RIA Central

This week I loaded up my three kids and drove four hours northwest along several different state highways to Punxsutawney, Pennsylvania, to witness the annual rite of “Groundhog Day” in the scenic Allegheny mountains. Along with 18,000 others, we watched the famed furry weather prognosticator come out of his stump, “see” his shadow on Gobbler’s Knob, and predict six more weeks of winter.

Before Phil made his appearance there was pre-dawn revelry including fireworks, dancing, food, drink, a lot of funny-looking groundhog hats.

What can entrepreneurs learn from the enduring success of Punxsutawney Phil which is based entirely on old German folk tale?

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If your client won’t return your calls, it’s either a sign they’re not real jazzed about your relationship … or that they’re out of the country on some kind of technology-free safari. You’ll only know, of course, if they return with an exotic animal head newly mounted on their living room wall.

Whatever the case … sometimes it can feel like your client is a million miles away. Rest assured that communication breakdowns happen to the best professionals in all areas of business. You will run into clients who have different communication preferences, and some clients who are downright rude — so rude that they won’t let you know in advance when they’re going on a month-long vacation to hunt gazelle and Wildebeest!
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I have already mentioned advisory consultant Michael Carpenter in my post about “communicating risk” to clients. He was kind enough to send me an article he wrote back in 2010 for the Journal of Financial Planning. The concepts he outlines, however, are timely for this ongoing period of uncertainty in the world economy and financial markets. He believes that successful advisors are going to essentially become “risk advisors” in the years ahead.

Here’s an excerpt from that Journal article, Risk Management Planning for the New Normal:
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In the first week of January, the SEC issued two major alerts on social media – one for financial advisors the other for investors.

It would have been nice if both were as clear cut. But the tips for investors provided a clear roadmap for navigating the social media waters, while the advisor alert was deliberately vague.

The two sets of “guidelines” came down on the same day the agency charged Anthony Fields, of Lyon, Ill., with offering to sell more than $500 billion worth of fake securities on LinkedIn and other social networking sites, and allegedly attracting multiple potential buyers.

From IFAWeb News :

Securities regulators say Fields made multiple fraudulent offers through his two sole proprietorships – Anthony Fields & Associates (AFA) and Platinum Securities Brokers. Fields provided false and misleading information concerning AFA’s assets under management, clients, and operational history to the public through its website and in SEC filings, officials charge in the administrative proceeding. Fields also failed to maintain required books and records, did not implement adequate compliance policies and procedures, and held himself out to be a broker-dealer while he was not registered with the SEC, they say.

It’s the first time the agency has issued a social media warning to investors. The guidelines reiterate many of the tried-and-tested tips for avoiding investment scams, and provided the usual hotline numbers to check out advisors, but also, included some specific social media examples of fraud.

For advisors, the social media alert was not so specific. It mainly constitutes a list of areas RIA compliance departments might want to cover in setting up their own firm social media policies. It was much less direct in its information, and seemed to be geared more toward chief compliance officers than investment advisors.

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