The "proper apology" article will be familiar to readers of Inside Information (We've written about it at least twice), but it breaks new ground for many in the profession, creating a systematic way to repair client relationships that have been scarred by inevitable mistakes. It's very thoughtful and worth reading again.
One of the contributed articles is actually a book excerpt, but it provides a good (albeit geeky) look at some regulatory and compliance issues surrounding who can be held to a fiduciary standard based on behavior with clients. You can bet the book was written for brokers who want to skate around having the courts interpret their actions in a way that imposes fiduciary obligations, and I gave the article a "high" relevance even though just about all Inside Information readers embrace (rather than evade) fiduciary responsibility. Based on this being the lead article in the contributions part of the Journal, I wonder what percentage FPA members are evading rather than embracing...
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There seem to be strong feelings about Jeffrey Gundlach and DoubleLine, whether the firm is taking significant risks in this interest-rate environment, or is using exotic investments to hedge those risks effectively. Morningstar has apparently weighed in with the former opinion, but the long article highlights the problems with trying to determine how smart your fund managers really are about investment activities that are highly-complicated and not always easy to evaluate from the outside.
Roy Diliberto does his usual excellent job of translating life planning concepts into practical terms, here distinguishing between data gathering and a true discovery process. And David Lawrence offers a look at some software tools that could raise the efficiency levels in your office.
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It's going to be interesting to see what kind of wealth management/investment research Harold Evensky can manage to coax out of the financial planning departments at various colleges, and in general it's great that he is putting out this effort on our profession's behalf. Behind this excellent cover article, Mark Tibergien makes some points that founder/owners of advisory firms need to really pay attention to: the fact that employee satisfaction is more deeply rooted in other factors than the salary that you're offering. And Angie Herbers focuses on one of those factors: does your staff feel uncertain about where your firm is headed because, well, you're a bit uncertain yourself?
I love the fact that computer guru Dan Skiles had to deal with a virus on his computer, and had the courage to tell you his story about it. He writes a great column, and this one is a terrific object lesson.
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Financial Planning magazine has put its content behind a firewall. So in this issue of Media Reviews, I'm providing links to the electronic version, which is easier to access.
What's new? The CFP Board's newer, shorter online CFP exam has been flying under the radar; why the change? How can six hours be just as comprehensive as 10? There hasn't been much explanation or buzz about what seems to be an important change.
I liked Allan Roth's article about tax alpha, which coincided nicely with the sessions at the AICPA PFP conference I just attended (and wrote about), but the most interesting thing is what is never said in these articles: that tax alpha generally outweighs investment alpha by orders of magnitude. THIS is where advisors can reliably beat the returns of even astute retail investors.
This month's practice profile, of Mainstay Capital Management, is a rare example of a firm that really does serve a niche market--although you wonder about the trading frequency in client 401(k) accounts. The profile of Money Tree's online version of Total Planning Suite will be interesting for advisors who use the program, and the article on peer-to-peer lending is quite interesting. Combine this with crowdsourcing, both in their infancy, and it looks like the Internet will eventually allow ordinary people to invest in each other, bypassing banks and brokerage firms in the process. That would eliminate a number of drags on the deployment of capital, enhancing efficiency as money goes to the people who need it, rather than a bloated bonus pool.
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