Jul 8, 2014, 3:22 PM EST

Adviser lessons from Dr. Dre: Long-term greedy vs. short-term greedy

By Joe Duran

Even if you aren't a fan of his music, how can you not be impressed by Andre “Dr. Dre” Young, the intrepid rapper and impresario who helped build and sell the headphone and music streaming service Beats Electronics to Apple Inc. recently? The company he and Jimmy Iovine had founded in 2006 has made billions.We all have clients who have saved carefully throughout their lives, but no doubt those who have accumulated real wealth did so by either owning a successful business or having equity in a larger successful enterprise. Unless you are born into it, there is only one legal way to get rich in America: You have to own equity in a growing enterprise that compounds over time and can be monetized. You have to be patient and take a long-term perspective. How many of us apply that logic to our own business and our choices?The large brokerage firms are in an arms war to have advisers join them with ever- escalating signing bonuses.... Read full post

Jun 12, 2014, 11:47 AM EST

Forget fines, regulators want public scoldings

By Joe Duran

The world has changed in many ways, but the inflow of former brokers into adviser roles and the shift in perspective for our nation's regulators are two things you'd best not ignore. Fines for bad actions are yesterday's news; today, sanctions come with acknowledgment of guilt and potential for personal liability and loss.String 'em up highFor most of our careers, regulators have coerced large financial settlements from institutions that behaved badly; however, there is clearly a shift in the directive for all of these oversight groups. From the Department of Justice to the Federal Deposit Insurance Corp. to the Securities and Exchange Commission, the top cops are not just correcting bad behavior but setting public examples of bad actors.Recently, Credit Suisse AG had the pleasure of not just paying over $2 billion in fines for assisting U.S. citizens in avoiding taxes, but also had to acknowledge guilt in its role. In the past, the... Read full post

May 23, 2014, 1:25 PM EST

Time is money: Quantifying the value of working hours

By Joe Duran

It's not a regulation, but it's no less inviolate a rule: your income will be completely dependent on where you and your team spend your 1,920 work hours a year. In a service business, time really is money. The allocation of work time is the engine of your productivity. We developed 'the law of 1,920' a decade ago to understand what differentiates exceptional entrepreneurs who build better businesses. If you were to work 48 weeks a year, and 40 hours a week, you would amass 1,920 hours per year. Why is this so important? Because it's an amazing tool to help you measure and improve your productivity.The rule of 1,920 simply stated as a formula is: annual revenue = hourly work value X 1,920.For those who need a refresher on algebra, to figure out what your time is worth per hour, just divide your target annual income by 1,920. Let's imagine you would like to make $1 million per year. Divide one million by 1,920, and that means you must... Read full post

May 7, 2014, 11:06 AM EST

Attack of the robo-advisers: Man versus machine

By Joe Duran

Countless books and movies have been written about the point at which computers shift from being our friend to becoming the enemy. For financial advisers, the battle lines are being drawn right now.Over the course of our careers, computers have helped elevate the services we provide to clients and have driven down costs, but something new is happening right now. Private equity firms have been pouring tens of millions of dollars into robo-advisers that have been gathering momentum. There have been several funding announcements in the past few weeks alone. These are computer-powered solutions where the adviser is being replaced by an easy-to-use machine. We are at an important intersection, like the one faced by travel agents in the '90s with the rise of smart technology (Expedia, Travelocity and Orbitz).RISE OF THE MACHINESComputer as adviser started with Financial Engines (an appropriately named firm if ever there was one) and has... Read full post

Apr 24, 2014, 12:48 PM EST

4 reasons you keep losing your best employees

By Joe Duran

At some point, we have all experienced that sinking feeling when a valued employee walks in to let us know that they are leaving the firm. After the shock come the questions, the finger-pointing and the blame. Working in a service business means understanding that the value of your business is entirely dependent on the people you count on to deliver that service. As our firms grow, leaders of advisory firms become more dependent on other people to maintain the standards that they have always believed in and delivered. High employee turnover is brutal for a service business.We have almost 50 offices around the country, about 400 employees. We have partner managing directors in each office, each with their own unique way of managing people. Every year we have our employees complete a 27-question anonymous survey to get a sense of how we are doing. We also perform confidential exit interviews with every employee who leaves us. That gives... Read full post

