Susan B. Weiner Investment Writing - Susan B. Weiner Blog

Ways to grow and retain your clients’ trust were the focus of Richard L. Peterson’s presentation to the CFA Institute’s Wealth Management conference on March 22, 2013. One of the methods he mentioned was “writing or forwarding articles for clients’ benefit,” which his firm’s research found was also associated with higher rates of business growth. This activity is even more important when market volatility strikes.

Peterson said that you should prepare things to say or written content to forward when market gyrations rattle your clients. List three things you’d use, he suggested.

I imagine that some of you don’t have anything at hand. On the other hand, even the best-prepared wealth managers may be wish to learn from what their peers have prepared. These thoughts prompted me to write this challenge for my readers.

What’s on YOUR list for easing client fears about volatility?

Let’s start a conversation about this topic. Please use the “comments” area below to identify content that would be useful to share during volatile times. You can share something that you’d say, an article you like, or even mention one of Carl Richards’ Behavior Gap sketches that you might use.

If you’d like to learn more about the overall wealth management conference, see my conference notes or the CFA Institute’s social media highlights.

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

This is my report on information that caught my attention at the CFA Institute Wealth Management Conference. You can also read my post on Scott Welch’s presentation about client reporting or participate in the conversation about how to help clients deal with market volatility.

The Hunt for Yield, the Municipal Bond Market, and Crossover Buyers–Cate Long, founder, Multiple-Markets

• Muni market changed after bond insurers blew up in 2007, making underlying credit more important.
• Unfunded pension liabilities now more important to muni bond analysis
• Puerto Rico is almost locked out of the muni market now. Its bonds are owned heavily by single-state funds because of its special tax status as a commonwealth.
• Municipal defaults are more common–36 times more common–than reported by rating agencies.
• EMMA is building a new muni bond market and it’s 10 times better than EDGAR.
• Social media is bursting with #muniland discussions.

2013 Trust and Estate Update for the United States and Canada

Greg A. Rosica, tax partner, Ernst & Young LLP

• Advisors, think about ALL taxes, not just income taxes.
• Interesting factoid: The 35% tax bracket is incredibly narrow for singles–$398,351-$400,000.
• Estate tax’s portability between spouses is a big plus.

Beth Webel, tax partner, PricewaterhouseCoopers LLP

• Canadians hit top tax rates really fast.
• When one spouse is a U.S. citizen and the other is Canadian, taxes are complicated.
• Gifting asset to Canadian spouse can be advantageous for U.S. spouse.
• Canada has no gift tax regime, but it has an attribution regime with rules around income splitting.

Current Trends in Single and Multi-Family Offices

Andrew T. Fay, senior vice president, Fidelity Family Office Services

• About 5,000 family offices exist, many under the radar.
• “I don’t know one family office that walks dogs.”
• The average family office fee is 40 basis points on assets under advisement. Fees start at 75 basis points and go down to 25 basis points. But families don’t like fees calculated in basis points, so some family offices are looking to charge flat fees.
• #1 concern for wealthy family is how to transfer wealth to children and educate them to be socially responsible. Providers aren’t spending enough time on that.
• Family offices typically don’t have scale to offer everything clients want. Therefore, they are outsourcing where the family doesn’t require control.
• Family offices haven’t adapted to the mobile/digital style of younger generation. They don’t want paper and they believe in communities, not committees.
• Investment trends:
  • “Insourcing Private Investments–Outsourcing Public Investments,” which means investing directly in private companies because private equity fees are too rich. Investors take board seats and have a say in the company’s direction.
  • Investors are “barbelling their equity portfolios” for heftier returns. This means  low-beta investing combined with investing in asset classes such as micro caps, small caps, and emerging market stocks.
  • Taking on more risk in fixed income for higher yields.
  • Moving against inflation by minimizing duration to about 2.5 years and investing in asset classes that move up with inflation, such as real estate and broader baskets of commodities.
  • Taking an institutional approach to cash management, laddering it instead of using money markets funds. “Cash management/laddering may offer opportunities for this audience,” said Fay.
• Look at groups such as the Cleveland Area Family Exchange for your networking and marketing.
• Look for trusted people in your community who can make your practice more holistic.
• More family are clubbing up with other families to make direct investments.

Using Digital/Social Platforms in Your Practice Marketing Strategy

April J. Rudin, founder and CEO, The Rudin Group

• I believe that a video recording of this presentation will be available. Watch for it!
• You are almost invisible to the next generation if you’re not on social media.
• Don’t have an intern do your social media.
• Five years ago, digital social was 19% of marketing spend, now it’s 38%.
• There’s no more mass marketing. Now it’s targeted.
• “The person who knows the most about you is Mr. Google.”
• Video is authentic.

