Intro:
Broadcasting live from the Business Radio studios in Detroit, Michigan. It's time for Detroit Business Radio. Now, here's your host.
The Mag
Lee Cantor here, another episode of Detroit Business Radio, and this will be a good one. Today we have with us N.Z. Bryant, Jr. with Patterson Bryant. Welcome, N.Z.
N.Z. Bryant:
Thank you.
The Mag
Before we get too far into things tell us about parent Patterson, Brian, how are you serving folks?
N.Z. Bryant:
Well, we're doing a lot in the area of both health insurance, which would be employee benefits that's health and life and disability and dental and vision for groups or corporations, typically, anywhere from five to our largest clients, 27,000 employees, but we do have clients that are three, five employees only because of the epidemic or the pandemic rather, that has caused businesses to shrink. And so we talk with them about the health care, but we also do executive benefits, those executive benefits might be Buy-Sell agreements, key person kinds of policies, non-qualified for compensation, estate planning, and some benefits of that nature will.
The Mag
Now for the organizations that don't appreciate how important it is to have somebody like you or your team working with them, can you explain how having a trusted advisor like yourself, and your team can really help not only save your clients money but actually help them kind of make more money?
N.Z. Bryant:
Well, this idea of having an employee benefits specialist, or broker, like myself is not anything new people have been outsourcing businesses or functions or responsibility in businesses for years, because they know that either they don't have the expertise, or they would rather do something else with their time and be more efficient at it. And so many people will actually ask Patterson, Brian, and we will come in, we will look over their benefits. Of course, everyone talks about cost. And so they want to try and see if they can get the same benefits at lower or less expensive costs or better benefits at the same costs. Sometimes we can do it, sometimes we can't. But the one thing that we always try and do is provide them with innovation and different ideas that perhaps they've not heard of before.
The Mag
Now, what's an example of one of those ideas is that something about the non-qualified deferred compensation and key person insurance are some of the things that may be not on their radar when they're either doing it themselves or don't have as good quality advisors as yourself?
N.Z. Bryant:
Well, that is an excellent point. A non-qualified deferred compensation program might be one of those areas. For example, I talked with a lady just yesterday that had about 150 employees, but she could not afford to really do a 401 K. But she was bringing in some very top-quality people. And so I said, Well, at this point, what you might want to do is do a non-qualified deferred compensation program. I think it's Andrew Carnegie who made a statement many years ago, he said, Take away my ships, my wagons, and my castles, but leave my key people and all that you've taken away everyone they have back.
And so what she was looking for are key people, people that could help her to run the organization. But not only to run it but to make it more than it already is. And so the nonqualified deferred comp is a program that says I will pick and choose In other words, I can put my vice president into this program, but I'm not going to put maybe someone else into it so that you can pick and choose the ones that you want to go into. And that's why it's nine qualify because it's not a tax-deductible program.
However, the promise that you make, and I believe that in light to two issues, one is the price. The other is the promise, if the promise is sufficient, then, of course, people will pay the price. And so the promise here is that if you continue to do a fine job, you stay with me until a given time, whether it be age 65, or retirement, whatever it is, then what I will do for you is I will give you $500,000 or 250,000, whatever denomination you want to come up with. But if you've got to stay here you've got to perform. And if you do that, that's what I'll do for you. And that's a great thing because the other piece of it is, is that in the event that they should die prematurely, then that promise that the employer made to that person, that promise extends to their family. In other words, I always say that we as a corporation will miss you both financially and personally. But we're not the only ones. Your family will miss you financially and personally.
And so what this plan does is it actually allows the employer to give that promise to that, that family and that 500,000 250,000 Whatever it was, that you promised the employee for staying there, and continuing to do a great job, you would actually give that to the family. And so when people hear that, they said, Wow, this is the kind of company that I want to work for, because at the end of the day, Lee, it's all about whether or not you care. And we have a saying that people don't care how much you know until they first know how much you care. And when people can find that you really care about them and what they're doing. And they'll try and make a difference in your life and in the life of your company. So I think that the non-qualified deferred comp is an excellent way of doing that.
