Partnering to Differentiate


Many advisors are beginning to look alike, according to a recent article in  All of us are calling ourselves financial planners, wealth managers and asset managers. But our clients can’t tell the difference because we essentially do all the same thing: grow assets.  

One of the ways clients appear to be looking to differentiate financial advisors is through branding and digital marketing. As a business owner, you probably find it difficult to devote resources to things that don’t directly generate revenue. However, our clients are looking for ancillary pieces of information to set us apart from the crowd. You need to make sure you’re delivering educational information, specific client data and thought leadership through a variety of different mediums.  

A lot of clients like shorter videos, for example. You can be concise while communicating complex ideas.  Additionally, you need to think about how you can have a digital presence. This goes beyond just having a website. Fifteen years ago, having a simple website was innovative. Today, it’s not only a table stake, but it’s often viewed as old fashioned. Your clients will ultimately demand immediate access to their account values, beneficiary information and other key account data. 

Gaining expertise on the latest technology remains expensive and time consuming.  You need to have partners who can help you differentiate your business. It’s no longer acceptable to be different because you’re independent or take a holistic look at the client’s situation. Instead, you have to do all of the above, plus deliver it when the client wants it – regardless of when they want it.  

Take a look at your partnerships. Can they assist you with advancing in the digital world? Can they provide expertise in social media marketing, application design and promoting your business through referrals? If not, question why that person is considered a partner and insist on having the right partners by your side. Call Ash Brokerage for information about how we can help you in these areas. 

Bottom Line: Partnerships are key to growth. Clients are looking for a different level of engagement with their financial professional. Make sure your partners are in line with where you need to go.  



Making for Meaningful Change


By now, many of you have heard about the Department of Labor’s Fiduciary Standards. This will be a topic of much discussion in the coming weeks, months and, quite possibly, years to come. First, let me be clear that I support the need for industry change which supports meaningful, constructive and enforceable standards in the best interests of our clients. We have a responsibility to keep their best interests in mind.  

Getting to a point where we can keep our clients’ best interests in mind and do so for all our clients is the challenge. In my opinion, the current version of the DOL’s Fiduciary Standard is not the path to the best interests of clients across America. Today, we have too much emphasis on greed and equity growth with little focus on safe, guaranteed, dependable income through retirement – something many Americans desperately need. Unfortunately, there’s almost no focus on utilizing non-financial wealth and diversifying income streams.  

In June, I spent three days in Washington, D.C., talking to congressional leaders from my state and region about this problem as our industry continues to get its arms around the broad, sweeping impact of this proposal. Through this blog, I hope to keep you informed on the ever-changing status of this legislation. As one speaker said this week, this will be the most significant regulatory overhaul in decades. If so, we have to get it right.  

Workable solutions include:

  • Crafting a “seller’s exception” to allow certain transactions without triggering various fiduciary requirements so long as the consumer is clear that the agent is not providing investment advice and not acting as a fiduciary
  • Maintain the 84-24 Prohibited Transaction Exception (PTE) for those products that are used in a transaction environment, not a fiduciary environment.
  • Draft a proposal that wouldn’t restrict product choice, retaining affordability while creating access to retirement professionals for all Americans, not just those with larger balances that justify the risk of bringing them as a client

Overall, there remains a lot of work to be done on this initiative. The industry represents many independent, registered representatives and existing fiduciaries who secure the financial futures of many Americans. This decision creates a lot of risk for many – we must focus on meaningful change.  Change needs to take place, but it must make sense for our end-users, our clients, who trust us regardless of our business model. As I’ve said before, the fiduciary standard is a way of business; it’s not a business model.  

Bottom Line: Our industry will definitely change in the next 18 months. We need to make sure the change is positive for our clients.  


Things Will Change


I just left a well-attended broker-dealer roundtable, where the crowd was the largest in the semi-annual meeting’s history. The content was the likely reason – the meeting focused on the U.S. Department of Labor’s proposed Fiduciary Standards.  

The DOL’s proposal creates many obstacles for registered representatives. The Fiduciary Standard reaches many aspects of financial planning involving insurance and investment products. Past rules protecting the state regulation of insurance products are circumvented through tougher language focused on impartial and unbiased recommendations to the client.

While no one wants less than a best-interest-of-the-client philosophy in our industry, policing the standards and implementing consequences would be far reaching. Additional disclosures, reductions in revenues, likely minimum account balances, and retooling of existing products to meet mandates (and not consumer interests) may be required if the proposal is accepted in its current form.  

