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Controlling Controlling Your Your Clutter Clutter

Can Can Be Be Profitable Profitable

TABLE OF CONTENTS Letter from the Editor ..................... 1 In the News .................................... 2 Calendar of Events ........................ 5 Control Clutter to Finely Focus ...... 7 by William R. Nelson, Ph.D. & Scott Winters How to Set Up Your Business, IV .. 11 by Sydney LeBlanc The Exit Planning Process: Step Six ......................................... 15 by David Leitner, Esq. CExP™ Beyond Reproach: Ethics Integrity, Trust ............................... 19 by David Loeper, CIMA®,CIMC®

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Chad Coe RFC, CWS®

Coe Financial Group, Inc.

Page Page 77

Top 10 List of Misleading Statements

Had Enough of "Not Enough?"........21 by Stuart Zimmerman and Carista Luminare, Ph.D. Managed Account Solutions: Setting the Record Straight ........... 25 by Charles Widger

It's About Time! ................................. 27 by Phillip Flakes and Nicholas A. Gudz Advisor "High Five!" Chad L. Coe .................................. 29

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Resource Directory ...................... 30


Advisor "High-Five"

Grin and Bear It! ........................... 31

TIME! Page 27

Published by Financial Forum Inc.

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MAY 2010

Business Management for Independent Financial Advisors

Transitions Magazine

From the Editor

Dear Readers, Here is a tale about the educational adventures of a would-be independent financial advisor. Tommy Weebler was not a fan of any kind of education, even at a very young age, and you’ll see what I mean as you read it. I am sure that, unlike Tommy, you know that continuing education and professional development is an integral part of your practice. The Legend of Tommy Weebler, would-be Financial Advisor By the time Tommy Weebler graduated from kindergarten and entered first grade, habits that would follow him for the rest of his life were well on their way to being established. Every morning was the same. Instead of jumping out of bed, washing his face, getting dressed, having breakfast and brushing his teeth before rushing out the door to catch his school bus, Tommy preferred the luxury of remaining on board the Shut-Eye Express long after he was scheduled to disembark. Ultimately, Tommy missed the bus in more ways than one, and the gas money spent fueling his family’s Ford Falcon station wagon to get him to elementary school before he received another tardy slip could have easily taken their car from New York to Los Angeles and back again. Not that any of this mattered to Tommy. School and the education that was supposed to go with it was, at best, an annoying distraction from what really grabbed his attention—watching cartoons on television and adding fresh acquisitions to his marble collection. Sixth grade came and went for Tommy like a midnight ride down a foggy highway. He didn’t learn a thing and he was forever running off the road and ditching his education in favor of any minor distraction that caught his eye.

Tommy’s high school diploma meant as much to him as one of those paper placemats at IHOP. Faced with the threat of having to either move out of his house or to start paying rent, Tommy somehow got accepted at the local junior college where Tommy’s downward spiral continued unabated. Unfortunately, there were only so many Basket Weaving 101 courses to go around and, eventually, Tommy’s long history of academic anemia caught up to him. He flunked out of school. His parents evicted him and, for the first time in his life, Tommy was faced with the reality of having to depend upon his own skills to provide the basics of food, shelter and clothing. This is when Tommy overheard someone talking about how much they thoroughly enjoyed working within the financial services industry. Something, who knows what, clicked in Tommy’s mind and he made the decision then and there to devote the rest of his life to a Wall Street career. Sadly, Tommy’s long overdue resolution to turn his life around came too late to salvage what little remained of his educational potential due to the fact that even minimal investigation on the part of prospective employers uncovered the truth behind Tommy’s sordid academic record. No one in the world of finance would hire him. In short, Tommy Weebler’s future within the financial services industry never had a chance of seeing the light of day. In the end, Tommy’s realization of all he had sacrificed by turning his back on education came crashing home with one hard-learned lesson: As in life, so it is in the financial services industry. No one likes having a bad rep.

From the Editor s

Somehow, Tommy made it to high school where the next four years blended together in confusing blur that saw little or no homework completed and even less true knowledge populate the wide open spaces of his mind. Tommy placed no real value on education and the only reason he made any effort to pass tests was because he was genuinely concerned that failing to do so would extend his sentence and lead to repeating whatever grade he happened to be in.

Until next time,

May 2010


Transitions Magazine

Industry News Publishers Lyn Fisher & Sydney LeBlanc

Real Estate Investment Securities Association (REISA) Names New President

Editor-in-Chief Sydney LeBlanc

The Real Estate Investment Securities Association (REISA) has named Rick Chess as president of REISA effective April 15. Renee Brown resigned from her position as president.

Managing Editor Cami Miller Contributors Phillip Flakes Nicholas A. Gudz David Leitner, Esq., CExP™ David B. Loeper, CIMA®, CIMC® Carista Luminare, Ph.D. William R. Nelson, Ph.D. Charles Widger Scott Winters Stuart Zimmerman

In the News

IT Directors John Weeks Shane Hansen Advertising Sales • Stephanie Kunz 435.750.0062 x3 • Lyn Fisher 435.750.0062 x1

Published by Financial Forum Inc. 550 North Main, Ste. 221 Logan, UT 84321 435.750.0062 •


Rick Chess is the managing partner of Chess Law Firm PLC, a practice focused on real estate, capital formation and governance. Previously, he has worked for Triple Net Properties, Hirschler Fleischer and United Dominion Realty Trust. Chess has served as a member of the Pennsylvania General Assembly, as an assistant county solicitor for Allegheny County and was the staff director of the local government attorneys of Virginia. He was selected as President Elect of REISA in January 2010. “We are very pleased to have Rick’s enthusiasm, knowledge and talents to help us during this transition and this challenging economic cycle,” said Bill Winn, REISA’s immediate past president. “I am excited to lead REISA at this time in our growth,” said Chess. “We will be working on many exciting projects which will enhance our members’ May 2010

businesses including the development of additional industry best practices, legislative outreach, capital markets education and additional networking/educational conferences, to name a few.” REISA is the association in the real estate investment security industry that represents sponsors, broker-dealers, registered representatives and affiliated businesses, such as law, accounting and real estate brokerage firms. REISA works to maintain the integrity and reputation of the industry, serve as an educational resource and advocating body, promote industry best practices designed to benefit investors. For more information, contact Executive Director, Brandon Balkman at 317.663.4176 or bbalkman@ Attorney Mark Quinn, Independent B/D Veteran, Joins First Allied Securities Inc. as Chief Risk Officer

