Don’t Be a Snob
I would venture a guess and say that most Financial Advisors have read the Peter Lynch book titled, “Beating the Street”. I would also venture to guess that most Financial Advisors have NOT read the Gary Vaynerchuk book titled, “Jab, Jab, Jab, Right Hook”.
Both men are “Best Selling” authors. Both men are highly respected in their industries. They are also worlds apart in those industries, right? The former manager of the massive Fidelity Magellan Fund, and the founder of Wine Library can’t have that much in common, can they? Not sure if Mr. Lynch likes wine, they may have that in common. But based on my knowledge of Gary, he is not looking for stalwart blue chip stocks. So maybe the similarities end with wine.
After reading both books I was reminded that they have both leaned on kids they observe or come in contact with on a regular basis. In Peter Lynch’s case it was his own children. He writes, “Mary had initiated her coverage of the Gap in the summer of 1990”. He also writes similarly about his family’s patronage of Clearly Canadian, The Body Shop and Chili’s. You can find these on pages 152-159. He writes that missed the powerful “buy” signals on “Chili’s”, “Gap” and “Clearly Canadian”. Clearly the teen attraction was not enough to sway him. He “was determined not to make the mistake in 1992”.
Gary, on the other hand quite plainly states (on page 9-10) that “Just because your teenage daughter and her friends are excited about a new platform does not mean that the platform is irrelevant to your brand”. Just because you don’t see any value in it does not mean it is not worth looking into. Furthermore, Gary states that when “20 million other people do, you need to do something with that information.”
Advisors need to pay attention to changes in social media platforms. They may all not resonate with you immediately but you should pay attention. The “teen effect” should not scare you away from nor discount their ability to impact your brand.
The one thing I hope you take away from this is that “Do not put your principles above the reality of the market” (Gary Vaynerchuk). If 20 million people are using it, you may want to take a peak, even if your teenager and their friends are using it.
Photo Attribution to Jason A. Howie via Flickr by CC-4.0
Payroll Deduction IRA Programs
A Guest Post from Craig Howell, The Online 401k
According to a July 2013 GAO study, only 12% of the 4.8MM US Employers with more than one but less than 25 employees offers a workplace retirement plan. (401(k) / SIMPLE / SEP). This leaves millions of Americans without “coverage,” and is exacerbating the problem of funding Americans’ retirement. It’s also a problem that, given the right products, Advisors are best-suited to address.
Tired of waiting for private-enterprise to better this statistic, a handful of states are examining a political response. California and Connecticut are two examples, each studying “Feasibility” of laws that would require business with a minimum number of Employees (10 in CA, 5 in CT) who do not offer a retirement plan to participate in a “Payroll Deduction” IRA programs managed by these states.
This is in addition to H.R 2035 (Sponsored by Richard Neal D-MA) at the Federal level, which would require business with more than 10 employees to either offer a workplace savings plan, or facilitate employee deferrals into IRAs.
Obviously, there’s a big difference between bills / feasibility studies and law. But, if private enterprise alone won’t improve the statistics above, then government is obliged to try.
As an organization who specializes in delivering 401(k)s and Payroll Deduction IRAs to the small-business segment (1-25 Employees), www.theonline401k.com believes this an opportunity for advisors to engage their small-business customers on the benefits of tax privileged retirement savings. We can help Advisors easily, inexpensively, and profitably set-up workplace savings plans – so that these various governmental mandates won’t apply.
Don’t Hide! Please.
LinkedIn is my go to social networking site. The site has a large number of features I like, the ease of posting, sharing and connecting is very appealing.
Recently I have seen an increase in the number of people viewing my profile anonymously. I know I am handsome, that award winning smile and the close cropped hair are well, wonderful. But let’s not be anonymous. If I post something that gets your attention, connect with me. If I post something you find useful, let me know. If I post something you DO NOT agree with, shoot me a message.
The power of being able to connect and share is what this is all about, isn’t it? Why not be visible? Why not connect? If you found me by accident, that’s OK. Who knows, I would love to connect with a photographer a chef, or a sommelier (or what ever the beer equivalent of that might be)! Connecting with me does not have to involve 401k plans and Plan Sponsor issues or ERISA. I think many of my connections have interest outside of the qualified plan space.
So let’s not hide. If you are on LinkedIn, you are looking to grow your network and grow your business. Who knows who I might be able to connect you with in my network.
What’s Your Plan?
