Advisor for Life E-Book

Stephen D. Gresham

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 507

Veröffentlichungsjahr: 2011

Beschreibung

"The Age Wave of retiring baby boomers is creating a seismic bonanza for financial advisors--if they can provide the kinds of creative and flexible strategies their clients will be wanting and needing. Steve Gresham provides the solid, imaginative, yet practical guidance needed to build winning strategies to meet the needs of a new generation of investors. I have long respected his work and heartily recommend this book." --Ken Dychtwald, PhD, founder and CEO, Age Wave, and author of Age Wave, Age Power,The Power Years, and Workforce Crisis "Steve Gresham showed us in The Managed Account Handbook that the basics to asuccessful advisor do not differ from one country to another. In this book, he is expanding his horizon with his extensive experiences to further help you to develop the skills for building a devoted client base. This is the must-read book for all who want to succeed in the financial advisory industry." --Toshiya ShimizuPresident and CEO, Nikko Cordial Advisors Ltd. "For thirty years, advisors have been using wealth accumulation as their main sales weapon. With the boomers entering retirement, all that's out the window. Now the imperatives are income distribution, planning--making sure the investor does not run out of money. In Steve's newest book, he does an excellent job of walking advisors through this change and showing them how to alter their practices to not only survive but thrive. This is a must-read for any advisor who still wants to be in the business in ten years." --Len Reinhartfounder and President, Lockwood Advisors? "For over thirty years, I have sought advice from industry experts who can help me grow and optimize my practice. Steve Gresham's advice is always of interest to me--he is always right there on the cutting edge." --John Rafal, President, Essex Financial ServicesRegistered Rep.'s Top 50 Financial Advisor for 2006 and Barron's Top 100 Financial Advisor "A good coach can help even the best players reach their potential. As a financial advisor, you coach successful families to tackle life's challenges and achieve their goals. Steve Gresham can help--he has the tactics to help you build a winning team." --Mike KrzyzewskiHead Coach, Duke University Basketball and the 2006 U.S. National Team

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Acknowledgments

PART I - The State of the Advice Industry and Your Opportunities

INTRODUCTION - Buicks and Big Macs

LOSING THE LIMO MARKET

NEW TIMES, NEW BRANDS

CHAPTER 1 - The Value of Advice

WHY THE AFFLUENT WANT YOU

THE ACID TEST—CAN YOU SHOW TRUE CONCERN?

THE FOUR COMMANDMENTS

BE INSPIRATIONAL—THE FIFTH DIMENSION

PART II - Investment Counsel Advice for Life

CHAPTER 2 - How to Develop a Compelling Investment Philosophy

COMMON VALUES AND YOUR SUCCESS

TIME HORIZON—IS TIME ON YOUR SIDE? BETTER YET, IS IT ON YOUR CLIENTS’ SIDE?

BULL MARKETS AND BRAVERY

RISK—WALL STREET’S FOUR-LETTER WORD

VOLATILITY—CAN YOU WEATHER THE STORM?

STYLE—IS YOURS FLEETING OR STEADY?

INVESTMENT VEHICLES—HOW DO YOU EXECUTE YOUR INVESTMENT PHILOSOPHY?

COST—A TOUGH ISSUE TO SOMETIMES JUSTIFY

PASSIVE VERSUS ACTIVE—CAN YOU JUSTIFY EITHER APPROACH?

STYLE BOXES VERSUS CORE AND EXPLORE—IT’S UP TO YOU

INFLATION—FIGHTING THIS “HIDDEN TAX”

TAXES—THE BANE OF INVESTORS

FOR THE MANY OTHER CONSIDERATIONS—ASK!

RECRUIT OTHERS TO YOUR INVESTMENT PHILOSOPHY—AND TURN AWAY SKEPTICS

CHAPTER 3 - Creating a Defined, Effective Investment Process

FROM WHAT TO HOW—THE INSTITUTIONAL METHOD

NOW IT’S YOUR TURN

YOUR ASSIGNMENT

CHAPTER 4 - Setting Goals: What Really Matters?

TIME TO START COUNTING

BEGIN WITH THE END IN MIND

IT’S NEEDS FIRST, GOALS SECOND

GREAT EXPECTATIONS—EVERYONE HAS THEM

LIFE AFTER WORK: WHERE TO LIVE

HEALTH CARE—THE REAL MONEY PIT

LAST CHANCE TO MAKE A DIFFERENCE

HAVING FUN YET?

SUMMING UP

CHAPTER 5 - Defining Risk

DO YOU WORK WITH ANYONE LIKE ME?