The Mag
And it's like you say, you're, you're only as good as the promises you keep. And this is a great way to make a promise that you can keep, no matter the circumstances, as long as everybody kind of does what they're supposed to do.
N.Z. Bryant:
Right. And you know, the other thing is, is that with a, I remember, when I first got into this business, there was a company that was going out of business, and all of the employees were calling me regarding their pension plans because, at that time, they didn't have the 401 K's calling me regarding the pension plans, which was fine. And I was, of course giving them what they deserve. But I thought about the owner of this company, and I thought, here he is going bankrupt, and he doesn't have the money, but all of the employees are getting something. And I thought if he had a non-qualified for COP after doing some research, that would have been an excellent plan for that company. Because the other thing that it does, is that when I say that, I'm going to give the employee $500,000 Every retirement, you as an employer, you say, Well, I don't know that I could do that.
Well, keep in mind, that what you're actually doing is you're putting a life insurance policy on that person's life, the cash value is accumulating to 500,000. So if the person dies, you're the beneficiary of that policy, you have a separate agreement that says that you will give that money that you promise to their spouse, or their family if that person lives and of course, the cash value you will give to the employee that retire, not going to do it in duration, and Allah Psalm, you're going to do it a year at a time. In other words, if it's 500,000, that you promised, you're gonna get $50,000 a year for 10 years, at the conclusion of 10 years, the promise has been fulfilled. And guess what, you still have $500,000, and a life insurance policy on that person's life. So whenever that person dies, tax-free $500,000 or more will come into the corporation. And I just think that that's a great way to not only continue the business but also to grow your business. Because it's the key person, it really makes a difference in how successful you'll become.
The Mag
But that's an example of how your service isn't just kind of giving them a menu of things to buy, you're there to really consult with them, and to help them find the solutions to the problems that they may not even know those solutions exist.
N.Z. Bryant:
Absolutely, in fact, the lady I was telling you about, was looking more interested in a 401 K, and she didn't know how it was going to be paid for. And so I really did an investigation and analysis to determine it's not really a 401 K that she's really interested in, what she's doing is she's looking for some vehicle to attract and to retain quality employees. And this was the vehicle that would help.
The Mag
Right, but the only way you know that is if you have a really great relationship with your clients. Because that's not something that if they were You were just seeing them once in a while you wouldn't even be aware of so you must be meeting with them pretty regularly to understand their business and their real needs.
N.Z. Bryant:
Yeah, that's absolutely correct. When I first got into the business, we would sell, for example, a life insurance policy, the person would pay one monthly premium, and then we'd receive a commission for the entire year or for the entire month for the entire annual premium, which if the person and that meant that you didn't have to service the person because you had already received your income. I didn't particularly like that. I like the idea of if you are being paid, then you got to do something to be paid, bring value. And the more you bring value, the more they're going to want to keep you the more you bring value, the more they want to seek you. And so you've got to continually bring the value you should be in their face at all times. And in fact, if you are bringing the value that we speak up, then they will just automatically refer you to someone else. And so there's a twofold value there.
The Mag
Right and that's a refreshing way of looking at business. Not everybody looks at business in that kind of relationship-centered way. A lot of people look at Is this and like you mentioned before more transactionally is like you pay me this, I'll do this. And it's not really a true relationship where you're each caring about the other person and trying to work together for a better solution.
N.Z. Bryant:
Right, right. You're not? You're never really shown that you care about the person. And that's what we're all about.
The Mag
And now, NZ, how did having a background in teaching impact the way that you do business?
N.Z. Bryant:
Well, it comes from a standpoint that you really have to separate yourself from the student. In other words, you're not doing this for you, whatever you're doing, you're doing it for the student. And having made an impact on students' lives. I can remember students coming back to me, years later, and this is actually after I got into the insurance industry. I can remember students coming back to me, and I'd say how are you doing? So I'm doing okay, so now, where are you going to college? And they said I'm not going to college. And they said, why? My parents didn't prepare me for it. And I was like, What was that all about? Well, they didn't have the money. So then I did the financial planning to try and help people to find a way to save for college, then I walked into the corporate setting so that I could also help them find ways to have employees save money, whether it be the reduced the cost of the health insurance so that they could then pay or provide a 401 K, or to give bonuses, whatever it might be. And so I think that people that go into teaching are not people that care about themselves as much as they care about who they're talking to, and trying to teach them into, to help them later in life. And not just for that very moment.
