Frustration was setting in for the normally unflappable Douglas Peete, ChFC, as he drove his Toyota Land Cruiser through the sprawling southwestern suburbs of Kansas City, Mo. He was searching for a local business with an elusive address and was late for his appointment. Even his portable satellite-enabled navigational computer wasn’t helping. “MAKE A U-TURN IMMEDIATELY” implored the mechanical voice on the computer.
“I’m sorry for this being so difficult,” Doug told the passenger accompanying him. He put away the computer and called his office a second time for the address and a fresh set of directions. This call did the trick, and in minutes they reached their destination. Another problem solved by Doug’s ever-reliable office staff.
Wrong turns are rare in the professional and personal life of Doug Peete, one of the leading insurance and retirement plan advisers in the Kansas City metropolitan area. Since the mid-1980s, Doug has built a strong specialty practice in corporate qualified retirement plans, which account for about two-thirds of his firm’s annual revenue. The other third comes from three additional business lines: investment services, life insurance for business owners, and employee benefits.
Doug has 25 years of Million Dollar Round Table qualification on his resumé, including 10 times at the Top of the Table. Two years ago, he served as Top of the Table chairman. By any measure, this lanky 48-year-old businessman and devout Christian has achieved the highest levels of success in his profession, but he quickly deflects the credit.
“I don’t pretend to think I’ve done it all myself,” Doug says. “I’ve had a lot of people who have trusted me. If your clients don’t trust you, you’re nowhere. It’s a matter of other people having helped me get to where I am. I feel very blessed that God has provided for me and continues to do so.”
Insurance/financial services is the only career Doug has known. He got his license and interned with Northwestern Mutual during his senior year at Kansas State University. His first customers were classmates. “I’d talk to them in the student union about saving $10 or $20 a month, building a savings and protection program,” Doug says. “I had some success early on, and then I realized there was a business marketplace, beyond just bugging your fraternity brothers for their beer money.”
After graduating in December 1980 with a finance degree, he soon found himself in front of small-company boards of directors, pitching deferred compensation plans, buy-sell funding, and key-person insurance. “I was fascinated by the process,” he remembers. “I looked upon it like an investment banking opportunity, a real business challenge.”
As a young Northwestern Mutual agent in 1983, Doug qualified for the Million Dollar Round Table for the first time. He met the legends of the business — Ben Feldman, Tom Wolfe, John Savage, and Frank Nathan, among others — and decided he wanted to rise to their level some day. “These men were bigger than life; they had an aura about them,” Doug says. “For a kid like me to spend a minute with the great Tom Wolfe was huge. It was a tremendous motivation to me, to learn what others had done and try to replicate their practice.”
Doug regards Wolfe, creator of the well-known Capital Needs Analysis sales system, as “my number-one mentor” in his developing years. “He was incredibly gracious to me,” he says. “I would keep a file of questions through the year, and show up at MDRT and hit him with all these questions. I’ve saved all that information in a notebook, including every letter he ever wrote me. I reviewed it until it became a part of me. I’m an absolute student of Tom’s work.”
Along Came 401(k) Plans
At one of those MDRT meetings early in his career, Doug heard a main platform speaker exhort young agents to go all-out during their first 10 years in the business, to establish their client base. So he did. “I hit it hard,” he recalls. “I’d work Saturdays and weeknights, with early-morning breakfast appointments and late-night meetings.” He also worked two markets concurrently — basic insurance planning for individuals and families, but also larger-case sales to corporations.
An early breakthrough sale came from a cold call on a company that bought $3 million of whole life for about $200,000 of annual premium, to fund a stock redemption buy-sell agreement. “It was one of my first tastes of how good this business could be,” Doug says. “I literally bought my first house because of that sale. That client now has about three or four times that amount of coverage with us.”
The other seminal event in Doug’s formative days was the advent of the Section 401(k) plan as an employer-sponsored qualified plan alternative. “The first 401(k) plan was installed in 1983 at the DuPont Company. Here in the Midwest, it takes longer for things to happen, but I got an early start in that market. I wrote my first 401(k) case in 1984, and it may well have been the first one in the Kansas City area.”
Doug and his staff of five oversee more than 200 qualified plans, most of them 401(k) plans for companies with as few as 10 employees or as many as 1,500. The plans collectively carry about $400 million in assets and 5,000 employee participants. “My mission is to help business owners take some of the money that’s coming and going through the doors of their business, and put that money aside in a bulletproof box,” he says. “That way, if the day comes when they don’t want to run as fast as they do now, they have something to fall back on besides just the value of their business.”
For all their tax and employee-retention advantages, qualified plans can be maddeningly complex to many businesses, and that’s where the expertise of Doug and his team can be so valuable. They “bundle” the plans for the ultimate provider, meaning they oversee the administration, recordkeeping, compliance, and communications, while the provider performs the actual services. Doug switched to Principal Financial as his provider last year. “Principal is a classic bundled provider,” he says. “I trust them to the core. They’ve always shot straight with me.”
Although he laid the foundation of his business through life insurance, most of the revenue growth Doug has enjoyed over the years has come from patiently crafting his skills and experience in qualified plans. “You’re not going to get rich quick in the retirement plan business,” Doug says. “It’s a long, long road.”
