Back to school: Books that revitalized my marketing career

Among my cherished hobbies is reading. My bookshelves are filled with volumes representing various genres, including the classics (Jane Austen is my favorite), ocean liner history, travel, business, and professional development. Additionally, I have a collection of contemporary literature on my e-reader.

I enjoy, as well, sharing my thoughts on the books I’ve read. I am a regular contributor to Goodreads, from where I also find recommendations for other books I might enjoy. (And, those are almost always spot-on.) Since returning to school to obtain my professional certificates in copyediting and marketing and branding, I’ve read some very helpful (and, at times, fun) books that are pertinent to my career.  I share my reviews, originally published on Goodreads, with the hope that others may find them useful.

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Mobile Marketing: An Hour a Day (Rachel Pasqua, Noah Elkin ~ Published December 26, 2012 by John Wiley & Sons)

I learned a great deal about mobile marketing from this book, some of which I am already putting into practice. Although this text was assigned reading for a college course I took over the summer, I would recommend it to anyone who wants to learn more about this essential, emerging business and how to develop actionable plans for marketing through mobile media.

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eMarketing: The Essential Guide to Digital Marketing (Rob Stokes ~ Published 2011 by Quirk eMarketing (Pty) Ltd.)

This book was assigned reading for a university-level continuing education course in Internet marketing. The price could not be beaten; it was a free download from the publisher. The material was organized well and included useful charts for planning and measuring marketing goals. My main issue with the book, however, was that it could get confusing for the American learner as the book was published in a different continent. Many of the Web sites mentioned were not familiar to me and, as a trained grammarian, I found myself distracted by a form of written English with which I was unfamiliar. I’d consider this book a decent resource (especially that it is available at no cost), but not the only resource for those who wish to learn about eMarketing.

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Integrated Advertising, Promotion and Marketing Communication (Kenneth Clow, Donald Baack ~ Published December 27th 2010 by Prentice Hall)

Integrated Advertising, Promotion and Marketing Communications was assigned reading for a recent class in Integrating the Marketing Message — and was an excellent choice by the instructor. The chapters were organized in a way that made sense, particularly for a student like myself who had been away from the classroom for many years. I found the lead-in vignettes, integrated campaigns in action features, and examples of advertisements very helpful in expanding my understanding of the material. The only negative was its price — a used copy was going for roughly $140 at the time of my purchase. Still, in retrospect, it was a decent price for such an informative text that I know will serve well as a reference book for years to come

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Special mention: Eats, Shoots & Leaves: The Zero Tolerance Approach to Punctuation (Lynne Truss ~ Published April 2006 by The Penguin Group (first published 2003))

I don’t have to admit to being a stickler. Everyone who knows me is already aware of my grammarian tendencies. I read Eats, Shoots & Leaves: The Zero Tolerance Approach to Punctuation on and off during a period three months, each time with a grin as I realized that I was not alone in my love of punctuation. And, that’s exactly what this book is about — the evolution of punctuation. Author Lynne Truss takes us on a journey from the early printed form of language to today’s emoticons while combining historical references with a bit of humor. Note that this is not a book about grammar; nor is it a definitive guide on how to use punctuation (as conventions vary between countries). Yet, for those of us who cringe at the misuse of the apostrophe or appreciate how a comma can change the meaning of a sentence, this is a wonderful read that will keep you entertained.

Have you read any good business books lately? Please share in the comments section, below.

Cruise alliance is a model for the retirement industry

A few weeks ago, I deviated from my retirement research to focus on another area of interest – the cruise industry. The Cruise Canada New England Alliance held its 2013 Symposium in my city and I was privileged to attend this three-day conference that featured discussions with executives from cruise lines, port authorities, and other industry stakeholders.

As I listened to the presentations, I could not help but think of the applicability to the retirement industry. This was a discouraging exercise.

Let’s backtrack. The Cruise Canada New England Alliance consists of port authorities of five separate regions—New York City, Boston, Maine, Atlantic Canada, and the Saint Lawrence. Between them, they represent nearly 40 ports of call in 3 U.S. states and 5 Canadian provinces. The Alliance was established in 1988.

