Financial Advisor Marketing & Technology

Marketing & Technology For Independent Financial Advisors


Archive for July, 2009

Changes In My Blog

Those of you who regularly read this blog know that I cover a mix of news for independent advisors—technology, compliance, marketing and a wide range of other topics. I also write about what's new at my company, Advisor Products, which makes websites, newsletters, and brochures for about 1,800 advisory firms.

Apropos of my schizophrenic role as reporter and service provider to advisors, I am splitting this blog in two.

This blog will now only cover what's new at Advisor Products. Articles I write about industry issues will now be posted in my blog at advisorsforadvisors.

advisorsforadvisors is a new practice management website. It's in beta, but you can sign up now for a 30-day free trial. (Advisor Products clients will receive an email next week about how to sign up for a free one-year subscription.)

Two veteran financial journalists have teamed up with me to create advisorsforadvisors. Mary Rowland is a former columnist at The New York Times who now writes a monthly column for Financial Advisor, and Bob Casey started up and ran Bloomberg Wealth Manager and is now a managing director of the Family Wealth Alliance.

advisorsforadvisors has strong social networking and provides crucial information to run an advisory business, including:

· Links to all important market and economic news stories by 8:30 a.m. EDT every business day
· A way to objectively compare advisor software applications feature-by-feature, side-by-side
· Social networking features that connect advisors who practice the same way as each other
· Advisor reviews of software applications
· User groups for software applications
· Daily analysis of industry and financial news by veteran reporters and industry experts
· Free access to weekly webinars with CE credit for many sessions and replays of all webinars 24/7

Earlier today, I posted about a new integration of Interactive Advisory Software (IAS) with MoneyGuide Pro. You don't need to be a member of advisorsforadvisors to read to my blog. But you will need to become a member to get most of the site’s other benefits. I’m pretty sure you’ll find that it’s worth the $60 a year subscription cost, and you can cancel in the next 30 days if you don’t think so.

Read my post about the integration of Interactive Advisory Software (IAS) with MoneyGuide Pro.

Jon Stewart’s Double Play

In a hilarious double-play, comedian Jon Stewart last night hammered Lenny “Nails” Dykstra, a former Mets centerfielder turned financial-advisor-in-bankruptcy, and then tagged TV financial personality Jim Cramer with a jarring comedic blast.

Stewart began a segment on last night’s show by focusing on the irony of the bankruptcy filing by Dykstra, who touted himself in recent years as a successful investment advisor and was profiled in 2008 as a “financial whiz kid” on the HBO program Real Sports. Dykstra, who told a Real Sports reporter that he did not read books because it was bad for his eyes, reportedly was sued by 20 creditors by the time he filed for bankruptcy on July 7.

Stewart revived his public humiliation of Cramer by playing an interview of Cramer on the HBO show in which he hails former Mets hero Dykstra’s as a brilliant financial advisor, “one of the great ones in this business.”

The irony of the baseball legend turned stock-guru’s misfortune provided Stewart with great material. Dykstra, 46, became a New York Mets hero for hitting a walk-off home run in Game 3 of the 1986 World Series, when the Mets defeated the Boston Red Sox in seven games to win one of baseball’s most memorable World Championship Series.

Cramer, the extremely energetic host of CNBC’s “Mad Money” and founder of, is a former hedge fund manager. Prone to hyperbolic rants, Cramer was the subject on March 4 and March 9 of scathingly funny blasts by Stewart. Stewart, the popular host of Comedy Central’s “The Daily Show,” assembled a string of video clips in which the self-proclaimed “infotainer” of finance made glaringly wrong investment predictions. Stewart wrecked any credibility Cramer might have had in the financial media by showing Cramer urging stock investors to “be buying things and accept that they’re overvalued, but accept that they’re going to keep going higher” a few months before the global financial crisis caused a stock market collapse. Stewart and Cramer’s public showdown became famous and then faded—until last night.

Financial Planning Coalition Gets It Right

The Financial Planning Coalition (FPC) released a statement this morning clarifying its position on the Obama Administration regulatory reform proposal.

The FPC applauded the Obama Administration proposal to require a fiduciary standard of care to brokers, repeating a position first articulated in its release of June 18, the day after the Obama Administration’s white paper on regulatory reform was released. However, the FPC now also expressed concern that the fiduciary standard would be “watered down” by the proposal.

The FPC is a recently created group comprised of the Financial Planning Association, National Association of Personal Financial Advisors, and the CFP Board of Standards. Please note that my blog of June 18 swiped at FPC for not mentioning that the fiduciary standard could be watered down by the Obama proposal.

Apart from qualifying its support for the Obama Administration proposal, today’s FPC statement, which I’ve highlighted for quick scanning, clears up an important part of the Obama Administration’s June 17 white paper. The 88-page white paper called for establishment of a Consumer Financial Protection Agency (CFPA) to help protect consumers from bad financial advice. Some observers interpreted this to mean an entirely new regulatory regime would replace the current regulatory framework. Not so.

FPC explained that the CFPA’s jurisdiction “would cover consumer financial products such as credit cards, savings accounts, and mortgages, and possibly insurance, but notably leaving securities transactions and investment advice to the SEC.”

This makes a lot of sense. While coverage in the trade press would have led you to believe that the CFPA was taking over responsibility for regulation and enforcement of advisors, it’s clearly not. Point is, wrangling over regulatory reform is going on behind closed doors and we know little about the structure of what’s to come, much less who the winners and losers will be.

With that qualification, I’ll speculate that our government bodies and existing institutions are likely to be relied on more heavily as reform is implemented. My guess is FINRA will gain power to regulate RIAs advising consumers.

FPC’s effort to prevent the watering down of the fiduciary standard of care for clients is important. If brokers are fiduciaries but can continue to be compensated on commissions, then the fiduciary standard of care has no teeth. And if the U.S. government bans commission compensation of independent financial advisors, as was done last week by Great Britain’s Financial Services Authority, an extremely unlikely reform, then telling the difference between fiduciaries will be difficult.

Clearly, once the fiduciary standard of care is defined under a new regulatory regime, it could be watered down as to be almost meaningless. The reform measures may not make it easier for a consumer to know the difference between an advisor who puts a client’s interest above his own and one who does not.

The FPC’s release today is laudable for pointing this out and for giving advisors tools to speak out. The bottom of the FPC release contains “message points” advisors can borrow to write letters to legislators.

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