I worked for the IRS in Austin, TX asa student while attending SouthwestTexas State University, and aftergraduation went to work full time forthe IRS (still on a seasonal basis).In July 1974, I still had not receiveda permanent job from the FederalGovernment, and I read an ad aboutmarketing financial products andservices to college seniors andgraduates. I applied and started tosell Whole Life policies to collegeseniors & graduate studentsrepresenting the Fidelity Union LifeIns. Co. out of Dallas, TX.
What has been your educationalbackground?
Southwest Texas State University(now Texas State University) is inSan Marcos, TX where I was bornand raised, and where I attendedCatholic School till the seventhgrade, and then the public schoolsystem. The Catholic school wasright next to the University, so therewas never any doubt as to whatcollege I was going to attend. Ireceived my BBA in Marketing in1973. I received the CLUdesignation from the AmericanCollege in 1985, and then the ChFC
You can be photographed with some of the luminariesand living legends of the financial services profession,such as: Rev. Dr. John Clements, Mehdi Farkazadeh,Charlie “Tremendous” Jones, and Norman G. Levine.
The IARFC will have a photographer on hand and yourpicture can be taken with these icons of the financialservices industry.
Not only can you be photographed, but you can spendthree days with them acquiring their perspective,experience and wisdom. This type of opportunity forextended personal time with the leaders and opinionmakers of financial services is unprecedented.
The 2006 Financial Advisors Forum will be an historicand signal event, and it will be talked about for the nextdecade. But you won’t be there unless you RegisterNow! Go to page 23, fill out the form, and fax it back tothe IARFC. Also, consider bringing your associates.
Our great line up of speakers includes: Lester Anderson,Hal Chorney, George Flack, Kip Gregory, James Lange,Jim McCarty, Robin Mills, Ed Morrow, Lew Nason, JerryTan, Peter Vessenes, Mike Zmistowski, Bill Nelson, DavidStitt, Mark Terrett, Wilma Anderson, Brian Nelson andJohn Harris.
Be Photographed at the Forum with Luminaries
What’s Your Kolbe Index?
See Ed Morrow’s article on page 3
Page 2 The Register • January 2006
Register LettersWe welcome your comments, suggestions and ideas.Please direct correspondence to: [email protected] may be edited for length and clarity.
We will be exhibiting again at the Forumin ‘06. This will mark the 4th year wehave worked participated in the FinancialAdvisors Forum. The attendees are atthe high end of our profession. Generallyfull service planners, many with roots inthe life insurance business. There areshows with larger numbers of producersattending, but the quality at IARFC is verystrong. We get good value for the moneyand while the number of exhibitors isgrowing, you don’t get lost in themasses. Last year I spent quality timewith most all attendees. Who arecertainly the leaders of the profession.Hope this helps. We’ll see you in Ohio.
Ed Ledford, RFC®, CLUMarketShare Financial Carmel, IN
We have attended the Forum as anexhibitor for several years. During thesame time we have also exhibited atMDRT, NAIFA, MarketShare, and severaldifferent broker dealers. The FinancialAdvisors Forum was among the smallest,with 100-150 or so, but also the leastexpensive in terms of registration — andof course travel was not an issue thispast year. The year before was in NewOrleans, and looking back, it too, was notexpensive.
The smaller attendance resulted inmuch more time with each attendeeand we found our results to be muchbetter. We had plenty of time to talkwith every attendee the cost/benefitratio for the Forum was double or tripleany other financial conference. Wherewe have exhibited.
We were also free to attend all thepresentations and events and able toshare and relate with the attendees onvery comfortable terms. I wouldrecommend you attend.
The materials prepared by thepresenters and delivered to theattendees are always outstanding.
Mark Terrett, RFC®
Financial Planning ConsultantsMiddletown, OH
As a member of the IARFC for number ofyears, as someone who has watched thefinancial services profession grow, andas a regular commentator on media-related issues, I’d like to express myopinion about the Financial AdvisorsForum to be held in May.
At every national conference I’ve everattended there are the well-known“keynote” speakers, and those who are apart of the industry. Quite frankly, I’vefound that many of the top names areunprepared, do not really know theaudience, give the same stockpresentation with a new title they haveused for years—and they disappear soonafter their 50 minutes on stage.
This will not be true with Jones, Levine,Fakharzadeh and Clements. Each ofthem is internationally famous—as ideapresenters and as truly remarkablepersons. These are the icons afterwhom persons name their children andgrand children. In fact, one of yourattendees and speakers, who is now aremarkable success as result of hisearlier contact with them, named two ofhis sons after these speakers. What atribute! I hope he will tell us about whatthey have meant to him in his life and tohis fine sons.
