New Question
Here’s a question a client emailed me today that I’ve never heard before:
"What is the standard deviation of our current portfolio?" I was busy selling a $225k VA to a different client, and this question doesn't intrigue me at all. Which one of you CFP's wants me to send you his ACAT paperwork?I would just be straight up with him and say, "Standard Deviation isn't a measurement I use as a reference in my client's portfolios. But here's why your portfolio is right for you..."
Or if he asked you on the phone or to your face you could have just not said anything for about 5 seconds, then burst out laughing and said "Get the F*** outta here, haha, you almost had me. Okay John I gotta go, you're the best though, that was great, haha, bye bye now." click.[quote=OS]
I would just be straight up with him and say, "Standard Deviation isn't a measurement I use to as a reference in my client's portfolios. But here's why your portfolio is right for you..."
[/quote] I would say, "Here is OS. He's a real go-getter, a genuine good sh1t. I'd trust him with my dead mother's life. He will answer your questions from this point on".[quote=snaggletooth]Here’s a question a client emailed me today that I’ve never heard before:
"What is the standard deviation of our current portfolio?" I was busy selling a $225k VA to a different client, and this question doesn't intrigue me at all. Which one of you CFP's wants me to send you his ACAT paperwork?[/quote]Just let him know that his expected return is set to fall within 3 standard deviations of the mean and to call you if he sees that it is slipping beyond that.
[quote=snaggletooth]
I would say, "Here is OS. He's a real go-getter, a genuine good sh1t. I'd trust him with my dead mother's life. He will answer your questions from this point on".[/quote] Haha, I appreciate that.[quote=Hank Moody] [quote=snaggletooth]Here’s a question a client emailed me today that I’ve never heard before:
"What is the standard deviation of our current portfolio?" I was busy selling a $225k VA to a different client, and this question doesn't intrigue me at all. Which one of you CFP's wants me to send you his ACAT paperwork?[/quote]Just let him know that his expected return is set to fall within 3 standard deviations of the mean and to call you if he sees that it is slipping beyond that.
[/quote] Game. Set. Match. Perfect.
That is funnyOr if he asked you on the phone or to your face you could have just not said anything for about 5 seconds, then burst out laughing and said “Get the F*** outta here, haha, you almost had me. Okay John I gotta go, you’re the best though, that was great, haha, bye bye now.” click.
I think you could go three routes.
1. Find out what it is, and then throw is some comments about alpha, r2 and some other modern portfolio bullshit. 2. Find out what he does and ask him some idiotic theory that goes on in his job, then say, it is your job to get him to where he wants to go, not to teach a class. 3. Explain why Modern Portfolio Theory doesn't work(plenty of info out there) and how the std dev has little to do with his retirement plans.Tell him its somewhere between Madoff and Barnum & Bailey
[quote=snaggletooth]Here’s a question a client emailed me today that I’ve never heard before:
"What is the standard deviation of our current portfolio?" I was busy selling a $225k VA to a different client, and this question doesn't intrigue me at all. Which one of you CFP's wants me to send you his ACAT paperwork?[/quote] Why the hell would a CFP want a time-waster like that? If this is L/T money, that's a stupid short-sighted question and I'd have him on a very short leash. If you want some pointers on how to fire a client and have fun with it, call me. For starters, I'd have your assistant kick out an S&P report (several pages each) on every position, burn them all to PDF files and put them on a CD and tell him that to calculate standard deviation, he needs to set up an Excel spreadsheet, and calculate standard deviation by using a weighted average of market values X standard deviation/aggregate market value. That ought to keep the asshole busy for awhile. Then, as soon as he's finished, the number is obsolete anyway. If he protests that he wants you to do it, tell him he's not that good of a client customer.I love this thread. Bookmarked.
[quote=iceco1d]Some of those responses are pretty damn funny…especially yours OS.
Snags - is there a serious question in there somewhere, or is this just for a laugh?[/quote] Ice, the client seriously asked the question. I posted it because I thought it was funny that anyone would ever ask that.Great thread! Reinforces my New Year Resolution to fire all the “engineer” types in my book!
What am I missing? Have you bothered explaining to him or asking him what he knows about standard deviation or why he's even asking? How big of an account does he have with you? If it's substantial enough, I'd get to the bottom of his question rather than sit and laugh about it before you lose him to someone who will give him an answer. I'm still missing the humor in all of this.
