Sunday, November 30, 2008

Investing in strangers' human capital

Family wealth advisors say you should invest in your family's human capital. But what about investing in the human capital of strangers?

The "human capital contract" is coming to the U.S., according to "Betting on Bob" in today's Boston Globe. How does it work? Writer Rebecca Tuhus-Dubrow explained that "...investors agree to cover the costs of college or graduate school in return for a percentage of the students' future earnings over a fixed period of time."

A U.S. company called My Rich Uncle tried, and then abandoned this approach, wrote Tuhus-Dubrow. Human capital contracts have been used outside the U.S. by Lumni, which is starting to apply it here, and Career Concepts of Germany.

According to "Popping the Tuition Bubble," an article published on the American Enterprise Institute's website by Frederick Hess and Kevin Carey, "...the smart money would go hunting for bigger returns at less expensive colleges that add great value. After all, other things equal, an investor fares much better by lending a student $48,000 over four years and collecting 4 percent of his or her future earnings than by lending that student $180,000 and collecting the same 4 percent."

Human capital contracts could help students in this economic crunch. But do they make sense as an investment? What do you think? Please leave a comment.


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Tuesday, November 25, 2008

Build your team--and your client base--with book clubs

You can train your staff using a book club, suggests Kirk Hulett of Securities America Inc. in "Move Over Oprah," published in Practice Management Solutions (Nov./Dec. 2008).

Hulett got me thinking. How about running a financial book club for your clients or prospects? It could deepen your relationship with them as you learn more about what makes them tick.


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Saturday, November 22, 2008

Vanguard is using LinkedIn

John Ameriks of The Vanguard Group has posted a question on LinkedIn that's running under a Vanguard banner.

Plenty of financial professionals post questions on LinkedIn, but this is the first time I've seen one running under an advertisement. Click on the banner, and you go to the Vanguard home page.

Will we see more mutual fund company advertising like this?

Have you seen other examples of fund companies trying to leverage social networking?

How effective are efforts like this?


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Another great way to annoy a reporter

I agree with Ed McCarthy about "Seven Ways to Annoy a Reporter," a sidebar to his "Sharpening Your Media Skills" in the November issue of the Journal of Financial Planning.

Let me add another: Publish on your blog that "I'm talking with Reporter X about Topic Y for the next issue of Magazine Z." 

Reporters--and their editors--don't like to be scooped by anybody. It's nice that you're excited by your interview. But spreading the word about the story before it's published is likely to get you banned from that magazine.

Save your enthusiasm until after the article is published. You will win points for blogging about it then.


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Friday, November 21, 2008

Should you say "No" to "Please"?

People feel passionately about "please."

"Common sense might tell you that adding 'please' or 'thank you' to an email will always make it more polite. Common sense would be wrong." That's according to David Shipley and Will Schwalbe in Send: Why People Email So Badly and How to Do It Better.

I decided to ask the participants in my workshop on "How to Write Effective Business Emails and Letters" if they think "please" should be optional. "No way!" was their response. 

I agree that it's good to leave "please" in your vocabulary. I'm puzzled by Shipley and Schwalbe's assertion that it's "almost impossible to use in writing without coming across as obnoxious."

Do you use "please" in emails? Please leave a comment below.



_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

"Email Subject Lines: 15 Rules to Write Them Right"

"Email Subject Lines: 15 Rules to Write Them Right" on the LyrisHQ blog offers some tips that can help even with your routine client communications.

For starters, remember that "Fifty characters could be all that stands between you and success in your next email campaign." 

Why? Because our reader will probably see only 50 characters--that's about eight words--of your subject line before deciding whether to read your email or delete it.

Here are four particularly useful rules from the LyrisHQ blog post. 

Rule 1. Read the newspaper.

Modeling your subject lines on newspaper headlines is another good suggestion. Newspaper headlines get to the point fast. They're also good at pushing readers' hot buttons.

Rule 5: List key info first.
If you're making a request, use an action verb. For example, if you're asking a client to send you something, start your subject line with "Please send."

Rule 7: Personalize.
If I really want to get a response from Jane, I might start my subject line, "Jane, can you...." That way she knows my email is directed specifically to her. 

Rule 15. Can you pass the must-open/must-read test? 
People's email in-boxes are jammed. You've got to give them a compelling reason to open your email.

You may find the other 11 rules of interest if you're sending an email newsletter or selling something using email.


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Tuesday, November 18, 2008

"Jeremy Siegel on why Equities are 'Dirt Cheap' ”

"I may be the lone optimist in this market," said Prof. Jeremy Siegel in a Q&A published in Advisor Perspectives

He was responding to a question about his Oct. 31 Yahoo finance column, in which he said, "I would be very surprised that if an investor who bought a diversified portfolio today did not make at least 20% or more on his investment in the next twelve months."

Are there any other optimists out there?


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

I like this financial crisis question

"Can you think of ways that something good in your life can result from the financial meltdown?" 

I like this question, which concludes "Rising from the Financial Ruins" on the HBR Editors' Blog. It's probably easiest to answer if you've got a financial cushion, or at least a steady job.


