Susan CFA's Update

Please visit my new blog at http://investmentwriting.blogspot.com/

2008-06-10T13:27:00.002-04:00

Do you want to read more articles like those posted on this blog?

I've moved to my new Investment Writing blog. Please visit me there!

How to get a portfolio manager's attention and other email tips from an investment marketing consultant

2008-05-29T08:00:00.000-04:00

It's not easy getting portfolio managers to open your emails. That's why investment marketing consultant Jen Dunning sometimes writes her email subject lines completely in capital letters.

"INVESTMENT COMMENTARY - PLEASE APPROVE BY JUNE 30" grabs the reader's attention where a meeker "Please approve by June 30" would not. Note that she puts her key action verb, "approve," and its object, "investment commentary," in the subject line. That also boosts her emails' effectiveness.

But limit your use of all-capitals subject lines to rare instances of pressing need with people who work for your own organization. You risk irritating your recipient if you use all-caps too often. It flouts the rules of email etiquette and is considered "shouting."

Some additional email tips from Dunning:

Save your pleasantries for the end of your email because busy readers want to get to the point right away
Before you attach an Excel file, name it and insert page breaks and headers and footers, including page numbers and total number of pages

_________________
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.

Writing Sample: "Don't Get Stuck Paying Extra Taxes"

2008-05-27T08:03:00.001-04:00

The subject line "Don't Get Stuck Paying Extra Taxes" compelled me to open the e-mail.

That's the power of a subject line that tells the reader "what's in it for me."

I opened the latest e-newsletter from Westchester Mortgage even though I was pretty sure I'm not making any dumb tax mistakes with my house. I was right. The article warned readers to be careful when using money from a retirement account to buy a house. Luckily, I don't have to worry about that. I've been in my house more than 15 years.

Try to put yourself in your readers' shoes when you compose an e-mail subject line. Your effort could increase your readership.

_________________
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.Wr

"Is Spelling Overrated?"

2008-05-23T08:00:00.000-04:00

Direct marketing guru Bob Bly recently asked "Is Spelling Overrated?" on his blog.

I don't think so. Good spelling won't win over new clients. But sentences rife with misspellings may make the reader wonder if you're similarly sloppy with their money.

It's one thing to have typos in the quick emails you send to your employees, as Bly points out. Quite another to tolerate them in formal communications to clients and prospects.

People often write "it's" where "its" should be. "It's" is short for "it is." "Its" is the possessive form of "it." This trips up many people because of the exception to the rule that you form a possessive by adding an apostrophe followed by the letter "s."

English is a challenging language for spellers. Get someone else to proofread your most important written communications.

_________________
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.

Tips for writing case studies

2008-05-22T08:00:00.000-04:00

Case studies can be powerful tools for the wealth management professionals who're allowed to use them.

A case study typically starts with a presentation of a client problem--something that's causing the client pain. The problem is followed by the solution, and then the client results. When prospective clients recognize themselves in the problem, you've grabbed their attention.

In "How to Write a Case Study" (available for download without registering) consultant Toby Younis lays out the steps for writing a case study. If you'd like to try doing it yourself, you may find his list of questions on page 12 particularly helpful.

However, don't write an investment management case study. That falls under the SEC's prohibition against testimonials.

_________________
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.

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

2008-05-21T08:00:00.000-04:00

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.

_________________
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.

Feeling emotionally connected to your client can cut both ways

2008-05-20T07:05:00.002-04:00

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.

_________________
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.

Six tips for listening better to your clients

2008-05-19T08:00:00.001-04:00

In my last post, "The Client Relationship Autopsy," I wrote about how to analyze client relationships turned sour. But if you'd listened better to your clients, perhaps they'd still be with you.

Consider applying the six tips for better listening described in "What?" a New York Times blog post by Marci Alboher.

Tip number six may be especially challenging: "Do not interrupt, even if you think you’re going to forget what you want to say." Instead, jot down a note, so you can circle back to your idea, if it's still appropriate later.

One of the tips suggests nodding to show you're listening. Nodding was essential when I lived in Japan for that very reason. If I kept completely still and silent, my conversation partner would have stopped talking because she or he would have assumed I wasn't listening. But in the U.S., you should be careful about nodding. Here, nodding suggests that you agree with the speaker.

_________________
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.

This blog is moving to InvestmentWriting.blogspot.com

2008-05-16T17:22:00.002-04:00

This blog is moving to http://investmentwriting.blogspot.com/.

I'll still cover topics related to investments, wealth management, writing, and marketing, but it's time to use a URL that relates to my business website name.

I've been posting to both blogs for awhile. I'll probably continue that for a bit.

Thank you for visiting me here!

_________________
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.

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

2008-05-16T14:00:00.002-04:00

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."

_________________
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.

"The Client Relationship Autopsy"

2008-05-16T08:00:00.002-04:00

You've probably lost at least one client. But rather than chalk it up as inevitable, try to learn why your client left you.

"The Client Relationship Autopsy" proposes a process consisting of:

Talking to your team
Talking to your client
Preparing a report

"The process will help you choose wisely when it comes to adding new clients, and it will help you glean insights for improving existing client relationships," says Leo Bottary, the ad agency account director who wrote the article. He goes into detail with suggestions for each step.

_________________
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.

Thank you, Boston Women in Finance!

2008-05-15T15:20:00.003-04:00

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"

Use personal stories in your communications

2008-05-13T08:00:00.002-04:00

"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

2008-05-12T08:00:00.000-04:00

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.

_________________
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?

2008-05-09T12:57:00.003-04:00

"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"

2008-05-09T08:00:00.000-04:00

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?

_________________
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

2008-05-08T08:00:00.000-04:00

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.

_________________
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.

More options for mind mapping

2008-05-07T07:27:00.001-04:00

Some of the participants in my "How to Write Investment Commentary that People Will Read" presentation say that learning mind mapping is one of the best parts of the program. It makes them feel they can organize their thoughts better before sitting down to write.

I recently learned about more web-based mind mapping tools that help you create and save an electronic version of a mind map. "Map your mind 2.0" by Rafe Needleman reviews Spinscape and devotes a paragraph apiece to competitors called MeadMap, Mindomo, MindMeister, and bubbl.us.

Needleman doesn't care for Spinscape, but he's not a fan of mind mapping. He seems to like MindMeister best.

I've written earlier about "Mindmapping for financial advisors."

_________________
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.

“The Top Four Investment Strategy Challenges for Financial Advisors”

2008-05-06T07:28:00.000-04:00

One year ago it seemed as if the good times would never end. Today, many investors go to bed wondering what bad news will greet them in the morning. In this volatile environment, Advisor Perspectives asked financial advisors to identify their greatest investment strategy challenges.

Continue reading my article, “The Top Four Investment Strategy Challenges for Financial Advisors,” in Advisor Perspectives.

Register for my May 14 presentation to Boston Women in Finance

2008-05-05T08:23:00.001-04:00

You can register for “How to Write What People Will Read About Investments,” my May 14 lunch presentation to Boston Women in Finance to learn techniques that will make your audience more likely to read what you write.

Writing about topics that will interest your clients, and packaging them in a reader-friendly way, will boost your return on investment. This interactive program will use examples from investment commentary to help you to understand your reader’s perspective on your writing. It will also suggest techniques for brainstorming, formatting, and editing your writing.

Please note that this is a little different from the presentations I deliver for the CFA Institute because the audience is more diverse.

Morningstar praises Putnam's "plain English" and provides tips so you can write in "plain English," too

2008-05-03T08:05:00.000-04:00

Writing in "plain English" is easier said than done. So I was intrigued when Morningstar singled out Putnam for "plain English" prospectuses in "Letter to SEC: Short Fund Prospectus Helps Shareholders."

For example, the author liked this description of Putnam Voyager's strategy: "We invest mainly in common stocks of U.S. companies, with a focus on growth stocks. Growth stocks are issued by companies that we believe are fast-growing and whose earnings we believe are likely to increase over time."

Here are some "plain English" writing tips I extracted from the Morningstar article:

Get specific about strategy. Instead of describing your investment objective using terms like "capital appreciation" that don't mean a lot to ordinary folk, get specific about "the types of securities the fund usually owns and the criteria a fund manager uses when buying and selling securities."
Use graphs.
Put returns in context by comparing them with the fund's benchmark. Don't make your readers struggle to understand returns without any basis for comparison.

_________________
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.

A Post A Day for the Month of May

2008-05-02T07:37:00.000-04:00

I'm engaging in a blogathon called "A Post A Day for the Month of May," initiated by Michelle Rafter of the WordCount blog. As befits a business blog, I plan to post once every business day.

Are there topics you'd like me to write about? Please tell me about them in your comments.

Visit Michelle's blog for links to the other blogs participating in the blogathon.

_________________
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.

Morningstar gets the WIIFM

2008-05-01T07:30:00.000-04:00

Before your readers dig into your written materials, they want to learn the WIIFM--"What's In It For Me?" If you can't convince them they'll get something out of it, they may not read it.

Morningstar's newsletters do a nice job of communicating the WIIFM. Consider, for example, this title of a Morningstar Fund Spy article: "Dissecting the Ultrashort Bond Fund Mess: What should you do if you own one of these funds?" If you're in a "mess," wouldn't you want to learn what your next step should be?

Here's another example: "Take the Greatest Advantage of the World-Stock Group: There are many good global funds, but you still need to choose carefully." The title promises not only that you can maximize your gains, but you can also avoid pitfalls.

Notice how both titles use the text after the colon very effectively. I often advise my clients to use subtitles and subheadings--rather than just titles and headings--to draw more readers into their investment commentary and other writing.

_________________
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.

Canadian economist gloomy, but "sunshine and lollipops" compared to Marc Faber

2008-04-29T12:26:00.005-04:00

"My presentation is sunshine and lollipops compared to [Marc Faber's]," said Patricia Croft, chief economist, Philips Hagar & North Investment Management, a Canadian firm. Both spoke at the Refining Wealth Management Conference in Edmonton, Alberta, on April 24. (Read my comments on Faber's presentation). Croft's focus was "Outlook 2008/09--Life in the Aftermath of the Great Global Credit Crisis."

One of Croft's key points: the Canadian dollar is overvalued, so the U.S. dollar will head up.

Over the next nine months to one year, the Canadian dollar is likely to trade vs. the U.S. dollar in the range of 95 cents to $1.10, said Croft. But, "longer-term, the Canadian dollar at parity is significantly overvalued." Based on the OECD's purchasing power statistics, 85 cents to the dollar is more realistic.

Croft expects the U.S. dollar to end 2008 stronger than it is today. Why? It's like the accounting concept of FIFO, "first-in, first-out." The U.S., which was the first to enter recession, will be the first out, she said. She also reckons that an Obama presidency could boost the U.S.

Other observations:

The Canadian housing market isn't likely to follow the U.S. example because Canada's mortgage market is more conservative (less than 5% of mortgages are subprime) and Canada is one of only two undervalued real estate markets (the other is Austria).
Food price inflation has staying power
We're near a major inflection pont for inflation and real interest rates will also rise
Good buying opportunities for Canadian investors include Canadian financial debt, Canadian bank stocks, and U.S. stocks

You can view a webcast of Croft's outlook for the second quarter of 2008.

_________________
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.

Buy farmland, not NYC real estate, says Marc Faber

2008-04-28T17:36:00.004-04:00

Buy farm land, said Marc Faber on April 24 in his presentation to the Refining Wealth Management Conference sponsored by the CFA Society of Edmonton. For one thing, as investment managers, the audience members should diversify out of financial assets. Plus, if war breaks out over scarce commodities, where’s a more likely target—Wall Street or a far away farm in Canada where you can grow your own food?

The farm land suggestion was just one tiny part of a presentation on "Will the first synchronised global economic boom in the 200-year old history of capitalism also lead to a synchronised bust?" by Faber, the publisher of The Gloom, Boom & Doom Report. Faber said "a colossal bust" is likely.

Faber was quite critical of Ben Bernanke and the Fed. "Expansionary monetary policies, which caused the current credit crisis in the first place, are the wrong medicine to solve the current problems.... But what options does the Fed have with debt to GDP at 350%?"

_________________
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.

How financial advisors use LinkedIn to boost their visibility

2008-04-25T17:04:00.003-04:00

"Boosting my visibility" is the number one reason why financial advisors are participating in LinkedIn (LI). LI profiles and answers both deliver benefits. But tread carefully, or your compliance department—or even the SEC—could nail you.

