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Trial by Fire

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We are obviously living in a very unique time. The loose money policies of government and Wall St. have brought us to a precipice. As an independent advisor, I too have been watching my clients’ accounts shrink. Since my income is tied to their value, it has also been shrinking. My fear has been that clients will reach a breaking point and want to jump off the ship in the middle of the storm. Yes, I have been concerned about the possibility of losing business.

Yesterday, I received an e-mail from a client who helped allay my fears when he wrote, “Do what you think is best. You’ve definitely done better than most, if not all, of my colleagues’ financial advisors. Most of them had much more stock exposure. I heard them crying to each other lately. I’d be willing to bet that most of them didn’t totally listen to their advisor.” Wow! I thought, “He’s pleased? How can he be pleased?” I suppose it’s because even though we’re down, we’re not nearly off as much as the market. We advisors can’t eliminate losses (unless we buy riskless investments), but we can control risk. Well, most types of risk, that is. A few months earlier, there were a couple banks that became illiquid and I happened to have bought CDs from them in some of my clients’ accounts. Fortunately, they were within the FDIC limits and we lost nothing. But all of this does make one a bit gun shy.

I’d like to thank those of you who sent e-mails to me to aid me in my search of a new custodian. I have been talking with a few companies and have scheduled a couple of Web demos in the coming weeks. I plan to be much more thorough with my due diligence process than I was in the beginning. I am finding there are several good custodial options. That said, I would still like to hear your choice of custodian.

I’m thinking about holding a seminar soon. When I began in the business years ago, I held many of these as that was my primary method of acquiring new clients. Normally, I wouldn’t be interested in doing this, but given today’s climate, I think it poses an interesting opportunity. People are looking for answers!

I’ll keep you posted.


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