Posts Tagged ‘Investor Investment’
The Key to Outstanding Client Relationships
Wednesday, January 4th, 2012
Lots has been written about what advisors can do to create outstanding client relationships.
What’s often missed is the role that clients themselves play – quite simply, there are some clients whose mindset and behaviour make a deep bond impossible. In many regards, it’s clients themselves that more than any other single factor determine whether a strong connection is possible.
The fact is that advisors aren’t powerless victims when it comes to the clients you deal with – advisors do have a choice on this matter.
In August, a column in the Globe and Mail outlined seven attributes that investors can bring to the relationship with an advisor that allow an advisor to work more effectively and maximize the value those investors get.
While written for investors, this column also offers useful guidelines for advisors when talking to prospective clients. A previous Globe column outlined guidelines for investors seeking a new advisor, suggesting that investors write down the key things they’re looking for before meeting with a potential advisor.
Advisors should do the same – while you might still choose to work with a new client who doesn’t meet all your criteria, it’s nevertheless worthwhile to identify the important things you’re looking for in a new client – and the dealbreakers that might cause you to take a pass.
Finally, please note that the seven attributes in this column won’t be a fit for every advisor – they may be a starting point, but to be effective you have to take the time to identify the qualities in a new client that apply to you.
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Tags: Attributes, Client Relationships, Financial Adviser, Globe And Mail, Globe Investor, Globe Mail, Important Things, Investment Ideas, Investor Investment, Investors, Mindset, Podium, Powerless Victims, Prospective Clients, Relationship
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Bringing discipline to client portfolios
Wednesday, December 7th, 2011
In light of the events of the last nine months, investors and advisors alike are reexamining the process used to build portfolios.
A May 25 in the Globe and Mail highlighted two tools to overcome investors’ (and some advisors’) emotional reactions to market movements, creating the impulse to buy and sell at exactly the wrong times. The article quoted the words of Walt Kelly’s 1950’s cartoon character Pogo: “We have met the enemy and he is us.”
The solution for advisors lies in bringing much more discipline to how client portfolios are managed, using two tools from institutional investors. The goal is to borrow Warren Buffett’s dispassionate approach to investing, which he summarizes as: “Be fearful when others are greedy and be greedy when others are fearful.”
To read the article click on :
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Tags: Advertisement, Buy And Sell, Buy Sell, Cartoon Character, Client Portfolios, Emotional Reactions, Globe And Mail, Globe Investor, Globe Mail, Impulse, Institutional Investors, Investing, Investment Ideas, Investor Investment, Lt, Mail Tools, Nine Months, Podium, Pogo, Portfolio, Strict Discipline, Target, Two Tools, Walt Kelly, Warren Buffett
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New research on the cost of volatility
Thursday, December 30th, 2010
We all know that volatility extracts a big price from investors in stress and lost sleep — but until recently the cost in portfolio underperformance was less clear.A recent article in the Globe and Mail highlights some new research from Morningstar that quantifies the impact of volatility in reducing investor returns — with significant implications for fund companies, advisors and investors.
Click to read the full article:
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Tags: Globe And Mail, Globe Investor, Globe Mail, Investment Ideas, Investor Investment, Investor Returns, Investors, Morningstar, Podium, Portfolio, Recent Article, Sleep, Stomach, Stress, Target, Volatility
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Tell Your Story to Prospects
Wednesday, April 28th, 2010
When meeting with prospects, many advisors grapple with how to talk about their approach without it sounding like a sales pitch and how to move the conversation forward without having prospects feel pressured.
Earlier this week, I got an email from an advisor who had read the June 29 post on this blog, based on a Globe and Mail article about 25 questions that investors might ask an advisor they are thinking about working with.
As it happened, he had a meeting with a prospect that day, who had told him that he’d be meeting with a couple of other advisors as well. He printed the Globe article out and started the meeting by asking the prospect if he’d seen the article, when the answer was no he suggested that there might be questions on the list that would be helpful as a starting point for their conversation.
With the prospect using the list of questions as a guide, they ended up spending over an hour and a half talking about the kind of work this advisor does as it might fit for this particular individual and then got into an in depth conversation about this particular client’s needs and circumstances.
At the end of the meeting, the prospect took the list of questions away to use as a guide in his other meetings — late last week, he called the advisor to say he’d like to work together. Part of the reason he gave him was this advisor’s openness and honesty in talking about his approach.
Using the list of questions in the Globe article worked in this particular case for this advisor, it might not work in other instances or for you. Whatever tack you take, when meeting with prospects look for ways to deliver your story in a way that engages prospects and makes them feel part of the process.
