This Month:
Co-browsing enhances sales, service with access in real-time
Future for U.S. life companies in Asia
Out of chaos comes order
Reaching the growing and under-served Hispanic marketplace
New Math: Keep clients current on changing Roth conversion calculus
Using losses, credits and deductions to shelter Roth IRA conversions
From big spender to big saver
Advisors and the Fiduciary Standard
Buy and hold is dead...again
Collective Investment Trusts growing in popularity
The Indispensable Advisor
Don't miss out on the benefits of cross selling
Today's Boomer: Firm ground has shifted
Adam & Eve revisited: Has anything changed?
Financial strategies for families with special needs
Real Estate Trusts are looking 'UP'
"Sandwich Generation" Dilemma - Balancing retirement needs with caring for younger and older dependents
Help clients invest in themselves
Divorce Planning: When is a dollar not a dollar?
Caring for the caregiver
Co-browsing enhances sales, service with access in real-time
by Ginny SimonGinny Simon, a contributing editor to LIFE&Health Advisor, is president of Project Marketing, Inc., a Pennsylvania based PR firm. She can be reached at gsimon@projectmarketinginc.com.
Insurance sales and service are, in the end, about relationships. The better the relationship, the higher the persistency and the greater the lifetime value of the policyholder. Offering multi-channel choices in a sales or service environment is imperative for companies that want to develop and sustain the best relationship possible with their customers. Phone and email are just the start. Web chat takes the process a step further, and co-browsing allows companies to take excellence in sales and service to the next level.
Today's insurance customers routinely go to the Internet as a first stop in either sales or service but these sites often include complicated forms and an intricate network of additional information. Even processes that are seemingly straightforward can get complicated, causing frustration, abandonment and often the loss of a sale. When the customer is on the phone, the agent or service representative spends too much time trying to figure out where a customer is on a site, wasting time and causing frustration on the part of the consumer, resulting in lost time, lost resources, and lost good will for the company.
With co-browsing, when a web site visitor clicks a "click to show" button on the company's web site, a window opens and a session number is automatically generated. The consumer communicates this number to the customer service representative via telephone, and the representative can see the consumer's screen, putting the agent and the customer, literally, on the same page within seconds. The agent can then use his or her mouse to navigate the page on the policyholder or prospect's computer. So, for instance, if a consumer is uncertain as to the legal requirements of an auto liability policy or a homeowner is uncertain about which coverages are appropriate, the agent can offer immediate assistance and move the process forward.
Co-browsing allows a customer service representative to help a customer fill out a complicated forms. It can allow a sales agent to help a customer properly fill out an application, thus avoiding the back and forth that often occurs when a prospect fills out an application solo. Co-browsing gives the agent additional tools to help establish and maintain excellent customer relationships, in addition to helping educate consumers in online self-service, an ability that serves both the policyholder and the company well throughout the customer life cycle.
Privacy and security issues are typically handled by limiting the agent's view to only pages from their own company's website and hiding the rest of the customer's computer. Additionally, fields containing sensitive information such as credit card, Social Security or other personal information can be masked ensuring regulatory requirements such as PCI DSS (Payment Card Industry Data Security Standard) and HIPAA are met. With these safeguards in place, co-browsing can increase service efficiency, and customer satisfaction, all while decreasing costs.
When added to a comprehensive service platform, co browsing technology offers:
- Increased customer satisfaction through more efficient resolution of issues.
- Decreased call time by creating an immediate understanding of what the customer needs.
- Increased accuracy by permitting the customer service representative to better view what is being entered while they listen to what the customer needs.
- Increased first call resolution by answering complicated questions on the spot.
- Increased upsell and cross-sell opportunities through personal interaction and a greater understanding of policyholder needs.
Best practices
Linda Ziemba is Vice President of Sales and Marketing for LiveLOOK, Inc., (www.livelook.com) a company that has developed co-browsing technology. In her opinion, there are "best practices" that a company should consider when implementing co browsing.
- Place the invitation to co-browse on all pages. This will make the prospect or policyholder less likely to abandon the site.
- Choose a system that can be implemented easily and efficiently without requiring expensive modifications of web pages throughout your entire site.
- Consumers may use either a PC or MAC platform. Make sure you can accommodate both, easily.
- Make sure the firewalls and other Internet security systems will not be an issue.
