Watching Others, Watching You, Watching Out

© Can Stock Photo / Bepsimage

You know the classic Catch-22 pun: “Just because you’re paranoid doesn’t mean they aren’t after you.” Here are a few items I’ve been keeping a watchful eye on lately. As an evidence-based investment advisor, you may want to take a look at them too.

Say Hello To the SEC’s SALI

Given the usual deluge of headline-grabbing alerts, you may not have noticed this May 2nd SEC press release, introducing its SEC Action Lookup for Individuals (SALI). SALI is super easy to use, and reports on “individuals” (typically, advisors) who have SEC actions against them “against whom a court has entered a judgment or the Commission has issued an order.” For now, the database covers October 2014 through March 2018, but it’s expected to expand in both directions over time.

SALI could come in handy for your own general research or due diligence on, say, a prospective hire or anyone whose credentials seem suspect. Depending on how you feel about SALI, you may also want to share the link with your investor network. Plus, try entering your own surname and make sure nothing too surprising comes up – especially if you’ve got a common name like Smith or Jones.

Boondoggle Brigade Busted

Admittedly, I’m pretty naïve. Having worked for reputable advisors and fund managers for as long as I have, I sometimes forget that outlandish fees, conflicts of interest and unprincipled practices persist among the wider financial community.

Thankfully, there are columnists like The Wall Street Journal’s Jason Zweig to remind me. Did you catch his recent “Intelligent Investor” exposé, “The Free Trips Your Financial Advisor Takes Could Cost You”? As Zweig observes of advisors who accept free trips from others, “Wining and dining with money managers for free under tropical skies could cloud his or her judgment.”

To say the least! Personally, I can’t even imagine a universe in which any reputable financial advisor would let someone else foot the bill for an all-expense-paid “due diligence conference” held at the Ritz Carlton at Marina Del Ray or the Four Seasons in Mexico City. I love that Zweig includes direct links to these and a couple of other actual, upcoming events, to show that he’s not just making this stuff up.

GDPR … It’s Growing on Me

GD-what? It’s not your fault if you’ve not even heard of the European Union’s General Data Protection Regulation (GDPR). Set to go live May 25th, it’s a big deal in Europe, but I might not have heard of it either if I didn’t have a number of colleagues and clients based there. Even then, it only dawned on me a few weeks ago that I may need to comply with portions of it too, as described in this Forbes article.

If you are not collecting, processing or storing any personal information on anyone in the EU, you can probably remain blissfully ignorant about the details. But, I wanted to bring it to your attention anyway because I’m intrigued by its parallels to our would-be fiduciary standards. Think of the GDPR as having a similar mission, but it’s meant to protect people’s personal data instead of their financial well-being.

Both seem well worth protecting, and the GDPR seems to be authentically leading the charge on this important front. If it works as hoped for, we may have the opportunity to learn from and emulate its successes as we seek to advance universal fiduciary standards of care and improve on financial best practices around the globe.

I think I’ll hit pause for now, to keep this post short and sweet. But I hope to revisit the subject soon … so keep a watchful eye on my blog. Or subscribe below to receive these straight to your inbox.

Are You Ever Asking for It: Ideas on Client Referrals

© Can Stock Photo / Pixelbliss

Note: If you’ve been reading my blog for years, this post may sound familiar. I originally posted a version in 2012. The subject came up again recently, so I decided a redux was in order …

“I know I probably should but …”

What’s your favorite excuse if you don’t routinely ask clients for referrals?

It feels pushy. It’s not my style. This isn’t the right time/place. I forgot. What if it isn’t a good fit? I’m not currently seeking new clients. I’m just no good at it. … Do I have to?

If any or all of these sound familiar, I challenge you to shift your mindset: Asking for referrals doesn’t have to be a chore or an embarrassment, and trust me, the more you do it, the easier and more natural it will become. Once you become comfortable with it, it can become a three-way win for you, your clients and those being referred to you. Here’s how:

It feels good.

Advisors who routinely make referral requests know a big secret: Happy clients actually appreciate being asked something like, “If you’re aware of others we can help, please know we’re always happy to meet with them,” or “Is there anyone else who might benefit from a conversation with us? We’d love to see if we can help.”

I know happy clients appreciate being asked, because I am a happy client myself. Remember, we love you. We are grateful for your help and flattered when you ask for our advice for a change. We love having the opportunity to give back, and to show off how smart we were to have identified such a great advisor. Everything about referring others to you makes us feel good.

