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Jan 4, 2011 6:15 pm

The average investor is seeking exceptional returns, through securities or real estate.

Average advisor is seeking average returns.

Permanent life insurance internal rate of return is either exceptional (high) or very low (not negative if properly structured).

Where an insurance need exists, it is rational to seek exceptional returns (even where the probability is low) combined with guarantees (for dependent survivors or legacy planning, high probability low internal rate of return) and to seek (high probability) average returns in the investment portfolio.

The correct strategy is goal-driven. The problem is devising a flexible strategy, because client goals change and options narrow over time.

Jan 5, 2011 5:44 pm

Marketing to women's market segment in 2011:

Jan 5, 2011 5:48 pm

Is this going to become your "thought of the day, week, hour" thread?  Or is the goal to get the rest of us to play along too?  You didn't ask any questions or solicit any responses, so I'm not sure what point you're trying to make. 

Jan 5, 2011 6:22 pm

My client is not seeking high returns. They want income, and would like to see their assets grow modestly, keep up with inflation. My clients are generally retired, really retired, or surprisingly old. They are mnw to hnw. Most of them feel middle class, but are worth more than that. Fortunately for me, they are battle hardened veterans of the last 10 yrs, and it takes a huge amount of volatility to get them worked up. Some of my investors have even experienced the 73/74 market, or at least it had an impact on their business/lives.

For a new rep, I highly recommend when profiling, to discuss historical events in the market, past experience, and try to get a feeling for how the client reacted to those times, and what they learned from it. That kind of thing can really help avoid complaints, and improve your ability to create a proper asset allocation program for the client that will not violate their volatility comfort zone.

Just because  a rep hasn't been in biz for very long, doesn't mean that they can't learn about the past. Study the past, read books, look at charts, talk to old reps, talk to old clients. Learn, learn, learn, so you can add value. Watch the movie Rebel Without A Cause, from the early 50s. There is a huge financial lesson in that movie, and if you look for it, would hit you like a ten ton heavy thing. At the peak of the r/e boom, I discussed that with clients (who have all watched the film), so they'd realize the absurdity of McMansions...

Jan 5, 2011 7:11 pm

Awesome, thanks for reminding me about that JD movie.

I don't think anyone has ever really proved that you could beat some passive form of 60/40 allocation (60 stocks), so it's always about, how much downward volatility can you really handle. Maybe a retired person needs to buy and hold 25% diversified stocks, or range between 20 and 30 percent stocks, to keep up with inflation, if you they can handle the ride. Boring but effective stratetgy.

But for those of us who were in business in the late 90's, you know the history of greed is bound to repeat itself.

That will be interesting.

Spiff - yes.

It's my thread an' I'll do wha I want. I'm bored of reading about leads and braggers who think they're better - I'd rather think out loud or alone and be challenged or validated on what I'm interested in than explain that you have to suck it up and stick it out for the five hundreth time.

Jan 5, 2011 7:33 pm

Times, I think the best way to asset allocate, is to try to toss out anything that appears to be a bubble. Take a decent asset allocation fund back in early 2000, remove all tech and telcom. The performance would have been MUCH better. Same in 07, if you could remove financials.

This is what I try to do to add value. In the past I was right about tech and financials. I was not there for energy or precious metals on the way up. I got in a bit late with metals, last may. But, I got lucky and benefited from the big move of slv. Hopefully I know when to get out. I'm inclined to get out early.

Times, yes, boy, in the late 90s people were clearly insane with greed, could not be reasoned with. Just like the last big downturn, you couldn't pry even a few thousand away from their bank acct to do some buying during the winter/spring of 08/09. Makes it tough to beat the market when you have no control over their fear and greed. Most clients bring you the big fat check, when they "feel good about investing". Nothing seems to dictate performance more, than when that client brought you the money.

Jan 5, 2011 9:58 pm

Yeah, this whole biz is just filled with paradox and there is no killer app.

The best thing I can do is try to become a more humbled servant.

Damn I wish it was sunny and sixty eight degrees.

Possible client has me looking at a pile of stock certificates that dates back to the eighties. Could be worth a fortune, or not - almost impossible to research with the splits - they are just going to have to deposit these in a brokerage account and we'll see what we've got.

Jan 6, 2011 5:42 pm

On the topic of out-of-box client aquisition and financial advice delivery for women, here's a great article:

The education and work involved in personal financial management might be made more appealing to women if done in a group or community, organized and facilitated by the financial planner. Women clients, prospects, and friends could be invited into a circle setting to discuss any variety of subjects, such as their childhood money messages, surviving divorce, the death of a partner or spouse, or raising financially responsible children. The planner’s role would be to create the safe and convenient space for this discussion, and to provide occasional advice or guidance on technical or factual matters. The community could even be continued through online “threads” or networking. Most of the work would be done, however, by the women themselves, discovering the collective wisdom of the group on subjects that matter to them. The absence of any hierarchy among the participants can be empowering to women, many of whom are intimidated by the traditional “on high” delivery of financial advice. By building relationships among women, the financial planner thereby strengthens his or her relationship with clients or prospects. It can be a way of branding his or her commitment to the needs and wants of women.