- Security is key, especially when dealing with financial or health information. Make sure that that the information viewed by agents is not exposing your organization to potential PCI or HIPPA risks.
- Although training is simple and straightforward, co-browsing is a new paradigm in customer service. Representatives and sales agents should be trained to understand when it is appropriate to augment an interaction with the co-browsing tool.
- Deploy an intuitive system that will not intimidate agents or customers.
- Companies want to be able to prove that they are making wise investments in technology. Consider using these key metrics to implement incentive programs:
- Finally, look for vendors with proven track records and the references to back them up.
- increases in upsell and cross-sell sales
- qualitative and quantitative improvements in customer satisfaction
- increases in first call resolution
- savings per sales call
- time savings on support calls
As more consumers rely on online insurance sales and service, the ability to provide excellent online service is a key differentiating factor for insurance professionals. Co-browsing is an important way to provide service quality while, at the same time, gaining efficiencies in sales and service.
Back to TopFuture for U.S. life companies in Asia
by Gordon Perchthold and Jenny SuttonGordon Perchthold and Jenny Sutton are with The RFP Company, which develops business strategies, structures complex projects, and selects vendors on behalf of its clients at the global, regional, and country levels. They can be reached at www.ExtractValuefromConsultants.com.
The 20th century was a competitively tame one in Asia as far as U.S. life insurance giants were concerned. AIG established its leading position even though Canadian insurers Sun Life and Manulife preceded AIG with operations established in 1895 and 1897 respectively. As the second half of the twentieth century wore on, Prudential Financial and AFLAC focused their investments on Japan establishing material competitive positions relative to AIG and the domestic Japanese companies.
The 20th century closed out with a sudden rush into Asia by Metlife, New York Life, and Mass Mutual, along with their European rivals heralding a new competitive era for the region. Country operations across Asia grew from 300 to over 1,000 in little over a decade.
As we head into the second decade of the 21st century, Asia has become the largest growth market for the insurance sector. But there are no longer 12 uncontested Asian countries where any company with a heart beat can expect to grow year-over-year premiums in line with the economic growth rate of the country in question. Life insurance markets in every country in Asia are now highly competitive, generally, more competitive than the home markets of the Western multinationals as there are not only the local players to contend with, but also other multinational insurers from the U.S., Canada, U.K., Netherlands, Belgium, France, Germany, Switzerland and Italy. The irrational exuberance of the naive and inexperienced based on initial success often flames out under adverse market conditions, as Hartford experienced within its first decade in Japan.
So how will the U.S. based multinationals fair in the years ahead?
The immensity of the AIG franchise in Asia has often been under-appreciated for even with the hiving off of Alico to Metlife, the remaining life entity, AIA, will continue to be the market leader in the region. What is more, it has simplified its structures, rebranded to highlight the roots of its business in Asia, and become re-energized as a regional business. While the failed Prudential plc acquisition knocked the wind out of the AIA momentum, AIA should be able to recover and become an even stronger competitor than before.
Metlife will face more challenges in Asia. It has a well run U.S. operation but has never had a competitively strong portfolio in Asia (even with the acquisition of the Travellers' assets) compared to AIA and the top Canadian and European rivals. Undoubtedly, Metlife's strong U.S.-centric functional silos and the New York-based management mentality have constrained its ability to develop the mental mindset to manage more effectively as a global company.
The acquisition of Alico, in a shot, will force it to rapidly evolve its management approaches as the number of countries to be overseen increases fivefold. However, outside of the large Alico operation in Japan, there are no material Alico assets in Asia that will help Metlife build scale in Asia. Thus, the distraction of the grand opportunity Metlife now has in Japan, South America, Europe and Middle-East, could potentially result in Asia being unintentionally sacrificed as it falls behind those more Asia-focused and capable insurers.
Prudential Financial is likely to remain focused and continue to apply disciplined management practices in its selected markets in Asia, Japan, Korea, India and perhaps a new approach to China. This New Jersey-based multinational managed to end its overuse of management consultants during the 1990s to emerge with a more capable, stock market focused management team. Whether they will continue to be satisfied with being a niche player in Asia has yet to be determined but time is running out if they want to make a broader strategic impact in the Asia region. The same prognosis may be valid for AFLAC relative to its positioning in the large-scale, highly competitive, flat growth Japanese market.