A- Have you ever had a client ask a similar question? If so, you know that more often than not, you end up with either (1) A customer who doesn't trust you and is reading investment theory, but not understanding practical application, (2) A customer who's getting ideas from someone else (Suze Orman or the retired brother-in-law who manages his own portfolio for fun), (3) a numbers geek such as an accountant or engineer (although there are exceptions...I have two excellent engineer clients) or (4) a customer who's talking to a competitor and is looking for a reason to leave. There could be other reasons, but those are common ones, and most of them don't have a happy ending. At the very least, you are going to end up spending time on foolishness and you're going to have to make a call about whether or not the client is worth the extra effort, because the questions will probably not stop there, unless you effectively communicate why the information won't really benefit the client. The customer I fired last year was obviously getting a second opinion on a regular basis and didn't understand enough about what she was getting to intelligently pose the right questions. I spent far too much time trying to guess what the questions were, answer those questions appropriately and take care of all sorts of increasingly unreasonable servicing requests. My guess is, Snag's client may end up the same even if steps are taken to diplomatically nip this in the bud now. Two times in my career I relaxed standards of who I would accept as a client. Once when I was starting out and once when I went independent and both times, I paid the price with a customer I ultimately had to fire. In the case of the last customer, it had nothing to do with the size of the customer...she was a high-six-figure account. For me, it was simply a matter of the relationship not being worth my effort at any size. I'm sure Snags will ask a question or two to clarify what the customer wants in case it's a harmless misunderstanding, but most likely the answer won't motivate him to bend over backwards to accomodate future requests from this customer. Snags...I think you have an ACAT candidate.What am I missing? Have you bothered explaining to him or asking him what he knows about standard deviation or why he’s even asking? How big of an account does he have with you? If it’s substantial enough, I’d get to the bottom of his question rather than sit and laugh about it before you lose him to someone who will give him an answer. I’m still missing the humor in all of this.
I am with Anabuhabkuss and Iceco1d on this. What is the big deal giving him the SD anyway, that is what software is for.
I agree with those who are looking for the humor in this.
I love a good laugh also, but since the market has tanked and FAs by the droves have decided that VAs are the current panacea-of-the-month, we now begin making fun of our clients who have questions about basic financial concepts in their non-annuity portfolios? It wasn't too long ago that we had complete faith in the investment portfolios we were putting together for our clients. Have we since abandoned the concepts we were selling up until the beginning of this down market? And as a result of being asked a question that far too many FAs couldn't answer without doing research, this client is now an ACAT candidate? Very interesting...I agree with myself on this.
[quote=Hank Moody]I agree with myself on this.
[/quote]
Are you absolutely sure about that, Hank? I’d run it by yourself another time just to be safe.
I guess that's why there are all kinds of advisors for all kinds of clients. You are more than welcome to all the clients who ask for the standard deviation of their portfolio. If I spend all my time answering these kind of questions, I have no time left to take care of legitimate client needs. Standard deviation, beta, etc. are all used in constructing client-appropriate portfolios. At the same time, if my car isn't running right, I don't ask the mechanic what the compression ratio is on cylinder number six...I ask him what's wrong with the car. I work with clients that need me...not people who already know how to contruct and manage their investment portfolio.I am with Anabuhabkuss and Iceco1d on this. What is the big deal giving him the SD anyway, that is what software is for.
Excuse my passionate response.
Legitimate client needs?! The f'n SD doesn't exist for no reason, IndyOne. What I'm literally translating from your post is that you are not concerned with the quality of the car you sell the client, only that you get a car to sell them. You're right, some care, some may not. But do not think for one second that people who pop their heads in to ask a question or two about SD or Beta are wasting their, or your, time. "I work with clients that need me..." yeah, you're the only one. Haha, whatever. That's fine. What are you going to tell the guy who has evidence that your portfolio's return garnered him the same return as a portfolio with lower SD or Beta? "Bah I don't have time for this crap, people need me!"?[quote=anabuhabkuss]Excuse my passionate response.
Legitimate client needs?! The f'n SD doesn't exist for no reason, IndyOne. What I'm literally translating from your post is that you are not concerned with the quality of the car you sell the client, only that you get a car to sell them. You're right, some care, some may not. But do not think for one second that people who pop their heads in to ask a question or two about SD or Beta are wasting their, or your, time. "I work with clients that need me..." yeah, you're the only one. Haha, whatever. That's fine. What are you going to tell the guy who has evidence that your portfolio's return garnered him the same return as a portfolio with lower SD or Beta? "Bah I don't have time for this crap, people need me!"?[/quote] You couldn't be more wrong. I care a great deal about the quality of my clients' portfolios and take a considerable amount of care constructing them. Otherwise, I may not have survived this mess and the last one in 2000-2002. Part of what I'm saying is that if a client knows enough to interpret the standard deviation of his/her portfolio, what do they need you or me for? They can get execution on eTrade. On demand, I can produce detailed portfolio performance reports with index benchmarking and asset allocation charts and from my standpoint, that is enough. If a client needs an income projection by month, I can give him a report for that also. It's my job, not the client's, to worry about various metrics for monitoring the client's portfolio return and volatility. If the client can do that for himself, he's not a candidate for my services. It's that simple. There are certain groups of people that I choose not to accept as clients. If those folks are your target market, you're welcome to them. Your passion, much like that of those who jumped on your Madoff remarks, is a sign of youth. Take a few deep breaths...you'll understand what I'm talking about in a few years.Maybe the guy's just curious? I actually DO ask questions to my mechanic. I think it's in the best interest of clients to be informed. Otherwise they end up being clients of Bernie Madoff. If the guy's not challenging you on it, why not just answer his question, and ask him what prompted the question, since most clients never think to ask that?