Where Credit Is Due: The Case for Alternative Fixed Income in a Low-Return Environment

John Cashwell, managing director, The Blackstone Group/GSO Capital

• Investors need to rethink fixed income investing in terms of the need to 1) generate yield, 2) insulate or protect portfolios if interest rates begin to rise suddenly, which would have a prolonged negative impact on portfolios.
• Consider expanding beyond traditional (core) and extended (core-plus) fixed income strategies to what Cashwell called “alternative credit strategies,” including leveraged loans (also known as senior secured loans), long/short and event-driven credit hedge funds, mezzanine debt, and distressed debt
• Alternative credit strategies are underexploited, with less than $500 billion in assets under management vs. $2.4 trillion in traditional fixed income and $832 billion in extended credit sectors.

Tax Management of Low-Volatility Portfolios

Paul Bouchey, CFA, managing director of research, Parametric Portfolio Associates, got to something I’d been struggling to explain recently: Why do low-volatility strategies outperform? Bouchey explained it’s because of better compounding for the geometric returns. I wish I could show you his graph.

The Behavior Gap

It’s impossible to do justice in words to this presentation by Carl Richards, founder of The Behavior Gap. For a hint, check out his sketch summarizing the conference’s tax presentation.

Catch the best tweets about the conference

The CFA Institute has collected some of the best tweets about the conference.

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Copyright 2013 by Susan B. Weiner
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Wealth managers’ performance reporting is “shockingly bad,” said Scott Welch, Fortigent’s chief investment officer in “Talk Your Walk: Client Reporting in a Goals-Based Framework,” his March 21, 2013, presentation to the CFA Institute’s Wealth Management Conference.

Reporting is more important than you think

Welch cited statistics showing that reporting is important for both high net worth and institutional investors. On the institutional side, where the statistics are more straightforward, the following ranked among the top 10 service-related drivers of client satisfaction:

• Clarity of investment reports
• Timeliness of investment reports
• Reporting capabilities of website

Even more impressive was Fortigent’s experience with reporting, as reported by Welch. He discussed a case when his firm had, for example, $2 million of a $10 million portfolio, but provided consolidated performance reports on the $10 million. Within 24 months, his firm routinely captures 100% of assets in cases like this. The ability to offer advice on the entire portfolio is unbeatable, he said.

Use behavioral finance in reporting

Welch suggested that advisors take advantage of the lessons of behavioral finance. You should redo your reports in a way that speaks to the way that clients think and feel.

With clients who have enough wealth, Welch suggested dividing their portfolios into goals-based buckets and reporting performance by bucket. Welch’s pyramid, adapted from the work of Ashvin Chhabra, starts at the bottom with a layer of Personal Safety/ Minimum Wealth/ Lifestyle Maintenance, followed by Market Participation, and topped off by the Aspire level. He also described the Aspire level as “This is money you can roll the dice with.”

Some advisors tell clients they they’re managing their assets to achieve goals, but then they give clients performance reports organized by accounts, not goals. If you’re doing that, you’re not really delivering goals-based investing, in Welch’s opinion. “All you’re doing is you’ve slicked up your sales presentation,” said Welch. Instead, you need to make your reports align with your clients’ goals. This would be easy if each account were dedicated to one goal, but that rarely happens. Still, there are technology solutions out there, said Welch, although he did not name names.

Part of the solution involves adding another level of categorization to data. Go beyond security and asset classes to use super-classes in line with the pyramid’s three levels, suggested Welch.

The benefits

Use goals-based reporting to communicate and you’ll have better, deeper conversations with clients, said Welch. This will also improve your client retention.

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

Should you email clients or use some other form of communication?

In my opinion, it depends on client preferences, the nature of your communications, your strengths as a communicator, and your schedule. My thanks go to @Tbmanning who raised this issue in response to my question about email challenges for advisors.

Ask for client preferences

Ask your clients what type of communication they prefer. It’s great service to provide information in the manner they desire. Of course, if you have many phone-loving clients, this may not always be practical.

Consider the nature of the communication

The flurry of advisor phone calls during the 2008-2009 market downturn reflected the importance of “live” interactive communications about serious topics. On the other hand, you can’t get a form signed on a voice call, so send the form electronically or pull it out in person.

Play to your strengths

If you’re a smooth talker with horrible spelling, grammar, and punctuation skills, then you should favor the phone. On the other hand, if it’s hard to raise your voice above a whisper, go for written communications.

Work with your schedule

I know advisors who have 300+ clients or are so highly scheduled they can’t communicate until late at night. If you’re one of those advisors, you’ll need to favor emails or U.S. mail more than your peers.

