1. Competing Against Luck: The Story of Innovation and Customer Choice
Clayton M. Christensen, Taddy Hall, Karen Dillon and David S. Duncan
The key insight of this book is that businesses succeed when they have an accurate picture of what job customers hire them to perform. As businesses get successful, they lose sight that clients hire them for a particular job, and default to offering cookie-cutter solutions. What is the job your clients hire you to do? The fact is it’s difficult for an advisor to pinpoint what job they are hired to do because clients often cannot articulate the requirements. It may appear that clients want advisors to offer investment help. But it’s likely closer to the truth that the real job of advisors is to help clients achieve a better life. Relentless focus on the “Theory of Jobs to Be Done” forces advisors to focus on what matters to the client: the often mundane but critical job that clients actually hire them to do. The result is innovation and, hopefully, the customer choosing you.
2. Never Split the Difference: Negotiating as if Your Life Depended on It
Chris Voss and Tahl Raz
If you think your main job when talking to potential clients is to getting them to “yes,” this book may open your eyes. Don’t be a hostage to “yes,” says Chris Voss, a former FBI hostage negotiator. The route to “yes” may be paved with a well-placed “no.” Think about this: When prospects say “no,” they have a tendency to relax. They tend to be less defensive and more open to questions. For example, a question like, “Do you want to fail in your investment strategy?” The answer to this question is clearly “no.” And now the ground is firmed up for a conversation on the strategy necessary for success. A counterfeit “yes,” where the prospect agrees to something just to end an unpleasant interaction, does no one any good. Voss fills the book with high-stakes negotiations with kidnappers, but his point is that the lessons the FBI learned can be applied to all manner of situations.
3. Buying, Selling & Valuing Financial Practices
Buying and selling an advisory practice has dozens of opportunities for leaving money on the table. This book, by one of the leading consultants on the topic, is targeted for anyone contemplating buying or selling an advisory practice. Grau focuses on two objectives. For sellers, the book lays out a strategy to deliver maximum value with the most favorable tax implications. For buyers, it’s a detailed road map to making an acquisition on the best terms and then progressively writing off the purchase price. This book is all about getting to “yes” on terms satisfactory to both parties. Grau is a former industry regulator who’s arguably the leading expert on financial services succession planning and business perpetuation strategies. This book is based on more than 8,000 practices Grau’s firm has valued in the last 20 years. To keep the book current, it includes a password-protected website with valuable resources.
4. The Man Who Knew: The Life and Times of Alan Greenspan
This biography of Alan Greenspan centers on a central question: Why did Greenspan, despite expressing concern about the housing market before his retirement, not take meaningful action to prevent the worst recession since the Great Depression? The author, a fellow at the Council on Foreign Relations and a columnist at The Economist, dismisses that Greenspan resisted regulation of markets. Instead, Mallaby suggests Greenspan became “imprisoned by his reputation.” He came to believe his own myth and crossed the line from being “maestro” of the economy to being its main steward. Based on past crises, Greenspan believed it was better for the Fed to clean up after the occasional burst bubble than to disrupt well-regulated markets. In the end, Greenspan bought into illusion that human leaders have the wisdom to discipline a stable economy over many years without incurring "complacency among citizens and hubris among the leaders."
5. The Curse of Cash
Kenneth S. Rogoff
Kenneth S. Rogoff
There are lots of reasons this one-time chief economist at the IMF thinks cash is a curse. Cash is implicated in tax evasion, money laundering and all manner of lamentable activity. But that’s not the author’s main beef. Rogoff believes cash thwarts an important tool of the Fed: to impose negative inflation-adjusted interest rates. Think of it this way: Cash is really a zero-interest bearer bond. If rates go negative, people will hoard cash. Rogoff proposes a “less cash” society, advocating the U.S. eliminate $100 and $50 bills and mint $5 and $10 coins. His aim is to make large cash transactions too cumbersome for the bad guys to handle. The book looks at economies such as Sweden, which is on schedule to go virtually cashless by 2030. Rogoff admits the U.S. won’t go easily to a less cash society for two reasons: the need for privacy that Americans cherish, and the need to pay undocumented workers below-market rates.
