife has done very well financially. What if I run out of assets? What do her kids think about spending their money? I'll repeat that. What her kids think about spending their money on someone not their father?This is what happens in second marriages. I am telling you, that's rarely ever talked about, but that's what happens.
(18:26):
Here's another example. You have a client who's divorced, not remarried. What we suggest a financial advisor say to that client, tell me what happens to your children if your former spouse needs care. Why? It's none of their business. It isn't? I'll repeat it. Tell me what happens to your children if your former spouse, who's not remarried, ever needs care? What are you talking about? What? See what just happened, David? What do you mean? Because you brought the kids in. Hey, tell me what happens to you if your ex-wife ever needs care. She can kiss my behind. Tell me what happens to your children. What? Your children. Listen to me, pay attention. All right, put the cell phone down. It's none of their business. Tell me what choice they'll have.
(19:14):
You see how you approach this subject? You see how you approach it? My former wife, Carolyn, and I've been divorced for 25 years, we're actually quite close. I got a long term care policy for her because I love my children, and they'll never have to choose to put their lives aside. You see how that works? That's what we really discuss.
(19:34):
By the way, in the half hour we've been together, have I mentioned one statistic?
Dave Alison (19:39):
No.
Harley Gordon (19:40):
Have I mentioned Medicare, Medicaid, nursing home costs? No. Because it has nothing to do with that. It's a deeply, deeply, deeply emotional subject. You saw how I choked up when I talked about your father? Looking at my father, who was a real tough guy, let's put it that way, to see him not being able to get up out of a bed, to see him when he had a severe stroke, and he wanted to speak and he couldn't. He got so angry. He got so angry at my brother, trying to tell him and he couldn't get the words out.
(20:20):
Now, you, sir, can tell me all you want that's not going to happen to you. And I'll tell you this, I agree. It's not going to happen to you. It's going to happen to them. What do you mean? See, what did I just say? What do you mean? I explain what happens to these people he brought into his life, and said, nominally, that he'd take responsibility for. Now, look, there are people, Dave, who don't care. That's a worse burden on their children, the guilt their kids have. Where were you when I was growing up? You're not such a tough guy anymore, are you? You see what this does?
(21:00):
Because there's no plan, because it's always been approached the wrong way, using statistics and cost of care and a nursing home. That's the last thing you should do. And by the way, the most difficult group of people to have this conversation with, you ready? Are financial advisors, most of whom are men. Because what do you think they think about who's going to happen to them? Do you think it's going to happen to the financial advisor? No. He thinks it's going to happen to his client. Does a client think it's going to happen to him, or the financial advisor? Well, the financial advisor. You see what you? Zero.
Dave Alison (21:37):
I think people can't start planning for this early enough. I mean, I'm 38, and I've already put plans in place so that my kids would never have to worry about this if something were to happen to me. But I feel like, as you probably know, Harley, I'm incredibly in the minority of somebody thinking about it already at this young of an age.
Harley Gordon (21:57):
But whoever had this conversation with you, if I was your advisor when you were 30, 32, before your mother-in-law was ill, and I said to you, tell me what happens, by the way, tell me what happens to your father. What do you mean? Tell me what happens to your father, and you, forget stepmother, his wife. You get what I'm saying to you?
Dave Alison (22:20):
Yeah.
Harley Gordon (22:21):
She's a nice person. Tell me what happens to your father, and you, and your sister, if your stepmother ever needs care. What are you talking about? You see how I got your attention? And then you would sit down with your father and say, "This has nothing to do with you, dad." What? "It has to do with us because of what it would do to you." And that's how we approach the subject, very, very powerful by the way.
Dave Alison (22:43):
Absolutely. Well, to close the chapter on that, although it's incredibly stressful, we've had that conversation with my father, and we had a plan in place. Things are stressful, but one of the things that you shared in a conversation I heard you talk about, too, that I just thought was so impactful. And then I want to talk about, I want to touch on this and then go to a topic of more just a traditional first marriage too, and some ideas there. But, you shared that you want to put people in a position to be a care supervisor, and not a caregiver, right?