All of the members share the goal of maximizing passenger traffic to their ports. After all, an influx of tourists can have notable financial benefits for a locale. For example, the Historic Charlottetown Seaport in Prince Edward Island estimates that cruise ship calls during 2012 generated $13.4 million for the province. Therefore, it might be reasonable to draw the conclusion that these port authorities are competing for passengers.

Yet, that is not the case. Before you can get cruise ships to commit to regular visits to your port, you must first convince the cruise lines that the region itself is worth considering. And, that is the goal of the Cruise Canada New England Alliance.

And, that also exemplifies a key difference between the two industries I follow. In the retirement industry, financial services companies have a number of products worthy of consideration for a retirement portfolio, and many can fit together as neatly as a cruising itinerary. However, there is a strong tendency to point out the disadvantages of competitors’ offerings rather than join forces to explain how to address the retirement issue in the first place.

Not every product is right for every investor who is saving for retirement. And, any product recommendation should not be considered by itself—that is, it needs to be considered for its role in the overall journey. In that area, the retirement industry has a lot to learn. In the meantime, I am continuing to weigh my options for my next Canada New England cruise.

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Want guaranteed income for life? Then opt in…again.

An article in today’s issue of InvestmentNews describes how one insurer’s plan to save a retirement income benefit could ultimately result in the loss of the benefit for some customers.

The Hartford Life and Annuity Company (The Hartford) will, as of October 4, require long-time variable annuity (VA) policyholders who elected the Lifetime Income Builder guaranteed lifetime withdrawal benefit (GLWB) to reallocate their underlying fund investments according to a prescribed formula. Those who do not will forfeit future guaranteed lifetime benefits.

This is a frightening prospect for a number of reasons.

The GLWB has been a key selling point for the annuity industry since the time of its introduction in the mid-2000s. According to the LIMRA report VA GLB Election Rates (2012, 4th Quarter), the GLWB election rate was 62% in fourth quarter 2012, easily eclipsing the 18% election rate of the second-most popular guaranteed living benefit.

Additionally, a large part of the growth of the GLWB in the industry involved so-called product development wars, in which insurers continuously one-upped each other to offer the most generous benefits to investors. Insurers even one-upped themselves to retain market share. And, when the economy faltered and hedging became extremely difficult, a reduction of benefits by one company opened the floodgates for the rest to follow.

Finally, advisors must now contact affected clients, some of whom were not theirs to begin with due to the passage of time and M&A activity in the years since the policies were sold. Inevitably, some will be unable to locate.

In all fairness, insurers have little choice when managing the risk inherent in these benefits. The implementation of investment option guidelines in concert with living benefit selection has been commonplace for years—whether in the form of asset allocation models or formulas that place limits on the percentage of funds allocated to specific asset classes.

Enacting such changes years after policy issue is permissible as the standard language in the contract between the insurer and policyholder included clauses that covered the insurer for a variety of contingencies. Even so, it was believed by many in the industry at the time that it would be unlikely for these to go into effect, other than fee increases.

Yet, this is my concern—given the copycatting that goes on in the VA industry, will it be long until other insurers terminate benefits unless customers take specific actions to keep them active? Discuss below.

Opening day

The arrival of spring in Boston is not complete until Opening Day. By this, I refer not to Fenway Park (for America’s pastime), but to Cruiseport Boston (for my pastime). Tomorrow marks the beginning of the 2013 cruise season in Boston, as Norwegian Cruise Line’s Norwegian Dawn departs on the first of her weekly, seasonal cruises to Bermuda. The attached photo of Norwegian Dawn was taken on Opening Day 2012, and I hope to get to the port tomorrow to capture a new photograph. Welcome home, Norwegian Dawn. And welcome, spring!

