I just spent the last 10 weeks interviewing 76 financial advisors across the U.S. I asked them about their risk tolerance process. Specifically, how they discover the right level of investment risk for their clients. The results were varied but the challenges were the same. Firstly,...
Understanding financial risk can be a complex subject mostly because everyone seems to have a different definition. Traditionally risk has been defined by a dry and mathematical term called volatility. Volatility being a measure of the dispersion of returns for an investment. Essentially, the amount...
Do you know why potential clients consider you too expensive?
As the dust continues to settle post-RDR consumers are adapting to a fee-only landscape. Though your existing clients are comfortable with this model, refugees from the land of commissioned sales don’t feel the same way. Even for those who have never had a financial advisor the costs often seem high. Why is this?
As the hype around Bitcoin recedes and the price finds a base at $108 from highs of $234 it’s time to take a measured look at the crypto-currency. Bitcoin exists as a reaction to the problems surrounding government issued currencies. Namely, that central banks can...
This week I wrote an article for the Institute of Financial Planning's Training and Development newsletter. I got a few emails from financial planners thanking me for the advice. Read more here....
Two weeks ago a heated debate kicked off on a LinkedIn group for financial planners. The argument centered on whether social media is an effective and efficient way to generate leads and acquire new clients. This is what one member said… “I must have spent hundreds...
As a financial adviser you get judged on many metrics but chief among them is portfolio performance. Which client would want a financial adviser who routinely looses them money? Depending on what you read asset allocation determines between 40%-100% of portfolio performance (The CFA institute has...
What makes a great risk profile questionnaire? With so many opinions and vested interests its challenging to know what to ask your clients. The FSA certainly has their opinion, so do researchers and clients. We have our opinion and it’s not just a laundry list...
Before the 2008/2009 financial crisis you probably didn’t worry too much about your client’s liquidity risk. Getting their money out would be as simple as putting it in. That was until Northern Rock happened. Given what unfolded and the recent troubles in Cyprus, liquidity is...
When it comes to risk it’s assumed that men generally like taking more risk than women. Some call it biology others believe it’s simple male bravado. Regardless of the reason these assumptions should be challenged and conclusions drawn based on fact. Once we have these conclusions...