Don’t miss this event! I urge you to bringyour spouse and also your associates. Ican assure you, that the 2006 Forum willbe a turning point in your life….
Forrest Wallace Cato, RFC®
Woodstock, GA
The Register welcomes yourarticles about the profession,
planning techniques andpractice management. You maysubmit articles of 300 to 1,500
words via e-mail, with anelectronic photo and a short bio
of not more than 100 words.
Financial Planning Building2507 North Verity Parkway
If you have ever worked with a businesscoach, the chances are they mentionedand recommended the Kolbe A™ Index. Ifnot, then they should have!
Perhaps you are skeptical about theuse of psychometric examinations,and for good reason. The firstbusiness application of the IntelligenceQuotient (IQ) testing was made byEldon F. Wonderlic. His battery of testswas used by the U.S. military. Thetheory was that officers should beselected from among the brightest groupand the lowest levels of service and thenon-commissioned officers would, bydefault, be selected from among thosewith lower test scores.
IQ Doesn’t Work! The IQ test or even themodern version of the Wonderlic tests,does not identify leadership qualities,loyalty, courage, determination and mostimportant, how a person works withothers and the tasks they instinctivelyperform best. Hiring the smartestapplicants, based on their intelligenceonly, rarely leads to success.
That does not mean IQ tests and examsto measure mathematical ability orverbal skills are not useful. But theydon’t help people work more effectivelytogether. When Kathy Kolbe workedfor her father, E. F. Wonderlic, shenoticed that there was very littlecorrelation between the smartestpeople and the best job performance.IQ didn’t equal superior results.Sometimes smart folks were successful,but often they were not. When shebrought this matter up, it became obviousthat items other than raw IQ were a majorfactor. But what were they?
Getting to the Truth. The initial summaryof this research appeared in her book,The Conative Connection. If you’re havinga difficult time with the definition of“conative”, rest easy, because it’s not justyou. As Kathy points out in her book, it’sone of the 1,000 most obscure words inthe English language, but it does fit.Conation (koh nay shun) is the part of ourminds that has to do with desire, volitionand striving, the way we act on instinct.And “conative” (KOHN uh tiv) describesanything relating to conation.
Actually, it’s not difficult. Kathy’s studiesled her to focus on how people actuallysucceeded, as opposed to how well theyfollowed instructions. As she says, “Idiscovered that achievement multipliedwhen individuals of any age or statuswere able to use their knacks for gettingthings done.” In other words, she foundout that “I will” can be more importantthan IQ.
Conation, or drive, is your knack forgetting things done, which is separatefrom intelligence or personality type.While intelligence helps you determine awise choice, and emotions dictate whatyou’d enjoy doing or like to buy, nothinghappens until your instincts kick in andyou get conative. That’s where the actioncomes from, and that’s when you put yourmoney on the table.
Instinct Power. Through her research,business consulting and her amazingrecovery from a “hopeless” brain injurycaused by a drunken driver, Kathy made astunning, yet simple discovery: Whatpeople can and will do has little to dowith what they have the ability to do.
The reason? People have been taughtthey should ignore their instincts or worseyet, to fear or hate their instincts. Kolbelearned that Ignoring your instincts andfailing to appreciate the instincts ofothers can be disastrous.
When people act according to theirpersonal and innate instincts, their energyis almost inexhaustible — like waterrunning downhill. But, when peopleare forced to act against their instinct,their energy is rapidly depleted — likewater being pumped uphill. They don’tperform well.
Using the Kolbe SystemTM. The first partof the Kolbe System is a 36-questionsurvey, which reveals your individual mixof striving instincts: the instincts thatdrive you to take action and flow naturally.You, your current employees and jobcandidates may take the assessmentonline (www.Kolbe.com) and pay online —$49.95 per person. Your evaluation isinstantly computed and storedtemporarily for subsequentprinting. You can even conveyyour results number to a trainedconsultant who can help youinterpret the Kolbe results.
However, the full report is quitevaluable, and very thorough. Itis helpful to you, and also to theperson being assessed.
Action Modes. As detailed inThe Conative Connection, thestriving instincts that all personshave to some degree aredivided into four categoriescalled Action Modes. The KolbeAction Modes® are observablebehaviors that result from usingour four Striving Instincts:
Fact Finder – Based on the instinctiveneed to probe, Fact Finder behaviorrelates to the way we gather information.
Follow Thru – Based on the instinctiveneed to pattern, Follow Thru behaviordeals with the way we organizeinformation.
Quick Start – Based on the instinctiveneed to innovate, Quick Start behavior ishow we deal with unknowns.
Implementor – Based on the instinctiveneed to demonstrate, the Implementormode relates to the way we seek tangiblesolutions.