EMBRACE RISK (BUT NOT TOO TIGHTLY)

THE RISK LIST

MEDICAL RISKS—DON’T IGNORE THE ISSUE

LIQUIDITY RISK—ASSETS YES, MONEY NO

PURCHASING-POWER RISK (A.K.A. INFLATION RISK)—WHAT HAPPENS WHEN YOUR ASSETS ARE ...

PREMATURE DEATH—ITS IMPACT ON A FAMILY, ESPECIALLY IF A BUSINESS IS INVOLVED

DISABILITY—ALWAYS A POSSIBILITY

IT’S LEGAL OR IT’S A LIABILITY—LEGAL ASPECTS

MARKET RISK—MANAGING TURBULENCE

FAMILY CARE RISK—DIVIDING RESOURCES AMONG ADULT CHILDREN AND AGING PARENTS

LONGEVITY RISK—LIVING TOO LONG?

REPUTATION RISK—FOR THOSE WHO ARE PERSONALLY, PROFESSIONALLY, OR FINANCIALLY VULNERABLE

THREE RULES FOR DEALING WITH RISK

CHAPTER 6 - Diversification

STEP 1: THE INVESTMENT GOAL—BEGIN WITH THE END IN MIND

STEP 2: THE INVESTMENT POLICY STATEMENT—THE BLUEPRINT

STEP 3: SELECTION OF COMPLEMENTARY INVESTMENTS

STEP 4: REBALANCING TO IMPROVE RISK-ADJUSTED RETURNS

FOUR STRATEGIES FOR BETTER PORTFOLIOS

CHAPTER 7 - Alternative Investments

REAL ESTATE

COMMODITIES

HEDGE FUNDS

PART III - Wealth Management Advice for Life

CHAPTER 8 - Managing Dreams and Fears

GREAT EXPECTATIONS

GREATER CONCERNS

WHAT TO DO

PROTECTING YOUR ASSETS

LIFESTYLE CAN BE A TRAP

ADVISOR ACTION PLAN

CHAPTER 9 - You Can Help Clients Grow

PROMOTING THE COMPETITION

THE ADVISORY BALLET—COMPETITION KEEPS YOU ON YOUR TOES

ASK YOUR CLIENTS

THE MONTHLY COMPETITION BREAKFAST

THE STEALTH COMPETITOR IN THE HIGH NET WORTH MARKETPLACE

CHAPTER 10 - All in the Family and Keeping It That Way

POSTCARD FROM A CAMPFIRE REVIEW

MAKING FAMILY MEETINGS WORK

A WORD ABOUT FAMILY OFFICES

CONCENTRATING ON THE CORE

TOP ADVISORS TALK ABOUT FAMILY ISSUES

LONG-TERM CARE INSURANCE: DIFFERENT OPINIONS

CHAPTER 11 - Money for Life

BLESSINGS AND CHALLENGES OF LONGEVITY

WHERE TO LIVE

RETIRE TO ... WORK?

ENJOYING LEISURE

HOW THEY’LL BE REMEMBERED

WHEN THE END IS NEAR

HOW THEY’LL PAY FOR IT

PART IV - Building Your “Advisor for Life” Practice

CHAPTER 12 - What Is Your Value?

VALUE LADDER STEP 1: WHO ARE YOU?

VALUE LADDER STEP 2: WHAT DO YOU DO?

VALUE LADDER STEP 3: WHY DO YOU DO WHAT YOU DO?

VALUE LADDER STEP 4: HOW DO YOU DO WHAT YOU DO?

VALUE LADDER STEP 5: WHO HAVE YOU DONE IT FOR?

VALUE LADDER STEP 6: WHAT MAKES YOU DIFFERENT?

VALUE LADDER STEP 7: WHY SHOULD I DO BUSINESS WITH YOU?

THE MISSING PIECE

CHAPTER 13 - How to Quantify Your Unique Value

THE VALUE TEST

CHAPTER 14 - The Client Experience

THE FIRST CONTACT

THE RIGHT STARTERS

THE PROSPECT’S A CLIENT; NOW WHAT?

SUMMING UP THE CLIENT EXPERIENCE

CHAPTER 15 - Driving Referrals

IT’S 10 A.M.—DO YOU KNOW WHAT YOUR CLIENTS ARE SAYING ABOUT YOU?