It makes things stick.

In contrast to any fear you may have of annoying your clients, I believe asking for referrals actually further cements your relationship. After pointing some of my friends to my advisor and hearing that they, too, are happy and grateful, it makes me feel even more certain that I’ve made the right choice. It also creates another bond between me and my advisor, making it less likely I’d walk away on a technicality. I now feel vested in my advisor’s success.

It highlights the sticking points.

I recognize that some clients may take it the wrong way anyway. But think about it. Might this not be a blessing in disguise? If someone is regularly suspicious of your motives or routinely misinterprets your intents, you may ultimately be grateful if they choose to move on.

It works when it works … and even when it doesn’t.

What about referrals that aren’t a good fit, from your perspective or theirs? They can still be worthwhile:

  • If you are forthright about your services and respectful of others’ needs, even if someone is not a perfect match, they’re likely to respect your integrity and bear you no ill will – especially if you have additional resources to recommend when you are not the best solution.
  • An imperfect possibility may become a better fit later on. They also may be able to refer you to others who could turn out to be your best clients ever.
  • If you’re introducing someone to evidence-based investing for the first time, think about how important that is. Even if they’re not ready to embrace the message today, you’ve planted the seed. One way or another, the good deed will likely come back to you further down the road.

Low-hanging fruit is still the sweetest.

Time and again I hear that, for most advisors, the vast majority of new business comes via word of mouth, especially the mouths of your clients. So, why fester over fancy strategies, spin increasingly complex tactics, or build ever-more-elaborate business development schemes? This easy-as-pie solution costs almost nothing but a smile. That, and one simple question, routinely slipped into your writing and casual conversations: “Who else might we help?”

Go ahead, ask for it!

Getting Sticky With It: A Parable About The WSJ

© Can Stock Photo / Subbotina

While The Wall Street Journal (WSJ) is not an investment advisory firm, this venerable publication faces similar challenges to the ones found in our industry. They’ve been around quite a while, working hard at being the source for “serious” readers, Jason Zweig fans (Jonathan Clements before him), and “stipple” drawings.

Still, as is the case in the advisor community, even the grandest institution can crumble if it doesn’t keep up with the Times (figuratively and perhaps literally in journalism). The bigger you are, the harder you might fall if you assume you can completely ignore those pesky roboadvisors, for example, or if the evidence underpinning your evidence-based investment strategy incorporates nothing newer than insights applied at the turn of the millennium.

Happily, this is not a cautionary tale based on the WSJ’s demise. Instead, I’ve now been subscribed to the publication for a little over a year, and I have been pleasantly surprised at the lessons I’ve been learning from it – directly from its news and commentary, and indirectly from its strategies for ensuring “clients” like me are happy campers.

I started out as a reluctant subscriber. There’s so much free content on the Internet these days (I reasoned), I shouldn’t have to pay for my news. I was especially annoyed when the WSJ started shutting down access to their own, previously free content. I resisted paying for it, partly on principle, and also because it was pretty pricey.

The thing was, I found myself continuing to run into WSJ articles when seeking this or that statistic, fact, or a “just right” quote for my writing projects. So, reeling me in with a low-cost trial run, I signed up. Grudgingly.

Good thing. I ended up paying for real once the trial was over, and almost happily so. I had determined that the cost was going to pay for itself in the time I was saving having to hunt down the financial goods that were otherwise so elusive.

But it doesn’t end there. I don’t even receive the print version; I don’t want to. “The paper” is dead … long live the paper. What I’ve discovered is an online resource that’s (relatively speaking) well-vetted, well-written and well-designed.

Besides scanning their site for news, I can sign up for specific newsfeeds of interest to me. They don’t send me junk I don’t want. They have recently launched a nifty value-added offer that has almost nothing to do with traditional journalism: Once a month, they offer a free download of a popular online book to have as my own. My first download happened to be Madeleine Albright’s Prague Winter, and it’s one of the best books I’ve read all year. As if that weren’t enough, once a month, they hold a drawing to win some free exotic trip somewhere. This month, it’s France. I haven’t won yet, but it’s fun to think I might.

The deeper I go, the more I find. What started out as a shortcut for some specific types of research for my day job has transmuted into an essential relationship I would be loathe to live without. In other words, they’ve got me. I’m stuck.

