Mark Wahlstrom mentioned in Forbes article on structured sales

This particular article, and my mention in it, probably falls under the " at least they spelled my name correctly " category, but it still warrants reading and review by structured settlement professionals, for the sole reason that it shows how both Allstate and Prudential continue to under support the marketing and education of professionals on the new structured sale annuity products.

You can read the full article, entitled " Deferral games" in this weeks Forbes by clicking here. Registration is required but is free, or you can just pick it up at new stands.

As many of you know, both Allstate and Prudential have come out with structured sales annuity products that are used to fund and secure installment sales of real property. I think it's a tremendous product, that it will have a great deal of application in the estate planning and real estate business, and that it offers a unique opportunity for the settlement market to begin to grow again. However, as noted in my earlier post, " The destruction of a trade name " the real estate deferral industry and tax shelter con artists have jumped on the trade name "structured sales" or "Structured installment sales" and used it as a front to again start selling privately managed accounts, variable annuities or other high commission schemes.

This article basically attacks the private annuity, 1031 exchange, private foundations and structured sales, and throws them all into the same basket, implying that only a fool defers capital gains at 15%. While I agree with the author that a lot of very shaky schemes are out there, I do think that the structured sale could have enjoyed a little more description then it got, but then that's the problem you run into when you are trying to cram all this into an article and come up with generalizations. I do think the structured sale came out relatively unscathed, but the description of the return as a paltry 4% isn't accurate and the benefits of life time annuities, deferral of taxes, conversion of assets into income didn't really get a fair hearing. I don't blame Forbes or the reporter for it, but I do blame Allstate, Prudential and to a lesser degree NSSTA.

We are being presented with a unique opportunity here, to recast our business and build a new market based upon a potential market, real estate transfers, that dwarfs the settlement market, and quite frankly we are blowing it as an industry. I have yet to see a trade article in the tax or financial planning press, and other then a favorable mention in the WSJ a few months back and another article in Vacation Homes magazine last month with myself and Henry Strong quoted, there is very little discussion in the business press. As a result we now have tax professionals who don't know the product commenting on it's merits, sleazy marketing organizations co-opting the name, and structured settlement professionals spinning their wheels trying to work with people and organizations they are ill suited to work with.

My solution? How about Allstate and Prudential digging into the advertising budgets and starting to do an educational campaign on this product to CPA's, Tax professionals, Tax law bloggers and others that shape the opinions of those who decide whether deferral is a good idea. In addition, lets do some industry advertising and education to real estate professionals on how this works, why it works and most importantly, who to work with to get it done.

If this doesn't happen the financial press and others who are either hostile to our interests or just not interested in learning the story are going to shape the destiny of this product. The old days of flying under the radar and cutting deals isn't going to work with this product and it's time for some fresh thinking.  

Posted on February 12, 2007 and filed under Structured Sales.