Harley Gordon (23:22):
Correct.
Dave Alison (23:22):
The care supervisor versus caregiver. Can you touch on that a little bit, Harley?
Harley Gordon (23:27):
Well, my sister Candace and I bought my parents a policy. I asked my dad to buy a policy, he's a Second World War veteran. You know what he says? "Go waste your money. I made it through the war, I can make it through this." By the way, I said to him, "Dad, you were behind the lines." "Hey, you weren't there." So, I moved on from that subject. So, my sister, my-
Dave Alison (23:53):
Brave.
Harley Gordon (23:54):
You weren't there, what do you know? Okay, all right, so we move on. So, my sister Candace and I bought a policy because we knew my brother John, an angel sent from God, would take care of them and we knew what would happen. I explained to my sister what would happen, so we bought the policy. We told our parents we had the policy. He said, "Go waste your money." By the way, they both needed care. Here's what happened. The policy provided a stream of income every month that allowed my brother to bring in professional care. He ended up supervising the care which meant he could continue the family business and have a life.
(24:34):
Now, let's play out what happens if there was no policy. My parents were okay, but most of their net worth was illiquid. My brother would've had a really difficult time raising cash flow to pay for the care and would've done it himself. You see how we just played that out? We think our brother, every day he says, "Hey, stop. I couldn't have done it if we didn't have that cash flow." That's how you play that out.
(25:05):
Which, by the way, is a nice segue if you want to, to clients who tell their advisor, I can sell funds, or the other way around. But that's how a policy which provides, and they all provide a steady stream of income, allow the child to change their position from providing care, which is devastating because it becomes 24/7, to supervising the care of professionals.
Dave Alison (25:30):
Yeah, and it is a great segue, because one of the things that we talk about constantly is as you go into retirement, it's all about cash flow, cash flow, cash flow. You could have a mountain of assets, but to your point, maybe it's real estate, maybe it's business interests. I mean, quite frankly, if you have retirement assets, you might say they're liquid, but are they really? Because if you have to pull money out of them, you're not going to get a hundred percent of what you get out, some of it's got to go to the IRS. If you have after tax portfolio assets, you have to pay capital gains. You could be in a down market. Let's kind of transition to this concept of cash flow, how that impacts these types of extended care events.
Harley Gordon (26:15):
When I got in the business about 25 years ago, it was dominated by, and now since we're talking to consumers, it was dominated by people who worked on leads. And when you buy a lead from a company that produces them, and they respond to whatever the impetus is, leads generate people who need a product, or people who've had a prior experience. 99% of the leads that these people, these agents or brokers, were working were for people with a prior experience, or they needed the product. If they never could get through to people who were perfectly healthy, now here's one of the reasons why, they thought that they could use their assets to pay for care and the industry that was promoting long term care insurance. And by the way, we're almost finished with this, that's the first time I mentioned a product, isn't it? The first time. I'm doing it in a sense that, gee, you don't want to spend all your assets, do you?
(27:19):
And so they could never sell to someone with high net worth. When I got in the business, I changed the dialogue, and I came up with a concept that this is a cash flow issue. And by the way, the minute it's a cash flow issue, it has a devastating impact on the business model of an advisor. So, watch what happens when the client says, "I'll just use my assets." Again, pause intentional. What we suggest the advisor tell the client is that your portfolio is a capital asset. Now when you talk to people who've found success in life, they understand what capital is. The purpose of capital is but one, generate predictable streams of income. Fair statement?
Dave Alison (28:05):
Absolutely.
Harley Gordon (28:06):
I have a lovely office in a nice building. If it's not generating cash flow, they'd tear it down, hopefully I'm not in the men's room. So, when you start saying the portfolio was a capital asset, what are you talking about? See what just happened. So now let's take a look at using your portfolio, $2 million, or 3 million, doesn't really matter. So, what are we going to go to first? Okay, let's sell some stocks. But you see, the estate plan calls for those stocks to go through the estate for a free step up. Now you have to liquidate, and you've got all sorts of taxes. By the way, if you live in New York City, you know what the tax rate is between the state and the city? It's over 50%.
