1988 Porsche 911 M491 Cabrio (Sold!)
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Wednesday, September 12, 2012
Thursday, September 6, 2012
Wednesday, August 1, 2012
What is missing?
When I came up with my last two posts, I put a lot of thought into the concept of a Wealth Journey. The Journey needs a road map and it needs to be prepared for risks and challenges that will make the Journey not as pleasant.
That said, there is something else missing that really differentiates the experience on the Wealth Journey that I need to talk about - probably even more so than the road map and the obstacles.
Many Wealth Managers will talk about how many client discussions have a perception of being important but far from urgent, which leads to postponed meetings, etc. How many things do we do that are urgent, but not important? The Wealth Journey if not attended to, is like a helium balloon. It starts up at the top of your ceiling and slowly makes its way down before you notice (until your three year old starts complaining about it, but that is a different story for a different time).
That slow leak is the difference between one person I have been talking to since May. They are paying $8000 more in fees than they would be if they moved over to me. I have a few clients like that. It's easy to say it's them. The truth may be it is me. Maybe I haven't made a good enough case to make what they want to do = what they have to do.
I haven't changed the paradigm in the industry. I need to remove the transactional feel. So how do I do this with my current clients?
Truth: Unexpected Honesty (how can I share personal stories that create a deeper personal connection, what can I reveal about our industry), Unbiased Facts (statistics), Proactive Integrity (what constraints and limitations have I put on myself that go beyond the industry). This is the difference between facts and a personal truth. However, I need to make this personal truth relevant to those I am talking to.
Relevance: Active Listening (am I engaged), Meaningful Point of View (Do I have a strong opinion on a challenge people are facing), Surrounding Context (what is hot in the media, what matters to that person right now).
Unselfishness: What am I giving? What am I offering? Where do I demonstrate human empathy for their personal challenges?
Simplicity: Focus on a clear core concept that they can easily share with a non-financial language
Timing: Is there a necessary urgency? Is there a seasonal event to capitalize on? Is there a habitual connection to make?
What matters is (1) Do I add value, (2) Do I save them money, (3) Do I make their retirement more secure?
So I haven't really focused on my previous two posts and I am focusing on how I can build my message on these elements.
That said, there is something else missing that really differentiates the experience on the Wealth Journey that I need to talk about - probably even more so than the road map and the obstacles.
Many Wealth Managers will talk about how many client discussions have a perception of being important but far from urgent, which leads to postponed meetings, etc. How many things do we do that are urgent, but not important? The Wealth Journey if not attended to, is like a helium balloon. It starts up at the top of your ceiling and slowly makes its way down before you notice (until your three year old starts complaining about it, but that is a different story for a different time).
That slow leak is the difference between one person I have been talking to since May. They are paying $8000 more in fees than they would be if they moved over to me. I have a few clients like that. It's easy to say it's them. The truth may be it is me. Maybe I haven't made a good enough case to make what they want to do = what they have to do.
I haven't changed the paradigm in the industry. I need to remove the transactional feel. So how do I do this with my current clients?
Truth: Unexpected Honesty (how can I share personal stories that create a deeper personal connection, what can I reveal about our industry), Unbiased Facts (statistics), Proactive Integrity (what constraints and limitations have I put on myself that go beyond the industry). This is the difference between facts and a personal truth. However, I need to make this personal truth relevant to those I am talking to.
Relevance: Active Listening (am I engaged), Meaningful Point of View (Do I have a strong opinion on a challenge people are facing), Surrounding Context (what is hot in the media, what matters to that person right now).
Unselfishness: What am I giving? What am I offering? Where do I demonstrate human empathy for their personal challenges?
Simplicity: Focus on a clear core concept that they can easily share with a non-financial language
Timing: Is there a necessary urgency? Is there a seasonal event to capitalize on? Is there a habitual connection to make?
What matters is (1) Do I add value, (2) Do I save them money, (3) Do I make their retirement more secure?
So I haven't really focused on my previous two posts and I am focusing on how I can build my message on these elements.
Tuesday, July 17, 2012
On any journey, even a WealthJourney, you need a road map
Earlier today, I talked about the challenges folks have on their WealthJourney. Despite having unique goals and personalities and circumstances. We all face the same challenges. I placed them into four themes which we will begin discussing soon.
As opposed to just presenting problems in the challenges, I want to also discuss solutions. The four challenges are not mutually exclusive, they are variables that impact the biggest variable of all - how you enjoy the currency of experiences and relationships. Experience Equity and Return on Relationships is how you should measure your wealth.
The solution isn't parallel with the challenges, but we will also discuss how we chart our way on the journey. This is your personal map and GPS that we will use.
(1) Write Your Wealth Story - In the world of Lean Six Sigma, user stories are designed to explicitly define conditions of satisfaction to the user. Your wealth story is no different. Also no different is that in Corporate America, they are dealing with constraints - time, budget, scope. Your life has those same limits so we need to identify where those limits exist.
(2) Place Desired Behaviors on Auto Pilot - Auto Pilot can prevent us from getting off track. It can keep us on course. You may need to account for previous bad behaviors, changing headwinds, or many other activities, but as long as you account for these, you will know where you stand and when action is required.
(3) Create Action Limits - Any time you get too far off path (or glideslope from my Naval Aviator days), you need to know how far is too far. You don't want to over correct, especially in the financial services world because those course corrections (ie, trades) create friction that eat away at your wealth. We will carefully craft action limits so we take the right action at the right time. Less is more, and if pragmatic and calculated, it can be A LOT more.
