Inside Information

I read through Scott MacKillop's evaluation of the fiduciary standard issue on the back page of this month's issue of Investment Advisor and wonder why all arguments can't be this clear. He manages to capture exactly the heart of the argument: the SEC ought to be focusing on the consumer, not on which business model might be affected by this or that standard. I wish the SEC were listening, but...

Roy Diliberto's column talks about an issue that I'm sure you've all faced: outside advisors offering random, drive-by advice that isn't informed by a close look at the client's overall picture, which means that you're in the uncomfortably familiar position of defending the people you work with from bad recommendations. Joel Bruckenstein and Dave Drucker offer a review of the new version of the Redtail CRM program and the audit-ready capabilities of document management software, respectively, and the cover article talks about some pretty powerful pro bono work that is being organized out of the San Francisco Bay Area. [Read more »] 

You read through this month's cover article in the Journal of Financial Planning and wonder what the editors were thinking. Feel free to read it yourself; it isn't the worst of the magazine's cover stories, and that, of course, only underlines the problem. Does it tell us anything helpful? Anything we didn't know before? Does it move the profession forward?

Most of you will do better to skip ahead to the article by Jon Guyton, looking at how decision rules worked during the 2008-09 meltdown, and more expansively, how diversification and rebalancing would have produced positive returns during the dismal 2000s. Eleanor Blayney's article on how to engage women clients is good marketing and practice management material.

Meanwhile, the Economist offers a really good summary of the state of half of the global economy: the developed nations, which seem to be stuck in a quagmire of slow growth, with more on the way. It looks at the problems that the U.S., Japan and Western Europe are facing from a variety of angles; you can read through it and feel smarter about the global economy. Another article looks at the biology of careers, income and employment. [Read more »] 

My goodness, this was a big, thick issue of Financial Planning magazine, with a generally good multi-article discussion of the future of the profession--although a "conflict-of-interest" warning should be issued: I wrote one of them, which you can find below in the "unrated" category.

Other than the cover package, one of the most intriguing articles is Susan Bradley's discussion of how to work with widows--and most importantly, how NOT to work with them. It sounds like common sense, but if you treat each client as a portfolio instead of as a person, you aren't going to connect the way a lot of people in difficult transitions will need you to. I also thought the "Yield vs. Risk" article was interesting, mostly for a graph which shows a very inefficient frontier of possible yield-oriented investments when they're put in a graph with yield on one axis and volatility on another. It shows us, once again, that these are not rational times in the investment marketplace. And Craig Israelsen offers another perspective on the lost decade, showing that it was only "lost" for those who held undiversified portfolios of large cap stocks. [Read more »] 

[Read more »]