New York Life and Mass Mutual as mutual companies do not have the pressure of shareholders demanding returns from capital deployed in Asia. As they are supposed to represent the interests of their policyholders (who could more easily invest directly in Asia through the stock market), some may question why they are even in Asia. Both companies have dabbled in the Asia region for many years without any serious competitive impact.�In the market entry era this was sustainable, particularly when margins were high and everyone could grow in rapidly expanding markets. But going forward, it is unlikely their "hope we do well' tactical approaches will improve their lackluster positioning across the Asia region. Inevitably, unless management changes course and becomes more serious about Asia, both these mutual companies will sell off their Asian "stuck in the middle" operations, the only questions are when, to whom and for how much?
So from a life insurance perspective, only AIA is likely to remain as a well positioned U.S. life insurer in Asia with Prudential, AFLAC and Metlife having strong niche franchises. ACE, CIGNA, and Principal are relatively recent but small entrants into the life and/or wealth management sector in Asia applying non-traditional niche approaches but time will tell whether they can solidify their position.
However, to recast their strategies and improve their operational positioning and capabilities in Asia, U.S. multinational insurance companies should avoid rushing out to engage their favorite brand of management consulting firms as it is very much "buyer beware" when it comes to the utilization of consultants in Asia.
Of course consulting firms have been staffing up in Asia to support their clients in the growing Asia market. But company executives often do not appreciate that it is more difficult to build a consulting practice in Asia than a management team in an insurance company. It takes about 10 years to develop the intellectual depth of consultant talent across the fragmented Asian market. An ability to speak English is no indicator of capability and it is the individual consultants on the ground in Asia that determines whether results are delivered in Asia. The U.S. consulting partners and staff parachuted into Asia take time to be effective in the complex environment of Asia, and they often spend only a few years in the region before repatriating while making mistakes for which their insurance clients inevitably bear the consequence.
Yes, Asia represents an immense opportunity for insurers. But in the new competitive environment of twenty-first century Asia, to benefit from these opportunities, U.S. insurers in Asia must see that their boards and management teams include individuals who have lived and worked in Asia, have a commitment to Asia for the long-term, willing to evolve global management practices to eliminate the dominating domestic biases, and apply a more disciplined and considered approach to seeking out and engaging external assistance.
Back to TopOut of chaos comes order
Financial crisis has elevated importance of advisors
by Michael J. VietriMichael J. Vietri is Executive Vice President at Metropolitan Life Insurance Company. He can be reached at mvietri@metlife.com.
The recession and financial crisis have left many investors feeling uneasy about the markets. In these uncertain economic times, financial services professionals have the opportunity to forge stronger relationships with clients by helping them make informed decisions to protect their investments.
In less tumultuous periods, advising on a client's "financial health" was more akin to a doctor performing regular physicals, assessing risk factors and making adjustments as necessary. However, the role of ER doctor was thrust upon advisors during the financial crisis, the job in the short-term was to stop the bleeding. Now that the economy has stabilized to a certain degree, how has the relationship between advisor and client changed, and what are some of the lessons we can learn to position practices, and relationships with clients, for future success?
MetLife recently conducted its Lessons Learned Advisor Poll of more than 1,000 financial advisors across industry segments. The poll aimed to discover how these professionals were interacting with their Baby Boomer clients, what actions they were recommending following the financial crisis, and how the crisis impacted their practices. Contrary to what some observers were predicting as the market meltdown progressed in 2008 and the recession gripped the economy in 2009, clients and advisors actually formed a closer relationship. Advisors identified the top three risks or challenges currently facing their Baby Boomer generation clients as:
- being able to retire when they want to;
- losing value of retirement savings; and
- having job security.
According to the Lessons Learned Advisor Poll, two-thirds of advisors believe that the financial crisis has enlivened and deepened relationships with clients. One reason for the new vitality is that most advisors are now spending more time contacting their clients to discuss personal financial needs and goals, and developing customized retirement portfolios accordingly. More than half of advisors say they spend additional time talking to their clients in person, and nearly half report that boomer clients have portfolio reviews more often.
Equally important, there seems to be a significant "meeting of the minds" on investment and retirement income strategies. When it comes to portfolio protection, a key component of a successful retirement plan, there is relatively close alignment between clients and advisors. Two-thirds of Baby Boomers with $250,000 or more of investable assets surveyed last fall in MetLife's Lessons Learned Consumer Poll agreed that protecting assets against market losses took precedence over participating in market gains. In the new Advisor poll, a very robust 83 percent of advisors surveyed endorsed this statement.
