Recovering From The Meltdown

One year ago, America’s financial system teetered on the edge of ruin. Happily, we avoided the worst. However, in the year since the crisis erupted and securities prices collapsed, even the most successful advisory firms suffered decimated fees and are earning a lot less. Worse still, confidence in all things financial—including advisors—has been similarly debased. Are you planning your comeback yet?

With Labor Day behind you and the final quarter of 2009 closing in, it’s time to start planning your firm’s recovery. It’s a good time to think strategically about you’re going to make 2010 a better year.

Part of your 2010 recovery plan is likely to focus on serving existing clients, and that what this post is about. It’s about making sure you know what your clients think about you and aligning your services and marketing with what clients want.

Julie Littlechild, the CEO of Advisor Impact, took me on a tour of Client Audit, a tool to systematize the client feedback process. Click on the image to the right to see a two-minute video about Client Audit or see my full review and a nine-minute demo at A4A.

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SunGard WealthStation On Advisors4Advisors

SunGard WealthStation, a leading financial planning application with 125,000 users, has posted its specifications on advisorsforadvisors, a practice management website for independent advisors.

Posting of the specifications enables advisors to compare WealthStation to 10 other financial planning apps feature by feature, side-by-side.

With annual revenue exceeding $5 billion, 20,000 employees and customers in 70 countries, SunGard is the world’s largest financial services technology firm. Its WealthStation product for financial planning is used by many banks and brokerages as well as about 1,500 RIAs.

According to the specifications SunGard posted, WealthStation:

· Provides an interface that is meant to be shared with clients

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Boost Your Blog’s Search Engine Ranking

On advisorsforadvisors, the new practice management website, advisor blogs are being aggregated, which makes it easy for advisors to see what other advisors are blogging about. This can give you ideas for your own posts or inspire you to start writing your own blog. More importantly, being listed on the blogroll can help boost your blog's search engine rankings.

One of the factors search engine algorithms use for ranking your blog site is “link popularity,” a measure of how many sites link to your bog combined with how much traffic those sites attract. Since
advisorsforadvisors is a portal for advisors, being listed on the blogroll can boost your blog's ranking by search engines.

To further leverage the
blogroll's effcts on yor search ranking, you might ty blogging about posts by other advisors. The web of connections among blog posts can be very influential in boosting traffic to your blog.

For example, let’s say your blog is listed on the
advisorsforadvisors blogroll and you post about using Section 72(t) of the Internal Revenue Code to take IRA distributions. If another advisor listed on the blogroll posts a comment on his blog about what you wrote—clarifying something you said in your post or perhaps disagreeing with you—and links to your blog in his post, that’s going to boost your blog’s search ranking. When a consumer Googles "Section 72(t)," your post is more likely to come up.

Algorithms used by Google and other search engines place more weight on link popularity when links are based on content. (They also can penalize link popularity schemes, as mentioned in my previous post.) Creating a web of links based on other advisors' blog posts
can be effective way gain traffic..

advisorsforadvisors makes it easy to track what other advisors are blogging about. We list advisor blogs and display the most popular posts on all the advisor blogs. The list of advisor blogs is just one art of the "Research" section of the site, which includes blogrolls covering 25 topics advisors want to follow.

If you’ve been a member of advisorsforadvisors for more than 30 days, please email me the name of your blog and its URL and we’ll add it on our advisor blogroll.

The blog section is only one small way
advisorsforadvisors is helping independent FAs. Sign up for a free trial.

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Link Exchanges And Advisor Websites

From what I can piece together, an ongoing thread on the discussion board of the National Association of Personal Finance Advisors has been for months creating excitement about NAPFA members engaging in a link exchange program.

I feel obliged to clarify the benefits of a link exchange program, which may have been overstated by some NAPFA members on the discussion boards. (Please keep in mind that I don’t have direct access to the NAPFA discussions and have to piece together snippets of information relayed to me.)

A link exchange program among groups of advisors allows one advisory firm to display on its website links to other advisory firm websites.

You may ask: Why would an advisor want to link to another advisory firm? The answer: To increase your website’s “link popularity,” a factor in a site’s search engine ranking.

What advisors must realize is that link popularity is just one of many factors that determine your natural search engine ranking. Many other factors, such as your site’s content and your URL are more influential in the algorithms used by search engines to rank your site. Moreover, search engines discourage gimmicks to enhance search rankings.

