The Commoditization of Portfolio Returns: What’s a Financial Advisor To Do?

We have an operating theory here at DataPoints that goes like this: portfolio returns are being commoditized for the vast majority of retail investors–either by robo-style services or index strategies, or both–and that this large swath of the population will be willing to pay less for the (likely illusory) promise of market-beating portfolio returns from their would-be financial advisors. This development will in turn put pressure on the financial services industry in general and financial[…]

Identifying Strengths For Wealth

What would you say are your greatest strengths? Weaknesses? Think back on the last few job interviews you had for a moment. How many of them included these generic, broad questions? They’ve been handed down through generations of well-meaning hiring managers, but because they don’t relate to specific requirements for the job (other than if the job requires narcissism or self-deprecation) and they’re not tied to a specific aspect of a job (i.e., strength for[…]

Value Above Technology: Advisors as Coaches

Executive coaching is estimated to be a $1 billion industry. These counselors, psychologists, and former “C-level” executives coach leaders to build competencies and skills required to be effective and successful at their high-level, high-stakes job. While coaches use technologies and numerous methodologies to assist in their practices, personal interaction is at the heart of the business. Like a C-level role, the job of household money management is multi-faceted, and includes many complex tasks: budgeting, creating long-term goals, investing, estate[…]

Advisors: Role Expansion to Coaching

Family/marital issues, health issues, grief, religion: just a few of the non-financial topics that advisors work through with their clients. A few years ago, a large-scale study of advisors yielded a wealth of information on the evolving role of financial advisors as coaches (Dubofsky & Sussman, 2009). The research, which included approximately 1,400 advisors associated with either the FPA or CFP board, highlighted the topics, challenges, and critical incidents faced by advisors related to non-financial issues.[…]

Why Heirs Leave

Between 2007 and 2061, it is estimated that $59 trillion will be transferred from one generation to another. This week in the Wall Street Journal, Alex Davidson addressed how this transfer is impacting financial advisors in an adverse manner. Some cures to the problem offered in the article include ensuring that a relationship is established early with the heir, using technology as part of the financial planning/investment management process, creating videos or having clients write[…]