Moreover, 70 percent of advisors polled noted that interest in guaranteed products has increased among their Boomer client base, and a majority wants clients to allocate a portion of assets to guaranteed income products. However, we also know that many individuals who could benefit from having a portion of their portfolios allocated to guaranteed products, such as annuities, have not taken action. There are numerous ways to explain the benefits of guaranteed products, illustrations, tools and the like, but perhaps the most important step advisors can take is engaging in true holistic planning with clients. Among other things, that means showing how a product or asset class fits into a total plan, including lifestyle preferences and risk tolerances. Clearly, clients know from the events over the last three years that risk awareness and risk management are necessary elements of successful investing. This is an opportunity to talk to clients about protecting the retirement savings they've worked so hard to build.
Methodology of the MetLife polls-The Financial Planning Association fielded the MetLife Lessons Learned Advisor Poll on behalf of MetLife from March 22 through April 2, 2010, interviewing a nationwide sample of 1,068 Financial Advisors with Boomer generation clients. Harris Interactive fielded the MetLife Lessons Learned Consumer Poll September 23-25, 2009, via its QuickQuery online omnibus service, interviewing a nationwide sample of 2,191 U.S. adults aged 18 years and older.
Back to TopReaching the growing and under-served Hispanic marketplace
by Steve LongleySteve Longley is CEO of TPG Direct, Philadelphia, Penn., a direct marketing agency, part of Omnicom Group's national network. He can be reached at 215-592-8381 or at slongley@tpgphl.com.
The significant size and growth in the Hispanic population is well documented. With a population of more than 46 million, Hispanics are the fastest growing minority in the U.S., currently representing more than 15 percent of the population. Projections suggest that fully a quarter of the 2050 population in American will be Hispanic.
Yet, this huge market remains underserved and under-marketed. Just look at the numbers.
According to Advertising Age (February 28, 2008, Major Ad Categories Still Failing to Target Latino Consumers) "In financial services, for instance, just 77 percent of Hispanic adults have any kind of bank account, compared to 90 percent of African-Americans and 98 percent of general-marketing consumers, according to research from Synovate� In other data, Synovate found that only 61 percent of Hispanics have a savings account; 32 percent have a retirement account; and 18 percent have invested in stocks or bonds. In other financial services, just 51 percent of Hispanics are credit or charge card users; 40 percent buy life insurance; and 26 percent have a mortgage."
In health insurance, Hispanics have a 31.7 percent uninsured rate (20.4 percent native born and 50.1 percent foreign born) compared to a 15.4 percent average among other groups, according to the Pew Hispanic Center tabulations of 2008 American Community Survey).
DIVERSITY
The Hispanic market is complex. One of the most common mistakes marketers make when advertising to Hispanics is to treat them as one homogeneous group, incorrectly assuming that sharing the same language translates into sharing the same customs, traditions and culture.
Hispanic is a broad term that refers to all people of Spanish-speaking descent, whether they are from Mexico, Cuba or the Dominican Republic. According to the Pew Hispanic Center "Nearly two-thirds of Hispanics in the U.S. self-identify as being of Mexican origin. Nine of the other 10 largest Hispanic origin groups, Puerto Rican, Cuban, Salvadoran, Dominican, Guatemalan, Colombian, Honduran, Ecuadorian and Peruvian, account for about a quarter of the U.S. Hispanic population." Attitudes and lifestyles can vary greatly by origin, age, nativity, and acculturation level to name just a few. Hispanics, like other heterogeneous groups, will respond very differently to ad campaigns depending on their key lifestyle characteristics and their cultural experience.
LANGUAGE
Translations may be useful, but they're typically not effective when communicating with the Hispanic market. Some words or phrases simply do not translate well and that holds true for every media: print, radio, TV, the Internet, call center script and customer service. A direct translation is spotted immediately and can not only break the channel of communication but insult the potential prospect. And even those who understand English and use it in their day-to-day life may be more likely to respond to a Spanish-language ad. The fact that English is understood and accepted as a means of communications by this group does not mean it is the most effective language in a marketing environment.
The accuracy of language, especially when it comes to complex products and services, like financial services, is critical. The bi-lingual consumer must be assured that the English and Spanish say the same thing or else they might grow skeptical of the offer, and the company.