Dave Alison (28:46):
Yeah, a lot of my clients, personal clients, are in California. They're sitting-
Harley Gordon (28:51):
Oh, my God, I think the nominal rate is 9%. So anyway, so now let's play that out. You have to liquidate, so you have capital gains tax, obviously, and it's subject to income tax. Now, here's another issue, pause intentional. Market timing. If you liquidated your portfolio to pay for care in the last year, you've actualized an unactualized loss. Any advisor will tell you this, just sit back. Do not liquidate. It's a paper loss. You liquidate, it becomes a real loss.
(29:27):
Number three, liquidity. Many of your clients may be illiquid, they might have their assets in income producing properties by the way. Why in the world would you ever want to sell those properties? Could you sell them? What are the taxes on selling them? And most importantly, you've now lost the income. And here's a critical thing, that people don't think about. Every capital dollar you spend on your care is one less capital dollar that generates future income, which utterly, utterly, undermines your overall plan to make sure that your surviving spouse is provided for. So that's what happens when you understand what capital is, that's why I call retirement portfolios, Dave, cap. And they really are, aren't they?
Dave Alison (30:17):
They absolutely are. I know you haven't spoke about product.
Harley Gordon (30:23):
Yeah.
Dave Alison (30:23):
Because this is conceptual, but, there's been a lot of innovation in how to handle these consequences too. The one thing I would say is, it's not that I think, Harley, you or I are saying everybody absolutely needs long term care insurance. I think what I try to stress with my clients is, you have to have a plan. That's the first thing. A plan is much different than a product, and there are different products that are available that have come a long way. One of the biggest objections to traditional long term care was, well, yeah, Harley, but if I pay all this money in over time and then I don't use it, I essentially have nothing for it. I insure my house, and my house doesn't burn down, well, I get nothing back from that insurance.
(31:07):
There's other types of policies out there today, that if you pay into them, provide long term care, and if you don't use it for an extended care event, than that money stays in your family. Some of the stuff that, for example, I would set up on myself as a 38 year old, and so there's just a lot of different areas that strategic planning around having this conversation can help.
Harley Gordon (31:34):
Well, let's start with this. The product was sold to protect an individual. You wouldn't want to be a burden, wouldya? By the way? W-O-U-D-Y-A? Wouldya? No. No. So, if you have long term care insurance-
Dave Alison (31:52):
Is that an official Boston word?
Harley Gordon (31:55):
Yeah. Wouldya?
Dave Alison (31:55):
Wouldya?
Harley Gordon (31:57):
Look at me when I talk to you. Wouldya? So, the client says, what if I don't need care? But what if you do? I don't think I will. But is that reasonable? See what happens? You get into an argument. Was sold to protect an individual, who, let me play this out again everyone, believes there's no risk.
(32:17):
See, a lot of guys can bifurcate risk and consequences. If there's no risk, then in his mind there are no consequences, and that drives women crazy. Listen to me, that drives women crazy, because women see a risk and the consequences as one and the same. You see that? You want to drive your wife, great, Dave, do you have any kids?
Dave Alison (32:34):
Three little girls.
Harley Gordon (32:35):
Okay, go ahead. Hey.
Dave Alison (32:36):
And none of them will be caretakers for me.
Harley Gordon (32:39):
Listen, hey Dave, you want to drive your wife crazy? Go throw your little girl up in the air.
Dave Alison (32:45):
Oh, yeah.
Harley Gordon (32:46):
She'll have the best time ever. Your wife, "What are you doing? You're going to kill our kid. I can't believe I chose you as a husband." Okay? You see? Because you as a guy, what the hell, there's no risk, she's having the time for her life. Your wife sees her, she'll break her leg, she won't be able to play soccer, she'll hit her head, whatever it might be.
(33:06):
So you see, when you sell a product to solve a problem that you think exists, but the client doesn't think it exists, no, that doesn't go anywhere. So let's take a look at repositioning the product. You're absolutely right, it starts with creating a plant.