I think we're all just assuming this guy's some kind of d1ck, that's questioning what we are doing.
"Hey, I read the other day that I should make sure I have X amount of homeowners insurance to make sure I am covered if XYZ happens? Am I covered for that?" Would this sound like a terrible question for a P&C client to ask? Or should I just ASSUME that my insurance broker has me in the PERFECT policy with the PERFECT amount of coverage? There's two side to the coin. Then again, mayeb the guy really is just a d1ck.[quote=anabuhabkuss] What are you going to tell the guy who has evidence that your portfolio’s return garnered him the same return as a portfolio with lower SD or Beta? “Bah I don’t have time for this crap, people need me!”?
[/quote]
You could say, so? Not all standard deviation, or variance, is bad when it comes to your investment returns. Remember the best performing securities must, by definition, deviate significantly from the mean - and therefore have a higher standard deviation.
Not all variance is created equal. Positive variance from the mean is great - it’s only the negative variance that you want to avoid. Standard deviation measures treat both the same, and too many inexperienced financial advisors make the same mistake, but we know better - right?
_________________________
If that doesn’t satisfy them, I’m completely with IndyOne - they are not the type of client I would waste any further time on. Neither of us will be happy. As the old saying goes, “You can lead a horse to water but you can’t make him drink.” I only work with thirsty horses.
That doesn’t mean I think I am better than every other FA out there. It only means I have the right to choose who I want to spend my time working with, just as clients have the right to choose if they wish to work with me.
B24, valid points. I don’t have a problem with curiosity and I don’t mind teaching clients. In fact, I enjoy teaching clients…just not he ones that (1) think they already know more than I do or (2) actually do know more than I do. Either way, they’re not candidates to be clients of mine. I said earlier that I’m sure Snags will get some clarification on what the client actually wanted rather than ignoring the request. If Snags then determins that the request is beyond what he wants to provide, than he’s within his rights to fire the client.
The client could very well be just curious and harmless, but my experience with these kinds of questions has been less than positive...mostly from folks who THINK they know what they are talking about, but in reality are wasting my time and theirs. ...and speaking of wasting time......I've been bad today...have to work late tonight to make up for it...[quote=snaggletooth]Here’s a question a client emailed me today that I’ve never heard before:
"What is the standard deviation of our current portfolio?"[/quote]Here is how I’ve responded to this type of question:<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
“That’s an interesting question. I am happy to give you the answer but I might be able to better answer the true underlying question if you could give me a better idea of where this particular question came from.”
--WM
[quote=anabuhabkuss]Excuse my passionate response.
Legitimate client needs?! The f'n SD doesn't exist for no reason, IndyOne. What I'm literally translating from your post is that you are not concerned with the quality of the car you sell the client, only that you get a car to sell them. You're right, some care, some may not. But do not think for one second that people who pop their heads in to ask a question or two about SD or Beta are wasting their, or your, time. "I work with clients that need me..." yeah, you're the only one. Haha, whatever. That's fine. What are you going to tell the guy who has evidence that your portfolio's return garnered him the same return as a portfolio with lower SD or Beta? "Bah I don't have time for this crap, people need me!"? [/quote]You're flunking out of the business and you want to argue about how to do this business? I've made a lot of dough in the last 9 years and I've never uttered the phrase "standard deviation" to any client/prospect.
[quote=indyone]Your passion, much like that of those who jumped on your Madoff remarks, is a sign of youth.[/quote]
Delusion being passed off as fact, always an impressive feat. Passion, intelligence, age and experience are not mutually exclusive. Take this fellow down here…
[quote=hank moody]You’re flunking out of the business and you want to argue about how to
do this business? I’ve made a lot of dough in the last 9 years and I’ve
never uttered the phrase “standard deviation” to any client/prospect.[/quote]
Argue about how to do wha? Where did I do that? What are you talking about? Last 9 years? What about the 20 years before that? And what does how much money you made have anything to do with the relevance of standard deviation? Are you trying to prove that any high school dropout can get into this business? Maybe your clients are dumb, I dunno. Do you have evidence I’m flunking or, if you’ll permit me to borrow words you used, are you…
Too cowardly to admit that you are dishonest? Seriously, Hank. Worst troll attempt ever.
