I recently read an excellent article by Joe Tomlinson of Tomlinson Financial Planning titled "A Better Way To Measure Risk Tolerance". The article criticizes some of the existing risk tolerance questionnaires that financial advisors use. However, unlike most critiques he actually gave suggestions of how the...
I recently interviewed Tom Sedoric of The Sedoric Group/Wells Fargo Advisors. He has been ranked the #1 Financial Advisor in New Hampshire and rated one of the best advisors in the country five years running. John: Give us some quick background on The Sedoric Group/Wells Fargo Advisors? Tom: Sure,...
After a little research earlier in the year looking for great financial advisor blogs I found a smattering of content across the web but few explained why a particular blog was great. Further still, almost none informed me what I could learn from reading their posts....
Kicking off our interview series with successful financial advisors I recently interviewed David Costigan of Banyan Partners. David is the Managing Director of Wealth Management at the firm, which has offices across the US. Below is a summary of our conversation. John: Give us some quick...
In 2011, the SEC approved two new modifications to existing rules on client suitability for investment. The new rules were proposed by FINRA who’s stated purpose is to dedicate itself to “investor protection and market integrity”. FINRA was and is concerned about sales practice abuses...
Now and again I like to rummage into the academic tomes of finance. Today I give you a paper by Philip Maymin and Greg Fisher. It looks into how the "performance of the average investor in an asset class lags the average performance of the...
September’s Journal of Financial Planning has a controversial article about emergency cash funds. Titled “Is an All Cash Emergency Fund Strategy Appropriate for All Investors?” the paper argues that a 6-month cash emergency fund comes with an “exorbitant opportunity cost” resulting in lower levels of...
Yesterday I came across this excellent video by Ray Dalio of Bridgewater Associates. For those of you who don't know, Ray Dalio runs the largest Hedge Fund in the world with $122 billion AUM. He breaks down the economy into three parts...
Modern Portfolio Theory (MPT) needs little introduction. Developed by Nobel Prize winning economist Harry Markowitz in 1952, the theory forms the basis of portfolio construction for large swathes of the money management industry. MPT is an approach to how you can optimize returns for a...
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,...