Archive for October, 2012

Don’t Apologize Goldman Sachs

Monday, October 22nd, 2012

Greg Smith is the proverbial straw that broke this camels back!  Having endured constant criticism of the financial services industry and its participants since 2008, I have had enough. Goldman Sachs is not perfect. The industry is not perfect. But Greg Smith is an opportunist, and I wouldn’t waste a penny on his book or a minute more watching him on TV.

Yes I’m mad. As with everything in life, the truth of this situation probably lies somewhere in the middle. Goldman Sachs has made mistakes and employees probably talked about some of their clients behind their backs in less than flattering terms. But let’s be realistic – it happens in every industry and every company. Capitalism is not always pretty, and yes we need to have effective regulation – but the free enterprise system is the best one out there.

And Mr. Smith was probably a decent employee; if he wasn’t, he wouldn’t have lasted a year in that environment. And we will never know if he did in fact ask for $1 million during the financial crisis and when others were being laid off (he didn’t answer that question when directly posed to him on 60 minutes).

What we do know is that he took his $500,000 a year in compensation for a number of years, don’t we? He was able to stomach the environment long enough to make some money. I guess he was able to put his disgust aside…..

I was upset when he first quit via a New York Times editorial – I thought then, as I do now, that it was grandstanding and self-serving. The release of his book is more of the same. I understand that American’s love gossip, and everyone loves to hate Wall Street and Goldman Sachs. But there is nothing earth-shattering in this book according to the reviews and interviews. It’s just part two of his plan to make himself more money.

I see nothing more than an opportunist here looking to take advantage of an anti-financial services environment to his own benefit. Period. Angry? Yes I’m angry. What gets lost again are all of the honest people. Goldman Sachs is not the enemy. Financial Services is not the enemy. Lets fix things – not try to make them worse and more divisive.

Mr. Smith – you have done yourself and the industry a disservice. I hope that your 15 minutes of fame is soon over for good.

The Future of the Wirehouses – and its Advisors

Wednesday, October 10th, 2012

There’s been a lot of talk over the past few years over what the future holds for the wirehouses – Morgan Stanley, Merrill Lynch, UBS, Wells Fargo, etc. If the future is indeed as negative as many believe, what are the implications for advisors?

A recent report by Cerulli Associates, Inc. indicates that these firms will lose 7% more market share over the next three years; today their market share is 41.4%, and they are expected by Cerulli to lose market share more quickly than other segments (such as RIAs).

Here’s an interesting, yet often overlooked, part of the equation. While no one disputes that the wirehouses are losing advisors to RIAs and regional brokerage firms, a large percentage of this market share loss has occurred at the lower end – the wirehouses have been shedding these advisors both by choice (in order to increase profit margins) and to competitors.

The Cerulli report does not split the losses between these groups. The conclusion that these losses are a large negative for the wirehouses is conjecture at best in my opinion. While I believe that the wirehouses are losing some top producers, the situation is not as dire as many have concluded from this and other studies.

At the end of the day, there are certain advisors who will flourish at wirehouses and others who are more suited for either smaller brokerage firms or independent firms (which they either join or start). The case can be made that products and services offered to advisors might actually improve at the wirehouses as they’re able to focus on a core group of higher end advisors and their needs.

Whether an advisor flourishes or not depends mostly on his/her personality. Becoming an RIA is akin to becoming a business owner or partner, which would take some personality types out of their element. Likewise, some personality types will flourish under the freedom that is gained by leaving the restraints of the heavily compliance-oriented, less entrepreneur brokerage firms.

Neither type of firm is going away. An advisors ultimate success is less dependent on what type of firm they work for, and more dependent on them working in the type of firm that best suites their personality and skill set.

Preparing for 2013 and Beyond

Wednesday, October 3rd, 2012

Our 4th Quarter Unlocking Real Value newsletter is out and features our latest White Paper: “Preparing for 2013 and Beyond.”

As 2012 enters its final months, it’s time to either start planning your marketing for 2013 and beyond if you haven’t done so yet, or, if you have, review your marketing plan to ensure that it remains on target.

The competitive landscape within financial services remains tough. Bad press continues to plague the industry, individual investors remain skeptical and the fiscal cliff looms.

Against this backdrop, successful planning is one of the best ways to hedge yourself and your business against the unknown, and to increase the odds that you’ll be successful. Your marketing plan must be detailed yet flexible.

For each section of your marketing plan, make sure that you:

  • Detail specific activities;
  • Identify the audience each activity is targeted to;
  • Know who is responsible for each activity;
  • Know how you’re going to measure success; and
  • Are prepared to make adjustments if necessary.

This White Paper contains tips for helping you adapt to this changing environment as you develop or revise your marketing plan. As you go through this process, be sure that you have the time and resources to implement it without negatively impacting your business.

Click here to download the White Paper.