I’m not suggesting you start holding travel contests for your clients. I doubt that’s even legal for you. But I am hoping this might start your own creative juices flowing.

How can you break the mold and improve on the meaning of “valued advisor”? What are one or two new things you can do each year to delight your clients in ways they didn’t even realize they wanted? How can you eliminate steps, processes or conversations that may be “the way it’s always been,” but that – let’s face it – they don’t really want or need?

Start brainstorming. Crack that code, and I bet you’ll soon find that your clients are stuck too.

PS: Fun trivia: Meet Noli Novak, the artist behind many of those WSJ stipple drawings.

News Glut

News glut
© Can Stock Photo / deserttrends

Have you ever ended up with so many subjects to write about that you seize up and skip writing anything at all? It happens. Time to get caught up on some of my blogging backlog …

Calling All Pacific Northwest Advisors

If you missed the news, Dimensional Fund Advisors is holding a three-day regional event this summer, June 19-21, at the Benson Hotel in Portland, Oregon. I took particular interest in its June 20th communications workshop. Sandwiched between a development conference and investor symposium on the 19th and 21st, the workshop is designed to help advisors “structure a more effective communication strategy with clients and prospects.” Rumor has it, the brainchild behind the event is one of Dimensional’s own communicator extraordinaires, Apollo Lupescu, PhD.

If all that isn’t enticing enough for you to attend, I’ll be there too! Let me know if you’re planning to join us. Maybe we can schedule an informal get-together before or after the program proper.

Twenty Over Ten Offers Content Assist

A few weeks ago, I attended one of Twenty Over Ten’s webinars, introducing Content Assist. The new offering struck me as one more reason to consider turning to this firm for your next website build. I especially liked the fact that it provides you with “starter” content, but you can edit it as much or as little as you please to personalize it for your own use. That’s not unlike my own Content-Sharing Library, except theirs is integrated tightly into their website service.

Will there be a content creation alliance between us at some point? Hey, stranger things have happened. No promises, but let me know if that’s of interest to you. Either way, I’d like to think Twenty Over Ten and I go together like Forrest Gump’s peas and carrots. Way to go, Twenty Over Ten!

Are You “Conflict-Free”? (Hint: No, You’re Not)

I’ll wrap with a communications tip of my own. Too often, I run across fee-only advisor websites (or in Canada, fee-based), assuring the visitor that the firm’s advice is “conflict free,” “completely unbiased,” or similar variations on these themes.

I hate to break it to you … Wait, scratch that. I’m happy to break it to you, since it’s in your best interest. Unless you’re a non-profit charitable organization, you’ve got pricing-related conflicts of interest. And if you’ve got brainwaves, they’re generating behavioral biases, whether you know it or not.

Worse, if you’re exaggerating your firm’s advantages, everyone essentially knows it, at least at a gut level. The strategy may not only strike a sour note in your communication efforts, it could be out of tune with best compliance practices. So, sing it proud, but say it accurately: Fee-only (Canadian fee-based) advice helps minimize biases, and better aligns your clients’ best interests with your own.

Or something like that. Need more help keeping your communications humming along? Keep me in mind.

New Year, New(ish) Content-Sharing Library

© Can Stock Photo/homestudio

Good news! This April, the Content-Sharing Library will be five years old. We’re just under 140 worldwide subscribers, with approximately 140 pieces available for download … and growing. Here’s a quick take on some recent updates I’ve made to celebrate and liven up the Library. (ALSO, don’t miss the UPDATED CONTENT announcement bundled into this post.)

Preview the Library Before You Join

Non-members can now preview the Library before subscribing. In preview mode, you’ll be able to browse everything that’s available for members to download. Click on Free Samples, to see how the download process works. When you’re ready to gain full access to the Library, Become a Member, and you’re on your way.

NEW: Updated Material from the Archives

Some of the material in the Library is now several years old, and yet still useful. To make best use of still-relevant material, I’ll be refreshing and re-releasing key content in updated form. You’ll find these updated materials featured in a new category, UPDATED Content.

To launch this initiative, I’ve just loaded an updated version of “The Vital Role of Rebalancing.” Originally released in June 2013, it’s still a timely discussion today.

Easier Access After You Join

Library members can now download content straight from “new content” email announcements or blog posts:

  • If you’re already logged into the Library, clicking on an email or blog post link (like this updated “Vital Role of Rebalancing” link) – will instantly download the referenced content.
  • If you’re not yet logged in when you click on a new content link, you’ll be prompted to log in, and then the material will immediately download.