The Mag
Now, let's educate the listener a little bit about a subject that gets maybe kind of confusing for a lot of people. Let's talk about life insurance for a little bit. How do you help your clients kind of land on how much life insurance they need, and the type of life insurance they should buy? Because I've heard a lot of different things from a lot of different people.
N.Z. Bryant:
So once again, I try and use the teaching aspect now that you want people to know everything that I know. But you do need to explain to them the different types of life insurance that they're being termed whole life, variable life, Indexed Universal Life, and those kinds so that they can see the difference. But the term is just what it says for a particular term of time. It is not for your whole life, it is not until you die. And so one of the questions I asked couples, in particular, is how long do you think you live, you think you live for another 20 years, they say, Yeah, another 30 years, of course. So the term only goes for 30 years. And so that's not a product that you need, I will tell you, it is less expensive. And the reason that people buy it is that if you're a business owner, they're just starting off, they have a partner, for example, they know that that partner brings in a certain amount of value, whether it be a certain amount of revenue, a certain amount of responsibilities, whatever it is that that partner brings in, they're bringing it in, and they have value. And so you put a life insurance policy on that person's life. So in the event of their demise, then you would receive X number of dollars.
So that value that you lost because you lost the partner within come to you in the form of life insurance policy death benefit. And then you can take that death benefit and perhaps hire someone else, but make up for the loss of that party mortgages, for example, maybe a 30-year mortgage, and so you may buy it for that period of time, chances are, you're going to have more than one house in that lifetime. And so maybe that's not the way to go. So and you asked the question about the accumulation of cash, the retirement benefit that is inherent in some policies, life insurance policies, and college education, the fact that you can borrow from policies does provide a certain amount of value to the life insurance policies that are not term policies. And so there's the question that is asked after that is, how much do I need? And that the typical flat answer is somewhere between five and 10 times your income? So you may settle on seven times the income, but what do I need all of this life insurance for? So you asked the questions? Well, do you have a mortgage? If you have a mortgage? What's the amount of that mortgage?
So if you should die, do you want your spouse to continue to live in your family to continue to live in that house? If the answer is yes, do you want to make certain that that happens? And so maybe you want to take a life insurance policy, so that for the value of the mortgage so that in the event of your demise, they would have the option of paying that mortgage off or not. And then secondly, are the kids going to college? Are they in private schools now? How much does that cost? And then once we calculate the total cost of college education Shin, and private school education, once again, in the event that you're not here, where's that money going to come from? And so then you set aside money for that, then, of course, one of the big obvious questions is, if both spouses are not working, and or one is making tremendously more than the other one, and that spouse passes away, then is the other one going to be able to maintain the lifestyle that they have? I was just at a client's house, there's out on the lake that must be a three $4 million home and the spouse is not working. So the question becomes, will she be able to stay there in the event of your demise and that income that coming in, so all of those factors have to be figured out yet? So those are just some basic kinds of things.
The Mag
Right? And when it comes to insurance, there are so many different types of insurance, you have long-term care, as you get older, you have a disability while you're working, and you can't work. How do you kind of walk your clients through all of these trends? It just seems so overwhelming from a customer standpoint, do you do it all at once? Or is it something that kind of gets brought up at the appropriate time as the person ages?