[quote=anabuhabkuss]
[quote=indyone]Your passion, much like that of those who jumped on your Madoff remarks, is a sign of youth.[/quote]
Delusion being passed off as fact, always an impressive feat. Passion, intelligence, age and experience are not mutually exclusive. Take this fellow down here…
[quote=hank moody]You’re flunking out of the business and you want to argue about how to
do this business? I’ve made a lot of dough in the last 9 years and I’ve
never uttered the phrase “standard deviation” to any client/prospect.[/quote]
Argue about how to do wha? Where did I do that? What are you talking about? Last 9 years? What about the 20 years before that? And what does how much money you made have anything to do with the relevance of standard deviation? Are you trying to prove that any high school dropout can get into this business? Maybe your clients are dumb, I dunno. Do you have evidence I’m flunking or, if you’ll permit me to borrow words you used, are you…
Too cowardly to admit that you are dishonest? Seriously, Hank. Worst troll attempt ever.
[/quote]
I might’ve gotten you confused with another idiot.
have your asst take 5 min to do a morningstar port X-RAY, give him the answer, and then use it as a teaching moment without too much lingo. no big deal.
Agree. Not giving the answer makes it look like there's something to hide, it's probably easier to just spit the number out than try to defend why you say it's not applicable. Wonder why people are losing faith in the advisor model just look at the thread here, the majority of FAs here that refuse to tell a client their SD, instead they'd rather fire the client?!have your asst take 5 min to do a morningstar port X-RAY, give him the answer, and then use it as a teaching moment without too much lingo. no big deal.
I don't understand why all the animosity toward the client. This last year's market has made everyone an expert on what "Wall Street" has done wrong. He may have very well heard someone on CNBC, MSNBC, or Bloomberg say, "You should have a portfolio mix with a SD of no more than x."
Do like newnew recommended. Do an instant X-Ray and get the info the client was asking for. But make sure you do a follow-up on why he was asking that question, "Mr. Client that is not a question I hear very often, what made you think of it?" It will more than likely tell you how to proceed with your client/broker relationship.
And yes, I have had someone ask me that question. But I found it to be a typical question from this particular client, he attended the Wharton School of Business.[quote=exEJIR]
I don't understand why all the animosity toward the client. This last year's market has made everyone an expert on what "Wall Street" has done wrong. He may have very well heard someone on CNBC, MSNBC, or Bloomberg say, "You should have a portfolio mix with a SD of no more than x."
Do like newnew recommended. Do an instant X-Ray and get the info the client was asking for. But make sure you do a follow-up on why he was asking that question, "Mr. Client that is not a question I hear very often, what made you think of it?" It will more than likely tell you how to proceed with your client/broker relationship.
And yes, I have had someone ask me that question. But I found it to be a typical question from this particular client, he attended the Wharton School of Business. [/quote] agree. The funny thing is I don't even think the question is sophisticated, I think a lot of FAs are going to start seeing more of these questions in 2009 and it's not just the Wharton guys that will be asking. My question is, are people here going to answer the simple request or fire the client for asking a question? I think it's humorous the sense of entitlement here, like it or not when someone wants their SD it's something you should be able to easily provide and there's no need to put up a fight about it, like it or not it's part of the FA's job to answer these questions. If I were a client and my FA put up a fuss about giving me that info I would think they have something to hide or that they are not competent. For a senior broker, or someone that has gone indy, it's one thing to act like a d-bag in response to a technical question but for the newcommers trying to build a book I think it's terrible advice to encourage a condescending response to a question about SD. Start answering a question with a question in a down market and you're destined to lose accounts, when people ask a question you should give them an answer.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
If a client asks for a number like SD or Beta of their portfolio you should give it to them. You may have to put it into context for them but that is one of the things they pay us for. As I see it is my job to be on top of my client’s portfolio and I should have those numbers at my finger tips. I should also be able to explain to my clients the strength and weakness lots of different portfolio evaluation techniques. If you do not like SD as a technique fine but that does not mean you should not provide it you the client who ask for it, and more important put it in to context for them.
<span =“Apple-style-span” style=“border-collapse: separate; color: rgb0, 0, 0; font-family: -webkit-monospace; font-size: 13px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-trans: none; white-space: pre-wrap; widows: 2; word-spacing: 0px;”>Those who seem to believe you are obligated to directly answer a question about standard deviation - or any such question - are missing the point.
If a client emails you out of the blue asking such a question (as was the case in which we are discussing), almost certainly the real issue has nothing to do with standard deviation, so simply answering the question is an exercise in futility. You could give them just about any answer and it would likely do nothing to make them feel more comfortable.
That’s because the real issue is that this client suddenly seems to have lost his trust in you. Asking a question about standard deviation is nothing more than a red flag alerting you to the existence of the real issue.
Given this, my experience has shown that simply answering the question will do nothing to address the trust issue. And I’ve also learned from painful experience that if you lose their trust, you’ve lost them - sooner or later. I prefer to press the issue directly and immediately, rather than tip-toe around it or let it fester.