LinkedIn profile makes you easier to find—and track

You’ll be easier to find in a Google search if you have an LI profile. "By adding connections, you increase the likelihood that people will see your profile first when they’re searching for someone to hire or do business with. In addition to appearing at the top of search results (which is a major plus if you’re one of the 52,000 product managers on LinkedIn), people would much rather work with people who their friends know and trust." as Guy Kawasaki said in "Ten Ways to Use LinkedIn." With more people looking online for services, that’s critical. At a minimum, your profile should include your name, title, and location, but you can beef it up with details, including a link to your website.

Rob Schmansky, a Detroit, Mich.-based wealth manager, likes that LI shares his profile updates with potential clients, friends, and family who are his LI connections. This may put his name in front of them when they can make a referral or need financial advice themselves. He makes it easy for his network to find his profile by providing a link in his email signature.

LinkedIn Answers let you display your expertise—and learn

LI Answers let you respond to questions posed by others and ask your own. The “personal finance” category will probably interest the greatest number of financial advisors. However, check out other categories , too.

Carlton Johnson, an independent advisor in the Charlotte, N.C. area, says “As I provide answers to questions, potential clients are always reading answers. ‘Best answers’ are great testimonies to technical prowess; however, even good and unrated answers can clue a potential client on how you are currently viewing finance world and particular situations relevant to them.”

Some financial advisors would submit answers even if there were no prospect of gaining clients. One advisor, who asked to remain anonymous, said he gives answers to help prevent individuals from making common mistakes.

Andrew Baechler of PWL Capital in the Ottawa, Canada area likes Answers “as a gauge to see what issues are currently top-of-mind with investors.” Johnson also sees Answers as an educational resource. “LI serves as a platform to exchange ideas and find solutions to questions that my clients and others may have about difficult financial situations.”

As an occasional writer for financial magazines, I see another benefit for advisors. You can connect with reporters. Journalists are increasingly using Answers to find sources to interview for stories. Being quoted in articles can enhance your credibility.

Watch out for compliance!

Pay attention to your organization’s compliance rules. One advisor told me that even something as basic as her LI profile had to be approved by the compliance department. Your firm may be more flexible. “My compliance department allows me to post on LinkedIn without their approval, so long as I don’t provide specific investment guidance,” says Baechler.

Some advisors may be crossing the line that forbids testimonials for registered investment advisors. Check with compliance before you accept a Recommendation through LI.

Are you an advisor who’s leveraging LinkedIn? Leave a comment about how it’s working for you.

_________________
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.

Your privacy policy can become a marketing document

2008-04-19T15:23:00.004-04:00

ING Direct's e-mail about their privacy policy made me feel good about being their customer. Why? Because they made me feel they value communicating clearly with me.

Here's how the e-mail started:

"Below is some important information that we're required to send you each year. It seems like a lot of legal stuff, but we promise, it will only take a few minutes. Give it a look."

Also, their opt-in policy made me feel that they care about me more than they care about cross-selling.

"Did you know our Privacy Policy EXCEEDS government standards? In 1999, Congress passed a law requiring financial institutions to give Customers the ability to "Opt-out" of information sharing. At ING DIRECT we went the extra mile to provide you with an "Opt-in" Privacy Policy, which means we won't share your information with any other company or partner unless you ask us to."

Are you missing marketing opportunities by writing your legally required disclosures in legalese?
_________________
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.

Do your performance reports send the wrong message?

2008-04-08T08:33:00.003-04:00

You tell your clients to think long-term. But are you sending them the opposite message?

Here's one manager's take on the topic.

"...we realized that we lectured our clients about long-term performance and investing to meet their goals; however, our reporting focused their attention on short-term returns and market performance. Today, we do not provide any performance for periods less than one year, and we benchmark against CPI, not the S&P 500, to better frame our clients’ understanding."

That's according to Harold Evensky in"The Rational Wealth Manager" (CFA Institute membership may be required to access this article).

Would you consider following Evensky's lead?

_________________
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.

Mindmapping for financial advisors

2008-04-05T08:28:00.001-04:00

"Mind Mapping: Some financial advisors find mind mapping software helpful in analyzing issues," an article by Joel Bruckenstein in Financial Advisor (April 2008) caught my eye because I recommend using mind mapping to help organize your articles in my presentations on "How to Write Investment Commentary that People Will Read."

I draw my mind maps using pencil and paper. Bruckenstein says mind mapping can be even better if you use software. He particularly likes Mind Manager Pro 7, which offers a 21-day free trial.

In addition to Bruckenstein's article, you can check out Joyce Wycoff's book, Mindmapping: Your Personal Guide to Exploring Creativity and Problem-Solving, which I was introduced to by presentation coach Cheryl Dolan.

"Weathering the Downturn—with Good Communication"

2008-04-04T08:57:00.005-04:00

I agree with the communications advice offered below. Thank you, Beverly Flaxington of The Collaborative for giving me permission to reproduce your article here.

Yes, it seems we are officially in a recession. Portfolios are shrinking—and fast. One never knows what the next day will bring in terms of rate cuts, market performance or the political climate.

What's a financial firm to do? Most people think they need to "batten down the hatches" right now. They hunker down and wish and wait for things to change. They worry about getting client calls. They worry about cutting the budget and they worry about shrinking fees tied to portfolio assets.

We've been through this before. What goes up, must come down and once it comes down, it usually goes back up again. We have historical perspective that says "this too shall pass." So, how to behave when the market isn't?

If it isn't your style to communicate when things are going well—now is not the time to stay in your style. Find reasons to reach out to your clients. Help them understand what's going on. If you are feeling concerned about market turbulence, think about the less informed client—it's a real scare to think you won’t be able to retire on time or send your kid to college next year.

If it is your style to communicate, make sure it is largely educational. Don't feel you have to justify your market-related poor returns. Explain to clients what is happening—in historical context explain what you are seeing in the market and what you are doing. Explain why you are making the investments you are and what you think clients can expect as a result. Show the clients you do have a plan and an approach. Clients know you can't control the markets, but they need to know you have a plan to deal with the volatility.

If your style performs well in a down market—tout it, loudly! We all like upside and seeing our portfolios grow, but firms that manage downside risk well look great in a down market. If you are one of them, take advantage of the timing!

Help clients think through timing. Is now the best time to begin retirement? Should they wait a bit longer? Should they look for the second home right now and take advantage of the market earlier than they planned? Should they put some other major purchases on hold? Be their partner—work with them to figure out how to manage in this environment. The down markets certainly shrink portfolios but they also provide opportunities for those willing to act on them!

CFA Institute: Consider annuities, even variable annuities

2008-04-03T14:36:00.000-04:00

Fee-only advisors hate variable annuities.

That's the stereotype in my head. It was reinforced several years ago when I contacted advisors for an article on variable annuities that appeared in Advising Boomers.

So, it was interesting to read the following statement by Stephen M. Horan, head of private-wealth and investor education at the CFA Institute, "Variable annuities can also manage the problem effectively." This was part of an opinion piece called, "Managing Risk in Retirement Portfolios: Using annuities and other techniques can address market volatility early on," which appeared in the Feb. 25 issue of Investment News.

In his article, Horan refers to the Financial Analysts Journal article about longevity annuities that I've blogged about.

_________________
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.

SEC's Director of Trading and Market Regulation to speak March 28 at Babson College conference

2008-03-24T16:32:00.002-04:00

The first Babson Investment Management Conference on March 28 offers some interesting speakers, including Erik Sirri, the SEC's Director of Trading and Market Regulation.

The conference will take place on the campus of Babson College in Wellesley, Mass.

The cost for the general public is only $25.

_________________
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.

It'll be tough to sell advisors on longevity annuities

2008-03-18T18:55:00.005-04:00

Longevity annuities--annuities that kick in at, say, age 85--are going to be a tough sell to financial advisors.

That was my gut reaction when I wrote about longevity annuities on this blog. My unscientific sampling of advisors on LinkedIn reinforced that impression. They warned against the costs associated with annuities and suggested other alternatives for providing long-lived income in retirement.

Many oppose longevity annuities

For example, Tom Taylor, principal and portfolio Manager at Thoma Capital Management LLC, said "I have never recommended a longevity annuity to a client or any annuity for that matter. Building a bond laddering portfolio that invests in TIPs and US Treasury notes is a much better way to go."

Patrick Costello of Costello & Associates said, "paying a lump sum now for a benefit that won't be available for 20 years, with no interim access to the sum, predicated on the unlikely scenario that one will be alive long enough to receive a good inflation adjusted return seems like a fool's move."

Some advisors would consider longevity annuities

However, I did turn up some advisors who seemed willing to consider longevity annuities to help clients avoid outliving their assets.

"As with all insurance products, based on actuarial tables, there are winners and losers," said James C Brandon of JCB Capital Performance.

Jeff Motsco of Motsco Financial said, "Some annuities are good, some are great, and some you don't want to go near, but dismissing something based on cost without considering benefit is haphazard."

Al Aldrete of New York Life suggested that a longevity annuity is a good way to hedge the possibility that a client would live much longer than he or she expected. He said, "This is not a tool to be used with everyone. But for clients who have serious concerns about living too long (because their parents and/or Grandparents have lived into the 90's and 100's) and they are not sure about the fate of Medicare, Medicaid (MediCal in California) and Social Security, this gives them a peace of mind that they will have something."

_________________
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.

Asset allocation in a low return world

2008-03-17T13:04:00.004-04:00

The rules of asset allocation have changed. Two of the new imperatives:

Using tactical asset allocation (TAA)
Investing in real assets

These are among the best strategies for individual investors in an environment in which U.S. stocks are expected to average annual returns of 6%-7%. This is what I took away from "Asset Allocation in A Low Return World," a March 13 presentation to the Boston Security Analysts Society, by Adrian Cronje, vice president and director of asset allocation, Wilmington Trust.

Tactical asset allocation doesn't deserve its bad rap

Everyone says, "Don't try to time markets." But TAA is not market timing, said Cronje. "It is not about forecasting turning points." Instead, it is a form of rebalancing that can boost your returns.

You might think of rebalancing as buying and selling assets to return them to predetermined percentages. That's not what Cronje meant. He spoke instead about adjusting allocations to take advantage of changes in risk premiums.

"Dispersion among sub-asset class returns reflects risk premiums that are not stable, but cyclical," said Cronje. He talked about sub-asset classes because he looks at distinctions finer than large-cap vs. small-cap or growth vs. value. He'd prefer to invest in narrowly defined subsets, such as value as defined only in terms of book value or growth in terms of earnings.

Sub-asset class outperformance can be significant—what Cronje calls "large amplitude"—and last one to four years. That's often enough to justify the transaction and tax costs of TAA.

Cronje believes it's possible to identify when there has been a strategic shift in sub-asset class returns, so you can change your allocation once the new cycle is already under way. That's a lot better than suffering for getting in too early.

TAA can deliver returns that made Cronje say, "Beta is not always boring, cheap and alpha's unloved cousin."

Investing in real assets is essential for individual investors

"Today, traditional stocks and bonds just aren't good enough any more," said Cronje. Individuals should diversify into real assets and alternative assets. These are asset classes that can deliver real sustainable earnings power.

In one sense, real assets can be defined as physical or tangible assets. But more importantly, they're assets that offer a hedge against inflation. For example, inflation-linked bonds, real estate securities, and commodities. Since the debut of ETFs, these asset classes have become much more accessible to individuals.

A typical Wilmington Trust client might have 10%-15% in real assets. But they're a lot wealthier than your typical individual investor. Cronje didn't describe the profile of the individual investor who should consider these techniques. Presumably there's a minimum level of investable assets required.

Alternative assets—hedge funds, private equity, and private real estate—are also expected to outperform over the long term. They're not as accessible to individuals. In fact, even institutions must compete to invest with top performers. Although Cronje didn't discuss them, there are new investment vehicles—such as mutual funds that pursue long-short strategies—that alternative investments more accessible.

Cronje based these asset class recommendations on a long-term, inflation-adjusted forecast for returns. He called forecasts for periods of 10 years or more "highly reliable." Of course, he's not looking for accuracy down to decimal points. What's important is which asset classes will outstrip others, and in what order.

Follow Cronje's advice, and perhaps your portfolios will be better positioned for today's uncertain environment.