Kolbe Paths to SuccessTM. The ActionModes are divided to create a 12-partchart of Paths to Success that summarizeshow you naturally contribute in each of thefour Action Modes. This is a verycomprehensive, yet simple and reliablechart of how your unique instincts help youcreatively solve problems. These actionmodes are divided into three zones ofoperation. Within each of the four Action
Modes you may be naturally inclined to:
• Initiate – How you will act• Respond – How you’re willing to act • Prevent – How you won’t act
Kolbe Zones of Operation. Each ActionMode is displayed across the above threezones of operation, determining how weinitiate action, respond to opportunities,or prevent problems.
Basic Personalized Report. Each Indexassessment taker also receives detailedexplanations about how they and theircharacteristics are valuable; how to avoidstress; how to improve personal and workrelationships; and how to maximize careeractivities and workplace interactions.
Everyone has an Assessment of 20. Thisis one of the beautiful aspects of how theKolbe System evaluates and displays theresults of the examination. Everyonereceives the same number of points — 20.(Every now and then the numericalrounding comes up with a total of 19 or21, but generally everyone’s assessmentis 20.)
Those 20 points are allocated among thefour Action Modes — so an Index of 8-1-9-2 adds up to 20, as does 4-7-3-6, buteach has very different meaning. Thisidentical total is very helpful in enablingpersons to openly contrast theirassessment with their work associates.Since everyone has a total of 20, no oneis higher or lower. No one is better orworse. But we are different, of course.This is much more acceptable to everyonethan an IQ or Math score, where personstend to vie competitively with one another,or act in a superior manner, because ofhaving received a higher score.
Higher Index Numbers May Be Helpful.A strong Kolbe assessment in oneparticular action mode tells what a personinstinctively does best — but it will bebalanced by lower numbers in othermodes, since the total must be 20. Alower number indicates what a person isnot inclined toward, and doesn’t likedoing. Imagine how uncomfortable aperson with a low Fact Finder assessmentwould be if an important part of their nextjob assignment was digging out historical
investment performance. Thatdoesn’t mean they couldn’t doit, but that it would not use theirdominant instincts, and“wouldn’t be fun.”
We have all seen smart peoplefail at a job. We have seenattractive, personable, intelligentpersons fail at tasks thatrequired personalitycharacteristics that seemed lessimportant. What all of us want,in both ourselves and from ourassociates, is goodperformance. When we workwithin our dominant ActionModes we are like runningdownhill; easier, faster andhaving more fun.
Therefore, whenever possible, itis more effective when the natural instinctof a person is matched, or closely aligned,with the characteristics of the job to beperformed.
Of course, education and maturity arecritical in this complicated world. So too,are discipline and values. But all toooften, education, discipline and valuesystems have been used to unnecessarilysuffocate instinct. Effective evaluationsand the use of the results can restore thecomplementary balance among learnedbehaviors and instinct, so that the energyof natural instinct can restore vitality todaily life, relationships and work.
The Proof of the Pudding. Themeasurements developed by Kathy Kolbeand Kolbe Corp. have been validated bymany financial advisors. In short, they areincredibly significant — because they helppeople work together more effectively.This is not a test used to select the mostpromising employment candidate.Nevertheless, the Kolbe Index can beessential in identifying a range of more orless suitable candidates for a particularposition, if the working characteristics ofthe candidate are in agreement orseriously at odds with the essential
continued from page 3 Kolbe Index
Page 4 The Register • January 2006
Example of a Kolbe Index A Summary
continued on page 5
The Register • January 2006 Page 5
duties of the position. In fact, it ispossible to input the job characteristicsinto a Kolbe C™ Index and get a Kolbeprofile that would be ideal.
“Kathy’s organization is a joy todeal with. Personally I feel as if Ihave met a kindred spirit in thiswork, the work of bringing moredignity and respect for the studentto the world of education.”
Robert Kiyosaki — from the bookRich Kid, Smart Kid
The Kolbe System: Offers financialadvisors an inexpensive, step-by-stepprogram that enables advisors and staffmembers to unleash the boundless powerof their own natural instincts to: findpersonal happiness, enrich relationships,become effective parents, and launchrewarding careers.
Multiple Versions. Some Kolbe Indicesare designed to help students andparents in communicating with eachother, and in maximizing their learningopportunities. However, for the purposeof the financial advisor, we are referring tothe Kolbe A Index that measures howpeople work — what are their conativebehavior patterns? The results identifythe instinctive methods of operation thatallow respondents to be most productiveand satisfied. It is primarily used bybusinesses because it offers detailedexplanations about avoiding stress as wellas maximizing career activities andworkplace interactions.