YOUR tips?

If you have tips on picking the right form of communication, please share them in the comments.

Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

As a financial advisor or investment professional, writing is not your focus. However, you can boost the reach and effectiveness of your writing with savvy use of an editor. I’m delighted that Rick Kahler of Kahler Financial was willing to discuss with me his experience with Kathleen Fox, the editor who helps with his books and columns.

By the way, unfortunately Kathleen doesn’t have the capacity to take on additional clients. If you decide to look for an editor, Rick says, “It certainly makes things easier if the editor has some background in your area of expertise.” 

Q. What prompted you to hire an editor?
A. My editor and I were both members of a civic group that often had coffee on Saturday mornings. One day I mentioned how I wanted to write a book and how difficult it was to get started. While I was accustomed to writing a 1200-word column once a week, writing a book seemed daunting. She helped another professional write a book by interviewing him. She suggested we do the same to get the book started. That sounded great to me, so we set aside Fridays each week to talk.  Soon she was sending me copy and it was easy for me to take that “primer” and expound upon it.  Kathleen ended up becoming my coauthor on that first book, Conscious Finance.

Kathleen then edited two of my other three books and continues today as my personal editor. She helps with my weekly online and print column as well as articles and white papers. We’re also looking forward to finding the time to coauthor another book.

Q. How do you work with your editor?
A. I talk with my editor once a week and bounce ideas off her. We’ve worked together now for almost 10 years.  She says she can hear my voice speaking to her or recall conversations from the past on topics that makes it easy for her to do my editing.

My editor often can start a column by putting my words on paper and sending them to me.  That saves me a lot of time, as I work fast off of something on a page.  Getting that initial kernel on the page takes a little longer for me.  Starting from scratch, I can write a column in one to two hours.  If I have 200 to 400 words already started, I can usually finish it off in 15 to 20 minutes.

Q. What’s the biggest benefit of this relationship?
A. This saves me time that I can be spending with clients, my family, or reading additional research for column ideas.

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

Everyone struggles to keep up with their blogging. It’s not only a problem for financial advisors, investment professionals, and the folks who support them. Writers grapple with this problem, too.

Below my friend Laura Laing shares some of her tricks for keeping her momentum going, including picking themes in advance, working on her blog on specific days, and having extra material so she can take breaks from generating new ideas. Laura and I welcome any suggestions you may have for managing this challenge.

Momentum Tricks for Bloggers

by Laura Laing

Launching a blog is exciting. Keeping a blog going can be exhausting Every single blogger in the history of blogging has asked, “How can I keep going? Should I keep going?”

And I’m no different So I’ve built up an arsenal of tools to help keep me interested. When I’m interested, I keep writing and posting.

– I post three times a week — usually Monday, Wednesday and Friday.

– Mondays are usually an interview with someone about how they use math in their work. This is a quick-and-dirty post based on an email interview. I try to get ahead on these, but even if they’re last minute, I can usually pull something together PDQ. They are also my most viewed posts of the week, typically — because the person being interviewed often helps promote them.

– Each month is centered on a theme. This way, I can set a monthly editorial calendar. I develop this during the previous month, but my plan is to have an entire year in place, so that I can work ahead or at least gather great ideas and plug in guest posts.

– Currently, I’m planning a new weekly schedule for admin and writing. On Fridays, I load my Monday post (an interview usually). On Tuesday mornings (my admin time), I write Wednesday and Friday posts. Eventually, I’d like to get ahead.

– I take breaks from blogging. These aren’t scheduled at the moment — in fact I’m currently on an unscheduled break, as I try to recover from a really challenging work schedule in January and February — but I am looking at ways to do that. So far, I’ve just gotten burned out and stop posting for about 10 days or so. It’s not the best thing, but it is incredibly helpful for inspiration. When I get back from my break, I’m usually raring to go.

– I have back-pocket posts for when the well is dry. For example, there’s a crazy web video series about a mathletes team. I know that when I’m really uninspired (or exhausted or overworked), I can simply write up a quick intro and link to two or three of these episodes. They don’t drive a lot of traffic, but they keep me posting.

When I have a sense of what is coming, I’m able to really focus creatively. One great benefit of my blog is that I can write about things that no one wants to pay me for. I can also try out ideas (that may become paying gigs), and I answer questions that folks have.

Laura Laing is the author of Math for Grownups and blogs at http://www.mathforgrownups.com. Yes, she writes about math, so you can count on one thing: if she can stay motivated, so can you. Her next book, Math for Writers, is coming out later this year.

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

Grammar is important. When used properly, it helps us communicate better.

