feed - Part 93

What’s The Point Of A Standard Of Care If It Can’t Be Enforced?

June 28, 2012 11:07 am 4 Comments CATEGORY: Planning Profession

In the ongoing effort to differentiate, many financial planners are engaging in a "race to the top" to assert themselves as delivering the best quality advice subject to the highest standards. At the same time, the financial planning membership organizations are similarly competing to attract more quality members by implying their existing members are of the highest quality due to the organization's high Standard of Care.

Yet the reality is that most of the major financial planning organizations now have an almost identical standard of care... and as a result, the real differentiation is not what the standard of care is, but whether the members really adhere to it, even though most associations have no feasible way to monitor the activity of their members. Which raises the question - what's the point of even claiming a standard of care as a differentiator, if the organizations can't enforce those standards to deliver on the promise anyway?Read More...

3 Easy Ways Financial Planners Can Get Started On Twitter

June 11, 2012 11:01 am 3 Comments CATEGORY: Marketing

As social media continues to rise in the digital age, financial planners are increasingly getting involved on platforms like Facebook and Twitter. However, fears and misconceptions about social media - along with a general uncertainty about exactly what the point is and why planners should get involved - have dramatically slowed advisor adoption. Yet the reality is that there are several simple and clear ways that platforms like Twitter can be used to create value for financial planners - including some easy ways, like helping the news find you and social listening, that pose no compliance hassles or risks, either! Keep reading for some tips about how to get started, what programs to use, and how to get start getting value from Twitter!

Weekend Reading for Financial Planners (June 9-10)

June 8, 2012 07:04 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition starts off with a quick recap of who said what at this week's Financial Services Committee hearing on the Bachus SRO legislation. From there, we take a deep dive into a long series of articles looking at how financial planning is changing. An interview with Rick Kahler explores how financial therapy is being integrated into his practice, and a Morningstar Advisor article looks at how personality types can help predict which kinds of behavioral biases your clients might exhibit. An article by Paula Hogan in the Journal of Financial Planning examines how to integrate financial planning from the economists' perspective - the so-called Life Cycle finance model - with the current world of financial and life planning, with a rising focus on planning for human capital... followed by another article looking at how several planners are being to incorporate human capital planning in their practices. Bob Veres looks at what we can do to ensure that planners really stay focused on planning, and don't allow themselves to be lured by "easier" business models. A panel discussion in Financial Advisor magazine explores how some executives at companies that serve and support advisors see the trends playing out. At the same time, a recent article on The Economist questions whether clients might sometimes seek advice more than they should, and how much advice we seek is really for practical reasons as opposed to psychological ones. And Dick Wagner raises the question of whether it's finally time to push the profession to financial planning 3.0. On a final note, we include a transcript of a recent speech given last weekend by financier investor George Soros in Italy; although a bit of a non-sequitur from the weekend reading theme of changes in the planning profession, the article provides such an amazing look at what's going on in Europe, that it just had to be included. Enjoy the reading!

Social Media As Drip Marketing For Financial Planners In The Digital Age

June 4, 2012 11:09 am 6 Comments CATEGORY: Marketing

The principles of drip marketing are not new; the concept of marketing by sending a series of messages to prospects over time to build familiarity and remain top-of-mind so that you're likely to be contacted when a need arises has existed for decades. In fact, drip marketing has only gained in popularity as the costs of distribution have declined - from the increasing efficiency of printing postcards, catalogues, and newsletters, to the almost negligible cost of sending messages via email (sometimes taken to its abusive extreme, "spam email"). Unfortunately, though, the challenge of most drip marketing is that it's still very impersonal, and it can often be a challenge to even identify a list of people to whom the messages should be communicated in the first place. Yet the growing world of social media creates the potential to take "drip marketing" to a whole new level, because it is more social - making it more personal and more engaging, with sharing tools to help the people who receive your content to refer you to their friends and family, and for those you want to reach find you!

Weekend Reading for Financial Planners (June 2-3)

June 1, 2012 07:14 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition starts off with two articles about the ongoing debate in Washington on the Investment Advisor Oversight Act of 2012 (the so-called "Bachus SRO legislation"), including a scathing report from the Project on Government Oversight on why FINRA would be a poor choice of SRO, and a second article about why in the end there probably won't be any action on the Bachus legislation until next year anyway but it's still important to take it seriously now. From there, we look at a few practice management articles, from an interesting look at how young Generation Y agents are changing marketing and business development in the insurance industry, to the importance of having a good first-six-weeks process in your firm to ensure that your own new Generation Y hires will stick around for the long run, to the importance of choosing the right name for your firm, knowing how to sell to develop your business (even as a professional!), and that the key to growing your business is to deliver an experience that is remarkable - as in, literally, something worth remarking about. There's also an article about whether Veralytic is really a useful tool for advisors evaluating life insurance on Advisors4Advisors (a response to a post on this blog from a few weeks ago), an examination of how advisors have shifted their investments before and after the financial crisis, and a look at how the due diligence burden on really evaluating ETFs has become far more complex with the proliferation of ETF innovation. We wrap up with Bill Gross' latest missive from PIMCO about the Wall Street Food Chain, and how the 1% at the top may be disrupted more than they expect as the global deleveraging process continues. Enjoy the reading!