To get exposure to more business owners, Doug joined several trade associations, including groups in machine tooling, plastics, architecture, and food manufacturing. He would mix among the members at their group meetings and introduce himself as a businessowner who works with people in their industry. “I’d say, ‘I’m just here to learn as much as I can about what you guys do, and be available to anybody who needs my help,’” he says. “I’d play in their golf tournaments, and contribute money from time to time, and drag myself to cocktail parties at 7 o’clock at night.
“Did everybody in the group love me? No. But some of them said, ‘I need somebody who does what you do,’ and I got business from it. So now we have half a dozen machine-tool companies, for example, that are good clients. We have their 401(k) plans and do their buyouts, estate planning, and manage money for them — because I kept showing up. Business owners are very independent, so you have to find ways to get with them on their own terms.”
The surest indicator that Doug and his company are bona fide experts in qualified plans is the series of regular seminars that Doug stages at Indian Hills Country Club in nearby Mission Hills, Kan. He invites local certified public accountants to attend a lunch presentation by an outside expert, such as Nicholas Paleveda, JD, LLM, a nationally known tax planning attorney who came in late August to speak on 412(i) qualified defined benefit plans. Attendance is limited to 24 CPAs; Doug could pack in more if he wanted to. “We want to educate the CPAs on the nuances of retirement planning techniques,” he says. “And get them to call us about their clients.”
Life Insurance Still Vital
Doug still produces substantial life insurance business, separate from qualified plans, and most of it is on business owners. “It comes in surges. We just put in two $10 million applications about a month ago,” he says. “We believe strongly in having business owner clients put money in variable life, as an overflow vehicle for savings. It allows for creditor-proofing those assets, and they don’t pay income taxes on the gains in the contract.”
As more people prepare for retirement, they are discovering the tax exposure of their retirement plan assets, and life insurance helped Doug solve that problem for a small-town Kansas doctor. “The case started with me showing him that he had adequate retirement income, but the value of his retirement account wasn’t going to pass effectively to his children because of the taxes that occur at death. So we set up a donor-advised fund targeting the Greater Kansas City Community Foundation.
“To replace the value going to the charity, we placed $1.5 million of permanent life on him, for the benefit of his children. The kids will get the tax-free dollars someday, equal to the amount of the profit-sharing plan account. The foundation gets $1.5 million through the gift, and the federal estate and income taxes on the whole transaction are zero.”
Giving and Living by Faith
Charitable giving isn’t just for his clients. Doug maintains a lengthy list of local, national, and international charitable organizations to whom he makes regular gifts. Some of them are household names like the MDRT Foundation, Special Olympics, the Ronald McDonald Houses, Susan B. Komen Breast Cancer Foundation, and the Fellowship of Christian Athletes. Others are fundraising groups for local victims of cancer or other life-threatening conditions. Doug also has served many local charities and community organizations as an officer, board member and general fundraiser, including 15 years’ service to the Kansas City Ronald McDonald House.
“Giving is very important to me,” he says. “A member of the Round Table, Marcus Cherry, was a charitable life insurance specialist, and he told me that if you serve on a board of a charity, be sure you’re there for the right reasons. You’ll probably get some business from it, but make sure you’re not there to get business from it. I just like to roll up my sleeves and get behind something I really believe in — give money to it and help out.”
Underlying his motivation to give and serve is his Christian faith. Doug starts each morning in the quiet of his home office, reading the Bible and getting a spiritual focus for the day’s business. “It’s the most important part of the day for me,” he says. “My life involves connecting with clients at a deep level, and I absolutely need a clear head and wisdom for that.” He also leads a one-hour Bible study in his office every Friday morning with eight to 10 other local business and professional men — not all of them clients. He started the group 26 years ago, before he had even established himself in business. It was the same year, 1980, that he married his wife, Dawn. They have three children: Katie, 20, a junior at Arizona State University; Kelley, 18, a freshman at Doug’s alma mater Kansas State; and Danny, 14, a high school freshman.
A lifelong love of sports drives some of Doug’s leisure time. Until being sidelined earlier this year by arthroscopic knee surgery, he played soccer for many years on club teams, and was an accomplished tennis player on the local amateur circuit. A large framed montage on the wall in his office conference room extols the glories of both sports. Now Doug is redirecting his athletic energies to golf. “I’m just picking up the game,” he says. “It’s going to be my new passion.”
Doug enjoyed his best sales year ever in 2005 — so good, in fact, that he will need a major burst of business in these closing months of 2006 to top last year’s production. He maintains a weekly goal of bringing in $5,000 of new revenue. “Sometimes we make it, sometimes we don’t,” he says. He uses the ‘we’ purposely because he considers his staff indispensable to the firm’s success. “I’ve got a great team, the most capable I’ve ever had.”
Business may ebb and flow, but Doug keeps a firm grip on his fundamental values. “I would be nowhere if people didn’t trust me, and if I didn’t have God’s provision,” he says. “If I’m ever down or discouraged, or I don’t have enough gratitude, all I have to do is look over my shoulder and see where I’ve come from.
“It’s been a tremendous adventure. You’ve just got to keep your eyes open and continue to live that way.”