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

"Is Face-to-Face Communication Always the Way to Go?"

Should you email your male clients and meet with your female clients?

Men may respond better to emails than to in-person communications, according to a study cited by Guy Kawasaki in "Is Face-to-Face Communication Always the Way to Go?" The same study says women respond better in person.

I don't like generalizing by gender. In either case, I think a personalized email will work better than a mass email.

What do you think?


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Monday, November 17, 2008

Can financial advisors write blogs and be in compliance?

An Investment Writing blog reader recently asked, "I was told that licensed financial advisors are not allowed to write blogs as far as compliance is concerned. Is this true?"

It's not true. But there are constraints.

For more details on the regulatory constraints, read "Finra, SEC rules constrain advisers in blogosphere" by Davis Janowski in Investment News.

You can find links to blogs by some financial advisors in the related posts listed below. 

Related posts:



_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Sunday, November 16, 2008

Your clients' stock options are down 76% overall

"For those executives whose company holdings were largely in stock options, rather than stock, the decline in wealth has been huge.... Over all, the options have lost 76 percent of their value."

That's according to New York Times columnist Floyd Norris, who wrote in "Be Glad You're Not Warren Buffett" about a report by Stephen Hall & Partners, an executive compensation consulting firm. By the way, Buffett's paper losses amount to more than $15 billion--or nearly one-third of the $52.3 billion in losses through Oct. 27.

I looked on the Stephen Hall & Partners website to see if their report is available to the public. I couldn't find any mention of it.

Are your clients talking to you about their stock options? If not, maybe it's time to bring up this topic.


_________________
Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved

Print newsletter vs. e-newsletter

Trying to decide between a print newsletter and a newsletter delivered by e-mail? Here are some of the pros and cons.


Print newsletter--Pro
  • Portable
  • More control over look and feel
  • Better for longer documents
  • Stands out more because most people get fewer letters than e-mails

E-newsletter--Pro 
  • Interactive, including links to your website
  • You can track who reads what
  •  Speedy delivery
  • Low cost to send

Print newsletter--Con
  • High production costs
  • Production and delivery take longer than for e-newsletters
 
E-newsletter--Con 
  • You may not have e-mail addresses for all of your contacts
  • You need permission to add e-mail addresses to your distribution 
  • May get caught in spam filter 
  • Not so good for long articles
  • Less control over look and feel 

Here are links for more information:
    _________________
    Susan B. Weiner, CFA
    Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
    Copyright 2008 by Susan B. Weiner All rights reserved

    Wednesday, November 12, 2008

    "LinkedIn's Little Secret: It's a Great Lead-Gen Tool"

    You can use LinkedIn to help build your investment or wealth management business. Adapt the techniques suggested in "LinkedIn's Little Secret: It's a Great Lead-Gen Tool" on HubSpot's Inbound Internet Marketing Blog.

    But, first, pay attention to this warning from HubSpot: 
    "Trying to directly message or reach out to your LinkedIn network or contacts could be considered spam. Please be sure that: 1) people you try to contact want to hear from you and 2) your message is relevant."
    Suggestion #1: "Create a LinkedIn Group" on a theme related to your industry. As I see it, as long as you offer something of value to group members, you can use a LinkedIn Group to position yourself as an expert in a niche and/or to expand your network. A LinkedIn Group can  keep you in front of clients, prospects, and people who can send you referrals.

    Suggestion #2: "Use LinkedIn's DirectAds" for targeted advertising. I'm not an ad expert, but it seems to me that you'd probably pursue other advertising options first. This might be a nice add-on.

    Suggestion #3: "Answer Questions on LinkedIn." This displays your expertise, plus you get an emotional boost from helping others. So far, I've gotten more benefit from asking questions on LinkedIn, another HubSpot suggestion. My questions have yielded valuable information and quotes for blog posts.
     

    Suggestion #4: "Integrate LinkedIn into Your Marketing." For example, suggests HubSpot, whenever you speak, invite your audience to join your group. It's an easy way to build on the connection that you form during your time with your audience. 

    Have you tried any of these techniques? I'd like to learn about your experiences. 

    Meanwhile, reading HubSpot's blog post got me wondering if I should create a LinkedIn Group for readers of my Investment Writing e-newsletter or for participants in the writing workshops I teach.  If you're a newsletter reader or graduate of one of my writing workshops, what would you want from a LinkedIn group?

    Related posts: 
    "How to publicize your white paper using LinkedIn
    "How financial advisors use LinkedIn to boost their visibility"


    _________________
    Susan B. Weiner, CFA
    Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
    Copyright 2008 by Susan B. Weiner All rights reserved

    Tuesday, November 11, 2008

    Encourage good communication or lose your multi-generational clients

    You are failing your financial family clients--and sabotaging your multi-generational client retention--if you're not encouraging good communication. That's one of the big picture lessons I learned from "Five Solutions for Mixing Finance, Families and Fiduciaries," presented to the Boston Estate Planning Council on Nov. 6 by Bonnie Brown Hartley, president of Transition Dynamics Inc., Richard Narva, partner, The Roseview Group, and Mike Hartley, chairman and CEO, DKE Inc.

