One of those resources was a rousing conversation within the Passive Investment Professionals (PIP) LinkedIn group (which, if you haven’t joined yet, you really oughtta), about a recent posting by columnist CBS MoneyWatch Allan Roth. In “Should You Invest in DFA Funds?” Roth revisited the classic conundrum: Dimensional vs. Vanguard. The gist of the resulting PIP debate was whether we were getting too microscopic by concerning ourselves with the differences between Vanguard and DFA. One commentator proposed that passive is passive, it’s all good, and fussing over finer points is splitting hairs. Others countered that those “hairs” could really add up over time.

 At about the same time, I came across another interesting article, “Efficient Markets Today,” by Professor John H. Cochrane of the University of Chicago Booth School of Business. Whether or not you agree with his every point, what struck me was his observation that asset pricing is “not a dead field, endlessly reveling in 35-year old triumphs.” He described how it’s only just begun and how it’s challenging some of the fundamentals of efficient market pricing.

 “A science moves on,” he mused, and I agree. But where is it moving? As was obvious from the PIP discussion sparked by Roth’s recent column, even among commonly minded advisors, there is cavernous room for debate that is far more than academic; it applies to both the scientific theory and practical application of passive investing.

From my bird’s-eye view of our little world, I’m seeing a noteworthy movement among the passive advisor community — including academics, fund providers and investment managers alike — with potential ramifications that move beyond the “hairs” of our investment strategy, down to its very roots. It has to do with factor investing, fund manager choices and two central questions on the matter: Can we and should we?

 Exploring the Possibilities in Factor Investing

First, can an investor efficiently (passively) capture more factors than the three we’ve all grown so comfortable explaining to our clients and ourselves? In my opinion, that’s a resounding maybe.

For example, as described in a recent Wall Street Journal article, “Here’s What’s Really Driving Your Returns,” there is potential in more intentionally capturing factors such as volatility, momentum, dividend yield, economic sensitivity and the health of a company’s balance sheet. For those interested in finding out more, BAM Advisor Services’ Jared Kizer recently launched a blog, Multifactor World, to summarize and comment on the latest ideas within this field of inquiry. (Confession: Many of the sources in this article are swiped from Jared’s blog. Thanks, dude.) I’ve also found it fascinating to read, and contemplate the implications of Antti Ilmanen’s textbook, Expected Returns. Granted, it’s been a slow read for me, because it’s pretty elevated stuff, but I believe my brain is better off for the exercise so far. Cochrane’s aforementioned paper and his own blog, The Grumpy Economist, speaks to the issues as well.  

Moreover, there are some early-adopting fund managers out there exploring whether they can apply additional factors in the same, passive way in which we’ve incorporated equity, size and value.

If I were a (passive) gambling sort, I might wager that Dimensional Fund Advisors has at least contemplated the possibilities, if not begun working on some of the opportunities to be had. As far back as 2009, the firm published a paper describing the momentum factor. And there are others. For example, check out this paper about risk adjusted momentum, from a lesser-known fund company that you may want to keep an eye on: Bridgeway Capital Management. Or, here’s an article about AQR Capital’s Cliff Asness’ similar explorations to popularize and perhaps passively apply the momentum factor. This article generated a lot of thought-provoking discussion among the PIP group a while back.

Exploring the Possibilities of Additional Fund Families

While we’re on the subject of fund managers, let’s talk a moment about the kind of passively managed funds already available from Dimensional Fund Advisors. A colleague of mine, Matt Hall, refers to these collectively as “capacity-constrained funds,” to differentiate them from classic, passively managed index funds and ETFs. I don’t know how much I love the term. But like the term “passive investing” itself, we’ve got to call it something, so we’ll let that suffice for now.

Are there, or will there ever be fund companies that might effectively compete with Dimensional by providing new brands of these so-called capacity-constrained funds? At least compared to the Loch Ness monster and Sasquatch, there have been some early indications that these creatures may be moving beyond the status of mythical, particularly in asset classes where capacity may be a concern (if a fund becomes too huge to continue to do the best job it can at capturing a constrained asset class such as small-cap value). The aforementioned Bridgeway’s Omni series may be just such a beast, Vericimetry is another would-be contender.

Exploring Advisability

For the sake of argument, let’s assume that the possibilities exist for passively capturing new factors and for exploring new fund family offerings for existing factors. Even if we can do it, the second question is, should we?

In distinct contrast to the far too prevalent, trend-chasing active management messaging, one of the best things about passive investment is how comfortingly consistent it’s been over the years. In the darkest hours of fall 2008, when even I, the most stalwart investor, couldn’t help but wonder whether things really were finally different, I was rescued from my doubts by a teleconference with Larry Swedroe as the speaker. He didn’t say anything he hadn’t said a thousand times before … thank goodness! To hear a trusted source explain how and why he believed that none of our underlying assumptions had changed meant more to my endurance than any conversation about enhanced factor-exposure ever could.

So, might we do more harm than good if we change or evolve our advice regarding best-practice portfolio construction?

Consider this quote from scientist Thomas Huxley: “History warns us … that it is the customary fate of new truths to begin as heresies and to end as superstitions.”

Right now, it may seem like heresy to consider changing our passive management tune (or, at least adding new chords). But it’s likely that the investment community experienced the same sense of disquiet when moving from one to three factors. I’m not “seasoned” enough to have been around for the earliest days, but I’ll bet there were some interesting debates at the time. I’ll bet some of the attempts to capture three-factor modeling worked, and some … didn’t. I’ll bet some felt it was getting too complicated, too difficult to explain to the everyday investor, more trouble than it would be worth.

In the case of three-factor modeling, time seems to have vindicated the outcome. We’ve learned how to communicate the message effectively. Its earliest practical-application champions, such as Dimensional Fund Advisors, have fared hysterically well. Today, the early “heresy” has become our standard. It’s hard to imagine a passively minded strategy without some level of three-factor modeling.

Does that mean we’ve grown superstitious in our adhesion to the tried and true?  

As Cochrane notes, science moves on. Clearly, so too are a handful of early adopters among us. It’s important to emphasize the “among us.” These are not Suze Ormans or Jim Cramers seeking to blow out our world; these are our fellow, passively minded colleagues who are exploring ways to make a good thing better.

Still, it makes sense that a larger group among us will move more cautiously. After all, you’re advising real investors with their real assets at stake. New factors, however well-intended, may well confuse some investors and distract them from the higher calling of remaining steadily invested. The messaging will be challenging. Some of the applications being built today may work better than others. All of this is true.

When commenting on Cochrane’s recent article, even Jared Kizer observed, “What are the investment implications of these new findings for the investment community? For most investors, I would argue it doesn’t mean much. I say this primarily because most don’t even understand the practical implications of the first 30 years of financial research, much less the last 30 years.” In his posting, “Five Traits of Factor Investing,” he lists a number of reasons that the strategies are “not for everyone.”

In other words time will tell how new, but still passively managed opportunities fare among the early adopters as well as our community in general. As one of my favorite anonymous quotes go: “The difference between being stubborn or being a visionary is whether or not you are right.” The early adopters are going to bear the brunt of the pain involved in stretching beyond the usual reach. Will they also reap the greatest fruit … or will it just hurt? Wait and see.

PS: If you like what you’ve seen so far, don’t forget to check out our existing custom creations and new 2012 subscription service for passively minded investment advisors!

First, what is “passive investing”? If ever there were a contest for descriptors that failed to capture what was truly meant, this one might be the champ. But, alas, for the time being, it remains the best-known name for our loosely affiliated group of like-minded advisors. So we’ll go with it for now. In my mind, whoever you are, passively minded advisors uniformly serve investors according to:

• The robust scientific evidence on how best to capture (and keep) the long-term returns that our markets are expected to deliver
• Each investor’s unique goals and personal tolerance for market risk
• Each investor’s highest financial interests, based on a fiduciary relationship

These are more or less the underlying principles upon which I’ve seen all passively minded advisor firms form and grow. From there, it’s been fascinating to see how:

1. Each advisor shapes his or her own unique practice
2. The passive advisor industry as a whole has continued to evolve, naming conventions and all

In this post, I’ll share some of the biggest variations I’ve noticed from one passive advisor to the next. In my next post, I’ll ruminate on industry trends. Hint: Even in our relatively quiet corner, there’s a whole lot of shaking going on.

Who do you serve?

The biggest variation I see among the passive advisor community is each advisor’s specific client base.

• Some of you prefer to serve clients close to home, while others are (or at least hope to become) nationwide household names.
• Some focus on narrow niches. Others of you are less choosey.
• Some of you excel in helping clients who are fearful, perhaps best off investing on faith versus reason if they are to stay the course. Others prefer to work with investors who want to be fully informed and more engaged in the decisions. Still others are agnostic on client personality.

There is no absolute right or wrong, but, in my opinion, the more precisely you can define who you want to serve, whether that’ a wide or narrow base, the easier it becomes to make good business decisions. I find that those who don’t have ready answers to this essential question have to work harder at whatever it is they’re doing to get half as far. It’s a little like the difference between investing with or without a plan.  

What do you offer?

There are huge differences here as well. I believe all RIA firms help investors build and maintain their portfolios, either in a highly customized or more turnkey fashion. But what else?

• Do you seek to specialize exclusively in one or a few key services or do you want to be a one-stop shop for all things “wealth”?
• Do you plan to remain lean and boutique, or become big and broad?
• How many of your services are managed in-house; how many are outsourced?
• When you outsource, do you favor the well-established, big-name relationships; or are you at the vanguard of exploring smaller roads less travelled? Or both?

Again, there is no one, right answer. I’ve seen models in all shapes and sizes on these counts, both successful and, well, not-so-much. To me, the right fit achieves a good balance between the highest use of your talents and interests, and the most important of your clients’ needs.

How do you price it?

