Research magazine’s May cover story, “Finding the Culprits,” focuses on derivatives expert Janet Tavakoli and her hard-hitting analysis of who and what caused the financial crisis.
The Chicago-based consultant points to massive malfeasance at financial institutions, particularly “the interconnected fraud that infected the mortgage lending market,” and complains that politicians and regulators have shown little interest in punishing the malefactors or enacting meaningful reforms to stop such abuses.
The May issue also features an article on “Marketing Advisors Like iPhones.” This looks at the power of brands for marketing financial advisory services, and how “forward-thinking advisors are currently taking a deep dive into brand building, an exercise that involves not only a critical self-inventory but also outreach to top clients.”
Other highlights of the May Research include a strategy for coping with college costs, advice in implementing a “Model Day” approach to time management and a discussion of the dollar’s purchasing power and the limits of conventional inflation measures.
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In Research magazine’s May cover story, Contributing Editor Jane Wollman Rusoff interviews Janet Tavakoli, expert on credit derivatives, about the origins and implications of the global financial crisis.
Tavakoli’s new e-book The New Robber Barons charges that the relationship between between failed mortgage lenders and investment banks that securitized and sold risky loans was “a financial Pearl Harbor,” where “investment bankers piloted many of the planes.”
Tavakoli speaks bluntly to Research‘s readership of financial advisors, saying that in recent years advisors “have let themselves and their clients down badly by not paying attention to the bigger picture,” including risks in the global banking system and the safety of cash flows. Indeed, she argues, in light of the collapse of MF Global, clients are ill-advised to leave “extra cash in trading accounts with any of the major brokerage firms, such as Goldman Sachs or Merrill Lynch.”
Washington has been complicit in enabling and covering up wrongdoing in the financial services sector, according to Tavakoli, who asserts that Congress, regulators and President Obama all have shown little inclination to address the practices that erupted into crisis. In addition, in her view, current public policy is headed toward sparking another crisis by 2015, as low interest rates push people into riskier investments.
Contributing Editor Ellen Uzelac reports on how innovative financial advisors are embracing branding as a powerful took for getting and keeping clients.
For instance, Venice, Calif.-based John Koudsi, CEO and chief strategist of Core Financial Partners, rarely wears a suit, meets with his entrepreneur clients in a modern loft and, Uzelac writes, “pretty much personifies his firm’s corporate slogan: ‘You don’t fit in a box and neither do we.’”
In another example, David B. Armstrong of Monument Wealth Management in Alexandria. Va., decided to build his firm’s brand around the “explorer” archetype, emphasizing freedom and possibility. “We’re the people searching constantly for a better way to do something,” says Armstrong. “We’re all about independence and fulfillment. My clients’ personalities are built exactly the same way.”
A sidebar focuses on Guy Kawasaki, former Apple executive and author of Enchantment: The Art of Changing Hearts, Minds, and Actions, who offers thoughts for financial advisors on how to create a great brand, for example in building trust. “Trustworthiness,” he says, “is about trusting others before you can expect them to trust you. This isn’t chicken or egg — there’s a definite order.”
Kent Smetters, professor at the University of Pennsylvania’s Wharton School and co-founder of Veritat Advisors, charts out how to help clients find a path to affordable higher education in a time of surging tuition costs.
Setting up a 529 plan and establishing a regular savings schedule are key pieces of advice, Smetters notes. “Moreover,” he writes, “clients need to invest their 529 savings wisely. They should not be seduced by larger projected returns—they come with more risk.”