When viewing the Library, members can now also click on the title of the content to download a single piece, or check multiple selection boxes to download several pieces at once.

More Good Content to Come

It’s been a fun ride so far building the Content-Sharing Library. I look forward to adding new materials and continued updates for many more years to come!

You (Yes, You) Are More Important Than You Know

© Can Stock Photo / smarnad

True story from a friend who has a daughter and son, ages about 4 and 7. This December, they each wrote a letter to Santa Claus. I don’t know what they said, but my friend liked them so much she wanted to keep them. Hoping the letters would find their way back home, she sneakily left off the postage, provided a vague mailing address, and made sure the return address was crystal clear.

Her daughter had other plans. “But, Mommy,” she observed. “It doesn’t say ‘Santa’ on it.”

Busted. My friend still managed to omit the postage, but she had to add an address – “To Santa” – and off they went.

As hoped for, the postal service did return the letters … although not in the “Return to Sender” format you’d expect. Instead, both letters had been removed from their original envelopes and inserted into a single new envelope addressed to the household. Along with the letters was a new one – from Santa!

Santa encouraged my friend’s daughter to be kind, and offered up some advice for her son as well, who cautiously observed, “Well, I didn’t used to believe, but I might have to now.” As you can imagine, the four-year-old was blown away by the personal reply; she will no doubt think twice the next time she’s choosing between naughty or nice.

What has this got to do with your role as an investment advisor? Call me Scrooge, but I still don’t believe in Santa Claus. I’m more inclined to believe there’s one or more wonderful postal workers – or maybe community volunteers – who take the time to respond to this sort of correspondence. To me, that’s even more miraculous. These anonymous, but very real individuals are surely touching lives in so many positive ways they will never know about. They must act on faith that what they’re doing matters.

There’s the connection for you. As we press on the accelerator to another busy year filled with market swings, global turmoil, and personal challenges alike, take a refreshing moment to realize this:

Every act of kindness you extend is important to someone.

Each piece of solid advice you offer contributes to everyone’s well-being.

Each time you need to be brave, and make the right choice instead of the easy one in your personal and professional life, your decision counts.

So, as “Santa” said, let’s be kind instead of careless. Let’s be honest, even when others seem to get ahead with a lie. Let’s be fiduciary, not because it’s the law, but because it matters. More than you are ever likely to know.

Happy New Year to you all!

Evidence-Based Advisors: Here’s to Our “Do Unto Others” Community

A Wendy’s Wednesday Whimsy

As we mad-dash toward another new year, it’s a good time to reflect on fitting friends, old and new.

Take Joe Goldberg, for example, who I met when we both worked at BAM Advisor Services. I went independent back in 2009, while he remained on board as director of retirement plan services until earlier this year. Like me, Joe became his own boss … with a much wider break from past job descriptions. Joe is now in charge of trimming bodies instead of 401(k) accounts at his new fitness studio, TruFusion St. Louis.

I could not be happier for Joe; even back in the day, health & fitness were core to him, as he cajoled BAM conference attendees to get up in the wee hours of the morning to join him for a morning spin. The more sweat, the wider his grin got.

One thing we both took from our years at BAM was a deep appreciation for the “do unto others” mindset you get when you combine dedicated fiduciary advice with rational evidence-based investing. Pair the two together, and you inherently end up with a powerful perspective you can’t ever fully legislate or regulate into being – and that we may too often take for granted.

I realized that when Joe recently posted as follows on Facebook:

Isn’t that just such an “evidence-based advisor” thing to say?

Continue reading “Evidence-Based Advisors: Here’s to Our “Do Unto Others” Community”

Mitch Anthony’s Startlingly Brave Call to Action

© Can Stock Photo / ionutparvu

Coming out on a Monday as it did, you may have missed this little bombshell of a Financial Advisor piece authored by “The New Retirementality” author Mitch Anthony: “Harsh Lessons in Modern Con Art.” In it, Mitch shared how he – and his mother! – were conned out of $1 million by an unscrupulous real estate wheeler-dealer.

I don’t think Mitch will mind if I share his opening and a few other key excerpts:

“As I sit down to write this article, I know it will likely be the most difficult composition of my writing career—difficult because it dredges up a miasma of regret, embarrassment, sadness and anger like nothing else I’ve experienced in life. I was conned out of almost a million dollars.”

