Media Reviews

This is a milestone of sorts: this is the first time in many years that I have given the lead article in the Journal a "high" relevance rating, and it deserves it. A roundtable discussion with four technology gurus is insightful and free of the usual self-promotion. You should probably read the article; you might get more out of it than my summary. I also liked the column that debunks some of the more popular deceptive claims by asset managers, and the special needs planning article was very good. [Read more »] 

This is the "predict the future" issue of Financial Planning magazine, but I'm afraid the real lesson here is that none of us can forecast things to come with any measurable effectiveness, and it's even hard to sound plausible. Better to focus on the profile of RegentAtlantic Capital, or how AssetBook's new Radar program provides stiff new competition for Advent and PortfolioCenter in the portfolio accounting space. [Read more »] 

After reading Joel Bruckenstein's review of FinFolio's touch-screen performance reporting abilities, you may find yourself wishing you could see what a fully Windows 8-compatible software program looks like. But I found myself wondering: how many of you are brave enough to switch to Windows 8 at this early stage?

Meanwhile, the risk parity article scares me to death. I find myself wondering who invests in these things?
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I think the most interesting and relevant item in this issue of Investment Advisor is the revelation that Richard Ketchum, CEO of FINRA, announced that the organization would abandon its efforts to become the SRO for financial advisors in the House, but neglected to mention that he's searching hard for a sponsor of similar legislation in the Senate.

Meanwhile, Jamie Green's profile of TD Ameritrade's new leadership will help you navigate through its organizational changes, and the Angie Herbers article is very interesting in its description of a very different career path for younger advisors--starting from day one. I also think pretty much anything Mark Tibergien, Tom Giachetti and Dan Skiles write is relevant; they have been consistently thoughtful about helping you improve your practice and procedures, and this issue is no exception. [Read more »] 

This issue of the Journal will be remembered for two things: first, the first article we've seen in this space that uses brain scanning technology to help understand how behavioral finance issues work in the complex minds of clients and investors. We are starting to see these instruments used in financial research, and I have a feeling that they will eventually replace questionnaires and other imprecise instruments that have been used by researchers in the past.

Second, the article by Wade Pfau creates something new: an efficient frontier for clients in the decumulation phase of retirement, which mirrors the efficient frontier calculation for accumulators, but uses different parameters. Here, the client's Monte Carlo chances of failure is set at 10% (based on forward-looking returns), and then thousands of different portfolio mixes are modeled, giving the client a chance to select along a risk-reward spectrum that takes into account the severity of failure and the expected percentage of the initial portfolio that will be left to heirs. Clients have a choice of how much risk they want to take within a relatively safe parameter--and of course you can change those parameters (and, of course, the asset mixes) based on what you know about the client. As you read the review, you'll be surprised at the optimal portfolios, and you can click through to see the full scatterplot of portfolio mixes below the frontier. [Read more »] 

Are you still not paperless? Chances are you're not, and if so, David Lawrence outlines a plan for you to get your documents scanned and into a CRM system. And Roy Diliberto makes a modest proposal: before you can advise clients on how to achieve a great, prosperous life, you have to walk the talk and live one too.

At the end, Nick Murray goes into bombast mode about how the naysayers said that 2012 would be a lousy investment year, and look how dumb they were. I have no problem with not listening to naysayers, but Murray is the opposite, a persistent yeah-sayer who should be waving pom-poms. [Read more »] 

Take a look at Mark Tibergien's and Angie Herbers' columns in this month's issue of Investment Advisor, and see if they aren't basically saying the same thing--and pointing out a huge blind spot in the planning profession's practice management practices. Advisors apparently haven't learned a basic skill that other professions have mastered: teaching not only the skills of the profession--planning--but also teaching how to manage a professional firm. There is an assumption that these skills should be acquired through some other means.

