Inside Information

Once again, this month's issue of Financial Planning never managed to make it to my mailbox, and I asked some other advisors who had the same problem. So... I am not including the page numbers with my reviews.

But there is some good information here, including an article by psychologist Brad Klontz that gets beyond what you often hear from money psychologists, where you are urged to act "thoughtfully" and "respectfully," and other advice you knew already. Klontz gets directly into the reason why people sometimes get in their own way. I also especially liked Allan Roth's recommendation that you create your own equity-indexed annuities for your clients. And Craig Israelsen's article tells us what you might have already known: more diversification tends to be better over the long-term. But the differences he comes up with are pretty dramatic.
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Melanie Waddell says that part of the Republican budget battles are an effort to weaken the SEC and prevent the enactment of the Dodd-Frank regulatory reform provisions--similar to the efforts to repeal last year's healthcare reform bill. Kate McBride reminds us that Congress and an outraged public were pushing hard for a full fiduciary standard after the 2008 meltdown and brokerage industry scandals--until the brokerage industry lobbyists moved into the discussion.

On the practice management front, Mark Tibergien and Joni Youngwirth talk about marketing issues; about using (and paying) solicitors to bring in business, and better ways to generate referrals from your clients. Angie Herbers helps you navigate through some difficult staffing issues, and two finance professors offer an interesting proposal: instead of issuing bonds, why not have the government sell annuities?

Plus a good column on new telephone technology from Dan Skiles, and a brief introduction to excellence in practice management by Dan Inveen and Eliza DePardo. [Read more »] 

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If you're not much of a fan of incentive trusts and the idea of controlling heirs from the grave, then you might check out the interesting two-part proposal for a different kind of trust document in the April issue of the Journal. Instead of demanding that heirs behave in certain ways, it requires them to learn and apply certain life skills before they can receive their inheritance. This isn't an issue where the parents feel comfortable with the judgment of their kids, but where they don't...

The magazine also presents the idea of a "debt policy statement," similar in concept to the investment policy statement, but outlining parameters and goals for the client's debt management.

In this Media Reviews message, we've also reviewed recent articles in The Economist, which has been asking all the right questions lately. What's the on-the-ground assessment of the impact of the devastation in Japan, and what are the economic implications? (Hint: supply chains have been disrupted everywhere; it seems that a lot of items assembled in China and the U.S. required components made in Japan.) How radical are the winners of the revolutions in North Africa and the Middle East? And do we have a mechanism for measuring these economic impacts and their likely outcomes? (No, but the preliminary evidence will surprise you.)

Finally, the magazine identifies a potentially disruptive new technology that could usher in the era of electric automobiles much more quickly than anticipated.
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The quarter end market report for the first three months of 2011. [Read more »]