The majority of the advisors I serve are strictly fee-only, and seem to price their services approximately (very approximately) in the range of 1 percent or less for $1 million AUM, on a sliding scale downward as AUM increases. But there are legitimate variations:

• Some supplement their fee-only services with stand-alone hourly services such as financial planning or limited investment services for more modest needs.
• Some are fee-based. I see this most often when a firm wants to provide direct risk management solutions (i.e., insurance) as a minor, but complementing part of their otherwise-fee-only offering. 
• Some, especially those with lower minimums, accompany their percentage fee with a flat, annual fee.
• I read about other compensation models that may or may not fit our world. It will be interesting to see what the future holds although, for now, I’ve yet to personally encounter firms that are trying out some of the more edgy ideas out there.

I see a lot of spirited debate about “fair” pricing. Some firms have chosen to focus on rock-bottom fees as a point of distinction. They feel advisory services are generally priced too high, especially since we stress the importance of managing investment costs. Others want to ensure that unreasonably low pricing doesn’t render it impossible to provide the comprehensive levels of service some investors want and need to manage their wealth fully and effectively.

Who do I think is right? Both and neither. Presumably investors can seek out the levels of services and pricing that makes best sense for them. Typically (and logically), the firms with the lowest fees are those who also are leanest on their services. I’d like to believe that our free market economy eventually weeds out those who seek higher fees without offering meaningful, commensurate value-added. In real life, I’m sure there are exceptions, but by and large, just as in our mostly efficient stock markets, that’s what I mostly see happening as I knock about our specific niche within the financial industry. Whether full-service or economy priced, I see most passive advisors acting responsibly with their pricing. Thus, it seems to me there is plenty of room for a range of competitive pricing to match a range of competitive services.

When it comes to portfolio construction, how do you do it, exactly?

In the good old days, I could ask one question and be done with my screening on whether or not an advisor might be a good fit for my particular brand of communication services:

Are you a Dimensional Fund Advisors firm?

That’s still a great and vital question on the list. But the world is a complex place, and no industry survives without growth. To quote Bob Dylan, “He not busy being born is busy dying.” In my next posting, I share my thoughts on some of the most recent and exciting ways I’m seeing our passive investment advisor industry continuing to be born, and thank goodness for that. 

These are my own impressions. You may not agree with all of them, but I hope they offer food for thought. As an investment and/or wealth advisor, you are on the front lines of delivering real advice to real investors, whose very lives depend on what you have to offer. From what I’ve seen, each of you takes  very seriously this frightening, and frightfully important responsibility, dedicating your hearts and minds to the challenge. Each has formed his or her own conclusions, sharing many wise commonalities but also some important and interesting differences. The results are, in my mind, a vibrant network of opportunities, in which both our commonalities and differences combine for a larger strength. If there is a theme to pursue in 2012, it is this: Vive la différence!

PS: If you like what you’ve seen so far, don’t forget to check out our existing custom creations and new 2012 subscription service for passively minded investment advisors!

While it never hurts to learn solid marketing and communication tactics to apply on your own, the truth is, you’re an investment advisor, not a writer (and thank goodness for that, because the world needs us both). There are times when it’s in your own and your clients’ best interests for you to skip the detailed learning process and get right down to the high-quality communicating, keeping investors well-informed and on-track amidst ever-turbulent markets.

It’s no wonder then, ever since I launched Wendy J. Cook Communications, I’ve been asked if I could provide turnkey communication materials that “just happen” in the form of excellent, affordable content, pre-written especially for passive advisor audiences.

You want it? You’ve got it:

www.wendyjcook.com/subscribe

This new service will include four, quarterly communications in editable (Microsoft Word) format, sent to you shortly after quarter-end. Each communication will emphasize timeless, passively minded investment strategies within the context of current events. Each will be formatted and delivered to serve as a timely cover letter for your quarterly client reports. Or, you can customize it for a variety of purposes, such as your blog, website or e-mail distributions.

 The annual subscription is affordably priced at $780/year ($195 per letter).

Granted, I’m more than a little biased on the subject of my new service, but I’d like to think it’s a one-of-a-kind opportunity. I feel so strongly about the validity of our shared passive investment philosophy that my business is exclusively dedicated to helping advisors spread the word on it. I’ve been writing quarterly client letters SINCE 1998, originally as Director of Communications at BAM Advisor Services and most recently in my own business. In fact, BAM still sub-contracts with me to contribute to the quarterly letters they provide to their own advisor firm clients. That’s no shabby testimonial, if I do say. (And, unlike you advisor types, we creative types are allowed to say!)

You’ll find additional information and a sample of my work at www.wendyjcook.com/subscribe. I welcome your interest, feedback, questions … and subscription.

 Warmest wishes for a healthy and happy holiday season to you and yours.

 Wendy

PS: Coming up on my third anniversary in business, I still marvel daily at how lucky I am to be helping passively minded advisors make a real difference in peoples’ lives. Many thanks to those of you who entrust me to assist you. I hope my newest subscription service will make a good thing even better for us all. If you have ideas on how to spread the word, please let me know.

Whether it’s on your blog, in a client letter or during a group presentation, a perennially popular strategy for communicating your own ideas is to quote somebody else who agrees with you. With good reason. Quoting a respected subject matter expert who echoes your logic is an excellent way to substantiate your work. It shows you’re not the only one out there who thinks the way you do. Mixing in others’ food for thought also adds a richer seasoning to your message. And let’s face it, as exciting as we find it to ponder the ways of capital markets, it’s a subject that could use a little livening up for the average reader.

But if you’re going to quote others, you want to do it right. In high school, we might have used experts’ quotes liberally to fulfill our assigned 200 words without having anything of our own to say. In grown-up writing, quotes should complement – not replace – your own voice and your own thinking.

“The secret of telling a story of influence is not found by asking the question,
‘How do I tell a story even though I don’t believe it will make a difference?’ but
‘How do I begin to believe I can make a difference?’” – Annette Simmons

In my opinion, the first rule of creative quoting is to consider the quality of the quote. A good quote should add some real, human interest in the form of a creative twist on the subject being addressed. It should do more than simply provide information that could as easily been imparted in the narrative.

In place of this rule of thumb, it’s far more common to see “talking head” quotes, especially in press release or corporate marketing types of materials. You know the kind. They’re churned out by someone far removed from the source.  It feels as if they never even spoke to the person for real. They’re quoting a company CEO who allegedly said something like, “XYZ Corporation is delighted to offer our customers unprecedented levels of service, striving to exceed their expectations with the introduction of our truly state-of-the-art, leading-edge Blah-de-blah Whatever.”

If your audience isn’t asleep by the time they’ve reached the end of that quote, more’s the pity for you both. I can empathize with the poor lackey tasked with writing these kinds of releases, because I’ve been there myself. But like lipstick and rouge, marketing and sales efforts only work when they enhance rather than smear over one’s natural attributes.

“Consider the public . . . coax it, charm it, interest it, shock it now and then
if you must, make it laugh, make it cry, make it think, but above all … never,
never, never bore the living hell out of it.” – Noel Coward

For maximum impact, the personality and linguistic idiosyncrasies of the individual being quoted should come through loud and clear. If the reader knows the person or at least knows of him, she should be able to smile and say to herself, “Yes, that sounds just like him.”

For example, if I had a nickel for every time I’ve read Larry Swedroe admonishing investors to stick to their plans like postage stamps stick to an envelope, I could probably single-handedly return the USPS to a state of solvency. Here’s one variation on that theme from his CBS Moneywatch blog:

“The lowly postage stamp does one thing, but it does it exceedingly well. It sticks to
its letter until it reaches its destination. Your job is act like that postage stamp – adhering
to your plan, ignoring the noise of the market and disregarding the emotions
caused by that noise – until you reach your investment goal.” – Larry Swedroe

The quote works (especially when used in context) because it’s good. It’s cleverly said. It has a very important message for investors; perhaps our most important investment message of all. And I can almost hear Larry’s Bronx-edged voice whenever I read it, reminding me, yet again, to stay the course … or he just may come personally knocking at my door. And, by golly, I stay the course!

As good fortune would have it, even as I was pondering how to wrap this piece, my husband happened to e-mail me a timely link to Mona Simpson’s moving eulogy of her brother, in which she quoted his final words in the face of dying:

“OH WOW. OH WOW. OH WOW.” – Steve Jobs

Yes, that sounds just like him.

Rewind to 1997. Jill was my fitness center’s step class companion. (6 a.m.!) Her day job was in advertising, where she worked with Sue, a copywriter whom I’d never met. At a family gathering, Sue’s nephew – one of Buckingham Asset Management’s principals – mentioned the firm was about to launch a new entity, BAM Advisor Services, and they’d been thinking about hiring a communications specialist. Around the same time, I mentioned to Jill that I was thinking about finding a new place to communicate. The rest is social networking history.

Fast-forward to last month, when I was privileged to attend the 12th annual BAM Advisor Services conference. It was, yet again, a perfect venue for catching up on many of the latest developments of interest to passively minded RIA firm advisors, not to mention visiting with old friends.

From specific to sublime, there were sessions on the “out there” future of investment science, contemporary fixed income, and upcoming 2012 retirement plan disclosure requirements. Carl Richards, New York Times blogger and founder of Behavior Gap, announced his newest napkin art, “The Weight of Evidence,” created in alliance with BAM to help relate our “passive versus active” message. (Not yet publicly released, you can get a sneak peek of his simple but powerful illustration by joining the LinkedIn Passive Investment Professionals group and following the recent discussions there.)

One of my favorite sessions was “Web Marketing in the Attention Economy,” by Christian Newton of Dimensional Fund Advisors. Many advisors are hesitant to venture too deep into web marketing via social networking. I can empathize. There’s so much out there. It’s daunting to know just what to do and how to do it, technically and compliantly. It’s typical and tempting to shrug it all off, saying, “My clients aren’t interested in that stuff.”