... Building a women-friendly practice does not require financial planners to throw out the rulebook and start all over again. The six-step planning process still provides the best foundation for comprehensive financial planning and competent delivery of advice. The major subject matters of planning remain the same. The role of the planner as an experienced, educated, and ethical leader is still the ideal.
What’s different in the case of women is that all-important moment of entry to the financial planning engagement. Does she feel empowered, accepted, and comfortable? More importantly, does she feel safe? There is a huge demographic of women out there with assets, incomes, careers, and big financial decisions to make. As a profession, we have the financial answers and strategies for these women. We just need to open our advisory doors a bit wider to get these women “in the room.”


Mar 20, 2019 5:03 am

Saving is a great habit but without investing and tracking, it just sleeps.

The struggle for Financial Freedom is very unfair. Just look at the rewards.

We provide our clients with services they can count on. Our financial advisors can help you achieve financial independence.
Jul 7, 2023 3:04 am

Financial planning is a crucial process that involves setting goals, creating strategies, and making informed decisions to achieve desired financial outcomes. Here are some key thoughts to consider when it comes to financial planning:

Goal Setting: Clearly define your financial goals, both short-term and long-term. This may include objectives like saving for a down payment on a home, funding education, building an emergency fund, retiring comfortably, or starting a business. Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals can provide a clear roadmap for your financial planning. Budgeting and Expense Management: Develop a budget that aligns with your goals and income. Track your expenses, distinguish between needs and wants, and allocate funds accordingly. A budget helps you live within your means, control spending, and ensure you have money available for savings and investments. Saving and Investing: Establish a savings plan that includes both short-term and long-term savings goals. Regularly set aside a portion of your income for emergencies, future expenses, and investments. Consider various investment options based on your risk tolerance, time horizon, and financial goals. Diversify your investments to spread risk and seek professional advice if needed. Debt Management: Take a proactive approach to managing debt. Minimize high-interest debt and develop strategies to pay off outstanding loans efficiently. Prioritize debt with the highest interest rates first. Explore options for consolidating debt or refinancing to potentially reduce interest costs. Risk Management and Insurance: Assess your insurance needs to protect yourself, your family, and your assets. This may include health insurance, life insurance, disability insurance, and property insurance. Regularly review your coverage to ensure it remains adequate as circumstances change. Retirement Planning: Start planning for retirement early. Estimate your retirement needs based on your desired lifestyle and projected expenses. Contribute regularly to retirement accounts such as 401(k)s, IRAs, or pension plans. Take advantage of employer matching contributions and consider consulting with a financial advisor to develop a personalized retirement plan. Estate Planning: Develop an estate plan that outlines how your assets will be managed and distributed in the event of your passing. Consider creating a will, establishing trusts, designating beneficiaries, and assigning powers of attorney. Periodically review and update your estate plan to reflect changes in your circumstances and ensure your wishes are accurately represented. Regular Evaluation and Adjustments: Financial planning is an ongoing process. Regularly evaluate your progress, reassess goals, and make adjustments as necessary. Changes in personal circumstances, market conditions, and financial goals may require modifications to your financial plan.

Remember that financial planning is a personal and dynamic process. It requires continuous learning, adaptability, and discipline. Seeking professional guidance from financial advisors or planners can provide valuable expertise and help you optimize your financial planning strategies.

Aug 8, 2023 12:48 pm

Financial planning involves establishing financial targets, developing a plan to reach them, and making informed decisions on managing funds, investments, or other resources.

The main concepts and considerations in the area of personal financial advisory services are given below:

Setting of Goals: Determine how to meet the shorter, medium, and longer-term financial targets. Savings for emergencies, home purchases, financing education, retirement planning, or being financially independent were also part of this.

Budgeting: To understand your income, expenditures, and savings, draw up a detailed budget. The budget structure helps you find areas to save more and avoid unnecessary spending.

Emergency Funds: The establishment of an emergency fund is essential. To cope with unexpected financial difficulties, save up to three or four months of living expenses in a readily available account.

Debt management: Prioritize paying high-interest debts as soon as possible. More savings and investments can be freed up through debt management and reduction.
Feb 10, 2024 1:21 pm

Financial management is all about handling money wisely. It’s important because it helps you make good decisions about how to use your money. Whether it’s budgeting, saving, or investing, financial management guides you to make the most of your finances. It ensures you’re prepared for unexpected expenses, helps you reach your goals, and gives you peace of mind about your financial future. One blog from the professional Intelligence academy, that blog about financial management helped me to understand all the basics of money-saving.

Money management classes are really important these days. It’s best to learn about handling money as early as possible. Lately, I’ve been taking a financial management course, but I believe kids should start learning about saving-money early on to prevent problems later. I read a blog that talked about why it’s crucial to teach children about managing money. In my view, nobody knows how to save money from the start, so everyone can benefit from classes or advice. That’s why I think money management courses are essential for getting good at handling finances.