Working With Today’s Modern Family

Practice Management

 

The family unit has been changing, and advisors need to view it through a broader lens. A study from Allianz shows that the traditional family of dad, mom and one (or two) children of their own represents only 20 percent of families, an Investment Advisor article points out. What does that mean for advisors? Dealing with expanded relationships and listening more intently, among other things. The article also outlines three key issues for families: dementia, childlessness, and boomerang kids. See the link below. Also, with Charles Schwab launching its automated investment platform (Institutional Intelligent Portfolios) for RIAs last week, now is a good time for advisors to survey the robo landscape to see whether one of the available options might fit into their practice. InvestmentNews provides a chart listing 11 top platforms for advisors and outlines their features, including pricing, asset minimums, software integrations, and mobile apps for clients. See below.

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Advisors: Speak The Language Of Sustainable Investing

Sales & Marketing

 

Sustainable investing will help advisors retain clients over the long haul, particularly millennials and women investors, according to speakers at a recent Morningstar conference. Plus, “There is absolutely no give-up in performance whatsoever,” said Morgan Stanley’s Chad Graves, who heads impact investing for the firm’s wealth management unit. Graves, quoted in a Financial Planning article, said advisors need to be able to “speak this language.” A link to the article follows. Also, nobody’s perfect, right? Even clients want to see your human side, so when you admit to a mistake, you can actually build credibility and rapport with them through your sincerity. Dan Richards explains that this is what psychologists call the “pratfall effect.” But to work, the advisor must possess “superior expertise” and the mistake must relatively minor and not threaten the advisor’s credibility. Read more in Richards’ column at Advisor Perspectives.

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The ABCs of Branding Your Advisory Practice

Toy blocks isolated on white

This week I caught up with Amy Zimmerman of AZ Communications, a marketing communications consulting firm specializing in the financial services industry. Zimmerman shared some key points about branding based on her recent article in Investment News.

 

Let’s consider these the ABCs of branding your advisory practice.

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SEC To Scrutinize Retirement Advice

Regulatory/Compliance

 

The SEC, true to its word, announced this week that it has launched a multiyear review program to protect investors saving for retirement. ThinkAdvisor reports that the Retirement-Targeted Industry Reviews and Examinations (ReTIRE) initiative will focus on “high risk areas” of registrants’ sales, investment and oversight processes. Read the details below. Also, recent enforcement actions by the SEC have unfairly targeted compliance officers, SEC member Daniel M. Gallagher has said. The SEC is “sending a troubling message that CCOs should not take ownership of their firm’s compliance policies and procedures …” according to a statement from Gallagher, which is published in an article at InvestmentNews. A link to the article follows.

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‘Third Inning Of Robo-Advice’

Practice Management

 

There’s been a lot more robo-talk in the past week thanks in large part to the InVest conference (put on by SourceMedia) in New York where robo-advisor executives, broker-dealers, VCs and others discussed the digital future of the wealth management industry. Big banks are getting in on the action as well. Alexey Sokolin, COO of Vanare, provides a rundown of the event in a column at RIABiz. “We are seeing the third inning of robo-advice,” he writes. Also, firms that want to get into the digital action have three levels to consider: foundational, value-adding, and forward-thinking, according to a presentation by Pershing. The details are in a story at Financial Planning.

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Your Clients are Made up of Mostly Couples

coupleadvisorhappymi600-resize-600x338

 

Sales & Marketing

 

Many advisors may not realize it, but their client base is typically 60 percent couples. But how many are paying attention to both spouses, particularly the wife? Research shows that most women switch advisors after a husband’s death, and now TIAA-CREF finds that 32% of advisors say they’ve lost a female client after a divorce, according to an article at ThinkAdvisor. TIAA-CREF has developed a program that gives advisors pointers on how to deal with the “couples conundrum.” One of the key tactics: Reframe the relationship to include both partners equally. A link to the article follows. Also, pay attention to the power of color when preparing a logo, marketing materials, and other client communications, advises sales coach Dan Solin. He interviewed a Boston University professor who’s an expert on graphic design to get her insight on the use of color. Among her tips: Pick an anchor color, update your colors, and be user friendly. Solin’s column is at Advisor Perspectives.