(33:21):
Now, here's something interesting, I'm going to say it slowly. If the advisor, or you've presented it correctly, the client looks at you and says, "So Dave, you are telling me I'm not going to need care. Is that what you've been telling me?" And we would teach you to say that's correct. Now the client says, "But David, you told me if I did need care, my kids would ever talk to each other again?" What do you say to that? You'd say yes. And you told me, Dave, as my advisor, that if I needed care, I'd have to reallocate cash flow which is already committed to my expenses. Is that what you told me? See? I would look at you and say, "Are you serious?" And you would say, for the first time, "I'm dead serious."
(34:08):
Now, he'll say, "I don't want that to happen." And the next step is exactly what you said, let's create a plan. Now here's the beauty of having a conversation based on consequences. Does the client still, listen carefully, it's a test question. Does the client still deeply believe that the risk of his or her needing care is essentially zero?
Dave Alison (34:28):
Yes.
Harley Gordon (34:29):
Absolutely correct. What motivated him to let you put together a plan? The consequences, which he measures as, 100%. So you're going to create a plan for a person who still deeply believes the event won't happen. That, in my world, is magic. Risk, zero, consequences, too severe. Now once the plan's together, it leads to the simple question, what's going to fund it? And that's what I've told the industry, to reposition the product as one that pays for the client's care to one that funds a plan to protect the client's family, and you know something? That works.
(35:10):
And you know what that reminds me of? It's life insurance, isn't it?
Dave Alison (35:14):
Yep.
Harley Gordon (35:15):
Disability income insurance. You know what all three share in common? They don't protect assets, David, they protect cash flow. Life insurance is a cash flow issue. DI is a cash flow issue. By the way, health insurance is a cash flow issue. And the same with these products. It should never be positioned as paying for your care, it's positioned as funding a plan that allows your family to continue with their lives if something happens to you. And that's how decent men want to think about their families. So, hopefully, that's helpful to your clients.
Dave Alison (35:47):
Absolutely, and I just want to remind, Harley, you don't sell insurance. You are-
Harley Gordon (35:51):
By the way, I forgot to tell you, I'm not licensed. I'm not licensed. But by the way, just ironically, that gives me tremendous credibility within the carriers, the manufacturers, because they don't want someone who's licensed because the first thing an advisor or a client's going to say, who are you doing business with? Who are you writing with? Are you getting a commission on this? And the answer is no. You know what I tell people? I think you might have heard me say this, I don't care whether you like the product or not, that's not why I'm here. You see how powerful that is? That's why I never got licensed.
Dave Alison (36:25):
Yeah. I just want to land the airplane with one thing, and for some people who haven't thought of this, is you talk about extended care events. There's really two big categories that put people into these extended care events.
Harley Gordon (36:41):
Yes, yes.
Dave Alison (36:42):
Can you share a little bit on that?
Harley Gordon (36:44):
They're called impairments. Again, pause intentional. There are two impairments, physical and cognitive. Physical impairments are chronic medical conditions that can be managed. They can be managed. They can be managed, with medication and therapy, they cannot be cured by either. Parkinson's, multiple sclerosis, severe stroke, chronic obstructive pulmonary disease, psoriatic arthritis. My son is stricken with psoriatic arthritis, which is an anti immune disease. It can be managed, it cannot be cured.
(37:24):
The second impairment is cognitive. A cognitive impairment, David, is a marked decline in one's intellect to the extent that the person who suffers this can no longer integrate his or herself with their family or their surroundings. Now, they both share one thing in common. The person who suffers from these illnesses are so frail and so fragile that they're no longer safe.
(37:52):
I talk to people in the audience whose parent has had dementia and it just breaks your heart. I remember, if I have a moment, I remember an ad that John Hancock did, had to be 15, 20 years ago. It showed two women, a younger woman and an older woman, sitting and talking and having tea. The older woman said, "I'm so glad you come here. It just means a lot for us to sit and talk." And the younger woman turns to the older woman and said, "Do you know who I am?" And the older woman said, no, but I'm so glad that you come to visit me. The younger woman said, "I'm your daughter."
