Showing posts from 2019


Our industry has always looked down on Wall Street’s recruiting checks.  Last week there were numerous announcements that independent firms were offering advisors money to purchase their practice.  The term for these transactions is inorganic growth.  This week we will look at why these transactions are the new rage and examine if they are better than the old Wall Street checks.

Popeye and financial advisors fall for the “I’ll gladly pay pay you tomorrow for a Hamburger today” pitch.  Unfortunately Popeye and and most financial advisors provide their hamburger but seldomly get paid what the firms and Wimpy promise.  Why?  The advisors need the cash and Popeye is gullible.  On Wall Street the deals adjusted when the advisors changed firms looking for a new deal every five to eight years.  The recent Luminous departure shows that the advisory contracts need to be adjusted.  The new contracts are written by experienced firms and lawyers to prevent serial departures.  Wall Street has …


The president’s recent interview confirmed how important information can be for a successful political campaign, running a country and in our case running an independent wealth advisory firm.  Our monthly podcast recommendations help.  The important item that I add is a consideration of what is the podcast host's agenda? We won’t need a Mueller report to decide.  Here are our new favorites and their agendas.

Grant’s Current Yield
Jim Grant has remained an informative voice on the fixed income markets for years.  His thoughts are unique and helpful.  His agenda is for us to subscribe to his newsletter.  

The Meb Faber Show

Meb is a thought leader and a top portfolio manager.  We always learn something new when listening to his podcast.  His clear agenda is to attract more investors to his funds.

CBS Sunday Morning
If you are like me this program airs too early on Sunday TV.  If you miss it because you stayed out late Saturday night you can catch the summary on this podcast.  

My podcast l…


The 75th anniversary of D-Day was moving and made me appreciate the power of history. This week we will examine the history of the wealth advisory business.  As is the case with any history, there are some good items we need to remember and several we don’t want to repeat. This is easier said than done but History can be our helpful guide.

The statistics and photographs of D Day evoke many feelings.  The soldiers were BRAVE but the mission was satistically doomed.  What can we learn from their experience.  I vacillate between anger and awe.  My hope is that we leverage our young to help our country move forward.  Youth has energy and is full of new ideas.  We need to provide them experienced information and engage in honest conversations that allows each generation to avoid the statement of “they don’t get it”.  History can only help us if we share accurate information about our past.
Legacy Systems
Change is difficult.  A recent article in The Wall Street Journal summarizes the pro…

Self Reported

The Luminous breakaway news has grabbed the headlines again.  Didn’t they already breakaway?  There are several items we need to consider regarding this break.  Our blog this week will discuss the items and the ramifications for clients and other advisors. The breakaway doesn’t concern me but the self reported figures do.  Here are the main items after I take a deep breath.

Dating Sites
The Gig economy loves DIY and is self confident and self aware.  These beliefs have manifested in numerous new companies that empower people to implement functions that larger firms and their parents controlled.  Two examples are dating sites and self reported financial data.  Dating sites are thriving and self reported financial advisors continue listing inflated asset levels on their websites and pitch books.  We can solve this problem, asking the online dates to meet in person and asking financial advisors for multiple references after meeting with their team in person.
Custodian and Financial Press Su…


I have based my career on being able to sell and teaching others how to sell.  While these might seem opposites I will discuss in this blog why I think combining each trait can make a good wealth advisor.  Fortunately the industry is starting to believe this but they are not walking the talk yet. Social Media has given me the conch so I’ll explain why this concept should improve your life and increase you EQ.
Wall Street screens client representatives based on how much revenue they generated for their last firm.  Recruiters ask candidates to provide them with a commission run and base their recruiting deals on “trailing 12” revenues.  The message sent on day one is that revenues are important. Most blogs and the established financial press demonize commission based advisors.  We believe that their leaders share some of the blame.  The leaders compensation is based on how many high revenue producing advisors they hire and how many high revenue producing products they “sell” to the…

Running For President

Last week’s news cycle was filled with new candidates entering the presidential race and new independent RIAs entering the independence race. Our blog will examine the similarities of the announcements and opine on who will win. My only concern is the permanence of social media posts. They are easy to make but they never go away. 
This last week saw more Democrats declaring their candidacy for president.  It also had the venerable Goldman Sachs buying its way into the independent RIA space with their $750 million purchase of United Capital.  We see more similearities in Goldman’s move and the Depomaratc Presidential candidadtes. Give us 400 words to show you why.
At this early stage in the presidential “race” it seems easy to declare you are in.  History warns that to be successful you need to identify an issue and make that a centerpiece  for your campaign.  One item?  Yes one, and repeat it it numerous times on the stump. Statistics have shown that we are one issue voters.  L…


Our society and social media values winners at the expense of people behind the scenes. Our monthly blog will continue to reference winners but will also highlight undervalued contributors. Sports does a better job than financial services at recognition. We hope to change that this week. 
One our favorite training podcast is NPR’s Hidden Brian.  The host Shankar Vedantam shares opinions that we believe are correct but scientific facts prove that we are mistaken.  The shared beliefs can also impact our business life and the “blind spots” can cost our business and our clients.  Hidden Brain is a great reminder and it is free with your NPR donation, which I hope you are compelled to make after listening to Shankar.