 

5 Ways To Cement Relationships With Client Couples
By Bernice Napach
Source: ThinkAdvisor

 

There are probably no goals more important for financial advisors than attracting new clients and keeping the ones they already have. But death and divorce pose big challenges to that. A 2011 study by Spectrem Research found that 70% of widows changed their advisor within a year of the death of their husbands.  A TIAA-CREF study released last week found that 32% of advisors report losing female clients after a divorce.

 

Read the rest of the story…

 

How To Use Color To Make An Impact
By Dan Solin
Source: Advisor Perspectives

 

As a function of my advisory consulting practice, I devote a lot of time to discussing with clients the critical importance of first impressions. We focus on the non-verbal and verbal factors that contribute to how we, as advisors, are perceived by a prospect from the moment of initial contact.

 

Read the rest of the story…

 

 

SEC Commissioner Warns About Complex Mutual Funds

A sign for the SEC is pictured in the foyer of the Fort Worth Regional Office in Fort Worth

 

Regulatory/Compliance

 

An SEC member this week expressed concern that “registered funds have slowly drifted toward a more flexible and permissive disclosure regime” and warned that retail investors may not understand “whether a fund is right for him or her.” Those were some of the comments made by Kara Stein in a speech at the Brookings Institution, as reported in an article at Financial Planning. See the link below. Also, financial advisors could be putting their businesses at risk when they make a comment or say something that, even in passing, could be considered advice, the head of an independent broker-dealer warns. Among his words of advice: “Always be vigilant about what you say and how you say it in any client interaction.” His column is at InvestmentNews.

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Is The AUM Fee On The Outs?

block-fees

 

Practice Management

 

The AUM fee model appears to have some serious flaws, and columnnist Bob Veres suggests that it may be on the way out. He describes some of the reasons a lot of advisors are considering make the transition to retainers or another form of fixed compensation. For example, “There are … some blatant inequalities built into the AUM model,” he writes. Read his column at Financial Planning. Also, Robert J. Martorana put together a list of mistakes he’s made to serve as cautionary tales for interns at his office. Now he shares them with fellow advisors in a column at Advisor Perspectives. Mistake No. 1 is: Clinging to a poor value proposition. That is, one that is vague, uncompetitive, or doesn’t exist. Read more below.

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Boost Your Business Through College Chums

boost-your-business

 

Sales & Marketing

 

When looking for ways to grow your practice, consider getting in touch with your past. Your alma mater, that is. John Morehouse of the deBart Group in Manhattan, who played football at Cornell University, told Financial Advisor IQ that former teammates have been a source of new business as well as a “natural market” for referrals. A link to the article follows. Also, next time you’re planning an educational seminar or client event, consider making this client request: “Can I ask for some advice?” Asking for their opinion “creates goodwill,” notes Dan Richards, in a column at Advisor Perspectives. But be selective about asking for advice, and don’t ask too often, he cautions. The concepts he describes come from research done by Harvard Business School and the Wharton School. See the Advisor Perspectives column below.

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Caveats To Consider When Buying Into A Practice

buying in

 

Practice Management

 

There’s a lot to consider when buying into an advisory firm, and it’s important to be aware of the “nuances” and caveats that can impact the value and profitability of the business. Michael Kitces summarizes some of the issues to bear in mind when considering a buy-in deal. For example, have the owners been separating “salaries” from profit distributions? Sometimes a third-party can help resolve certain concerns, but sometimes the terms are untenable and the best thing to do is walk away. Read more in Kitces’ blog post at Nerd’s Eye View. Also, dealing with difficult people is a fact of life. But instead of avoiding them — or firing them if they are employees — it helps to first look more closely at what “difficult” means to you and to understand why that behavior negatively affects you. An article at Morningstar looks at ways to effectively deal with difficult people. See the link below.

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