N.Z. Bryant:
You have to bring it up when is the right time. But if you do a proper job, you're going to ask questions. The questions may be in the area, as we were saying, Does the spouse work? What's the spouse's income? What's your income? Do you have a mortgage? And do you have a disability plan at work in the event that you become disabled so that the mortgage can be paid, you may not at any one time, say, Okay, you need to buy this, this, and this, you may just say, Well, here's the most important thing that we can do right now, given the resources that you have in terms of income as they get older, and you don't want to necessarily wait until someone reaches age 70 or 65, in order to talk about a long term care policy. But certainly, at that time, they are talking about long-term care. And I was just with a customer the other day, and he was telling me about a long-term care policy that he had bought, he had bought it for his mother. And he said I hate long-term care. And I said why? He said, Because I bought one on my mother, she went into the nursing home, she stayed in there for two months, and then she died. And so I wasted all that money.
And I said, then you have a long-term care policy that also included life insurance so that if she had die, you would have actually gotten back life insurance or a death benefit. And that would have noted more than paid for all of the premiums that you had paid. And he said I didn't know anything about that. And there's even policies that you can take a lump sum, for example. So let's say that you've got $100,000, sitting into a bank account, and it's getting 0.0 point 0%, you could actually reposition that asset over into a long-term care policy, and it would still get the same interest rate. But in the event of your need for long-term care, then it would have $300,000 that you could draw from to pay for long-term care.
But the fear that people have is that I'll never need long-term care. So I'm wasting my money. And so in that case, then the person that they never needed, they die, they would receive $100,000. Or they may say, What happens if I need that money because it's sitting over in the bank. And if I need it, I can go get it. But the same thing about a long-term care policy, if you need it, this particular time, you can go and get it and have $100,000 there from the day you start to the day you take it up. So there are different kinds of policies. And so people have to be educated. And so when I talk about teaching, it is a process of educating but it first begins by finding out what their needs are understanding that you may not be able to take care of all of those needs at once but then zeroing in on the primary needs.
The Mag
So now for your clients. It sounds like obviously, you're a trusted adviser when it comes to the insurance side. What is the other kind of players on the team that you think that people should have to build that kind of quality team of trusted advisors?
N.Z. Bryant:
Well, you're definitely going to need a CPA or an accountant to do the taxes you're going to need an attorney to do and I suggest that everyone has a wheel or a trust. For example, I believe that we're oftentimes first-generation 1000 heirs and we should be second-generation millionaires. And we're not because we've got learned the importance of leaving a legacy and do not learn how to properly leave a legacy. Every time we die. The next generation has to start all over again. And you see stars like Aretha Franklin or prints or Elvis Presley, and it doesn't have to be a recording artist, but many, many people, in fact, it's only about 5% of the people in this country, the richest country in the world that have trust.
And so people need to understand the value of trust. Now, when you do the estate planning now, it used to be that if you had over $1.2 million in assets, then you would be hit with estate taxes. Now that amount is over 10 million. And if you're a couple, it's over 22 million. So the need for the money to pay the estate taxes is not as great now, as it was before. And of course, we never know what the change in the administration and the President or how things are going, to be in the future. But those are things that we have to think about.
The Mag
And they all kind of fall under your umbrella, right? Because you're kind of looking out for their well-being and their legacy and their family situation. So all these things kind of bleed into each other.
N.Z. Bryant:
They do. And if I find that there is an area, that is not my area of expertise, I know whose area it is. And so what we can't do, we've we know who can. And so it's important to have the right kinds of people, people are what they are for two reasons the books they read and the people they meet, surround yourself with good people and of course, read the period best in books. And so I try and make certain that I surround myself with good people, or at least read and know who it is that I need to contact in the event that we need a trust done. For example, I'm not an attorney, I may know about trust and wheels and be able to tell you about the things that you need to do. But you're gonna have to have an attorney to actually draw it up.
The Mag
Well, NZ if somebody wanted to learn more substantive conversation and more subjective conversation with you or somebody on your team, what's the website or best way to get a hold of you?
N.Z. Bryant:
So the website is, of course, pattersonbryant.com. My email address is NZ@pattersonbryant.com. And the telephone number is 248-433-9002.
The Mag
Well, thank you so much for sharing your story today. You're doing important work and we appreciate you.
N.Z. Bryant:
Thank you very much for having me.
The Mag
All right, this is Lee Canter. We'll see y'all next time on Detroit Business Radio.
Image source: https://www.linkedin.com/in/nzbryant/