_________________
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.

"How to write investment commentary that people will read": Attend one of my upcoming presentations

2008-03-16T15:26:00.004-04:00

I'll deliver presentations on "How to write investment commentary that people will read" in:

Naples, Fla., for the CFA Society of Naples, on April 8 at 12 noon
Edmonton, Calgary for the Refining Wealth Management conference put on by the Edmonton CFA Society on April 24 at 1:15 p.m.

Also, I'm tentatively scheduled to give a lunchtime presentation on writing on May 14 to Boston Women in Finance.

You can highlight market turmoil's silver lining

2008-03-16T15:17:00.003-04:00

Tired of giving bad news about the stock market to your clients? Follow the example of The Wall Street Journal to talk about "How Market Turmoil Creates Opening to Enrich Heirs" (March 15-16, p. B1).

In short, the market's decline enables your clients to give your heirs more shares of stocks or mutual funds and to get more mileage out of grantor-retained trusts.

By the way, if you read the article, notice the "The Market's Gift" box. Using a box--known as a "sidebar" in the lingo of layout professionals--to highlight your article's main takeaways can snare the attention of readers who skim. Try it some time.

Write your own newsletter or buy a canned newsletter?

2008-03-03T11:05:00.002-05:00

You've decided to send a newsletter to your clients. Which route should you go? Write it yourself or send a canned newsletter provided by a third-party service?

Do it yourself, said most of the advisors who responded when I posted this question on LinkedIn.

The pluses of writing your own

"Writing your own newsletter is the most timely and cost-effective method," wrote Ike Devji of The Wealthy 100.

Assabet Advisors' Lisa Phelps likes having complete control over topics. She said, "I can pick topics for which I have a particular interest resulting in an article with a bit more depth or excitement than normally found in such newsletters." Plus, she can mix in insights from her own practice.

Brian Langenberg of Langenberg & Co. said that newsletters don't require a big investment of time--just a few hours per issue in his case. Moreover, "It is a great way to reach a broad audience, give them your thoughts, and stimulate awareness." I'm sure the investment of time varies by advisor. Some would find it much more time consuming.

Another plus of writing the newsletter yourself: It gives your readers a sense of who you are, especially if you're a good writer. It helps you to create a personal connection with them.

Why choose a canned newsletter

Russell Lowry of Sagemark Consulting prefers to talk directly with his clients, so a personally written newsletter would be overkill for them. He uses a canned newsletter to stay in touch with prospects.

Assabet Advisors' Phelps understands that some advisors prefer a canned newsletter because they "lack the time or skill to write a newsletter themselves."

A newsletter is a great marketing tool

Whatever route you take, a newsletter is a great way to keep your name in front of clients and prospects. Of course, a third option is to hire a writer or editor to help you produce a polished newsletter.

What route are YOU taking? Please leave your comments.

_________________
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.

One firm's approach to managing client fears

2008-02-28T09:37:00.003-05:00

Wondering how to address your clients' fears during challenging markets?

Get ideas by looking at what others are doing.

For example, Forefield Inc., which provides educational content to advisors, recently sent an email suggesting advisors use their articles about:

Handling market volatility
Monitoring your portfolio
Balancing your investment choices
Understanding risk
Evaluating volatility
Dollar cost averaging

Have you discussed those topics recently with your clients? If not, maybe now is the time to do it.
________________
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.

HSBC economist Stephen King says "Goodbye to all that"

2008-02-26T21:06:00.004-05:00

The world that we took for granted is gone. No more rapid global growth. No more easy investment opportunities. No more excess liquidity.

That was the starting point for "Goodbye to all that," a Feb. 25 presentation to the Boston Security Analysts Society by Stephen King, chief economist and global head of economics for HSBC Group.

King, who's based in the U.K., brought a global perspective to the current housing and credit crunch in the U.S. "The U.S. housing crisis has become a transatlantic lenders' problem," he said. Why? Because in their quest for higher yields, institutional investors in the U.K and the eurozone became heavy investors in U.S. corporate bonds. By corporate bonds, he meant asset-backed securities, especially mortgage-backed securities. U.K. banks that have gotten burned are tightening their lending standards just like their U.S. counterparts.

King predicted that 2008's biggest negative surprise for financial markets might come from outside the U.S.: the sudden loss of momentum in the U.K. and elsewhere. In fact, he suggested that the U.S. dollar may appreciate in 2008 because economic risks are priced into the U.S. market, but not in Europe.

On the emerging market front, King said that those economies have decoupled from the U.S. "Slower G7 domestic demand growth may not be an emerging market disaster," according to him. But while some strategists stress the upside of emerging market demand for the U.S., King emphasized the downside. A slowly growing U.S. that's cutting interest rates will boost capital flows into emerging markets, where too much domestic demand will fuel inflation in fuel and food costs. That inflation will deliver another blow to the economies of developed nations.

________________
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.

"Will the U.S. Sub-Prime Crisis Be as Bad as History Suggests?"

2008-02-26T20:01:00.003-05:00

"If history is a good guide, the U.S. economy will stay in the doldrums much longer than we’d like—a minimum of two years. That’s the scary implication of 'Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International Historical Comparison' by Carmen M. Reinhart of the University of Maryland and the National Bureau of Economic Research (NBER) and Kenneth S. Rogoff, Harvard University and NBER."

Read more of my article about Reinhart and Rogoff's research and what advisors say about its implications. This article appeared in the Feb. 26 issue of Advisor Perspectives.

_________________
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.

Financial Analysts Journal article favoring annuities

2008-02-23T17:45:00.006-05:00

The Financial Analysts Journal writing favorably about annuities? That grabbed my attention.

In "The Longevity Annuity: An Annuity for Everyone?" in the Jan./Feb. issue of the Financial Analysts Journal, Jason S. Scott suggests that a relatively new product called a longevity annuity can maximize retirement spending for some retirees. This is especially true for retirees who:

Are in good health
Aren't very concerned about leaving a bequest
Have enough wealth to afford an annuity, but not so much that they needn't worry about outliving their assets

Here's how Scott, managing director of the Retiree Research Center at Financial Engines, describes this product.

"Longevity annuities are essentially immediate annuity contracts without the initial payouts. That is, a longevity annuity involves an up-front premium with payouts that begin in the future. For example, an age-85 longevity annuity can be purchased at age 65 with payouts commencing only when and if the purchaser reaches age 85.

Longevity annuities are better than immediate annuities because they "maximize the insurance benefit per premium dollar." Scott compares the cost of securing that future spending with bonds vs. with a longevity annuity. He finds that "the future spending that costs $1.94 to secure in the bond market costs only $1.00 in the annuity market. Thus, every annuity dollar allocated to finance spending at age 85 frees up 94 cents for additional spending."

What do you think? Is this something your clients should consider?

_________________
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.

Nice analogy in credit default swaps article

2008-02-17T15:43:00.004-05:00

Sometimes my head hurts when I try to understand credit default swaps. That's why I smiled when I read this analogy in Gretchen Morgenson's "Arcane Market Is Next to Face Big Credit Test" in The New York Times.

"It would be as if homeowners, facing losses after a hurricane, could not identify the insurance companies to pay on their claims. Or, if they could, they discovered that their insurer had transferred the policy to another company that could not cover the claim."

You'll have to read the article to appreciate how nice this analogy is.

_________________
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.

Speaking to high net worth audiences

2008-02-16T12:02:00.004-05:00

I agree with PR expert Beth Chapman's advice in her recent newsletter that your preparation for speaking to high net worth clients should include:
1. Honing your speaking skills
2. Understanding that educational, non-self-serving content is required
3. Trusting that your current clients are the conduit you need to the audiences you seek.

I was intrigued by her suggestion that you

"Offer to speak to your clients' social groups, condo associations, or at a coffee in their homes for ten or more friends. I can hear you now -- this is so low brow, good grief. But, wait. Don't misjudge the importance of small groups of clients and who they know. Your existing clients have conduits to all the high net worth groups you wish to access. But you have never asked your clients to introduce you to these target groups as a speaker, have you?"

_________________
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.

Retirement at risk, but can be saved, says researcher Alicia Munnell

2008-02-15T11:59:00.004-05:00

Most Americans won't have enough income for a comfortable retirement. However, individuals, employers, and the government can take steps to improve the situation, said Alicia Munnell in her presentation on "Retirement 'At Risk': The Changing Landscape of Retirement in the U.S." to the Boston Security Analysts Society on February 14. Munnell is Peter F. Drucker Professor of Management Sciences at Boston College Carroll School of Management and director of B.C.'s Center for Retirement Research

A three-legged stool of Social Security, employer-sponsored pensions, and individual savings used to support retirement better than it does today. The situation is only going to get worse because:

Social Security will replace a smaller percentage of income in the futur
The shift to 401(k)s--and individuals' bad decisions about them at every step of the process--is not working as well as it could
Individuals save virtually nothing outside employer-sponsored retirement plans

As a result, 43% of households are at risk of not maintaining their standards of living in retirement. That's according to the National Retirement Risk Index, which you can read more about in "Is There Really a Retirement Crisis? An NRRI Analysis," a paper co-authored by Munnell.

To improve Americans' outlook for retirement, Munnell called for:

Individuals to work longer, to save more through 401(k)s and IRAs, and to consider tapping their home equity in retirement
Employers to revise personnel policies to encourage older workers and to make 401(k)s more effective through automatic provisions
Government to redefine what's old (in other words, no early retirement at 62) and to help individuals to save more, possibly by introducing a new tier of funded, privately managed retirement savings

I was intrigued by Munnell's suggestion that the government require that some percentage of 401(k)s should default into an annuity once the account holder begins withdrawals.

You can learn more about research by Munnell and B.C.'s Center for Retirement Research.

By the way, that 43% statistic might prove useful for starting a retirement savings conversation with your clients.

----------------

Feb. 16 update

Research from the Urban Institute supports Munnell's advice about individuals working longer. It found that:

On average, working an additional year increases annual retirement income about 9 percent (figure 1).
Working an additional five years boosts annual retirement income about 56 percent.
The impact is even larger for people at the lower end of the income distribution.

I read about this in the Feb. 16-17 Wall Street Journal.

_________________
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.

"Young Millionaire Investors Best Positioned to Survive Market Volatility"

2008-02-05T13:57:00.001-05:00

"Due to broader diversification in their investment portfolios and a willingness to own more alternative assets and newer, non-traditional investment products, younger millionaires may be more likely than older generations to limit the impact of potential market turbulence over the coming year..." according to a Jan. 2008 press release from Northern Trust about its "Wealth in America" report. A 56-page summary of the report is also available on the Northern Trust website.

_________________
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.

"Stock Price Correlated to Likeability of Super Bowl Ads"

2008-02-04T10:23:00.001-05:00

"When TV viewers like a company's Super Bowl commercial, the company's stock price goes up, according to a study by researchers in the University at Buffalo School of Management and Cornell University."

It's not too late to watch the Super Bowl ads to assess them for likeability.

_________________
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.

Lousy headline, provocative first sentence

2008-01-28T08:31:00.001-05:00

I nearly didn't read an interesting article about stocks in The New York Times.

Why?

Because of the bland headline: "An Ear to the Ground on Stocks." The article could have been about anything. Perhaps college students who pick stocks for a class. An investment club. A well-known equity portfolio manager. But the real topic was more intriguing.

The first sentence of this article by Mark Hulbert grabbed my attention. It said, "Investor sentiment suggests that the bulk of the stock market’s decline is now behind us." Now that's provocative. The author takes issue with what most people think.

I also like how Hulbert summarized his argument--and set up the structure for the rest of his article--in his next paragraph:

This conclusion is based on an analysis of two very different groups. The first is investment newsletter editors, who, on average, are usually wrong about the market’s direction; they are currently bearish. The second is corporate insiders, who usually get it right, and they are mostly bullish

From there, Hulbert discussed the behavior of newsletter editors, and then of corporate insiders. He spent four paragraphs on editors and five on insiders. The equal weighting between the two topics reflected his good organization. If he'd had six on editors vs. one on insiders, he probably should have emphasized the editors more in his summary.

Lessons for writers:

It isn't enough for your headline to be accurate, it has got to attract attention.
State your main idea--and your main supporting points--clearly at the beginning of your article.
The body of your article should follow the organization that you set up in your introduction.
Compare the number of paragraphs you allocate to each main point from your introduction. If they're roughly the same, then your introduction probably gives the right weight to each point. If not, you may need to tweak your introduction or the body of your article.

_________________
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.

“Better writing without parentheses” by Harriett Magee

2008-01-27T16:09:00.000-05:00

Here’s a guest article by Harriett Magee, a writer-editor who specializes in alternative investments.