Newton offered a helpful way to think about today’s high-tech social networking from a fresh perspective – that is to say, straight from your old-fashioned comfort zone. He proposed that today’s state-of-the-art social networking doesn’t reflect any whiz-bang new way of communicating, as much as it represents technology finally catching up with our business as usual.

Just as with my career-altering 6 a.m. step class conversations, traditional social networking takes place in all makes and models of venues where people gather to share common interests. Clubs, sporting events, churches, bars, quilting circles, Civil War reenactments – you name it. The common interest may be the main event, but conversations ensue and life-altering bonds form that extend way beyond the original cause. Even if your best clients don’t share your passion for fly fishing, their son or their neighbor or the guy who sits next to them on their next flight to Toledo might. And you never know what sorts of conversations might ensue to send them your way. Your current and future clients are interested in social media, even if they don’t know it.

From that perspective, web-based social networks can be thought of as a successful virtual extension of our existing physical networks. Build a strong network in the areas you find of interest (including, presumably, some investment-related forums), and chances are good “they” will come. Even if they don’t, you’ll still have fun, as long you pick the forums that truly interest you.

As for how to effectively use social media for marketing, you’ve already got a leg up on the concept. As an investment advisor:

• You already are interested in building relationships with other folks and having a positive impact in their lives.
• You’ve already developed an excellent sense of how to engage people in genuine, two-way conversations … with your golfing buddies, Chamber of Commerce associates or fellow philanthropic board members.
• You recognize that casual networking may seem a little random and incomplete at the time. But the sum of your interactions forms a strong bridge between you and any number of important personal and professional opportunities. It’s the very spontaneity of the conversations that can generate the most exciting results.
• You understand that you must balance your social activities with the rest of your interests. You don’t even try to attend every possible meeting in town or accept every invitation that comes along. Similarly, you don’t have to let web-based networking take over your life to still make good, selective use of it.
• For privacy and compliance considerations, you already know when it’s okay to present your insights to a wider group, and when it’s time to take a conversation private. (“Wow, Bob, that’s an interesting financial challenge you’re facing, and I have some good ideas to share. Let’s meet over lunch tomorrow?”)

Congratulations, you already know how to market on the Web.  Now all you have to do is figure out what’s up with those hash marks.

This blog/e-blast is dedicated to the memory of Sue Seasongood my true, serendipitous friend. Sue, I thank you, I think of you and I miss you!

The Part-to-Whole Healthcare Data Puzzle

by Katherine S. Rowell, of Katherine S. Rowell & Associates

When I was a kid, my grandmother was always working on a jigsaw puzzle of one sort or another and I would always work on it with her while she and I visited. I was pretty good at the puzzles, but it was my Uncle Ed who always managed to find and fit way more pieces than anyone else.

I knew to find all of the outside edges first, that was pretty easy, and then I would pore over the picture on the box searching for the parts of the picture, using the colors as my guide to try and figure out how the remaining pieces might fit.

But not Uncle Ed–he never looked at the picture on the box–ever. He just fit the puzzle pieces together one after another, after another–and he always found more pieces than I did.

How did he do that? I literally begged to know–he was just too good–he was up to NO good.

Finally, my grandmother ratted him out–it seems that my Uncle Ed was color blind and so he only looked at the shapes of the puzzle pieces, which enabled him to include or exclude the pieces that could potentially fit together a lot faster than I could.

He saw the parts of the whole based on shapes alone.

Once my grandmother let me in on my Uncle’s secret I started to use it to my advantage. By looking at the shape of a puzzle piece first–like he did–I could determine if it should be included or excluded, quickly reducing the pool of possible puzzle pieces for the section I was working on. Only then would I check to see if the color matched. By adding the first step and then coupling it with my advantage of being able to see the colors of the puzzle I could (and did) beat my Uncle Ed at his own game.

To say that I was a competitive child may be a slight understatement–and yes, a foreshadowing of things to come.

The simple fact was–I learned a few rules and techniques that changed how I approached puzzles–and I received early training in how to think about and consider part-to-whole relationships.

Displaying part-to-whole (proportional relationships) in healthcare data is perhaps one of the more difficult challenges that people face, but if you know a few of the rules and techniques for displaying this type data, you will become proficient at it (just like I did at beating Uncle Ed at the puzzle game).

When faced with displaying part-to-whole relationships in your data you may be tempted to use a pie chart or a stacked bar chart with bright colors. Just say NO to the pie chart and consider other options that may be preferable to a stacked bar chart.

Begin with the appropriate medium to display your data–not the color of your graph. What encoding will best display the shape of the data–the story in the data?

Consider the following three examples:

1. Values and proportional relationships can be more easily interpreted and understood when displayed as a bar graph.

The pie chart below displays the same data as the bar graph above, but it is much harder to compare the sizes of the slices than it is the lengths of the bars–especially for the values that are close in size–and the colors add no information at all–they are purely decorative. Additionally, the bar chart allows for ranking values–not so much with a pie chart.

2. Bar graphs also work well for comparing how multiple part-to-whole relationships differ. See how challenging it is to compare the total number of medication occurrences and their causes in the following three pie charts.

Now notice how easy it is to make these comparisons using the bar graphs below. Again, it is about the shape of the data and the information that is imparted to the viewer–you no longer have to worry about the different colors to figure out the data (and blue is so soothing).

3. A stacked bar chart is fine for some displays but remember, it should only be used when you want to display and compare several part-to-whole relationships (for example, one for each country in the following WHO example).

The problem with displaying the information in this manner is that it is difficult (if not impossible) to compare the segments of a stacked bar between countries, because they do not share a common baseline. The most the reader can gain is a general sense of how the whole is divided into its parts.

Instead, if you want the viewer of your graph to compare multiple wholes to one another along with the ability to compare the parts of each whole, consider using multiple graphs like the following:

Puzzles are challenging and fun–they provoke us to think and strategize about how to fit the pieces together to create a picture, and they are a great model for how we can approach the display of healthcare data. And best of all, when you know the “rules of the road” and the “tricks of the trade” you will find that in actual fact you will have a whole lot of fun with both of them.

And truly, if you haven’t put together a puzzle in a while, I encourage you to give it a go–you will be amazed at how fun it can be–especially now that you know my Uncle Ed’s secret.

READY TO COMMUNICATE?  NOT SO FAST…
So, you’d like to improve your corporate communications.
What are the essentials for being efficient and effective?
Wednesday, August 3

Wendy J. Cook of Wendy J. Cook Communications will offer solid tips in three key areas of your communication action plan to help you avoid the typical, “ready, fire, aim!” approach to corporate communications:

1. AUDIENCE – First and foremost, with whom are you trying to communicate?  How well do you really know them?
2. MESSAGE – Next, what would you like to communicate, and why?
3. FORUM – Now (and only now), how are you going to go about doing it?

Now that the webinar is completed, here’s the link to it,  so you can view it at your leisure from my blog.

Happy August.

I’m not an investment advisor, but as a professional service provider for advisors, I share much in common with your business model. There are three, overlapping areas in which I use the Internet to see and be seen:

• Research — Remaining abreast with the latest ideas about wealth and investing
• Presence — Managing Internet appearances to reflect the “me” I try to be; quantity is okay, but quality is crucial
• Networking — Connecting with key people and audiences, including clients and prospective clients, industry colleagues, service providers, and appropriate media outlets

Let’s explore these one at a time.

The Internet for Information

If you’re like me on this (and, as an investment advisor I hope you are) you find endless fascination in remaining current with all things investing. Of course there are print publications worth keeping an eye on, but mostly I use the Internet to remain informed. And fascinated.

Of course I can’t read everything. To remain abreast with, without getting lost in the swift current:

• I scan headlines, and then dig deeper if it’s a subject or author of interest. A scan not only offers an efficient way to find lots of good stuff, but by spotting patterns among various sources, I get a reading on major issues of concern.
• I seek conversations among those with whom I’m of like mind as well as those who challenge my thought process.
• I prefer forums that offer fact-based, respectful conversations versus emotional name-calling. I look for that from the author, as well as post commentators, since some of the best material is found in the conversation threads.

I could easily put both of us into deep slumber by listing all the possible information sources out there, and I hope you already have many favorites of your own, but here are a few financial news sources that I routinely track for useful fodder:

• Passive Investment Professionals – a must-have LinkedIn group for any passively minded advisor
• Trade publications (and/or their e-blasts, LinkedIn groups, Facebook pages or Tweets) – InvestmentNews, RIABiz, Advisor Perspectives and Financial Advisor
• News blogs – CBS MoneyWatch Wise Investing (Larry Swedroe), The Wall Street Journal Intelligent Investor (Jason Zweig), The New York Times, Bucks blog (Carl Richards and others)
• Specialty resources – Such as Ramit Sethi for younger generation investors; Vanguard Diehards to watch the battle of the Titans; and The Coffeehouse Investor, just because

Again, this is just a hair on the chinny-chin-chin of the Jolly Green Giant of resources out there, but perhaps it’ll get you thinking about your own Internet browsing habits.

Perfecting Your Presence

At the same time you’re watching people on the Internet, like it or not, they’re watching you. If you’ve taken intentional steps to establish your Internet presence, you’ve probably already discussed your goals and strategies with a web marketing professional, considering issues such as search engine optimization, contemporary website design, and the gamut of social media opportunities. You can read some of my ideas in these areas by scanning through my blog.

But even if you’ve remained the strong, silent type, there are directories and resources out there that are posting your and your firm’s information without your consent or involvement. Are those appearances helping or hurting you? If you’ve not done so lately, it’s worth taking a look, to see how you look:

• Do a few Google searches on your and your firm’s name along with various combinations that might lead to you … and see what pops up.
• Check the relatively new Brightscope advisor search database and see whether your profile is relatively accurate.
• Consider setting up Google Analytics to send you notices when your company name or other important keywords appear on Google’s radar screen.

