Travis Thompson Podcast

Speaker 1 (00:00):

This is one of the very few cuts that we've ever done in a podcast.

Speaker 2 (00:03):

You're about to have about eight more, so just be ready, <laugh>.

Speaker 1 (00:07):

All right. Here we go. Welcome everybody to the Alliance Group podcast, and we have a special guest all the way from Charlotte, North Carolina, uh, Travis Thompson with Diamond Life. Uh, Travis, welcome to the show, man.

Speaker 2 (00:20):

Thank you. Awesome. To be here 23 years and, uh, this is my first experience seeing what you guys do, uh, here every day.

Speaker 1 (00:26):

Yeah, man. 23 years, uh, with Alliance Group, which is, which is pretty amazing. Um, you have, uh, you're obviously, you know, top of our production charts every single year. Uh, a big reason, uh, for that is you help a lot of people with a lot of big problems, uh, in, in, in what you do with your business. And we're gonna get into that, uh, in just a second and let our viewers know kind of what you specialize in. Um, let's actually start back at the beginning. Something that was very interesting to me when I first met you many, many years ago, uh, was your background as a professional athlete, right? So you were a, you were a baseball player, right?

Speaker 2 (01:02):

I was, I, uh, grew up in Charlotte, North Carolina, went to East Carolina University and, and played baseball there. Mm-hmm. <affirmative>, and after my senior year was signed by the Cincinnati Reds. Very cool. And, uh, spent eight years with Cincinnati, Cleveland, Toronto, Philly, Texas as a, uh, right-handed pitcher. Oh,

Speaker 1 (01:23):

That's awesome.

Speaker 2 (01:24):

Um, my career was aa triple A in the minor leagues. I got traded a couple times, uh, spent, you know, many, many years on buses all over the country. Right. In every small town you can possibly think of

Speaker 1 (01:37):

That, that that minor league career isn't, isn't quite as, as glamorous as the, as the jets of the major league career, right? Correct. But you had an amazing career. It's so cool. I mean, to me, I'm, I'm a huge baseball fan. Uh, just the idea that you got to be a professional athlete and get paid to play baseball on any level is just, I'm sure it was an unbelievable experience for you.

Speaker 2 (01:57):

It was, it was awesome. The, um, the lessons you learned, the, the, you know, everything that goes with team sports, you know, from adversity to, uh, you know, just competition and controlling what you can control and, and all the things that are, that are involved in, in team sports. And, um, I look back on my life now as, as, as I'm a dad of three boys. Yeah. And I've got, uh, but all three boys are playing baseball and, and I coach them. Yeah. And, um, and so, you know, I, I try to give back what all the lessons that I learned and, um, you know, it's just, uh, it's such a great game. It's America's pastime and, and, uh, super blessed and super fortunate to, to be able to experience that and, and, um, you know, just an, just an awesome opportunity that,

Speaker 1 (02:43):

And, and, and really take what, what you kind of, um, you know, alluded to there, which is those lessons that you go through in order to, to, to develop your craft and, and to be a, a successful athlete to the level that you were, which is unbelievable. You take that and you, and, and you carry that through in your life and, and, and you apply it to your practice. Now, one thing about your, um, your, your baseball career, uh, that, that has paid many dividends for you is that that life as a professional athlete kind of got you in those circles of athletes, uh, tho those high net worth individuals, uh, that you're now able to, to serve being really one of them, right. You, you know, the background, you know where they're coming from, and you kind of have that, that, that in with them. Um, so talk to me a little bit about what you do with not only professional athletes, uh, but other high, high net worth individuals as part of Diamond Life at your, your, your practice there.

Speaker 2 (03:41):

Yeah. Um, definitely, you know, part of our circles of influence and, um, you know, I would say over the last seven to 10 years, our practice and and firm has, has started working with high net worth individuals, families, business owners, um, and anybody. And, um, right. What that's allowed us to do is to, to serve them in many different ways, whether it's a simple, you know, term life insurance policy or is it a, a, um, you know, irrevocable life insurance trust that we're trying to find a second to die policy for. So Right. Whether we're mitigating estate taxes or, you know, just doing anything regarding disability, long-term care insurance planning, um, we have a number of different things that we try to bring to those individuals and families to help them out, you know, if that were to occur.

