Today is October 19, 2011. It is the 23rd anniversary of the Black Monday stock market crash of 1987, and in a few months we will "celebrate" the 6-month anniversary of the May 6, 2010 Flash Crash. With our recent obsession about crashes, I've begun to wonder: what is it about market crashes that scares us so much?
The Toll of Market Uncertainty on the Financial Planner
Any financial planner who has worked with a client through some "market turbulence" or an outright bear market is well aware of the stress that market uncertainty can bring to the client. But how often do we look at the stress that market uncertainty brings to the financial planner vis-a-vis the client relationship?
No Cost of Living Adjustment for Social Security… Again
On Friday, the Social Security Administration announced that there would be no increase in Social Security benefits for 2011, representing the 2nd consecutive year that Social Security benefits have not increased... and prompting no small amount of outrage from many Americans who feel that they are falling further and further behind in their ability to keep up with their retirement expenses.
The Rising Popularity of "Free Range" Investment Managers
For much of the past decade or two, one of the most important qualifications for a "good" mutual fund manager was that he/she keep the fund squarely within the constraints of its Morningstar style box, while hopefully generating some positive alpha. Now, however, an emerging group of managers are overtly bucking the trend, with a new approach of "free range" investing.
Is the CFP Board Failing As "Our" Champion?
As discussion and debate rages on regarding the CFP Board's proposed 80% fee increase, and the associated public awareness campaign it is intended to support, much of the underlying concern seems to boil down to a simple issue: Is the CFP Board "our" champion? Should it be? Can it be?
The Inherent Conflicts of Delivering Professional Services
A new blog video post by financial planner Tim Maurer makes an interesting point - the very essence of our 6 step financial planning process includes a conflict of interest that we as financial planners must navigate: that while gathering information and setting goals may be the most important step for a client, it's not the step where we get paid.
CFP Designation Public Awareness – At What Cost?
If you've been watching your email lately, you may have noticed that the CFP Board has been soliciting your input about a potential public awareness campaign to support the visibility of the CFP certification marks for the general public. Well, apparently the input has been gathered, and board is considering its next step - an 80% increase in the annual cost to maintain your CFP designation to help fund the new campaign.
Are You Comfortable With Silence?
We often evaluate the quality of a conversation by its activity; the pace of the back-and-forth banter can be used as a barometer of how engaged someone is in the discussion. Given our tendency to find comfort in sustained dialogue - thus the phrase "awkward silence" - I was very struck to see the following profound tweet: "Get comfortable with silence. Some of the most important things clients say follows silence."
It’s Never Too Late for College Funding Planning
Most planners think of college planning as accumulation planning – contribute to a 529 plan, invest properly, and start spending in 5, 10, or 15+ years; and if you don’t earn much income nor have a lot of wealth, you can apply for need-based financial aid. In reality, though, it’s never too late and you’re never too wealthy to keep doing good planning for college funding… but the strategies are different!
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Using Client Irrationality for Good, not Evil
It is a popular trend these days in financial planning to talk about all the ways our clients behave irrationally, supported by a growing base of research in "behavioral economics" that demonstrates how our hunter/gatherer brains are ill-equipped to cope with today's complex world. We tend to talk about these behaviors in the negative, but what if we could use some of our irrational tendencies to our benefit, instead?