Featuring a Guest Post from James Holland | MillenniuM Investment & Retirement Advisors
I was recently asked by an Advisor friend what I thought of his new “opener” for prospects. He had the word Coach in there which is now being used more than the word Fiduciary. Everyone today is a “coach. That led to the always popular topic of Elevator Speeches. Do they really exist? No one talks on an elevator unless they want everyone to think they are crazy and no elevator rides last 3 minutes. You have 15 seconds and 15 words to get someone’s attention. “I help individuals SECURE the Financial Freedom” “I help people obtain their retirement goals” “I help people keep more of their own $$” is anyone else yawning?
Catch them off guard. Retirement Plan Regulatory Changes are a silent killer, much like a heart attack. HR Departments are swamped with ACA items for the rest of the year. How will you stay in front of those decision makers? ACA is a big deal but so are retirement plan changes.
Will you be remembered when they need help? Will that elevator pitch make them pick up the phone when things go awry? Stay top of mind because if you don’t the Advisor that has will get the call. What is your plan to stay top of mind? Do you have one? If not, make one.
Worry less about your elevator pitch, or opening and focus on staying in front of them. Everything you try won’t work. But keep doing it. Remember, no one eats green eggs and ham on the first request.
Image courtesy of Idea go at FreeDigitalPhotos.net
Cake Vs. Cupcakes
I have been quoted as saying that “cake is a delivery system for frosting” (or icing depending on which word you prefer).
Two of the most watched shows in my home are The Cake Boss and DC Cupcakes. Not because we are confection junkies but because my kids like to watch the inner workings of any businesses. They also have a knack for asking for the most complicated and realistic designs for their birthday treat.
What is notable here though is how parents get frustrated after seeing how much cake & frosting are left after the party. In the final analysis we have found that cupcakes give us more variety and portion control, and yes, waste reduction.
What does this have to do with retirement plans you ask? When we speak with many Advisors the questions we normally get focus on the debate of cake vs. cupcakes. Should it be a feature rich platform with loads of bells and whistles or should it be skinnier and more individualized? Will extra features actually be utilized or will they be the leftover frosting, wasted and perhaps expensive? Is the success of the participant outcome dependent on the platform or the Advisor?
Do plan sponsors often buy cake with extra frosting but later find out their participants really needed cupcakes?
Image courtesy of -Marcus- at FreeDigitalPhotos.net
The Long and Winding Road | Dalbar Certification
A guest post by John Marion from Howard Capital Management
Howard Capital Management started on the journey to achieving Computer Model Certification 5 months ago. We started down the road because we wanted an independent third party to review our methods for compliance with ERISA and we wanted the certification to show it.
There are very few companies that are approved by the Department of Labor to certify computer models under ERISA. DALBAR is one of the best know of these companies. So we chose DALBAR as the “gold standard” to conduct our certification.
Five months ago, we asked DALBAR to open the Optimizer’s hood and kick the tires. The certification process covers the following points, among others:
- Clean background check
- Investment theory is generally accepted
- Performance and fees are reasonable
- 5-year track record
- No conflicts of interest
After 7 weeks of intense scrutiny, we received DALBAR’s certification on May 20th, 2013. Needless to say we are proud to have received this credential.
Now we can say that the Optimizer has been evaluated by DALBAR to determine if it meets the requirements to be used as a Certified Computer Model as defined by the Employee Retirement Income Security Act of 1974, as amended [“ERISA”] Section 408(g) and Internal Revenue Code [“IRC”] Section 4975(d)(17). As a result, the HCM 401(k) Optimizer® computer model has been granted Certified Computer Model status by DALBAR. This is important, because ERISA plan fiduciaries who meet all other ERISA requirements and use a certified computer model will qualify for the fiduciary relief granted under ERISA Section 408(g).
There are very few companies offering models that have been certified and none that we know of that embrace the Advisor as the Optimizer does.This is very important because it allows us to partner with advisors to offer plan sponsors a solution that can grant them fiduciary relief.
Image Courtesy of nuttakit at Freedigitalphotos.net
Talk to the Experts, even Me!
A few months ago I read an article in Inc. by John Brandon (read it here). He discussed being able to talk with Mark Cuban or (one of my favorite people to follow) Gary Vaynerchuk when you needed business advice. Admittedly I was very excited. Being able to reach the most coveted “keynoters” for a fee was very intriguing. Being able to ask them pointed questions about my situation(s) was tempting.
I checked out the site Clarity (clarity.fm) and signed up. I used my LinkedIn profile to populate my profile and in a day or so I was in and on!
