Joe Duran

Duran Duranblog

Joe Duran

Nov 23, 2016, 11:29 AM EST

Presidential election is a warning shot to financial services industry

By Joe Duran

The U.S. Presidential election turned a lot of heads worldwide. For the first time in modern history, the U.S. elected a commander in chief with no political experience, little of the support traditionally given to the candidate of a major party and none of the big money from business interests. This happening in the same year that British voters surprised everyone by electing to leave the European Union suggests some bigger movement is afoot. Talk about a revolutionary time.These changes were messages from the people about their level of dissatisfaction with the status quo. We are empowered and informed now more than ever. We want honesty and authenticity. Voters have taken it upon themselves to protest a broken system and want a voice in fixing it. That's true in every facet of their lives and now it's evident in politics, too. But it's also a warning shot to our industry.(More: Leadership insights from former President George W.... Read full post

Nov 3, 2016, 4:38 PM EST

Leadership insights from former President George W. Bush

By Joe Duran

I was fortunate to be invited to have dinner and witness a conversation with the 43rd President, George W. Bush, exactly one week before the election. Given my own sense of frustration with the candidates thrust upon us this year, it was an opportune time to listen to someone who sat in the Oval Office and made the tough decisions for eight years. The evening was disorienting in a couple of ways. First, every impression I had of the president given his public persona and media interpretation turned out to be wrong. He was funny, charming, humble and incredibly bright. Secondly, I couldn't believe I was sitting with my lovely wife while getting the opportunity to shake hands and share a joking moment with a former president of the U.S. Considering I grew up in Zimbabwe and came here with $600 in my pocket, it was just unfathomable. Most first-generation Americans say it all the time, but I couldn't help thinking it during the evening:... Read full post

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

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