SEC Regulation Best Interest (Reg BI) became effective on June 30, 2020, a little more than a year after the SEC formally adopted it. Reg BI established a “best interest” standard of conduct for broker-dealers when making recommendations to retail…
What is an Investment Policy Statement?
When visiting a new country, the best way to find your way around is to map out the directions. You will also want to make an activity plan for all you’ll do once you get there. Your financial future is…
Don’t Let Your Clients Be Fooled by Randomness
It’s no secret that the Robinhood mobile app makes it easy for beginners to start investing. However, it’s unlikely that everyone understands the potential risks of using Robinhood to purchase investments. During periods where we have volatile markets, traders with…
Financial Advisors Need to Be Risk Managers
When it comes to your client’s investment or retirement portfolios, there’s always some level of risk. Because of this, measures such as diversification, asset allocation, and dollar cost averaging are so important. But how can you teach your clients about…
How to Explain the Benefits of Having a Financial Advisor
The most successful people in the world have coaches. Top athletes, CEOs of major corporations, and entrepreneurs all have trusted advisors that help improve performance. So, how can you convey this to prospective clients that need help reaching their financial…
Advising Clients on Stock Market Gains During a COVID-19 Economy
As a financial advisor, you already know how unprecedented it is for a global health pandemic to impact the U.S. stock market powerfully. The incredible volatility that we are experiencing due to COVID-19 has been gut-wrenching for many, and your…
How to Help Your Clients With Financial Planning During a Crisis
As families all over the nation focus on the health of loved ones, financial advisors play a significant role in helping clients take financial control of their lives. Although our client’s job security, steady income levels, and stock market prices…
Virtual Advisor: Best Practices for Online Meetings
For the foreseeable future, face to face client interactions will not be an option, especially with the risk to immunocompromised and elderly clients. Unfortunately, online web and video conferencing, as well as phone conversations, are lower forms of communication. Keep…
Breaking Down the Top Virtual Conferencing Tools
There are so many existing platforms that are being used right now to bring previously in-person gatherings — conferences, meetings, celebrations — online. The wealth of options and feature variability may have you overwhelmed with choices. We’re diving into the…
How to Get Referrals in This Environment
Stay at home. No groups of more than two outside. Social events canceled. These are words financial advisors don’t want to see as they are trying to grow their business. Networking right now has changed, you are no longer able…
A Rare Opportunity Your Clients Need to Understand
Over the last number of years, you likely had to tell your clients the importance of being defensive. This is despite markets rallying to new highs month after month, year after year (except for 2018, of course). Why were you…
Calming Your Clients – How to Position Volatile Markets
These are stressful times. When the markets are strong, advisors can keep their client base on autopilot and can grow at the pace they want. However, at times like these, when markets are incredibly volatile, your client base is stress…
Tail Risk – Your Clients Don’t Understand It … Yet
If you thought the last few weeks in the markets were bad, you did not go to bed very happy Monday evening on March 3rd. Market breakers got triggered, and it was a historic day in the stock market one…
Good Investment Coaches are Indispensable to Their Clients
When clients hire financial advisors, there’s an expectation that their advisor will work with them to develop an investment strategy that reflects their investment profile. That’s what advisors do. And, for that, advisors are evaluated based on how those strategies…
Why an Investment Policy Statement is Essential
Warren Buffett has been accused of “investing like a girl,” a charge to which he has proudly professed his guilt. The world’s most successful investor is patient and exercises self-control, muted confidence, and discipline because he strictly adheres to his…
4 Steps Advisors Should Take To Strengthen Compliance
As regulatory activity in the wealth management industry hits a fever pitch, financial advisors and their firms are increasingly finding themselves at odds with compliance departments who are under increasing pressure to keep their firms out of trouble. In some…
Why Planning for a Liquidity Event Needs to be a Priority
There are few things more life-changing than a liquidity event. It takes extensive preparation – financially and emotionally – to ensure the successful transition of wealth so that it can be preserved and used in the pursuit of new ambitions.…
Why Now is not a Good Time to Sell International
After a nearly 14% gain in the first four months of the year, the MSCI EAFE index slogged through a 3% decline in the month of May, triggering concerns by advisors that it may be over for international stocks. Our…