Other Kolbe indexes are available thatprovide more information in specificrelationship and career situations. There’seven a Kolbe Youth™ Index for people at a5th grade reading level (about 9 years old).Books and tapes are also available on anumber of topics. Some of these come incost-saving packages. Of particular valueis a small pamphlet “Kolbe Bottom Lines”that can be purchased and presented toeach participant.
Scientific Support. The Kolbe System isthe latest in a series of successfulpsychological systems developed by thewell-known and highly honored author andtheorist, Kathy Kolbe. The System hasgrown out of scientific studies of learningdifferences that began in 1970. In the1980’s Kathy began using what shelearned from these studies to advise suchbusiness giants as Kodak, IBM, Xerox,Alaska Airlines and many others around
the world. Now, Kathy has taken thesehighly successful techniques, previouslyonly available to the business community,and reshaped them into a system forindividuals, couples and families. Forthe research behind the Kolbe Conceptvisit: www.kolbe.com/info_center/kolberesearch.cfm.
Unleash Your Instincts. You work mosteffectively when performing in your naturalmode — and you may be quite resistivewhen asked to do certain types of tasks.Some folks love to speak in public, othersare fearful. Some enjoy research, whileothers are quickly bored. It is not a matterof IQ, it is a matter of instincts.
Examining a Kolbe Results. Let’sexamine the profile shown at the top ofthis article. This person in abbreviated“Kolbe Talk” is a 8-1-9-2 or a “QuickStart/Fact Finder.” Those are thedominant Action Modes. In fact, thetwo highest modes — scoring 8 and 9,are quite high. Correspondingly, theresults for Follow Thru and Implementor,of 1 and 2, are rather low. What are a fewobservations that would apply to workingwith this person?
• This person requires facts and needsto be precise. If making a purchasehe or she will want to evaluate all theoptions, features and prices. Whenyou want to start a project or jointeffort with this person, expect themto ask lots of fact and detail orientedquestions, and insist on having theanswers. Actually, it would be goodfor them to do this researchpersonally if possible — and it wouldbe done well.
• This person has a very low Follow Thruresult. They might not promptly attackthat research project. This person is a“world class procrastinator.” Tounderstand what this person willinstinctively do, look at the next factor.
• This person is an “Initiating QuickStart.” He or she starts new projectsand takes on new assignments. Willeagerly speak on any topic (probablywithout fear) without notice. While agroup is evaluating the status quothis person is contemplating nextmonth, next year, or the next decadeand inventing ways to do thingsdifferently. It is often frustrating for anon-Quick Start person to be workingwith a Quick Start 9.
• This person also “prevents” in theImplementor mode. He or she willnot instinctively assemble materials,
demonstrate with props, operateequipment, file accurately or handlefacilities arrangements. That doesn’tmean he could not work at thosetasks, but his enthusiasm and energywould quickly be dissipated.
If you are involved in a work assignmentwith an 8-1-9-2 you’ll need someone onthe team who initiates very well in theFollow Thru category — or any project willfall far behind. If there are physical tasksthat are important to a successfulconclusion get someone else to do them,because this Quick Start/Fact Finder willbe off on other tangents and tasks.
This will not be an easy person to workwith. This person’s high energy level intwo areas, Quick Start and Fact Finder willtend to dominate the group activity. Theflow of new information (from the FactFinder Mode) and the stream of newideas (from the Quick Start Mode) will bedistracting. But, you’ll never be bored. Atleast, that’s what the persons here in ouroffice say, as well as my wife, who liveswith the guy.
Ed is the Chairman and CEO of the IARFC.He specializes in enabling financial advisorsto increase their sales production and clientservice, by building their practices througheffective client relationship management.For information on his services:[email protected]
Many financial advisors need to testnew job applicants for their mentalcapacity in key areas. For some jobs,mathematical skills are very important,such as a financial plan writer or abookkeeper. For other tasks, verbal andwritten skills are critical. Speaking andpresentation skills are important for amarketer or seminar presenter. Nearlyeveryone today uses a computer — asan input device for text and numbers, fore-mails, for correspondence, proposalsetc. Therefore, rudimentary typing skillsare required. In subsequent issues wewill explore additional evaluation optionsfor advisors.
There are other psychometricassessment tools that you will want toconsider. The Harrison Assessment hasproduced fantastic results when used toanswer this question in the recruitingprocess: “What is the likelihood thatthis candidate can be successful inselling life insurance or in offering moresophisticated financial services?”Would the correct answer be valuable toyou when hiring a new financial advisoror sales representative?
continued from page 4 Kolbe Index
Page 6 The Register • January 2006
Where the IARFCwill be represented:
Million Dollar Marketing WorkshopJanuary 26-27, 2006, Orlando
Hong Kong — RFC ClassesFebruary 15, 2006, Hong Kong University
If you are going to attend any ofthese events, please let us know.