First Allied Securities, Inc., a leading independent broker/

Transitions Magazine

Industry News

Quinn’s primary areas of responsibility will involve the review and oversight of First Allied’s systems and processes, with the objective of mitigating risks the firm may encounter, including legal and regulatory issues. He will focus on the design and implementation of procedures to ensure the firm’s ongoing compliance with applicable laws and industry regulations. Quinn’s responsibilities include the direct oversight of the firm’s Supervision, Compliance, and Investment Advisory Compliance teams, and the coordination of such with all functional areas of the firm. “In Mr. Quinn we have identified a Chief Risk Officer who possesses the skills, knowledge and experience to balance the ever-increasing burden of regulation along with the business needs of a growing independent contractor firm like ours and our affiliated business owners and advisors,” said Adam Antoniades, President of First Allied. “I’m confident Mr. Quinn will become an integral part of First Allied and will help us to further improve our compliance

and supervision processes,” Antoniades said. Quinn, 54, has more than 25 years of experience working with legal, compliance, and regulatory issues in the financial services industry. Prior to joining First Allied, he was in private law practice, acting primarily as a consultant for broker/dealers and investment advisors. He also served as an arbitrator and mediator at FINRA Dispute Resolution. From 1998 through 2008, Quinn served as Senior Vice President and General Counsel of Royal Alliance Associates, Inc., the largest independent brokerage and investment advisory subsidiary of AIG. In that role, he had overall responsibility for the legal and compliance functions of the firm,

including litigation and regulatory matters, design and review of compliance systems and programs, and other corporate legal matters. Prior to joining Royal Alliance, he practiced law in New York City. Commenting on his new position, Quinn stated, “I am very excited to join an organization of the caliber of First Allied, as the firm is uniquely positioned to grow and thrive in the independent broker/dealer channel. The business of providing financial advice has become increasingly complicated in recent years,” he said. “I have spent most of my career with independent firms, and look forward to bringing the experience I have gained at larger institutions to strengthen First Allied’s efforts to identify and

In the News

dealer, announced today the hiring of Mark Quinn as Chief Risk Officer, a newly created position within the firm.

May 2010


Transitions Magazine

Industry News mitigate risk.” Quinn is a frequent speaker at legal and securities industry meetings on topics related to sales and distribution of securities and investment advisory services. He is a former Chairman of the Compliance Council of the Financial Services Institute and a former member of its Board of Directors. Quinn holds a B.S. in Finance from Arizona State University and M.B.A. and J.D. degrees from the University of Denver. He is a member of the Colorado, New York, and Florida bars.

In the News

Fifth Annual Conference for African American Financial Professionals, June 3-4 For the fifth consecutive year, The American College, the nation’s leading educator of financial services professionals, is hosting a two-day conference that will provide participants with the knowledge and tools necessary to be successful as financial representatives and advisors. Through workshops and panel discussions, individuals attending this event will have the opportunity to network with and learn from other successful African American financial professionals from across the industry. It will take place at the Clark Atlanta University in Atlanta, Georgia, one of the nation’s 4

foremost historically black colleges and universities at 223 James P. Brawley Drive, SW, Atlanta. The event is designed to promote professional development and networking among African Americans in financial services, and by extension, strengthen the industry through greater inclusion. The theme of this year’s conference is “Empower Yourself: Commit to Your Education – Connect to Your Future.” To learn more about this event, visit at TheAmericanCollege. edu/Empower or Phone: 610-526-1450 linkedFA Launches New Compliance Feature to Ease Compliance Burden New Technology to integrate with internal email capture and monitoring software linkedFA, the social networking site for financial professionals recently announced the release of its new compliance feature for brokerage firms and wirehouses providing compliance officers with automatic daily reports on FA’s activity. This feature fully integrates into firm’s internal email capturing and monitoring software and addresses FINRA’s* regulatory notice 10-06 on the supervision of electronic communications May 2010

which states: “Whatever procedures firms adopt, however, must be reasonably designed to ensure that interactive electronic communications do not violate FINRA or SEC rules.” A key element of linkedFA’s offering to the financial community is its unique compliance feature which stores all linkedFA communication and documentation between FAs, peers and investors, for six years as per the Securities Exchange Act 1934 rules under 17a-3.c. These communications are extractable and reportable at any time. linkedFA’s new compliance tool automatically runs and emails daily reports on the FA’s linkedFA social networking activity to the firm’s compliance officer for inclusion in their firm’s archives. The feature supports current internal procedures and electronic monitoring processes while providing additional details as required by compliance law. Says linkedFA President, Jason Bishara, “We radically modified our compliance feature at the request of leading brokerage firms, wire house firms and IFAs. For several months now, we’ve been working closely with them to solve the issue of how to use social networking to grow their business while adhering to regulatory

Transitions Magazine

Industry News Let your clients know they can use the site to:

LinkedFA’s new custom compliance tool supports internal systems such as Orchestria, Assentor, Live Office or Smarsh and removes the capital and resource cost associated with middleware solutions. By using linkedFA, firms gain access to a free and fully compliant network.

• Receive useful and entertaining information about budgeting, saving and other goals.

linkedFA unveiled the new compliance feature on 6 April 2010 at the IR Global Rankings Conference in New York which included CFOs and IROs from leading companies such as Bloomberg, KPMG, Centrica, E Trade Financial, Fedex, GfK, IBM, Intel, J Sainsbury, Merrill Lynch, Microsoft, Prudential, RBS, SAP, UBS and Wachovia. For more information, please contact Helen Downey or Michelle Milsom at Downey McKay Marketing, 954-804-1941 or *linkedFA is not approved by, endorsed by, or affiliated with FINRA. Online Planning Center — Your Rebuild Toolbox The Principal® has created a convenient mobile Web site for advisors and people on the go.

    — 2010 —  

• Evaluate retirement goals through a planning calculator.

• Access savings tips. • Schedule calendar reminders to contact their advisor. To access the site, enter in your mobile device. At the heart of America Rebuilds with The Principal, its national campaign is dedicated to helping people get back on track, by offering an online hub of information. Full of expert advice and educational information to motivate individuals and businesses to take action with an advisor. AmericaRebuilds. com, features even more information, such as: • Stories and videos showing how advisors have successfully helped their clients through challenging situations in the last couple years. • Inspiring videos of real families and businesses, featuring advice from financial expert Jean Chatzky. • Financial calculators, tips and much more. uuu May 2010

CALENDAR OF EVENTS MAY May 17-19 IMCA National Conference Orlando, FL May 19-21 NAPFA National Conference Chicago, IL May 24, 2010 REISA Washington, DC

JUNE June 3-4 American College's 5th Annual Conference for African-American Financial Professionals Atlanta, GA June 9-11 Pershing Insite 2010 Hollywood, FL June 14 REISA Midwest Symposium Chicago, IL

SEPTEMBER Sept 11-14 NAIFA Career Conference & Annual Meeting Seattle, WA

OCTOBER Oct. 9-12 FPA Annual Conference Denver, CO Oct 17-19 REISA National Conference Las Vegas

In the News

pliance rules around document retention and the review and supervision of electronic communications.”

To include your upcoming events, please email the info to:


Membership has its Privileges You are cordially invited to become a member of a vibrant, actively growing, collaborative network of like-minded professionals. Gregg Financial Network, LLC is one of the nation’s fastest growing financial services companies comprised of independent and objective member firms throughout the U.S. We leverage the collective strength, experience, skills, knowledge and collaboration to best serve our clients.

