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Liberate Yourself From the Calendar’s Tyranny

April 9, 2014

Quick — name a practice-management tool straight out of the Middle Ages still in constant use today. It’s the calendar, on which advisors everywhere rely as if chained to it. Writing in WealthManagement.com, CEO Jeff Spears of Sanctuary Wealth Services describes four areas where FAs might greatly enhance their client service and perhaps their own careers by liberating themselves from the hoary technology.

Why, after all, should portfolio rebalancing and tax-loss harvesting — two investment-management activities meant to respond to market changes — be done by the datebook? Most advisors discharge these duties at year-end, with some intrepid souls rebalancing at the end of every calendar quarter. But why, Spears asks, shouldn’t clients expect these services when their portfolios call for them, not when an arbitrary schedule kicks in?

And speaking of arbitrary, Spears warns against selecting money managers based on their three-, five-, seven- or 10-year performance records. For one thing, everybody knows how easy it is to manipulate time frames to make a manager look like a star. Just a few weeks ago, the calendar wiped clean the five-year performance stain of investment pros who hit bottom in March 2009 along with every other Tom, Dick and Harry. Real manager due diligence, Spears writes, “needs to be an operational core competency of a wealth management firm — one that never ceases.”

His final point is, to our way of thinking, a little less straightforward. Wirehouse brokers switching firms have always liked to do it over three-day weekends, the idea being they have an extra 24 hours to contact clients so they can hit the ground running. Spears opines that could change because the new recruiting-bonus disclosure requirement, which he expects the SEC to sign into law, “is likely to slow down the movement between Wall Street firms.” That may very well be the case. But for brokers who do move — and let’s face it, FAs will always hop between wirehouses — it seems as if three-day weekends will make even more sense, giving advisors time to explain their new compensation. Sometimes, perhaps, the good old calendar may be your friend after all.

By Joan Warner
  • To read the WealthManagement.com article cited in this story, click here.