The Wealth Consigliere

It’s that time of year again when people start talking about their New Year’s Resolutions.  Unfortunately it is difficult to predict the events that will impact our life a year in advance.  My sage confidant surprised me last week when he asked me about my 2019 resolutions.  Rather than pushing back I have decided to focus this week's blog on my hopes for 2019.  Characterizing them as hopes can be helpful for advisors and investors.  Here are my hopes for us in 2019. Rolodex All RIA firms want to grow.  Most realize that there are two types of growth - inorganic and organic.  Both types of growth depend on a recruiters' and an advisors' contacts.  Evaluating how robust these contacts are separates good from great professionals.  Unfortunately most professionals believe their contacts are gold.  Inorganic growth falls short when the new advisor signs the contract but the mistakes don't show up until later.  Successf...

The pull back in the financial markets reminded me of the quote from Warren Buffet t.  He said that when markets pullback we can see who is swimming naked.  After this week we can see many people who chose to swim without a suit.  Our blog this week will look at some surprising naked swimmers and discuss what new bathing suits they should buy. Markets are volatile and the last week of December reminded us of this reality.  How should investors and advisors respond?  The losses are comprable to the losses before the financial crisis.  I panicked in 2009 and sold because I couldn’t take the pain and I made the eroneus projection that the capital markets and the world might be coming to an end.   I was wrong as most emotional decisions turn out to be.  Mr. Buffett has one of the best investment track records because he has not panicked and in fact he has bought from others like me me who panic and are skinny dipping.  Maybe that is...

The passing of President H.W. Bush taught us all about his humility and his faith.  His morning conversation with James Baker still resonates with me.  When asked what are we going to do today?  The President answered he was going to Heaven to see Barbara and their daughter.  I’m sure it was a loving reunion.  Heaven has played a large role in my earthly life through Led Zeppelin’s song Stairway to Heaven,   This week’s blog will chronicle how that song can help after another CRAZY week in the markets. High School Dance When the guitar solo started we all knew what we needed to do. Find a slow dance partner ASAP.  We had both been thinking about this moment since the dance started. The risk of the ask was replaced by the risk of what will happen when the music speeds up and the couple is forced to break their slow dance clutch.  We both know what is coming.  The same holds true for equity investors.  We know  the eq...

Advisors, prospects and recruits eventually reach a fork in the road when a final decision must be made.  This week’s blog will discuss decisions from the perspective of the advisor, client and the hiring firm.  We will share there is a right way and a wrong way to make final decisions.  Decisions that don’t go our way are difficult to hear.  I recently experienced a painful decision that I did not want or expect to hear.  I hope my experience of being rejected will help you. Time Time is our most scarce and valuable asset.  Seth Godin defines that we make up every day with 15 - 20 hours of attention. Respecting how we allocate our attention and how we respect our clients’ attention is one of the most important decisions we make.  When we meet with clients their top consideration is how long will this meeting take?  The advisor and client both know that the goal of the meeting is to make a sale...

Good investors are always trying to evaluate investor sentiment.  Most successful investors use sentiment as a contra indicator.  Thanksgiving dinner conversations and Uber drivers are my contra indicators. I spent my Thanksgiving with my family in Dallas. While most of our guests drove themselves to dinner like most good Texans do.  Uber was used by my California based family. This week I share my Thanksgiving and Uber conversations and my conclusions from each. Thanksgiving I have worked in the financial services industry since 1987.  Initially  my family believed my job provided me a crystal ball into the direction of the stock market.  I was flattered when they asked and I provided them the company line on where the market was going.  It made me feel smart but when my opinions were incorrect my family members remembered.  Eventually my Thanksgiving response became that I didn’t know where the mark...

The recent Focus Financial earnings conference call identified numerous questions without credible answers.  The market price agreed and now the RIA industry needs to examine what Focus has gotten right and where the firm needs to improve.  Our blog this week will try and answer these questions and also provide a historic perspective of how we  got here. History History does not repeat itself but it does rhyme.  Wealth Advisory firms need to understand who their recruiting targets are and create a program to transition the professionals from their old business model to their new firm’s culture.  Understanding the advisors’ history is an effective place to start.  I have made the mistake of hiring people that shared my history in the brokerage industry.  This approach has failed and I have examined why.  The first place to start is to compare the professional focus of the advisors’ old firm. ...

November 15 is a big date for hedge fund investors and their managers.  November 15 is the date investors must inform managers that they would like their money back in January.  The October statements could scare clients into making the decision to redeem.  Successful investors warn against making emotional decisions we might eventually regret.  While we might block out past erroneous decisions, a good investor and their experienced advisors can be a good sounding board.  This week we will look at resources that can help us make good decisions on November 15 and beyond. Dalbar Wealth managers often reference the results of the annual Dalbar study .  The poor results that retail investors continue to experience were at first shocking but have now become ‘Meh” . Our advice is to educate your clients on how they can avoid the Dalbar pit.  We have found that establishing an IPS during calm times and remind...