Thought Leadership May Be The Only Edge For Financial Advisors
You are your brand. Your brand is you. You may never think that this is a top business priority as a financial advisor, but your clients – current and prospective – crave insightful information. If you provide this to them…
Four Reasons Financial Advisors Must Embrace Technology
The future is now. Financial advisors who can see it, and grab it, have an advantage over their competitors. While it is popular for some financial advisors to lament the rise of robo-advisors, the fact is that robo-advisor firms control…
How To Avoid Email Marketing Mistakes
For many financial advisors, email marketing is an effective way to communicate with their target market. Advisors favor email because, once it’s set up, it is easy to manage – simply Define a campaign, create content, send it out, measure…
Specialization May Be Financial Advisors’ Quickest Path to Success
Most financial advisors begin their careers as generalists, offering a full range of investment and insurance products to anyone who will see them. Some remain as product salespeople while others develop the knowledge, skills, and credentials to perform comprehensive financial…
“As Long As Money Is Cheap, People Are Going to Go Further Out On The Risk Curve”
In the past 100 days, the stock market has advanced about 22%. This return is so extraordinary that many investors would be satisfied with that gain over an entire year. This rally has many investors wondering how to hedge portfolios,…
How Advisors Can Use Social Media to Gain Influence and Clients
Today, the vast majority of a financial advisor’s potential clients reside in a parallel universe called social media – a digital cosmos that exists alongside the physical world. It’s a place where they commune with friends, including people they really…
Attract Ideal Clients With Online Personas
Most financial advisors understand the value of an ideal client profile in helping them identify the type of prospects they should pursue to grow their practice. While that may have been useful in the past, it does very little to…
For Advisors Looking for Next Generation Clients: It’s a Matter of Trust
The greatest intergenerational transfer of wealth in history is underway. As a financial advisor, it represents either an unprecedented opportunity or a threat to your survival. It will ultimately come down to trust The financial advisory industry has a trust…
An Essential Way To Grow Your Business
For much of the past decade, advisors have benefitted from market-driven growth. As the markets advance, assets under management increased. Now, as the bull market trounces onward in this, its 10th year, financial advisors are increasingly thinking about something that…
Luck, Risk and Avoiding Losers
When Howard Marks speaks, it pays to listen. The chairman of Oaktree Capital recently sat for a lengthy interview with Shane Parrish of Farnam Street in which he covered many key issues, including risk management, the role of luck and…
Is the Era of Index Funds About to End Badly?
In February 2019, the Standard & Poor’s 500 index hit a new high, less than two months after one of the worst one-month declines on record. From its December 24, 2018 low, the S&P 500 has gained nearly 20%, brushing…
How To Create Your Own Guaranteed Pension
Many people struggle with choosing a retirement income strategy that assures they will not outlive their money without assuming significant risks. The optimum strategy is especially elusive for the so-called mass affluent – households with a net worth of $100,000…
The Long and Short of Investing
For much of the past decade, investment profits have flowed to anyone who simply bought stocks and sat tight. But now the stock market is beginning to show signs of aging. Volatility is increasing, and many investors believe that a…
Why Advisors Need to Offer Private Equity to Their HNW Clients
One of the key lessons of the 2018 investment year is that extreme volatility can wreak havoc on investment portfolios, even those that are thought to be relatively safe due to diversification. For some investors, the answer to those problems…
Someone’s Making a Big Bet on a Border Wall
Steven M. Sears, StratiFi’s chief investment officer, recently focused on some of the key attributes of successful investing in a column that he wrote for Barron’s. At a time when many investors are debating what happens next to the stocks,…
The Danger of Index Funds
The recent stock market decline is a stark reminder to investors that there is risk in index funds. This is coming as a shock to many. After years of quantitative easing, artificially low-interest rates and, more recently, a “Trump bump,”…
Intentional Wealth: An Intergenerational Challenge
Now is not the Time for Advisors to Cut Back on Their Marketing
In 2018, volatility in the stock market returned with a vengeance, catching most investors and many advisors off guard. Advisors, who have experienced at least a couple of market cycles, understand that volatility is normal and market pullbacks are temporary,…
Is it Time to Add a Tactical Strategy to Your Asset Allocation Plans?
