Outside voices and views for advisers

Nov 19, 2014, 4:07 PM EST

Using your imagination to help you move your book to a new firm

By Mark Elzweig

Wouldn't it be great if you just could curl up on a yoga mat, close your eyes, repeat your favorite mantra and magically transport client assets to your new firm? Well, I'm not suggesting that you can move your book so easily. But advisers can use simple visualization techniques to help them move client assets with more confidence and serenity.Back in the '90s, a friend of mine gave me a copy of Shakti Gawain's book "Creative Visualization". The basic premise of the book is that we can use our imagination to create what we want in life. In other words, by imagining positive outcomes, we can create the mental attitudes that can make us more likely to achieve our goals. Despite some of the book's New Age-y perspective, I found myself intrigued by the power of the technique. I liked the idea that an experienced meditator could shape his emotions by choosing what to think about and when to think about it.Somehow, it dawned on me that... Read full post

Nov 19, 2014, 3:02 PM EST

A road map for navigating the changing financial planning landscape

By Larry Roth

Change is a constant in our industry, and financial advisers must learn and adapt continuously to keep up with changes in the economy, technology, the regulatory environment and a range of other areas.What is not constant, however, is the pace of change — and as advisers are realizing, that pace is accelerating more rapidly than ever. This is especially true in the complicated but crucial world of long-term financial planning for clients, where secular trends such as longer lifespans for retirees, greater complexity in the tax code and the rising prevalence of nontraditional wealth transfer arrangements are converging to create challenges that require increasingly specialized skills on the part of advisers.The best practices and industry knowledge that, by themselves, enabled advisers to build their businesses in the past may no longer help them succeed next year — or even next month. In order to provide clients with the... Read full post

Nov 18, 2014, 2:59 PM EST

Stock market's October slingshot rebound impressive

By Gene Peroni

The short-lived selloffs in the major stock market indexes earlier this year proved to be springboards for short-term rebounds to record high levels. The deeper the decline and the more reactive the CBOE Volatility Index (VIX) becomes, the more sensational the recoveries. October's decline was dramatic. The intense selling last month reached near panic levels and was beyond the varying shades of fear witnessed in the prior two corrections. This was depicted in the VIX's meteoric ascent to 31 from 15 at the height of selling on Oct. 15. The selling rout in mid-October resulted in a slingshot rebound that catapulted the stock market toward all-time record highs by Halloween.October delivered on two historical points for which the month is renowned: a dramatic selloff and a pivotal rebound. The decline may have satisfactorily addressed the question of when a 10% correction might unfold. Although the major indexes held short of... Read full post

Nov 17, 2014, 2:17 PM EST

Advisers need to crack fund managers' narrative

By Tom Brakke

Asset managers need to create a narrative about what they do and how they do it. Lacking a story, it’s all about the numbers.You might say, “Well, that’s the way it should be. This is a performance game.” Except that’s unrealistic. Everyone has periods of underperformance, and clients who lack understanding of an asset manager’s approach are more likely to bolt at the wrong time. That’s typically bad for the clients and obviously bad for the manager.To be clear, creating a narrative that is dishonest and manipulative is not a tenable long-term strategy (in addition to being just plain unethical). On the contrary, trust is built through transparency, awareness and education about the real way an asset manager navigates the markets.The narrative should be effective and truthful. If you don’t have a powerful story to tell, you’re going to have a hard time of it and will be fighting a... Read full post

Nov 13, 2014, 5:08 PM EST

3 traits the best investment cultures all share

By Michael Roberge

If you don't think culture matters, take a look at the team-first San Francisco Giants, who recently won their third World Series in five years. Sure, the Giants have a few big name players, but their run of championships is defined by a roster of players who are solid contributors but certainly not household names outside the Bay Area. This has driven a consistent, complementary culture of team-first players, an impressive and refreshing achievement in an era of big-name player movement in most professional sports. Team chemistry in the corporate environment is no different. A CEO will tell you that culture – the values, behaviors and beliefs that pervade the entire organization – is what differentiates a company today. A strong culture matters — particularly for an investment firm, where people and judgment are your greatest assets. In fact, research done by Focus Consulting Group showed improved decision-making, ... Read full post