Parentheses (like all punctuation) can hurt (and help) most writers (maybe even all) in getting their point across to readers. Readers may find such marks annoying, like in the previous sentence, because they interrupt the flow and weaken the message with irrelevancies. And while most readers don’t count words in sentences, parentheses often result in long sentences, which tire and confuse readers. (The ideal sentence length is 15–20 words.) To get your message across, use parentheses sparingly.

For writers, parentheses can seem like a lifesaver because they offer a home to data and show you’ve done your homework. They’re ubiquitous in research reports. Writers may also use them as a way to repeat information to drive the point home. For example, “The $750 million Big Ideas Venture Fund II was allocated roughly half to early- and to late-stage life science investments (49% and 51%, respectively). Fund III, however, had only about a tenth of capital ($75 million) invested in one early-stage investment.” But readers will get the point faster if you leave out numbers.

When writing about investments, often the urge to insert alternative metrics can be satisfied by putting the data in a graph. For example, give the prospective investors in the $2 billion Big Ideas Fund IV a bar graph showing the shift in allocations to young vs. more-established companies. A bar graph would accomplish two things: provide variety by breaking up the text with a picture, resulting in more white space to give the eyes a rest, and provide alternative metrics for people, especially those who want more detail.

Hedge Funds in High Net Worth Portfolios

2008-01-18T10:38:00.000-05:00

There’s more than one way to invest responsibly in hedge funds.

That’s a lesson from RINET Company, LLC and The Colony Group, LLC, two Boston-based wealth management firms. RINET typically puts its clients in hedge funds of funds. Although it sometimes relies on its own due diligence, The Colony Group prefers direct investment in hedge funds in which its wholly owned subsidiary, Colony Funds, LLC, serves as general partner. Yet RINET’s and Colony’s approaches to due diligence overlap. Both delve deep into the quantitative and qualitative details. Without extensive due diligence, clients could lose everything to fraud, deviation from strategy, or reckless investing.

Read more about these two firms' strategies for hedge fund investing in my article published in Advisor Perspectives.

_________________
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.

Five writing lessons from New York Times economic article

2008-01-13T12:25:00.000-05:00

If you want your clients and prospects to actually read your investment commentary, you can learn some lessons from "No Quick Fix to Downturn: Some Fear Stimulus Is Already Too Late," an article on the front page of The New York Times (January 13).

1. Create a headline that blares your main message.
In this case, it's "No Quick Fix to Downturn." I'd prefer "No Quick Fix to Economic Downturn," which is the title the Times uses on the website version of this article. I think that column width constraints squeezed out "economic" in the print version of the newspaper.

2. Get more specific in your sub-headline.
That's "Some Fear Stimulus Is Already Too Late."

3. Deliver your main message quickly in the body of your article.
Co-authors Peter S. Goodman and Floyd Norris lead with "As leaders in Washington turn their attention to efforts to avert a looming downturn, many economists suggest that it may already be too late to change the course of the economy over the first half of the year, if not longer."

4. Keep your paragraphs short.
Like many newspaper stories, this one begins with a one-sentence paragraph. You needn't be as brief. However, an occasional one-sentence can provide a welcome change of pace.

5. Quickly answer the "So what?" question.
Most readers will ask "Why should I care about what you're telling me?" I found my answer within the first 130 words of this 1400-word article. The authors write that the answer to "how much the economy can be expected to fall before it stabilizes.... could be a defining factor in the outcome of the fiercely contested presidential election."

Your readers face competing demands on their attention. If you make easy for them to understand what you're discussing and why, they're more likely to stick with you. Also, they're more likely to go away understanding the main thrust of your article.

If you saw the Goodman-Norris article, did these writing techniques help snag your attention?

_____________________________
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.

Strong analogy for Federal Reserve policy

2008-01-13T12:24:00.000-05:00

Clean writing will make your investment commentary writing easy to read. Strong analogies will make it memorable.

I like this analogy for Federal Reserve policy from "Larry, Curly, Moe and the Economy" in Ben Stein's Jan. 13 column for The New York Times (note: free registration may be required to access the article).

...punishing the United States economy because oil prices are high is attacking the wrong culprit. It’s sort of like a Three Stooges movie in which the wrong person keeps getting hit on the head.

The Three Stooges image will make Stein's point last longer in the minds of many readers.

_____________________________
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.

For better investment commentary, read it out loud

2008-01-09T16:10:00.000-05:00

Your investment commentary will pack more pop with a conversational tone. Individual investors will find it more intelligible and intriguing.

How do you know if your writing sounds conversational? Read it out loud.

When you read out loud, you'll also:

Discover typos that you might have overlooked
Become more aware of your writing's rhythm--The right rhythm can help keep your reader on track

Nice analogy about large caps vs. small caps

2007-11-26T07:12:00.000-05:00

I like this analogy from "A Rough Ride on the Risk Curve" from The Wall Street Journal (Nov. 26):

"Because of their deep balance sheets and diversified businesses, large caps can often ride out storms like cruise liners, while small caps are tossed about like sailboats."

Nice explanation by Vanguard CIO Sauter

2007-11-21T15:13:00.000-05:00

I like this excerpt from a Q&A with Vanguard CIO Gus Sauter, "Timeless lessons: Sauter reflects on market volatility in ('87 and '07)" In The Vanguard (Autumn 2007).p. 4.

When something goes on sale in the grocery store, people rush to buy it. When something goes on sale in the stock market, people rush to sell it.

Sauter uses this to explain why people buy high and sell low.

_____________________________
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.

Know your audience before you write investment commentary

2007-11-05T09:54:00.000-05:00

Think about your audience before you begin writing your investment commentary.

Identifying your audience will help you choose the topics, tone, and language that will glue readers to your commentary.

It's all about your reader

What's the typical reader's favorite word?

Some portfolio managers suggest "outperformed" or "beat the benchmark" when I ask this question in my investment commentary writing programs. These terms probably run a close second behind the winner.

The winner is "you." Using the word "you" will help to attract readers' attention. They also like content that is tailored to their needs and style of communication.

Think about your clients, prospects, and referral sources.

Are they:

Emerging affluent, high net worth, institutions or consultants?

Sophisticated investors, newbies or somewhere in between?

New college grads, young families, entrepreneurs or creators of wealth, planning for (or living in) retirement?

When you meet in person with your clients, you quickly discover their different interests and levels of understanding. You should reflect these characteristics in your writing as well as in your face-to-face meetings.

Emphasize impact on client portfolios

Your clients will zoom in on "What does this mean to me?" Especially, "How does it affect my portfolio?"

If you manage all client accounts identically, you can easily discuss the impact of market trends--and even specific stocks--on their portfolios. Be sure to make that connection explicit in your commentary.

It's not so easy to tie your commentary to client portfolios when accounts vary due to differing investment styles, managing for tax efficiency, timing of cash inflows, and other factors. But you can still do it.

When you've got account dispersion, you can still personalize your commentary by talking about:

Asset classes (and maybe even sectors) instead of specific securities

Where you're looking for new opportunities or where you foresee weakness

Address questions your clients ask

How account performance may vary because you customize your portfolio management to client needs

Choose topics that interest your readers

When I first wrote investment commentary at Fleet Investment Advisors (now Columbia Management Group), I focused on recapping the past quarter's events, just as my predecessors had. Nobody complained. At least, not in the beginning.

However, as I got to know the portfolio managers in the field, they warmed up enough to tell me the truth. "We can read this in The Wall Street Journal," they said. "What can else can you say?"

I discussed one response earlier: Talk about what you see coming in the future. Be sure to relate it to how you'll adjust your client portfolios.

Another route is to answer a popular question, such as "How can I generate more income in this low-return environment?"

Or, you can take a stance on a controversial topic. Some good sources for topics:

The Wall Street Journal and other publications read by your clients
CFA Magazine, Financial Analysts Journal, and other specialist publications
Brokerage research

One benefit of using the abovementioned sources is that they'll provide documentation that you can use to satisfy the compliance professional who reviews your commentary.

Write for your clients' level of understanding

You may be able to toss around terms like duration, contango, and reversion to the mean without confusing your investment colleagues. That's not true for the typical individual investor. So, simplify your vocabulary for them.

I like Warren Buffett's advice. He suggests, "Write with a specific person in mind. When writing Berkshire Hathaway's annual report, I pretend that I'm talking to my sisters.... They will understand plain English, but jargon may puzzle them." Buffett made this comment in A Plain English Handbook: How to create clear SEC disclosure documents, an excellent resource for investment commentary writers.

Follow these tips and your investment commentary will keep your readers' attention.

More asset management M&A ahead?

2007-10-30T19:43:00.000-04:00

"... one result of the credit dustup could be a more pronounced shift of capital toward brand-name firms and managers, along with an acceleration of M&A activity in the sector," says the third quarter 2007 newsletter from Berkshire Capital (p. 2).

For example, Berkshire cites Citadel Investment Group's acquisition of distressed assets from Sowood Capital.

How to cut excess words from your investment commentary

2007-10-30T11:58:00.000-04:00

Fewer words and more punctuation can give your investment commentary more impact.

Below you'll find a before and after example.

BEFORE
With only two more Fed meetings remaining in 2007 (on Oct. 31 and Dec. 11), the issue remains whether the Fed’s unexpectedly aggressive 50 basis point cut in the fed funds rate last week was intended to shock the markets to restore confidence or, they are concerned that the underlying economic conditions are worse than most of us think.

AFTER
The meaning of the Fed's 0.5% cut in short-term interest rates is not clear. The Fed might have made this unexpectedly large cut to restore confidence. Or, the Fed might be worried that the economy is in worse shape than most of us think.

The Before sentence is fine if it's only read by investment professionals who want to extract its meaning. They can get it in one reading. But unsophisticated readers will struggle. Why? Because the sentence is long. It also includes superfluous information and technical language.

In my After sentence I

Deleted unnecessary information about the Oct. and Dec. Fed meetings
Paraphrased my way around references to fed funds rate and basis points
Broke one sentence into three sentences
Referred to the Fed as it instead of they

CFA Digest: "Diversification Benefits and Persistence of US-Based Global Bond Funds"

2007-10-26T15:46:00.000-04:00

Adding a global bond fund can improve your portfolio's risk-return characteristics.

According to a CFA Digest abstract of "Diversification Benefits and Persistence of US-Based Global Bond Funds," "Adding global bond funds to a portfolio is found to provide significant incremental benefits to equity index funds and domestic bond funds and to reduce the impact of volatile markets on a portfolio."

The full article by Sirapat Polwitoon and Oranee Tawatnuntachai, CFA appeared in Journal of Banking & Finance, Vol. 30, No. 10: (October 2006)2767-2786.

Strategic relationships can boost revenues--and client satisfaction--for estate planning attorneys, says DKE Inc.

2007-10-25T14:01:00.000-04:00

Estate planning attorneys can boost their revenues--and client satisfaction--through strategic relationships with investment advisors, says DKE Inc. in their white paper, excerpted below. You can access the entire white paper by clicking on this link and then clicking again on "Attorney Strategic Relationships." DKE Inc. is one of my clients.

Estate planning attorneys face downward pressure on their income due to increased competition from attorneys and non-attorneys. Changes in tax laws also threaten the market for their services.

Estate planning attorneys can overcome these barriers to growth by forming strategic relationships with professionals in related, noncompetitive areas. These relationships should not focus on revenue enhancement. Instead, their goal should be improving client satisfaction within the context of the estate planning attorney as the client’s most trusted advisor. Revenues will follow.

In this paper, we provide a blueprint for estate planning attorneys to establish solid, effective and enduring relationships with such professionals and their clients.

Tax Policy Center has a new website

2007-10-04T10:55:00.000-04:00

The Tax Policy Center has a new website.

This is a great source of data on tax issues, such as the AMT, that affect your clients.

Note added on 10/10:
The center has just added a matrix comparing presidential candidates' tax policies. This could be good fodder for your commentary.

T Rowe Price fund focused on Africa

2007-10-02T18:04:00.000-04:00

I know that mutual funds are cutting up the world into smaller and more exotic slices. Plus, emerging market investment has become much more respectable as their economic and financial strength has increased.

Still, I was surprised to read about the new T Rowe Price Africa & Middle East Fund (TRAMX) in David Snowball's article on the FundAlarm Annex.