Are You A Team Candidate? A team is a group of people with a high degree of interdependence geared towards the achievement of a common goal. A team has a synergistic effect - one plus one equals a lot more than two! If this sounds like you, join our network and become a member of a winning team!

Together Everyone Achieves More

Membership Benefits Include: •

Access and collaboration with some of the best and brightest minds in our business

Strength in numbers ~ Economies of scale

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Insurance MGA, RIA, and Broker-Dealer affiliation

Shared resources and shared gains

To request your membership kit go to or you may contact us at (760) 658-5311 or

“While there is great value in Independence, there is even greater value in collective strength, expertise, collaboration and shared experiences.” – Keith Gregg

1613 So. Escondido Blvd • Escondido, CA 92025 • (760) 658-5311 • 6

May 2010

Transitions Magazine

Control Clutter to Finely Focus


ow many times have you entered another advisor’s office, or maybe even your own, to find filing cabinets filled with clients’ paperwork lining the walls and a pile of papers protecting the desk from sight? Don’t

feel badly about — or trapped by — the situation. Escape from clutter is possible and more profitable than ever by implementing work rules and technology. The

Cover Story

By William R. Nelson, Ph.D. and Scott Winters

profound impact on your productivity will increase your income while reducing the time spent working, thereby improving your quality of life.

May 2010


Transitions Magazine

Cover Story

As an advisor, your time is your most valuable asset and should be spent talking with investors. You make money by building and nurturing trusting relationships. Talking to investors, preferably face-toface in your office, is the highest value use of your time and you should organize your work time to maximize the face and talk time with investors.  Clutter detracts from time with investors so you need management strategies.  

Even if you adopt the paperless, gold-standard for new accounts you will still have a variety of documents stored on your computer or that you hope to collaborate on with others. Please see our April 2010 Transitions article, "Virtual Insurance for Advisors," for suggestions.

Communication Clutter

Three forms of clutter and the associated mitigation strategies are discussed: document, communication, and task.

Document Clutter Document clutter plagues productivity from two directions: 1. Time is wasted when trying to find required information. 2. Time is consumed trying to organize documents so to avoid #1.   The first step to avoiding both problems is to move toward a paperless office by either sticking with your current business methods but scanning the files, or changing your business methods to a modern system that is paperless from start to finish. Staying with current methods is tempting, but lacks the time and money savings possible if updating business processes to modern methods. The gold standard for modern method asset management is using zero paper throughout the introduction, sale, and account opening process. Email introductions, PDF brochures, and e-signatures reduce waste, cost little, arrive quickly, are easy to find, take essentially no physical space, and can facilitate automatic archiving into a CRM.  Establishing such a system is expensive and time-consuming, so outsourcing this task to a turnkey asset management platform (TAMP) is recommended because it will free your time for meeting with investors and enjoying your passions.   8

Communication is an often overlooked and thus underanalyzed form of clutter, and as such is an insidious time sink. An advisor is almost surely inundated with emails, text messages, and phone calls.  There is unlikely enough time in the work day to respond to all of the demands for your attention in a timely manner.  To use your time effectively you need to prioritize your communications and optimize your response process.   First, you must make it clear to friends and family that your livelihood depends on using business hours for business.  Second, check your email no more than once an hour.  If it is urgent, the send can call.  Third, set time aside each day for outbound calls and have messages taken for all inbound calls during this time, other than

May 2010

Transitions Magazine

Cover Story

Task clutter is common and costly. The most successful advisors, like the most successful athletes, identify their strengths and exploit them to maximum advantage. Financial advisors have a very challenging job which is essentially impossible without the valuable ability to establish trusting relationships with investors.  An investor will not entrust his/her life savings to an advisor Magazine whom he/she does not trust; building trust is the largest contributing factor to your success.  Everything else an advisor does is merely support and packaging of their trust- building ability, and you should not waste your time on administrative support tasks or designing your own packaging.   Eliminate the clutter by outsourcing. Do not squander your time performing research on equities, for example.  If you were Warren Buffett, you would not run an advisory firm.  Do not calculate your own billing.  Efficient firms run billing for thousands of accounts in 4 clicks — total.   Do not design and manufacture your own marketing materials.   Developing and integrating the technology to manage money effectively and market the money management solution is the business of TAMPs and exhibits large economies of scale.  Decide whether you want to operate a technology company with billions of AUM and dozens of employees or an investment advisory business with, hopefully, a few hundred million in AUM and a couple of employees.  If it is the latter, outsource tech to the former.  If it is the former, good luck and put your golf clubs into

To Sum Up Clutter comes in many forms, but all divert advisors from their primary job — building and nurturing trusting relationships with investors. Organize your information and non-investor communication to minimize the time consumed by these non-AUM generating activities.  Set aside blocks of time during which interruptions are essentially eliminated so you can establish flow and conduct your calls with maximum effectiveness.  Wise advisors don’t ask what else they can do, but rather what else can they pay others to do so that the advisor can focus on speaking to investors.  Outsourcing technology and operations to a TAMP is a prudent alternative that will allow you to make more money in less time with less aggravation. uuu

Scott Winters is National Sales Director of Eqis Institutional, and Dr. William R. Nelson is the Chief Financial Strategist of Eqis Capital. Dr. Nelson’s acclaimed original research has been published in the American Economic Review, The International Conference on Information Technology ITCC 2004 Proceedings, the Journal of Economic Behavior and Organization, Latin American Finance and Capital Markets, among many others. Eqis Capital provides a turnkey asset management platform that delivers enhanced power, flexibility and efficiency. Based in San Rafael, California, the company enables Registered Independent Advisors (RIAs) and Registered Representatives (RRs) to engineer portfolios that combine diversification, sophistication and world-class insight. Eqis provides pioneering technology with a global reach. For more information, visit them at

May 2010

Scott Winters

Task Clutter

storage. Many challenges await.

Dr. William R. Nelson

from prospects. Successful outbound calling requires a dedicated mindset that takes effort to enter; once you are in it, protect your intellectual and emotional investment by fending off distractions.  Building your relationship farm of leads and prospects by nurturing with calls, emails, newsletters, etc. is critical to your business and must not be shirked in favor of less important tasks with a more immediate result. 


Transitions Magazine

How to Set Up Your Independent Business: Part 4 Your Startup Costs

Editor’s note: This is a great article that originally was published in a book Lyn Fisher and I wrote for John Peluso, President, Wachovia’s FiNET division (now WellsFargo Advisors Financial Network). The book is called “Independent Business Ownership: Navigating to Your New Destination.” We think you will find it very helpful when starting up your new business.


