November on the Investment Writing blog

If you’re not visiting my Investment Writing blog in its new location, you missed the following posts in November:

• Reader challenge: What’s the writing lesson from Physicians Mutual?
• Poll: Is the SEC’s plain language requirement for Form ADV Part 2 a good idea?
• Brokers, CFA charterholders, and fiduciary duty: Charterholders are not always fiduciaries
• Guest post: “Be Compliant When Using LinkedIn Messages”
• Business lesson from my Tanzanian safari
• Poll: Which high-impact prospecting technique works best for you?
• Guest post: “Client fears and financial advisor services”
• "Escrow Accounts: What's the Deal?" My article for HouseLogic.com

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Copyright 2010 by Susan B. Weiner All rights reserved

A financial advisor's "Cure for Money Madness"

People are too obsessed with money and need to get over their irrational beliefs about it, so they can focus on living their lives. That seemed to be the main point of Spencer Sherman's March 19 talk to the Wharton Club of Boston. Sherman is the author of The Cure for Money Madness.

Sometimes it takes a life-threatening experience to make your aware of your money madness. Take the case of Sherman's friend Billy, who went swimming by himself off a Hawaiian beach. He panicked when he got caught in a riptide. Instead of swimming parallel to the shore, as experts recommend, he headed straight for the beach. Billy thought his life was over. His last thought before he was rescued? "At least I don't have to worry about my finances any more." Finally, Billy put his money into perspective.

Your irrational feelings about money, which are rooted in your childhood, spur you to make mistakes, said Sherman. For example, you may feel that your self-worth depends on your net worth. So you may "buy high and sell low" instead of the more desirable "buy low, sell high." 

Sherman mentioned some techniques for developing a more rational approach. For starters, think about how you'd advise a friend who's in your situation because it's easier to be rational about someone else's money. Would you advise her or him to buy this stock, build this addition to the house, or take this job? Sherman's book has a section devoted to exercises and he offers presentations and free conference calls on money madness. 

One of Sherman's suggestions surprised me. He'd like us to ask ourselves "How can we make our current financial situation the goal?" I'm so accustomed to financial advisors focused on growing their clients' wealth instead of finding satisfaction now. Ironically, he said, when we stop striving for more, we see the possibilities in what we've got. The idea of making the most of what we've got seems very appropriate today. 

I liked Sherman's exercise for adjusting to less wealth.
1. Together with your spouse or significant other, write down your spending intentions for 2009.
2. Figure out how to create a great life within the limitations of those spending intentions.
3. Cut your 2009 spending intentions by 25% or even 50%. Get creative about working within those limits. For example, instead of eating out, you could organize potluck dinners and spend more time with family and friends.

If you're intrigued by Sherman's approach, check out his website or one of his YouTube videos.

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Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2009 by Susan B. Weiner All rights reserved

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.


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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

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.


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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

Fidelity writes good headlines for volatility

Dealing with market volatility is a full-time job.
For us. Not you.

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The headline copied above works. It got me to pick up a brochure about the Fidelity Portfolio Advisory Service.

Why does it work?

First, it raises the reader's anxiety with "dealing with market volatility is a full-time job." But that isn't enough. The brochure quickly offers a solution: Fidelity will handle volatility for you.

Consider trying to apply this model to your written communications.

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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

What Jason Zweig does right--and wrong--in his inaugural column for "The

"Stop Worrying, and Learn to Love the Bear."

I love the title of Jason Zweig's inaugural "The Intelligent Investor" column for The Wall Street Journal. With this title, Zweig follows advice I give to writers of investment commentary. He takes something that's viewed as negative and finds the positive side. That's a great way to grab your reader's attention.


Zweig says, "...if you are still in your saving and investing years, a bear market is a gift from the financial gods -- and the longer it lasts, the better off you will be. Instead of running from the bear, you should embrace him." So that's his thesis. 

But Zweig falls short in explaining how the bear market will help investors, other than offering the opportunity to buy good stocks cheaply. He gives the example of how the last long bear market--1969-1982--set the stage for stocks to return 18.5% a year for the 18 years following the bear market's end.

Let's assume--and it's a big assumption--that scenario will repeat. Then, sure, folks who are just starting their saving and investing would end up better off. But what about those who are in the midst of their saving and investing? Will they ever make up their losses?

