Anatomy of a conference call: the video
This brings back memories (nightmares) from when I worked at a bank.
Just say no to conference calls.
Frisco Financial Planning LLC
Investment portfolio design with a Christian worldview
Filed undersimplicity
But what if something happens to you?
I occasionally get the question: "but what if something happens to you?"
Meaning, if I die or become incapacitated, where will my clients turn for help?
This question is often planted by brokers to imply that because they are employed by a big firm, their clients have a built-in succession plan (brokerage firms stand ready with a replacement, but a "court-appointed" broker typically isn't the type that is sought after).
So, here's the answer: If I die or become incapacitated, you'll have to find a new financial planner. Just like if your doctor dies, you'll have to find a new doctor. Or, if your attorney dies, you'll have to find a new attorney.
A better question to ask yourself is: "if my broker bails to another firm, do I want to be in the middle of a signing bonus quarrel while each party's attorneys squabble over who I belong to?"
If you are my client, you don't belong to me. You've trusted me with the privilege of working hard on your behalf. You are free to leave any time and I hope that the quality of my work acknowledges that I don't take you for granted.
Alas, if you must have a backup plan, here it is:
"Now it is required that those who have been given a trust must prove faithful."
-- 1 Corinthians 4:2
For more on the "big v. solo" issue, read these related posts:
Small is the new big. Solo is the new small and The power of one.
Small is the new big. Solo is the new small and The power of one.
The power of one
Hire the smallest organization that can effectively deliver the product or service you require.
To safely and cost-effectively fly across the country, a commercial airline is required.
You need a pilot, some mechanics, baggage handlers, and flight attendants to pull it off.
To create and implement an investment and financial plan, you need one person (chosen carefully).
As an organization adds people, it adds complexity, communication challenges, scheduling issues, differences of opinion, layers of bureaucracy and overhead,
and lack of accountability. You "institutionalize" the organization (a fancy term for "de-personalizing;" good for the organization, bad for the client).
"I don't go to meetings. I don't write memos. I don't have staff. I don't commute.
The goal is to strip away anything that looks productive but doesn't involve shipping [delivering the service to the client]""How many handshakes do you need to introduce three people? Three. Four people need twice as many, six. And five people? Ten.
Coordinating teams of people becomes exponentially more difficult as the group gets larger. And for important projects in an organization
with something to lose, the group pushes to get larger."-- Seth Godin from Linchpin: Are You Indispensable?
Small is the new big. Solo is the new small.
Big financial institutions have planted an idea in many people's heads that bigger is better.
In fact, the word "institution" is defined as "an established organization or corporation," implying stability and permanence.
So, let's take a step back and examine exactly what you are paying for when you engage a financial adviser.
Financial products (mutual funds, insurance policies, annuities, stocks, bonds, mortgages) are commodities.
There is no shortage of excellent financial "tools" available to help solve most financial problems.
Many of the best products can be had at very low cost (in some cases, this is exactly what makes them the best).
Technology now exists that allows you to easily, accurately, and cost-effectively execute a sound investment strategy.
So what's left? What's worth paying for?
Examining history, however, leads us to conclude that large financial institutions are anything but stable or permanent.
So, let's take a step back and examine exactly what you are paying for when you engage a financial adviser.
Financial products (mutual funds, insurance policies, annuities, stocks, bonds, mortgages) are commodities.
There is no shortage of excellent financial "tools" available to help solve most financial problems.
Many of the best products can be had at very low cost (in some cases, this is exactly what makes them the best).
Technology now exists that allows you to easily, accurately, and cost-effectively execute a sound investment strategy.
So what's left? What's worth paying for?
Intellectual capital.
The worldview, experience, education, and insight of a particular person. Not people, not company, not institution.Objectivity.
A business model and fee structure that (to the greatest degree possible) eliminates partiality and conflict of interest. Efficiency.
A low overhead, low bureaucracy environment that strips away as much wasted time, energy, effort, and cost as possible while delivering simple, effective strategies.
So are big companies bad? Not necessarily. But small and especially solo financial advisers (who are also independent and fee-only) offer investors a unique opportunity to leave behind a bureaucratic, cumbersome, and short-term, profit-fixated business model in favor of a nimble, independent, long-term focus.
Dumb brokerage firm technology must have been designed by a man
My wife has an expression to describe things that are designed poorly.
She says "it must have been designed my a man."
Take this refrigerator for example:
Freezer on the bottom? Dumb. Two handed water dispenser on the inside? Dumber.
Most brokerage firm technology platforms are just as bad. They are a throwback to the days when you (meaning someone... I'm not exactly sure who) would walk into your broker's office and say "Hey, Jim-Bob... Buy me 200 shares of Acme Rocket Boot Company!"
Normal people don't do that. Intelligent investment plans are based on percentages. "40% to XYZ fund" for example. Dumb brokerage firms make you convert percentages to dollars, dollars to shares (in the case of stocks or ETFs), and then enter each trade separately.
Even if you are only investing in a handful of funds, and only making occasional changes, this technology wastes time and creates multiple opportunities for you (or your investment adviser) to make potentially costly mistakes.
Here's a much better alternative:
