Clients & Advisors Learn Lessons from Recession

I did an interview over the weekend for a Columbia graduate student seeking both professional and participant commentary about the state of the 401k industry. He wasn’t expecting to hear a whole lot of positive considering the recessionary environment, but he genuinely wanted to know how attitudes and advice regarding 401k investing had changed. He even asked: “had I learned (as an advisor) any lessons from the recent and precipitous market declines?” The answer to that question is a resounding yes and I’d like to share what has changed in my practice and comment on the realities which have surfaced in the planning profession in general as a product of the recession.

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The Exodus from Wirehouse to Indepedent

The issue of how to practice is a big one for financial advisors. Regardless of whether you’re starting a business from scratch or moving an existing client book from one firm to the next, the decisions you make will impact your earnings potential and the mood of your office. Is it better to work on a commission basis or collect fees? Will your business grow faster if you join a large brokerage firm or an independent broker/dealer? Should you consider starting your own Registered Investment Advisor (RIA)? A young person entering the financial planning profession will likely be overwhelmed by these choices. All of the recent financial turmoil has only added to the confusion by causing big shifts within the industry. Some of the older and more established firms are disappearing through consolidation and bankruptcy while newer and more current business models are taking over. This hasn’t gone unnoticed by the financial media. Nearly every publication which is specific to the financial planning profession has been doing feature stories on business models for financial advisors. So I figured, why not chime in?

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Cash is King: Ideas for the Ultra-Conservative Investor

Even though the stock market has been showing signs of stability over the past few weeks, the recession is ongoing and plenty of investors may remain paralyzed and shocked over the events of the past six months. Some maintain the attitude that stocks and even bonds are too volatile and sticking with cash investments is the best idea at this point. Others believe the market is headed lower in the short-run so it makes sense financially to keep plenty of cash on hand. Regardless of the reasons, here are some tips for cash-heavy investors who want to stay relatively safe and perhaps earn a little interest on their money.

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