New Training for Service Managers. In response to many inquiries from IARFCmembers, the Association has started on the development of a course to train theservice managers for financial advisory firms. This will be very different from the ParaPlanner courses that are essentially the first part of the financial services curriculum.
The new course will be a three to four day training program preceded by homeworkand reading assignments for the staff member. For example, the participants will beasked to undergo the Kolbe evaluation, along with the advisor and operationsmanager with whom they are working. This will enable them to modify their workingexpectations and arrangements for maximum efficiency and effectiveness.
They will also bring samples of how they are currently processing new clients andhow they are servicing the established clientele of their firm. A major focus of thecourse will be how to help the financial advisor accomplish the following:
Retain all their “A” ClientsObtain more referralsProcess Referrals into ClientsReduce administrative stressAccelerate the growth of the practice
A New Designation. Upon the completion of the course, there will be anexamination and the participants will be awarded a valuable new professionaldesignation — that of Registered Service Manager — RSM.
Class Design and Presentation. This course will be developed for the IARFC withthe assistance of Peter and Katherine Vessenes (both RFC) and their Chief OperatingOfficer, Cathy Thompson, who worked effectively in this capacity in a very successfulregional firm of Registered Financial Consultants. Many of the techniques in the newRSM curriculum will augment the training and course work from the highlysuccessful Million Dollar Practice Workshops that have been jointly sponsored byVestment Advisors and the IARFC.
Classes in June. We are developing the curriculum and study materials now. As youmake plans to enhance your organization and practice in 2006, you are encouragedto send your important service managers to the RSM course. The first class willhave a limited number of registrants and is planned for late June in Middletown orCincinnati, Ohio.
Do You Have Ideas to Offer? Is there a particular tool or technique that you haveused in your practice to enhance the capacity of your service manager or salesassistant? Do you have unique reporting forms, charts or assignments that havebeen helpful to you? We would appreciate receiving your suggestions. Naturally, ifthey are incorporated into the course you’ll be given credit, and your servicemanager will receive an enrollment discount.
Million Dollar Marketing Workshops. These two-day events are produced byVestment Advisers with the sponsorship of the IARFC. The second workshop, held inMinneapolis in November was a blazing success and the responses and evaluationof the attendees was astounding. If you’re looking for innovative guidance inadvancing your financial practice several levels higher then you should considerattending the next workshop, January 26-27 in Orlando. For details and registration,www.Vestmentadvisors.net or call 952 401 1045.
Are You Happy With Your B/D? We keep hearing from financial advisors whooperate within a securities broker dealer that they are not happy. Most of theirfrustration is related to the compliance departments with their “frivolous over-control.” Some broker dealers have even indicated they “own” the advisor’s clienteleand they will control its disposition upon death, disability or retirement. If you arevery pleased with your broker dealer please send us a confidential e-mail([email protected]) so we can pass it on to those who are unhappy.
From theChairman’s Desk...
The Register • January 2006 Page 7
designation in 1987, the CSA, the RFC®,and in 2004 my Masters of Science inFinancial Services (MSFS) also from theAmerican College. Other than my work asa Tax-Examiner at the IRS, waiter andconstruction work during college, sincegraduation I have worked only in FinancialServices.
What were your early job duties and howdid you like or dislike them?
I sold life insurance to college seniors &graduate students on a promissory noteof $10 down, and “Just start paying yourpremiums after graduation, and in fiveyears you would have paid off the noteand own a life policy.” I did not likemaking the calls to college students everyMonday night back then. Today when Ithink about it, it was probably easy to callon a ‘Niche’ list. I also wanted to marketinsurance to the ‘locals’ of San Marcos,and eventually received my Property &Casualty license and became anindependent insurance agent.
Were you successful at first?
I was probably about an average salesperson, really always just barely making it.I still had a reluctance to call on peoplefor the first time. But, I just kept at it.
What were your major obstacles?
Call reluctance, and no business plan ormarketing plan to follow. I just worked dayto day, which of course is not a veryeffective path to success.
Tell us about your current practice.
I continued in the Insurance business for tenyears, and started to hear a lot aboutfinancial planning. I started to investigatecompanies and services. Finally in 1984 Ifound Money Concepts International, whichwas the only financial services company thathad a franchised system. So, I invested in aMoney Concepts Franchise with all of mysavings, because I wanted to own, be anindependent planner representing manycompanies, and I wanted a Turn-Keybusiness system. I prepared my firstbusiness plan when I started with MoneyConcepts. Money Concepts has been myonly financial services company and my onlybroker-dealer.
