With trust in banks and the nation’s financial system at historic lows, new market research reveals that 86 percent of investors are thinking twice about their financial advisors.
If you don’t trust your financial advisor, get a financial second opinion. Above all, you want to work with a financial advisor who tells the truth. The best definition of truth is when the word and the deed are one. Find an advisor who truly looks out for your best interest--someone who isn’t just there to tell you what you want to hear, but someone who is there to tell you what you need to hear. An advisor who makes commissions from selling you a financial product has an inherent conflict of interest. Remember, an advisor who swears to act as a fiduciary bears a legal obligation to act in your best interest at all times.
An industry survey recently revealed how confused investors are about which financial professionals operate under a “fiduciary standard” that mandates putting their clients’ interests ahead of their own. Although most investors don’t understand that brokers and registered investment advisors work under different legal obligations, 97 percent of investors agree that “when you receive investment advice from a financial professional, the person providing the advice should put your interests ahead of theirs and should have to tell you upfront about any fees or commissions they earn and any conflicts of interest that potentially could influence that advice.”
The Dodd-Frank Act gives the SEC the chance to craft a pro-investor policy that requires all financial professionals to operate under the fiduciary standard. The investing public deserves nothing less.
Monday, October 25, 2010
Monday, October 18, 2010
You Can be Excellent at Anything
In The Way We're Working Isn't Working, Tony Schwartz lays out a guide, grounded in the science of high performance, promising he can “systematically build your capacity physically, emotionally, mentally, and spiritually.”
Says Schwartz, “It's possible to build any given skill or capacity in the same systematic way we do a muscle: push past your comfort zone, and then rest.” There is something wonderful about his observation. It suggests that hard work, not innate talent, plays the biggest role in determining our successes. Keep that in mind as you set your financial goals and as you pursue your chosen career – or your golf game!
Here are the six keys to achieving excellence that Schwartz has found most effective in helping his clients reach their goals:
Talent is Overrated by Geoffrey Colvin
The Talent Code by Daniel Coyle
Outliers by Malcolm Gladwell
The Genius in All of Us by David Schenk.
Bounce by Mathew Syed
Says Schwartz, “It's possible to build any given skill or capacity in the same systematic way we do a muscle: push past your comfort zone, and then rest.” There is something wonderful about his observation. It suggests that hard work, not innate talent, plays the biggest role in determining our successes. Keep that in mind as you set your financial goals and as you pursue your chosen career – or your golf game!
Here are the six keys to achieving excellence that Schwartz has found most effective in helping his clients reach their goals:
- Pursue what you love.
- Do the hardest work first.
- Practice intensely
- Seek expert feedback, in intermittent doses.
- Take regular renewal breaks.
- Ritualize practice.
Talent is Overrated by Geoffrey Colvin
The Talent Code by Daniel Coyle
Outliers by Malcolm Gladwell
The Genius in All of Us by David Schenk.
Bounce by Mathew Syed
Monday, October 11, 2010
The Recession is Officially Over
On September 20, 2010, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), a non-profit group based in Cambridge, Massachusetts and the arbiter of when U.S. recessions begin and end, officially declared that the recession ended in June 2009 when a trough in business activity occurred in the U.S. economy. The trough marks the end of the recession that began in December 2007 and lasted 18 months, making it the longest of any recession since World War II. Previously, the longest postwar recessions were those of 1973-75 and 1981-82. Both of those recessions lasted 16 months.
While economic indicators now make a double-dip recession seem unlikely, NBER states that it will categorize any potential future economic downturn as a new recession, not a continuation of the recession that began in 2007.
Notably, however, the Committee did not conclude that our economy has returned to normal capacity. We are simply on what may be a long and winding road to a recovery that likely will require multiple quarters to achieve.
As an aside, NBER defines a recession as a “significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” Absent from that definition is the commonly-held public opinion that a recession is marked by two consecutive quarters of decline in real GDP.
While economic indicators now make a double-dip recession seem unlikely, NBER states that it will categorize any potential future economic downturn as a new recession, not a continuation of the recession that began in 2007.
Notably, however, the Committee did not conclude that our economy has returned to normal capacity. We are simply on what may be a long and winding road to a recovery that likely will require multiple quarters to achieve.
As an aside, NBER defines a recession as a “significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” Absent from that definition is the commonly-held public opinion that a recession is marked by two consecutive quarters of decline in real GDP.
