Media Reviews

All of us in the press have tried to write--or help somebody else write--that difficult article about how to find a great financial planner amid the crowd of hucksters, salespeople and pretenders. Roy Diliberto's column may do a better job of this than anything I've seen so far. Also: check out the Rob Brown article if you're currently underweighted equities.

And Jim Picerno's column is one of many, perhaps the most plausible, that talks about the new respectability of technical analysis and charting in the investment world. Even the academics are writing approvingly of what they once castigated.

It's an interesting world... [Read more »] 

The heart and soul of Investment Advisor magazine is the consistently excellent practice management columns by Mark Tibergien and Angie Herbers, plus Tom Giachetti on compliance and Dan Skiles on technology--which, of course, are also practice management issues. This month, Tibergien talks about how to create a successful partnership (hint: ask the tough questions early), and Herbers talks about a superior way to have great employees.

For their sakes, I hope the magazine survives; it's awfully thin this month, and many of the articles were written by the editor. [Read more »] 

I suppose I'm probably the only person who didn't receive the November issue of Financial Advisor in the mail but, well, I didn't, so I can't give you the page numbers of the articles. I can, however, say that I'm skeptical that the former chief operating officer at UBS Private Wealth can run a conflict-free service helping clients evaluate their financial advisor (see the Mary Rowland column), and I wonder how anybody can believe that Advent has completely changed its attitude about working closely with the financial planning community (see the Joel Bruckenstein article). And I find myself wondering whether Advizent can attract enough paying members to effectively move the needle marketing the financial planning profession, and if they do, whether some consumers will question the $25,000 to $100,000 annual fees the firm charges to evaluate these advisory firms and give them a seal of approval. How often will they charge $100,000 and then NOT hand over this seal of approval?

Perhaps the most interesting example of this disturbing wave of non-skeptical reporting is the Andy Gluck column, which is not given a "high" rating after reporting that a technology provider of online investment tools is collecting fees from product manufacturers, and then evaluating what products (exclusively from those vendors and peddlers) are appropriate for clients. This is the future, we are told. It sounds like a grim one. [Read more »] 

Angie Herbers has written a really interesting review of what appears to be a very interesting white paper about... reducing client stress in your office. There are a variety of reasons for this, chief among them that communication works better in a relaxed atmosphere, and clients are more likely to follow your recommendations. The way you ask questions and the environment you ask them in seem to be important.

I also thought the article on broker-dealer due diligence was very revealing, but perhaps not in the way the author intended. I mean no disrespect; it's good information, but it also suggests that the business environment for broker-dealers is awfully difficult these days. Mark Tibergien always offers great advice and information, as does the Angie Herbers column, and Dan Skiles and Tom Giachetti. And you might find it interesting to know some of the biggest compliance violations in the broker-dealer world. [Read more »] 

If you have already graduated (or received a certificate from) one of the schools providing financial planning education, the cover article for this issue of Financial Planning magazine probably isn't relevant to you. It is interesting, though, to see the variety of programs and sizes of programs out there.

Meanwhile, you can look at Martin Shenkman's advice on how to prevent clients from losing control of their assets, Allan Roth's "state the obvious" review of all the "alternative" funds that have not performed well, and Joel Bruckenstein's collection of the interesting tech sessions he's attended in the past five months. And my column, for a change, made a few good points. [Read more »] 

By far the highlight of this issue of the Journal is the Klontz/Britt article that talks about money scripts and how they are related to a variety of money behaviors. The article focuses on dysfunctional behaviors, and offers a few guidelines on how to spot their sources. But it also makes available two assessment instruments in the appendix, both of which might help you assess clients on your own. It would be interesting to see if these correlations hold up if many advisors had their clients take these evaluations and send the results (anonymously, of course) to the researchers, and give them a statistical sampling of the population.
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There's a good core of practice management articles at the core of this issue of Investment Advisor--a magazine which is apparently only available online these days. (Who knew?) Julie Littlechild of Advisor Impact offers the results of many many client surveys and an advisor survey, and finds that there is a roadmap to cultivating the kind of clients who will reliably give referrals. We also get the first of a four-part series that summarizes the best information from the latest FA Insight study, basically telling us that there is a formula for sustainable business growth in the planning profession. Mark Tibergien draws on some of the same data to recommend more business and process structure in advisory firms, Angie Herbers presents an alternative to micro-managing employees and Dan Skiles calls you on your procrastination when you could be upgrading the technology in your office.
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The most interesting item in this issue of Financial Advisor magazine is the Brian Hamburger column, which suggests that we not celebrate too soon on the debate over who will regulate RIAs. If FINRA is turned back, the alternative seems to be user fees for the SEC, which gives the SEC an incentive to be even more inefficient than it is already (records could be set here...), and in any case, there is no evidence that more SEC audits, or more frequent ones, will make any difference in protecting consumers. Is THIS what we're lobbying for?

