Earlier today our affiliated blog, The Settlement Channel, posted a provocative question about whether or not the Structured Settlement profession needs to heed the advice of the fictional ad man, Don Draper of the long running series, "Man Men." I've decided to copy it here in it's entirety so those looking for advice on structured settlements as a profession can read the complete piece on this news site. Enjoy!
"If you don't like what's being said, change the conversation."
One of the enduring lines from the iconic cable drama "Mad Men" is provided by the fictional advertising guru, Don Draper. Portrayed in the series as a genius in marketing, advertising and counter intuitive thinking, many of his ideas and slogans actually have great relevance in a new media world.
What can Don Draper teach the structured settlement profession about new media?
Don Draper had multiple character flaws, but it was obvious that there was great wisdom in that particular line as it continues to resonate with fans and marketers years later. It was uttered during an early episode set in the mid 1960's, when developers were facing outrage over an announced plan to tear down the Old Penn Station so as to build the new Madison Square Garden. The Ad man's advice was essentially to stop talking about and defending what was being lost and to instead talk about and champion what was about to be gained. Great advice.
So how does this relate to the structured settlement profession,and in particular the things being said about structured settlements and settlement planning in general?
First, in the last year we have witnessed an avalanche of news, both online and in standard media, concerning the factoring, or sale, of structured settlement payments and the abuses which are alleged to occur when those transactions take place. The primary focal point of the stories was in Baltimore, Maryland, where it was discovered that the late Freddie Gray was one of thousands of lead paint children, who after settling their liability case using a structured settlement, eventually sold those payments for lump sums of cash at a steep discount. The details of how that all occurred and it's impact aside, having already covered that in prior posts, but what really matters is that the term "structured settlements" has been repeatedly associated with fraud, corruption, bad planning, exploitation and even racism. While the primary structured settlement market likes to gloat about how the secondary structured settlement market "got what was coming to it", they completely miss the point that the concept of structured settlements as a brand has been essentially destroyed as a result.
The vast majority of politicians, regulators, courts and even trial lawyers when asked to name a structured settlement firm would almost certainly reply in unison, " JG Wentworth" due to all of the advertising on selling structured settlement payments that has saturated traditional, trade and online media. Now you can add in major stories from Washington Post, CBS news, NPR and various Gannet dailies, with the result being that the term "structured settlement" is carpet bombed and associated with the worst kind of professional practices. It's a mess, it's happened and there is no turning back from it. NSSTA, SSP and structured settlement professionals can not possibly continue to pretend the brand isn't badly damaged and that this damage is impacting our professions future.
So, what would Don Draper say to the over 400 structured settlement experts and settlement planning professionals that make up the primary market?
1. Change the conversation. If our profession continues to glory in the abuses of the secondary purchasers of structured settlements, instead of refocusing the dialogue toward the exceptional benefits of structured settlements in personal injury cases, we are doomed as a brand and a profession. Enough about factoring abuses and corruption, let's discuss instead how directing payments of a structured settlement into a trust would have likely prevented the vast majority of cash out's, as there would have been a responsible entity to vet the decision to sell. Change the conversation to what works, not what doesn't!
2. Use their bad news as your good news. Reporters and news organizations couldn't care less about the survival of the structured settlement profession, they are looking for Pulitzer's, professional respect and audience. They simply report what they see as "news" and then move on to the next story, while settlement professionals have to live with the fall out. In this case it's simple to show lawyers, injury victims and others that these changes prove how serious regulators, courts and lawyers are about protecting injury victims settlements. Then highlight these law changes and process improvements and use them as the opportunity to discuss why protecting structured settlements is so important in the first place. People are hearing the term "structured settlement" online, in news and on TV, so take time to let clients know what a structured settlement actually is and why it is so important in protecting injured victims.
3. Take full advantage of new media, social media and effective tools at your disposal. The tools available to our profession are extensive, powerful and inexpensive, yet virtually all but a hand full of organizations and professionals actually use them. Blogging, podcasting, video commentary or associating with professional broadcasting cooperatives like The Structured Settlement Expert Directory and Settlement Channel are all options ANY planner can use. Instead we see either a scatter shot, or non-existent, effort to get involved in social media and commentary to our clients. You can get it done in a cost effective fashion that is powerful, impact-full and generates good will and new sales. There is simply no excuse for professionals to not invest at least 4 hours per month, one hour per week, toward branding yourself or your firm online.
4. There is strength in numbers. The reality of new media and social media is that there is incredible strength in search, relevance, credibility and news feeds when you join a marketing cooperative, or if your firm is big enough, when you start your own online channel. For over a decade structured settlement professionals have bemoaned the fact that "we can't compete with factoring companies advertising budgets", so our associations, life markets, general agents and others elected to do nothing. At the very time when someone can for a few hundred dollars per month have a full blown video marketing platform that feeds into all major news feeds, most members are paralyzed into inaction or just jealously guard their dwindling number of clients they currently have. Joining a marketing group empowers you, dramatically amplifies your message and allows you to keep your current clients and acquire new ones.
5. Start making your own news and stop being a punching bag. Be on the attack. Manage your message and brand or just sit back and take it. Enough said.
The tools are in place, and have been in place for over a decade, for the structure settlement profession to brand our services as a social and financial good for injury victims. With the exceptionally low cost of video commentary and the availability of new media collaboratives, like The Structured Settlement Expert Directory , it is now possible for both individuals and the profession as a whole to dramatically improve sales, increase use of structured settlements and to educate our market on the various creative applications of the annuity platform at it's core. It's time to get moving and stop making excuses, our profession is at stake and we all know it!
