Nearly two years after passage of the Wall Street Reform and Consumer Protection Act, or Dodd-Frank, much remains unclear about the legislation’s scope and significance. In Research magazine’s July cover story, “Dodd-Frank’s Many Questions,” policy analyst and author Nicole Gelinas ennumerates uncertainties and unknowns in areas ranging from “orderly liquidations” and the Volcker Rule to credit-card disclosures and payday lending.
In “Seeking Social Media’s Payoff,” Ellen Uzelac looks beyond the hype surrounding social networking to assess the burgeoning field’s potential benefits for financial advisors—and the risks for those who are slow to get involved.
Research‘s popular annual feature “Portrait of a Branch Manager” this year focuses on Keith Vanderveen, president of the home region of Wells Fargo Advisors’ Private Client Group. Profiled by Jane Wollman Rusoff, Vanderveen is a hard-driving competitor who is dedicated to bringing his once-lagging region into the top spot among the firm’s territories.
Other highlights of the issue include Prof. Michael Finke offering analysis of how to revamp planning for “Retirement in a Yield-Free World” and Sales Seminar columnist Bill Good drawing out UBS’s Ira Walker’s wisdom on “ Aiming High” to become a top producer.
Click through the following slides to preview the July issue of Research magazine.
On July 20, 2010, President Barack Obama signed into law the Wall Street Reform and Consumer Protection Act, better known as Dodd-Frank. Nearly two years later, formidable uncertainties remain as to what the legislation entails, writes Nicole Gelinas, a Chartered Financial Analyst charterholder and contributing editor to the Manhattan Institute’s City Journal.
“The law had three broad goals: preventing bailouts, protecting the economy from the risk posed by the nancial industry, and protecting consumers from bad financial products. Signing the law was just the start,” writes Gelinas. Subsequently, regulators have had to write rules for implementing the law, a process that is still ongoing. Moreover, how those rules will be interpreted in practice involves further uncertainties.
Gelinas offers numerous questions about the legislation that remain unresolved. These cover topics ranging from what firms will be designated “systematically important financial institutions,” or SIFIs, and what regulators will do with such firms, to what activities fall under the category of “abusive practices” from which consumers will be protected by the Consumer Financial Protection Bureau (CFPB).
She also discusses the legislation’s “missing pages,” or matters that it does not address. These include: “Can Dodd-Frank protect the economy absent reform of Fannie and Freddie and of the government student-loan market?”
Contributing Editor Ellen Uzelac ranges across the important yet overhyped subject of social networking.
She finds examples of financial advisors who are finding valuable contacts and information by using tools such as Facebook and Twitter. She also finds that hard information is hard to come by regarding how such networking affects advisors’ bottom lines.
Illustrating the different uses advisors find for social media, Uzelac highlights one who blogs regularly, another who focuses on meeting people and building rapport with clients, and a third who uses Twitter as a “listening post.’
“Social media is not a standalone, not a silver bullet,” Marissa Fox-Foley, executive vice president of marketing for LPL, tells Uzelac. “But we are certainly seeing the power of it as a communication and amplification platform. I’m hearing from the wirehouses and other financial advisors that they are following news more on Twitter than on Bloomberg. That’s where people are going today for true information updates. That’s fantastic.”
Contributing Editor Jane Wollman Rusoff profiles Keith A. Vanderveen, president of the home region of Wells Fargo Advisors’ Private Client Group. In three years, Vanderveen has driven that region—Texas, Oklahoma, Kansas, Missouri, Nebraska, Arkansas and parts of Illinois—from last of 10 to fourth place in profitability and advisor retention.
“His chief goal is to lead the region to No. 1,” writes Rusoff. “If resolve and performance record are any indication, that will happen soon.”
Vanderveer places a big emphasis on recruiting. One of his key considerations: “I want FAs who understand that they’re dealing predominantly with clients in ‘the second half of life’ who want personal connection and trust.”
He also focuses on finding managers who inspire advisors—plus removing ones who don’t: “I have not been afraid to change managers when we needed to, and put someone in the seat that knows how to set a vision and inspire people to perform better than they would on their own.”
In this month’s Annuity Analytics column, Prof. Michael Finke of Texas Tech University writes on how to readjust retirement planning for an era in which yields have plummeted.
It’s a shift that’s not easy to make. “America has become a nation of yield addicts,” writes Finke.
Finke looks at declining yields for Treasury Inflation Protected Securities, or TIPS, as an indicator that zero or even negative real returns on safe assets may be the norm over the coming decade. He then delves into withdrawal rate strategies suitable for such a climate.
Finke advises taking a fresh look at annuities that offer a higher withdrawal rate in exchange for a loss of liquidity. “Many advisors bemoan current rates of return on annuities which are as low as 3.8% on an inflation-adjusted single premium immediate annuity,”he writes. “However, these rates are based on the current yield-free reality. Are you willing to gamble that the market is wrong?”
Sales Seminar columnist Bill Good details the strategy that has enabled Ira Walker of UBS to become a top producer.
“The key is leverage,” Good explains. “You and everyone else have exactly the same amount of time each week. Why then do some make it to the end of the rainbow and others don’t?”
According to Good, “Ira Walker understood and implemented the concept of leverage better than anyone I’ve seen.” That has meant building a staff with specialized functions and following a disciplined “Model Day” schedule.
Good turns the mic over to Walker to explain some keys to success in his own words. For instance, Walker describes how he practices “advocate-based marketing.” Says Walker: “A major focus of my day is finding out how I can help my clients. Sometimes it’s making a critical introduction. Sometimes it’s helping them get tickets to an event that is otherwise unavailable. Sometimes it’s referring them business. Some of the people I advocate for appreciate it, and they become great advocates for me.”
In his latest Political Monitor column, Senior Editor Kenneth Silber sketches out some developments to watch for in the presidential race.
“Romney has far outpaced Obama in raising campaign funds from donors in financial-services industries,” Silber writes, and predicts that the Obama camp will try to turn this disparity to its advantage, by citing it as evidence in portraying Romney as a candidate closely linked to Wall Street.
Yet, Silber observes, “such portrayals seem to be already accepted by the public and their significance discounted.” A poll taken in May showed that a 56-32% majority thought Romney would do more than Obama “to advance the economic interests of financial institutions.” The same poll, however, had Romney edging Obama 47-46% on being trusted to do a better job of “handling the economy.”
To access the July issue of Research, click here.