The use of pan-regional Spanish, generic Spanish that avoids colloquialisms, can provide an advantage in that it is a cost-efficient way to reach as many people as possible without devoting time and resources to micro-targeting. The drawback is that with a void of significant cultural symbols, the approach can leave a cold, generic impression.
It is important to know which Hispanic group one is targeting to avoid using taboo words and meanings. For a local or regional agent or broker, this can be fairly straightforward given an understanding of area demographics. For an insurance carrier, carrying out a national marketing strategy, this can get more complicated but by using available demographic data, can be accomplished successfully. Bottom line is words matter. Let's not forget the lesson of GM's Nova, marketed in the 1970s. Although the name and the car went over well in the U.S., the word Nova in Spanish means "does not go," and clearly resulted in an unanticipated and undesired effect when the car was introduced in Mexico.
MESSAGING
Cultural relevance is important. A marketer must define how customer affects attitudes, usage, and behaviors of the Hispanic target audience and develop a message that addresses these cultural needs. Even if many Hispanics are fully assimilated, they share a family-orientation and a strong awareness of their Hispanic identity, which includes memories of family holiday traditions and pride in their heritage. For insurance, financial services and healthcare marketers for whom providing assurance and security is important, finding original ways to speak to the needs of families and family members is important.
Education is also an important component of Hispanic messaging. First-generation Hispanics, or even second and third generation Hispanics who have been brought up in culturally Hispanic homes, may not have the financial familiarity that other target groups have. Thus education is a key component including discussing what insurance is, how one can buy it and the protections that are offered.
And don't forget to carry over these lessons into fulfillment and retention efforts such as newsletters and cross-sell and upsell offers. Though the Hispanic market tends to be loyal, consistent attention to their preferences is important. Make sure for instance that both fulfillment and service centers have Spanish-speaking representatives.
MEDIA CHOICES
Although traditional methods such as television, radio and print have proven to be effective in raising response, the landscape is changing and reaching out to Hispanic customers though the Internet, using both computer and mobile technology, can have a major impact on a marketer's strategy and its success.
When using the Internet, Spanish-speaking individuals must, in most cases, enter the English version and search for the "En Espanol" text link which is far from ideal for the user and, in some cases, does not present the same information. As insurance companies begin to rely heavily on the Internet to provide interactivity with their prospects and customers, they must work to reach this key market in a committed manner.
Hispanics are enthusiastic consumers who are quality-conscious and loyal to brands. And because Hispanics still don't receive many Hispanic-oriented offers, when they do, they are more inclined to open/view and to respond to them. As their economic status improves, they upgrade their purchases more often than the general marketplace. Their entry into Cyberspace is increasing rapidly. Today, the Hispanic market can represent up to 20 to 25 percent of the current marketplace. All good omens for financial marketers who are working to reach this underserved and growing marketplace.
Back to TopNew Math
Keep clients current on changing Roth conversion calculus
by Mark E. Caner, MBA, AEP, ChFC, CLU, CFPMark E. Caner, MBA, AEP, ChFC, CLU, CFP, is the president of W&S Financial Group Distributors, Inc., the wholesale division for Western & Southern Financial Group, Cincinnati, Ohio.
Math anxiety is a common phobia but imagine if the rules of mathematics continually changed. Then you start to appreciate why heads spin and stomachs churn over taxes. A 2005 study by the Tax Foundation, a tax research organization, found that the number of words in the Internal Revenue Code had more than tripled since 1975.
That makes doing the math on potential tax moves a growing challenge. Case in point: Roth IRAs. While putting money beyond the reach of taxation has appealed to retirement savers since the Roth IRA was created in 1997, the factor of higher taxes on the horizon makes the idea of a Roth IRA conversion particularly intriguing in 2010.
The adage "timing is everything" holds true. Forces now at work, ranging from the Tax Increase Prevention and Reconciliation Act of 2005 to the Patient Protection and Affordable Care Act just signed in to law on March 23, 2010, lend urgency to discussion of retirement and taxes.
Before the current, expanded Roth IRA conversion opportunity entered the equation on Jan. 1, 2010, high-income earners always had been barred from converting a traditional IRA (or other qualified retirement plan) to a Roth IRA. No more. Roth IRA conversions now are open to all, regardless of income level.