Weekend Reading for Financial Planners (May 26-27)

May 25, 2012 04:46 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition starts off with an interesting article from the Journal of Financial Planning about how the industry can develop more effective risk tolerance questionnaires, along with a good article reviewing college funding strategies and a review of a new cloud-based software program to analyze all the different possible combinations of Social Security claiming opportunities for couples. From there, we look at a few practice management pieces, from how advisory firms can better build their own brand, to some tips about how to develop trust more quickly in new relationships with prospective clients, to the reasons why clients don't refer (and what to do about it), and the increasing amounts that advisory firms are spending on technology with a focus on ROI. We also look at some articles highlight trends and opportunities in the industry, from the potential fallout in the 401(k) marketplace when the new fee disclosure rules take effect later this year, to the "career arbitrage" that's occurring as one executive after another leaves the custodian, broker-dealer, and investment company environment to take on a position as a principal with an independent RIA. We wrap up with a look at the potential for a "Grexit" - the new term du jour for a potential Greek exit from the Euro - and a striking article from The Economist that asks whether the era of the public corporation is coming to an end, given the resurgence in everything from private equity to state-owned enterprises to partnerships around the globe. Enjoy the reading!

Is Quarterly Performance Reporting Too Frequent For Clients… Or Not Frequent Enough?

May 15, 2012 11:02 am 10 Comments CATEGORY: Practice Management

As financial planners - especially those who provide comprehensive financial planning services - try to convey the overall value of the services they provide, it is increasingly popular to reduce how often portfolio performance is reported to clients. As the theory goes, if performance is reported less frequently, clients will fixated on it less often.

Yet perhaps the reality is not that performance reporting is making clients focus on investments, but instead that clients are simply being prudent stewards of their wealth who want to know how they're progressing towards their goals?

If that's the situation, then the reality is that restricting access to good portfolio information may not make clients think about it less, but instead may make them worry about it more! Which means, counter-intuitively, that the best way to make clients focus less on investments may be to make information available even more often!
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Technology Will Improve Financial Planning And Augment Planners, But It Won’t Replace Them

May 14, 2012 11:03 am 12 Comments CATEGORY: Planning Profession

The financial planning world is in a state of change, as the rise of the digital age begins to exert its impact upon the profession. Thus far, trends have included the shift to outsourcing, the rise of web-based software, and a growing number of planners using services like GoToMeeting and Skype to supplement face-to-face meetings with more virtual interactions. As the coming decade wears on, technology will play an increasing role in the financial planning world, driving change in everything from how we deliver services to the client experience.

Nonetheless, while technology will continue to augment financial planners, it will never replace them, for one simple reason - real financial planning solutions require clients to implement recommendations and make changes in their lives, and there are few forces for behavior change more effective than the accountability of another human being. Which means, simply put, as long as we are human beings and our brains operate the way that they do, effective financial planning will require another human being at the other end of the relationship, especially in times of stress and when we need an outside perspective. Technology alone may give clients the answers... but the fact that we all don't get the right amount of exercise, eat a perfect diet, and take all the other steps necessary to become optimal human beings, makes it clear that technology delivering information alone will never be the solution.

Weekend Reading for Financial Planners (May 11-12)

May 11, 2012 06:02 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition focuses entirely on practice management issues, leading off with a discussion in the Journal of Financial Planning about whether the profession needs to institute a process of peer review to both clean up those delivering poor advice, and to help challenge everyone to deliver better advice. From there, we look at some articles about how to navigate the challenges of being in a small firm, from how to demonstrate that you can compete with the services of larger firms, to supporting the career development of staff in a small firm environment, to managing the challenges when you're both the business owner and the financial advisor driving the firm. We also look at some articles that share how to know whether your website is a clunker, how advisors are adopting video on their websites, and how your marketing efforts should be certain to both capture target clients and allow unqualified clients to slip through your marketing net so you don't waste time finding out you can't work with them anyway. We also look at a good article by Mark Tibergien about the key traits for an enduring advisor firm, and a discussion by Bob Clark of how some independent broker-dealers are stepping up to define a new offering - with remarkably high payouts for the B-D world - to be appealing to the new independent advisor. Wrapping up, we look at an interesting article from the Harvard Business Review about how Gen X and Y are redefining a new, more human definition of what it means to be a "professional" and a nice article from Bill Bachrach reminding us how important it is to take a real vacation - with some concrete tips about how to really do that, especially if you're not good at taking vacation in the first place. Enjoy the reading!

Will Veralytic Reform The Life Insurance Industry?

May 10, 2012 11:06 am 11 Comments CATEGORY: Insurance

Life insurance policies - permanent ones in particular - have long been difficult to accurately evaluate, due to the relative opacity of actual pricing representations comingled with performance assumptions in policy projections.

To address this challenge, a company called Veralytic has developed a tool to "x-ray" through a life insurance policy illustration, evaluating and benchmarking the underlying policy expenses and their viability.

In the near term, Veralytic's analytical tools may provide a way for financial planners to finally conduct effective due diligence on client proposed and existing life insurance policies.

In the longer run, though, the transparency and benchmarking that Veralytic is bringing to the life insurance industry has a chance to truly reform the industry, making it clear which products and companies are truly competitive and which are not. But Veralytic cannot reach a tipping point without getting more users on board; accordingly, they've offered readers of this blog a special deal to take a test drive!Read More...