Startup Costs our new business is unique, just like you are. All new businesses have their own particular cash needs at the various stages of growth, so there really is no template or exact guideline for you to use. While it is possible to start your business on a shoestring (many have done so successfully), you certainly would feel more comfortable having a nice budget to purchase everything you need, and to pay for all the startup costs. If you require a lot of technology or other equipment, your investment may be pretty hefty on the front end. We can’t overstress the importance of either having enough money on hand to launch your firm, or of having a source that will lend you the capital you need. To determine your startup costs, the first thing you need to do is identify all the expenses that your business will incur during its startup phase. Some of these expenses will be one-time costs such as the fee for incorporating your business or price of a sign for your building or office; and others will be ongoing, such as the cost of utilities, inventory, insurance, and so on. As you begin your list of expenses, decide whether they are essential or optional. A realistic startup budget should only include those things that are absolutely necessary to start the business. These essential expenses can then be divided into two separate categories: fixed expenses (or overhead) and variable expenses (those related to maintaining and growing business). Fixed expenses will include things like the monthly rent or mortgage, utilities, salaries and administrative expense, and insurance costs. Variable expenses include such things as direct marketing, advertising, seminars, brochures and newsletters to name a few.

Setting Up Your Business

By Sydney LeBlanc

The most effective way to calculate your startup costs is to use a worksheet that lists all the various categories of costs (both one-time and ongoing) prior to starting your business. Here are a few examples of initial costs you will incur:

May 2010


Transitions Magazine

Setting Up Your Business • Travel and other expenses incurred in transferring clients

most new businesses comes from savings and other personal resources.

• Fees paid or incurred for consultants and professional services

• Banks and finance companies: The most common sources of funding, banks and finance companies will provide a loan if you can show that your business proposal is sound. Finance company interest rates are traditionally higher, though.

• Employee training • Rent and utilities for space maintained prior to moving in

• Angel investors and venture capital firms: Capital in exchange for equity or partial ownership.

• Technology/Hardware and software • Office equipment

• Credit cards: Should be used as a last resort as there are better options, or just for the very small or shortterm loan.

• Telephone systems • Signage

• Home equity loans

Ordinary Business Expenses

• Strategic partnering Ordinary business expenses are ongoing, and are directly related to the business. Some common business Magazine A Few Tips About Bank Loans expenses include: It is often said that small businesses face difficulty borrowing money, but this is not necessarily true. But, the inexperi• Auto expense, parking, mileage, etc ence of many independent business owners of the loan pro• Banking fees cess often prompts banks to deny loan requests. Requesting • Office supplies a loan when you are not properly prepared raises a red flag to your lender that you may be a high risk. • Postage and overnight shipping • Local business taxes

Bank Loan Tips

• Repairs and maintenance • Trade publications • Trade association dues • Insurance premiums • Charitable contributions

Finding the Money You Need There are several sources to consider when looking for financing. It is important to explore all of your options and to consult your legal and tax advisors before making a decision. Here are just a few options: • Personal savings: The primary source of capital for

May 2010

First, get prepared. You must know exactly how much money you need, why you need it, and how you will pay it back. This helps convince your lender that you are a good credit risk.

Terms of loans vary from lender to lender, but there are two basic types: shortterm and long-term. Generally, a short-term loan has a maturity of up to one year. These include 12

Transitions Magazine

Setting Up Your Business working capital loans, accounts receivable loans and lines of credit. Long-term loans have maturities greater than one year but usually less than seven years. Real estate and equipment loans may have maturities of up to 25 years. Longterm loans are used for major business expenses such as purchasing real estate and facilities, equipment, furniture and fixtures, vehicles, etc. SBA-type loan programs are intended to encourage long-term small business financing, but actual loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed. However, maximum loan maturities have been established: 25 years for real estate; up to 10 years for equipment (depending on the useful life of the equipment); and generally up to seven years for working capiMagazine tal. Short-term loans are also available through the SBA to help small businesses meet their short-term and cyclical working capital needs.

The Business Startup Checklist Just as you did with your startup cost list, a business startup list is imperative to help remind you of the tasks you may have to perform when starting your business. A sample list is below. You probably won’t have to complete each task on the sample provided, but it is a good template to get you started. The tasks are not in any particular order, but you will want to organize yours with date and follow-up categories:

o Write a business plan and a marketing plan o Decide upon renting, leasing, or buying office space o Choose a business name o Verify your right to use the name through the legal fictitious name process

o File partnership or corporate papers, if appropriate o Obtain business license

o Reserve your corporate name, if appropriate o Register or reserve state or federal trademark, if appropriate

o Have business phone lines installed o Check into business insurance, errors and omissions o Research health insurance o Apply for sales tax number, if needed o Get tax information such as recordkeeping require-

ments, information on withholding taxes if you will have employees, information on hiring independent contractors, facts about estimating taxes, forms of organization, etc. Or hire your accounting and legal consultants to do it for you.

o Apply for employee identification number or Federal Tax ID

o Find out about workers’ compensation, if appropriate o Open a bank account o Purchase office equipment, supplies o Order signage o Create and print business cards and stationary o Create and print brochures with new address o Write and send out press releases o Decide on Yellow Pages advertising o Research advertising rates in publications Now that you have a better idea of the capital you need, and know what your options are for raising the money, we’ll show you next month how to control your ongoing expenses as well as the tax benefits you will enjoy as an independent owner. uuu

Resources: Small Business Association ; www.; Keiter, Stephens, Hurst, Gary & Shreaves

May 2010


Please sign up early!

Feb 16-19, 2011 – Grand Hyatt in Weston, FL

Transitions Magazine

The Exit Planning Process Step Six: Business Continuity Planning By David Leitner, Esq., CExP™


ost often, those who purport to be advisors with expertise in business continuity planning try to sell their services so that the business owner can be sure their family members will be taken care of in a desirable fashion in the event of death or permanent disability. While that is an extremely important planning concept, it is not continuity planning, it is estate planning which will be discussed in the subsequent article as Step 7 in the Exit Planning Process.

An Important Step to Protect the Business Business continuity planning is not principally concerned with making sure that an owner’s family is taken care of in the event of some unforeseen negative eventuality. It is a means of handling a variety of transfer events and consequences that impact the business and the remaining, or new, owners when the original owner leaves. So, continuity planning is an important step taken to protect the business in the event of the death or disability of the owner, whereas estate planning is designed to protect the family of the owner of the business in the event of death or disability. Business continuity planning is about the preservation of the business in the short-term and in the long-term so that, if its owner dies or otherwise becomes incapable of running the company, the company does not falter or fail. In this article we are concerned with the business.

Exit Planning

The first five steps in the Exit Planning Process pub- 7-Step Process for Exit Planning lished in the December-April issues of this publication Step 1 Your Destination Valuing Your Business have all been geared, more or less, toward the sale or Step 2 Step 3 Enhancing Your Value transfer of your business to others. In step six, Business Step 4 Sell to Outsiders Continuity Planning, the emphasis shifts somewhat to Step 5 Transfer to Insiders Business Continuity preserving your business in the event of some untow- Step 6 Step 7 Estate Planning ard event. This event can be anything from a planned retirement to being run over by a bus. The basic concept is that you need to plan for the unplannable because, though unplanned, many things occur that can interfere with your machinations for the future. Such eventualities can be planned for and the adverse effect greatly mitigated through the application of the proper process.