One thing we can say for certain is that, after a 10-year bull run with minimal volatility, the market is due for a change. With the return of extreme volatility this year and a late year selloff, the market may…
What Does Your Online Presence Say About Your Advising Business?
You have an online presence, either intentionally or unintentionally, or both. Go ahead and “Google” yourself or the name of your firm. Does anything come up on the first page of search results? Keep looking, you’re there, somewhere. Hopefully it…
To Grow, RIA Firms Must Achieve Scale without Sacrificing Specialization
Leading RIA firms understand that the key to profitable growth is to optimize their ability to specialize in their core business functions of client management and business development, while effectively managing the complexity of growing investment and back-office operations. But,…
The Dawn of Professional Collaboration
Call it what you will – cynicism, disillusionment, enlightenment – an increasing number of clients are no longer willing to tolerate product-centric recommendations masking as financial advice. Increasingly, they are beginning to question the value of investment advice that isn’t…
The Higher Purpose of Financial Advisors
More than any other type of professional advisor – be it a doctor, a lawyer, an accountant or a counselor – financial advisors have an extraordinary opportunity to build a profitable business around unique abilities that can be shared with…
The Great Wealth Transfer: Will You Be Left Behind?
It may be the closest thing to a blind side that financial advisors will ever experience. The theme is becoming more commonplace: The husband of a couple you’ve worked with for 10 years dies suddenly from a heart attack. Within…
Getting to the Next Level with an Associate Advisor
Anyone with an ambition of getting to the next level and beyond is bound to reach a critical juncture when they realize that what got them to where they are isn’t enough to propel them further. As a financial advisor, you…
Howard Marks: Advisors Need To Be Risk Managers
Howard Marks, one of the world’s great money managers, has a simple message for financial advisors: focus on defining and managing financial risk for your clients or risk extinction. In an interview, Marks, co-founder of Oaktree Capital Management, said advisors…
Market Volatility Creates Communications Challenges
The wild gyrations that have characterized the market this year should be a stark reminder to financial advisors of the importance of having a defined communications plan in place if they want to retain the assets of anxious clients. Timely…
Is Multi-Asset Class Investing the Answer for Concerned Passive Investors?
The wild stock market gyrations this year have shocked investors who had been lulled into complacency during a largely uninterrupted rally over the previous decade. Suddenly, the word ‘volatility’ is dominating stock market discussions, and investors are being warned that…
Protecting Your Clients from Behavioral Investing Mistakes
“The investor’s chief problem – even his worst enemy – is likely to be himself.” – Benjamin Graham A key to understanding behavioral finance is understanding that investments do not necessarily cause investors to lose money. Investors often cause themselves…
Getting More from a Client Relationship with Client-Centric Investing
It has been nearly a decade since the global financial crisis and, while investors are beginning to regain their confidence in the markets, many are still having difficulty overcoming the trust deficit created by financial advisors who treated them as…
Wealth Exposed – Why Advisors Need to Take the Lead in Risk Management
The sudden return of market volatility this year should be a reminder of the critical role financial advisors play in helping clients to protect their assets. However, as advisors proactively take measures to protect portfolios against inevitable market declines, their…
Why Risk Considerations in a Relentless Bull Market
Bull markets do not die from old age, but they often succumb to events or changed perceptions. Right now, a litany of issues exist that could roil the market’s historic nine-year advance, including China trade tensions, rising interest rates, and…
Reverse Churning: A Black Swan May Soon Confront Financial Advisors
If you are a financial advisor, you need to be aware of reverse churning. This little understood issue might even be a Black Swan for the wealth management industry. This issue is so pernicious that it could ensnare many advisors…