In part two of The Settlement Channel's look at the issues of competency and guardianships, we today turn our eyes on the amazing drama unfolding in the case of Sumner Redstone, the legendary chairman and driving force behind Viacom. In the last few months we have witnessed 5000+ word profiles in Vanity Fair, NY Times and other publications looking into the maneuvering by family, business associates, shareholders, foundations, girl friends and companions, all with an eye on getting control of the $40 billion Viacom empire, or the Redstone estate, when Mr. Redstone eventually expires.
What makes this particular case so intriguing is that it centers largely around how competent the one time media power figure is at this point in his life to make financial, business and estate planning decisions. Just two weeks ago in Los Angeles a judge abruptly ended what was expected to be a long hearing on competency and control of assets by Redstone's daughter, and his two former female companions, who stood to gain a substantial financial sum if a prior directive was upheld which gave them millions in assets. The court ruled, after listening to a video tape deposition of Redstone uttering profanities directed at his two former companions, that Redstone was still competent to provide orders and direction as to his care, his estate and his business.
No sooner had that hearing been resolved when it was announced last week by Redstone's daughter, that her father was also removing his long time associates from control of his trust and foundation, each of which has substantial shares of Viacom, and as such, controlled to a large degree the operation and decisions for much of the company. The basis for this decision? The directive from the court that Redstone is competent and that he now wants to make these changes. The response from the spurned business associates? Why of course a response that Mr. Redstone is NOT competent, despite their testimony several months prior that he WAS fully competent in the prior matter of the two companions attempting to retain control of the assets. They didn't anticipate that assessment coming back to be used against them, so the war for control rages on with no end in sight.
Obviously I can't do this all justice in a short blob post, so I recommend you read the NY Times article, the Wall Street Journal article and the Vanity Fair articles covering all the players and what the current status is. Trust me, it's fascinating and changes daily.
So let's go back to my original question, " Is Summer Redstone competent enough to sell his structured settlement payments"? Or, I could frame it another way, " Is Sumner Redstone competent enough to plan his estate and purchase a structured settlement?" Ridiculous questions you say, Sumner doesn't own a structured settlement so why even ask it, right?
Not really, as my hypothetical goes to the heart of an issue that has gotten constant coverage over the last 8 months, which is the Baltimore lead paint cases and the contention that the people who sold their structured settlement payments were not competent to do so. In those cases, or in last weeks commentary on Britney Spears, as well as the Redstone case, a central question that needs to be asked for which there is no easy answer is, "Who determines competency in an adult and at what point are they unable to make fully informed decisions about their financial future?"
In the Sumner Redstone case, I would content that ANY annuity sales person who approached him about buying an annuity program at this point in his life, and who successfully got him to sign an application and put money in an annuity, would probably be up on charges for financial elder abuse or the sale of an unsuitable product. There are laws in most states that protect elderly people who are not deemed incompetent, but yet are afforded legal protection against predatory sales practices. However, does a court ruling on Redstone's competency mean you get a free pass on selling a questionable annuity package that might be unsuitable for a person, but which a court or the person waves through?
So, when is an impaired, but not incompetent person, no longer able to determine whether to buy an annuity or to sell future payments? Look at Redstone and ask that question, then look at Ms. Spears or the lead paint cases, and ask the same question as well. There is no easy answer even when you are talking about people with millions of dollars and access to the best legal, financial and estate planning assistance in the world.
Yet, in the Baltimore lead paint cases the attorney's, planners and structured settlement brokers faced the same general question on how much impairment was provable and how would it impact future decisions and care. It is usually quite clear in lead paint cases that a doctor or vocational expert outlines the ability of the person in question to manage their affairs, this is the basis by which they get their settlement. They are impaired, likely impaired for life and generally considered not competent to manage their affairs. Yet in most cases a structured settlement was put in place under the assumption that the impaired individual needs the certainty of payments over a life time or period certain, so as to keep them from making poor financial choices by restricting access to their money. So far so good, we can all agree this should make sense in theory.
However, we all know there is a robust market of companies and investors looking to PURCHASE payments like those in the Baltimore cases. Everyone who is even remotely involved in court settlements and structured settlements knows this. However, no protections were put in place beyond the purchase of the structured payments which would have provided for a guardianship, a settlement preservation trust or an asset protection trust, all of which are an excellent line of defense against unwise decisions. There are companies who specialize in these trusts, such as First Capital Surety & Trust Company, which can arrange long term protection for structured settlement payments.
So why weren't these protections in place and why is the AG of Maryland now suing factoring companies on the basis that they exploited a vulnerable class of consumers? They weren't in place because determinations of competency and guardianships take time, they cost money and it requires more work and service on the part of the structured settlement broker or settlement planner. In other words, it's too much trouble, it's too much cost and it's too much liability for those promoting the structured settlement to take the next step an arrange those protections for vulnerable claimants. So what we have in effect is a situation similar to Redstone's. The victims are deemed competent enough to get their settlements arranged and put into structured settlements, however, they are apparently considered too incompetent to know the impact of selling those payments, despite the process being over seen by Maryland courts, judges, clerks and others in that process. Too impaired for one decision, yet competent enough to make another, how can that be?
My conclusion. That while the cost of setting up a guardianship or a settlement preservation trust for a potentially vulnerable plaintiff at settlement might seem steep, how does that cost compare with the sharp discounts they paid to legally transfer the ownership of their payments to a settlement purchasing company? There is a cost for EVERYTHING in life, but in this case we know that determining competency is hard, particularly if contested, but the cost of a financial misstep can be in the hundreds of thousands, or in the case of Redstone, in the millions or billions. I encourage settlement professionals to start looking at trusts, guardianship and asset protection options for a wide class of plaintiffs. My next commentary will look at the types of solutions that can be used which are relatively low cost, effective and protect vulnerable claimants from future mistakes.