For the first time, traditional IRAs owned by those with a modified adjusted gross income (MAGI) above $100,000 are convertible, regardless of the owner's tax filing status. An estimated 13 million households holding $1.4 trillion in qualified assets qualify to take advantage.
Another development is the newly enacted health care legislation. Set to go into effect in 2013 are several tax hikes on high-income taxpayers. One, a 3.8 percent Medicare tax, will be levied on the lesser of net investment income or the excess of MAGI over a threshold amount ($200,000 for singles and $250,000 for couples). Sources of investment income include rents, royalties, dividends, interest, annuity distributions, trust income and most capital gains.
IRA withdrawals themselves won't be subject to the surcharge. But money taken in retirement from a traditional IRA is included in MAGI. Doing so may push the taxpayer over the threshold, which would subject other investment income to the 3.8 percent tax. And once a traditional IRA owner reaches age 70½, annual distributions are required. RMD-related income can't be managed, timed or deferred like income from a Roth IRA.
Up to five million tax returns may be affected by the new Medicare levy. That number includes one million individual filers and four million couples who file jointly. Unlike tax brackets, thresholds for the looming Medicare surcharge are not indexed for inflation. As incomes rise, more taxpayers will exceed the thresholds.
Given that conversions to a Roth IRA are generally fully taxable, the question of "pay tax now or pay tax later?" remains a key consideration. Two factors to take into account are: What does the client expect their future income tax rate to be? Does the client believe income tax rates are moving higher in the future?
If a client foresees paying tax at their current rate or a lower rate in retirement, the asset may be better left in a traditional IRA. If a client anticipates paying tax at a higher rate in retirement, converting to a Roth IRA and paying income tax now at what the client believes to be the lower current rate may be of greater long-term financial benefit.
It's impossible to predict what the future holds for income taxation. It is a fact that 2013 tax increases related to health care reform are on the books. And absent any Congressional action, tax rates on both earned income and capital gains will increase next year, after current cuts expire at the end of 2010.
"Whether you are converting some of your IRA to help yourself or your eventual heirs, the odds are the beneficiary of your savings will pay more taxes later on any unconverted money than you would pay to convert it this year," noted USA Today in an examination of Roth conversion issues (March 26, 2010).
Staying current on evolving tax considerations is especially important now. A special provision in the law allowing a choice regarding the tax reporting of conversion-related income is available only this year. For conversions completed in 2010, a taxpayer can elect to spread the resulting income tax over the following two years. If an IRA owner goes that route, no tax is owed for 2010. In 2011 and 2012, 50 percent of the conversion amount is attributed to the owner's income, and taxed at the owner's then-current income tax bracket, each year.
Conversion isn't for everyone. Weigh the benefits of tax-free income and no required distributions against the disadvantages of accelerating a deferred obligation and the associated cost of paying that tax.
If you have a client who favors conversion but lacks sufficient liquid assets to pay the tax associated with a conversion without invading the IRA itself, make certain they understand that:
If the traditional IRA(s) include nondeductible contributions, that portion of the conversion represents after-tax investment that generally can be converted income tax free. Any after-tax investments in all IRAs are considered in the aggregate when determining the taxable amount of a conversion of less than all of one's IRAs.
An owner can make partial conversions. Doing so may help avoid being moved into a higher tax bracket by a significant increase in taxable income in a single year.
The evolving calculus of Roth conversions can be complex. Allow clients to form their own personal conclusions about what the future holds for their own income tax situation. Work with them to review changing circumstances, revisit financial plans and reaffirm relationships for the future. Seize this opportunity to reconnect with clients, better understand their needs and long-term goals and respond with innovative, personalized solutions.
Back to Top
Using losses, credits and deductions
to shelter Roth IRA conversions
by Douglas A. Ewing, JD, CFP
Douglas A. Ewing, JD, CFP, is a Special Markets Attorney with John Hancock's US Wealth Management Division in Boston, Mass.
So why wouldn't a client convert? Well, as you consider the pros and cons of converting traditional IRA assets to a Roth IRA, one conclusion is inescapable... Roth conversions are expensive. For individuals who are already exposed to the 33 or 35% marginal tax brackets, a conversion will be fully taxed at those rates. Accordingly, for larger IRAs a conversion can mean writing a significant check to the Internal Revenue Service. The sticker shock that results will be sufficient to discourage many newly eligible taxpayers from moving forward with a conversion.