This includes being willing to initiate a change (i.e. firing them) if and when it becomes apparent to me that they no longer seem inclined to trust me and take my counsel. Sometimes the issue can be resolved. Sometimes it can’t. But either way, it should not remain in limbo.
That is why I say the issue has nothing to do with standard deviation. And it certainly has nothing to do with “animosity toward the client” as exEJIR presumes. It is about being in control of what type of client you choose to work with, and being willing to actually be the advisor in that working relationship.
Morph
P.S. Smokescreen, I’m choosing to ignore your silly and uninformed comments about “people losing faith in the advisor model” which tells me you’re once again simply projecting from your bitter and unsuccessful experience in the industry.
What I’m still puzzled about is why you feel compelled to continue offering your opinions here at all. Maybe if you were actually in the business or had ever had any meaningful first hand experience managing clients as an FA (rather than simply functioning as a sales assistant), your opinions about managing clients or what you think might be “part of an FAs job” might be more relevant.
Amen to the red flag underlying issues prompting the inquiry.
I left by choice, if I so choose to go back to it later in life I may do so. I was in the industry long enough to understand the role, sure "junior broker" and "sales assistant" might be interchangeable to some degree in your mind but my role was much closer to that of an FA than you probably think, but feel free to assume anything because it really doesn't matter anyways. Until my licenses are expired I feel pretty comfortable weighing in my opinion, in fact plenty of people here agree with me. I think it's funny you are trying to attack me based on the fact I walked away to essentially turn my hobby into a job, almost anyone in my situation would have done the same thing in a heartbeat and by no means should that make my experiences, observations, and conclusions any less valid. If you have a problem with my opinion on the topic that's fine but to say I am off base simply because I took my career in a different direction that's weak.<SPAN style=“WORD-SPACING: 0px; FONT: 13px -webkit-monospace; TEXT-INDENT: 0px; LETTER-SPACING: normal; BORDER-COLLAPSE: separate; orphans: 2; text-trans: none; widows: 2” =“Apple-style-span”>
P.S. Smokescreen, I’m choosing to ignore your silly and uninformed comments about “people losing faith in the advisor model” which tells me you’re once again simply projecting from your bitter and unsuccessful experience in the industry.
What I’m still puzzled about is why you feel compelled to continue offering your opinions here at all. Maybe if you were actually in the business or had ever had any meaningful first hand experience managing clients as an FA (rather than simply functioning as a sales assistant), your opinions about managing clients or what you think might be “part of an FAs job” might be more relevant.
I think Morphius is right.
There a certain advisors who will take any client(out of need, job fear, can't say no, just pushing another product and forget them, etc...) and they will answer this question directly, because they don't know their client very well.. Morphius is right because when someone asks a question that is out of his realm, he either heard it on tv(probably CNBC, worst station ever) or is losing faith/trust in you to do your job. Crappy advisors have commoditized the market with people just wanting to sell a product to as many people as they can(kind of why I left Jones(not suggesting everyone at jones does it, but my region did)) with no regard for the client. When I take on a client I point out somethings up front. I. I am not a peddler. I am giving you my advice; if you choose not to take my advice. That’s fine it’s your prerogative, but you don't need me or my firm, go open an account at Ameritrade. II. I am the expert I will listen to what you say, however I will make the investment decisions because I am the expert. I have this quote from a mentor of mine:“If you open an account with me only 3 people are going to make a decision, you me or us.
If you are going to make the decisions, you don’t need me or an account with my firm, you can do this on your own.
If I make the decisions that is the way I would like it, I’ll make those decisions and you just follow my advice.
If We’re going to make decisions together, then here is the deal, I will make the suggestions, you retain veto power. But you can only veto for non-investment reasons: If I recommend a fund and you don’t like the color of the brochure, Fine, If I suggest you buy a stock and your brother-in-law works for that company and he is a jerk , Fine. But please don’t argue investments with me”
Sorry that got long, at home sick…
Also for those of you who say, just calculate it, there is a disconnect there because you cannot accurately calculate a SD for all portfolios. Sure for mutual funds,etfs,stocks no problem plug it in Morningstar(is there a more jaded company) and get a read out, but for everything else... good luck[quote=JackBlack] If a client asks for a number like SD or Beta of their portfolio you should give it to them. You may have to put it into context for them but that is one of the things they pay us for. As I see it is my job to be on top of my client’s portfolio and I should have those numbers at my finger tips.
[/quote]
Being “on top of your client’s portfolio” has little to do with StDev or Beta. It has everything to do with matching investments to goals and time frames.
If you try and practice this for all of your clients you will not last long enough to gather enough clients to stay employed.
Incredible Hulk:
I have been doing it that way for over 10 years. You may not be able to do it but I can, my software downloads my portfolio data with just a couply of mouse clicks.[quote=smokescreen agent]
sure "junior broker" and "sales assistant" might be interchangeable to some degree in your mind but my role was much closer to that of an FA than you probably think [/quote]What I think is that being "much closer" to being an FA is still a far cry from "being" an FA. Maybe if you had ever actually been one you would better understand that.