Snowball's well-written article referred me to "The Case for Investing in the Middle East and Africa," a four-page report available from T Rowe, and the Center for Global Development's "Why Doesn't Africa Get More Equity Investment? Frontier Stock Markets, Firm Size and Asset Allocations of Global Emerging Market Funds-Working Paper 112."

Passive vs. active verbs: Following up BSAS Investment Commentary Class

2007-09-26T12:16:00.000-04:00

Can you show me an example of passive vs. active verbs?

That question from a participant in my BSAS class on "How to Write Investment Commentary That People Will Read" sparked my decision to publish the article below from my Investment Writing e-newsletter.
---------------------------------------------------------------

Sentences featuring active verbs typically have more oomph than their passive counterparts. You can also ratchet up your sentences' appeal by using colorful active verbs, such as "ratchet."

Here’s a quick test. Which of the following sentences uses an active verb?

The announcement of a peace treaty sparked a stock market rally

The stock market rally was caused by the announcement of a peace treaty.

Yes, it’s sentence number one. In sentence number two, the use of "was" -- a form of "to be" -- betrays the sentence’s passivity.

Still confused? Check out this explanation of active vs. passive verbs.

Scroll down to the fourth section, “Changing Passive to Active” for hints on how to purge your sentences of passivity.

I must thank Karyn Greenstreet’s Passion for Business e-newsletter for bringing this grammar web page to my attention.

I like this related tip from Richard H. Weiss' "How to be your own best editor,": "Use powerful verbs. Underline all the verbs in your copy. Did you find a bunch of 'is' and 'are' constructions? Can you replace those words with verbs that convey momentum and action?"

"How to Write Investment Commentary Your Clients Will Read," Sept. 24 BSAS program

2007-09-11T18:33:00.000-04:00

You invest a lot of effort in writing your quarterly client letter or commentary. Wouldn't it be nice if your clients actually read it? Some simple, quick tips can spice up your commentary without landing you in trouble with your Compliance Department. "How to Write Investment Commentary Your Clients Will Read," an interactive program, will teach you to make your text reader-friendly without stripping it of meaty content.

Register for this program led by Susan Weiner, CFA on the Boston Security Analysts Society website. If you can't attend the September 24 program, contact Susan to present customized training at your company.

Has backtesting really become respectable in the investment world?

2007-09-09T16:23:00.000-04:00

"Backtesting may be more powerful than ever."

This excerpt from an article title in CFA Magazine stunned me. When I started learning about investment management in the 1980s, backtesting totally lacked credibility. It appears that clients, marketers, and data providers are responsible for an attitude shift.

"Despite widespread skepticism about backtesting on the part of financial professionals, it has become an indispensable marketing tool because clients demand it," according to "Making the Grade? Despite lingering skepticism, backtesting may be more powerful than ever" by Christopher Wright in the July-August issue of CFA Magazine.

Another factor, said Wright, is the proliferation of enormous high quality databases from providers such as FactSet, Quantitative Analytics, and TradeStation.

What do you think about backtesting?

Sept 23. comment:
Speak of the devil!
Backtesting is a key part of the argument in "Variable Annuities: From Controversial to Mainstream Using a Two-Bucket Strategy, Part 1," Journal of Financial Planning (August 2007).

Top three challenges for RIAs, according to Moss Adams

2007-09-04T16:15:00.000-04:00

According to the press release for "Uncharted Waters: Navigating theForces Shaping the Advisory Industry" from Moss Adams and Pershing Advisor Solutions, the top three challenges confronting registered investment advisors are:

Increased competition from the dramatic growth of the RIA market
Need to provide advice to increasingly sophisticated clients
Competition among RIAs to recruit top talent

According to the press release, you can obtain a copy of the executive summary and full report by e-mailing Pershing Advisor Solutions at pasinformation@pershing.com.

New white paper on fiduciary role under Pension Protection Act of 2006

2007-08-20T18:04:00.000-04:00

"Pension Protection Act of 2006: Is an Expanded Fiduciary Role the Right Choice for Financial Professionals," a white paper, has been issued by The Principal Financial Group.

More resources related to the Pension Protection Act of 2006 are available on The Principal's website.

Should you say "sorry"?

2007-08-17T19:31:00.000-04:00

"Running a hedge fund means never having to say you're sorry," writes Wall Street Journal reporter Gregory Zuckerman in "Dear Investors, We're...: Hedge Funds Strain to Find Words to Say 'Sorry' for Your Losses" (August 16, pp. C1-2). They're not apologizing for their poor performance. Not even with the sharp declines they've experienced recently.

"Instead, in letters to clients, they point fingers at other hedge funds, once-in-a-lifetime events and their own computer problems."

That's a good thing, according to attorneys who say apologies could make managers vulnerable to law suits.

Would YOU apologize for poor investment performance?

Rich are getting richer, according to U. of Michigan research

2007-08-13T11:27:00.000-04:00

"Over the last 20 years, the net worth of the top two percentile of American families nearly doubled, from $1,071,000 in 1984 to $2,100,500 in 2005. But the poorest quarter of American families lost ground over the same period, with their 2005 net worth below their 1984 net worth, measured in constant 2005 dollars."

That's according to research from the U. of Michigan's Institute for Social Research.

Related URLS:

Institute for Social Research: http://www.isr.umich.edu

Panel Study of Income Dynamics: http://psidonline.isr.umich.edu/

Frank Stafford: http://www.ns.umich.edu/htdocs/public/experts/ExpDisplay.php?ExpID=721

"Personal Finance Classes Help More in College than High School."

2007-08-13T11:22:00.000-04:00

"Adults who took a high school personal finance class don’t do any better on a test of investment knowledge than those who didn’t take such a class, a new study found. And while college classes on personal finance do seem to help improve adults’ knowledge of investment topics, neither high school or college classes spurred students to save more of their money, researchers found."

This is according to research conducted by Ohio State University.

"Researchers say giving leads to a healthier, happier life"

2007-08-01T08:45:00.000-04:00

Wealth managers hesitate to raise the issue of philanthropy with their clients. At least that's what I hear at meetings of the Boston Security Analysts Society.

But they could be doing their clients a disservice, according to "Researchers say giving leads to a healthier, happier life," a recent article in the Christian Science Monitor.

The article focuses on research by Dr. Stephen Post of Case Western Reserve University, co-author of a new book, Why Good Things Happen to Good People.

"As head of the Institute for Research on Unlimited Love (IRUL), at Case Western Reserve University in Cleveland, he has sponsored more than 50 studies by scientists from 54 major universities. In a wide range of disciplines – from public health to human development to neuroscience, sociology, and evolutionary biology – the studies have demonstrated that love and caring expressed in doing good for others lead people to have healthier, happier, and even longer lives."

CFA Institute's wealth management publications and webcasts

2007-07-23T11:53:00.000-04:00

The following resources come from a CFA Institute press release.

Publications and Articles

Asset Allocation, Human Capital, Life Insurance, and Payout Annuities
Roger Ibbotson, Peng Chen, CFA, Moshe Milevsky, & Kevin Zhu

The Literature of Private Wealth Management
William W. Jennings, CFA & William Reichenstein, CFA

Investment Management for Taxable Private Investors
Jarrod Wilcox, CFA, Jeffrey E. Horvitz & Dan diBartolomeo

Tax-Advantaged Savings Accounts and Tax-Efficient Wealth Accumulation
Stephen M. Horan, CFA

“Managing Individual Investor Portfolios”
Ch. 2, Managing Investment Portfolios: A Dynamic Process, 3rd edition, James W. Bronson Matthew H. Scanlan, and Jan R. Squires.

"Asset Allocation for the High-Net-Worth Investor"
Dan diBartolomeo

"Core/Satellite Strategies for the High-Net-Worth Investor"
Clifford H. Quisenberry, CFA
"Tax-Efficient Management of Equity and Equity Equivalents"
Mark Fichtenbaum

"Is a Behavioral-Finance-Based Allocation Really Suboptimal?"
Jean L.P. Brunel, CFA

"Effect of Behavioral Biases on Market Efficiency and Investors’ Welfare"
Terrance Odean

"Investment Policy Best Practices: Communication, Creation, and Commitment"
Leslie S. Kiefer, CFA

Webcasts

Overview and Trends in the Wealth Management Business webcast
From the Toronto CFA Society Wealth Management 2007 Conference

Highlights from the 60th CFA Institute Annual Conference Webcast
· The Markets, the Economy, and Politics Lawrence Kudlow, CEO Kudlow & Co., LLC and Host of CNBC's "Kudlow & Company"
· The Role of Alternative Assets in a Well-Diversified PortfolioDavid F. Swensen, Chief Investment Officer and Adjunct Professor of Finance, Yale University
· Implications of Behavioral Finance for Real Estate and Other Markets Robert J. Shiller, Stanley B. Resor Professor of Economics, Yale University
· The Next Generation of Life-Cycle Investment ProductsZvi Bodie, Norman and Adele Barron Professor of Management, Boston University

"How to Share Your Obituary with Your Online Friends" on wikihow.com

2007-07-23T06:59:00.000-04:00

It used to be that most of a person's friends were listed in a hard copy of an address book. That's all changed with the Internet.

If something happens to you -- or to one of your clients -- how should online friends be treated? "How to Share Your Obituary with Your Online Friends" suggests answers, starting with picking a personal representative and telling him or her how to log onto your email accounts.

More marketing, design and production advice from Margaret Patterson

2007-07-20T11:06:00.001-04:00

Did you miss this blog's readers' Q&A with designer Margaret Patterson? I've copied the Q&A exchanges below.

QUESTIONS / Answers

Approval Committee. It would be helpful if you could specify the functional representatives. Who chairs the committee? Marketing typically has the lead but my experience is that sales is often neglected.
Field experience with consultants and prospects is critical. A firm's Director of Marketing chairs the approval committee. It is essential that sales executives be consulted for input throughout the process.

When do you get Compliance involved?
When the first complete text draft is accepted by the approval committee. They are consulted again if further edits are made.

Expertise Gets New Business. Do you advocate an "A" Team of presenters in a team driven process?
A well rehearsed team that enjoys working together wins business.Not sure what you mean by "A" Team. I highly recommend presentation coaching for individual and/or team presentations whenever the budget allows it. However, I believe that individual presenting styles shouldn't be "shaped" into slick pitches. Prospects appreciate meeting and conversing with real people, rather than being hit by machine-like information. I am not a presentation coach myself.Some pitching coaches dislike presentation books so much that they advise against using them. Oh so wrong! A well developed pitch book helps your meeting go smoothly and gives valuable information to leave behind.

Who should control pre-final rehearsals? Should they be mandatory for Investment Professionals?
A firm's Director of Marketing manages the entire presentation coaching process implementing advice from the coach. One cannot make rehearsals mandatory, but can urge how much better presentations results will be if investment executives have coaching.Customize.Prospective clients love to see their names early in a presentation.

Do you advocate a page that summarizes why a client should do business with the firm?
Always.

The same page at the conclusion creates a re-cap opportunity.
Repetition can be deadly. I conclude presentations with an expertise section.This brings up a good point. Assistance with content development, design and production are inseparable. By providing all three services I enable in-house marketing groups to meet deadlines with great results. Using templates and design system guidelines I provide they can take over the process very easily.

Handouts. Loose pages should be avoided. Do you recommend an Appendix in the back of the book to "store" or "have available" material that amplifies a topic/page?
I create many, many strategy fact sheets, company profiles, research papers and market commentaries every year. They are always loose, making them handy at conferences, lunch meetings, etc. The appendix you mention is not a bad idea, but firms will do a lot of editing as that page will change constantly.

Shelf Life. When should the previous quarter's updated information [performance/AUM etc.] be available? What does the Consultant Community expect today?
Last I checked, NASD recommends two weeks for mutual fund performance number reporting. My institutional clients vary a bit on these points. Generally they have performance numbers for reporting within 10 days of the end of a quarter. Their asset numbers are usually reported to the public within about 2 to 2.5 weeks. Consultants may only have the asset numbers after they have been reported to the public. Consultants want information as soon as possible.

