Joe Duran

Duran Duranblog

Joe Duran

Oct 17, 2016, 2:55 PM EST

The DOL rule kicks in. Will independent broker-dealers survive?

By Joe Duran

A year ago I wrote about the impacts of the Department of Labor's fiduciary standard being applied to our industry and the immense implications. Now we have two important news events with ripple effects that impact every financial adviser in the U.S.On Oct. 6, Merrill Lynch announced they would no longer allow retirement investors to pay a commission for trades when the rule becomes effective next April. A few days later, InvestmentNews reported that LPL, the nation's largest independent broker-dealer, was seeking “strategic alternatives.” These two events are not coincidentally so close together. They reflect the harsh economic realities that differentiate full-service broker-dealers and the independent broker-dealers that have been thriving for the past few decades.(More: Paying for retirement planning in a low return world: Are advisers worth the cost?)MUSCLE OF THE THUNDERING HERD I haven't been a huge fan of how big... Read full post

Sep 19, 2016, 5:36 PM EST

Paying for retirement planning in a low return world: Are advisers worth the cost?

By Joe Duran

At a recent open house hosted by one of our new offices I encountered something quite unusual: Affluent retirees were openly questioning costs in a large group setting. One gentleman commented, “I didn't mind paying 1% in fees when the stock market was going up 12% and bonds yielded 6%, but shouldn't adviser fees be lower now that everyone is making less? Should I just be doing this myself?” Most of the group was either a little taken aback at his directness or nodding in agreement. We probably all have clients wondering the same thing (even if it's in a less public setting). Since the turn of the century we have experienced two 50% declines in the stock market, a real estate collapse and a decline in interest rates from 6.7% to a measly 1.5% today. The DJIA is up only 14% in 16 years. Prestigious firms, including McKinsey and GMO, are forecasting future returns of low single digits for the equity markets. (More: 3 things... Read full post

Aug 16, 2016, 12:42 PM EST

3 things financial advisers need to know when serving female clients

By Joe Duran

I recently watched an Ellen DeGeneres clip where she makes fun of the Bic pen designed for women. Ellen humorously points out the clichés Bic used in designing and marketing its pen. Their “pen for women” is like any other writing instrument, but comes in cutesy “feminine” colors and is double the price of a regular pen. This stereotype-based approach has underpinned many of our industry's efforts to understand female clients. We all know the importance of women investors to the future of financial services, and as such, there's been lots of conventional research about why women are unhappy with our industry. According to the surveys, women don't like data, they are more trusting, they don't like to negotiate and they don't feel as confident as men about finances. LEARNING THE TRUTHInstead of conducting another survey that validated old assumptions, we decided to conduct independent research that allowed women... Read full post

Jul 20, 2016, 2:03 PM EST

Learning and profiting from Gen X

By Joe Duran

Today's era represents the first in history where almost every generation is learning how to interact with the world from their children. Our kids teach us how to use social media, and we teach our parents how to use Netflix. This has led to a manic fascination with millennials and how they consume. The generation born after 1984 certainly is at the crosshairs of innovation; however their parents, the Gen Xers who were born between 1965 and 1983, serve as a superior barometer of whether a company is going to make money or not. Their behavior can provide invaluable insights into how to be successful in our industry for the next few decades. While Snapchat and Instagram are great stories, Facebook and LinkedIn are money makers because they are used by Gen X. The tipping point for any company happens when the 35- to 50-year-olds begin adopting them because they will drag their parents along. Netflix and Amazon make their money by... Read full post

Jun 20, 2016, 12:41 PM EST

What unicorns can teach you about increasing your firm's value

By Joe Duran

Unicorns are private companies with valuations in excess of $1 billion. Facebook and Google were the pioneers and Uber, Airbnb, Snapchat and Pinterest are some of the most dominant unicorns today. CB Insights recently estimated the aggregate value of all of today's unicorns at a breathtaking $599 billion. Our industry has its own rising unicorns. Three recent transactions highlight a few of them. Like many unicorns, valuations are not based on traditional measures like profits or cash flow, but instead on future potential.UNICORNS IN OUR INDUSTRYBetterment, Wealthfront and Personal Capital are the closest companies to unicorn status in terms of valuation multiples, while the sale of Edelman Financial brought them the closest to a private billion-dollar threshold in total value. Betterment recently raised $100 million at a $700 million valuation, Personal Capital raised $75 million at a $425 million valuation and Edelman Financial was... Read full post