Five Key Problems There are five key problems that need to be addressed in business continuity planning. The first is the continuity of business ownership. In a multi-owner company, a funded buy-sell or business continuity agreement among the owners generally resolves any potential business ownership continuity issues. In a sole owner company, however, more detailed planning, including consideration of potential buy-sell agreements with

May 2010


Transitions Magazine

Exit Planning

competitors or complementary businesses, should be considered. A Certified Exit Planner can be of assistance in fashioning a business continuity ownership plan and, where appropriate, help to determine what owners of competitive or complimentary businesses may be good choices to approach about a cross business buy-sell arrangement, as well as implementing one.

exist as well with multi-owner companies, but their impact due to unexpected death or disability of an owner is lessened by the presence of other owners. But, the presence of other owners, without more, is not continuity planning. I am reminded of a situation that occurred in my hometown recently wherein all four co-owners of a thriving business died in the same small plane crash. Because they had in place a written, comprehensive, continuity plan, the loss of the four owners at the same time did not destroy the business.

In a sole ownership company, the unanticipated loss of the owner frequently has extremely negative consequences for the company’s financial resources. For example, you may have personally guaranteed the com- Again, planning for the unplanned is essential. Indeed, pany’s line of credit or other financing. Your sudden de- having a plan, as Theodore Roosevelt once said is far parture from the scene will cause the bank to re-examine less important than planning. By that he meant, that its relationship with the company. The same applies to the planning process is an ongoing and continuous procompanies that are required to post bonds, either of the cess. The result of the planning process, the plan, can fidelity or surety variety. For example, a construction not be allowed to sit on the shelf and gather dust, but company is required to post a completion bond. Unless must be periodically revisited and revised as approprithe financial wherewithal of those ate to constantly changing business ciryou leave behind is as solid as yours, In a sole ownership com- cumstances. Also, the process of planbonding companies may look somepany, the unanticipated ning, especially under the guidance of a what askance at issuing new bonds. Certified Exit Planner, can reveal more loss of the owner freIn some industries, the inability to strengths and weaknesses in your curquently has extremely rent business than you would otherwise obtain necessary bonding can lead negative consequences be aware of, in the absence of a crisis. very quickly to the demise of the for the company’s finan- And, by undergoing this exercise, in the company. By the same token, lease obligations may be personally guarevent of a crisis, you will be prepared to cial resources. anteed by the owner. With the unexdeal with it appropriately. pected departure of the owner from Another major problem that can be the scene, renewing those lease obligations may not be addressed with proper continuity planning is the unexpossible, or may be on significantly less advantageous pected loss of key business talent that is the owner of terms, unless the successor’s financial strength is suf- the business. This can also be mitigated through proper ficient to guarantee those leases. planning. Another financial resource that is lost when the owner departs from the scene unexpectedly or prematurely is often the ability to recapitalize the company. It is not uncommon for the sole owner of a business to periodically infuse his own capital into the company, because little capital is generally retained by the company. But, since the owner’s deep pockets go out the window with the owner, this can cause significant disruptions and imperil the long-term viability of the company. These problems 16

These and other problems can be avoided, or their adverse effects mitigated, through proper continuity planning. By going through the exit planning process even if no sale or disposition of the business is considered an imminent goal, going through the process and implementing the recommendation of your Certified Exit Planner can help keep your key employees from leaving upon your death or disability. This can be accomplished through the use of several tech-

May 2010

Transitions Magazine

Exit Planning niques that would ensure the continued involvement of your key employees, mitigating the loss of key business talent. I encourage you and your clients to contact a Certified Exit Planner and commence the planning process sooner rather than later. By setting out, in writing, the owner’s desires and thoughts regarding the sale or other disposition of ownership of the company in the event of his or her untimely demise, including listing the specific advisors upon who his family should be instructed to rely, including a Certified Exit Planner, the successful continuation of the business is far more likely. This applies equally as strong in a multi-owner company where an adequately funded buy-sell agreement that is periodically reviewed and updated is extremely important. The loss of financial resources that often befalls a business when the owner dies unexpectedly can also be hedged against by an appropriate plan, including the acquisition of sufficient life insurance to make up for the loss of the financial resources of the owner. In sum, a good and effective business continuity plan must address the four key issues of continuity of ownership, loss of financial resources, loss of the owner as key talent and loss of employees and customers. The goal in proper planning goes beyond simply the peace of mind that the owner might have in knowing that there is plan

in place. It goes back to the definition of a successful business. A business, in the exit planning context, is a successful one if it can either be sold for top dollar allowing the owner to exit in style, or one that can survive, in style, the untimely exit of the owner. uuu

David Leitner has helped numerous business owners achieve their goal of exiting from their business in style and with financial security. He is a 1976 graduate of Stony Brook University and a 1979 graduate of the University of Iowa College of Law. He has been licensed to practice law in Iowa since 1979, before the United States Supreme Court since 1994 and in Nebraska since 2000. In addition to his law practice, concentrating in civil litigation and estate planning, he has published or contributed to 14 books and many law journal articles on subjects ranging from insurance coverage litigation to employment discrimination and from managed care to software. David has been recognized by the American Bar Association, Who’s Who in Emerging Leaders, Who’s Who in American Law, Who’s Who in the Midwest, Who’s Who in the World and others. He can be contacted at 515 252 0777 or

Get the Most from your Web Site Get a FREE 6-Point Analysis on your web effectiveness Includes: 1)Are you search engine friendly? Can you be found? 2)Correct use of meta tags and key words 3)Readability quotient 4)Google search ranking factor 5)Compelling offers made by site to get prospects 6)Comments on looks and design. Is it client friendly?

Get Your FREE Analysis at 435-753-8848 (mountain)

May 2010


Sound Off!


Outstanding Wealth Management Teams to feature in the 4th Edition of The Wealth Factor: A Team Approach This customized, hard-cover book provides an objective, third-party endorsement for you and your team. It's authored by veteran journalist Sydney LeBlanc, and published by Financial Forum Publishing. Books can be distributed to clients, prospects, members of your network, editors and writers at targeted publications. Call today for details and to see if you and your team meet the criteria for inclusion. CONTACT: Lyn 435.750.0062 x1, or email *Fee includes 300 copies of the book and a complete marketing and PR package.

Transitions Magazine

Beyond Reproach Ethics, Integrity and Trust by David B. Loeper, CIMA®. CIMC®

Win a Three Volume Set of Autographed Books This month, I need your help, and I’m willing to give you an incentive to compensate you for it. What follows is a list of ten questions a prospective client might ask of you. I’d like to hear from you how you would honestly respond to any of these potential client questions. In a future column I will publish (but keep your name confidential) the best and worst responses. If I use your response in the column (whether best or worst) I will send you an autographed set of my three books. Just e-mail me at with “Beyond Reproach” in the subject line and be sure to include your name, shipping address and phone number in your e-mail. If I use your response I’ll send you the autographed first edition set of my three books. Are you up for it? Are you misleading your clients or are you on track to build a practice that is beyond reproach? Let’s find out … here are the questions: How would you respond to the following questions from a client? 1. Will you identify my tolerance for investment risk? How will you do that? Once identified, how will you use it? 2. I’m concerned about conflicts of interest so I need to know— are you or any of your associates ever compensated by product vendors in the form or a commission.