There also are advisor directories in which you can voluntarily appear. Frankly, you want to proceed with caution here. Some of these more closely resemble phishing schemes for gathering contact information that can then be sold for less-than-kosher purposes. Others charge a fee and promise you improved Web presence by serving as a one-stop portal to your various appearances. Personally, I’ve not seen these sorts of offerings tangibly improving on numerous free strategies you can use to develop your Internet presence much more naturally (and cheaply).  But there are a few legitimate directories that I’ve seen advisors use effectively:

• NAPFA (if you are a NAPFA member)
• FIGuide
• Google places, if you want to be a presence in your local community

I’m probably leaving out some good ones but hopefully this will give you a decent jumpstart.

Networking By Any Other Name

Last but not least is the melding of watching and being watched. In the world of international politics, that’s called espionage. On the Internet, it’s networking.

As a business and (probably) a people person, you already know the personal and professional advantages networking has to offer, as well as the drain it can be on your time. If you’re already the Zen master of blogging, threading, Tweeting and posting, you have my permission to stop reading if you’ve made it this far. Do me a favor and “Like” me on your way out.

I see more advisors moving hesitantly into networking, citing compliance concerns and lack of interest among their client base. If you ask me, even the SEC can’t shove that champagne cork back into the bottle, and your client base is already at least taking sips when nobody’s looking. It doesn’t mean you should disregard compliance, but there seem to be plenty of opportunities to enjoy a glass of networking bubbly without being branded a lush.

• If you’ve not yet set up a LinkedIn profile, get one — with your picture — and start connecting some dots.
• Facebook and Twitter seem less prevalent in our industry, but growing, especially Facebook. If you’re not there yet, at least keep an eye on it, and never say never.
• Optionally (if you find it enjoyable), you can participate in some of the Internet forums described above by posting well-reasoned comments. I’ve known of instances where good postings have resulted in media interviews.

You may like, love, hate or yawn at the Internet, but when it comes down to it, it’s not much more than simply the latest “pencil.” Another way for us to interact with one another. No doubt it too will be replaced by something else, sooner or later. Recently, I read a quote from Richard Bach (the Jonathan Livingston Seagull author) that applies well to the ways of technology: “What the caterpillar calls the end of the world, the master calls a butterfly.”

Fly, my friend, fly.

Take the cartoon at right. It took me under a minute to track it down at www.xkcd.com/386/ and determine that the author is okay with my sharing it here. So far, so fantastic. But then …

About a half-hour later, I managed to stop hitting “next” to view cartoon after cartoon. Hey (I justified), maybe these others will come in handy sometime too.

I fooled no one; the truth is, I was goofing off.

Finding Balance Through Losing Control

To some extent, effective Internet use requires us to put on our work-a-day blinders and stay on task. That said, if you’re virtually all work and no play, I am afraid you might miss some of the best content out there. To all things, balance, so I recommend you also allow yourself a modicum of random serendipity, clicking on cartoons, networking with colleagues, and generally meandering down whatever worldwide paths happen to pique your curiosity. For me, I tend to ease into the day that way. You may prefer it as a way to wind down in the evening, or as a lunchtime or coffee-time break or a Friday afternoon treat. After all, it’s a lot healthier than smoking.

If your inner bean counter must account for the time spent on this sort of indulgence, think of random web surfing versus serious business as the difference between basic versus applied “research.” In applied research we seek to find specific solutions to discrete challenges. In basic research, there’s “no particular use in mind,” as described by Nobel laureate and astrophysicist George Smoot in this Statesman.com article. And yet it’s every bit as important. “People cannot foresee the future well enough to predict what’s going to develop from basic research,” says Dr. Smoot. “If we only did applied research, we would still be making better spears.”

So consider your “pointless” Internet time to still be of value. In fact, the cited Statesman article is a good example of the utilitarian possibilities of following electronic dots with no particular use in mind. If you read all the way through the piece, you’ll notice a nod at the end to David Booth at Dimensional Fund Advisors, which is what happened to lead me to this article (because I track Dimensional Fund Advisors using Google Analytics), which happened to serve as a perfect resource for my blog at hand. Who would have guessed? Plus, the reference to Dimensional’s connection with academia may be of additional future use. Which brings me to my next point.

Wasting Time Effectively

Even with your basic research, you can make more or less efficient use of your time. The secret is to spot the nuggets of possibility as you stumble across them and — critically — map them for future reference. Otherwise, you’re left vaguely remembering you read something, somewhere, that seemed interesting at the time. But then, when you think of a use for it, either you can’t find it at all, or you must spend more time relocating it than it’s worth.

Your mapping system doesn’t need to be fancy. Once you’ve got a process in place, it takes only a few seconds to document potentially useful material and move on. Here are some steps I take in my own routine:

• If it’s an article – I print it to a PDF file, add a sticky note that includes the website link and file it in a folder on my PC. The file name is the source, subject and date published. For example, if I find an interesting interview about Dr. Markowitz discussing diversification in Investment News, the file name will look something like this: IN-Markowitz_Diversification-06-07-11.pdf. If there are particularly nifty passages, I may yellow-highlight them. Using search tools within Windows Explorer, I can then find the article later by searching on or sorting the folder any number of ways.
  
  ( Note: To create a PDF file as described here requires Adobe Acrobat Standard or Professional; the free Adobe Reader does not enable you to create PDFs, add sticky notes or highlight passages. From a copyright standpoint, I believe it’s okay to save a copy of an article, as long as you never share it with anyone else in its copied form. If you cite the material, point to the original source on the Internet; the copy should be for your reference only.)

• If it’s a quote — I maintain an Excel spreadsheet of interesting quotes, including columns for where I found it, who said it, when I added it to my spreadsheet, and a couple of “keyword” columns for sorting. For example, if I need a good quote about leadership, staying the course, or bear markets, I can filter by these and other keywords, to narrow the selection.

• If it’s a great website — I add it to my Favorites toolbar in Internet Explorer (or the equivalent in whatever browser you’re using), further categorized by various subjects. For example, I have a Favorites subfolder of well-designed web site examples, of advisor technology resources, of good financial blogs, etc.

• If I have a particular use in mind — I maintain a Word document of article ideas pinned for permanent, easy access from Microsoft Word 2010’s “Recent” library (or, on older versions, it was sitting on my Desktop). I keep a simple bulleted list of ideas there, with hyperlinks to critical resources. Whenever I need inspiration, I reference this document, culling out ideas after I use them or when they become obsolete.

These processes aren’t rocket science, but they’ve worked well for me. You may have your own variations. You might prefer to print articles and save hardcopy in organized file folders. Or if you have a paperless office, your scanner may help you build an even more effective resource library.

The point is, slow and steady resource management wins the race. By taking a few minutes whenever you find an interesting resource to immediately create a breadcrumb trail back to it, you’re well set to feast later on, sharing it with a client when the subject arises, using it for blog fodder, or being ready to respond to a reporter with pithy commentary, seemingly on the fly.

Establishing a process will feel awkward at first but, trust me, after you’ve done it a while, your sixth sense for newsworthy fodder and your ability to speed-file keeps getting better. If you have office support, you also should be able to delegate some of the efforts.

So go ahead, waste a little time regularly. Properly wasted, it can be time well spent.

——————————————————————————————————————————————————–

Enough goofing off. In my next blog, “You and the Internet Part II: Places To Go, People To See,” I will cover some specific Internet-based resources I’ve found to be particularly useful to the fee-only, passive advisor community and your corporate communications activities.

When Is It Worth It? When Is It Not?

Whenever your words are expected to produce little more than hurt feelings, assume that your mother is right: holding your tongue – and your “send” key – remains the best plan of inaction. This is especially so in your business communications. (And, as an investment advisor, essentially anything you publish on the Internet should be considered as such.) But, still, there are times when you must present or defend your ideas, even if they’re directly critical of someone else’s. Sometimes, it’s just that important.

It’s too bad we can’t weigh importance like we can a fish, so we can spot the keepers. When should you go ahead and cast your barbed words and when do you cut bait? My rules of thumb include the following two reality checks:

1. Would I say it to his or her face? When I’m considering writing bluntly, I begin with this all-important hurdle of a question. If I know in my gut that I wouldn’t dare say anything like what I have in mind in person, I know I also should back away from an electronic exchange. If you post a personal critique on the big wide Web for the world to see, odds are, it will not only reach your target and all his friends and family eventually, it’ll probably reach them at least twice as fast as any praise can travel.

2. Have I slept on it? Whenever possible, I give it some time, preferably overnight. Often, I find my passion has diminished during the cool-down period. Sometimes not, and that’s when I know it’s worth considering crafting a message.

Responding to the Call

Each of us has a different comfort level about engaging in spirited debate. Admittedly, to quote George McFly from Back to the Future, “I’m afraid I’m just not very good at… confrontations.” And that’s okay. Like George, who reserved his energy so he could well and truly wale on the bad guy in the end, I’d like to think I know when duty really calls.

On the other hand, there are those in our passive advisor community who seem to rise to the clarion call of confrontation at the slightest whisper of an argumentative breeze. And that’s alright too. Some of these regular jousters are quite good at presenting their cases in constructive ways – sometimes debating passive versus active, and sometimes arguing over variations of one form of essentially passive strategy versus another. Even if you don’t necessarily long to jump into the fracas, we’d all be much worse off without this thought-provoking exchange of well-reasoned, if sometimes sharply worded ideas.

So let’s say you’ve decided to accept the challenge, and that a serious critique is in order. How do you effectively champion your subject, revealing the “truth about its hero”?

As Chesterton’s words imply, it’s not what you have to say on any particular subject, but rather how well you say it that spells the difference between engaging the majority of your audience to at least consider your viewpoint, versus causing a panic at the exits by those whom you seek to convince.