Test your proofreading skills on Mistake Monday

Blog posts on grammar, punctuation, style, and other writing challenges

• Are you as compulsive as me or I?
• Fun with Strunk and White: Grammar rap video
• How can I brush up my grammar?
• Poll: What’s your favorite online resource for grammar, punctuation, and word usage questions?  You’ll find the poll results on page 3 of this newsletter.
• My five favorite reference books for writers
• Do your grammar and punctuation affect your credibility?
• Should you hyphenate “fixed income”?

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

My writing is better organized than my personal possessions, so I sometimes read books about organizing. But I unexpectedly found an insight for writers in Julie Morgenstern’s SHED Your Stuff, Change Your Life.

Here’s the quote that caught my eye:

Something doesn’t have to be disorganized to be clutter. A perfectly arranged dresser filled with clothes you haven’t worn in years is still clutter.

The same goes for writing. Perfectly punctuated, grammatically correct content that is irrelevant to your readers is useless. Toss it.

For example, let’s assume you’ve written a compelling, plain-English blog post about the need to use low-cost mutual funds or exchange-traded funds (ETFs). This post won’t benefit from a long, technical explanation of the origin of ETFs. You may be intrigued by the topic, but your readers won’t give a darn.

Yes, I know you may be emotionally attached to that content. After all, you probably slaved over it. But it’s not doing anyone any good. Not you, nor your readers.

Of course this is easier said than done. I’ve been reading books about clutter for years, and I’m only slowly seeing improvements at home. However, every little bit helps.

Image courtesy of Bill Longshaw / FreeDigitalPhotos.net

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

Public relations can be a powerful tool for financial advisors. In “How to Get PR Without Hiring an Agency,” Mike Byrnes shared many tips tailored to advisors in his presentation to the Financial Planning Association of Massachusetts on Feb. 27, 2013. I share some of his tips below, with an emphasis on the lesser-known tips.

1. Use Skype, FaceTime, or Google+ Hangouts

You know how you make a deeper connection when you meet someone face to face? You can achieve a similar connection with tech-savvy reporters who use Skype video, FaceTime, or Google+ Hangouts to communicate using video in addition to audio.

Google+ Hangouts have an added advantage. You can offer a video recording of your call to the reporter. These days even traditional print publications are hungry for video to display on their websites.

However, don’t try to force these technologies on reporters who don’t use them. You’ll just annoy them.

2. Hire an intern who’s a journalist

You need content to feed your PR effort. If you’re on a tight budget, but need help generating content, hire an intern who’s a journalist so she or he writes well.

The intern’s lack of industry knowledge can be a plus. How’s that? You’ll need to explain things in simple, nonfactual terms. This is the language your clients and prospects will respond to.

Just make sure you allow plenty of time to educate your intern. He or she will have a steep learning curve.

3. Provide hyperlinks to your website

If you publish an article on an outside website, be sure to provide a hyperlink to your website. This makes it easy for readers to find you. In an interesting twist on this strategy, Byrnes also suggested commenting online (with an appropriate link) on articles or blogs that your target audience reads. This could introduce you to people who read those comments.

4. Reduce the potential for misquotes

You will be misquoted or misinterpreted at some point in your PR experience. It won’t be malicious. It may be something you can avoid by taking an extra step.

The extra step is to email the reporter with key points after your conversation. If the reporter shares questions prior to your call, you can prepare and send your key points in advance.

A  note from my personal experience as a reporter: Don’t expect reporters to send you articles for your approval prior to publication. They may let you check the accuracy of your quotes before they submit the finished story. However, the more demands you make, the less attractive you’ll be as an interviewee.

5. Follow reporters on social media

It’s much easier to interact with reporters on social media than by traditional means. If you retweet and make positive comments on their articles, you’re helping them look good on the job.

Have these tips worked for you?

If you’ve tried these techniques, I’d like to hear from you about your experiences.

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Copyright 2013 by Susan B. Weiner
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This content may not be reposted without the author’s written permission.

“Why did you mention ziplining on LinkedIn? It’s not business.” This comment by my husband made me think about what’s appropriate for sharing on social media. It also prompted the poll questions below.

LinkedIn is the most business-oriented of the social media channels I use. I estimate that 95% of my status updates there are strictly business. But I believe it pays to show an occasional glimpse into my personal style. My LinkedIn status update about ziplining, along with updates elsewhere, prompted quite a few responses.

YOUR opinion?

Please answer my two-question survey about whether it’s okay to share non-business information on LinkedIn. I’ll share the results in a future issue of my newsletter.

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Copyright 2013 by Susan B. Weiner
All rights reserved

This content may not be reposted without the author’s written permission.