Margaret,I am a portfolio manager in solo practice.How important is it for me to have a professionally designed pitch book? Are there free templates that I can use?
Having a pitch book, period is essential. If budgeting is an issue your own design will work just fine for now.Tips: Avoid using bullets on every page. Phrases and short paragraphs work well; long, compound-complex sentences don't. Each chart should illustrate one clear concept. Use a headline that clarifies your point.Your biography should emphasize accomplishments and experience that support the strategy you employ for your clients.If you have never written a pitch book a professional writer like Susan Weiner may be of great value. Meanwhile, think of your book as a script for conversation, not a complete "how to" manual.A designer with a lot of industry experience, like myself, brings a lot of value to a pitch book by suggesting visual and written content that best clarify your expertise.Sorry, I am not aware of any free design templates tailored for use by portfolio managers.Margaret

Margaret,Can you explain why you recommend not using bullet points on every page of a pitch book?
PowerPoint presentations work well as highlights to guide a face-to-face presentations. However, that many bullets get tedious, like studying for a test.Aim for visual and narrative variety. As for narrative (complete sentences/sans bullets)... brevity is best.

Do you have suggestions on how to target socially conscious investors without alienating traditional investors? Both are important to our firm's success.
The first several pages of your book should be dedicated to your firm's positioning in the market... your mission, investment philosophy, investment styles (of each strategy you manage) and your firm's expertise. The prospect wants to know what you do and how well you do it.They won't be alienated by a variety of strategies. Rather, they will be relieved that you respect their need for clear communication.I recommend dedicating only a page or two to each strategy, bearing in mind a 20-25 page maximum for the whole pitch book. Save the bulk of your strategy-specific details for product sheet handouts.

Is there any way to avoid the issue of your pitchbook having been created in one version of PowerPoint and the user's version is older so the formatting (and sometimes, colors) are altered?

If the user is a prospect or business associate in a different firm I recommend saving your PowerPoint pitchbook in the PDF format. Do that by printing the document as a PDF. The fonts, colors and all import files will appear as you intended, and, the document cannot be edited.Tip: Make the PDF smaller by opening it through Acrobat and resaving it with the same name to the same folder.

To solve in-house problems all workstations using PowerPoint should have the same version of the application and can acess all font and import files that were used.PowerPoint documents being passed from PCs to Macs are another can of worms. All editing should be done at the same workstation. Make things easy for the employee responsible for editing (the "editor"). Data provided by various executives is reviewed by the Director of Marketing, then all edits are implimented by the editor. When versions are created by different executives your messaging gets off track and formatting issues can be painful.Preserve the integrity of your firm's identity throughout all marketing and PR materials. I refer to how the logo is used, overall design and the text... the three components of "content."

Margaret Patterson Company
Corporate Identity & Communications Graphics for Financial Services Firms

How much should you spend for public relations?

2007-07-20T08:54:00.000-04:00

At least $3,000 - $6,000 per month is the price of entry for establishing your financial planning firm in the world of public relations.

That seemed to be the consensus on the "Reaping Benefits from Working with the Media" webcast by Investment News on July 11. The webcast featured three financial planners:

Karen Altfest, v.p., L.J. Altfest & Co.
Vern Hayden, president, Hayden Financial Group
Don Schreiber, president and CEO, WBI Investments

What's been your experience with hiring PR expertise? Do you have any advice for others looking for media exposure?

By the way, in a recent article, Altfest says:

“The keys to working with the media are to be available as a resource, not to demand anything, and to recognize that you are a financial planner, not a rock star.”
“Be patient, get to know who is out there in your field, and start by establishing a presence in local media.”

"L.J Altfest & Co.: Building a Practice through Public Relations, Niche Marketing, and Proprietary Financial Planning Methodology" appeared in Advisor Perspectives.

"Managing Color and Customization Without Losing Your Mind" by designer Margaret Patterson

2007-07-05T11:20:00.000-04:00

Ink-on-paper, web sites and HTML news bulletins are sources of angst for sales support staff under pressure to achieve consistent results in record time. These “good to know” pointers will seem too basic for many readers, but revisiting basics can help solve woes for everyone.

Printing Speed

Digital color printers can be ranked by page per minute (ppm) speed. Never mind what manufacturers claim… the devices are not that fast. To boot, printing speed may be slower if your document contains multiple import files (photos, complicated charts, big logo files on every page, etc.)

Printing Process

Digital Imaging is commonly referred to as DI. DI presses are direct-to-plate (no film is necessary), a fast printing solution. If you need quantities that would bog down your in-house inkjet device a good DI printing companies is a must.

Here is my “yardstick” for choosing a printing process:

· Most small- to mid-size financial services firms need time-sensitive short runs. Desktop inkjet printers are good for color proofs, and modest batches of pitch books and fact sheets.

· High-end digital imaging service providers are cost effective for runs of up to 4,000

· Commercial offset service providers may be more cost effective for quantities above 4,000

Color Management

Like most financial services firms, most of your marketing tools are created and produced in-house. Using a precise measurement program, your IT provider can ensure consistent color results from initial ideas to the final printed piece—and all the device-to-device exchanges in between.

Color management is a detailed process, too long for this blog. With brevity, the first step is device calibration, eliminating drifting color changes that scanners, monitors and printers experience over time. Step two is device characterization, actually creating custom device-specific profiles that are more accurate than factory-generated, generic profiles supplied by manufacturers.

Chart Updating

Make every effort to maintain links between your PowerPoint charts and relevant Excel spreadsheets. If a chart will not print well you can import a printed PDF, but you will have to update and import again every time your chart data changes.

Customizing

Many DI and commercial printing service providers can customize each sheet or batches of sheets, a process called “variable data capability”. For example, it may be useful to specify recipients’ names or different contact names within your firm.

Customizing investment management data is another animal. As stated in an earlier article, I only encourage that level of pitch book customization if you clearly understand your prospect’s concerns and the data you provide has been reviewed by your compliance department.

Input and questions are welcome. Your thoughts may show up in future articles, so let me know if I can quote you.

Margaret Patterson Company

Corporate Identity & Communications Graphics for Financial Services Firms

Hedge fund insider's article from CFA Institute

2007-07-01T14:25:00.000-04:00

For a hedge fund insider's insights on his industry, a CFA Institute press release directs you to his article. Here's an excerpt from the release.

"Byron R. Wein, chief investment strategist for Pequot Capital Management, contended in his presentation at the CFA Institute Hedge Fund Management 2007 conference that 'although some investors may believe that hedge funds are in a bubble, the hedge fund business has been a great business and may become an even greater one.'

"Wein's presentation, 'Hedge Fund Management at a Tipping Point?,' along with the question and answer session, is available on www.cfapubs.org free of charge and appears in the June 2007 issue of CFA Institute Conference Proceedings Quarterly."

Wealth Management Service Models Must Evolve as Needs of High Net Worth Individuals Grow Increasingly Complex, according to Merrill Lynch & CapGemini

2007-06-29T12:41:00.000-04:00

"Wealth Management Service Models Must Evolve as Needs of High Net Worth Individuals Grow Increasingly Complex," according to the press release issued under that title by Merrill Lynch and CapGemini.

Download the entire report here.

PR for wealth managers working the aging parents angle

2007-06-26T20:52:00.000-04:00

If you're a wealth manager with expertise in the challenges of caring for elderly parents, read the article below for a timely PR idea from Joan Stewart, the Publicity Hound.

======================================
1. Aging Parents & You
======================================

USA Today and ABC News are devoting this week to exploring the
challenges of caring for elderly parents.

The newspaper kicked off the series yesterday with seven articles
devoted to the topic. You can read more about the series at
http://tinyurl.com/2yuhea

Last night, ABC's "World News with Charles Gibson" aired a story
on nursing home alternatives.

Are you Hounds thinking what I'm thinking?

How about piggybacking onto this series and pitching your own
stories related to coping with elderly parents? Since many
broadcasters "rip and read" stories from papers like USA Today,
they will be well aware of the series. So will newspapers in the
Gannett chain, the parent company of USA Today. The bloggers are
probably also discussing this series.

Here are ideas to get you started, based on the stories that will
be appearing in USA Today this week:

--Today, the newspaper features articles on how to balance work
demands with caregiving, and tips on negotiating with employers
for time off. How is your company helping employees with elderly
parents? Do you offer related perks that are part of a
recruitment and retention strategy?

--Tomorrow, the newspaper will report on navigating sibling
relationships when giving care, the rise of multigenerational
households, and how to avoid scams targeting your parents. The
scam angle, in particular, is worth piggybacking onto. If you
know of scams in your particular state, pitch the idea.

--On Thursday, USA Today will focus on the risks of long-term-
care insurance, how and whether to get a long-term-care policy,
and what to do when a parent has Alzheimer's or dementia.
Financial planners, insurance companies and experts in the
medical community can offer background and commentary on these
topics.

--Friday's installment will feature articles on planning ahead
for retirement and elder care, and how to spend down assets to
pay for care. Financial planners, retirement experts, authors,
speakers and others who can address these issues can pitch
story ideas.

--If you like the series, don't like it, or have your own two
cents to add, write a letter to the editor of USA Today. I'm
guessing they will be devoting a lot of space on their editorial
pages to readers' reactions to this series.

When pitching media in your own community, it's OK to mention the
USA Today series, and offer your own experiences as "the local
angle."

Reprinted from "The Publicity Hound's Tips of the Week," an ezine
featuring tips, tricks and tools for generating free publicity.
Subscribe at http://www.publicityhound.com/ and receive by email
the handy list "89 Reasons to Send a News Release."

U.S. Secretary of Energy Samuel W. Bodman addresses BSAS

2007-06-26T19:08:00.000-04:00

U.S. Secretary of Energy Samuel W. Bodman addressed the Annual Meeting of the Boston Security Analysts Society on Monday, June 25.

In his speech, Bodman said "pretty much what he was supposed to say." Or at least that was the consensus at the table where I sat.

Things got more interesting during the Q&A.

China, said Bodman, ignores environmental and energy policy in favor of economic growth. The Chinese government's big fear is that if it loses economic growth, then it will not be able to maintain order in their society. There's tension because of the big gap between the rich and the poor.

Bodman predicted it'll take three years to break ground on new nuclear plants in the U.S. and it'll be 2015 before those new plants are in working order.

In answer to a question about the high cost of sugar in the U.S. despite Brazil's cheaply produced sugar, Bodman said that's why cellulosic ethanol is being pursued. In answer to this question and others, he said that he doesn't try to take on things -- such sugar subsidies -- that he can't change.

Designer Margaret Patterson: Producing Pitch Books Without Losing Your Mind, Part Two

2007-06-25T14:05:00.000-04:00

Production Tips

Delegating Responsibility

Delegate pitch book production to one employee. A pinch hitter can help out, but only if your key production person is out sick. This saves time and helps maintain effective results even within tight deadlines.

File Management

An organized library of electronic files is a great beginning. It is also a valuable tool for controlling time sheets and preserving good vibes. A few basic steps:

1. Name your files so clearly that everyone knows what they are.

2. Use suffixes at the end of every document title (.doc=Word, .qxd=Quark, .idd=InDesign, .ppt=PowerPoint, etc.)

3. Organize files in electronic folders labeled by usage: fact sheets; drilling down to folders for each product; drilling down to a folder for each version you currently use, etc. Keep documents and relevant import files together in folders. This speeds up printing and minimizes hectic last minute production jitters.

4. Create archived image libraries for logos, charts and photos.

5. Always obtain a complete “menu” of files from consultants who create them… unformatted and formatted files for many uses.

6. Contract to own every file created by consultants you hire. Here’s what you need:

Compressed files… Multiplatform

JPEG files are for viewing continuous tone images on monitor. Photos and logos with blended or fading colors are good examples. GIF formatting can retain sharp images that have no blended or fading colors, ergo, having only solid colors and lines. Both formats contain just enough pixels to be clear on the monitor when saved at 72 DPI (dots per inch). Using these small files minimizes web site screen refresh time. JPEG and GIF color specs cannot be altered in the document into which they have been imported. What you import (place) is what you get.

Do not open and resave a JPEG and GIF file over and over again. Ever time you resave a compressed file it compresses again until, eventually, it is no longer sharp on screen.

Noncompressed Files

Tiff files are multiplatform, retain any color usage you can create and can often even accept new color assignments after being placed in your document. For good printing quality save them at 144 to 200 DPI, depending on the printing device you are using. Save them at much greater DPI if the output will be large like a poster.

EPS files are platform specific. Having higher resolution than JPEGs or GIFs they print well, but are too data-heavy for use on the web.

When in doubt give unformatted PhotoShop files (suffixed .psd) to your web master or graphics designer. These files can be used to create generate formats and DPI settings as needed.

