Inside Information - Financial Advisor

MEDIA REVIEWS - December 16-23, 2011

nospam@example.com (Admin) — Sat, 17 Dec 2011 15:18:00 -0500

I kind of like the concept of emotional alpha, offered by a column in this issue of Financial Advisor magazine. In fact, I can envision other alphas: the added peace of mind you would provide, the enhanced possibilities of life, an alpha related to a higher savings rate--perhaps someday we'll have a way of measuring all these things.

Meanwhile, Roy Diliberto offers a reminder that we need to constantly be aware of trends, which usually force the advisory firm to provide ever-more-comprehensive and better service and expertise. Static equals losing market share and maybe your business as well. And Scott MacKillop offers a similar message relevant to the investment markets; a lot of times we assume that something is true without carefully examining the assumptions behind it. The more we learn, the more we have to evolve.

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MEDIA REVIEWS - November 8-15, 2011

nospam@example.com (Admin) — Sat, 12 Nov 2011 19:24:00 -0500

In this issue of Financial Advisor, editor Evan Simonoff offers a peek into an interesting issue that will have implications around the profession: advisors are financing their succession plans with loans from their custodians, who at least have to hope that they'll retain the business of the successors. Dan Moisand asks us to come up with more precise definitions of market timing and rebalancing, and Joel Bruckenstein looks at some software features you probably haven't heard of before.
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MEDIA REVIEWS - October 16-23, 2011

nospam@example.com (Admin) — Thu, 20 Oct 2011 19:40:00 -0400

I've found Somnath Basu's new column in Financial Advisor magazine to be a little scattered at times, as if he knows he has to say something, but isn't sure what to say. (It's hard to be profound every month.) But here he hits the nail on the head: the rise of gold prices is not due to all those complex macroeconomic factors or currency correlations; it is, plain and simple, a response to the uncertainty in the global economy. As long as people are scared, they'll bid up the price of gold. As they calm down, they'll realize they overpaid for a commodity that is pretty but not terribly scarce.

I liked the Bill Bachrach column, cherrypicking all the insights from a conference of people who make a living being inspirational, Joni Youngwirth offers some helpful thoughts on succession planning, and Joel Bruckenstein reviews a new software product that I had never heard of before.
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MEDIA REVIEWS - September 8-15, 2011

nospam@example.com (Admin) — Thu, 15 Sep 2011 02:26:00 -0400

The blockbuster article in this issue is the reanalysis of the small cap premium--one of the two exceptions to CAPM that Gene Fama and Ken French reported in their seminal article. This article suggests that on a risk-adjusted basis, small caps have actually trailed large caps over virtually all longer time periods, including those studied by Fama and French.

The conclusions will be reported in a peer-reviewed journal, and meanwhile debated endlessly across the profession. Read the article now and you'll have a head start on the debate.

Meanwhile, you can always get something important out of Mitch Anthony's column, including a reminder here that work may be necessary for emotional, social and intellectual stimulation; that quality of life in retirement may require people to stay involved and active in some form of workplace. Joel Bruckenstein evaluates a new way to buy the Microsoft Office suite, and there's a nice writeup of all the actively-managed ETFs on the market.
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MEDIA REVIEWS - August 24-31, 2011

nospam@example.com (Admin) — Mon, 22 Aug 2011 02:23:00 -0400

I hope Dan Moisand's article here calls additional attention to the Wade Pfau article on calculating a client's "safe savings rate" for retirement. And I hope people pay attention to Roy Diliberto's advice on how to help clients identify their true goals, in order to allow you to give better, more customized advice.

Meanwhile, Somnath Basu--writing before the Downgrade Panic--suggests that the world economy may be heading for a double dip recession, and offers some signposts to watch out for.
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MEDIA REVIEWS - July 8-15, 2011

nospam@example.com (Admin) — Fri, 08 Jul 2011 17:59:00 -0400

Hmmm. Andy Gluck seems to think that it's a foregone conclusion that FINRA will become the regulator for RIAs, and that the FPA is systematically alienating its members. Wall Street wins, the FPA loses--and so does the profession.

For happier news, turn to the latest RIA survey, which ranks advisory firms according to the number of assets they have under management, and provides a few other details (growth, assets per client) that makes you wonder: does anybody rank dentists by the number of clients they serve or how much money they take in during the year? But the good news is that the RIA world appears to be growing again; AUM is up 19.8% year over year, which is certainly faster than the brokerage world is growing.

I also thought the Jim Picerno article on active vs. passive represented a fresh look at the subject, though there seem to be a few holes in the active argument that might not have been considered fully. And Joel Bruckenstein's profile of MacroRisk Analytics identifies a type of software program that many financial planners will be using in the fairly near future.
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MEDIA REVIEWS - June 16-23, 2011

nospam@example.com (Admin) — Thu, 23 Jun 2011 10:19:46 -0400

I really enjoyed Evan Simonoff's article on how the rollups have fallen on hard times, perhaps because they were fundamentally flawed to begin with. The idea that you can buy up a bunch of independent advisory firms and take them public at a much higher multiple than you would be able to sell them for individually has always seemed kind of scammish, and when you look at the preferred deal terms--the rollup company gets first dibs on your revenues, which means that the remaining amount of your firm that you own is worth substantially less--you realize that there is a predatory element in this market. It makes far more sense for advisory firms to consolidate with each other if they're seeking scale and synergy.