GENERATING REFERRALS FROM FOUR SOURCES

REFERRAL ACTION PLAN

A FINAL THOUGHT ABOUT REFERRALS

CHAPTER 16 - Selling Yourself

THE NEW PROSPECTING

HAVE TOOLKIT, SEEK TARGET

MILLIONAIRE HOT BUTTONS—PRESS HERE

MARKETING THROUGH THE MEDIA

CHAPTER 17 - Valuing the Advisor for Life Practice

CHAPTER 18 - Taking Care of Number One

YOUR TURN

BEING THE ADVISOR FOR LIFE IS A CHALLENGE FOR YOUR LIFE

YOUR ROLE: ADVISOR OR SERVICE PROVIDER?

YOUR MAINTENANCE PLAN: THE FOUR PILLARS OF VITALITY

MAINTAINING YOUR GUARDRAILS

THE END OF THE ROAD

PARTING THOUGHTS

APPENDIX A - Practice Analysis

APPENDIX B - Investment Policy Statement

APPENDIX C - Top 20 Client Analysis

Bibliography

About the Author

About the Contributors

Index

Copyright © 2007 by Stephen D. Gresham. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Gresham, Stephen D.

Advisor for life : become the indispensable financial advisor to affluent families / Stephen D. Gresham.

p. cm.

Includes bibliographical references and index.

ISBN 978-0-470-11233-5 (cloth)

1. Financial planners. 2. Investment advisors. 3. Affluent consumers—Finance, Personal. I. Title.

HG179.5.G738 2007

332.024—dc22

2006037890

To the most important people in my life: Jane, Rachael, Meggie, and T.J. Gresham

Acknowledgments

Writing a book is like taking a long journey: You start out with a pretty good idea of where you’re going and what you’ll do and see along the way. But as in any trip, it’s the surprises—the unexpected and wonderful sights and experiences along the way that happen only if you keep your eyes and ears open—that make the voyage memorable. And having friends along for the ride makes it all the more fulfilling.

Described in these terms, Advisor for Life was a great journey. The process of capturing the best practices of top advisors uncovered some terrific new tactics. Some advisors I have known for years revealed new aspects of financial advice that are exciting concepts for today’s competitive markets. I also found new thinkers who helped me better frame my observations.

A first-class team of professionals joined me for the journey and provided the support and camaraderie required to complete the trip in style. Their contributions added both balance and deeper meaning to my words, and I’m indebted to them.

First, the advisors I have met over the years provided the inspiration for Advisor for Life. These are the classy professionals who embody the values sought by affluent families. Kerry Bubb, Peter Burton, Louis Chiavacci, Mary Beth Emson, Scott Finlay, Ken Gordon, Steve Grillo, Brian Kelly Sr. and Brian Kelly Jr., Bill King, Leon Levy, Robert Levy, Bill Lomas, Greg Miseyko, Jim Pratt-Heaney, John Rafal, Mike Simon, and Trisha Stewart all gave generously of their time and selflessly offered their insights to the community that is the financial advice profession.

Many industry colleagues encouraged me to update my past work with fresh insights for the current marketplace. Frank Campanale of Campanale Consulting Group; Rose Cammareri of AGF Funds; Bob Cunha of Market Metrics; Chris Davis of the Money Management Institute; David Geracioti of Registered Rep. magazine; Hannah Grove of Hannah grove.com; Brian Lord of Premiere Speakers; Steve Geist, Tom Williams, Ginny Macdonald, and the team at CIBC Asset Management; Eric Sondergeld of LIMRA; Cami Miller of Financial Forum; Len Reinhart of Lockwood Advisors; Julie Segal of Institutional Investor; Toshiya Shimizu and Yasusuki Annen of Nikko Cordial Advisors in Tokyo; Victor Dodig and Tom Monahan at CIBC in Toronto; Susan Moloney, Mona Bisson, Jane Wolff, Anne Steer, and Norman Malo of National Financial; and Evan Stewart of Zuckerman Spaeder are just a few of the countless supporters and contributors to my career.

Some genuine superstars provided additional inspiration and insight from their unique perspectives. Ken Dychtwald was generous with his time and research information. Coach Mike Krzyzewski of Duke University blends leadership insights with humility and compassion to get results. And mountaineer Laurie Skreslet is a fascinating authority on human nature, as well as a wonderful teacher.