    A case of poor communication easily resolved
    Advisors to financial families often avoid bringing up sensitive issues. This is a big mistake. 

    Take the case of the family with an unsigned buy-sell agreement for their main asset, a large corporation. Their beloved daughter-in-law was the only holdout. But nobody knew why. Not the family patriarch. Not the family attorney. Not even the husband. They were too scared to ask, as Bonnie Hartley found out through gentle probing.

    Imagine the family members' surprise--and relief--when Bonnie learned the daughter-in-law's objection could be easily removed. With permission from the patriarch and the husband, Bonnie asked the daughter-in-law why she wouldn't sign. The answer: "I won't sign an agreement that doesn't make me a trustee if my husband dies before my children reach their majority." As a mother, she didn't want to leave her children's future in the hands of strangers. This objection was easily addressed, so the agreement was signed.

    The family wasn't the only beneficiary of this good communication. A stronger relationship resulted between the family and the advisors who brought in Bonnie as a consultant. 


    More hints for good communication 

    Try running "fire drills" to test "what if" scenarios" such as the death of a key family member of the sale of the family business.  

    Deepen your relationship with the younger generations.
    1. Train them in how to be good trustees and beneficiaries. 
    2. Communicate with them using the methods they prefer. That could mean foregoing meetings in favor of e-mail, texting, or communication through a family-advisor intranet. Family-advisor intranets, available through DKE Digital, are particularly well-suited to multi-generational families whose members and advisors are geographically dispersed.
    3. Assign members of your firm to mentor younger family members--and go outside your firm to find mentors if necessary.
    4. Include younger members of your firm in meetings with multi-generational clients.
    5. Use genograms to get a better understanding of your client families' dynamics.

    For more insights from the Hartleys 

    If you're interested in more insights from Bonnie Hartley, you can sign up for a quarterly e-newsletter at the bottom of The Hartley Group's website.


    On a personal note, it was a great pleasure to attend this presentation because Bonnie and Mike have been valued clients.


    _________________
    Susan B. Weiner, CFA
    Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
    Copyright 2008 by Susan B. Weiner All rights reserved

    Alternative investments: Farmland investing, emerging markets infrastructure, and catastrophe bonds

    Mercer, the investment consulting firm, tackles three unusual asset classes in "Introducing emerging alternative opportunities."

    According to the article, institutional investors are considering investing in these three asset classes to diversify their portfolios or achieve more stable returns:


    _________________
    Susan B. Weiner, CFA
    Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
    Copyright 2008 by Susan B. Weiner All rights reserved

    Monday, November 10, 2008

    Independent investment research will suffer in the near term

    The recent decline in commissions generated by buy-side equity trading will cut funding available for independent and sell-side investment research, according to "Integrity's Outlook for Independent Research." Michael Mayhew of Integrity Research Associates says that commissions are expected to fall by 40% next year.

    However, there is a silver lining to this dark cloud. Integrity says, "However, once the dust settles (in late 2009 or early 2010) we anticipate that the market for investment research, and particularly non-traditional independent research, is likely to improve markedly." Why? Because buy-side research staffs will have shrunk and the supply of good research will be tighter.

    Interested in more news like this? Visit Integrity ResearchWatch or  subscribe by email or RSS feed.


    _________________
    Susan B. Weiner, CFA
    Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
    Copyright 2008 by Susan B. Weiner All rights reserved

    Tuesday, November 4, 2008

    Prof. Andre Perold on "Stable Risk Portfolios: A Timely Alternative to Static Asset Allocations?"

    Risk matters. October’s wild stock market swings have reminded investors that volatility can be painful. They simply can’t stomach as much risk as they thought they could.

    In this environment, it’s no surprise that Professor AndrĂ© F. Perold’s October 21 talk on “Risk Stabilization and Asset Allocation” attracted a bigger than usual crowd to the monthly meeting of the Boston chapter of the Quantitative Work Alliance for Applied Finance, Education, and Wisdom, affectionately known as QWAFAFEW.

    Perold’s premise: A stable-risk portfolio that keeps risk constant is a viable alternative to investors’ classic static policy portfolio, such as 60% stocks and 40% bonds, and it may offer superior risk-adjusted returns. 


    Continue reading about stable risk portfolios in my Advisor Perspectives article.


    _________________
    Susan B. Weiner, CFA
    Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
    Copyright 2008 by Susan B. Weiner All rights reserved

    "How to Craft a Blog Post" by Darren Rowse

    Starting to blog without thinking about your process can be a big mistake.

    Read Problogger Darren Rowse's "How to Craft a Blog Post - 10 Crucial Points to Pause" for helpful tips. 

    If you follow his advice, it may take you longer to write your blog posts, but your return on investment will increase exponentially.

    _________________
    Susan B. Weiner, CFA
    Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
    Copyright 2008 by Susan B. Weiner All rights reserved