Meanwhile, this issue of Financial Advisor has a transcript of a conversation among some industry leaders, talking about how the profession can regain the trust of the general public. It is still hard to imagine that consumers believe that the Madoff scandal is somehow representative of the RIA profession, or that they might confuse RIAs with Wall Street, but, well, those distinctions are going t
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MEDIA REVIEWS - May 8-15, 2011

nospam@example.com (Admin) — Mon, 16 May 2011 22:39:00 -0400

Andy Gluck is trying to chronicle the ups and downs of the various professional associations, and what that means in terms of power and influence in the current debates over fiduciary, FINRA etc., but having just returned from the NAPFA National Conference, I find myself wondering why he doesn't put NAPFA anywhere in the equation--or the AICPA either.

Elsewhere in this issue, we learn about a new Financial Therapy Association, a new planning tool for calculating sustainable withdrawals from a retirement portfolio, and if you are still rebalancing client portfolios using Excel spreadsheets, then David Lawrence's column was written for you.
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MEDIA REVIEWS - March 8-15, 2011

nospam@example.com (Admin) — Wed, 16 Mar 2011 16:33:25 -0400

It's good to see tax/estate attorney Deborah Jacobs back writing for the profession; she was one of Bloomberg Wealth Manager's best writers when the magazine was a viable print publication. I also think the Bill Bachrach and Mitch Anthony columns are very strong in this issue of Financial Advisor magazine; the one talking about success factors in the planning profession, the other about basic human nature that retirees seem to think can be overwritten when they decide to retire.
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MEDIA REVIEWS - February 8-15, 2011

nospam@example.com (Admin) — Fri, 11 Feb 2011 05:15:19 -0500

The highlight of this issue of Financial Advisor is the article about brokers who leave their wirehouse firm--sometimes after years of pre-planning, delivering their resignation and stepping out of their office and into their new firm in the same hour, asking members of their team to join them in a secluded meeting elsewhere in the brokerage offices at the same moment the resignation is being delivered, soliciting clients over the weekend before a temporary restraining order can be filed. It looks almost like an escape from a communist country, where there are armed guards at the border with their guns trained inward...

Meanwhile, Roy Diliberto wonders why so many advisors are trying to structure their practice so as not to have a fiduciary obligation to clients, and Joel Bruckenstein takes us on a tour of a new college planning software tool for your practice.
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MEDIA REVIEWS - January 16-23, 2011

nospam@example.com (Admin) — Mon, 24 Jan 2011 01:44:11 -0500

In this month's issue of Financial Advisor, we learn that TDA Ameritrade has opened up its custodial back office application to third party vendors, making it possible for them to create apps and applets for the advisory community--an important step toward the "app store" ecology that some of us have been predicting. Joel Bruckenstein looks at a software wizard that helps you craft your Form ADV Part 2 in plain English, and Gail Liberman notes that the real estate crisis may be hitting a new phase--and not an altogether pleasant one. And an article by Ben Mattlin chronicles the latest instability in the LTC marketplace.
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MEDIA REVIEWS - December 16-23, 2010

nospam@example.com (Admin) — Mon, 13 Dec 2010 22:52:14 -0500

If you're helping small businesses create and manage their qualified plans, then make sure you look up BrightScope, which may, according to Andy Gluck, offer the best marketing tool you are likely to find anywhere. This issue of Financial Advisor also contains an interesting article on real estate investment opportunities. Interesting? I never imagined that Jerry Reinsdorf of Balcor would return to the financial marketplace.

Meanwhile, Joel Bruckenstein offers a detailed review of the new features in Tamarac Version 10, and Roy Diliberto's column should be closely studied by anybody who thinks that asking your clients personal questions is just a bunch of hooey.

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MEDIA REVIEWS - November 8-15, 2010

nospam@example.com (Admin) — Thu, 11 Nov 2010 22:49:52 -0500

Other than the article by Joel Bruckenstein, introducing you to a new competitor in the portfolio management software world, and the all-too-brief profile of Oxford Financial Group, the highly-relevant articles in this issue of Financial Advisor are of niche-interest at best. It would have been nice to get a more complete profile of Oxford, how it operates, how it markets itself, what other senior executives other than the founder have to say, but the firm is very interesting nonetheless.
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MEDIA REVIEWS - October 24-31, 2010

nospam@example.com (Admin) — Thu, 21 Oct 2010 17:32:40 -0400

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.
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MEDIA REVIEWS - September 24-30, 2010

nospam@example.com (Admin) — Fri, 17 Sep 2010 15:31:48 -0400

I have to admit that I'm fascinated by the idea, proposed by Roger Ibbotson and reviewed by Evan Simonoff, that illiquid stocks can be viewed as an asset class and consciously incorporated as a high-return, high-risk component of client portfolios. It was so interesting that I read the full article (it's available here: http://advisor.morningstar.com/articles/article.asp?s=1&docId=16609&pgNo=1), and searched, in vain, for the answer to what seems to be a simple question: is the (presumably large) bid/ask spread when you try to sell thinly-traded stocks taken into account here? In other words, the stock price may go up more for thinly traded stocks than stocks that are more liquid, but is it possible that in the real world, you get hammered when you finally decide to sell? Nothing in the article addresses this issue--that I can find, anyway...

The cover article on Andrew Rudd, of Advisor Software, kind of alarmed me. Without apparent irony, and no visible perspective from the author of the article, we are told that a client couple living on the edge of being able to retire (or not) should dial down exposure to equities to 11% and buy almost all TIPS with the rest of the portfolio. This is so far outside mainstream opinion in the planning space that it would have been nice to see more discussion, or reactions from thought leaders in the investing space.

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