6. Warren Buffett’s Ground Rules: Words of Wisdom from the Partnership Letters of the World's Greatest Investor
Jeremy C. Miller
Most advisors consider Warren Buffett’s annual letters to Berkshire Hathaway investors mandatory reading. But before he wrote those, from 1956 through 1970, Buffett managed a series of investment partnerships. Periodically he wrote letters to his partners explaining his values and strategy. These are the subject of Miller’s book. Readers will recognize Buffett’s direct style, as in this from July 1966: “I am not in the business of predicting general stock market or business fluctuations. If you think I can do this, or think it is essential to an investment program, you should not be in the partnership.” Most of these letters are available free online, so why shell out for this collection? Because Miller’s book provides important context, anticipates principles that inform the success of Berkshire Hathaway, and draws some critical lessons for today’s investors. Buffett permitted use of his letters but otherwise didn’t participate in the book.
7. The FINTECH Book: The Financial Technology Handbook for Investors, Entrepreneurs and Visionaries
Susanne Chishti and Janos Barberis
Financial technology is disrupting every corner of finance. Just ask any underemployed financial advisor done in by robo algorithms. The authors crowdsourced the creation of The FINTECH Book, soliciting articles from pioneering visionaries and social network innovators. Every contributor shows how fintech is displacing legacy brokerages, advisory services and asset managers while reducing costs and risk to clients. The FINTECH Book is the first crowdsourced book on the subject, making it invaluable for anybody interested in this space. These disruptions already have names: robo advisors, crowdfunding, peer-to-peer lending, crowdsourced alpha, crypto currencies and blockchains. This softcover book serves as a good introduction to all things fintech and the experts who will shape the global playing field to build more efficient, transparent and coordinated financial services to the benefit of clients and society.
8. The Game of Loans: The Rhetoric and Reality of Student Debt
Beth Akers and Matthew M. Chingos
Princeton University Press
Student debt gets a bad rap and for good reasons. College funding is a key requirement of many clients, and advisors often help clients save for college costs. Even for wealthy families, student debt remains part of this equation, and advisors perform best when informed and liberated from misconceptions. This book presents the issue on a level playing field. Yes, Americans owe over $1 trillion in student debt, but two-thirds of all borrowers owe less than $25,000. The highest student loan default rate (34 percent) is not among borrowers with large debts, but among those owing less than $5,000. Another troubling fact: Only a quarter of college freshmen can state their student loan amount within 10 percent. Higher education is essential to our nation’s future. The question is how do we pay for it? Borrowing is a viable path and this book helps advisors serve as a guide to clients navigating the shifting terrain of student debt.
9. The New Profession
The New Profession is a clumsy title for this free book. A better title would be The Old Profession: Why It Never Really Worked, and a Hundred Ways to Make It Indispensable. It’s an idiosyncratic but stirring look at the financial industry by an insider who still thinks values and ethics are consistent with a rewarding career. Veres, publisher of the Inside Information guide to trends and innovations in the industry, challenges almost every assumption of the industry, from marketing to characterizing prospects as “high net worth” (even people with eight-figure net worths don’t think of themselves as wealthy). The New Profession presents well-considered personal productivity and success tips gathered from the author’s three decades of experience. Check out Chapter 5, which lays out what advisories will look like in 10 years. The book is well recommended for those considering the financial services industry as a career.
10. B.S. Incorporated
Jennifer Rock and Michael Voss
Wise Ink Creative Publishing
This is a satire of an American corporation that at one time made something tangible, but has succumbed to financialization and fantasy. BSI prospered making copier machines and supplies. But the margins were not good enough for the corner office suits, who decide to shift the focus from making things to pimping an abstraction called “Optelligence.” As far as I can tell, the only thing Optelligence manufactures is corporate jargon of the most odious (and hilarious) nature. Along the way, the characters are reduced by every function of the enterprise from HR to corporate communications to nefarious consultants. The book, in short, offers a colonoscopy of the contemporary corporate world. This is a funny novel written by two survivors of the world they are lampooning. Think The Office meets The Bonfire of the Vanities. The authors crowdfunded the book on Indiegogo, raising $7,945 from 183 backers.