R-E-S-P-E-C-T. Sing it with me. Above all else, if you’re going to offer constructive criticism, you can be direct. You can share strong beliefs that are in serious opposition to somebody else’s. You can ruffle the feathers of those who refuse to consider opposing viewpoints. But that doesn’t mean you need to be petty or mean about it. Even if you’re 100 percent right and your opponent is 100 percent wrong, the more you veer toward personal and/or emotional attacks, the more you’ll end up looking like the Biff (the bad guy in Back to the Future).

No matter how much you disagree with someone, there is almost always at least one square inch of common ground. Start by acknowledging that inch before you dive off your platform. Then, as you state your own case, focus on remaining rational and objective, sharing your talking points cleanly, convincingly, and with as little name-calling as possible. (Also, I recommend drafting your comments somewhere safe prior to posting, such as a Word document or a pad of paper, to avoid pulling a “Ready, Fire, Aim,” in the heat of the moment.)

There’s sometimes a razor’s edge between honest and cruel, and where that edge is can be highly subjective. If you truly feel you’re being honest without being mean, and the small-minded take it the wrong way, one can argue that it’s their insecurity versus your bad. BUT, you may still have to accept the reality that they or their friends may decide to bad-mouth you for it, and you may suffer a dinged reputation, whether deservedly or not. That’s life. And it’s yet another reason to think carefully about unintended consequences before you proceed.

A Live Demonstration (Gulp)

Let me offer an illustration of a critique I posted a while back. It’s a little scary, but I do feel pretty strongly about it. Still do. So here goes.

First, let me state that Carl Richards and I share way, way more than an inch of common ground. I am in awe and admiration of his wonderful “napkin art,” and the incredible advances he has made in helping the passive advisor community share its investment strategy in such a delightfully approachable way. The man is generous and kind, and has my overall highest respect.

That being said … a while back, Carl posted one of his designs that really rubbed me the wrong way. In an otherwise well-written New York Times Bucks blog posting, he compared the behavior of teenage girls to a herd of sheep.

Baaaahhhd idea. I followed all of the above guidelines, including considering how very much I enjoy and appreciate all the rest of Carl’s work. Even so, I couldn’t let it slide. As the financial VP and treasurer of the local American Association of University Women (AAUW) branch, among my life’s missions is to support efforts to help girls successfully move past gender-based stereotypes exactly like this one. Here is an excerpt from the comments I posted on his blog (reprinted with my permission and much love for my brother Al, who is unwittingly suffering the abuse):

Great general observations, as always, Carl. But why pick on teenaged girls, versus the folly of youth in general? Granted, I did (still do) plenty of silly stuff as a girl. But I’M not the one who shot out my tooth with a BB gun while playing “Truth or Dare” with my pals. I’M not the one who started a campaign in high school to have all my friends bark like dogs whenever my sister walked by. That was my teenaged brother, on both counts. In his defense, he matured into a caring and responsible father and professional nurse, who is now about as far cry from a lemming as it gets. So no long-term harm done. But let’s not perpetuate a damaging myth that girls are sillier than boys, at any age. Adjust that napkin to simply, “TeenagERS”?

The results? The jury’s still out. Carl has not replied to me, publicly or privately. He also did not revise the artwork as I’d hoped. It’s still available on his NYT sketchpad archive, although it does seem to be removed from his Behaviorgap.com website. Carl, I and a world of teenaged girls who deserve better (future moms, doctors and, yes, investment advisors) are waiting for a change. What do you say?

Compliance Teachings From the Frontlines

by Todd E. Schwartz, Schwartz Law Group

Whether you’re continuing to redraft your firm’s Form ADV II or you’re celebrating having recently completed it, it’s time for a break. I want you to know as a compliance attorney I feel your pain. I know attempts to implement the seemingly perpetual regulatory minutia to the day-to-day operations of your firm may make you feel like a modern day Sisyphus. So stop pushing the compliance rock and take a look at the below tips. Without a single citation to compliance related statute or regulation, below are a half-dozen nuggets of wisdom that might lessen the compliance incline somewhat.

1. 99% of Compliance Is Disclosure and Documentation: When in doubt, disclose it. When you do it, document it. The vast majority of compliance related issues are due to a failure by the investment advisor to disclose. Failure to disclose properly on the Form ADV is almost always an issue during an SEC examination or state audit. Do yourself a favor and err on the side of disclosing those soft dollar arrangements you have been reluctant to admit exist. Yes, you have a conflict of interest, but what RIA using a qualified custodian doesn’t? Did you receive a client complaint letter? Lucky you! Now you have something to document. In doing so, you get to demonstrate to the regulators your commitment to compliance. Place a copy of the letter and a memo explaining the resolution along with any supporting documentation in the client file and your “Client Complaint” file.

2. Don’t Forget the Rudder: Your compliance manual is your ship’s rudder. If you are not comfortable or are not following the policies contained in the manual, you are way off course. Get rid of language that is unduly burdensome or find a way to make certain required provisions workable. Don’t fall into the trap of having a compliance manual that is so burdensome it isn’t used. Nothing puts an SEC examiner/state auditor in a worse mood than a compliance manual covered in dust (or a “last modified” date 10 years prior).

3. You’re Not in Kansas Anymore, Keep Your Eyes and Ears Open: It’s tough to say you’re fulfilling your compliance obligations role if you don’t properly communicate the importance of compliance to your employees. At a minimum, have a quarterly compliance meeting/training session with your employees. Don’t forget to follow nugget of wisdom number one (above) and document the meetings. Bring your compliance manual.

4. Performance Numbers Can Bring You Down: Not surprisingly, most clients are interested in knowing what type of results they can expect by trusting you with their investments. Unfortunately, publicizing your performance numbers is one of the biggest compliance problem areas. Your numbers and calculation methods will be subjected to intense scrutiny. Don’t take a chance with your business: Either avoid advertising performance numbers at all or hire an expert in Global Investment Performance Standards™ (GIPS™) to run your numbers.

5. Email Is a Business Record: Remember business related electronic communications (email, instant messaging, Facebook, Twitter) are subject to the same requirements as other business records. Save all business related records for a minimum of five years. If you are still in the 20^th Century, you are doing it with paper documents, do the same with electronic communications. Be able to easily access your business records during this five-year period. In regards to email, access means searching by key word. Microsoft Outlook and almost all non-web based email programs have this capability.

6. Testimonials Are Tricky: It’s understood that testimonials are disallowed for Registered Investment Advisor firms, but it can be less obvious what qualifies as a testimonial. Bottom line, if it’s a compliment from one or a group of your clients — and it’s shared in a manner over which you have control — it’s a testimonial. So a client can generally say something complimentary (or critical) about you in The Wall Street Journal and that’s okay. You don’t control what the WSJ chooses to publish. But you cannot reprint that coverage and share it, because it has then come under your control. Following are some other shades of testimonials best avoided: a web site page describing clients’ opinions about you or your services; recommendations on your LinkedIn profile; testimonial postings you’ve “Liked,” that display on your Facebook wall; and language in any venue that sounds something like this: “Clients appreciate our XYZ service because …” (or similar implications of client satisfaction).

Todd E. Schwartz is a partner in Schwartz Law Group, LLC located in Lake Oswego, Oregon. Schwartz Law Group has a national clientele and specializes in investment advisory firm regulatory and compliance issues. Mr. Schwartz may be contacted by phone at 503.344.4346 or via email at tschwartz@ria-law.com.

Why Bother?

Let’s face it; faces are important. People don’t excel at hearing you or (unfortunately, for us writers) reading about you. They excel at seeing you:

• Research indicates that we recognize our mother’s face within days of birth, and we begin differentiating facial expressions at around three months old.
• Remembering faces is apparently so critical that, as we mature, we keep improving the skill for about a decade longer than most of our other mental abilities.
• Vision is by far our strongest sense. According to Now You See It author Stephen Few (page 29),  about 70 percent of all of our sense receptors are located in our eyes. He observes that may be why we say, “I see,” to indicate that we understand.

Wendy J. Cook Communications

The science is interesting, but what’s it got to do with you as an investment advisor? In my opinion, proper use of your photo is among the easiest, most cost-effective and powerful client relation tools available. Consider the value of your smiling mug in the context of a prospective client comparing your services against others, or an existing client weighing other options as he or she revisits your materials. A decent photo cements relationships, strengthens personal connections, and adds instant personality and approachability in a way that 1,000 words can’t achieve.

Make It Meaningful

Now for some implementation advice. Just as choosing the right words matter for your corporate communications, so does choosing the right images. As a passive advisor, you wouldn’t publish tips on how to succeed at timing the market, even if they were spectacularly well-written. Similarly, don’t use photos – even really nice ones – that don’t reflect the right message for you. Here are some considerations and illustrations:

What does it say? Photos can communicate formality, friendliness or a myriad of shades in between. What sort of experience can a client expect when he or she meets with you in person? Your photo should answer that question by letting your professional personality shine through. (Click on the names after selecting this link.)

How well does it say it? Even if your images are going to be informal, they should be of good quality, with pleasant lighting. Think, the opposite of the camera-phone, deer-in-the-headlight look. Seek a professional photographer who will keep his or her fees modest and will give you unlimited use of the artwork as part of the initial cost (so you’re not left paying extra each time you use the image in a new setting). Or consider a clever variation on the theme of photography.

Who does it include? If you’re a multi-person firm, you may use group shots, individual shots or a combination. Does your firm emphasize a one-on-one approach to client service? Then you may lean toward individual shots of each key player. If your firm has a strong team approach to client services, a group shot may work well, in addition to or instead of individual images.

What will you wear? Again, let your intended message determine the level of formality. But either way, avoid clothing with a lot of pattern in it (which can create a dizzying moiré effect). Are there going to be multiple individual shots of your team? You don’t have to look like you’re in school uniform, but establish some consistency so you don’t end up with one of you in a suit and the other dressed for happy hour.

