Archive for July, 2011

It’s Hard to Stay Out of the Political Fray……

Thursday, July 28th, 2011

It’s hard not to shake your head and say WTF? Regardless of your political affiliation, we should all be embarrassed by way that our elected officials are behaving. I don’t usually do politics here, and I’m not going to take sides. I just wanted to get this off my chest:

  • To some extent, the damage has already been done – at least to our country’s reputation. I have no idea if a deal will be done by Tuesday, but even if one is, our international standing has been diminished – hopefully only temporarily, but tarnished nonetheless. Can you hear the Chinese laughing? While they will be hurt in the short-run by the loss in value of their U.S. bonds, they win long-term.
  • Even if there is an agreement, the odds of a ratings downgrade remain very high – the process has shown Washington to once again be dysfunctional and unable to compromise.
  • A downgrade, or even the continued threat of one, hurts our economic prospects and increases the odds of another recession. This fight over the debt ceiling and our government’s inability to devise a plan to significantly reduce the deficit – which must eventually happen – has in the short-run significantly increased the odds that interest rates will rise, economic growth will slow and the deficit will actually get worse as the carrying costs of our debt increase . Almost wants to make you cry, doesn’t it? Talk about unintended consequences.
  • Even under the best scenario of a last-minute deal that is sizable enough to prevent a downgrade, businesses have already lost confidence in the government, and as uncertainty continues to grow, businesses will continue to be reluctant to invest. New jobs will be scarce. In fact, many companies have been increasing layoffs over the past few weeks. Unemployment will remain high for the foreseeable future.

If I seem kind of down on this whole thing, I am. I hope that I’m missing the silver lining – but I don’t think that I am. The situation is bad. But it is the reality that we all have to live in and run our businesses and daily lives in. Sometimes, reality sucks. Now is one of those times.

The leadership of our country has failed us. The vocal ones as well as the silent ones.

We all know that the deficit must be reduced, that our entitlement system must eventually be reformed because there is not enough money to pay the benefits indefinitely, that spending must be brought under control and that the arcane tax code needs to be rewritten. Everyone should pay their fair sure. But class warfare, name calling and rhetoric are not the answer.

This does not have to be a zero sum game.

If any one of us ran our businesses the way that our elected officials are running are government, we would have been fired long ago – probably by the Board of Directors at the insistence of the shareholders. Guess what – we are the shareholders.


The Value of a Consultant

Thursday, July 21st, 2011

Why do some people believe that consultants can help them, while others do not? The non-believers have probably had experiences with consultants that only assess their weaknesses; the believers, on the other hand, know that for a consultant to truly add value, he or she must be able to make recommendations and then assist with the implementation of the solutions.

Case in point was a recent prospect meeting. The CEO stated that they had a list of 16 recommendations for improvement from their last consultant, but that they had not had the time to address these recommendations, and further he didn’t feel that they had the knowledge to devise solutions themselves.

If a consultant can only come in and tell you what is wrong, yet not offer solutions to help you improve, then I would have to agree that the usefulness of that consultant is limited. After all, we all know that we can always find ways to do things better. The trick is being able to actually do something about it.

One way to evaluate a consultant is to consider who their strategic partners are – who helps them implement improvement plans for clients. In most cases, solutions will encompass hiring others to complement the strengths of the consultant. The article  Consultants Sell Success with Strategic Thinking & Teamwork was recently featured in allBusiness.

The article discusses how my partner Petey Parker and I work in our Consult P3 business partnership (Consult P3 complements the work that I do for financial services firms with firms from other industries). Our philosophy is based on assessment and solutions. Petey and I do the assessments and then work with our faculty of highly-qualifed partners who we recommend as appropriate to help clients improve their three Ps – People, Planning and Processes.

Next time you think of hiring a consultant, be sure to inquire about their implementation strategies. Oh yea, the answer for the prospect above. Step one would be an action plan to address the 16 points already identified and provide an implementable solutions roadmap. That would be something worth paying for!


On-Line and On-Point: A Guide to Social Media Success

Tuesday, July 12th, 2011

Our newest White Paper – On-Line and On-point: A Guide to Social Media Success – has been posted on the Resources page of our website and included in our 3rd quarter newsletter. Click here to read the White Paper and click here to see the entire quarterly newsletter.

The White Paper specifically deals with how financial services practitioners and companies can develop a social media strategy. The benefits of a successful social media are two-fold – to stay top of mind with existing clients while developing and building new relationships.

Enjoy the White Paper – and start building your own social media strategy.

The Sad Story of Morgan Keegan

Wednesday, July 6th, 2011

I spent almost eight years at Morgan Keegan and still have many friends who work there. So it saddens me to see what’s happening to the firm. Many will say that the sale to Regions Bank was the beginning of the end. While to some extent this may be true, what has led the firm to where it is today is greed – turning the other way and ignoring the unsustainable returns of the mutual funds that have now caused the firm so much trouble. If something seem to be good to be true…..

Now what happens? Probably one of two outcomes. Either the firm will be sold to a private equity firm or to another broker/dealer; insiders speculate that talks have been under way for awhile, and now that the “for sale” announcement has been made by Regions, it better happen fast or the advisors will start running for the doors.

The two inevitable losers from any sale – the home office staff and the City of Memphis. If a private equity firm buys the firm, you can bet that belts will be tightened and staff levels reduced. The same goes if the firm is bought by another broker/dealer – the odds of the home being in Memphis are pretty slim, and no one at Regions has the same loyalty to Memphis as Allen Morgan and his mostly long-retired gang.

For advisors, a sale to a private equity firm would be better; a sale to a wirehouse would result in a mass exodus, retention bonuses not withstanding. But even if Morgan Keegan remains quasi-independent, and is not melded into another broker/dealer, you have to wonder how far the firm is behind the competition now – certainly from a technology point of view – given the amount of money and time it has had to dedicate to the many lawsuits it has faced.

Yes, unfortunately, there are many losers. The dedicated home office that appears to be a loser under any scenario. The many advisors who didn’t sell a lot of the funds in question, have not been sued by clients, yet nonetheless have suffered from the reputational damage that has been done to the firm.

It saddens me that this is happening to this once great firm. Hopefully I will be proved wrong, and the end-result will not be a negative one for my friends at the firm.