September 16, 2014Should Close Friends Be Clients?
Advisors launching a practice often reach out to the people they know well, but is it a good idea?
Never. I can’t think of a better way to destroy a professional or personal relationship.21% Close friends make the best clients — in fact it’s a perfect example of “aligned interests.”53% I don’t see any inherent conflict or problem, but the situation has to be handled with care.
September 9, 2014Why Is ‘Commission’ a Dirty Word?
Some voices in the industry suggest no advisor who earns commissions in any form is conflict-free. What accounts for their opinion?
The view is based on a false notion of Wall Street as a collection of bucket shops.35% Clients wrongly believe they pay more with a transaction-based compensation model.15% Most of the criticism comes from advisors who like to bash the wirehouses.33% It deserves to be — commissions are an incentive to sell, no two ways about it.
August 26, 2014How Do You Balance Work With Fitness?
Planning can be a stressful career. How much of a priority do you place on keeping yourself in good health?
I hardly ever hit the gym. I’m busy building a practice.70% Plenty. I realize it’s important to stay fit and blow off steam.14% I find I exercise more as my book of business grows.
August 19, 2014Does It Matter Where Advisors Custody Client Assets?
Custodians work hard to differentiate themselves, with everything from technology to research. Does it make a difference?
Not really. They all do basically the same thing in the same way.62% Yes, it matters a lot. The providers differ significantly in quality, price and services offered.5% Only advisors with particular needs, like custodying liquid alts, need to shop around for a good fit.33% Custodians differ, but not a lot, so it’s about good personal relationships more than anything else.
August 12, 2014Does the Foreign-Policy Mess Make Gold a Buy?
The chaos in Ukraine, Iraq and Israel has gold bugs crawling out of the woodwork. What are you telling clients?
You can’t lose with gold when international tensions are running this high.60% I like a little gold as portfolio ballast even when the U.S. isn’t bombing anybody.40% Gold is so 20th century. Unless demand suddenly skyrockets, I say steer clear.0% My clients are asking about gold because they don't trust the stock market.
August 5, 2014How Do You Serve Clients Who Swear They’ll Never Retire?
Many clients — especially business owners — fully intend to work until they die. What’s the advisor’s role?
Focus on estate planning and charitable giving.44% Create a “stealth” retirement plan based on covering medical contingencies.0% Fight back tooth and nail, saying that’s not a viable long-term strategy.13% I’ve never had a client who wanted to die in the harness.
July 29, 2014Will Floating-NAV Money Funds Matter to Clients?
The SEC last week said it would reform the way certain money-market funds are valued and redeemed. Should clients care?
The SEC is basically announcing, “These funds are risky.” I’m telling clients to put their cash in CDs and T-bills.53% The new rules won’t take effect for two years, so we’re not making any changes for the time being.26% Not at all. Retail funds will still be a buck a share, and redemption “gates” are a good idea.
July 22, 2014What Use Are Advisor Certifications?
From the generalized CFP to the hyperspecific CRPC and CEPA, advisor designations are said to help differentiate service in a competitive field. What is their main value?
The coursework and continuing education keep me informed and on top of my game.26% Certification in a niche like retirement or small-business ownership boosts my credibility with clients.6% Getting a designation brings entrée into a community of like-minded advisors.26% Designations are worthless, even as window dressing — because clients don’t care.
July 15, 2014How Many Hours a Week Do You Work?
Financial advice is notoriously time-intensive. How long is your average workweek?
It’s usually close to 60. There’s no way to get everything done in less time than that.38% It’s highly variable, depending on everything from time of year to how the market’s doing.14% I make a point of working a normal 40-hour week. If you can’t do that, something is wrong.16% I run a lifestyle practice. Most days, I’m out of the office well before 5.
July 8, 2014Do You Explain Investment Terms Like Beta and Valuation to Clients?
Advisors eat and breathe financial concepts most people comprehend vaguely, if at all. Should you explain them in layman’s language?
Always. My clients should understand every move I make with their money, on a granular level.26% Usually. Most are eager to learn about how I do what I do.44% Rarely. Few clients care about the mechanics of the capital asset pricing model.24% Never. Nitty-gritty portfolio management isn’t how I want them to think about financial planning.