(38:42):
That's what these things do to families. I'm your daughter. And so when you put it in those terms, I just took my 42 year old's daughter to New York with her daughter.,I basically raised my kids in New York City. I used to go eight, nine times a year. Do you know she wants to do now? Raise her daughter in the city. And there's my 42 year old, who yesterday, by the way, who yesterday was lying on my chest sleeping. You see what happens? So, have they left my house? Yeah. Have they left my life? Never. And that's how you have to approach this. I mean, I say to guys, I'm going to say to you, okay, and see what you think. So, you're married, yes?
Dave Alison (39:27):
Yes.
Harley Gordon (39:28):
So you finally did something good with your miserable life?
Dave Alison (39:31):
I did.
Harley Gordon (39:32):
See? Every guy says that. Yeah, yeah I did. And by the way, did you marry up? Yes or no?
Dave Alison (39:39):
Completely up.
Harley Gordon (39:41):
See that? And here's another thing a decent man says, when the children turn out and they say, good for you, what will a decent guy say? All the credit goes to my wife.
(39:49):
And that's what we're appealing to, people who are decent. You can't talk to someone who's not decent. You can't talk to someone who doesn't care about another. You can't talk to narcissists, you cannot talk to people whose whole world are egocentric. You can talk to people who've put their lives aside to provide for others, and that's really what this conversation's about. By the way, isn't it a powerful, powerful advertisement? I'm your daughter.
Dave Alison (40:18):
Absolutely.
Harley Gordon (40:19):
Devastating. Anyway, not that you asked my opinion, but.
Dave Alison (40:23):
No, Harley, this was incredible. You're definitely one of the foremost thought leaders in this space in our industry. You've done so much to serve advisors like myself, consumers out there, everybody who listens to this podcast. Although, hopefully, you're not doom and gloom and depressed after everything we spoke about.
Harley Gordon (40:42):
No.
Dave Alison (40:43):
But there's a silver lining it at all.
Harley Gordon (40:45):
My mother and father lived a wonderful life. The policies paid, my mother went to an assisted living, and you know how life is so circular? Who ended up being in assisted living? Her friend she grew up with. And guess what paid? The policy paid, at that time, the assisted living was $7,000 a month. The policy paid, and it paid for about $100,000. I don't care if it only paid for a month, right? It was there.
(41:12):
And by the way, these policies also include our care coordinators, because families are so confused when the event happens, the carrier brings in a geriatric care manager to actually put together a plan, and that's exactly what happened with my mother. This geriatric care manager talked to different assisted living, chose the right one, and, by the way, got my mother to come up from the Cape. My mother lived at the Cape, and she said, "I'm not leaving here." Wouldn't listen to her kids, but she listened to the care manager. So, that's how powerful these products can be, but only in service of funding a plan.
Dave Alison (41:48):
Absolutely. Well, if you haven't spoke to your advisor about it, please reach out to them. If you have any questions and you're working directly with me, please reach out to me. If you're working with one of our Prosperity Capital advisors, you have to have this conversation. I know if you're working with the Prosperity Capital advisor, I'm sure they're proactively having this conversation with you already, but Harley, everything you shared was so valuable today. Thank you for your time. Any closing comments? Over to you.
Harley Gordon (42:18):
No, no. I very much appreciate being able to get this message out, and if it brings people back to why they got in the business, if you will, of having a family, and it causes them to step outside of themselves for a moment and to see what their behavior, the impact it has on others, and if they could do some things to protect those people. That's really what the presentation was about.
(42:48):
And by the way, just again to remind everyone, in the 50, 55 minutes we've talked, how much time did we spend on insurance? Minute, two minutes? Because it was never an insurance sale. It was always a family sale. And by the way, last thing, families come in all sizes and shapes, don't they? There were two moms, there were two dads, different colors, but what they all share in common is a deep love for someone and bringing children in this world. You tell me if I'm wrong, it's just an expression of how much you love your wife, in this case. Anything that happens to her is something that's of interest to you, and that's what I hope, that's the point I hope I got across.
Dave Alison (43:31):
Absolutely. Thank you so much, Harley.
Harley Gordon (43:34):
Thanks.
Speaker 3 (43:35):
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