The Risky Business of Life


Seemingly everything we do as part of our normal daily lives has some level of risk. We make decisions every day to help mitigate our level of risk; some of these decisions are even done subconsciously or purely out of habit. 

Some activities in our daily routines have a risk associated with them, whether we know it or not.  For instance, how many of you have ever read the back of your toothpaste tube? I decided to read mine this morning and found, “Warning: If more than used for brushing is accidentally swallowed, get medical help or contact a poison control center right away.” Who knew using too much toothpaste was a risk? 

Many risks are viewed differently today than they were 20 years ago, and I would say as a society, we have become much more risk averse. When I was a kid, my father had a two-door pickup truck with a cover on the back of it. Occasionally on the weekends, he and my mom would put all our bicycles in the back of the truck and take us to the park to ride our around the pond. The part I remember being most fun is all three of us kids riding in the back of the truck as well. Today, I would venture to say there are very few who would attempt this stunt, and if someone did, they would get plenty of dirty looks.

Although smoking cigarettes has become taboo and organic food is the new vogue, many Americans still take unnecessary risks with their investments. While we have had an amazing bull market and are achieving new all-time highs since the lows in March of 2009, there are certainly still risks when investing in equities. 

At a time when we are becoming more conservative as a society, many people are becoming less risk averse with money; perhaps simply because they are not aware of any good options that eliminate or reduce risk.  

The Bottom Line: At Ash Brokerage, we offer great solutions for Americans who are concerned about risk associated with their money and want to help as many of them as possible to address their needs/concerns. If any of your clients are looking to mitigate risk in their portfolio, you should get in touch. 


Wishing You Were Better


Think back 10 years ago. Did you have competition in 2005? Did you think there were a lot of regulations prior to the financial crisis? Did you think it was difficult to do business 10 back then? How would your answers change now? A lot is different, but at the end of the day, nothing has really changed. 

Compared to a decade ago, there’s more competition today, from a variety of channels. Banks are more prevalent in our industry. And, disruptors like Google are entering the business, making it easier to sell, underwrite, apply for and sell insurance. The financial services industry continues to evolve and, in general, grow in complexity. Because of that, more regulation burdens us than ever before.  

Additionally, applications are longer, more information is requested of clients, and our revenues continue to shrink. Nothing has really changed. 

Jim Rohn, American author and businessperson, said to not waste time wishing things were different. Instead, you should wish you were better. One of my wholesalers told me our new world is difficult and challenging. I argue that today is just as challenging as it was 10 years ago, proportionally. 

The successful salesperson will adapt. The successful salesperson will understand the new complexities of our industry. The successful salesperson will be more transparent than ever before and demonstrate the value he or she brings to the client engagement for the fee charged. At the end of the day, the successful advisor will simply get better. 

This year, let’s turn our attention to our skillsets. Focus on adapting to the changing environment by gaining new insights that will enhance the client relationship. Focus on becoming more effective at designing income-generating portfolios that provide guarantees, safety and predictable increases in income. Don’t wish things were different (because they can never be the same); wish you were better – and do something about it!

Bottom Line:  Don’t wish things would change back to, “The good ol’ days.” Wish you were better and focus on how you can improve for your clients’ sake.   


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?