Clearly, as I have said many times in this blog, it’s time for our industry to change – to better itself – by developing innovative products, gaining a deeper understanding of our clients and securing income through more options. 

But, the end result of this proposal will be to eliminate the willingness of financial firms and their advisors to address the needs of middle Americans. This group needs professional advice more than any group in America right now. According to the American College’s Retirement Income Certification Program, 70 percent of middle Americans’ wealth is tied up in non-financial assets. That means the amount of financial wealth this group has must be used wisely and efficiently for the highest priority needs – guaranteed expense coverage. We must look at the best possible use of dollars and attempt to secure the best possible lifestyle and legacy. That’s their best interest. 

Additional paperwork doesn’t promise the best interests of the client. More importantly, leaving the policing of the Fiduciary Standard to litigation opens a door of responsibility that most firms will be unwilling to take in the future. I challenge all our advisors to pay close attention to these proposed regulations and change in procedures over the next 18 months. Be active in your professional organizations and local government bodies to voice your opinion. It might be the best practice management time you spend to protect your financial firm. 

Bottom Line: Our business is about to change. Can we stop the onerous regulation and have meaningful and impactful change to our clients?


Sometimes, You Just Know


Twenty-two years ago, I was a finance major at the University of Idaho, where I was studying modern portfolio theory and managed a small portfolio for the university's business school. We utilized multiple securities analysis techniques, as well a piece of software – which only the University of Idaho and Stanford University were allowed to use – to construct the portfolio. 

I knew the research we had done for that portfolio would pay off, and I realized we were on the leading edge of great advances in construction. There are just times in life when you, "Just know."  

It was years before I saw anything in the marketplace that constructed portfolios any more efficiently or effectively than we did at that time. Today, you can find more powerful tools on just about any financial site you visit. In fact, the accumulation side of this business has become so seemingly commoditized we now have robo-advice that, according to a recent article in Investment News, is nearly indistinguishable from much of the human advice. 

For years now, I've been studying the decummulation side of portfolio construction and once again in my life I feel like, "I just know." I'm working with a team who’s on the edge of great portfolio construction; only this time, it's for the back nine of life.

Most advisors, as well as many clients, have heard about the risks of retirement, yet portfolios continue to be constructed as if those risks were some kind of old wives tale. If you and your clients have figured out a way to minimize sequence of returns risk, inoculate against interest rate risk and volatility risk, and have eliminated longevity risk, all while keeping tax efficiencies and Social Security maximization in mind, then we will be of little help to you. 

On the other hand, if you would like to have a team to bounce ideas off of, or actually help construct portfolios like these, then please call on us.

The Bottom Line: This business has become too complicated for any one person to be an expert in all areas and still have time to take care of clients. I know our team can be your experts on the leading edge of decummulation for your clients’ retirement portfolio. 

A One Man Wrecking Crew


If you followed the NBA Finals, you know the Cleveland Cavaliers lost two of their five starters late in the season and in the playoffs. Regardless, the team made it to game six of the finals before giving up the championship to the Golden State Warriors, who have the league’s MVP, Stephen Curry. Maybe the best all-around player is LeBron James, who carried his injured Cavaliers team through the end of the season. 

Everyone was cheering for the underdog team from Cleveland in hopes that LeBron could single-handedly win the series for the city. But while everyone was talking about how he’s a one-man wrecking crew, they were also talking about his stamina, or rather lack thereof. One of the greatest athletes in the league, he appeared to be tired and run down in the playoffs. You can’t blame him. He was forced to score more points, grab more rebounds and assist in more baskets than his teammates. 

I think the Cavaliers demonstrated why a collaborative team approach is best – in basketball and financial planning. With Kevin Love and Kyrie Irving on the sideline, LeBron was forced to essentially do everything to fill the gap they left. While he made it work during this series, it clearly took a physical toll. 

The same would be true for your financial planning practice. Too often, I see planners attempting to be the LeBron James of financial services. They try to do too much. In the end, they get tired, lose focus and makes errors. Their client base grows too large and the personal contact their clients loved quickly evaporates. The solution: Make sure you build a team infrastructure into your planning process. If the primary relationship manager (you) aren’t available, then envelope your clients with the bench strength they deserve (your team). 

By building a team with a strong supporting cast, you can build a sustainable, profitable business model that your clients will appreciate. While you might have short-term success (one series) with just one superstar, long-term success (a championship) with a team approach creates value in your business and makes it referable.  

Bottom Line: Being the superstar might work in the short run, but having a strong bench adds value to your client relationships, which translate into wins for you.