The Globe article and the list of questions that investors interviewing possible advisors might use follow below.
25 questions for potential advisors — This is the list of questions for investors on the Globe website
To investors selecting a new advisor
Below are 25 questions you could ask a financial advisor you’re considering working with, broken down into nine broad categories. These questions were developed based on in depth conversations with investors who have recently selected a new advisor and with financial advisors themselves.
This list may seem overwhelming initially but remember, it is unlikely that you will use them all — pick the ones that are the most relevant for you.
These questions should not be used as a laundry list to blast through — to get a good handle on whether you and an advisor will work well together, exploratory meetings have to consist of a conversation, not an interrogation. That said, some of these questions can be a starting point to learn more about an advisor you’re talking to.
It’s important to note that there are some tough questions on this list and some will require real thought by the advisor– seemingly simple questions may need complex answers. Rather than focusing on an advisor who provides quick and glib responses, look for someone who really thinks about your questions and gives considered responses.
General background
- Tell me about yourself? How long have you been a financial advisor?
- What did you do before you became a financial advisor? What made you decide to pursue this as a career?
- What kind of qualifications do you have? Tell me more about those qualifications. What do you typically do to each year to stay current?
- Tell me about the firm you work with? What attracted you to this firm?
Fit and chemistry
- We all have preferences in the people we work with. What’s the most important thing you look for in a new client? Describe the kind of client you find you work with best?
- What’s the average asset level of your clients? How many client households do you work with — and where would my portfolio fit in?
- Tell me about the last couple of clients who left you and took their account elsewhere. Have you had any client complaints to your firm in the past couple of years?
General approach
- Do you typically complete financial plans for clients like me? What would be covered in this plan? What would the process be to develop this plan?
- I know that some advisors put their primary focus on getting the investment process right while some others also get into issues like insurance, tax planning, estate planning issues and retirement planning. Where do you fall on this spectrum?
Investment philosophy and your portfolio
- What’s your investment philosophy and process? In your experience, how is this different from other advisors?
- What kind of changes would you recommend in my current portfolio? Tell me more about about your reasoning for these changes. Which of my current holdings would you suggest we retain?
- I know that some financial advisors build portfolios of stocks and bonds for clients themselves, some delegate this to money managers and some do a combination of the two. Tell me about your approach to this.
- How do you go about building portfolios or choosing money managers? To what extent do you rely on research from your firm or outside parties in selecting stocks and money managers.? How do you go about monitoring portfolios or money managers?
- I understand that there are two schools of thought about trying to get in and out of the stock market. I know some advisors are fairly proactive about moving parts of portfolios to cash if they think the market is poised for a correction, while others believe you can’t effectively time when to get in and out and tend to be fully invested all the time. Where do you stand on this issue? As well, what’s your stance on making calls on getting in and out of individual sectors such as energy?
Communication
- How often do you typically meet with clients like me? How long do those meetings last? What do you cover in those meetings?
- How have you been communicating with clients like me since last fall? What have you been doing differently as a result of the market events since September?
- How frequently do you call clients like me between meetings? How long does it typically take to return calls from your clients?
Compensation
- In ballpark terms, what would my annual fee be if we worked together, including fees charged by money managers?
- How are you paid? What kind of money would you make on my account annually? What would I get for that?
Support
- Tell me about the team that you have supporting you.
- Would you be my primary contact or would I be dealing with one of them day to day? What kinds of issues would I be talking to them about as opposed to you?
The last 12 months
- How did you position client portfolios like mine going into the beginning of last year?
- What kinds of changes have you recommended to clients since last fall? What kind of advice are you providing to clients like me today? What are you doing to manage risk in client portfolios in light of how uncertain things seem to be these days?
- Without getting into the actual dollar amounts, in general terms would you be willing to share what you held in your own portfolio going into last fall and what your own portfolio looks like today?
- In your opinion, what are the most important lessons you’ve learned as a result of the events of the past year?
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Tags: Adviser, Blog, Circumstances, Email, Globe And Mail, Globe Article, Globe Investor, Globe Mail, Honesty, Hour And A Half, Instances, Investment Ideas, Investor Investment, Investors, June 29, Mail Article, Openness, Podium, Prospects, Sales Pitch, Taking Time
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Articles You Can Send Clients (October 28, 2009)
Thursday, December 3rd, 2009
This weeks selection is a thematic group of articles which focus on the Canada/Emerging Markets theme.
