Moss Adams released their 2006 Advisory study, you can find the summary of the study here. In short it says that although margins are decreasing the financial statements are looking good. What I really like is the section that talks about how a firm tends to grow and that adding more head count decreases productivity per head.
Its that time of year again, you know what I am talking about…. tax time. It’s time to start pulling together everything you need and start figuring out what you are supposed to do. Catch up on tax changes and everything else that goes with it.
One of my pet peeves in building portfolio management software was tracking cost basis. Why? Because in the many systems I built, I don’t think I ever designed it right. A lot of my confusion stemmed from the fact that it took ten years for me to realize there are only two real methods of calculating cost basis: average and specific lot.
But what about LIFO and FIFO you ask. Highest and Lowest? Well, my friends, they’re all derivatives on specific lot accounting. So if you can first design your system so it tracks average and specific lot, then you’re done. You may want to add some power tools to allocate the lots using FIFO, LIFO, etc., but once your system can handle specific lots you’re essentially finished. Most people don’t understand this–I tried to explain it a couple years ago in a financial planning class and only one person (a CPA) understood what I was talking about.
Recently, I had the Web 2.0 conversation with a friend. I think by now everyone with technology feelers has heard this term: Web 2.0. I’ve heard: “Web 2.0 is coming”, “this would be good on Web 2.0″, etc… etc… But what is Web 2.0? I don’t see any Microsoft Web 2.0 development platforms and I don’t see any Web 2.0 Linux tools or Java tools.
For the last few days, my Internet connection has been gummy. It’s bad enough that I started researching other service providers in the Vegas area and discovered that WiMAX is now available here. (woo hoo!) But that’ll be another blog post.
After talking to various friends and acquaintances, I don’t think it’s just me. Nobody’s Internet is actually down, but everybody I talk to says their connection is slow. Nobody knows what’s going on, but I’ve run into speculation along these lines:
…the Internet is currently suffering a massive slowdown because the spam bots have gone out of control. The conclusion among some admins, at least, is that it’s caused by a bug in one of the zombie viruses (the ones that take over a Windows computer and turn it into a spam factory). Wherever the bots are coming from, it’s slowing down—and bringing down—servers. Including yours.
It appears that Charles Schwab is going to start bankrolling Independent Advisors. I thought they were dumping the IA business. It’s not that Schwab said this directly. But as my grandma always said, actions speak louder than words.
Note: Although Matt and I both posted about this at the same time, we have very different takes on this, so I decided to leave both articles intact.
What a great idea! (I’ll bet you can’t say “bankroll breakaway brokers” three times fast.) Schwab is offering startup loans to break-away brokers with at least $75 million under management. Schwab set up a new marketing site targeted directly at brokers who are considering leaving their broker/dealer.
The long term advantages of landing high-producing brokers is so big, I’m surprised Schwab isn’t offering the loans interest-free. Best advisor-facing marketing idea I’ve heard in a long time.
According to an article in Financial Planning magazine, the former fund giant Putnam funds has been sold. I’m not sure if this is good news or bad news. The purchaser, Great-West Lifeco Inc. subsidiary Financial Corp, said they will keep Putnam intact.
Maybe Great-West is just looking for a quick way into U.S. Markets; maybe they think new leadership can turn Putnam around. But if they don’t make some radical changes then they’ve missed the boat. Putnam isn’t failing because they have the wrong owner, they’re failing because their performance is poor. Read the rest of this entry »
There’s one more magazine you can add to your list of free advisor subscriptions: Morningstar Advisor Magazine. It’s brand new and sounds like a quarterly rehash of the articles posted on their site.
The description:
Morningstar Advisor is a quarterly magazine that focuses on Morningstar’s core strengths: investing insight and processes. A must-read for those advisors who rely on Morningstar at some level in their practice, Morningstar Advisor equips advisors with the independent research, analysis, and tools they need to make the best investment decisions for their clients.
In each issue of Morningstar Advisor magazine, you’ll find:
- Morningstar industry analysis
- Tips and tricks to make the most of Morningstar data and tools
- Insight into the strategies employed by leading portfolio managers and industry thought leaders
- Solutions advisors can put into practice immediately
Click here to sign up. Their signup page blew up on me but maybe it will work for you.
I have a friend with a solo advisory practice who has been struggling with a decision. Should he keep his practice small and comfortable or should he staff up, aggressively market and network, and build his practice into a multi-faceted firm–able to support a much larger client base and provide a wide range of financial services.
To me, this wouldn’t be much of a decision. I love the process of building companies and watching them take on a life of their own. I’d imagine it’s similar to the satisfaction most people feel raising children. In the beginning, they can’t even feed themselves. You have to be there all the time, molding, nurturing, feeding them clients or they’ll quickly wither away.
As time goes on, they start to crawl and won’t starve when you step away, first for a long weekend, then a week-long vacation. As you build a competent team with managers and leaders, they begin to flourish and take on a life of their own. Eventually, you have a huge team of people, each working toward a central goal of providing wonderful services to as may people as they can.