“Some webmasters engage in link exchange schemes and build partner pages exclusively for the sake of cross-linking, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites,” Google says in addressing link schemes. “This is in violation of Google's webmaster guidelines and can negatively impact your site's ranking in search results.”

Advisors who expect a link exchange program to bring a lot of new traffic to their sites are likely to be disappointed.

Despite all this, Advisor Products is creating a link exchange program for advisor websites. While the potential for abuse exists, we want to respond to requests from advisors asking for this feature and we will try to educate advisors about how to best utilize the tool.

We’re now programming a new feature in our content management system, BackOffice, to enable your firm to add a “Link Exchange” page to its website. This will allow you to quickly add links to other firms that will be displayed on your marketing website. The page on your site will be pre-formatted to look attractive and easy to read.

While enabling link exchanges with other advisory firms is unlikely to greatly enhance your site‘s search engine ranking, we want t be responsive to advisor requests for this feature and do believe a link exchange program that expands beyond advisory firms can be used productively as long as it is not used excessively.

If you have suggestions about how you would like the link exchange page to be created on your website, please let us know.

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Money Tree Moves Ahead Even As Its Leader Steps Back

Mike Vikauskas, who quit being a financial planning in 1981 to start a financial planning software company, is taking Money Tree Software forward even as he plans his exit from the company.

Vitkausas is stepping down from day to day activities to spend more time on volunteer activities in his church. It’s part of a succession plan that Vitkauskas has envisioned for years.

But even as he leaves, Money Tree is moving forward on the path set by Vitkausas over the past three decades by launching a new advisor application, Distribution Solutions, which helps advisors create retirement plans for baby boomers.

To see a video about Distribution Solutions and read more about what's happening at Money Tree, please register for a free trial of advisorsforadvisors, our new practice management website for advisors.

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Important Content For Advisors

The launch of advisorsforadvisors this month is moving ahead and our growing list of bloggers began providing important content for advisors. Some of the posts:

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A "W-Shaped" Recession

Last Friday, at the Financial Advisor Webinar Series, economist-turned-money-manager Rob Stein, predicted a "W-shaped" recession.

Forecasts of a W-shaped recession are drawing attention. See the Carlos Lozada commentary in The Washington Post on April 19, FT Columnist John Authers’ on May 17, or economist Nouriel Roubini on July 16

Stein, who heads
Astor Financial LLC, predicted that technology will be among the sectors that gain disproportionately from the coming economic rebound. Stein’s also bullish on China.

Stein, who began his career at the Federal Reserve in 1983, believes The Great Recession of 2008-2009 has combined two recessions in one: a traditional V-shaped recession and a credit-bubble recession. While the US economy is now slowly coming out of the traditional recession and economic growth starting up, a second downturn is likely to follow in the next couple of years because of continuing losses from the credit crisis.

Using a macroeconomic approach, Stein actively manages three styles of broadly diversified ETF portfolios: a long/short balanced fund, growth fund, and low-volatility program.

You can view a reply of Stein's presentation, "Actively Managing An ETF Portfolio." It's free, but you need to register. You can also download his slides.

Next week, CFPs will be able to get continuing education credit on replays of the Financial Advisor Webinar Series at

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Changes In My Blog

Those of you who regularly read this blog know that I cover a mix of news for independent advisors—technology, compliance, marketing and a wide range of other topics. I also write about what's new at my company, Advisor Products, which makes websites, newsletters, and brochures for about 1,800 advisory firms.

Apropos of my schizophrenic role as reporter and service provider to advisors, I am splitting this blog in two.

This blog will now only cover what's new at Advisor Products. Articles I write about industry issues will now be posted in my blog at

advisorsforadvisors is a new practice management website. It's in beta, but you can sign up now for a 30-day free trial. (Advisor Products clients will receive an email next week about how to sign up for a free one-year subscription.)

Two veteran financial journalists have teamed up with me to create advisorsforadvisors. Mary Rowland is a former columnist at The New York Times who now writes a monthly column for Financial Advisor, and Bob Casey started up and ran Bloomberg Wealth Manager and is now a managing director of the Family Wealth Alliance.

advisorsforadvisors has strong social networking and provides crucial information to run an advisory business, including:

· Links to all important market and economic news stories by 8:30 a.m. EDT every business day

· A way to objectively compare advisor software applications feature-by-feature, side-by-side

· Social networking features that connect advisors who practice the same way as each other

· Advisor reviews of software applications

· User groups for software applications

· Daily analysis of industry and financial news by veteran reporters and industry experts

· Free access to weekly webinars with CE credit for many sessions and replays of all webinars 24/7

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Jon Stewart’s Double Play

In a hilarious double-play, comedian Jon Stewart last night hammered Lenny “Nails” Dykstra, a former Mets centerfielder turned financial-advisor-in-bankruptcy, and then tagged TV financial personality Jim Cramer with a jarring comedic blast.