No Fault “Insurance”

Formatting and/or printing problems can occur as documents are passed from workstation to workstation. I always enjoy working closely with in-house marketing and production people. We share ideas that help marketing tools print and link to sites with ease. Good ideas:

1. Give yourself and your consultant enough turnaround time to handle proofreading, editing and production.

2. Keep a cool head in emergencies. Solve production problems by retracing steps.

Input and questions are welcome. Your thoughts may show up in future articles, so let me know if I can quote you.

"Stocks Won’t Go Up Forever. Are You Prepared?"

2007-06-20T11:39:00.000-04:00

This is a catchy title, which I found in an email from Financial Advisor magazine.

When you find a good title, consider using it in your communications. You can even adapt titles from the non-financial realm to grab your audience's attention.

"How to Avoid Green Marketing Myopia"

2007-06-19T16:10:00.000-04:00

CFW's question about socially responsible investing (SRI) was on my mind when I read "How to Avoid Green Marketing Myopia," an article from MarketingProfs.com.

"Green marketing must satisfy two objectives: Improved environmental quality and customer satisfaction. Misjudging either or overemphasizing the former at the expense of the latter is what can be called 'green marketing myopia.'...To avoid green marketing myopia, marketers must fulfill consumer needs and interests beyond environmental requirements," say authors Jacquelyn A. Ottman, Edwin R. Stafford, and Cathy L. Hartman. In other words, you can't sell socially responsible investments solely on the grounds of being socially responsible. You've got to appeal to other consumer desires.

It would be nice if you could promise better or more cost-effective performance using SRI. Too bad that's not possible. How about promising convenience? Customization to client definition of SRI? Credible benefits to society?

Check out this article's "strategies for success" and let me know if it inspires new ideas for you.

Also, look at how Calvert is advertising its Global Alternative Energy Fund. It looks like you must have performance or the potential for it.

Creating Pitch Books Without Losing Your Mind: Design & Content Management Tips by Margaret Patterson

2007-06-13T16:29:00.000-04:00

Below you'll find the first of three articles on "Creating Pitch Books Without Losing Your Mind" by Margaret Patterson.

Please ask questions of Margaret using the "Comments" feature at the bottom of this post. You can ask questions about topics other than pitch books.

Typically many employees provide input for a firm’s pitch book. To pull all that information together you need a good plan.

1. Delegate pitch book content management to one employee. That person will be the key contact for every employee and consultant who influences the pitch book.

2. A small approval committee, 3 to 5 people, should determine what content works best.

3. Give considerable attention to investment process but whittle it down to no more than five steps. Don’t over-explain. Let your graphics be a starting point for conversation.

4. Emphasizing investment professionals’ expertise gets new business. Don’t leave out the support they get from marketing, client service, operations and reporting. Finding inefficiencies in markets, sticking to disciplined investment processes and impressive client service are the marks of well-structured firms regardless of their size. An impressive organization chart carries a lot of weight with prospects.

5. Request senior management approval only after you have a complete draft that can be defended with valor. You need a concise mission statement supported by brief, punchy text and elegant graphics. 20 to 25 pages are enough. After all, people are pitching to people. Be a good listener and let your spoken story address a prospect’s unique concerns.

6. It’s a good idea to customize books if you clearly understand your prospect’s investment objectives. Customized pages can be inserted into your standard book.

7. Handouts are also valuable tools in a high courtship pitching process. Use fact sheets, company profile handouts and composite performance PDFs to provide more detailed information. Handouts also help you control who gets the information and when. Conversely, prospects will resort to taking phone calls and planning golf games if your pitch book is too long and intense.

I create a PowerPoint design system guide for each client to help them maintain consistent, effective messaging.

Input and questions are welcome. Your thoughts may show up in future articles, so let me know if I can quote you.

Introducing designer Margaret Patterson, a new guest on this blog

2007-06-11T19:26:00.000-04:00

Margaret Patterson will be a guest on this blog starting later this week. Please ask her your questions about the design and production of investment and wealth management marketing materials. Her biographical information follows below.

Margaret Patterson Company is a Boston-based resource for financial services firms. She has created sales support tools and provided production management expertise to numerous institutional asset managers and consultants, mutual fund companies, bank corporations and wealth management advisors for 25 years.

Strengths:

Knowledgeable about financial products and services

Successful decision-by-committee teamwork with clients' approval committees

Seamless coordination with in-house marketing personnel

Knowledgeable of dynamics relevant to merger and acquisition

Associated with reputable presentation coaches, PR specialists, photographers, videographers, technical writers and web masters

Skilled with mainstream graphics and image enhancement software

Branding, cross selling and new business development

Identity Development Winner of several national design awards

Graphics Standards Guidelines
To facilitate consistent messaging and company branding throughout all marketing tools

Web Sites Content development and design

Pitch Books Discovery/content development/production planning

Performance and Product Fact Sheets
Quarterly updates or templates for in-house use

Firm Overviews and Manager Biographies

White Paper Templates Market commentaries, product education, etc.

Annual Meeting Packages
Announcements and attendee information

Brochures

Pocket Folders and Report Covers

A few recent retail, high net worth and institutional clientele:

Eaton Vance Management Institutional Asset Management

Merganser Capital Management Institutional Asset Management, Fixed Income

New Century Portfolios Funds of Funds

Numeric Investors LLC
Institutional Asset Management, Quantitative

Pillar Financial Advisors Wealth Management Advisors

Standish Mellon Asset Management
Institutional Asset Management, Fixed Income

Wagonhound Investments, L.P.
Hedge Funds, Global

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

Nice intro paragraph from Wall Street Journal's "Ahead of the Tape" column

2007-05-09T11:46:00.000-04:00

The good news for Federal Reserve policy makers is that the risks to the economy are balanced. The bad news is that the weight keeps getting heavier on both sides of the scale.

The two sentences above are the simple, effective sentences that open Justin Lahart's "Ahead of the Tape" column in the May 9 Wall Street Journal. They get across the idea of stagflation without using technical terms. In fact, Word software says this sentence is written at a level below a seventh grade education.

When I addressed the CFA Society of Washington, D.C. last week, an audience member asked me, "Won't our clients be offended if we write at a lower grade level?" What do you think? When you skimmed the Wall Street Journal this morning, were you offended by Lahart's writing?

CFA Society of Washington, D.C.'s provocative investment topics

2007-05-03T20:03:00.000-04:00

The participants in my presentation to the CFA Society of Washington, D.C. on “How to Write Investment Commentary that People Will Read” suggested the following topics might intrigue readers of their investment commentary.

If the Democrats retain control of Congress, capital gains tax will rise once the current provisions expire in 2010
Small cap stocks will continue to perform well
Economic growth will continue strong, despite housing and other problems
Oil will fall to $30/barrel
Iran will discontinue nuclear activities
We must achieve energy independence
The residential housing market is not as bad as it seems
Why the market won’t correct

Thank you, all participants, for your energetic involvement in our interactive exercises. You made the session very enjoyable for me.

van Agtmael: Put 20% of your portfolio in emerging markets

2007-04-24T18:43:00.000-04:00

Your neutral benchmark for stocks should include a 20% allocation to emerging market stocks, said Antoine van Agtmael in his April 23 speech on "The Emerging Markets Century" to the Boston Security Analysts Society. Twenty percent is roughly the percentage of global market capitalization accounted for by emerging market stocks.

Van Agtmael, the chairman and chief investment officer of Emerging Markets Management, wouldn't stop at 20%. He recommends raising your allocation by 1% annually. Your benchmark should be dynamic, he said. However, after a series of good years, you should skip a year of raising your allocation. Speaking of good years, emerging markets have enjoyed a strong run recently. Accordingly, van Agtmael would currently recommend underweighting emerging markets in your portfolio.

Consider companies outside the top 200

Van Agtmael recommended that investment professionals consider companies other than only the 1,000 included in the indexes. He noted that 90% of investments in emerging market companies are made into the top 200 stocks. That's a small percentage of the 15,000 stocks listed around the world.

Investment managers should look at what made the current leaders among emerging markets great. They should seek those same characteristics in what's likely to become the next generation of market leaders. For van Agtmael, those characteristics include:

Unconventional thinking about how to solve problems
A truly global mindset
An obsession with quality and execution

America no longer at the center

From a broader perspective, van Agtmael said that Americans need to lose their perception that we're the center of the economic universe. This is less and less true. Moreover, we are now in the midst of the biggest and greatest shift in the global economy and power since the Industrial Revolution. In some sense, it's a return to the world before the Industrial Revolution, when China and India were the world's largest economies, he said.

Van Agtmael's new book

Van Agtmael recently published The Emerging Markets Century: How a New Breed of World-Class Company is Overtaking the World.

How your competitors raise AUM -- accessible only until April 30

2007-04-14T12:35:00.000-04:00

Interested in learning how your competitors raise assets?

For insights, listen to audio webcasts of the Asset Gathering Conference put on by UBS. To access the audio webcast, go to www.ibb.ubs.com. Find the Conferences icon in the middle right side of the page. Click on icon. Follow link for Webcast next to the Asset Gathering Conference header. The webcast is accessible only until April 30.

Jen Dunning, Client Services and Marketing, Wagonhound Investments, L.P., manager of Pronghorn L.P., a global opportunistic equity hedge fund, told me about this resource. She says "I would recommend listening to the following talks:

Alliance/Bernstein-about derisking and rerisking, some interesting new jargon
McKinsey-concept of ‘convergence products’-alternatives are not seen as an asset class, rather they are techniques being applied to traditional asset management and will be embedded in traditional products
Callan-predictable info, but timely
Fidelity-interesting example of why compounding is so critical for ensuring enough $ for retirement"

Simple explanation of "contango"

2007-04-14T12:29:00.000-04:00

Contango is a complicated concept.

That's why I was struck by the following sentence: "The reason is a futures-market phenomenon known as 'contango' -- the industry's way of saying near-term futures are cheaper than those the next month out."

This sentence appeared in "Oil-ETF Investors Are Stung by 'Contango,' " an April 10 Wall Street Journal article by Ian Salisbury.

You can read more definitions of contango.

How many of your clients will defect...

2007-04-09T17:05:00.000-04:00

... if your wealth management firm is sold?

On average only 1.5% of revenue-generating clients defect in wealth management deals, according to Elizabeth Nesvold of Cambridge International Partners, an M&A advisory firm. Nesvold spoke about "Evolution (or Revolution?) of the Wealth Management Industry" to the Boston Security Analysts Society on April 2, 2007.

Nesvold said she could only think of one high net worth deal where client defections were so bad that they triggered a modest decline in a firm's purchase price.

Nice visual perspective from Birinyi Associates blog

2007-04-04T13:43:00.000-04:00

Which country's stock markets were winners and which were losers during the first quarter of 2007?

You can grasp the answer within seconds, thanks to this "visual perspective" on Ticker Sense, the Birinyi Associates blog.

Vanity Fair as a stock market crash predictor

2007-04-04T13:38:00.000-04:00

Here's an entertaining stock market article from Wooden Horse, the media directory specializing in magazines. I'm reprinting the article with their permission.
--------------------------------------------------------------------------

Whenever VANITY FAIR breaks a record for ad pages, the stock market crashes immediately afterward, Brandweek has determined, quoting "a highly scientific study" by "Short Takes."

VF's March 2007 Hollywood edition (which of course hit the streets in February) was "Our Biggest Issue Ever!" With 500 pages. During the week of Feb 26, Dow Jones plummeted to 12,114 from 12,647.

VF's previous largest issue was its April 2001 Hollywood edition, with 430 pages. In the week of March 19, 2001, the Dow tanked from 9,820 to 9,504. (By September it was at 8,235).

Need more proof? The largest VF prior to 2001 was the September 2000 edition, at 396 pages. In the week of Oct. 16, 2000, the Dow plummeted from 10,801 to 10,279.

Mutual fund pioneer's comments still relevant today

2007-03-27T17:57:00.001-04:00

Can you believe it? Comments made by a mutual fund pioneer in 1928 are still relevant today. The speaker was Paul Cabot, founder of what became State Street Research.

I received permission from Michael Yogg, the author of a recently published biography of Cabot, to post an excerpt below the dotted line. The indented blocks include some spicy quotes from Cabot.
-------------------------------------------------

Paul was sensitive to the potential abuses of the investment trusts because of his research on their British counterparts of the late nineteenth century. In 1928 he addressed the American Savings Bank Association and, without mentioning any institution by name, outlined some actual abuses that concerned him.