Apr 4, 2014, 2:40 PM EST

How Lewis' "Flash Boys" will impact the financial advisory industry

By Joe Duran

There are good books that make you think differently about the world, and occasionally great books that really make you question the underpinnings of what you think reality is. I believe the new Michael Lewis book, “Flash Boys,” falls into the latter camp. The new book might be Mr. Lewis' most audacious, scary and infuriating work. For me, it might be his most impactful. I read the book cover to cover on a recent transcontinental flight. At times it felt like I was reading George Orwell's “1984”; at others it felt uncomfortably like I was reading a hidden report about the Watergate scandal. It gave me knots in my stomach. This is an important work that will create debates and re-open the barely healed wounds of the public's trust in the world's capital markets and its participants.I have been thinking about the implications and lessons that this carefully documented account of high-frequency trading — and... Read full post

Mar 27, 2014, 9:03 AM EST

Finding originality in financial services in a sea of copycats

By Joe Duran

Like most mature industries, financial services is replete with copycat market-share-focused firms - all the fish fighting for their own pool of safety in the blood red waters cluttered with all types of fish. Matt Brinker, our head of partner development, and I were having a talk about that subject because once again, we were working with two firms with the same name. We have the good fortune of meeting and assessing hundreds of successful independent advisers every year. We get to see the broad spectrum that our industry has to offer. Without exception, the folks we meet with believe that they have an exceptional firm that is not quite like any other. The truth is that they are absolutely right if they drill down to the details. However, to the more casual observer, the differences are imperceptible. Why does this matter? Because many of your potential new clients are simply comparing you to the other 143 million firms that pop up... Read full post

Mar 6, 2014, 9:35 AM EST

An adviser's toughest job: Telling a client the truth

By Joe Duran

Yahoo recently posted an article about the oldest living person in the world, a smiling 116-year old great-great-grandmother living in a retirement home for the last 18 years. Her surviving children are 92 and 94. It made me think about the worst conversations we can ever have with a prospective client — those in which they are already retired, but do not have enough savings to maintain their lifestyle. Their golden years might not be as golden as they'd hoped. Here's the great dilemma our nation is going to have to solve over the next decade: 10,000 Americans will reach the retirement age of 65 every day for the next 18 years. That's over 3.5 million Americans every year for the foreseeable future. Most are woefully unprepared to live for decades on their savings. What should we be doing about this impending crisis?First some context. In the early 1900s, people typically died before reaching the current retirement age. In the... Read full post

Feb 21, 2014, 11:35 AM EST

The adviser of the future: 3 trends of tomorrow

By Joe Duran

The future of business is being determined at breakneck speed. Three years ago, I wrote a paper with Joseph Michelli, Ph.D., about the “Consumer Revolution” that suggested we were in a unique time in American history, where entire industries were being eviscerated by category killers that were altering the rules of engagement with consumers and forcing revolutionary change upon all of the other firms in their industry. It's incredible how much has happened to change that reality in such a short period of time. In that small span, new and improved companies have become woven into our everyday lives. Imagine life without Skype, Facebook or Twitter. Imagine life without Amazon, SiriusXM or Google. Imagine life without Netflix, your iPhone or Starbucks. The truth is we are all intertwining companies into our lives in ways we could never have imagined just a few short years ago. These are frontier times in global business. This... Read full post

Feb 13, 2014, 12:01 AM EST

The beauty of truth

By Joe Duran

"'Beauty is truth, truth beauty — that is all ye know on earth, and all ye need to know."John KeatsWhat a perfect ode to your valentine. I was given this poem as a young man, studying English literature in Zimbabwe. I remember being completely uninterested in having to memorize “Ode on a Grecian Urn.” How could the trials and tribulations of some hand-painted caricatures on the outside of an urn possibly be reflective on me and my life? But these lines, for some reason, have stuck with me the entirety of my life. The idea that the ultimate quest for all humans is truth — and when you see it, if it is genuine and real, everything can take a patina of genuine beauty — is simply inspiring to me. It's especially interesting when you think about it from a professional perspective. Surely nothing could matter more to our clients than us seeing the truth and helping them to live their truth. Unfortunately,... Read full post

Earlier Posts »

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Jul 23 04:39PM
Clips from Today?s Halftime Report http://t.co/gmAjiF0UFQ
Jul 23 04:23PM
SEC passes money fund rules andndash; but wait, the buck could still break http://t.co/93W2jffVZf

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