In the columns I’ve written so far, we have covered some pretty heavy-duty topics about ethics and integrity to build trust with our clients. We’ve discussed everything from being a fiduciary and truly avoiding conflicts, breaking our addiction to track records, the uncertainty of the markets and even the core premises you need to adopt to truly build a practice that is worthy of the trust clients give you.

Integrity and Trust s

Top Ten List of Misleading Statements — Are You Guilty or Are You Beyond Reproach?

3. I know that track records are not necessarily an indication of results, so why should I care about the track record of an investment?

May 2010


Transitions Magazine

Ethics, Integrity and Trust

4. Will you produce regular performance reports for me? What will they show and what will we use them for in our work together? 5. I’ve heard that asset allocation is important and is measured against the efficient frontier. Will the portfolio allocation you design for me produce a higher return and/or less risk than the efficient frontier? 6. I’m familiar with Morningstar and its star rating system. Do you use a rating system in helping me select investments? How do you use it? What does the rating show? 7. I’m concerned about generating a lifetime income, yet I’d like to participate in markets. What would you recommend for this goal that would confidently produce a continuous source of income for my retirement but help me make the most of my lifestyle? 8. I’ve heard that market returns are highly uncertain and that some advisors use some sort of “Monte Carlo” technique to calculate my odds of success because of that uncertainty. Do you use such a method? If so, how high should my odds be and why? 9. My last advisor asked me at what age I’d like to retire, but I like my job and I never really came up with an answer for him. How can you help me with this? 10. I’ve heard that it is important to have the proper asset allocation for my age and that as I get older I should have less exposure to stocks and more towards bonds. Do you use this technique and if so, how do you use it? Why is that the right approach?

Let Me Hear From You! There you have it. Ten questions you might hear from a prospective client and probably have already heard from several of your existing clients. How did you respond? 20

E-mail me your response to for any one or all of these questions, and if I use it in a future column (your name will be kept confidential) I’ll send you an autographed first-edition set of my current books. uuu

David B. Loeper is the CEO of Financeware, Inc. which does business as Wealthcare Capital Management. An SEC Registered Investment Adviser with nearly 25 years experience, Loeper has appeared on CNBC and has been a featured contributor on Bloomberg TV and CNN. Loeper joined Wheat First Securities as vice president of investment consulting in 1988, where he served for 10 years. He was promoted to managing director of investment consulting, and then eventually to managing director of strategic planning for the retail brokerage division. He left his position at Wheat First Securities in 1999 to found Financeware. Active in industry associations throughout his career, Loeper has been a member of the Investment Management Consultants Association (IMCA) for over 20 years, serving on the advisory council for more than 5 years, most recently as chairman. Loeper was also appointed by the governor of Virginia to serve on the Investment Advisory Committee of the nearly $30 billion Virginia Retirement System. He received his CIMA® designation in 1990 by completing a program offered through Wharton Business School, in conjunction with IMCA. Drawing on years of experience in financial services including serving as a fiduciary for all types of ERISA plans, Loeper has authored numerous whitepapers and books including the top selling book, Stop the 401k Rip-off! as well as The Four Pillars of Retirement Plans, Stop the Retirement Ripoff and Stop the Investing Rip-off.

May 2010

Transitions Magazine


Not Enough Time. Not Enough Energy. Not Enough BUSINESS! By Stuart Zimmerman and Carista Luminare, Ph.D.

If YOU have had enough of “Not Enough” and answered “YES” when you read our title and subtitle, please read on.


ou may be experiencing the following:

• You have deep concerns about the macro-economic climate for the intermediate-term. • Your analytical tools may not work as well now as they did in the past.

• Competition is stiffer than ever.

• And it feels like someone turned up the dial on the treadmill at work so you have to go faster and faster just to keep pace with all your mounting to-do’s. In this post-9/11 and 2008 global financial meltdown era, your role as an independent advisor goes beyond the numbers. Your life goes beyond your business. It is time for a new paradigm of financialadvisor, one that offers you and your clients deeper peace of mind and well-being in every facet of life. It is crucial that you bust through your stressors and live a richer life, personally and professionally, with ease and efficiency. At the same time, it is also necessary for you to distinguish your services from the vast preponderance of your competition that is still locked into an outdated advisory model. Money flows through relationships. It’s not just who you know, rather it’s how people feel about you that determines the extent of their business with you. Building and nurturing deeper relationships is good for your business and your whole life. One way for you to enrich your relationships is through the power of appreciation … and we’re not just talking about your portfolio management skills.

Self-Improvement s

• Wealth transfer issues may result in a new set of decision makers with a portion of your assets under management.

Appreciation is the deep heartfelt emotion of gratitude. We all know that when we are simply grateful for what we have, then we are more at peace, generally happier and attract people to us. And when we are grateful, we feel like we have “more than enough” in the moment. Appreciation is also a state of greater mental awareness and understanding of different contexts (e.g., I appreciate what you’re saying.). Being able to appreciate your clients’ needs, concerns or value

May 2010


Transitions Magazine


tems, even if their needs are more emotionally-based or spiritually-driven, will further distinguish you from advisors who are primarily numbers-oriented. Finally, appreciation requires action. In addition, to regularly expressing your gratitude and using active listening skills to increase your understanding of people’s needs, another key of appreciation is acknowledgement. Whether it’s your co-workers, your clients or your loved ones, everyone loves to be acknowledged.

Here’s What You Can Do Today Express your heartfelt gratitude to someone today ... and everyday. Let them know how you it makes you feel inside for them to contribute to your life in the way that they do. For example, you can thank a client for their business. You can even thank a loved one for loving you. Notice how you feel in your body as you share the truth of your thankfulness and observe how they respond to you.

Stuart Zimmerman and Carista Luminare, Ph.D., are principals of Inner Securities, Inc., a coaching and consulting company dedicated to meet the profound, evolving needs of today’s financial advisors and their clients. They know what advisors are going through; they have been in the trenches. Stuart and Carista have several decades of experience in working directly with the investment and high net worth community. Stuart is a high net-worth life coach, former RIA, hedge fund manager, broker-dealer and stock broker; he has been on the front-line in the industry, and he knows the business, the high net-worth community and your pressures firsthand. Carista is a holistic therapist and business consultant, having guided high-achievers, people with inherited wealth and families of high net worth to deeper levels of inner peace and personal/professional fulfillment. For more information on their coaching and consulting, please visit or call 707-425-2360.

Contact a client today and ask them about their greatest needs or concerns, informing them that you would love to have greater understanding as to how best you can serve them. People love to be understood. Acknowledge three people on your team today for actions large or small they have taken on your behalf – even if their efforts haven’t produced your desired result! Numerous surveys have found that acknowledgement stimulates employee engagement even more than compensation does.