Monday, October 4, 2010
The Art of Getting Along
I had a meeting with a gentleman last week. He shared a personal story about a high school graduation gift that his grandfather gave him. It was a print of "The Art of Getting Along." The gift was not appreciated at the time; but today it is one of his prized possessions and is displayed prominently in his office. I liked his story so much that I wanted to share this and share the words of "The Art of Getting Along." Thank you for sharing your story with me, Chris!
Sooner or later a man, if he is wise, discovers that life is a mixture of good days and bad, victory and defeat, give and take.
He learns that a man's size is often measured by the size of the thing it takes to get his goat...that the conquest of petty irritations is vital to success.
He learns that he who loses his temper usually loses.
He learns that carrying a chip on his shoulder is the quickest way to get into a fight.
He learns that buck-passing acts as a boomerang.
He learns that carrying tales and gossip about others is the easiest way to become unpopular.
He learns that everyone is human and that he can help to make the day happier for others by smiling and saying, "Good morning!"
He learns that giving others a mental lift by showing appreciation and praise is the best way to lift his own spirits.
He learns that the world will not end when he fails or makes an error; that there is always another day and another chance.
He learns that listening is frequently more important than talking, and that he can make a friend by letting the other fellow tell HIS troubles.
He learns that all men have burnt toast for breakfast now and then and that he shouldn't let their grumbling get him down.
He learns that people are not any more difficult to get along with in one place than another and that "getting along" depends about ninety-eight percent on his own behaviour.
--Wilferd Peterson
THE ART OF GETTING ALONG
Sooner or later a man, if he is wise, discovers that life is a mixture of good days and bad, victory and defeat, give and take.
He learns that a man's size is often measured by the size of the thing it takes to get his goat...that the conquest of petty irritations is vital to success.
He learns that he who loses his temper usually loses.
He learns that carrying a chip on his shoulder is the quickest way to get into a fight.
He learns that buck-passing acts as a boomerang.
He learns that carrying tales and gossip about others is the easiest way to become unpopular.
He learns that everyone is human and that he can help to make the day happier for others by smiling and saying, "Good morning!"
He learns that giving others a mental lift by showing appreciation and praise is the best way to lift his own spirits.
He learns that the world will not end when he fails or makes an error; that there is always another day and another chance.
He learns that listening is frequently more important than talking, and that he can make a friend by letting the other fellow tell HIS troubles.
He learns that all men have burnt toast for breakfast now and then and that he shouldn't let their grumbling get him down.
He learns that people are not any more difficult to get along with in one place than another and that "getting along" depends about ninety-eight percent on his own behaviour.
--Wilferd Peterson
Who Do You Trust?
Trust in banks and the financial system in general is at historic lows. The Dow Jones Industrial Average dropped 700 points in just ten minutes on May 10, 2010. Since the Great Recession started in mid 2007, over two trillion dollars of wealth has evaporated. According to the Conference Board, consumer confidence in 2009 plunged to an all-time 41-year low. Market research into the continuing turmoil has discovered that 86 percent of investors are thinking twice about their financial advisors.
If you are looking for advice in today’s uncertain market, look for an advisor who is a fiduciary. What does it mean to be a fiduciary? When you are a fiduciary, you put the needs of your clients ahead of your own--in all cases.
According to Professor Steven Blum, a business ethics professor at the Wharton School, acting as a fiduciary encompasses both a “duty of care and a duty of loyalty.” He insists that our industry embrace a new definition of a professional, noting, “A true professional uses his or her ability and power solely to advance the best interests of the client. When the professional's interests diverge from those of the client, the professional always follows only the client's interests.” That’s a definition, I have embraced since day one in the business and one I hope will soon be more widely practiced. The investing American public deserves nothing less.
If you want to read more on this topic, read my article titled "Defining My Fiduciary Standard" by clicking on the title.
If you are looking for advice in today’s uncertain market, look for an advisor who is a fiduciary. What does it mean to be a fiduciary? When you are a fiduciary, you put the needs of your clients ahead of your own--in all cases.
According to Professor Steven Blum, a business ethics professor at the Wharton School, acting as a fiduciary encompasses both a “duty of care and a duty of loyalty.” He insists that our industry embrace a new definition of a professional, noting, “A true professional uses his or her ability and power solely to advance the best interests of the client. When the professional's interests diverge from those of the client, the professional always follows only the client's interests.” That’s a definition, I have embraced since day one in the business and one I hope will soon be more widely practiced. The investing American public deserves nothing less.
If you want to read more on this topic, read my article titled "Defining My Fiduciary Standard" by clicking on the title.
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