Did you know that despite the economic turmoil Barack Obama inherited as president and the state of the economy during his term, that the stock market actually had one of its best performances in history?

WealthManagement.com quoted figures from Leuthold Weeden Research showing that the S&P 500 has shown a 77.8% price return during Obama’s administration, as of September 2012.

There are also some other surprising figures historically in the article. In Franklin D. Roosevelt’s first term, the S&P showed a record price return of 162%. At 79.2% and 72.9% respectively, Bill Clinton’s first and second terms were second and fourth in the top five historically, regarding the S&P 500 figures.

There was only one Republican in the top five numbers for the S&P – Dwight D. Eisenhower’s first term, which showed a 69.9% price return.

Written by Lisa Swan

Share

Morgan Stanley announced that it had lower numbers of advisors as of 2012’s third quarter, but with slightly higher financial advisor productivity. WealthManagement.com revealed that the firm now has 16,829 advisors, down 1 percent from the previous quarter and 5 percent from this time the year before.

In comparison, Wells Fargo and Merrill Lynch, said that their head counts have stayed flat in the previous quarter. Scott Smith of Cerulli Associates told WealthManagement.com regarding Morgan Stanley that “they’re mucking along, but with 16-17,000 advisors, it’s just tough to recruit to fill natural attrition and retirement.”

In addition, Morgan Stanley said that they were purchasing back Citigroup’s 14 percent share in the company. Morgan Stanley also shed Smith Barney from its name. The Citigroup purchase would be $13.5 billion at 100 percent valuation. The firm also said that it would buy Citigroup’s remaining 35 percent share in the company by 2015.

Morgan Stanley announced that its FAs saw their revenue per advisor go up this quarter. The assets under management per advisor increased from $101 million to $105 million.

James Gorman, the company’s CEO, said that “a key to our future is the increased contribution of our wealth management to our revenue, profitability, returns and funding stability.”

Written by Lisa Swan

Share

Some financial advisors may need a new elevator speech, WealthManagement.com writes. The article says that “answering basic questions about value proposition continues to challenge so many financial advisors.” That means being able to answer simple questions about who you are, and what you have to offer. Here are some of the areas that WealthManagement.com says raise red flags:

  • Reciting a mission statement: This can “activate the sales alert antenna,” the article says, and can end up causing harm.
  • Putting on an “I’m smart” act: While advisors are generally smart, it is not smart to try to sound too complex with obscure jargon. It could potentially be a turnoff to your clients.
  • Acting like “I really care”: This should be “a given,” the article says, like having good hygiene. Some read “I really care” as a sales pitch. Show, don’t tell.
  • Communicating “I’m different”:  Give a normal response. You potential clients won’t like an answer that comes across as silly or weird.

Instead, when asked what you do, keep in mind that half of the people aren’t even listening to your answer. But you don’t want to answer it in any of the above ways, or it will raise red flags. In addition, communicate with good body language, not just words.

Written by Lisa Swan

Share

Financial advisors referring to themselves as “tactical investing” experts are the latest thing, Marketwatch reports. But what, exactly, is tactical investing?

Marketwatch says that it is “shifting money among different asset classes to dodge market crises.” However, tactical investing has become such a buzzword, that it is unclear exactly what it is anymore. In addition, the article says that it can give investors “scary moments in a potentially rocky fourth quarter, where political and economic currents are leading many advisors to recommend portfolio changes.”

Tactical investing grew in popularity after the 2008 financial crisis, when many people lost their shirts with the “buy and hold” strategy. However, this may mean different things to different people, as there is no official definition of the term.

For example, some financial advisors engaging in tactical investing “now advocate a strong position in stocks—albeit defensive ones,” the article notes, while others are advising cash allocations.

At any rate, you should check with your financial advisor to see how often he or she checks your portfolio, and ask what events might goad them to changing your allocations.

Written by Lisa Swan

Share

Millionaires need financial advisors, too. According to a survey by Millionaire Corner, 98 percent of those surveyed said that they are looking for an advisor who is “honest and trustworthy.”

One other thing that millionaires look for in a financial advisor is transparency. A total of 86 percent said that they want an advisor who doesn’t just provide transparency, but who keeps them informed.

In addition, 92% look at the track record of the advisor – how he or she has done over the years.  And 88% percent are concerned about the fees for services provided, and 86% would have a negative opinion of a company if they underwent a credit downgrade.

Also, 87% are looking for a variety of products, while 81% seek an advisor who works with a variety of companies.  And 72% are currently happy with their advisors, with those 55 and up having the most satisfaction with their financial advisors.

Written by Lisa Swan

Share

Many people, not just those in the high income brackets, could potentially be paying more in taxes next year.  Rick Rodgers, a financial planner, tells FinancialPlanning.com about some tax breaks you may be able to claim now, before they go away.