Inside or out? Sometimes, advisors ask me whether their photo should be on the front page or inside bio page of their website. Again, let your intended messaging be your guide. More often than not, I see photos placed on the inside bio page. But what if team service is among your most important attributes? Then it can work nicely to place your team front and center. I also sometimes see front page photos for advisors who are relatively well-known public figures. While I can see the brand-identity logic in that, I also wonder whether it might backfire, implying that the relationship may be more about the advisor than the client.

Where is it going? Prime targets for photos include your website, your introductory brochure and, definitely, your social media profiles — LinkedIn, Facebook, Twitter. For goodness sakes, if you are going to go social, don’t debut as the dreaded, “no photo” faceless-gray blob! What kind of message does that send about your approachability?

In addition, you may end up using your photo in miscellaneous communications such as a speaking engagement flyers, etc. Because each of these settings may call for anything from a tight close-up to a full body shot, have your photographer take a range of shots, making them all high-resolution, so they can be adeptly edited as needed for particular settings.

Big fat disclaimer: Some of the website links in this article belong to firms with whom I’ve done business and others do not. The opinions herein are my own and don’t imply any sort of endorsement, approval or agreement from any of these sites’ owners. They are merely a few illustrative sites to help you brainstorm about your own, so please don’t read any more into it than that.

I am delighted to re-blog a recent blog by my colleague Kristen Luke of Wealth Management Marketing, Inc. (with permission, of course). Read on to consider her three best-in-show marketing ideas for ramping up your firm’s 2011 marketing efforts. While you’re doing that, I’m going to go work on my blog template, like she suggests.  

Cheers,  

Marketing Ideas I’ve Learned From My Clients

by Kristen Luke   

As a marketing consultant, it is my job to provide financial advisors with different ideas they can implement as part of their marketing plan. One of my favorite parts of the job is learning new ideas as a result of working with different firms and advisors. Sometimes these ideas come from campaigns that my clients have been implementing over the years and sometimes these ideas come from collaborating with clients to find a solution for a problem they are facing. Below are three of my favorite ideas that have come from a result of working with clients over the past year.  

Client Initiation Email Auto Responders 

In the initial weeks and months of a new client relationship, there is a plethora of information you may want to share with a client such as introducing the members of the client service team or explaining how to read quarterly statements. Overwhelming clients with all of this information in one meeting reduces the likelihood that the information will be retained. To work around this problem, you can create a series of emails to initiate a new client into your firm. Each email should be focused on one topic such as “How to Read Your Statement” and should be as brief as possible. By utilizing the auto responder function commonly found with most email marketing programs, you can create a set schedule of emails to be sent to new clients every few days or every few weeks depending on your preferences. Each new client added to your email list would then receive the series of emails automatically based on the parameters you set. This strategy, once setup, efficiently enhances client communication in the early days of the relationship.  

Blog Reprint Template 

A blog is a wonderful marketing tool that helps increase awareness of expertise within a niche market. Unfortunately, the blog posts are often lost on people who are not technologically savvy or haven’t stumbled across your blog yet. To overcome this problem and further the reach of the online articles, advisor bloggers can develop at blog reprint template. Just as you would have reprints of articles you wrote that were published in a magazine, you can create reprints of your blog articles to handout to prospects. It is useful to have reprints of all of your articles available so that you can customize the information you provide to a prospect depending on his or her specific situation. The reprint template should include your logo, firm name and contact information as well as the name of the blog if applicable. Utilizing this strategy creates more marketing collateral to help you market your firm, without adding much additional work.  

Speakers Kit 

Many advisors love to schedule speaking engagements with local organizations and associations as a way to reach prospective clients. However, unless you have existing relationships or money to spend on sponsorships, it can be difficult to get into these organizations. One way to increase the chances of success when cold calling an organization is to position yourself as an expert speaker who is in high demand. One technique to help accomplish this is to create a Speakers Kit – marketing collateral that positions you as a professional speaker. The Speakers Kit should include a bio, a roster of past speaking engagements (if available), information about specific programs and presentations offered, and how someone can contact you to schedule a presentation. The programs offered should target niche markets and should include sufficient details so that the audience knows what they can expect to learn. The more professional and targeted your Speakers Kit is, the easier it will be to pitch your speaking presentations to organizations. To further this strategy, the same information can be included on a “Speaking” page on your website to solicit more speaking engagements.These are just three strategies that have resulted from collaborating with clients. By meeting with your peers at professional association meetings or industry conferences, you too can pick up new ideas to implement in your own business. 

About Kristen Luke — Kristen Luke is the Principal of Wealth Management Marketing, Inc., a firm dedicated to providing marketing strategies and support for Registered Investment Advisory firms. Her firm enables independent advisors the ability to market with the same quality and consistency as their larger competitors by providing the resources of an entire marketing department at a fraction of the cost of a single employee. For more information, visit: www.wealthmanagementmarketing.net

That said, as a creator of creative capital, I think I can offer some good ideas from the front lines on frequently asked questions about its ownership, such as:

(1) How can I safely “borrow” from other people’s work?

(2) Should I protect my own work?

(3) What if I’ve hired a freelance writer?  

Learning the Alphabet

Let’s begin with a brief tour of the creative lingo.  

• Creative capital is anything you’ve invented (created), that is of some relatively demonstrable value to you and/or others (capital) — whether it’s written content, artwork, a product offering or a process.
• Copyrights protect your words.
• Moral rights protect your artwork.
• Trademarks protect your corporate identities, including logos, taglines and product names.
• Patents protect your products and processes.(2)  

Lawyers the world over are likely cringing at my broad strokes here, akin to using a blow torch to light a candle, but it’s how I think about it all, anyway. Now that we’re in the ballpark, let’s touch on the bases.

Borrowing From Others

No matter how convoluted, laws exist to guide us on what we communally consider fair or foul. So “Do Unto Others” remains a great starting point for drawing on other people’s creative capital. Remember your grade school teacher’s response when asked if you could have a hall pass to escape? “Of course you can,” he or she would smirk. “But may you?”

Same thing with copyrights. Just because you can reproduce an article or a picture does not mean you’re allowed to. Whenever reproducing somebody else’s creative capital (beyond brief, properly cited quotes as described below), it’s your responsibility to proactively seek copyright or moral right permissions from the author or artist – which may justifiably involve paying them for it.

An exception to this rule of thumb is if: (1) you briefly quote and properly cite somebody’s content, and (2) you’re adding substantial value of your own, versus simply repackaging somebody else’s book report. (A while back, I blogged on some of the nuts-and-bolts rules when it comes to proper citing and sourcing. If you missed that blog the first time, you can revisit it now.)

Protecting What’s Yours

In a perfect world, everybody would respect each other’s creative fields, and you’d need never worry about someone unfairly harvesting the fruit of your labors.

Last I checked, it’s not a perfect world. If you’ve got creative capital that you want to protect against theft, here are some ideas.

Copyrights Have You Covered

Copyrights (and I believe moral rights too) are subject to an interesting characteristic. Authors automatically hold copyright to their work … at least until they choose to sell or grant it elsewhere. That’s whether or not you formally register it with the U.S. Copyright Office or display a notice on it, like: “Copyright © 2011, John Doe.”

So why bother with notices or registration? As I understand it, without these, your legal recourse is limited. For example, should someone violate your copyright when notice and/or registration are lacking, you may still be able to achieve a “cease and desist” order to prevent further offense, but you might have trouble collecting on damages done.

Thus, since it’s cheap and easy to do, go ahead and display a copyright notice on most of your work. Formal registration becomes appropriate if we’re talking book-length or for work that you highly value, but it doesn’t seem worth registering every scintillating word you share, unless you’ve got a whole lot of spare time and money you’re looking to get rid of. (If you do, I’ve got some better ideas; call me.)

Trademarks Are a Different Breed

Trademarks have very different rules from copyrights. My understanding is that you must not only formally establish registered trademarks for your logos, taglines and similar corporate identities, but you must also carefully maintain your ownership, lest it be lost through attrition. Protecting your trademarks requires at least these two important steps:

1. Including the “®” symbol in almost all appearances of your trademarked content
2. Regularly monitoring for and aggressively acting on any violations that occur

If you can’t demonstrate that you’ve been diligent on both of these steps, my understanding is that you can lose the ability to protect your trademark – even if you’ve gone through the bother and expense of establishing it to begin with. Ugh.

Bottom line, if it would be a serious blow to your business to lose the rights to your company name and/or particular product names, taglines or similar marks, it may be worth establishing and maintaining trademarks to protect them.  

Freelance Writers and Designers

What if you’re working with a service provider to assist you with your corporate communications? As you might expect, the legal transfer of rights can be handled — or mishandled — in all sorts of ways. There are surely enough variations to provide an army of intellectual property lawyers with job security well into the next century. Since there is no universal standard that I’m aware of, whenever you work with creative alliances, it behooves you to ask how they personally handle it and to ensure that their processes work for you.

Personally, I’m fond of the KISS strategy. My practical goal is to transfer the copyrights and moral rights for client-specific projects to the client … once I get paid for doing the work. Brilliant, huh? I contracted a lawyer to help me form a legal agreement that describes this simple goal in copious legal language. Just as good fences make good neighbors, I believe that good formal agreements make for good working relationships. So far, I’m pleased to report my beliefs on that count have held true.

Even though this is one of my longer blog postings, clearly there’s plenty of remaining learning opportunities on the subject of protecting your creative capital and respecting that of others. So I’ll part with a couple of resources I’ve found handy in my own schooling:

• The Law (in Plain English) for Writers, by Leonard Duboff and Bert Krages II. A good book on copyrights and similar issues, from actual lawyers.
• The U.S. Patent and Trademark Office TESS database. A free resource to check on whether a trademark already is owned. But note, TESS is just a rough guide, not replacing formal trademark searches when warranted.

How do you write about yourself without boring everyone else?

Some of it comes with practice. Like when you started as a fee-only, passive advisor, you were able to follow the essential tenets of sound investing to quickly provide enormous value to your clients. (Certainly more value than they were getting from their average big-box broker type … but I digress.) Then, as you gained experience building strong relationships, managing customized portfolios and helping people through various markets, you were able to deliver even higher levels of client care.