You can read the rest here, plus check out Financial Advisor’s op-ed about the piece, “Why Mitch Anthony Displays Courage.”

If you’ve never read Mitch’s larger body of work, I encourage you to do so. You may also consider using it as a resource for your clients who are pondering the practical and emotional aspects of their work/life balances. I’m not exaggerating when I tell you my early encounters with Retirementality directly influenced the path I took with my own career. As much as I enjoyed my corporate day job at the time, his insights expanded my thinking, readying me to seek even more out of life by moving to Oregon and going freelance with my work (on the eve of the Great Recession, no less).

But first, read his breaking – and heart-breaking – “Harsh Lessons” article. Imagine how tough it must have been for him to describe to us, his own community, how he had fallen victim to the very sort of swindlers that fiduciary advisors are constantly warning their clients to avoid.

What separates the mice from the Mitch, however, was his willingness to share his learning experience despite the risks, focusing on the greater goal of advancing an important call to action we are well-advised to heed.

Specifically, as awful as the experience was, Mitch describes how it was aggravated by a federal five-year statute of limitations on prosecuting the perpetrator for his flagrant financial crimes. The problem is, five years isn’t always enough time to catch a financial thief. Mitch explains:

“Once you discover you have been defrauded, very likely two to three years have passed. Legal proceedings will chew up a year or two. By the time prosecutors decide there is merit in proceeding, the time has almost run out, and they will cease their efforts knowing they are up against the statute. This was our exact experience. By the time I brought the fraud to the attention of the FBI, they informed me that the perpetrator was already ‘on their radar’—but at this point, there wasn’t enough time left to do anything, and they couldn’t afford the time and resources to waste their efforts.”

So, rightfully so, Mitch has asked for our help. Based on his conversation with Senate Judiciary Committee Chair Senator Charles Grassley’s office, here’s what we can do (emphasis mine):

“[Grassley’s] staff have informed me this is an important matter, but that for the law to change, we will need to speak up about it. This means having our various associations express their concern to the committee and to law enforcement as well. … If you want to voice your concern directly to the Senate Judiciary Committee, you can do so directly by contacting Richard_DiZinno@judiciary-rep.senate.gov.”

For Mitch’s sake, for your sake and, most of all, for your clients’ sake, go to it … and spread the word. As soon as I hit publish on this piece, I will be doing the same.

Grease Isn’t the Word After All

© Can Stock Photo / Leaf

On the threshold of Thanksgiving (here in the U.S. anyway), I pause from my regularly scheduled project list to post some ponderings on the power of a single word.

What’s the Word?

Recently, I was privileged to attend the BAM ALLIANCE 2017 National Conference. Returning to my roots is always part educational, part sentimental, and entirely inspirational; this year was no exception.

I could blather on for pages about some of the insights gained by networking with my peeps. Maybe I will in a future post. But if I were tasked with condensing the entire event into one word, it would be this:

It’s Empathy.

Events ranged from deep dives into academic financial theory, to business development workshops, to helping the local food bank with an outreach program, to pondering the true meaning of happiness. Throughout, I couldn’t help but notice a silver thread of empathy connecting all of us attendees, fund managers, financial service providers and keynote speakers alike.

Continue reading “Grease Isn’t the Word After All”

Color Me Communicative

© Can Stock Photo / roxanabalint

A Wendy’s Wednesday Whimsy

Did you catch Jason Zweig’s recent post, “It’s the Little Things That Can Color an Investor’s Outlook”? In it, he shared the results of a recent study on how strongly we behaviorally biased humanoids can be swayed simply by the color in which our investment choices are displayed. When participants saw financial losses in fire-alarm red instead of benign black and white, their responses were more frequently stained with the telltale fingerprints of fear and risk aversion … unless, unsurprisingly, they were colorblind.

So that’s one interesting data point suggesting that the colors in your communications may matter more than you realize, and not always as you might expect from a financial accounting point of view.

This important message, often overlooked, reminds me of an article I stumbled across recently by software developer Nick Babich, entitled “Red, White, and Blue.” Babich is a self-described “UI/UX lover,” which may sound nefarious but it means he concentrates on how to improve websites’ user interface (UI) and user experience (UE).

In other words, colors are his bag, baby. He offers several other reasons you should be more in touch with your and your clients’ inner rainbow than you may currently be.

Continue reading “Color Me Communicative”