The Coverdell Education Savings Account (CESA), also referred to as the Education IRA, is an account that helps parents and students save for education expenses.
When you discuss CESAs, do the following:
Discuss Features and Benefits
In order to feel comfortable selling products or services or even referring individuals to CCB, it helps to know what the product or service is (feature) and how it helps individuals (benefits). Below are the features and benefits of the CESA.
Features
- Choose from Savings, CDs, and Money Market accounts
- Open with as little as $50.00
- Earn a competitive interest rate
- Make contributions up to $2000.00 each year
- FDIC insurance up to $250,000
Benefits
- Offers flexibility to fit client's needs
- Minimal costs to open
- Allows flexibility to meet overall financial needs/goals
- Saves more money by taking advantage of tax incentives
- Gives peace of mind by providing investment protection
Note: Any individual whose modified adjusted gross income is under the limit set for a given tax year can make contributions. Organizations, such as corporations and trusts can also contribute regardless of their adjusted gross income. Distributions are tax-free but only if they cover educational expenses for the client.
Identify Opportunities
Always be on the lookout for individuals who may need an CESA. Most people like to have a nest egg or plan for the future. Below are examples of prospective clients.
- Clients who have young children and would like to save for their education costs
- Individuals who are currently expecting a child
- Individuals who are planning to adopt a child
- Someone who has a niece, nephew, goddaughter, godson, and so on for whom they would like to save for his/her educational expenses
- Clients who are expecting a grandchild
- Anyone who has a child in their life for whom they would like to save for his/her education
Discover Client Needs
Before you recommend a product or service to a client, prospect, family or friend, it only makes sense to recommend things they might actually need or like. This is why it's important to ask questions that help us gain insight about an individual's banking preferences.
Sales Associates
To identify the best savings vehicle for each prospect based on his or her needs, you need to ask some discovery questions. Some examples include:
- Tell me about your current savings for your child's education.
- Are you currently putting any money aside to pay for you child's education?
- What average balance do you plan to keep in this account?
- Are you interested in learning about ways to earn more interest on your money?
- I noticed you have $10,000 in your checking account. Do you have any plans for these funds?
Non-sales Associates (Take it to 10)
If you don't feel comfortable with CESA product information, but are working towards your Take it to 10 goals, don't focus on a specific account. Instead, ask if the prospect is interested in opening a savings account at CCB. To do this say:
I work at Capital City Bank and we offer several savings and investment products, including traditional IRAs. Would you be interested in learning more about them from an associate of mine?
Recommend Products/Services
When you have identified a need or learned about a prospect's banking preferences, you are ready to make recommendations that align with his or her goals.
Sales Associates
Below are examples of what you might say when recommending a specific IRA after identifying goals and needs.
A Coverdell Education Savings account will help you save for your child's education. If you would like to take advantage of the tax incentives provided by this account, we can help you get started today. Or, if you would like to consult your tax advisor first, I can call you in a week to set up an appointment after you have considered all of your options.
Non-sales Associates (Take It to 10)
If you are simply trying to make a referral to CCB, then you are recommending the bank, and even a specific banker. Below is an example of how you make this recommendation.
I recommend that you check out Capital City Bank. I work there and I know it's a great place to bank. CCB is a stable, community bank that can help you with your savings need. I don't know too much about the various options, but I can certainly connect you with a friendly banker who would be willing to help. His name is _______________.
Handle Objections
It is highly likely that once you make a product or service recommendation, you will receive objections. Before responding, keep the following points in mind:
- Make sure you understand the question or objection
- Be empathetic
- Address the question or objection even if you can't change the product or service
- Check with the prospect to make sure they accept your response or explanation
To respond to objections, use Feel, Felt, Found to structure your responses. Below are examples of checking account objections and suggested responses.
Sales Associates
Client Objection: "That interest rate is really low. How is that supposed to help me?"
Feel: I understand why you might feel disappointed by the interest rate.
Felt: Many of my clients have felt the same way. They do, however, find that this interest rate is comparable to what other banks offer, and interest rates are a reflection of today's economic environment.
Found: Even though the interest rate isn't what they want it to be, they have found that it is still helpful to open a savings account instead of leaving the money in a checking account, because there are limitations on how often you can withdraw money from a savings account. By placing the funds in a savings account, it makes it easier for them not to spend the funds unnecessarily. How do you feel about that?
Non-sales Associates
Client Objection: "Do you have only savings accounts?"
Feel: I understand that you prefer to have more information about what we have available.
Felt: I'm the same way and would like to have more information than I am able to offer you.
Found: However, I can tell you with confidence that we do have more than just savings accounts. We have checking accounts, CDs and investment products, to mortgages. I would love to connect you with a knowledgeable banker who can answer all your questions. What do you say?
Ask for the Business
If you don't receive an objection or have already come to an acceptable resolution with the client or prospect, you are ready to ask for the business. Asking for the business is what we say to move the sale forward. Below are some examples of what you might say to ask for the business.
Sales Associates
- May I open that account for you now?
- Do you want to open the account now?
- Are you still interested in opening the CESA or do you prefer to explore other options?
- We can get that account started for you, if you would like.
Non-sales Associates
If you are making a referral for Take it to 10, you are trying to get the prospect to agree to meet with a banker about a need. Below are some examples of what you might say to do that.
- I would be happy to connect you with a banker who can help you. What is your name and number?
- May I get your contact information so I can have my friend, ___________, call you?
- Can I get your name and number so I can have a banker call you about opening up your account?
- May I have a banker call you to help you find the best account for you?
Make a Referral
If you are a sales associate or non-sales associate who cannot open IRAs, but have identified someone who is interested in a savings account, remember to refer him or her to an associate who can help.
Making referrals at Capital City Bank is as easy as A B C! Below is an example of the ABC method to making referrals.
Acknowledge or Ask questions about a need.Do you have money that you are looking to invest?Bridge with a transition statement highlighting how Capital City Bank can meet that need.I work at Capital City Bank and we have numerous savings and investment options designed to meet your various goals.Connect to a Capital City Banker that can help.Our Personal Bankers can help you find the best solution for you. Would you like for me to have a banker contact you at a time that works for you?Process the Sale
Sales are processed generally one of two ways:
- The associate who can sell the product follows established policies and procedures to open an IRA.
- An associate connects the person to a qualified banker using a Synapsys referral for the savings account. The qualified associate opens the account.
Additional Information on Sale Processing
For IRA procedures, see Help U.
See the Synapsys referral instructions.