I also liked the point made by Dan Skiles, that you are probably doing a better job managing your clients' plans than your own business plan; that you should measure and monitor progress toward your practice management goals. This, too, is a skill that advisors tend to neglect, even though you probably do it extremely well for clients. [Read more »] 

You may find yourself nodding in agreement at Deena Katz's column about advisors who have a passion for this business; she argues, persuasively, that you acquire a passion for financial planning (or, really, anything else) as you achieve a high level of mastery. The magazine's cover article offers a very brief review of different consequences of the new tax regime, and Joel Bruckenstein offers his view of the new Windows operating system. Allan Roth talks about the elephant in the living room as far as the investment markets are concerned; just exactly when are bond rates going to rise and deliver a lot of nasty surprises to investors and clients? And what can you do about it? (Believe it or not, he has an answer.) Finally, Joni Youngwirth offers one of the best "last word" pieces you are likely to see; it gives advice on how to help your employees be more helpful to you. [Read more »] 

I have to say, I really REALLY like the adaptive withdrawal rate concepts proposed in the final article of this month's issue of the Journal, and wonder why such a gem was buried deep in the very back of the magazine. It appears, to me, to be the most elegant withdrawal methodology model we have yet developed as a profession, allowing clients to compare their current situation with a timeline graph, and adjust their spending accordingly.

I also really liked the Bill Winterberg article on "pull" (vs. "push") marketing, which seems to put the whole social media marketing discussion into a nice context. And Dan Moisand's efforts to recommend a good financial planner to a friend in a part of the country where he doesn't know anybody is a classic: if one of us can't figure out how to tell, from the outside, a good financial planner from a sales guy posing as one, how is the public ever going to make these judgments?

Finally, Harold Evensky's column is, as usual, extremely informative about the best recent research coming out of academia. [Read more »] 

After investors virtually wrote off the American economy (and markets) last year, only to receive double-digit returns, I'm inclined to believe Evan Simonoff's evaluation that America may be the world's most interesting success story. The story is flawed, but look at the rest of the globe. Whose isn't these days?

Mitch Anthony tells us that a financial planner's primary role is to inspire people to reach their goals, and dispense wisdom. Brian Hamburger, who faced down hurricane Sandy, reiterates the importance of having a disaster recovery plan, and Joel Bruckenstein offers up the latest technology announcements from the Schwab organization--which lately has been talking a lot but not always doing very much in this arena. Finally, Scott MacKillop, of Frontier Asset Management, argues that academic research into the markets is book-smart but not street-wise; that is, it does a poor job of evaluating the inefficiencies and human differences among investment managers in the real world. [Read more »] 

Financial Planning magazine is surely going to be criticized for publishing a list of the largest RIAs and excluding all dually-registered firms, some of which are fully the equal of many of the firms you read about here in terms of service and sophistication--and some of which will be fee-only before long. The accompanying article talks a lot about conflicts and doing what's right for the client, which adds insult to injury. However, the desire to be included in these rankings might provide a small additional incentive for some of those firms to make the short leap out of the FINRA world. Interestingly, the accompanying article about custodians is not nearly so exclusive; independent BDs are listed alongside the institutional custodians who serve fee-only advisors.

Ed Slott does his usual great job of explaining how to avoid unseen pitfalls, this time the 3.8% Medicare surtax on investment-related income for above-average-earning taxpayers. And Allan Roth looks at the growing number of very low-cost ETFs, and sorts out those occasions where low-cost may not be the only criteria to evaluate on. [Read more »] 

Bob Clark nails it when he says that incoming (possibly temporary) SEC Commissioner Elisse Walter is "the most pro-Wall Street commissioner ever," narrowly winning that honor away from her predecessor--and making it clear that, against all logic, brokerage house insiders are running the regulatory arm of the wirehouses' main competitors in the marketplace. Does that make sense to ANYBODY?

Meanwhile, this issue of Investment Advisor is heavy on practice management: a summary of the most most recent "Growth by Design" survey, Mark Tibergien talking about how so many advisors look alike to the consuming public, Angie Herbers breaking down the consequences of a profession with too few younger advisors, and Tom Giachetti listing ways that you can pass SEC inspection on the issue of protecting client data. [Read more »] 

There is no graceful way to say it: this is a pretty awful issue of the Journal, with two research-oriented contributions in the back of the magazine which, if I had been one of the reviewers, I would have rejected.

The high point is the Ross Levin column. Over the years, Levin has provided a chronicle of his challenges in this profession; here, he is working on the difficulties of letting go as his firm enters its succession phase. A lot of much older advisors will sympathize. [Read more »]