(4) List your action plan for those respective limits - How did you reach the limits - was it changes in your behavior or needs? Was it caused by market misbehavior. Knowing what to do ahead of time and how you feel before the emotional triggers kick in is a good exercise.
(5) Chart our Path - There are two timeframes to be concerned about - the next six years and then the values we expect to see at peak (often retirement). Lots can happen over the course of a lifetime, but we often have a lot more clarity over the next six years. 30 year plans introduce bad timing situations and lots of changes in policy that we can't even think about, let alone model. Ambiguous uncertainty runs amuck. Combine this with choice and you often just get decision paralysis. It is better to hit the themes that we need to think about, but let's focus on what we have clarity and control on....the next 6 years.
As opposed to just presenting problems in the challenges, I want to also discuss solutions. The four challenges are not mutually exclusive, they are variables that impact the biggest variable of all - how you enjoy the currency of experiences and relationships. Experience Equity and Return on Relationships is how you should measure your wealth.
The solution isn't parallel with the challenges, but we will also discuss how we chart our way on the journey. This is your personal map and GPS that we will use.
(1) Write Your Wealth Story - In the world of Lean Six Sigma, user stories are designed to explicitly define conditions of satisfaction to the user. Your wealth story is no different. Also no different is that in Corporate America, they are dealing with constraints - time, budget, scope. Your life has those same limits so we need to identify where those limits exist.
(2) Place Desired Behaviors on Auto Pilot - Auto Pilot can prevent us from getting off track. It can keep us on course. You may need to account for previous bad behaviors, changing headwinds, or many other activities, but as long as you account for these, you will know where you stand and when action is required.
(3) Create Action Limits - Any time you get too far off path (or glideslope from my Naval Aviator days), you need to know how far is too far. You don't want to over correct, especially in the financial services world because those course corrections (ie, trades) create friction that eat away at your wealth. We will carefully craft action limits so we take the right action at the right time. Less is more, and if pragmatic and calculated, it can be A LOT more.
(4) List your action plan for those respective limits - How did you reach the limits - was it changes in your behavior or needs? Was it caused by market misbehavior. Knowing what to do ahead of time and how you feel before the emotional triggers kick in is a good exercise.
(5) Chart our Path - There are two timeframes to be concerned about - the next six years and then the values we expect to see at peak (often retirement). Lots can happen over the course of a lifetime, but we often have a lot more clarity over the next six years. 30 year plans introduce bad timing situations and lots of changes in policy that we can't even think about, let alone model. Ambiguous uncertainty runs amuck. Combine this with choice and you often just get decision paralysis. It is better to hit the themes that we need to think about, but let's focus on what we have clarity and control on....the next 6 years.
Let me lead you on the wealth journey
Unique clients like to be treated uniquely, and they should be. Unique personalities, risk appetites, life goals. It makes sense.
Regardless of where your wealth journey takes you, you must navigate the same challenges.
Challenge #1: Risk - Stock picking vs Asset Allocation, Too much vs too little risk
Challenge #2: Human Behavior - both cognitive and emotional
Challenge #3: Fees - The Endless Pursuit of Fee Awareness and Detection of Hidden Fees
Challenge #4: Products - How products often adversely impact wealth and introduce conflicts of interest
Over the coming weeks, I will tackle each one of these challenges. I hope you will join my so that I can take down your personal wealth path and make it as enjoyable as possible.
As much as we are going to talk about money, the currency of wealth is about relationships and experiences. That is what the wealth journey is all about.
Regardless of where your wealth journey takes you, you must navigate the same challenges.
Challenge #1: Risk - Stock picking vs Asset Allocation, Too much vs too little risk
Challenge #2: Human Behavior - both cognitive and emotional
Challenge #3: Fees - The Endless Pursuit of Fee Awareness and Detection of Hidden Fees
Challenge #4: Products - How products often adversely impact wealth and introduce conflicts of interest
Over the coming weeks, I will tackle each one of these challenges. I hope you will join my so that I can take down your personal wealth path and make it as enjoyable as possible.
As much as we are going to talk about money, the currency of wealth is about relationships and experiences. That is what the wealth journey is all about.
Thursday, June 21, 2012
High Fees, the equivalent of feeding your portfolio rat poison
High Fees - Source: Marketwatch.com
Research focuses on two big investor errors: (1) The inability to separate past performance is not an indicator of future results, so they don't mind paying more, and (2) not realizing how fees impact portfolio value over time.
Here is the actual research paper.
University of Pennsylvania - Mutual Fund Fee Impact
Research focuses on two big investor errors: (1) The inability to separate past performance is not an indicator of future results, so they don't mind paying more, and (2) not realizing how fees impact portfolio value over time.
Here is the actual research paper.
University of Pennsylvania - Mutual Fund Fee Impact
Saturday, June 16, 2012
The Impact of Fees on your portfolio
I am a strong believer that nothing will impact your portfolio more over time than:
(1) Avoid steep declines
(2) Active management of passive investments that meets your risk profile through tax and placement strategies
(3) Modest Fees
Here is a blog post on the impact of fees
WSJ: The Impact of Fees
(1) Avoid steep declines
(2) Active management of passive investments that meets your risk profile through tax and placement strategies
(3) Modest Fees
Here is a blog post on the impact of fees
WSJ: The Impact of Fees
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