Producing investment pitch books without losing your mind, and other advice from Margaret Patterson

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Designer Margaret Patterson’s posts about investment management pitch books were among the most popular on my previous blog. Her tips can make producing these important marketing materials less stressful.

Here are links to her posts.

Contact Margaret by posting a comment on this blog. Or, if you’re a potential client, call her at 617-971-0328.

Why baby boomers will NOT offer a gold mine for financial services

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If your business strategy depends heavily on Baby Boomer-driven rapid growth in the number of retirees, it’s time to re-think your approach.

That’s according to “The Baby Boomer Retirement Fallacy and What It Means to You,” which appears on a blog on the Harvard Business Publishing website.

Over the next 25 years, the number of retirees will grow at a rate of zero to 4% per annum, according to Kevin P. Coyne and Shawn T. Coyne, the management consultants who coauthored the blog post. The Coynes say the hype around Baby Boomer retirement fails to take into account the fact that people are staying in the work force later in life.

They’re selling versions of their study, “Smaller than You Thought: Estimates of the Future Size and Growth Rate of the Retirement Market in the United States” for prices ranging from $950 to $2,850.

Feeling emotionally connected to your client can cut both ways

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Feeling a connection with your clients can be a double-edged sword. It can fuel your personal satisfaction. It can also lead to burnout.

This is according to”Financial Feeling: An Investigation of Emotion and Communication in the Workplace,”an academic study by Katherine I. Miller and Joy Koesten, which appeared in the Journal of Applied Communication Research. The article was based on a survey answered by almost 300 financial planners.

However, the study also found that “the most effective and satisfying relationships for financial planners came when they truly cared about the client and saw themselves in a relationship with the client. These connections–when genuine–did not cause burnout.”

Here are the authors’ tips to help you avoid burnout:

  • Understand that financial planning involves relationships as much as it involves numbers.
  • Try to understand the relational needs of your clients through active listening and taking the perspective of the other.
  • Develop a stance of empathic concern in your client relationships where you feel for the client but do not feel with the client.
  • Realize that relationships exist at different levels, and it is sometimes okay to “paste on a smile” if it helps to accomplish the goals of you and your client. At the same time, it is important to remain true to core convictions about your profession and your relationship with clients.
  • Work to understand norms of interaction in different organizational and national cultures, and interact in ways appropriate for those cultures.
  • Rely on others for social support when dealing with stress. Coworkers who understand your job are particularly good at giving advice or just providing a listening ear.

 

Writing sample: Nice short sentences from Wall Street Journal’s "Ahead of the Tape"

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A couple of short sentences can be a great way to draw a reader into your article or investment commentary.

I like how the Wall Street Journal’s “Ahead of the Tape” column started yesterday.

Stocks have had a nice run these past couple of months. The downside: They may no longer be a bargain.

Notice also the nice conversational tone of the writing.

Did this New York Times columnist listen to me?

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In “Passions Run High On Indexing,” New York Times columnist Joe Nocera writes about the conflict between traditional and fundamental indexers that has been running in the Financial Analysts Journal. He does what I suggest in my investment commentary workshop. He picks a controversial topic from a professional journal, then explains it in non-technical terms.

Nocera’s article is more about what he calls “an old-fashioned academic cat fight” than the indexing debate. If you tackle this topic for your clients, I suggest you focus on the latter rather than the former.

But Nocera does eventually express an opinion on the substance of the debate. He agrees with Jack Bogle that fundamental index funds are a form of active management. “… they ain’t index funds, and they shouldn’t be viewed as a replacement for index funds. Mr. Arnott and his allies would better serve investors by saying so out loud,” writes Nocera.

The charitable trust that’s best in a low-interest rate environment

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Now is a great time to create a charitable lead trust, assuming it would further your client’s estate planning goals.

That’s according to Nadia Yassa, Director of Estate and Gift Planning for the Boston Foundation. She spoke on “Tax Benefits of Charitable Trusts” to the Boston Security Analysts Society on May 13.

Why now? Because when interest rates are low, the IRS will value the non-charitable remainder interest at a lower value, using the IRS discount rate in effect when the trust is established. That’s regardless of what the actual value is when the transfer occurs. The bottom line: Ultimately, more of your assets will reach your beneficiaries because any growth in the trust above the discount rate passes free of gift tax to heirs. As Yassa explained, “A low Section 7520 discount rate allows donors to ‘freeze’ estate and gift values to minimize overall transfer tax liability.”

A non-grantor charitable lead trust provides income to one or more qualified charities for a preset period. At the end of that period, the assets of the trust transfer to non-charitable beneficiaries. People often use this kind of trust to contribute to charity, while ensuring that their assets end up with family members at a lower cost in taxes.

On the flip side, low interest rates mean this is the least favorable time for creating a charitable remainder trust. However, in any case, taxes should not be your only consideration when establishing a charitable trust.

Want to learn more about planned giving, including charitable trusts? Check out the Planned Giving Design Center, suggested Yassa. “It’s a free on-line resource sponsored by the Boston Foundation. Go to www.tbf.org and click on the Professional Advisors section/Planned Giving Design Center. Advisors can register and have access to technical outlines, articles, rulings, news reports, and receive periodic emails with legislative updates, as well as the Section 7520 rate as it is announced each month by the IRS.”

Thank you, Boston Women in Finance!

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Members of Boston Women in Finance made my experience enjoyable when I presented my one-hour workshop on “How to Write What People Will Read about Investments” yesterday.

Here’s some of their feedback on my presentation:

  • “Although brief, packed with very useful takeaways!”
  • “Susan was able to fit in an hour what people spend days learning in conferences”
  • “Susan reminded me to remember my audience and to listen to my ideas”
  • I learned “a new thought process for brainstorming” and “ways to make my market piece more direct and to the point”

Morningstar Market Barometer, 2003-2007

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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.

 

Does your auto mechanic communicate better than you?

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“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.

"Interruption vs. Self-Service Marketing"

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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?