The Bottom Line You have the personal power to break through the “not enough” time, energy, money syndrome. No matter what the markets do or how stiff the competition is, the power of appreciation can catapult your life and your business to unprecedented heights. uuu 22

May 2010

Transitions Magazine


The Power of Inner Security Peace of Mind, Independent of Outer Circumstances A Breakthrough Tele-Course For Financial Advisors FREE! ONE HOUR INTRODUCTORY CALL Did you know that the words Will, Trust and Appreciation have a definition beyond “financial security?” In our free, introductory call you will learn the deeper meaning of these words, and you will take-away one powerful practice that will help you shift from the debilitating effects of heightened uncertainty in life to a new level of security and wealth that you can feel in your body and mind. Plus, you will service your clients with an unprecedented sense of centeredness and confidence!!


s we all know, the financial industry and the macro-economic climate have changed radically in the Magazine past decade. Uncertainty is rampant on many levels.

We also know that uncertainty frequently stimulates fear or deep-seated insecurity, sometimes unconsciously. You and/or your clients may be feeling unsettled or fearful due to all the transitions taking place right now. We believe these insecure times call for you to cultivate Inner Security – the powerful state of being in which you are at peace with the way things are … enabling you to navigate through a challenging environment effectively and gracefully. When the outer circumstances are so unpredictable, the place one can depend on 24/7 is within. The Power of Inner Security course is specifically designed for financial advisors and their clients (yes, they want Inner Security too!). We literally utilize key financial concepts such as Will, Trust and Appreciation that have greater than financial meaning to create security beyond money. Your course benefits include: • A new relationship to security and wealth that revitalizes you, your clients and your loved ones • More confident, concise and compassionate communication skills you need to deepen client/advisor bonds • Practical tools for greater life balance and emotional resiliency during moments of stress • Fresh approaches in prioritizing, valuing and appreciating your time, energy and finances. Together, we offer you a comprehensive set of concrete tools, practices and skills that will elevate you, your clients/prospects and business to unprecedented levels of satisfaction. And will free you from the vicious cycle of “Not Enough Time, Energy or Business”! (Lyn: link to their article in this issue)

Here’s what you can do for yourself today: Give yourself an allowance! (continued next page)

May 2010


Go and take a walk in nature for thirty minutes, preferably in a quiet, calm setting. Just to shift your energy and give yourself an opportunity to center and clear your mind. Turn off your cell phone. Consciously breathe in the fresh air deep into your lungs. Observe the turning of the season into springtime. Notice how you feel in your body as you simply breathe more deeply and commune with nature. Now ask yourself: “In my heart of hearts, what do I really want?” Consider all aspects of your life: your physical well-being, your family and friends, your sex life, your professional relationships, your finances, your business, and your spiritual foundation. Be honest with yourself. Write down your answers. The purpose of this simple self-inquiry is twofold: 1. You become more aware that you are so much more than a financial advisor and 2. You begin creating a clear destination to which we can help you arrive.

What’s Your Next Step? Join us for a free one — hour introduction to The Power of Inner Security course. We will offer you one specific practice that will help you immediately. The one-hour call will be on Tuesday, May 18th at 8pm EDT, 5pm PDT. Email Stu Zimmerman at to register and receive dial-in instructions. Here’s who we are: Stuart Zimmerman and Carista Luminare, Ph.D., are principals of Inner Securities, Inc., a coaching and consulting company dedicated to meet the profound, evolving needs of today’s financial advisors and their clients. They know what advisors are going through; they have been in the trenches. Stuart and Carista have several decades of experience in working directly with the investment and high net worth community. Stuart is a high net-worth life coach, former RIA, hedge fund manager, broker-dealer and stock broker; he has been on the front-line in the industry, and he knows the business, the high net-worth community and your pressures firsthand. Carista is a holistic therapist and business consultant, having guided high-achievers, people with inherited wealth and families of high net worth to deeper levels of inner peace and personal/professional fulfillment.

For more information on their coaching and consulting, please visit or call 707-425-2360.

Get the Most from your Web Site Get a FREE 6-Point Analysis on your web effectiveness Includes: 1)Are you search engine friendly? Can you be found? 2)Correct use of meta tags and key words 3)Readability quotient 4)Google search ranking factor 5)Compelling offers made by site to get prospects 6)Comments on looks and design. Is it client friendly?

Get Your FREE Analysis at 435-753-8848 (mountain)


May 2010

Transitions Magazine

MANAGED ACCOUNT SOLUTIONS Setting the Record Straight

Editor’s Note: In an April 12 cover story in Forbes Magazine written by Asher Hawkins, he discusses how “wrap fee” accounts are ripping off investors. It is a scathing article which, in our opinion, neglects to mention some very important aspects of managed accounts and the value they can add through the investment and consulting processes. Charles Widger, CEO Brinker Capital, Inc., and Chairman of the Board of Governors, The Money Management Institute, took issue with the piece and wrote the following response to Forbes. It provided a more balanced look at managed account solutions and it highlighted and clarified a few of the unclear statements in the original story. If you would like to read the original article first, here is a link to Forbes online: We would be interested in hearing your opinion on the subject ( “Asher Hawkins’ April 12 cover story, “Wrap Account Rip-Off,” warrants another view of these programs; one that we hope sheds a more positive light on the various aspects of fee-based and separately managed accounts. After the term “wrap” became popular in the industry, it was quickly outdated — not only because of the improper emphasis on “fees” but also because the robust consulting services that accompanied the programs were lost in the definition. The terms “managed account” or “managed account solution” better describe the overall investment strategy and service. While Mr. Hawkins’ feature highlighted a few concerns about “wrap” accounts, further research would have uncovered the real benefits and dispelled numerous misconceptions. In the early days of managed account programs, pioneers and architects of this fee-based business did not develop these investment solutions as a product to sell to clients. Rather, the key differentiator of these programs and investment products was (and is) its unique process that the broker and/or advisor manages on behalf of the client. The latter constitutes fiduciary standing, prudent procedures, documentation, and the necessary technology for value-added services and best investment practices. Managed account programs and their processes originally were offered to institutional investors more than 30 years ago. The value of institutional-caliber managers administering their portfolios and of advisors monitoring those managers is well understood by investors and by the regulatory agencies that oversee them. They also appreciated the elimination of the conflict of interest (trading to generate commissions) and that the management fee remained the same whether 1 or 100 trades were made. As the value of the account grew, the financial advisor earned a larger fee as it is based on a percentage of managed assets.

May 2010

Investment Solutions

Charles Widger

Mr. Widger’s Response


Transitions Magazine

Investment Solutions

In today’s uncertain economy, it is more important than ever for an investor to work with an advisor who uses a consultative process consisting of: determining investment objectives and risk tolerance, making asset allocation decisions, developing the investment strategy, monitoring economic changes in the client’s family, and then implementing it in collaboration with the client. This sophisticated process provides true value. An investor can choose to hire a broker or an independent advisor (certified financial planner, or chartered financial analyst, for example) to do this. These professionals can research, service, and recommend the same or similar product array, regardless of their title or whether they are affiliated with a large national securities/advisory firm or an independent firm. In Mr. Hawkins’ article he highlights a competitive model (Mutual Fund Shares At A Discount) that has seemingly stalled, precisely because it eliminated the value of the advice component. It appears from the article that several reputable fiduciaries are balking at being a part of a model that sells investment products without the benefit of knowing the investor.