Stewart began a segment on last night’s show by focusing on the irony of the bankruptcy filing by Dykstra, who touted himself in recent years as a successful investment advisor and was profiled in 2008 as a “financial whiz kid” on the HBO program Real Sports. Dykstra, who told a Real Sports reporter that he did not read books because it was bad for his eyes, reportedly was sued by 20 creditors by the time he filed for bankruptcy on July 7.

Stewart revived his public humiliation of Cramer by playing an interview of Cramer on the HBO show in which he hails former Mets hero Dykstra’s as a brilliant financial advisor, “one of the great ones in this business.”

The irony of the baseball legend turned stock-guru’s misfortune provided Stewart with great material. Dykstra, 46, became a New York Mets hero for hitting a walk-off home run in Game 3 of the 1986 World Series, when the Mets defeated the Boston Red Sox in seven games to win one of baseball’s most memorable World Championship Series.

Cramer, the extremely energetic host of CNBC’s “Mad Money” and founder of, is a former hedge fund manager. Prone to hyperbolic rants, Cramer was the subject on March 4 and March 9 of scathingly funny blasts by Stewart. Stewart, the popular host of Comedy Central’s “The Daily Show,” assembled a string of video clips in which the self-proclaimed “infotainer” of finance made glaringly wrong investment predictions. Stewart wrecked any credibility Cramer might have had in the financial media by showing Cramer urging stock investors to “be buying things and accept that they’re overvalued, but accept that they’re going to keep going higher” a few months before the global financial crisis caused a stock market collapse. Stewart and Cramer’s public showdown became famous and then faded—until last night.

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Financial Planning Coalition Gets It Right

The Financial Planning Coalition (FPC) released a statement this morning clarifying its position on the Obama Administration regulatory reform proposal.

The FPC applauded the Obama Administration proposal to require a fiduciary standard of care to brokers, repeating a position first articulated in its release of June 18, the day after the Obama Administration’s white paper on regulatory reform was released. However, the FPC now also expressed concern that the fiduciary standard would be “watered down” by the proposal.

The FPC is a recently created group comprised of the Financial Planning Association, National Association of Personal Financial Advisors, and the CFP Board of Standards. Please note that my blog of June 18 swiped at FPC for not mentioning that the fiduciary standard could be watered down by the Obama proposal.

Apart from qualifying its support for the Obama Administration proposal, today’s FPC statement, which I’ve highlighted for quick scanning, clears up an important part of the Obama Administration’s June 17 white paper. The 88-page white paper called for establishment of a Consumer Financial Protection Agency (CFPA) to help protect consumers from bad financial advice. Some observers interpreted this to mean an entirely new regulatory regime would replace the current regulatory framework. Not so.

FPC explained that the CFPA’s jurisdiction “would cover consumer financial products such as credit cards, savings accounts, and mortgages, and possibly insurance, but notably leaving securities transactions and investment advice to the SEC.”

This makes a lot of sense. While coverage in the trade press would have led you to believe that the CFPA was taking over responsibility for regulation and enforcement of advisors, it’s clearly not. Point is, wrangling over regulatory reform is going on behind closed doors and we know little about the structure of what’s to come, much less who the winners and losers will be.

With that qualification, I’ll speculate that our government bodies and existing institutions are likely to be relied on more heavily as reform is implemented. My guess is FINRA will gain power to regulate RIAs advising consumers.

FPC’s effort to prevent the watering down of the fiduciary standard of care for clients is important. If brokers are fiduciaries but can continue to be compensated on commissions, then the fiduciary standard of care has no teeth. And if the U.S. government bans commission compensation of independent financial advisors, as was done last week by Great Britain’s Financial Services Authority, an extremely unlikely reform, then telling the difference between fiduciaries will be difficult.

Clearly, once the fiduciary standard of care is defined under a new regulatory regime, it could be watered down as to be almost meaningless. The reform measures may not make it easier for a consumer to know the difference between an advisor who puts a client’s interest above his own and one who does not.

The FPC’s release today is laudable for pointing this out and for giving advisors tools to speak out. The bottom of the FPC release contains “message points” advisors can borrow to write letters to legislators.

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