Speaker 1 (04:33):

Right. And, you know, it's, it's, uh, what, what you find, I'm sure you'll agree with me, is that, you know, there's, there's common things that everybody needs to plan for, whether you're a high net worth individual or kind of middle America, right. Um, you can help people from all across the spectrum and you and your firm do. Um, when you get to those high net worth individuals, though, those same problems, they just become bigger. Right. Uh, when you think of things, you just mentioned it, estate planning, um, you were telling us a story earlier, uh, of how you were kind of helping somebody see an estate tax problem that they weren't even aware of mm-hmm. <affirmative> and how you can kind of walk them and navigate them through that conversation. So, uh, that is a common, uh, concept that you're discussing with your clients all the time, right. Actually planning for an estate tax problem that they might not even be aware of,

Speaker 2 (05:27):

Right? Yeah. We work with a number of different, uh, family offices. We work with a number of different, uh, trust companies. And so, you know, whether it's, uh, their clients that they're trying to solve this estate tax problem for, uh, we become their, have become their trusted insurance advisor to help implement the insurance as part of that process. Mm-hmm. <affirmative>, um, you know, the one we talked about earlier was an an b a player, you know, he's, he's worth, uh, you know, between 30 and 40 million, had a great career mm-hmm. <affirmative> and, um, has done very well. He's, you know, he's seven, eight years outside of playing and, um, but has never addressed what if, what if me and my wife pass away in an airplane crash or a car crash, you know, what does that look like for my four kids? Right. And, uh, those are the things we try to educate clients and advisors on that, you know, life insurance is a great tool to help mitigate that risk

Speaker 1 (06:25):

Penn's for dollars. Right. That's right. I mean, it's, so a lot of folks don't realize that, you know, right now the estate tax threshold as we sit here today, it's what, 20,

Speaker 2 (06:35):

It's right around 24, you know, it's increases a little bit each year. That's set to sunset in, I think 2026. Um, and, and who knows what it goes to after that. Um, you know, a lot of people are talking, it could go to 10 from from 24. My goodness. Um, so, you know, just, which,

Speaker 1 (06:51):

Yeah, that's, that's, that's a lot of people that, that fall between, you know, worth 10 million and worth 24 million that once that loss onsets, now they have an estate tax problem that they might not even be aware of. So for that player that you were talking about, he's between, uh, 30 and $40 million worth. What you're trying to discuss with him is, Hey, man, if something happens, God forbid to you and your wife, when you're out enjoying retirement, you, if that happened today, your kids have a significant tax bill that they have, how long to come

Speaker 2 (07:22):

Up with the money? Nine, nine months, you're gonna, so it's 40% of, of anything over 20, you know, currently over the current numbers of 24 million. And, um, you know, if that changes in the future, then, you know, we have to react to it. Um, so insurance is always as cheap as it, it it is right now mm-hmm. <affirmative>, and, you know, so it's always good to put something in place and, and at least start that process. And as times change and as laws change, then, you know, we can react from that as long as the the trust has been established.

Speaker 1 (07:53):

So walk me through that. So if, if somebody who's worth something above that threshold, if something happens to them, they actually are gonna owe 45 per 40

Speaker 2 (08:05):

40 around 40,

Speaker 1 (08:06):

40% of everything above that threshold. And now their kids have this tax bill, they're grieving, obviously something horrible has happened, right? Right. Now they've got this other problem. Yeah. Uh, they have a bill that, in this case that we're talking about, maybe it's a 10 million tax bill mm-hmm. <affirmative> that they have nine months to come up with the money, and if you don't have liquid assets Right. That you're, that you're, you know, leaving behind, you have a fire sale.