Alas, as with many things I am excited about I forgot I had done it, or what I would do with it.
Then four months later I get an email from Clarity.fm stating that someone wanted to schedule a call with me. ME! Just like Mark Cuban. Get out, had to be some hacked account or an error.
I checked it out. It was not. It was a bona fide person, with bona fide questions about a tool for retirement plan Advisors. I was blown away. The caller was an expert in their field and not one in ours. The caller’s daily profession had spurred an entrepreneurial desire to create (let’s just call it) a widget. I am very excited about the tool.
I am also very excited about the possibilities of what a tool like Clarity.fm can bring to the Advisor community at large. Get paid, for talking. Take the calls from wherever you are, at the time of your choosing. Set your own fees.
I know that our industry is normally behind the curve. But if you are trying to build a solution that would allow you to get paid for your expertise a platform like Clarity may be the answer. Better still, nothing for you to build. I am sure there will be others but for now I am very enthusiastic about the future using this one.
Check it out and let me know what you think about the future of consulting.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
Would you rather …?
It’s a game children play. I assume, mostly boys play it. We have the books. If you are unfamiliar with the game it goes like this:
“Would you rather have to wash your mouth out with soap every time you said the word “the” or “share your bed nightly with a family of racoons?” 
Not the most sophisticated of games but very telling, insightful even.
So let’s play a round of Qualified Plan “would you rather”:
Would you rather … play on the non-ERISA side of the coin or the ERISA side?
Would you rather … have the ability to avail plan participants of your other services or be a named Fiduciary on a plan?
Would you a rather … try and compete with large firms that charge as little as $350 for fiduciary services or would you rather add value and deliver meaningful education to participants? 
I am not saying we have all the answers. I do think we ask good questions.
I do not think the soap or racoons are all that appealing.
But once you decide on how you want to play your game of ” would you rather” let us know. We can help you either way.
Redemption!
This is a story of redemption.
For years my technology skills have been better than my partner’s. I will not regale you of the stories of cellphones in lunch coolers and the Blackberry that was dropped out of a canoe. I will not go into detail about the trouble with changing email signatures in Outlook. I will not share my constant frustration in trying to explain what an RSS Feed is and why you would want one.
What I will tell you is that my partner has come a long way. He built both versions of our Study Group website. You can find the public site here. The private site is for members only.
He built our first mobile app. No kidding, we have an app. Yes, the kind that you can put on a Smartphone. (COMING SOON! In that big, announcer’s voice)
He also just published our first e-book. (COMING SOON! Ditto)
He has learned how to manipulate HTML. He has learned what embed codes are and how to use them. He has worked hard to be a student of simple, clean design. He has learned how to blog and insert media. He has learned that lean is sometimes better.
Why do I write all of this you ask? Because I hear the constant hum of Advisors saying technology is too hard to learn. I hear the drone of “by the time we learn that it won’t work”. It is and has never been about technology. At the core, at the very heart of Chris learning all of this “technology” was so he (we) could reach more people. He also wanted a challenge, a creative muse (if you will).
So what’s the point? The point is that you can do these things too. If you want to reach more people, or clients, or prospects (whatever you want to call them) use the technology. But don’t forget it is about the people. It takes time, it takes patience. But in the end you have mastery.
So here we both sit, technology geniuses. Basking in our glory, resting well knowing we have mastered one more frontier.
Wait a second, no he did NOT just ask me what our Twitter handle was again?!
Image courtesy of Ambro at FreeDigitalPhotos.net
What if …
What if you woke up and read that some Senators were looking to change the way you did business?
What if you woke up and a new agency had been added to oversee how your industry did business?
What if the statistics that your industry promoted were not answering the bigger questions?
What if new regulations (if enacted) would alter the way you did business?
What if you would take on increased liability if you had to change your business model?
What if the fees you currently charge were being compressed?
What if the industry you practice in did not rank high in the “trust” category?
But then you realized it was all a bad dream! This was not happening to you and your peers. These things are absurd. 
But wait! They are happening. What should you do? Who should you call? Should you get your resume together? Will you bury your head in the sand?
I have been accused of being Chicken Little before. I only had to be correct once for that moniker to go away.
Things are changing my friends and if we (the real We) don’t get together, folks will be taking care of their retirement accounts on the webpage just behind their health insurance.
To read articles that inspired my remarks click here
Image courtesy of chrisroll at FreeDigitalPhotos.netImage courtesy of Stoonn at FreeDigitalPhotos.net
The 401k Study Group 