As I developed my business the financialplanning industry was starting to expandand mature. When I look back on thoseyears, we at Money Concepts were really
writing the book on financial planning andservices. In 1991 I was given theopportunity to be a Regional Director forMoney Concepts for South Texas, and Istarted to recruit Money Concepts newoperation CEO’s and associates.
Today I have a large personal clientpractice and a Region of about 60associates, who I help with training,education and motivation to help themexpand their business.
What are you enjoying most aboutthis position?
Every week is a new challenge and moreopportunities in the financial planningbusiness. That I can help clients reachtheir financial dreams and goals.
What are your major frustrations?
Every week I run out of time, becausethere are so many wonderfulopportunities to do business, that I can’tall of do them all as effectively as I’d like.
What attracted you initially to the IARFC?
I got to know Ed Morrow so well, that Iknew if he was behind this organization, Iknew in my heart and my mind that IARFCwas good. I also saw that this was anorganization for CEO’s in financialservices. While we have complianceissues in our business, we also have abusiness to run for profit, and I saw IARFCas a strategic partner for this.
What would you personally like to see forthe Association in the next five years?
To triple our membership, and tocreate an organization of very successfulCEO’s in financial services all of whommake a nice six-figure income. To dothis will require not only technical
education and training, but emotional andright-brain training.
What do you think will be the majortrends in the financial services field inthe next five years — and how shouldRFCs be positioning themselves?
The major trends will be very simple;There will be more money in motion (inthe trillions) than in the entire history ofthe United States. Seniors, Baby Boomers,Generation X & Y will need the services ofgreat financial planners and investmentadvisors. RFCs need to increase theireducational and training commitment fortheir own success.
Where will the economy be moving in thenext 3-5 years, and what should financialadvisors be doing NOW about it?
The economy should be moving straightup mainly because of the baby boomersturning age 60 every 10 seconds, andbeing in the financial arena of retiring andneeding help managing their money.
What will be the impact of technologyon the practices of financial advisors?
I think if a financial advisor does notmaintain current technology, they will beout of business, nuff said!
What three things would you advise a RFC®
to concentrate on in 2006 to have thegreatest impact on the next three years?
• Increase their education andknowledge, both marketing and technical,through either new designations, orthrough planning their attendance ofworkshops, schools, and seminarsthrough out the year. Certainlyattendance at the IARFC Forum in Mayshould be on everyone’s list.
• Have a practice where you can marketservices through both commissions andfees. Gradually build the fee basis whichis recurring revenue.
• Think of yourself as the ‘CEO’ of yourbusiness all the time.
In addition to serving as a Director of theIARFC, and managing 60 associates,Ruben has just released a book, TheOne-Hour Hispanic Millionaire, and isformulating workshops and marketingefforts to reach this growing segment of oursociety. Contact Ruben at: 512 396 2437or [email protected]
continued from page 1 Ruiz
Page 8 The Register • January 2006
Financial Advisors Forum 2006Exhibitors
Press releases to local newspapers areone of the easiest, lowest cost ways toraise your company’s visibility while alsogetting more people in your communityto visit your website. They are powerfulmarketing tools, and cost nothing if youwrite them yourself. They are often anunderutilized marketing tactic, especiallyfor small businesses, for severalreasons: uncertainty about the “rules”for a press release format, the need tothink about all the public relationsopportunities, and someone to write anddistribute them.
The primary purpose of a press releaseis to get published in targeted mediasuch as newspapers, trade magazines,and Internet media. The higher up themedia food chain you go, to national andglobal publications, the less likely your“news” will catch the attention of aneditor — unless something reallyshocking or profound happened inconjunction with your business.
A secondary purpose is to addmeaningful content to a website toimprove search engine ranking. Rankingalso improves when the incoming links toyour site increase in number when pressreleases get posted to news-orientedwebsites.
The process to write a press releasebegins by listing some ideas about“newsworthy” topics concerning yourbusiness. Here are some examples:
• A new partner has joined your firm.
• Your company launched a newwebsite.
• New, useful content has beenadded to your website.
• Your company has sponsored afundraising event for a charity.
• You’ve added a new service to yourcompany’s offerings.
• You are conducting a workshop orseminar.
Once you begin thinking about news-worthy topics, you’ll begin to more easilysee them as opportunities to write andsubmit press releases. The easiest (andprobably quickest) way to get them writtenis to have your marketing firm or an
independent business writer do them foryou. But you, or someone in your office,can learn how to structure and craft agood press release by looking at examplesof professionally produced ones.
To write a press release, search onlinewith the words “press release format”(including the quote marks around thephrase). Many resources give you adetailed outline of the proper format. Ifyou have an IARFC website powered byFinancial Visions, there is a pressrelease template available that highlightssome of your website features. Forexample, your site provides useful, free,financial planning calculators for localindividuals that give them quick, real-lifeperspectives on many financial issues.