Speaker 2 (08:33):

That's exactly right. That's the biggest concern is if it's tied up in a business, if it's tied up in real estate, if it's tied up in, um, you know, stocks that are severely depressed at that time, you know, they are right now. Yeah. <laugh>. Um, so it's, it, you know, insurance is the, is the best way to, to solve for that. And, um, you know, using an attorney to establish a trust mm-hmm. <affirmative>, and then inside that trust you can put a policy such as a second to die or survivorship policy mm-hmm. <affirmative>, uh, that will allow the trust to pay off that estate tax bill outside of the

Speaker 1 (09:09):

Estate. Outside of the estate, which is, which is really important. Yeah. A lot of folks don't realize it's not just about buying the insurance policy. Yeah. Because guess what that's counted in your estate. That's right. Uh, so that's gonna get taxed too. You have to set up something specially with someone like yourself with estate planning attorneys who can set up a proper trust that works the right way, uh, so that this problem can actually get taken care of with life insurance. And if you can set up these solutions properly, then you are, you are circumnavigating what could be a massive problem, and again, something that nobody wants to leave behind for their loved ones. Yeah. You know, in, in addition to this tragedy that, that that must have happened, uh, for all these policies to be, you know, for all of this to be happening, um, you don't wanna leave them with the burden of coming up with money for a tax bill, and even the worse having to sell off assets like a business at, at, at lower rates because they have a very finite amount of time to come up with this money.

(10:05)
So that's when you see fire sales, that's when you see things that are worth millions getting sold for hundreds of thousands of dollars just to get rid of it and get the money for the bill. So, and,

Speaker 2 (10:13):

And another thing is, um, just doing a review of any existing policies that might have been in place for years. Right. That's another, you know, a piece and an advantage to, to what we do at Diamond Life is, is we do an internal audit of their existing insurance policy, um, and make sure they're positioned correctly, make sure they're, um, funded properly mm-hmm. <affirmative>. And, uh, that's, that's something that's extremely important as time goes by to just do a, a, a annual review of those existing policies that are in force to make sure they are positioned correctly.

Speaker 1 (10:48):

Right. And so for people out there who are like, well, I'm not worth 26 million, you know, I don't have to worry about that. You brought up a very good point earlier, estate tax, uh, laws are not in stone. They change all the time. Right. Uh, we're actually at, at a moment in, in this country's history where that that threshold's actually very high historically. Mm-hmm. <affirmative>, it's been as low as like a million dollars within the last couple of decades. This is something that can change very quickly. Correct. Um, so it is important for people to be educated about these things, even if they don't think it affects them. Now, who knows what's gonna happen in the future, first of all with your net worth, but second of all, um, what's gonna happen as far as, as far as legislature and these tax laws, uh, what other things besides estate planning, obviously that is one huge thing that, that you can help your clients out with. Um, what other types of, of, uh, of, of issues are you helping your clients navigate at at Diamond Life?

Speaker 2 (11:41):

Um, I think, you know, another one that's coming up, um, routinely is, is long-term care planning. Um, when clients, you know, get 60, that's kind of the next switch that goes off is how do I hedge or plan for long-term care? Yeah. You know, the average cost in North Carolina where where we are is, is about $8,100 per month for a skilled nursing or assisted living facility. And, um, there's not many insurance policies out there that will, that will cover that amount. Right. Uh, that, that, that a client might have. That's an existing policy. And so just helping them understand what can they do in the event they need to pay for long-term care. And, um, and so we have, you know, various different carriers that we can par partner them with mm-hmm. <affirmative>, uh, to help mitigate that risk. Um, also when it comes to, uh, retirement income and just helping them and understand what are my options for fixed income or guaranteed income. Right. Um, people are living longer today mm-hmm. <affirmative>. Right. And, uh, you know, 90, 95 is, is very common these days. Yep. And if you retire at 60 or 65, you really think about it, that's a 30 or 35 year retirement that you gotta plan for.

Speaker 1 (12:59):

That's a lot of time. That's a

Speaker 2 (13:00):

Lot of time. And if you're pulling from a portfolio or assets to support 30 or 35 years, you know, market goes up, market goes down. I mean, there's, there's risk there. There's uncontrollables.

Speaker 1 (13:13):

Absolutely.