One thing he suggests is to convert your traditional IRA into a Roth IRA, taking the tax hit now instead of a potentially higher tax bill in the future. There is also a safety net built into this. Rodgers says that if Congress passes a big tax reform bill, you will have until October 15, 2013 to reverse the switch.

Another idea Rodgers has is to sell items now that could face capital gains taxes in the future, or higher such taxes if the current tax laws expire without being renewed.

In addition, if you have looming medical expenses, you may want to get them done in 2012. Currently, any expenses above 7.5% of your adjusted gross income are deductible. Next year, only those medical expenses above 10% will be deductible. That means that you may want to make medical payments early, and take care of eye exams and dental exams now.

Written by Lisa Swan

Share

Barack Obama is derided as a socialist by some of his political opponents, but there is something very surprising about what the stock market has done during his tenure.

WealthManagement.com reports that according to Leuthold Weeden Research, Obama’s presidential term is one of the “best handful of terms in modern stock market history.” In fact, the other three best performances by the S&P 500 took place with Democrats in the Oval Office. “Curiously,” though, writer David Aldo Geracioti  notes that neither Obama nor the Democratic Party have publicized those facts.

In addition, of the five worst modern S&P 500 performances, four took place with Republicans in the Oval Office, with George W. Bush as president for two of them.

The S&P 500 has increased in value by 77.8% percent during Obama’s term. That is third in modern history, trailing only Franklin D. Roosevelt seeing a 162% S&P price return in his first term, and the S&P 500 increasing 79.2% under Bill Clinton. Bill Clinton’s second term and Dwight Eisenhower’s first term round out the top five.

Of the five worst, Herbert Hoover saw the S&P 500 go down in value by 73.3% in his term. The second worst was FDR’s second term, with the value going down 41.3%. Nixon’s second term, and George W. Bush’s two terms are the other two presidential terms with the most negative S&P values.

Written by Lisa Swan

Share

October 5 marked the first anniversary of Steve Jobs’ death. Eric V. Holtzclaw writes for Inc. magazine about four leadership lessons he learned about the Apple founder after reading Walter Isaacson’s biography of the computing legend:

  • Jobs was “willing to start over”:  Holtzclaw notes that time and again, Jobs would scrap ideas that weren’t quite right. He says that “regrettably, I see the opposite of this with most companies I work with,” in which they will release products even though they have “a known flaw or inferiority.”
  • Jobs kept it simple:  Jobs believed that while simplicity was harder to achieve than complexity, he felt it was worth it. He once rejected a 125-page contract from IBM, saying that it was too complex. IBM rewrote the contract. Holtzclaw says that executives can learn from that in making sure to keep paperwork from being too confusing or complex.
  • Jobs said what he felt:  Not only did Jobs speak his mind, he wasn’t afraid to be a leader, or to be controversial. “You are the boss,” Holtzclaw advises. “You may be the only one who can make your team address the big problems.”
  • Jobs believed others could do great things: Some employers hire sycophants. Jobs hired an “A” team, with superstar employees. And his belief that they could do great things helped spur them on. Holtzclaw says that he adheres to that, saying that “I assume others can do things when given the task until they prove otherwise.”

Written by Lisa Swan

Share

Smith Barney is no more, notes OnWallStreet.c om. Morgan Stanley, which purchased Smith Barney, has now changed the name of its financial advisory practice from Morgan Stanley Smith Barney to Morgan Stanley Wealth Management.

Many people remember the Smith Barney name because of the commercials starring “Paper Chase” star John Houseman, who used to intone:  “They make money the old fashioned way: They earn it.” But the name Smith Barney was itself due to a 1938 merger between Edward Smith and Charles Barney, both Philadelphia brokers.

Smith Barney “has been both predator and prey in the acquisition business,” OnWallStreet.com says, The company bought Harris, Upham and Company in 1975. They also were acquired by Primerica in 1987 before being part of Morgan Stanley.

The name Smith Barney is just the latest financial firm name to go to the graveyard, the article says, the way Salomon Brothers, Paine Webber, and E.F. Hutton have also bitten the dust.

Written by Lisa Swan

Share

One way to make yourself stand out as a financial advisor is to be a “financial thought leader,” Wired Advisor says.  So how can you differentiate yourself that way? Here are a few tips:

  • Remember that customers are concerned about themselves: Customers aren’t necessarily concerned with your credentials and products, the article says. What they are looking for is someone who can lead them and listen to their concerns. “They need your leadership, guidance, reassurance, and emotional support,” the article says.
  • Use social media – or others will beat you to it: The article suggests that financial advisors act as if they were their “own personal media company,” publishing important information for your customers. You want to be on the “short list” of sources they have that influence them. Keep in mind, though, that you’re not the only voice out there.
  • Start a blog, and a newsletter, and tell your story:  ”Storytelling” is key, the article says, in developing your “Content Marketing System” and becoming a financial thought leader.

Written by Lisa Swan

Share