May 26, 2016, 11:28 AM EST

The mobile edge: Moving your business across the digital divide

By Joe Duran

Uber is killing the taxi cab, Amazon is overtaking retail and Netflix is dominating entertainment, but it is the cell phone that makes this all possible. The threat from digital disruptors only became pervasive when technology took the huge leap of becoming portable. The biggest danger to your business is the cell phone resting in your client's pocket. We consume almost every imaginable service via our mobile devices — we shop for everything from shoes to cars, to vacations; we assess our home values, read, research and entertain ourselves. We share our lives and interact with the world on a daily basis through our portable computers. The structural change this brings to all commercial ventures cannot be overstated.COMING TO GRIPS WITH THE DIVIDEPhones and tablets are changing how we consume products and services in three key ways: 1. We educate ourselves and form opinions before we buy. A referral from a friend used to be enough ... Read full post

Apr 28, 2016, 12:35 PM EST

An open letter to a broken industry

By Joe Duran

Dear financial industry,I grew up in war torn Zimbabwe and dreamed of becoming a financial whiz in the U.S. In the almost 30 years that I have worked in this profession, I have been fortunate beyond words. But I have also watched our once great industry steadily atrophy. According to a recently released study by the National Association of Retirement Plan Participants, trust in financial institutions has dropped to a new low of 8%. And it's not just the large institutions who are in the dog house. A 2015 consumer opinion survey by the CFP Board found only 25% of consumers believe that financial advisers act in consumers' best interests. People are disillusioned, and they think we win even if our clients lose. The sad irony is that people don't trust us, yet we live in a world where they need our help more than ever. I've been thinking a lot about what it will take to get us all on the right track. 1. Let's start by getting comfortable... Read full post

Apr 5, 2016, 1:35 PM EST

Crawling up the wealth management pyramid

By Joe Duran

Where you live in the wealth management pyramid has a huge impact on your relevance to clients, your pricing and your future viability. Research shows few clients know the difference between services provided by a bank broker or an independent planner. But differences matter, especially with regard to how we invest in our businesses and how we defend our pricing in an increasingly competitive world. Each adviser approaches their clients from their own place in the wealth management “stack.” Let's take a closer look at the pyramid we created from the perspective of where different advisers live, working our way up from the bottom.Investment manager: This adviser starts and ends their client relationship at the bottom of the pyramid. It still represents the vast majority of our industry.Most charge 1% for portfolio construction and rebalancing. There is not a lot of added value to the client for the price charged. This is... Read full post

Mar 3, 2016, 2:54 PM EST

4 secrets on influence we can all learn from Donald Trump and Bernie Sanders

The presidential election process in the U.S. is fascinating, especially for a first generation American coming from a dysfunctional country. Seldom has that been truer than this year. The biggest surprise has been the surging popularity of two candidates: Donald Trump in the Republican Party and Bernie Sanders for the Democrats. These two candidates have added an element of unpredictability to the entire race that is captivating the nation and giving all politicians (and any of us wanting to learn) a good lesson in effective communications.Many of the establishment favorites have either dropped out (Jeb Bush, Scott Walker, Chris Christie) or have struggled to take a dominant position (Hillary Clinton, Marco Rubio). How have Mr. Trump and Mr. Sanders, two unlikely candidates, managed to garner so much support?Mr. Trump and Mr. Sanders might be polar opposites when it comes to their ideologies, but they have captured the imaginations of ... Read full post

Feb 12, 2016, 3:50 PM EST

Why Vanguard is about to engulf the financial planning industry

By Joe Duran

Vanguard Group's ever-expanding web is now about to engulf the financial planning industry.Bill McNabb, CEO of Vanguard Group, gave a keynote speech at the 2016 Inside ETFs conference in Florida declaring the importance of advisers in delivering alpha to clients. But a bit more interesting to me was the incredible growth the firm is experiencing in its centralized advice offering. Vanguard is seeing inflows of $1.6 billion per month while charging only 30 basis points. Every few months they are onboarding more in assets than the entire robo-adviser world has amassed in many years of cumulative work. They have surpassed $30 billion in planning assets and they launched just last year!The largest fund manager (and second-largest in exchange-traded funds) has its sights set squarely on the advice industry. They are well on their way to building the largest RIA delivering financial planning in the U.S. It is an important development for all ... Read full post

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