Speaker 2 (13:14):

And, um, you know, those uncontrollables are like, uh, longevity risk, how long are we gonna live? Yep. Uh, withdrawal rate risk, how much can we pull out? Is it 4%? Is it two? Right. Yeah. A lot of people say two, a lot of people say four. And you know, my opinion, I think it's around two, right. Because we're living longer. Yep. Um, and then sequence of returns risk. How many years of negative returns as we enter retirement are we gonna experience? We don't know when we can't control it, but if you have three negative years in a row, it's, it's pretty detrimental to a portfolio. Yep. So we just help folks understand, okay, if you're approaching retirement or you're in retirement, what are my options out there to hedge against that for preservation of wealth for fixed income? Guaranteed fixed income,

Speaker 1 (14:00):

Create certainty. That's right. Right. Because there's so many, you just went through a ton of, of levers that are out there that can be pulled and, and, and you don't have any control over that. You don't know what the market's gonna do. You don't know what, where tax rates are gonna be. You don't know what legislation might be coming in the future. So what you really do is you help them. Yes. Congratulations, you've built a big pile of money for retirement, but just as important, if not more important than how big the pile is. Mm-hmm. <affirmative> is how are we going to strategize the, creating some certainty around what your financial future is going to look like and how we access this money in a way that makes sense and that creates certainty for you, which is what everyone really wants in retirement.

Speaker 2 (14:39):

Right. Right. I mean, that's why we do what we do when we when we're working, is to accumulate. That's the accumulation phase. Yep. And then when we enter retirement years or approach that, you know, that's the distribution phase we want to use or have what we've worked for. Right. And to make sure it's positioned in a way that it's gonna last a long time mm-hmm. <affirmative> and not exposed to things that we can't control.

Speaker 1 (15:04):

Absolutely. Minimize things like penalties, minimize things like taxes, minimize, you know, uh, exposure to market risk mm-hmm. <affirmative>, um, which is awesome. So part of what you do, and this term that you've used a lot, uh, safe money buckets. Right? Tell me about safe money buckets.

Speaker 2 (15:20):

So whether it's a life insurance policy or a fixed income annuity, um, you know, that's gonna be, or just a, a regular annuity, um, that's gonna be your bucket that does not have any market risk cuz your money or your cash value is not invested in the market. Mm-hmm. <affirmative>, it might be tied to an external index or indices. Right. Multiple indexes. Um, but it's not in it. And so if the market's up 8% in a particular index, in a certain strategy, you could earn 8%. If it's up 15%, you might earn 10 because there's a cap. Mm-hmm. <affirmative>, but, but,

Speaker 1 (16:02):

But in return for that cap

Speaker 2 (16:03):

And the return for that cap, if the market's down 10, you earn zero. If it's down 36, you earn zero

Speaker 1 (16:11):

Zero's. Your

Speaker 2 (16:11):

Hero, zero's your hero. So floor of zero, some particular cap, you look at it on a 30 year history, it's done pretty well over 30 years.

Speaker 1 (16:21):

Absolutely. And especially when you've built up this, this big pile, um, that's, that's when you really want to protect it, right? Yeah. Uh, we've seen what happens, you know, uh, we saw it in 2008, we saw it in 2020. We're kind of seeing a, a longer kind of, you know, uh, drawn out, uh, version of, of, of, of, of the market going down Right now, what people don't want is to just watch that big pile that they've built and worked so hard their whole lives to create just kind of dissolve. Uh, and that's, that's what you, you allow people to do by setting up these, these safe money buckets. You let them protect that pile and then show them the best ways to access it, to give them certainty. And in retirement.

Speaker 2 (17:00):

That's right. We come along, you know, aside the VI advisor at times, you know, maybe they're managing the portfolio, whether it's equities or bonds or mutual funds or real estate, you know, all these different spokes mm-hmm. <affirmative>, um, we're kind of that little 10, 15, 20% piece of the portfolio under fixed income. Right. And, um, and so that's where our safe money bucket comes from, is helping a client understanding what their goals are and then positioning a percentage of their portfolio in X.

Speaker 1 (17:31):

Right. So for people who maybe already have a financial advisor that they really like, or they already have, you know, someone that they're working with, they really like you absolutely can and do all the time work with and introduce yourself, uh, to new, uh, people that the client might, might be bringing to the table. And you've, you've got an excellent track record record of, of helping them and, and working with them in order to, to, to create the best results for the client. You also have a team of people that you've worked with that if somebody needs a good estate, a planning, a estate planning attorney, for example, you have people that you can bring to the table. You have kind of an all-star team that, that you've, that you've developed around you Yeah. Uh, that you can help. So, um, what other, uh, what other services besides the one that, that, that we've talked about, what other kind of things, uh, are are clients coming to you right now with things that they're concerned about that you can help with?