Escape the High-Net-Worth Client Trap To Build a Successful Business
The top 1% of Americans now control over one-third of the nation’s total investable assets. These high-net-worth (HNW) investors are the proverbial golden geese sought by many advisory firms. And why not? More assets per client; and the more you…
Managing Crypto-Inclined Clients
Whatever your view on cryptocurrency, many of your present and future clients likely own, or want to own, digital currency. According to a recent survey conducted by Blockchain Capital, 30% of people aged 18 to 34 would rather invest $1,000…
The Unfaithful Client
Your client is worth $25 million, yet you only manage a small portion of that total. Sound familiar? The issue of clients with accounts spread across multiple advisory firms often arises during discussions of a firm’s billable assets. Yet, the…
A New Era for Cash Management
Interest rates are rising. If your clients are asking how you’re moving to protect their capital, you’re not alone. Global money market funds saw the largest inflows of any open-end fund class in the first quarter of 2018, according to…
Three Immediate Risks to Your Firm and How to Manage Them
If you follow financial industry trades or perhaps just skim the headlines, you know the term “risk” is omnipresent. It’s not surprising given the entire investment world is loosely balanced on a grand scale of risk and return. Not every…
Avoid The Overconfidence Trap: Conduct Your Own Stress Test
When Willie Sutton, a famous bank robber, was asked why he robbed banks, he answered because that’s where the money is. And so it is with the stock market. Most people invest because they want to make as much money…
How to Make $1 million on Wall Street
Everyone wants to make money in the stock market so we’re going to let you in on a secret. The way to make $1 million on Wall Street is to start with $2 million. If you’ve been around the markets…
Build Trust and Be Indispensable To Your Clients
Do your clients trust you? Do they think you are indispensable or an easily replaced commodity? We’re asking those questions in a spirit of helpfulness. Trust and commoditization are among the securities industry’s greatest weaknesses and challenges. If clients do…
Finding Serenity In a Noisy Market
We live in an era when investors have more information readily available than the world’s most accomplished investors ever imagined just 50, or even 100 years ago. Still, many people complain that it is hard to find useful information in…
Is Amazon.com Eating Your Client’s Business?
At a recent Barron’s conferences for the nation’s top advisors, we were surprised by a recurring topic: Amazon.com. Everywhere we turned, someone was discussing how Amazon.com was impacting their businesses. The online retailer, at least since we last checked, has…
The Sweetest Risk Factors Leave The Bitterest Aftertastes
Of all the risk factors that confront investors, concentrated-stock risk is perhaps the sweetest. If you have this risk in your portfolio, you likely picked a stock that has blossomed in value, or you participated in an initial public offering…
How to Expect the Unexpected? Educate Yourself.
One of the market’s wise men – someone who is known and respected by everyone but shuns the limelight – believes the financial markets represent pure chaos. He contends that indexes, and exchange-traded funds and other financial products exist to…
Is Your Portfolio Truly Diversified? Probably Not.
At this very moment, some advisor, somewhere in the securities industry, is confronting a difficult reality with their clients. They know that bonds are often as risky as stocks, and that stocks and bonds often behave like each other. Yet,…
How To Thrive In The Age of Volatility?
Volatility is one of the most widely used, yet misunderstood, words in the investment world. It means so many things to so many people that volatility is at risk of becoming another Wall Street word that does not mean much…
The Language of Money
Winston Churchill once quipped that America and England are two countries separated by a common language. We have often thought of this as our travels, and lives, keep us alternating between Wall Street and Main Street. On Wall Street, most…
A Conversation on Risk & Return
We want to start an ongoing conversation with you about risk and return. We want to move beyond headlines, and the incessant focus on buying this fund, or selling that stock or bond. We want to get away from the…