E-mail your press releases to thebusiness editors of local newspapersand all trade publications. And you canpost them online for free atwww.prweb.com.
About the Author: Sylvia Todor is theMarketing Director for Financial Visions,an IARFC technology partner that createsaffordable, high-content websites forIARFC members. www.iarfcwebsites.com
Drive Traffic to Your Website with Press Releases
Sylvia Todor
FA Legal Association
Financial Planning Consultants
Advised by James Investment Research, Inc.
James Advantage Funds
Liberty Publishing
MarketShare Financial
National Heritage Foundation
Vestment Advisors
The Register • January 2006 Page 9
Page 10 The Register • January 2006
Your Estate of Mind By Arthur W. Rothfuss, CEP, CSA, RFC®
A New Year—A New BeginningThere’s never a better time to get afinancial house in order! One of the firstitems of business after the New Year is tobegin thinking about Tax Preparation.
An extra benefit for clients working with afinancial advisor is the opportunity for acomplimentary review of the client’s last2 years tax filings. Advisors usually haveonly a very small number of accountantsand CPAs they are completelycomfortable referring to their clients. Fora personal introduction to one of thesetrusted and trustworthy advisors offer toyour time to make the referral for yourclient. The accountant will appreciate thereferral, and so will your client.
Validity of Wills ThreatenedCheck you own will (and those of yourparents) for two sets of signatures!Courts of Appeals have ruled that tosatisfy the requirements for a “self-proving will in Indiana, the documentmust contain two valid sets of signature:1) to attest to the will’s provisions and2) a separate document to verify thewill had been signed by someone ofsound mind with two witnesses present.Tens of thousands of wills are laid open
to challenge. The “self proving” will lawtook effect in 1975 to relieve the burdenof having witnesses or handwritingexperts testify in court for validity of wills,but the two signature requirement is aserious burden.
Non-Citizen = Non-ExemptPersons who are not U.S. citizens do notqualify for any state or federal estate taxexemptions. Marital status makes nodifference. This can be a killer provisionfor families where one spouse is not acitizen, especially with minor children!
The Q-dot trust (Qualified Domestic Trust,based on IRS Code 2056) may be thebest answer short of citizenship. Reviewyour client file for non-citizens anddiscuss these issues.
Domestic Partnership Agreements GainPopularity Among Estate Planning ToolsOften a need for Estate Planning existsbetween persons joined by other thanthe bonds of marriage. DomesticPartnership Agreements may fill the bill.Some situations which can be coveredby executing a domestic partnershipagreement are:
• Adult family members living in samehousehold and sharing ownership ofgoods, property and debt.
• Couples living together. These includesenior couples who would bepenalized by Medicare/Medicaidregulations should they marry; youngcouples cohabitating as a trial periodprior to marriage; same sex couples;couples a part of whose income isderived by one person receivingalimony or social security whichwould cease upon remarriage.
• Couples joining by Common-Lawrecognized by some states and havingthe same legal rights as marriage).Common-Law marriages are NOTrecognized in Indiana and many otherstates.
• Couples joined by CommitmentCeremonies (recognized byVermont and perhaps by a fewothers) and having domesticpartnership benefits similar tomarriage. Commitment Ceremoniescarry no legal weight in Indiana,nor in many states.
The National Institute of Certified EstatePlanners (NICEP) provides education andsupport to attorneys and financial consultants.NICEP has both self-study and classroomestate planning curriculums, granting theCEP designation. For programs and courseinformation: www.NICEP.org 765 453 4300or e-mail: [email protected]
Arthur W. Rothfuss, CEP, CSA, RFC® Art is anexperienced estate planner, educator financialadvisor, and CEP “Planner of the Year” 2003.His firm, Genesis Projects located inIndianapolis, serves clients in twenty-ninestates. Art is one of the five national directorsof NICEP and may be contacted at: 317 872 9574 or [email protected]
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Builder Suite ProvidesProfessional Sample Plans.Use to Close the engagementagreement by fulfilling theclient’s need to see, touch andfeel a sample of the product theyare buying: Produced with theBuilder Suite system.
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DipRSA, PECI, AIMgt, FRSA, FInstSMM, and of course RFC®
Well, we already know the answer to that.We bother because the improvement ofour civilisation depends on it. And ifconstituted authorities don’t take theinitiative, then individuals have to. Andthat means you!
You are naturally dissatisfied with parts ofmodern society; you wish things werebetter, and want them changed. But youcan’t expect somebody else to do changethem on your behalf. And you can’t evenexpect to change things yourself until…
…until you change yourself!