Also: Roy Diliberto offers a real-world look at the safe withdrawal discussion, and Joel Bruckenstein offers a window into the technology platforms at the larger broker-dealers. I also happen to think the "crowdfunding" concept written here by Gail Liberman is going to become a big part of the advisor profession. Somebody has to investigate those Internet offers... [Read more »] 

I think this might be the first time in at least a decade that I've give a "high" relevance rating to the cover article of the Journal of Financial Planning. I would have liked to see more details (I have actually gone through the Money Egg process myself, but it is not explained in any detail here), but overall, Kahler's lead article is a good contribution to our professional discussion.

One article that I did not give a "high" rating to is the David Blanchett evaluation of guaranteed income annuities. I think any objective observer is turned off when the evaluation starts off by suggesting that you either use a moderate amount of annuity exposure in the portfolio or a lot--and seems to be unaware of the default "none" option. You will see this article invoked in sales presentations, but the charts seem to make the opposite of the bully case presented in the text, and I would recommend that a client who waves this article in your face be shown the relevant charts and provided with a reasonable interpretation of them. [Read more »] 

Financial Planning magazine picked out an interesting group of "Influencer" Award recipients this year: Tom Orecchio, Julie Littlechild, Bob Curtis, Wade Pfau and Marv Tuttle. Alas, none of them were interviewed in depth; this is a really smart group of people who would have had a lot to say about where the profession is now and where it's going.

Also take a look at the "Even Riskier Than You Think" contribution by Jim Pasztor, which is a distillation of a white paper published by the College for Financial Planning. It suggests that the financial world is MUCH riskier than we realize--and we were a little nervous before reading it. [Read more »] 

One trend that is never talked about in the financial services world is the progress being made toward deconstructing the inner workings of life insurance policies. How much is the company deducting to pay for the actual insurance coverage? What are the fees and expenses? What is the rate of return on the capital that remains inside a cash value policy? The insurance industry has seen a number of holes poked into its black box, and this issue of the Journal of Financial Planning offers another example of this: Brian Fechtel's deconstruction of a policy illustration, translating useless information into something useful, and then comparing the results the policyholder achieved with what was illustrated.

Interestingly, I think the biggest defenders of the black box are not the insurance industry executives themselves, but a small group of fee-compensated life insurance analysts, who may wonder why the world would need them if life insurance policies were as transparent as, say, mutual funds. But as you read this article, you wonder to yourself: how is it possible, in this age of consumerism, for a very large industry to continue managing peoples' money inside a black box?

Maybe FINRA should regulate THEM. [Read more »] 

This issue of Financial Planning magazine revolves around a cover story that tells you much of what you already know about 529 plans and college expenses--except that, for some reason, many advisors have not been recommending them to clients. I liked the profile of Stewart Koesten but wanted to know MUCH more about what he says to clients that he is coaching on their human capital, and Joel Bruckenstein will pique your interest in Proposal Generation Manager, a new Fiserve software offering.
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I'm probably being overly critical, but when I sit down with professional or industry leaders, they inevitably provide a lot more insight and information than you ever get out of these Investment Advisor roundtables. I suspect that the CEOs of the "broker-dealers of the year" award winners have a lot of insight, but this seems like just a kind of surface-level skim over a lot of subjects, what you might hear when these gentlemen (they are all men) are making polite conversation. I gave the summary a "high" relevance rating in case you, the reader, disagrees.

I think Mark Tibergien offers great advice to ambitious advisors: focus your attention on one or two things you want to improve in your practice. Angie Herbers, meanwhile, continues her stress-related series of columns, noting that overstressed employees are far less effective and offering some ways to identify the problem in your office. Meanwhile, John Ryan, one of the leading insurance consultants in the planning space, offers a look at the recent turmoil in the LTC marketplace.
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The new version of MoneyGuidePro (G3) looks like a remarkable tool, and Joel Bruckenstein does his usual thorough job of evaluating the newer features. Joni Youngwirth does a great job of outlining the reasons why you might need a CEO for your advisory practice. But the article that people will be talking about and debating is a survey which seems to show that most advisors are not practicing fully as fiduciaries. Alas, we don't get to see the questions, and we don't know if advisors gave truthful answers, and the survey was conducted by the people who provide fiduciary training, so there are going to be questions about methodology and conflicts of interest.
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