It’s like that with writing too. There are a few essential steps you can quickly apply to produce better-than-average corporate communications. These are: discovery, reflection and execution. With experience and practice, you can grow from there to higher levels.

Essential Discovery

Before you type your first paragraph, it pays to go through the same exercise you probably inflict on your clients before you build their portfolio for them: Discovery.

When you hold discovery meetings with your investor clients, you ask them to describe themselves in detail. Who are their most important relationships? What are their personal interests and professional goals? How do they define wealth? Even though these are pivotal questions, people are often surprised to realize they can’t answer them. That realization can be as useful as the answers themselves.

So ask yourself pointed discovery questions, such as:

• Who are you? Who is your firm? Where are you at today, where do you want to go, and how do you compare with others in your industry?
• Who are your clients? What are their demographics today and what would you like them to look like in the long run?
• What is your mission? Does your firm have a mission and, if so, how does it relate to the language, design and specific communication projects you want to accomplish?

 If you can’t articulate these sorts of underlying essentials in pretty good detail, step away from the computer. Otherwise, you may fall victim to what George Bernard Shaw has quipped is the single biggest problem in communications: ”The illusion that it has taken place.” Even if the writing is well done, good prose won’t be great communication unless it’s aligned with your and your audience’s unique qualities. It’ll end up being stuff they’ve read or heard before. And that will be boring.

Essential Reflection

Whenever I begin working with a new investment advisor client, our first project is to hold a joint discovery meeting, as described above. Afterward, I end up with several pages of notes. I let these notes simmer, at least overnight. Then I re-read them with my electronic yellow highlighter in hand.

As I review, I find common threads among fee-only, passive advisors, such as a strong dedication to fiduciary levels of care; a recognition of how markets really work; and an understanding that money is a means, not an end. These types of commonalities are important and well worth reflecting in your messaging. But what I find most fascinating is the stuff that’s not as immediately apparent. As I reflect, I always find statements, ideas, personality traits or other insights that I’ve never heard from any other advisor. That’s without exception!

And that’s where my yellow highlighter comes into play. There can be all sorts of things you might not immediately recognize as important but, used in the right context, they will help you stand out in subtle ways that make a big difference. For example, personal interests you may share with your client base, unusual client niches, a surprising background that brought you to where you are today, business strategies that are a little off the beaten track, characteristics that matter within your geographic region, unusual alliances that are helping you reach your particular prospects … You get the idea. Come up with even just a few of these, and you’re on your way to the Land of the Interesting.

Essential Execution

Great, now all that’s left is the writing. When I go to write, if nothing immediate comes to mind, I review the points of distinction I’ve highlighted during reflection and compare them to the specific goals of the project. Usually, this generates ideas on how to address those goals in a fresh, new way.

For example, I was recently working on website content for an advisor’s new website. The firm has been around for more than a decade, but its younger generation is transitioning into a stronger leadership role, requiring updated messaging. Reviewing my notes, I noticed that both generations of leadership had been particularly enthusiastic about their affinity for technology, especially their all-Macintosh-based operations that they were proud of. They also commented on how they’ve been a “green” office since way before it was trendy. Without giving away their specific marketing messaging, suffice it to say that these sorts of distinctions helped us reposition this seasoned firm’s communications to be of real interest to a brand new generation of wealth.

An Essential Ally

As with any creative skill, writing efficient, effective content to promote yourself and your services first takes learning and applying the basics. Then it takes a ton of practice. Above all, it takes an unabashed love for the craft, to spur you through the challenges. Or, if your interests lie elsewhere (and you’re a fee-only, passive management advisor), it can take giving me a call instead.

1. Why do I want to get published?
2. How am I going to do it?

A Publishing Industry Overview

First let’s talk about the “how” of it. At the highest level, there are two choices: self-publishing or traditional publishing. Are you going to do it yourself or seek professional help? Next, you can publish electronically, in print – or both. For self-publishers, you also decide whether to print on demand (in small quantities as needs arise, higher per-book cost but less initial capital outlay) or in bulk (larger quantities and capital outlay upfront but lower per-book costs).

Swell, we’re already halfway there! Well, maybe that’s a touch optimistic. But seriously, knowing what’s out there should help get your productive juices flowing. Next, why you’re publishing will help you determine your next steps.

What Portfolios and Publishing Have in Common

When you’re selecting particular passive vehicles to build portfolios, you consider each client’s distinct needs. Same thing with your manuscript. Consider your distinct needs related to:

1. Audience
2. Timeframe
3. Marketing efforts
4. Control
5. Costs

Just as your clients usually have conflicting wealth needs to resolve, you’ll likely end up with conflicting considerations. Prioritize them, and choose the solution that comes closest to addressing each factor, in order of importance. The result should reflect your overall best game plan.

Putting Publishing To Work for You

Now that you have a sense of why you’re publishing and how you can go about doing it, let’s connect the dots. Similar to starting with a model portfolio and ending up with a customized fit for each client, here are some guidelines to help you craft your custom fit.

Audience — If you mostly want to share practical wisdom with your prospects and clients, then self-publishing may be the way to go. It’s quicker and keeps you in the driver’s seat on project decisions. Traditional publishers are typically focused on mass-market profitability, so they might have conflicting priorities from your narrow-audience needs. On the other hand, the more extensively you’d like to share your work, the more you should consider seeking an experienced literary agent who specializes in business and personal investment books. He or she can help you establish a good working relationship with a traditional publisher who is the right fit for you.

Timeframe — If you need to have your book in hand “last week,” again plan to self-publish. Traditional publishing often takes a year or more after you sign the agreement.

If you’re okay with your efforts taking some time to bear fruit, then consider traditional publishing. Another potentially attractive characteristic of the traditional approach is that you can begin pitching your detailed ideas for a book – before you’ve fine-tuned the entire manuscript. If you send an agent a strong query letter, you may be invited to submit a proposal along with the first chapter or two. This gives you time to build from there if it feels as if the fit is right.

Marketing Efforts — How much sweat-equity will you or your support team realistically have to actively market and promote your book once it’s published? Clearly, if you are self-publishing, you’re on your own for either doing or hiring someone to do everything. If you are being traditionally published, the publisher will offer some support, but those levels of support are diminishing these days. It doesn’t take a Nobel prize in economics to notice a strong, positive correlation between quality marketing efforts and ultimate success in the publishing industry. Plan and budget accordingly.

Control — How much pain would it cause you if a publisher changed the title of your book, redesigned the cover, postponed its release until after the holidays or yanked the index, deeming it an “unnecessary frill”? Any or all of these things can happen in traditional publishing — especially if you’ve not got a sharp eye (or better yet, a sharp agent’s eye) for negotiating your agreement terms. Properly negotiated, you should be able to maintain sufficient control over the content of your traditionally published book. But if you are going to sweat every detail, you may find self-publishing more to your taste. There is no right or wrong here. Sometimes every detail truly does matter. The point is, be honest with yourself on what sort of control you will need, to achieve your particular goals.

Costs — If your budget is a big goose egg, traditional publishing doesn’t have to cost anything besides your time. In fact, publishers typically don’t take on a book unless they think it will generate revenue. (Here’s another point when an experienced literary agent can ensure that the terms of the publishing contract are in your best interest.) There also are ways to electronically self-publish your book for essentially no cost. One place to explore that option is Smashwords, a popular e-publishing resource. 

If you are self-publishing with a budget, how much you have to spend will naturally dictate how big a splash you’ll be able to make with your masterpiece. Print and electronic publishing abounds for authors seeking a Do-It-Yourself sales strategy. To whet your appetite:

• For print-on-demand — I’ve heard from several authors that Lightning Source is worth considering.
• For bulk printing — a local author friend of mine reported having good ongoing experiences at reasonable costs at Printcrafters, a Canadian-based book printer. Or, to remain stateside, I’ve also heard good reports about United Graphics Inc. in Mattoon, Illinois.

Book publishing consultant Barbara Gleason of Cranedance Publications suggests to expect printing costs in the range of $3-$7 per paperback, with layout costs in the range of $2-$7 per page. These costs vary widely depending on factors such as paperback or hardback, colors used, quantities desired, and number of charts or illustrations. She estimates that print-on-demand costs tend to double the per-book price, but then you probably need to be prepared to print a minimum of 1,000 books to cost-effectively print in bulk.

However you’re publishing, I highly recommend budgeting for:

• Adding a decent index to the back, per my previous blog on the subject
• Marketing and promotion (below), to significantly improve success and readership

That’s All She Wrote (For Now)

Clearly, we’ve just skimmed the surface in this three-part blog series, but every story must come to an end. Contact me to keep the conversation going.

Barbara Gleason of Cranedance Publications consults on book publishing and self-publishing, helping writers “realize their dreams of getting their work into the public eye by publishing their own books.” Gleason advises, and I agree, that would-be authors should “start with the end in sight.” (This is of course no different from what you advise your clients regarding their long-term portfolios.)

Set Your Goals. What are your specific goals? Why are you writing this book, and for whom? Start a notebook or Word document to jot down ideas and research notes. (Or a tape recorder if you’re not yet ready to type. I’ve also heard that Dragon NaturallySpeaking voice recognition software works well, if you’re into gadgetry.)

Circle Your Troops. Be aware from the beginning that you will probably wish you were done with the book long before you really are. Who will help you stay on task? Friends, family, colleagues? How will they help you? Are they ready for the ride?

Create a Plan. Just as you wouldn’t invest without a detailed investment plan, don’t write a book without a documented production plan in hand. Include project specs, measurable steps to success, calendar deadlines and a dollar budget. (I’ll provide more ideas on production costs in Part III, in which we review publication options.)

Your plan doesn’t have to be fancy. There’s software available to help manage big projects with lots of moving parts, but personally, I tend to use a simple Word document and entries in my Outlook calendar to describe and schedule my plans — or even index cards and a paper calendar, if you’re even more old school.