I was especially fortunate to receive contributions from several industry authorities whom I sought out for their special knowledge and experience. Ron Surz of PPCA is one of the industry’s brightest and original thinkers. Walt Zultowski is the guru of the perennial Phoenix Wealth Survey and read much of the text, adding key facts along the way. Leo Pusateri and I have worked together for nearly 20 years, traveling the world in search of best practices and advisor value. He has taught me more about value and life than almost anyone. He and his business partner, Giles Kavanaugh, delivered a key part of this book in Chapter 12 that could stand alone. Jeff Marsden of PriceMetrix joined the team at Giles’s urging and provided additional perspective to the tricky topic of demonstrated advisor value. Tim Welsh was a valued collaborator while at Schwab Institutional, and his chapter on valuation brings clarity to a complex subject that will continue to be a hot topic for the rest of our careers. Russ Alan Prince of Prince and Associates has both tremendous knowledge and unerring candor. Finally, my father and fellow Registered Rep. columnist, Dr. Glen Gresham, offered a great deal more than his few credited words on the financial implications of health care events.

My editorial team made me look a great deal better as a writer than I am. The folks at John Wiley & Sons, led by David Pugh, were patient and supportive. Todd Tedesco, senior production editor, ably guided the manuscript through production. The staff at Cape Cod Compositors grabbed the composition task with energy and diligence. Joe Finora worked on several chapters and contributed the section on using the media in Chapter 16. Mike Lynch was a valued ally when we worked together at Phoenix Investment Partners, and he brought energy and technical expertise to the project—especially Chapters 6 and 7. My assistant at Phoenix, Susan Ingvertsen, pitched in at key moments to bail me out of countless logistical logjams and kept the train running.

Two key players require special notice. I am especially indebted to my editor of many years, Evan Cooper, who took charge as the project neared completion and created significant additional value out of my collected writings. My longtime friend and accomplice, Arlen Oransky, helped manage the overall project from start to finish as the ultimate utility player concerned with everything from the checkbook to top advisor interviews. Thanks to you both.

And no one but a hermit could write a book without sacrificing considerable personal time that should be reserved for family. My wonderful wife, Jane, never complained and helped make time on the weekends and early mornings for me to write without interruption. My terrific children, Rachael, Meggie, and T.J., all gave me space and even prodded me back to work when I wanted to take a break. All three are still hoping I’ll write a “real” book someday.

Finally, thank you for taking the time away from your practice and your family to explore ideas that I hope might make a difference in your business. Let me know what you like, what you’d like to hear more about, and where I can improve. You are my client.

—Steve Greshamwww.greshamcompany.com

PARTI

The State of the Advice Industry and Your Opportunities

INTRODUCTION

Buicks and Big Macs

What the Financial Advice Industry Can Learn from General Motors, McDonald’s, and FedEx

Irecently participated in a workshop for top advisors of a leading wirehouse brokerage firm. My topic was “Catching the Baby Boomer Retirement Wave”—specific tactics for tapping the historic opportunity of 77.5 million Americans hurtling toward retirement with (generally) insufficient funds. I was interrupted along the way by an advisor who admitted the importance of the boomer wave, but shared that he just doesn’t see anyone from that generation. Our dialogue follows:

Gresham: How old are you?

Advisor: Forty-two.

Gresham: So you’re a boomer yourself and you don’t encounter boomer-aged people in your practice?

Advisor: Not as clients.

Gresham: Have you purchased or leased a car in the past couple of years?

Advisor: Yes—but why?

Gresham: Did you choose a Cadillac?

Advisor: No.

Gresham: Why not?

Advisor: No reason—I just didn’t.

Gresham: My grandfather saved for years to get a Cadillac, and he was so proud of it—he showed people he had finally succeeded. You’re more financially successful than he was, so why no Cadillac?

Advisor: I have nothing against Cadillacs, but buying one never occurred to me.

Now you know how a lot of baby boomers feel about full-service financial advisors—once a status symbol of the elite, they are largely out-of-mind for the current generation.

Cadillac was for many years the epitome of postwar American success—even its name came to symbolize success and status, the standard-bearer for an industry with commanding worldwide market share. In the same era, having your own stockbroker usually implied your sophistication about money and a macho ability to take risks in search of outsized riches. But just as Cadillac lost its luster when it failed to court the children of its most loyal customers, the full-service brokerage industry now teeters on the brink of its own mortality. Is it too late—as it was for Oldsmobile—or will the wirehouses reinvent themselves to avoid being trumped by a financial Lexus?

LOSING THE LIMO MARKET

Surveys of millionaire households confirm anecdotal reports that many members of the baby boom generation are going it alone as investors. Buoyed by a sea of information and online tools, the boomers can sail seemingly without fear toward retirement. At work, most of them are given that role without choice as 401(k) plans replace the defined benefits of their parents’ generation and a shifting economy creates job changes and new rollovers. Try Googling “mutual funds.” You’ll find , a site at which a bevy of powerful analytics and provocative research ideas are but a few clicks away. Combined with a robust history of seemingly every known fund, what more could an investor need for assurance?