[quote=smokescreen agent] Until my licenses are expired I feel pretty comfortable weighing in my opinion.[/quote]
Another illustration of your lack of understanding. Holding licenses - dormant or otherwise - gives one no basis to offer relevant opinions on a job you have never performed. OTOH, even if your licenses were terminated, your input could be helpful if you had ever had any meaningful experience in managing clients. It's the experience - or lack thereof - that counts.
Now if you wanted to offer opinions on being a SA based on your experience as an SA, your opinions could be helpful. But that is not what you are doing in this thread.
[quote=smokescreen agent]I think it's funny you are trying to attack me based on the fact I walked away to basically turn my hobby into a job, anyone in my situation would have done the same thing and by no means should that make my experiences, observations, and conclusions any less valid.[/quote]
Pointing out that you have zero relevant experience on which to base informed opinions hardly constitutes an attack, and contrary to your assertion a lack of relevant experience certainly does make your 'conclusions' (i.e. guesses) less valid, if not invalid.
[quote=smokescreen agent] If you have a problem with my opinion on the topic that's fine but to say I am off base simply because I took my career in a different direction that's weak.[/quote]
Your decision to leave the industry isn't the issue. It's the fact that you never worked as an FA, have zero experience managing clients, and in addition are not even presently in the industry, yet for some unfathomable reason you still feel compelled to offer your uniformed opinions to - and critique the opinions of - others who are actually doing the thing that you have never done.
[quote=Morphius] [quote=smokescreen agent]
sure "junior broker" and "sales assistant" might be interchangeable to some degree in your mind but my role was much closer to that of an FA than you probably think [/quote]What I think is that being "much closer" to being an FA is still a far cry from "being" an FA. Maybe if you had ever actually been one you would better understand that.
[quote=smokescreen agent] Until my licenses are expired I feel pretty comfortable weighing in my opinion.[/quote]
Another illustration of your lack of understanding. Holding licenses - dormant or otherwise - gives one no basis to offer relevant opinions on a job you have never performed. OTOH, even if your licenses were terminated, your input could be helpful if you had ever had any meaningful experience in managing clients. It's the experience - or lack thereof - that counts.
Now if you wanted to offer opinions on being a SA based on your experience as an SA, your opinions could be helpful. But that is not what you are doing in this thread.
[quote=smokescreen agent]I think it's funny you are trying to attack me based on the fact I walked away to basically turn my hobby into a job, anyone in my situation would have done the same thing and by no means should that make my experiences, observations, and conclusions any less valid.[/quote]
Pointing out that you have zero relevant experience on which to base informed opinions hardly constitutes an attack, and contrary to your assertion a lack of relevant experience certainly does make your 'conclusions' (i.e. guesses) less valid, if not invalid.
[quote=smokescreen agent] If you have a problem with my opinion on the topic that's fine but to say I am off base simply because I took my career in a different direction that's weak.[/quote]
Your decision to leave the industry isn't the issue. It's the fact that you never worked as an FA, have zero experience managing clients, and in addition are not even presently in the industry, yet for some unfathomable reason you still feel compelled to offer your uniformed opinions to - and critique the opinions of - others who are actually doing the thing that you have never done.
[/quote] Wow, don't spend too much time on this man... Bottom line is I have had clients assigned to me and i have seen similar questions asked. I know as well as you do that when a client asks about SD it is usually a sign they are compairing it to someone elses proposal, my point is that there's no sense in dancing around, if the client wants to know the value then it's part of the job to provide it best you can and then confront the reasons why, not start asking why they want it and only providing it if they have a large enough account or firing them otherwise. Be ready to explain the meaning of the number and be ready to possibly fight for the account but the going advice here was to not give the answer. It's just completely untrue when you say I never managed clients, or when you assume because my exact title was not the exact same as yours that I never handled these issues on my own, where are you getting your info? You have no idea what I have or have not done you're just assuming.
Did you really just say “clients assigned to you”?? oops there goes your credibility
Did you really just say “clients assigned to you”?? oops there goes your credibility
[quote=Squash1]Sorry that got long, at home sick…
Also for those of you who say, just calculate it, there is a disconnect there because you cannot accurately calculate a SD for all portfolios. Sure for mutual funds,etfs,stocks no problem plug it in Morningstar(is there a more jaded company) and get a read out, but for everything else... good luck[/quote] How about the return data and a calculalor?How about try to build assets and protect peoples portfolios, not work for morningstar… How long would it take you to run a standard deviation on 150 portfolios?