The first three articles are focused on a discussion of strong Canadian fundamentals, and led by pro-Canada, pro-commodities arguments from David Rosenberg, Chief Markets Economist, Gluskin Sheff. The subsequent three articles provide strong indications of demand from emerging markets, particularly China, whose savings are unequalled anywhere in the world, where more cars are now sold than in the US, and an outlook from Merrill’s Francisco Blanch that oil could reach $100 in the next year.
Making a case for Canada and commodities
This is where Canadian strength relative to the United States comes into play — nearly 45 per cent of the TSX composite index is in resources; almost triple the share in the United States. Almost 60 per cent of Canada’s exports are linked to the commodity sector, roughly double the U.S. exposure.
This explains how it is that the Canadian equity market has managed to outperform the S&P 500 this year by a cool 2,000 basis points (in this sense, Canada is basically a low-beta way to play the emerging markets via commodity exposure).
Moreover, considering that the Canadian dollar enjoys a 65-per-cent correlation with the CRB index, the added boost from the appreciation in the loonie means that an American investor putting money in Canada would have garnered a 28-per-cent gain on a currency-adjusted basis (versus a 4.0-per-cent gain from the S&P 500).
If a country is too good to be true … then diversify
The Canadian stock market has been the star of the show over the past decade. With the help of a strong currency, the S&P/TSX composite index has beat the S&P 500 in eight of the past 10 years (in Canadian dollar terms), and nine out of 11 when 2009 is included. And there are persuasive arguments why this will continue.
A report by Scotia Capital entitled “Why you want to own Canada” nicely summarizes them. It points out that Canada’s main attributes are: 1) emerging-market exposure with lower volatility; 2) cheaper valuations relative to the MSCI World Index; 3) stronger domestic fundamentals; 4) Canadian dollar strength relative to the U.S. dollar and British pound; 5) proximity to the U.S. economy; and 6) above-average market capitalization companies in financials, materials, technology and industrials.
In a recent Globe column, David Rosenberg referred to Canada as a “low beta [less volatile] way to play the emerging markets via commodity exposure.” He went so far as to say, “this period when the Canadian market outperforms its southern peers is barely halfway done.”
If there is one thing that Canadians are never happy with (in addition to their local hockey team) it is the Canadian dollar. When it was flirting near that record low of 62 cents nearly a decade ago, everyone lamented the future of the loonie. It was too expensive to buy anything that was imported, it was too costly to make that annual trip to Florida, and tickets on Broadway were prohibitively expensive. We felt poorer. We must have been doing something wrong.
Financial staying power gives China an edge
If Americans have been the world’s greatest consumers, the Chinese have been its greatest savers
It is testimony to the resilience and resourcefulness of the Chinese people that, so soon after these terrible times, their country is positioned to lay claim to the paramount role in a new world order of the 21st century. Only 15 years ago, China’s manufacturing output was only one-fifth that of the United States. Now, it is about two-thirds and rising; IMF data show a dramatic rise of annual per capita income to $3,180 (U.S.) in 2008 from only $350 in 1990, lifting more than one-third of a billion people into China’s standard of middle class.
Motoring ahead: More cars are now sold in China than in America
CHINA’S car market has overtaken America’s in sales volume for the first time, several years earlier than analysts had predicted before the financial crisis. Plummeting demand in the West is to blame. Earlier this year, as the American government was buying 61% of General Motors and 8% of Chrysler to prevent them from collapsing, the two manufacturers’ sales in China were rocketing. GM’s sales in China in August more than doubled on a year earlier. For 2009 as a whole the company predicted a 40% rise. Sales of all car brands in China in August were up by about 90%, helped by a cut in the purchase tax on smaller, more fuel-efficient cars. There is also huge pent-up demand as a new middle class takes to the road.
Oil could exceed $100 next year
October 26 2009 19:40 | Last updated: October 26 2009 19:40Crude oil prices could push above $100 a barrel heading into 2011 due to a combination of a cyclical improvement in demand, the rapid weakening in the US dollar and strong global liquidity growth, says Francisco Blanch, head of global commodities research at Bank of America-Merrill Lynch.
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Tags: Adjusted Basis, American Investor, Basis Points, Canadian Dollar, Canadian Equity, Canadian Stock Market, Commodities, Commodity Sector, Crb Index, David Rosenberg, Dollar Terms, Emerging Markets, Globe Investor, Gluskin Sheff, Investment Ideas, Investor Investment, Loonie, Star Of The Show, Thematic Group, Tsx Composite Index
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