Nov 11, 2014, 5:29 PM EST

It's time for a revolution in how advisers work with couples

By Kathleen Burns Kingsbury

The financial services industry needs a couples revolution. This revolution would result in a real shift in how the advisory field views and work with couples. No longer would it be commonplace for advisers to meet with just one partner to discuss the family finances.Instead, all advisers would require joint couples meetings where they would assist partners in resolving financial differences, making financial decisions together, and empower them to talk openly with their children about money.The byproduct of this revolution would be healthier couples and stronger families. Advisers would benefit as well as they would increase client loyalty, retain more assets and be the next generation's logical choice as their trusted adviser.My fear is that without a couples revolution, well-intended advisers will continue to collude with the idea that it is okay for intimate partners to discuss all aspects of their lives together, except money. Our ... Read full post

Nov 10, 2014, 4:56 PM EST

Bill Gross' move to Janus not likely to have long-term ripple in bond market

By Stephen J. Huxley

News surrounding 70-year-old Bill Gross's switch from Pimco to Janus has generated a good deal of speculation as to the potential impact on bond markets. When put in perspective, however, it is doubtful there will be much impact for anyone not directly involved with the specific funds he managed.(More: Meet the new bond kings)One perspective is the relative magnitude of the fund Mr. Gross managed for Pimco, its Total Return Fund. PTTPX, the firm's largest fund, had about $200 billion in fixed income securities, or about one-half of one percent of the total outstanding U.S. bond market debt, which now stands at about $38.1 trillion (see table). Nearly half of this is U.S. government debt. Pimco's overall assets are a significant percentage of the total ($1.9 trillion or about 5%), but he directly managed only PTTPX. The fund he will now manage for Janus, its Global Unconstrained Bond Fund (JUCIX), has a miniscule $80 million. Nearly... Read full post

Nov 9, 2014, 12:01 AM EST

All-weather bond funds sacrifice traditional benefits of core

By Robert Smith

As in times past, an ample number of surprises and volatility in financial markets around the globe were unleashed in October. This environment also offered investors some important remedial lessons on the virtues of a core fixed-income allocation within a diversified investment portfolio. To be sure, investors have been suffering through an extended low-yield environment fostered by an ultra-accommodative domestic monetary policy and a below average economic recovery. In this low-yield, late-cycle environment, many investors have been turning to unconstrained bond funds for added yield, higher returns and as a defense against the potential for higher interest rates.The intention is good. Unfortunately, too many vehicles that market themselves as all-weather fixed - income choices sacrifice the traditional benefits of owning core fixed income in the first place. It's easy to forget, but the main reasons to own core fixed income, aside ... Read full post

Nov 9, 2014, 12:01 AM EST

Interest rate call: Still 'low for long'

By Krishna Memani and Peter Strzalkowski

Mistaking today's environment for a normal cycle, investors have focused on rate increases when the real story is continued global economic weakness and persistent easy-money support. While the U.S. economy has mended and is growing, and larger emerging-market countries such as India and China are recovering, conditions in Europe and Japan have deteriorated significantly. Paradoxically, however, the unsynchronized and relatively weak nature of the global expansion should extend rather than curtail this cycle. The Federal Reserve will have no reason to embark on anything but a long and deliberate policy normalization process, with major pauses thrown in for effect and no surprises in store for the markets. In the post-taper world, other central banks (for example, the European Central Bank and Bank of Japan) will assume the Fed's mantle and continue to provide liquidity to the global economy. Barring something unforeseen —such... Read full post

Nov 5, 2014, 3:03 PM EST

Jump-start succession planning by broadening advisers' perspectives

By Dale Brown

The goal behind everything we do at the Financial Services Institute is strengthening and protecting the independent-financial-services industry. Most of the time, that means communicating with legislators and regulators, but often it means facilitating conversations among our members on critical topics.One subject we have worked to call attention to over the past several years is the much-discussed shortfall in succession planning for independent financial advisers. According to our polling, only 41% of our adviser members have a succession plan in place. Some other sources have estimated that the number may be as low as 20% for all advisers nationwide.In order for our industry to maintain the momentum it has built over the past few decades, we must work together to ensure advisers have the resources and information they need to develop and execute strong succession plans. This is not only a crucial priority for today's advisers and... Read full post

Older »