[quote=JackBlack]
Incredible Hulk:
I have been doing it that way for over 10 years. You may not be able to do it but I can, my software downloads my portfolio data with just a couply of mouse clicks.[/quote]
How many StDev’s from the mean are you over the last 12 months? Does it comfort your clients to know that? Can 90% of them even comprehend it? Did it help any of them retire last year? It’s all statistics and you know what they say, there are lies, damn lies and statistics.
10 years? Really? I’ve been out 73 years and have eleventy kabillion under management with a StDev of 9.3 and a Beta of .85.
Out.
Clients assigned to you?!
How presumptuous of me to question your total lack of experience!! What was I thinking?! I hadn’t fully realized that your boss had “assigned” a client to you to have for your very own!! To play real live FA with?! How totally exciting!! What outfit did you wear that day?! Was it just the coolest day ever?! OMG!!!
OK enough of the Bullsh*t!
This question most likely came from the client because some other broker called him and said "Do you know what the standard deviation of your portfolio is? If not how do you know if you are taking on too much risk. With the volatility of this market you should really know how you are invested, why don't you come in and we can review you portfolio" Should you tell the client? Absofrickenlutely! Why not? Bring him in for an appointment, run the morningstar (quick way to get std dev, I'm looking at one right now, std dev is 9.89) show him what it is and then tell him how it relates to and what effect it has on his portfolio. Then go back ask him if he remembers why you structured his portfolio this way in the beginning. This is not Rocket Surgery Time to go watch the National Championship game. Go Sooners!Again you can only use morningstar for funds, stocks and etfs…let’s assume he has bonds, private reits, uits, and the many other securities that can’t go into a morningstar report.
Sooners!(Only because I hate Florida)The real comedy here is that your self righteous ass thinks whether or not you cold called or had a rich uncle with an account changes the fact we are talking about a client service issue here. I’m not telling anyone how to prospect or what family parties to attend. The discussion of how to handle the client question has very little to do with whether I was all commission or not. You're a sales guy, do you not think the sales cycle is ongoing? Or do you think the first handshake locks them in for life? You tell me, was my compensation tied to performance or not? I love how you wear this shit like a badge man and in your small brain it makes you feel substantial, kudos to you when a client asks a simple question and you are either too dumb or cocky to answer it, yeah apparently anyone that works in the industry and is not titled "FA" knows nothing about how to handle sales and client servicing, you're fucking lost as you have no idea what my former role was and what my responsibilities were. Clearly you're just looking to discredit my opinion any way you can because my statement "the public is losing faith in the advisor model" is a threat to you, obviously you have some insecurity to focus on me so much here. Get off the boards and go sell more, that’s all you know how to do and every time you post towards me it exposes your lack of confidence more, just move on.Clients assigned to you?!
How presumptuous of me to question your total lack of experience!! What was I thinking?! I hadn’t fully realized that your boss had “assigned” a client to you to have for your very own!! To play real live FA with?! How totally exciting!! What outfit did you wear that day?! Was it just the coolest day ever?! OMG!!!
[quote=smokescreen agent]The real comedy here is that your self ritious ass thinks whether or not you cold called or had a rich uncle with an account changes the fact we are talking about a client service issue here. I’m not telling anyone how to prospect or what family parties to attend. The discussion of how to handle the question has very little to do with whether I was all commission or not. I love how you wear this shit like a badge man, kudos to you when a client asks a simple question and you are either too dumb or cocky to answer it. Get off the boards and go sell more, that’s all you know how to do.[/quote]
You’re a real piece of work, aren’t you lad? Are you really just a teenager pretending to be a former secretary pretending to be a former almost FA? Or are you really, honestly just a former secretary pretending to be a former almost FA?
Now out of the blue you suddenly start rambling incoherently about “rich uncles” and “family parties” and “all commission” or not, since you can’t face the basic issue that you persist in pretending to be something you never were: an FA with real clients. And you think I’m the one who is, ahem, … self “ritious”?
Dude, here’s some friendly advice: when you find yourself in a hole … STOP DIGGING!! Here there be monsters!!
Smokescreen,
You can go back and erase all your old posts from months ago describing your impressive career as a secretary all you want, it won’t change the facts. Every time you open your mouth you just dig yourself a deeper hole. Besides, try as you might you can’t erase your comments that have been quoted by others … so who are you kidding? I mean, other than yourself. Again.
You can choose to stop, or you can persist in your make believe fantasy world. Your call.
Let's just be friends and talk about standard deviation The fact you're digging through my posts seems a little crazy, no? Truth be told I deleted them because I know you will try to paint me as a negative guy or a burden to the community. I have nothing to hide about my career details, I just didn't want to make it easy for you to say "look at this grouchy bastard, he always argues!" I will admit my posts are generally negative but I noticed on some of my old threads you were a jerk. You should be nicer to strangers, you never know maybe someday I will be your client!Smokescreen,
You can go back and erase all your old posts from months ago describing your impressive career as a secretary all you want, it won’t change the facts. Every time you open your mouth you just dig yourself a deeper hole. You can choose to stop, or you can persist in your make believe fantasy world. Your call.