Assign Tasks. With your plan in place, decide which tasks you want to or must do, and which ones you expect to outsource. A book is strengthened by collaboration, so don’t go it alone. Interview and select alliances you plan to use. Ask them how they will help, in detail, and agree on both costs and scope, preferably in writing.

Set Sail. Now, finally, you and your support team can embark on the “real” tasks: producing an outline, researching facts, writing content, and creating or arranging for imagery and related permissions.

Of course it’s easy to say, “Now write your book.” It’s quite another thing to do it! To give this subject proper due, read a book or two on the subject. One of my faves is the timeless classic “Bird by Bird,” by Anne Lamott.

Edit, Edit, Edit. Edit Some More. Arrange for a team of editors/reviewers, including as many of these components as your time and budget will allow:

• A professional editor to assist with big-picture, thematic and structural concerns
• One or more people who represent your target audience for the book (such as friends and family who will catch jargon or explanations that make perfect sense to you but will be lost on your intended reader)
• One or more colleagues who can comment on substantive concerns
• A professional line-editor/proofreader to spot typos and grammatical gaffs, preferably as a final sweep after all other changes are done

Do not try to play all of these roles by yourself. Not even Robert DeNiro is that versatile. You’re the executive editor, who will gather everyone’s input and make the final call on how or if to incorporate your own and others’ revisions. Plan for several rounds of this type — several more than you expect it to take.

Compliance. As an investment advisor, you also get to enjoy the “bonus” of compliance concerns. While it seems to be a gray area whether a book is regulated as “advertising,” it still makes good sense to adhere to the usual caveats, such as protecting client privacy, avoiding testimonials and discussing past, specific performance.

Future Marketing. As you near publication, plan for a marketing campaign. How will you get the book into the right people’s hands? How will you market it? (Hint from Barbara Gleason: Even if your book is professionally published, publishers often have very limited marketing budgets these days!) If your budget permits, consider the services of a professional publicist, such as Jane Wesman Public Relations who has helped financial authors such as Larry Swedroe, Bill Schultheis and Charles Schwab promote their books. I subscribe to the free e-newsletter available from Penny Sansevieri’s Author Marketing Experts, Inc., and I find it chock full of sensible book marketing ideas in the current environment.

In my next posting, Part III, we’re going to reach that glorious day when you’ve completed your manuscript and you’re ready to turn all that hard work into a finished product. We’ll cover some publishing tips, both print and electronic.

You probably chose your career as a fee-only, passive advisor because you enjoy helping people properly manage their wealth, so it’s no wonder if you’ve contemplated publishing a book about it. Over the years, you’ve gathered plenty of fuel for the fire. Are you ready to let loose your inner author?

In today’s Plain Speak, Part I, we’ll take an objective look at financial authorship. In Part II, I’ll provide some practical steps for converting your wealth of wisdom into written reality. In Part III, I’ll offer some ideas on ways to publish your completed manuscript.

The Brighter Side of Books

There are many benefits to publishing a book on passive investing. First, there’s the group benefit. I’ve had the privilege of speaking with a number of investment advisors turned financial authors, including Larry Swedroe, Bill Schultheis, William Bernstein and others. Few of us would question the value of their combined contributions to our communal success in spreading the word about the passive strategy, all too often ignored by the popular press. Each author has successfully taken his own, unique approach to telling the passive story; each new book helps keep the passive investing flame alive; each benefits you and your clients.

Each also has helped the author dramatically enhance his own business. Even if the tale of passive investing already has been told, you have a new viewpoint to share. Your own book in hand, you can:

• Reach new audiences
• Strengthen relationships with existing clients
• Significantly enhance your credibility as a financial expert
• Open the door to new forums of interest to you, such as interviews, radio shows, guest blogs, panels, public appearances and more
• Develop a myriad of successful marketing campaigns, especially with today’s on-line social media opportunities

But Books Can Burn

So, yes, the power of print can be unstoppable, but don’t be blinded by the light. Talk to any of the authors above, or others you may know. Writing a book is a hard labor of love, consuming countless hours and dollars — usually both — long before any reward of readership is ever enjoyed, and long after your family is barely speaking to you for fear you’ll ask them to read your manuscript … again. Then, just when you think you’re done, your editor sends you a new round of revisions, due pronto.

That’s not to say it can’t be worth it. For all of the reasons described above, a book is among the very best tools for jump-starting new marketing and business opportunities for your firm. It offers instant credibility; you don’t even need to add water. Plus, sharing your creative spark with others is, as Bill Schultheis describes it, “an immensely soul-satisfying experience.”

At the same time, Schultheis notes that the author has to be willing to reveal his or her soul to begin with, “first in the process of self-discovery through the writing, next, in sharing the work with the world.”

Thus the difference between writing a book versus, say, waxing poetic in a three-part blog, is like the difference between purchasing a Starbucks franchise versus picking up a pound of the house blend. You’d best begin with a strategy in place on how to move the project from dream to done.

Here’s my next Plain Speak blog, “Becoming a Financial Author, Part II: Realizing the Dream.”

That’s why it was bothering me that, for my own website, I would have had to caution you until recently to do as I say, not as I do. No longer! The new and improved www.wendyjcook.com is open for business.

Let’s use my recent overhaul as an illustration on how you can go from so-so to so cool with your own site.

Step One: Where Are We At?

I knew it was time for a site makeover, but where to begin? First, I wrote down everything I liked about my old site, so I wouldn’t accidentally jettison the good with the bad. Here were some of its positive traits:

• Clean, uncluttered look and feel
• Easy for visitors to navigate and easy for me to maintain
• Large chunks of content worth retaining
• Affordable (I’d built it myself with DreamWeaver)
• Relatively good positioning on the search engines

That felt good. As bored as I’d grown with the old site, I was surprised to discover how much of it was actually … not so bad. Still, there was room for improvement. Plenty of room:

• Most importantly, it didn’t clearly and prominently explain what I do (writing, editing and presentation services) and for whom I do it (passive management, fee-only investment advisors).
• The design and logo were clunky and didn’t represent me or my company very well.
• The site and its platform did not integrate well nor enable me to remain current with all the great marketing and communication opportunities out there these days, such as RSS feeds, LinkedIn, Twitter, Facebook and blogging.
• The back end lacked robust, current tools for easily improving on Search Engine Optimization.
• The site displayed inconsistently across the various browsers, such as Internet Explorer, Firefox and Safari.

Step Two: Where Do We Go From Here?

After itemizing the beauty and pock marks of my former site, I felt ready for a makeover. Better prepared, I made yet another list – a splendid wish list, subdivided into four main categories:

Design – Theme ideas, photo ideas and color preferences

Content – Thoughts on important talking points, specific pages and overall navigation among them

Build – Technical preferences or questions to address

Integration – Plans or questions on integrating search engine, e-blast and social media ideas

Similar to the way you help clients build an Investment Policy Statement, my wish list was like a “Site Policy Statement.” It made it easier to communicate exactly what I wanted with my site designer. It made it easier for him to help me create what I needed to get there. It made it easier for both of us to assess whether or not we were on target toward my goals. Hopefully, it makes it easier for you to enjoy my new site. Your feedback is most welcome in the comment field below or via the Contact page!

Just as our financial industry has evolved, so too has the print industry. Not long ago, full-color materials could only be produced by “offset” printing, which made it cost-prohibitive for all but relatively high-end, large-runs. Today, there’s “digital” printing, which brings color printing to a wider range of needs. Still, as with almost all technologies, each printing solution has its pluses and minuses.

Recently, my colleague Pat Rollins at EFI Printers Alliance distributed a great “plain speak” article on the differences between digital and offset printing … for when you do decide to print. Here is Pat’s article, reprinted with permission. Thanks, Pat!

Digital Printing Vs. Offset Printing by EFI Printers Alliance

The growth of digital printing technology has brought technical advancements and more options to today’s commercial printing, but it has also brought some confusion. We have client’s that ask us what is the reason to have something printed digitally versus printed offset, so we thought it would be helpful to explain the advantages and disadvantages of digital printing and how those compare to offset printing.

Advantages of Digital

• Shorter turnaround.
• Every sheet prints exactly the same.
• Lower unit costs for very small print runs.
• Variable Data Printing is a form of customizable digital printing. Text and graphics can be changed on each piece without stopping or slowing down the press. For example, personalized letters can be printed with a different name and address on each letter.

Advantages of Offset

• High image quality.
• Works on a wide range of printing surfaces.
• The unit cost goes down as the quantity goes up.
• Quality and cost-effectiveness in high volume jobs.

Still Not Sure Which is Right?

• Quantity. Offset printing has a front-end cost load. Short runs may have a high unit cost. But as quantites increase, the unit cost goes down. Very short runs can be much more cost effective with digital printing.
• Printing medium. If you need or want special paper, finish, unusual printing surface or a unique size, offset printing offers the most flexibility.
• Color. Digital presses use 4-color process printing. If you need only black ink or one or two colors, offset printing may offer a more cost effective solution. If you need 4-color printing, digital may offer advantages in lower up-front costs.
• More on color. If you’re planning to print using PMS colors, offset printing will give you the best match. Digital printing simulates the color using a 4-color matching process, so some digital printers may offer less accurate color matching on projects.
• Turnaround. If you need it fast, digital is the way to go.
• Proofing. Digital offers accurate proofs since you see an actual sample of the printed piece. Accurate color proofing for offset printing can be expensive.
• Customization. Digital printing offers the most affordable way to customize marketing materials, direct mail pieces, letters, etc.

In Summary. It really depends on the kind of print job as to which technology is best suited not only from a cost standpoint but also from a quality standpoint. Both digital and offset printing have their advantages and disadvantages and that is where having experienced printing consultants such as EFI Printers Alliance can help decide the best way to produce your printed products