Norwegian Dawn, Opening Day 2012 (c) 2010-2013 NauticalNotebook.com

Norwegian Dawn, Opening Day 2012
(c) 2010-2013 NauticalNotebook.com

Learning from sequestration – a case for a base income

A recent article in The New York Times described the human impact of reductions in unemployment compensation due to the federal government’s automatic budget cuts. According to the article, the level of emergency unemployment compensation (EUC)—defined as payments to those who have collected benefits for more than 26 weeks—decreased by nearly 11% effective this week for New Yorkers. (In my state, Massachusetts, EUC reductions will be 12.8% as of the first week of May.) These decreases, which will impact every state to varying degrees, will be in effect through September.

The New York Times profiled two individuals—a GenXer who is a married mom of a 7-month-old child, and a Millennial whose $60,000 per year job vanished nearly a year ago. There was no questioning their fear. How were they going to pay for groceries, for diapers, for medical needs? As one of them put it, “$40 a week adds up.” These are not luxuries; rather, they are basic living expenses.

Their stories got me thinking of parallels to income in retirement.

The key takeaway for me was that, no matter what your age, a base level of income is absolutely critical.

To be clear, there was nothing that long-term unemployed individuals could have done to avert their current financial situations. (Even an emergency fund would have, very likely, run dry by now.)  Yet, this brings to mind something they may be able to rely on later, once they’re able to amass several years’ worth of savings—an income, or immediate, annuity.

Data from the Beacon Research Fixed Annuity Premium Study shows that income annuities are growing in popularity. During 2012, income annuity sales represented 13.8% of total sales of fixed annuities, up from 11.1% in 2011, and sales of the product grew 8.5% year-over-year.  

So, will memories of unemployment be the impetus for even greater consideration of income annuities down the road?  Will Boomers, many of whom are also dealing with extended unemployment, roll over a portion of their 401(k) assets into income annuities? Only time will tell. Speaking for myself (a trailing-edge Boomer), the uncertainties of the financial markets have shown in real terms—not just via conceptual actuarial calculations—the importance of having a base income.

I will be paying close attention.

Reference: Generations, defined

Baby Boomers, Silent Generation, X, Y, Millennials? What does this all mean? I love this table compiled by the Pew Research Center. (By the way, Generation Y and Millennials are synonymous.)

How a conversation with Mom put the retirement crisis into perspective

During a conversation with my mom a few nights ago, she mentioned something that both resonated with me and validated a position I’d maintained for some time.

It happened as I detailed my difficulties in finding employment as I approached my 50th birthday. My mom responded – most assuredly in a helpful manner – that people my age are usually getting ready to retire. Perhaps, she said, that was something I should consider. When I replied that I still had 15 to 20 working years ahead of me, it was her turn to be surprised. For Mom, age 50 meant that retirement was approaching. For me, age 50 means that I am in the second half of my career.

And, my family is fairly representative of others. Among the findings in the recently released 2013 Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates was that today’s workers expect to retire at a later age than that of their counterparts of a generation earlier. Specifically, 36% of today’s workers expect to retire after age 65, up from just 11% in 1991. And, only 9% of today’s workers expect to retire before age 60, down from 19% in 1991 and 24% in 1998.

Even so, the EBRI/Greenwald survey reports that 37% of today’s retirees were younger than age 60 when they retired, continuing a two-decade-long trend of retirements occurring before they were expected. Many of these early retirements, according to the survey, were due to unexpected, negative events such as loss of employment. And, this leads us to an important point—one that I shared with Mom during our call. Today’s workers do not have the confidence that our retirement savings will sustain us for the rest of our lives. The EBRI/Greenwald survey found that 49% of today’s workers have little or no confidence that their retirement savings will be able to provide a comfortable lifestyle; this is up considerably from the 1995 survey, in which 27% expressed that same sentiment.

The selection of a retirement date is just the beginning. The retirement experience of my generation will bear little similarity to that of our parents, resulting in a population of trailing edge Boomers who will not be able to look to their parents for retirement advice. If we rely on the same strategies as our parents did, we will find ourselves in a critical situation when the time comes. The retirement crisis is very real, and education for advisors and individuals will be instrumental in helping Boomers forge a path to lifelong financial security.