Under Appreciated 
The NBA playoffs have reached the Conference Finals. While the stars will still make invaluable contributions they can’t win by themselves.  The supporting cast needs to contribute and their contributions are what separates the good from the great team…

2019 IPO Rush

The IPOs just keep on coming demanding our attention. Unlike the Gold Rush this is not our first IPO Rush. What did we learn from the last cycle and where will all of this new money go?  We will examine that question in this week’s blog. I feel like Llyod Bentsen when I write I knew the last IPO Rush and you are are not an IPO Rush.  What defines an IPO Rush and how can we benefit.

Money In Motion
Financial advisors try to identify money in motion to increase their growth.  Money in Motion is defined by changes in liquidity caused by a corporate event like an IPO.  During the last IPO Rush the firms that underwrote IPOs provided introductions to the corporate executives.  My firm, Montgomery Securities, provided 100 IPO introductions in a single year.  These 100 introductions were mandated to be made to advisors that coordinated with the trading desk and the outsourced money management division.  The introductions benefitted the firm and also helped advisors create large businesses.  Th…

Data Security

Some people put a higher value on privacy than others. My wife is a privacy zealot and I am indifferent. Recently a panelist at an industry conference accused other firms of selling client data. It’s not quite to a Bezos - National Enquirer level but it caught our attention. Our blog will examine data security and share our thoughts on who owns what, as well as who is responsible for security. While we have opinions we recognize the only opinions that matter are the clients. 
When we post anything on The Internet we lose our ownership and transfer our rights to the platform. Numerous government hearings have emphasized this reality and have pushed some platform owners to ask for new government regulations. We have instituted our own family internet regulations that might make us feel good but are not that effective. Our children know more about the internet than we do. That same conundrum is true with FINRA and SEC regulations. They feel good and when we write regulations but …

Voyeur vs. Participant

The reality of my "value-add" sunk in while I was writing this monthly review.  My reality is I have gravitated to a voyeur who listens to podcasts to increase my knowledge and synthesizes what I learn through my blogs and the consulting I provide independent wealth advisory firms.  Truth be told, most good managers are voyeurs who appreciate the accomplishments of participants who are in the arena.  Good managers have tried to score the basket or hit the curve but live below the Medoza Line.  I’m thankful that technology has allowed us to listen to achievers share their story in the first person.
Management and teachers use podcasts as a medium to convey their message.  Our favorite this month is  WorkLife from professor Adam Grant.  Podcasts allow the professor to reach stidents with out requiring quizzes or attendance records.  We have found that questions or comments on podcast are more insightful than the in class questions that often times are made for recognitio…


The recent acquisition of MoneyGuide Pro by Envestnet deserves our attention and an analysis on how technology can make us better advisors. We will try and answer that question and consider how past technology solutions worked. Our life outside of wealth management has definitely been improved by technology, thank you Steve Jobs. Wealth management is different. We will try to explain why.
Wealth management is multifaceted which creates challenges for technology solutions. We will look at three main areas of wealth management and discuss how technology can help our transition to the future. 
Technology and the availability of data have improved dramatically.  What we do with all of this new data can be overwhelming. Do any of us actually read the footnotes in financial statements?  Better yet do we understand how to evaluate the footnotes?  If your answers are yes then you won’t need a guide. If your answer is yes and you are male you might need some help so you don’t get lost.…

Unit Economics

The Lyft IPO filing reminded us why we love the car sharing services.  The price is a bargain - for consumers - not so much for the company which has negative unit economics.  Negative unit economics can’t last forever.  Our favorite podcasts and blogs remind us of this reality.  It is 2019 but some of the IPOs are starting to remind us of the Dotcom euphoria.  Freemium is seductive but someday we must pay.  Those advertisements sandwiched into the podcasts with their tracking systems are essential.  The irony is many of these advertisers have negative unit economics too.
Invest Like The Best
One of my favorite podcasts remains Invest Like The Best.  The podcast delivers the two essential elements of a good podcast.  A knowledgable host who asks great questions and is able to attract guests we want to hear.  Two great episodes that deserve your time are episodes with Peter Zeihan and Michael Kitces.  Who knew that geopolitics and wealth advisory could be so interesting?  Listen and see …