The investing public deserves the best tools and strategies the financial services industry has to offer. As the industry continues to grow, more advisors understand that managed accounts afford them the unique consulting process necessary to properly serve the diverse needs of smart investors today.” uuu

Since 1997 the Money Management Institute has been educating investors and the media on the value of professionally managed solutions. MMI members’ advice-driven investment solutions serve an evolving worldwide financial landscape and their organizations are committed to the highest standards of fiduciary responsibility and ethical conduct. For more information, visit

Taking closer look at the investor in Mr. Hawkins’ article with investable assets of $8 million, we see that, in reality, she was not truly diversified. Simple diversification and the buy-and-hold theory are not smart, workable solutions. Allocation fact: One-quarter was held in municipal bond funds and cash and the rest in only three stocks with seeming no particular or careful justification. The vast majority of financial advisors would agree that her portfolio was not properly diversified. A knowledgeable and ethical professional would have advised this $8 million client, “We are going to work you out of these three positions and more carefully diversify your portfolio.” Putting these assets into a managed account with full diversification and professional administration would have been the most rational approach. 26

May 2010

In the Spotlight

Transitions Magazine

IT’S ABOUT TIME ! By Phillip Flakes and Nicholas A. Gudz


n last month’s edition of Transitions magazine (page 30), we were featured as a firm that focuses on serving financial advisors who are considering a broker-dealer change. We thought it would only be fair to explain just where we are coming from. Call us crazy but here is how we view our industry. You well-to-do, client-centric financial advisors are the most important people out there. Without your efforts of bringing clients to the market, this industry simply would not exist. There would be no fund companies, there would be no annuity companies, no third-party money managers, there would be no broker-dealers, and the list goes on and on. Being the most important people to this industry creates many challenges, none more crucial than time management. The time challenges that financial advisors face are forever present. Running and managing your business effectively is vital to its success and that requires — time!! That being said, we will be outlining a series of articles to be published over the course of the next several months that will address these issues in the magazine.

Time Management

Editor’s note: We asked our friends Phil and Nick, principals at StarPoint Consulting Group, to write a monthly feature on various topics of interest to advisors. Whether you are transitioning to independence or investigating your options among the numerous B/Ds, issues of technology, client transfer, support, compliance and more will be addressed over the coming months. As a third-party consulting firm, StarPoint will be interviewing financial advisors, wholesalers, consultants, money managers, attorneys, and other industry-related professionals — all designed to save you time.

Some of the areas we research when helping advisors transition include Compliance, Clearing Firm Options, Technology Offerings, Back Office Support, Business Development, and Product Offerings. We will

May 2010


Transitions Magazine

Time Management

talk about the importance of each, and what advisors should and should not do in the hopes of saving time. Given the complexities of each and every case we deal with, we are going use case studies as a way to help outline the realistic options that exist.

What are the Options? Let’s get specific. We will present a real case that may sound like this: “Hi I’m a financial advisor with XYZ broker-dealer. I am unhappy with the level of service that I receive from my broker-dealer. I have been with them for more than 10 years and their technology and company culture is really all that I know! I simply don’t have the time to research other options, but I am confident that there are other firms that are a better fit for my business. HELP!!!” What are the various options that are available to this advisor and what should he or she be considering? • RIA: Hybrid, Stand Alone? • Custody and Clearing, which is right for your business? • Wirehouse • Regional Firm • Bank Channel • Independent Broker Dealer After a complete discussion of the pros and cons of each option, in the following months, we will outline what you


should consider when evaluating options. For example: • Company Culture: Highly supportive BD or handsoff and leave me alone? • Clearing Firm: Which option is right for my business model? • Fees: Ticket Charges, E&O, technology, and other add-ons. • Product Offerings: Does the BD focus on Fee-based business, Insurance, Securities, Wealth management and planning, or all of the above? If I specialize in one area, which BD is the best fit? • Compliance: Loose or stringent? • Technology: Ease of use and efficiency. • Payout: My business mix is X and Y. What is Z broker dealer offering? • Business Development Resources: They are out there, what BD is sticking to their guns? • Back office Support: What is the home office staff to rep ratio? What is the average industry experience of the associates that are handling my business? Our column next month will focus on RIAs and what their options are, either as a stand-alone/independent, a hybrid or operating as an IAR. Please let us know if you have any questions regarding this topic and we’ll be happy to address them. Contact info: email starpoint@ or call 866.431.4848.

May 2010


Transitions Magazine

Advisor "High Five"

Chad L. Coe, RFC, CWS速 Coe Financial Group, Inc.

In 1999, Mr. Coe and his wife Debbie founded the non-profit charity Special Kids Network. Its 70 volunteers help provide other organizations such as Cure Autism Now, the National Stuttering Foundation, Keshet and Lawrence Hall Youth Services with financial support through a variety of events. The Special Kids Network raises as much as $200,000 annually for children-centered organizations and has raised more than $1 million in total since its inception. In addition, Chad also serves on the Board of Trustees of Keshet, an educational program for children with disabilities, and the Founders Board of Directors for Rainbows, which fosters emotional healing among children grieving a loss from a life-altering crisis. Chad says he sees his professional and charitable endeavors as a daily opportunity to help others and commented that, "When I'm managing their money, I change their lives." Chad has received numerous accolades for being an outstanding advisor who provides his clients with unbiased and objective advice to potentially help them reach their wants, needs, goals and dreams. He is a Certified Divorce Financial Analyst (CDFA), who champions the cause of women faced with making critical financial decisions during the stressful periods pre- and post-divorce. co-founded the Second Saturday Group, that helps women handle divorce with dignity.

Advisor "High Five!" s

Chad L. Coe, founder of Coe Financial Group, Inc., is recognized as a visionary in the field of wealth management by building his full-service wealth management firm as a values-based business. His focus is on the personal well being and financial security of high net worth individuals coming to terms with their financial futures at various turning points in their lives. By becoming familiar with their personal values and disciplines, Chad becomes better equipped to customize plans with protection strategies and continued growth of their portfolios drawing upon what he learns of their goals and individual tolerances.

Chad received a Bachelor of Science degree in Marketing from the University of Illinois. He is Series 6, 7, 24, 51, 63 and 65 licensed and is an Investment Executive with First Allied Securities. uuu

May 2010


Transitions Magazine

Resource Directory Click on ads for more information and to visit websites.


Independent Broker Dealers


Resource Directory s

Money Management

PR/Marketing Services


Financial Forum Inc. Book Publishing for Financial Professionals For more information: tel: 435.750.0062 x1


May 2010



As a new advisor, Greer quickly learns the secret to a clean desk.

A Touch of Humor s


Grin and Bear It!

Something got your funny bone? Submit your jokes and cartoons to Entries selected for "Grin & Bear It!" will receive a $10 gift card.

May 2010


Transitions Magazine - May 2010  

The magazine of buinsess management for independent financial advisors

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