In my opinion there is to-day in this country a large and well-known
investment trust whose shares are selling for far more than their
intrinsic or liquidating value, which has continually managed its
portfolio so that it can show the greatest possible profits and
thereby obtain the greatest market value for its shares, regardless
of their real worth. Generally speaking, in this trust during the
past year the good securities that have appreciated in value have
been sold and the poorer ones retained or increased, simply to show
profits.

The Economist tells us that this is exactly the game they were
playing in England almost forty years ago.

American Founders Corporation, the dominant investment company organization of the 1920s, concluded correctly that Paul was talking about them and went to National Shawmut Bank, of which Paul was a director, and threatened to withdraw their account if Shawmut did not force Paul to stop talking about them. Paul reacted to this strongly.

They told me this; well I flamed up. I got so goddamn mad I said,
why the sons of bitches, in the first place I didn't mention their
name in this thing at all, and obviously it shows the shoe binds them
since they are excited about it. I said I'll show them how I'm going
to be shut up. I trotted up to the Atlantic Monthly, the editor of
which happened to be my uncle, and gave him this speech and he
published it?.It went all over the country and I got a hell of a lot
of letters from it.

2007 World Investment Management Industry Review

2007-03-27T17:33:00.000-04:00

Who's acquiring whom in different sectors of the investment management world? Berkshire Capital Securities' 2007 World Investment Management Industry Review gives you the details.

Wealth management continued to ring up the largest number of deals compared to the institutional, mutual fund, cross-border and real estate/alternative investment segments.

I was interested to read that Bank of America's private bank enjoys a whopping operating margin of 44%. That's double the level at U.S. Trust, BofA's recent acquisition, despite much higher average account size at U.S. Trust.

Morningstar Stars vs. Fund Analyst Picks

2007-03-20T15:21:00.000-04:00

Do your clients get carried away with enthusiasm for Morningstar ratings or Fund Analyst Picks?

"Understanding the Star Ratings and Fund Analyst Picks" will ensure your discussions with your clients are grounded in a good understanding of both the star ratings and the fund picks. The article by Morningstar's Russel Kinnel originally appeared in Kiplinger's and has been posted on the Morningstar website.

"Expect That You May be Misquoted" by Beth Chapman

2007-02-12T13:30:00.000-05:00

Expect that you may be misquoted. The e-mail outline of what you thought you said may help avoid this, but never entirely. Keep in mind that on day two after the article appears, most people will only remember that you were smart enough to be quoted, not what you said.

It is not at all uncommon to be interviewed and not quoted. This happens all the time. Most common is that you can see your thoughts in the substance of the story, but there is no attribution. There is really nothing to do, except if the same reporter calls again, make it clear that you hope to be quoted, because you were not the last time. It is also not uncommon not to be quoted if you are new to the reporter as a source. Sometimes you have to "earn" your quotes through several interviews. No reporter deserves more than two interviews without a quote.

The attribution may be incomplete. If the attribution is garbled, last name only, no company name, or no town, that is correctable and the reporter will likely accede to your request that your proper attribution be printed in the newspaper or magazine’s next issue.

Despite all the do’s, don’ts, and pitfalls, working well with the media is an important tactic to build the reputation, referrals and revenues of your firm.

Got questions for PR expert Beth Chapman? Post them as a "Comment" below.

Visit the SusanCFA blog again next week for more do’s and don’ts of working the media and suggestions for overcoming likely pitfalls.

Beth,

I have a question on my own behalf.

Is it worthwhile for me to send out a press release to my local newspapers about my becoming a member of the CFA Institute's Speaker Retainer Program? If so, do you have any advice about how I do that?

Here's how the CFA Institute describes the program: “The CFA Institute Speaker Retainer Program was developed to aid CFA Institute member societies in finding exceptional speakers for their educational events. The program is comprised of a select group of individuals who have volunteered their time to educate members of the investment profession.”

In essence, the CFA Institute would reimburse my expenses to deliver my presentation on "How to Write Investment Commentary that People Will Read" to the Institute's societies. I was selected because my presentation got excellent reviews when I delivered it to the Providence Society of Financial Analysts.
Beth Chapman said...: Most news outlets would characterize the announcement of your joining the CFA Institute's Speaker Retainer Program as a "What's Happening" and group it under promotions and new jobs, if at all. It's actually not the best place to put such information. An announcement is limited thinking in how to promote the accomplishment. I would skip the newspapers completely. Instead, I would send a letter to the president of every financial services firm in your area and all of the CFA societies. For presidents of financial firms, it should read something like the following, although given this topic, you will have better suggestions:

Dear Mr. President:
Ever wonder how you can spice up your investment commentary? The CFA Institute, granting body of the Chartered Financial Advisor designation, has granted me membership in their speaker's bureau based on my presentation "How to Write Investment Commentary People Will Read."

I cover, topic, topic, and topic and engage your communications staff in dialogue about making a dull subject come alive for the reader.

I can write commentary your clients will want to read or train your firm's writers. Call me about taking a new look at how you can do a better job of reaching your audiences.
Sincerely,
Jane Doe, Chartered Financial Analyst (CFA)

Now for the program chairpersons of the CFA societies.

Dear Program Chairperson, CFA Societies:

It was a big hit in Providence! I presented a program "How to Write Investment Commentary People Will Read" to the Providence Society of Financial Analysts. As a result, I was invited to become a member of the CFA Institute's Speakers Bureau and the Institute will reimburse my expenses to come to your Society to deliver this program.

Analysts are always asked to write and for many with a quantitative bent, this is difficult work. I can show your analysts the tricks of a writer's trade that can be used immediately. I discuss topic, topic, and topic.

Please contact me for more information.
Sincerely,
Jane Doe, Chartered Financial Analyst (CFA)

Speaking usually morphs into writing opportunities and writing opportunities can morph into more speaking. Both are an excellent way to showcase your excellence before the appropriate audiences. Add your membership to the speaker's bureau to your resume and add it to your web site and blog. I would skip sending this information to your local news outlets. They are not the audience that really cares about the message.

Accounting "Principles vs. Rules and Fair vs. Unfair Values"

2007-02-12T12:34:00.000-05:00

Wonder of wonders -- I've heard a humorous presentation about accounting!

The topic was "Principles vs. Rules and Fair vs. Unfair Values," delivered by Professor G. Peter Wilson of Boston College to the Boston Security Analysts Society on Feb. 8, 2007.

I was struck by Wilson's conclusion that "we'll have more new [accounting] principles and five times as many new [accounting] rules five years from now."

Wilson believes that accounting requires both principles and rules in a well-arranged hierarchy from broad principles down to more specific rules. "You often need rules to help you follow principles," he said. However, "the most effective control is people wanting to do right."

Another academic, pro-indexing study

2007-02-05T15:47:00.000-05:00

"The idea of "local knowledge" – or "investing in what you know" -- is popular stock-picking advice that doesn't appear to hold true for individual investors, according to new research from the University of California, Berkeley's Haas School of Business," according to a recent press release.

"In a study of almost 1 million transactions from more than 43,000 households, Haas Assistant Professor Mark Seasholes investigated whether investors who buy stocks of local companies have superior information. He found that individuals who buy local stocks fail to outperform the stock market, suggesting that these investors had no superior information about the companies. Seasholes also found that overall, stocks bought by individuals tend to go down, while stocks they sell tend to go up."

"As investors revisit their stock portfolios with the new year, Seasholes says his findings suggest they should consider index funds."

I haven't read Seasholes paper (which you can link to from the press release), but it seems to me that individuals' poor investment returns don't argue only for indexing. Instead, why not consider professional investment management?

Beth Chapman: "Putting Your Best Foot Forward: The Media is Always on Deadline"

2007-02-04T11:40:00.000-05:00

The following article was written by PR expert Beth Chapman of Ink & Air.

Always prep your staff about how to handle the media. Work with the primary people on your phones to understand the importance of phone etiquette with the media. They are always on deadline. Let’s repeat that, the media is ALWAYS on deadline. Therefore, it becomes urgent that they reach you as soon as possible.

Why the urgency? The media keeps dialing for sources as long as it takes to find someone to answer their questions. They do not wait for call backs. The early bird -- well, you know the rest of that saying.

Do: Call or e-mail the reporter making the query immediately. Tomorrow will not work. When you call, if you do not reach them, give them all of your contact information, including office phone, cell phone and e-mail address. They may e-mail their question while on the phone with someone else. Time is of the essence.

Do Give a thoughtful response. You are competing for “top of mind” awareness with the reporter. When you find out the question, ask the time frame and whether you could have a few minutes to e-mail your thoughts. If they prefer a verbal interview, try to write notes of the points you make. Don’t let the reporter hang up without giving you their phone and e-mail. As soon as you finish the call, send them an e- mail synopsis of what it is you thought you said. Stay on point.

Do: Offer the reporter additional professional sources. Never hesitate to give a reporter someone who is specifically able to answer the question. You get points for not wasting their time.

Do: Offer additional materials If appropriate, ask a reporter if they would like to receive additional material that supports your point, tax codes, bulletins from professional organizations, or overviews found in trade journals. This may require a special fax number they will give you.

Don’t Guess! One of the worse things you can do is take a stab at the answer. It is also not smart to become an “instant” expert by doing a quick review of the subject with reference material you have on your desk. If the question is not spot on in your area of expertise, don’t go there.

Don’t share the topic of a media query with other media. It may be tempting to discuss with a second reporter what the first one just asked. It is considered bad form in the journalism world. A reporter will not trust you going forward if another reporter uses you for the same story at the same time. Wait until the first reporter’s story is published.

Got questions for Beth Chapman? Post them as a "Comment" below.

Visit the SusanCFA blog again next week for more do’s and don’ts of working the media and suggestions for overcoming likely pitfalls.

This is Susan, copying Q&A from the Comments section for your reading ease:

Anonymous said...

Beth,

How would you handle the guerilla marketing campaign, from Turner Broadcasting's point of view and from the city of Boston?

Can guerilla marketing work any more, or does it now have to be so shocking as to be negative?

7:35 PM

Beth Chapman said...

Turner Broadcasting has dealt with very negative PR in a quick, concise manner and, by assessing themselves their own penalty beyond the actual costs of the emergency created, they have effectively said "Mea Culpa" in a very public way. No large corporation, receiving good PR counsel, would ever want such a public "scandal" to keep making news, much less make its way to court. They have very effectively controlled the negative media hype.

Guerilla marketing is about finding and communicating to specific communities. There are many ways to do this that do not include posting anything on public infrastructure which historically has been against most municipal bylaws. I do not believe good guerilla marketing needs to be shocking or negative, but equisitely targeted to the demographic sought. A focus group, or groups for the purposes of brainstorming with this demographic would uncover opportunities for marketing that are creative, effective, and legal.

If nothing else, this is a very loud and clear wake up call for everyone over the age of 25, and particularly those in government, to learn about blogging and turn to it for public sentiment and information during an emergency.

Anonymous said...: Our firm is a high net worth investment manager based in the Boston. Our clients mainly reside in the New England, New York, Florida, and parts of California. While we have clusters of clients in other geographical areas we would like to gain more national exposure. Could you provide us with any tips as to how we may expand our client base further?
Beth Chapman said...: I make presentations to groups of financial advisors all over the country. I seldom find any who have made successful inroads with local media for a specific reason -- local media does not cover investment management. Oh, they cover firms opening, and closing and scandals, but the basic metropolitan newspapers use syndicated columnists to cover personal finance. High net worth families, however, read all of the national business media. Reaching national media is a matter of story idea development, targeting specific publications and reporters, and sending good story ideas once a month to those reporters. The stories can be based on client questions that you know would interest the readers of your target publications. Working with the national media takes time, and persistence, but will be vastly more satisfying that trying to get local publications to cover your ideas. One other suggestion is to look at the industries or professions of your best clients, and target those publications as a means of reaching good clients like the ones you already have.

FactSet: Add risk-based performance attribution for more meaningful analysis

2007-02-02T08:52:00.000-05:00

Traditional weight-based performance attribution can be deceiving, said FactSet's Chris Ellis in his January 30 presentation on "Effectively Connecting Portfolio Risk and Excess Return" to the Boston Security Analysts Society. Ellis is FactSet's director of portfolio analytics and a senior vice president.

Ellis started with the assumption that the portfolio manager's goal is to outperform the benchmark on a risk-adjusted basis. Traditional performance attribution doesn't analyze whether active risks contributed to active performance.

Ellis suggested adding factor reports to link active risks and active performance. That's the best way to figure out what's driving relative performance.