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Susan B. Weiner, CFA
Investment Writing
Writing that's an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Use personal stories in your communications

"In a sea of competition, you’ve got to capitalize on what makes you unlike anyone else."

This advice from "Feel Great Naked: Confidence Boosters for Getting Personal" is aimed at bloggers. The author urges them to share personal stories. But also applies to financial advisors, especially solo practitioners or small firms, when you communicate with your clients and prospects.

Sharing your personality--and even a bit of your personal story--can help you connect with your clients.

For example, in a sales letter, one salesman shared his story of how his family had suffered needlessly because of an estate planning mistake. That mistake fueled his passion for bringing new clients to his firm. After sharing that story, the letter shifted to discussing the benefits his firm could offer his prospects. I'll bet that personal story prevented some prospects from dropping his letter into their wastebaskets.

Don't focus your communications exclusively on yourself. Ultimately, your client or prospect will care more about the WIIFM ("what's in it for me"). But a bit of sharing can create a connection that goes deeper than dollar and cents.

Any financial advisor can heed this advice in one-on-one meetings. It's more challenging when you work for a large firm and you get into written communications. There'll probably be a company-wide communications policy that sets an impersonal tone. This gives an opening for advisors with smaller firms to outmaneuver their colleagues at larger firms.

Have you tried taking a personal tack? I'd like to learn what your experience has been.

Morningstar Market Barometer, 2003-2007

Want to show your clients how equity styles and sectors perform differently over time?

The newly released 2-page Market Barometer from Morningstar can help.


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Susan B. Weiner, CFA
Investment Writing
Writing that's an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Does your auto mechanic communicate better than you?

"Nearly three-fourths of the 1,203 adults polled said their auto mechanic uses clearer English than their financial professionals," according to "Financial Jargon: You Just Don't Understand" by Cathie Gandel in AARP Bulletin Today.

Are you one of those confusing financial pros? And are your clients suffering as a result?

Learn more about the results of a survey by AARP Financial about consumer understanding of financial jargon.

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Susan B. Weiner, CFA
Investment Writing
Writing that's an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

"Interruption vs. Self-Service Marketing"

I'm following up my post on how financial advisors are using LinkedIn. Raising your visibility by using LinkedIn is an example of "self-service marketing," which I read about recently in "Interruption vs. Self-Service Marketing" on marketer Bob Bly's blog.

He quotes an article from DM News: " 'Self-service marketing is all about putting content where people will find it,' writes Rapsas. 'It makes sense to go where the customers are.' " Bly contrasts this with traditional marketing which interrupts people when they're not looking for it.

Bly makes an interesting point down in his comments:

"My rule of thumb: self-service marketing works with products which consumers actively search for information (including pricing) on — for instance, installing solar panels on the roof of your home. Interruption marketing works with products people want when they hear about but weren’t thinking about beforehand — e.g., designer handbags, a home-study course on becoming a locksmith."

It seems to me that people actively search for financial or investment advice, so maybe self-service marketing has a future in this field. What do you think?


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Susan B. Weiner, CFA
Investment Writing
Writing that's an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Annuities gathering steam in professional journals

Annuities may be picking up steam among fee-only financial planners and investment advisors.

According to a press release from the Financial Planning Association:

Despite their tarnished reputation due to sleazy sales tactics, high expenses and weaker investment performance compared with mutual funds, popular variable annuities (VA) with “living benefit” riders may still be a sound choice for some retirees, concludes an article in the May 2008 issue of the Journal of Financial Planning, published monthly by the Financial Planning Association® (FPA®).

In his article, “A Context for Considering Variable Annuities with Living Benefit Riders,” John H. Robinson examines how the investment performance of a particular type of VA rider stacks up against an index mutual fund as each tries to weather two bear markets.

I've written earlier--in "CFA Institute: Consider annuities, even variable annuities" and "Financial Analysts Journal article favoring annuities" about increasingly favorable coverage of annuities in the CFA Institute's Financial Analysts Journal and other venues. More recently, annuities received favorable mention in the inaugural issue of the CFA Institute's private wealth management e-newsletter.

The Journal of Financial Planning addressed this trend in "Variable Annuities: Emerging from the Dark Side?" by Nancy Opiela in March 2007.

But the barriers to acceptance by advisors remain, as "It'll be tough to sell advisors on longevity annuities" suggested.

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Susan B. Weiner, CFA
Investment Writing
Writing that's an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.