[quote=smokescreen agent]
Let’s just be friends and talk about standard deviation The fact you're digging through my posts seems a little crazy, no? You should be nicer to strangers, you never know maybe someday I will be your client![/quote]Most intelligent post I've seen from you yet.
Just don't hold your breath for ever becoming my client one day. Remember, I'm apt to fire people just for asking about standard deviation! What are the chances I would put up with your act long enough for you to become a client?
But if you stop digging, there won't be any dirt to fall back onto you.
I wish I could have said this as well sooner. That's pretty much my point. If a customer is yanking my chain and jerking me around, I'm not obligated to maintain the relationship and I choose not to. I have never been asked about standard deviation in my years in the business, but the few instances where I have been asked similar questions, every time, it spelled trouble...usually in the form of a competing advisor feeding my client their lines. A couple of times, I fired the client in question when it became apparent that we weren't going to be able to have a satisfactory relationship. I struggled on with a few of them, but dumped all my "problem" clients when I went independent, since it became obvious to me that I'd need to be more efficient with my time since I would be responsible for running my business in addition to producing. A client who doesn't respect my time is not someone I'm interested in maintaining. As someone mentioned earlier, you may choose to accept some potentially problematic clients early in your career when you are struggling to make it. I made that mistake myself. Perhaps it's not a mistake if these clients are the difference between your failure and your success, but you may well find yourself looking for a graceful exit once you are established and no longer need these types to be successful. Some of you may also have Wharton-educated clients who discuss alpha and beta in the same manner that most people discuss golf scores. That's not my target market. If it's yours, I'm happy for you. It's not mine, so you can save your disdain for the way I run my business. My clients are well satisfied with my service and efforts on their behalf and none of them have expressed any interest in knowing what the standard deviation of their portfolio is. If you make it long enough in this business, you'll learn that there are plenty of legal, acceptable and ethical ways to run a practice besides your own preferred method. I choose a different road and it's working fine for me and my clients, despite some of the concerns expressed here.<SPAN style=“WORD-SPACING: 0px; FONT: 13px -webkit-monospace; TEXT-INDENT: 0px; LETTER-SPACING: normal; BORDER-COLLAPSE: separate; orphans: 2; text-trans: none; widows: 2” =“Apple-style-span”>Those who seem to believe you are obligated to directly answer a question about standard deviation - or any such question - are missing the point.
If a client emails you out of the blue asking such a question (as was the case in which we are discussing), almost certainly the real issue has nothing to do with standard deviation, so simply answering the question is an exercise in futility. You could give them just about any answer and it would likely do nothing to make them feel more comfortable.
That’s because the real issue is that this client suddenly seems to have lost his trust in you. Asking a question about standard deviation is nothing more than a red flag alerting you to the existence of the real issue.
Given this, my experience has shown that simply answering the question will do nothing to address the trust issue. And I’ve also learned from painful experience that if you lose their trust, you’ve lost them - sooner or later. I prefer to press the issue directly and immediately, rather than tip-toe around it or let it fester.
This includes being willing to initiate a change (i.e. firing them) if and when it becomes apparent to me that they no longer seem inclined to trust me and take my counsel. Sometimes the issue can be resolved. Sometimes it can’t. But either way, it should not remain in limbo.
That is why I say the issue has nothing to do with standard deviation. And it certainly has nothing to do with “animosity toward the client” as exEJIR presumes. It is about being in control of what type of client you choose to work with, and being willing to actually be the advisor in that working relationship.
Morph
P.S. Smokescreen, I’m choosing to ignore your silly and uninformed comments about “people losing faith in the advisor model” which tells me you’re once again simply projecting from your bitter and unsuccessful experience in the industry.
What I’m still puzzled about is why you feel compelled to continue offering your opinions here at all. Maybe if you were actually in the business or had ever had any meaningful first hand experience managing clients as an FA (rather than simply functioning as a sales assistant), your opinions about managing clients or what you think might be “part of an FAs job” might be more relevant.
I’m not going to argue the fact that a client asking about SD throws up a red flag. I believe you have your head in the sand if you think any differently. That’s why I said you need to follow-up with the question of “what made you ask?” IMO Joe Public has lost confidience in their advisors, because too many advisors are telling their clients to “Just hang in there.” By no means am I including everyone on this board (so don’t jump down my throat), but answer me this question… When you are talking to a prospect, what are they saying their current advisor has told them or done for them in the last 12 months?
Wow, turned out to be an awesome thread!
FWIW, the client is a very small client that I only took on for the possibility of referrals. Yes, the 10 minutes it took to run Morningstar reports was a complete waste of my time, but I did it. The guy has an engineer's mind and is just curious. He actually enjoys reading finance books. You guys on here are funny.Source URL:https://www.wealthmanagement.com/forums/general/new-question