Speaker 2 (18:22):

Yeah, and, and just to, um, pick back up on your previous statement is, you know, we come alongside family offices, we've built relationships with family offices, advisors, trust companies, um, you know, that's, that's, those are our circles of influence and, and we want to do a really good job to, to make them look good because we, they understand that insurance is a part of the portfolio of the holistic plan mm-hmm. <affirmative> and, uh, so we, we, we pride ourselves on, on really doing a good job for their clients, for them and, uh, you know, other services that we do, uh, disability insurance. Right. Um, our biggest asset is the ability to earn an income mm-hmm. <affirmative>, and whether you're professional athletes such as an NFL player who's risking their injuries every single Sunday, Thursday, or, you know, Friday whenever they're playing. Right.

Speaker 1 (19:17):

They actually play a lot of days of the week now,

Speaker 2 (19:19):

<laugh>. Yeah. Um, or, you know, you, you're a business owner or you're, um, you know, a contractor, whatever it is mm-hmm. <affirmative>, um, the ability to earn income is, is our biggest asset. And so we have a lot of different, uh, insurance companies that we partnered with to, to be able to find those coverages for those clients in the time of need. Yeah. Um,

Speaker 1 (19:41):

Which is, is really what, you know, the, the, the common theme is you're saying, you know, I help people who have done a, you know, a really great job at at, at building something, I have to help them watch out for the what ifs. That's right. Whether the, what if is, what if the market drops? What if you get hurt? What if you have to go into long-term care? What if this, you're really just helping them make sure, like secure that, that financial household that, that they've really worked hard to build, and just make sure that you're making them aware of the risk that, that, that they might have in the future, and that you're making plans now to mitigate those risks.

Speaker 2 (20:15):

That's right. It's all about peace of mind. Right. And, um, and just knowing that if something happens, we're right there. I mean, we've been in the industry for 23 years. I've probably helped 25 different clients on a living benefit claim, whether it was a heart stroke or cancer mm-hmm. <affirmative>. And, uh, you know, we've been in it so long now that, uh, you know, from a death perspective, which, you know, is never, never fun part of what we do, but of course we come alongside that family to make sure everything gets processed quickly and properly. Right. And, um, and so just peace of that if something happens, uh, you've got the right coverage in place.

Speaker 1 (20:51):

Well, it's, it's, uh, I'm sure it's, you've had a long career. Uh, you have, you have a long way to go. It's, it's been a, it's been a rewarding career. What is it, what's your favorite part about your job? Why do you love what you do so much?

Speaker 2 (21:02):

It's all, for me, it's all about relationships. Long, long-term, true relationships. Um, not transactional whatsoever. Um, I want something that, uh, you know, to build something with a, a client or a family because life changes, right? Mm-hmm. <affirmative>, um, we have kids, we get married, we change careers, we, you know, stuff changes. And so I wanna be alongside them as those changes happen mm-hmm. <affirmative>, and then help them from the insurance side react to that. And so it's all about the long-term relationships, whether it's with an advisor, with a family office, um, uh, establishment or a client and their family.

Speaker 1 (21:44):

Yeah. Well, I want to thank you on behalf of Alliance Group for joining us, uh, for this episode. And, and, and thank you, you know, on, on behalf of your clients for everything that you do to help them. If somebody wants to get in touch with Travis Thompson, uh, and ask a question, where should they, where should they reach out to you?

Speaker 2 (22:01):

So our website is, uh, diamond life llc.com. And, uh, all of our contact information, uh, can be found through there.

Speaker 1 (22:09):

Travis Thompson, uh, diamond Life, thank you so much, uh, for being with us, and thanks for everything you do for your clients and, and for us at Alliance Group.

Speaker 2 (22:16):

Absolutely. Thank you for having me. Of

Speaker 1 (22:17):

Course. Listen to this interview and more on the Alliance

Speaker 2 (22:22):

Group.

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