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Carving Out an Indie Niche; Boosting Client Communication: June Research—Slideshow

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Research magazine’s June cover story, “Exploring Independence,” looks at how ex-wirehouse advisors are finding that having a distinctive niche can be the key to a successful advisory practice.

Sometimes that means taking a very different tack from your earlier career. Independent advisor Brian Solik, for instance, describes himself as a “former Wall Street broker” and emphasizes that his services can help clients protect themselves from Wall Street and the IRS.

In “Six Conversations You Need to Have,” experts weigh in on the most crucial subjects of advisor-client discussions. Areas covered range from the client’s overall financial picture, to the type of relationship a client wants, to how to prepare for the possibility of a major market decline.

Some other highlights of the June issue: an assessment of the opportunities and risks in the shale gas boom; the final installment of Moshe Milevsky’s important new book The 7 Most Important Equations for Your Retirement; and columnist Bill Good’s advice on how to avoid the worst mistakes in seminar marketing.

Click through the following slides to preview the June issue of Research magazine.

Exploring Independence

“For a lot of former brokers,” writes Contributing Editor Ellen Uzelac, “the transition to the independent space has resulted in creative, new business niches as they redefine themselves in ways that would have been largely undoable as brokerage employees.”

Uzelac finds these indie advisors engaged in some rather diverse niches. Texas-based Peter Roth, for instance, specializes in helping business owners conduct exit planning. Craig Adamson is eastern Iowa’s resident expert on retirement products. Brian Solik of New Jersey puts a focus on equity indexed annuities and cash value life insurance.

When Laurie Bachelder worked at a broker-dealer, she was unable to interest her bosses in developing a niche in non-tradtional investments. Subsequently, Bachelder formed a fee-only RIA to specialize in such assets. “If you own dressage horses and you’re not comfortable in the stock market, why not invest in dressage horses?” says Bachelder. “Our specialty platform wasn’t intended to replace traditional investing. It simply adds balance.”

Six Conversations You Need to Have

Contributing Editor Jane Wollman Rusoff taps the wisdom of a panel of experts regarding six critical conversations that can help advisors meet investing goals and steer clients away from self-defeating decisions.

The subjects of such conversations include: the client’s total financial picture; what type of relationship the client wants; how much money the client expects to spend in retirement; investment strategy and the importance of diversification; how to prepare for a sharp market decline; and whether an investment strategy is actually meeting client needs.

According to Jay Nagdeman, founder and president of Suasion Resources, a financial services marketing firm in Roseland, N.J., “The most important thing to remember is that this is a mutual relationship and that both parties need to be satisfied. Many times advisors are in sales mode and forget this. But the advisor isn’t selling products or services; the advisor is selling trust.” Nagdeman suggests advisors pose questions to clients, such as: “What was the best experience you’ve had with an advisor?” And, “What was the worst experience?”

The Shale Gas Rush

Contributor Gerald Burstyn reports on the boom in hydraulic fracturing, or “fracking,” of natural gas from shale rock. The growing use of that technique carries substantial investment risks as well as opportunities, he finds.

Although worries about possible contamination of drinking water have gotten much publicity, Burstyn writes that “environmental concerns aren’t even the greatest threat to this investing area.” Rather, he suggests that investors keep a sharp eye on “historically low prices of natural gas and questions about how the industry presents its current assets and future prospects.”

Significiant uncertainties arise in attempting to assess how much natural gas exists in shale rock and how much can be extracted for a profit. However, some experts argue that such doubts are overblown. “One can certainly not argue that the resources do not exist in large quantities,” says Simon Rosenberg of Snow Capital Management. “Whether that is more or less than original estimates is beside the point.” 

What Is Your Financial Legacy — Today?

In the final installment from his new book The 7 Most Important Equations for Your Retirement, Annuity Analytics columnist Moshe A. Milevsky discusses how Solomon S. Huebner changed the perception of life insurance from a dubious “game of chance” to a rigorous field that makes serious use of the tools of economics and human capital valuation.

Writes Milevsky: “Professor Huebner’s main idea, and the one for which he is recognized today, is that people should insure their human life value, which is the present value of all the wages, salary and income that a breadwinner will earn over the course of his working life. He argued every head of household had a moral responsibility to have life insurance to protect that capital.”

Milevsky also recounts how Huebner applied diversification to a strategy of buying stocks in the depths of the Great Depression, stating “One share in 50 companies is better than 50 shares in one company, because it gives the spread of averages.” Huebner profited handsomely from that insight, decades before diversification became a staple of Modern Portfolio Theory.

Sales Seminar columnist Bill Good sketches out the “six worst mistakes” of seminar marketing. Ignoring what competitors are doing is one such blunder. Failing to test-market one’s own approach is another. Then there’s having a bad invitation, a bad location, being just plain boring and misusing PowerPoint.
Among Good’s tips: ”Wrong locations include: country clubs, ethnic restaurants (Mexican, Chinese, Thai, etc.), public libraries, community meeting rooms, Moose Lodges (yes, I had to reprimand someone for using one of those), and worst of all, your office.”
He adds: “Don’t get me wrong. You can use your office but not for a public seminar. It’s fine for an educational seminar for clients and client guests. The usual social contract for people you have never met is: you buy dinner and I’ll give you some time.”
No less important, Good writes, is not being boring. In his words: “You’ve heard it said, ‘Seniors have a short attention span.’ Rubbish. If you believe that, you have a serious droning problem.”
To access the June issue of Research, click here.


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