As individuals, the Self is really all wehave to think and feel with. Whateverkind of governmental and social systemsmay be operating in the wider world, wewill never be happy with them — muchless acquire the power to change them —until we are happy with the quality of ourown thoughts, feelings, competencies,attitudes, actions, and aspirations.
That entails a certain amount of hardwork, of course — hard work on the Self.To transform the workings of society, wemust first transform the workings of thehuman being.
We live in a culture where mediocrityreigns in most areas of private and publiclife. But we don’t really like it that way.We would prefer to live in a culture whereexcellence reigns: where the “just-good-enough” is superseded by the superlative.
• academic knowledge spiritualwisdom
• lower self ideals higher self ideals
• immaturity responsibility
• stress peace
• quick-fix formulas soul-deepenrichment
• self-gratification altruism
• inertia self-motivation
Did you ever see a banner with those words“We Want Mediocrity” scrawled on it?
Of course not. Mediocrity is not the kindof thing people get up and demonstrateabout. At least not about their own. Butwhen it’s somebody else’s mediocrity…then we see the banners flying — and themessage is never complimentary!
“INTEGRITY IN PUBLIC OFFICE!”“POWER TO THE CONSUMER!”
“EQUAL RIGHTS FOR ALL!” “ABOLISH SLEAZE!”
“LIBERTY!”
Now those are anti-mediocrity slogans.From the grass roots of rural communitiesto the oak-and-marble corridors of power,everybody wants the best of everything.But, conversely and perversely, mostpeople no longer expect the best ofeverything. They’ve learned not to —because they always get disappointed.
And the disappointment has now enteredtheir souls.
“WHY BOTHER?” seems to be an unwrittenslogan for society at large. Ask certainpeople to express their views on life, andthey’ll do so in a wistful, defeated tone thatseems to say: “If the authorities don’t rootout corruption, why should I bother? It’snot my job”. Or, in discussing familyrelationships: “If they don’t care aboutme, why should I care about them?”
Why indeed? After all, it’s a dog-eat-dogworld. We might almost ask ourselveswhy we ever bother to act civilised at all…!
• reactivity pro-activity
• walking blindly progressingpurposefully
• nightmare vision golden vistas
• materialism spirituality
Sounds like a utopian vision, doesn’t it?
Well, so does everything if you aren’tready to work on it — or on yourself.
But once you relinquish the “quick-fix”mentality, things suddenly seem achievable.It’s all a matter of attitude. And that, as weknow, is what determines altitude!
Even if nobody demonstrated for mediocrity,we’ve all got it. And it’ll never go awayunless we march out with this banner:
“WE WANT EXCELLENCE!”
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You will explore how to make yourmost desired alternate universe areality. You will learn why financialadvisors are “Excellence-Seekers” whoonly need a slight redirection now inorder to achieve major business andpersonal results and enjoy a heightened“Sweet Taste of Success.”
Don’t miss John’s exciting presentation“Fruitful Prospects – Ripe for Picking”at the Financial Advisors Forumnext May. You may contact him at:44 10 603 436 658 or by e-mail:[email protected]
Page 12 The Register • January 2006
Used well, good association sites arewindows into organizations. They shedlight on who’s in charge, how thosepeople can be reached, whenand where meetings occur,issues of concern, andmore — invaluable insightswhen approachingmembers of a group if youwant to demonstrate youunderstand their world andthe challenges they face.
But where do you beginassessing whether asite offers potentialvalue to you? Here arefive suggestions.
The first thing to check out (if available)is a Site Map which can give you a bird’seye view of content across the site(usually arranged by category). After thatcome the four P’s… people, publications,programs (events) and problems (facingmembers of that group).
To locate elected officers and boardmembers, look for links labeled “AboutUs,” “Management,” or “Leadership.”There you’ll often find bios and contactinformation for key people. Once youknow who they are Google their names(with and without the association nameincluded in the search) to see what otherprofessional affiliations, personalinterests, or article mentions surface.(The more complete the profile youdevelop of each potential contact, thebetter able you’ll be to determine a solidbasis for connecting with them.)
Do the same with paid staff (oftenfound in the sections mentioned aboveor under “Contact Us”), particularly those
Prospecting Online
in charge of membership, professionaldevelopment, and publications — the“in-house” centers of influence whosesponsorship can quickly raise yourvisibility within the organization.
Next, see if there’s an archive of articlesor press releases available (“PressCenter” or “Media” are the links to lookfor here). Reviewing a few of those willtell you what issues members are facing.With each article ask, “is this a topic Icould write an article or letter to the editorabout… or one I could present on at ameeting, sharing information that couldhelp members solve a problem?”Retirement planning, businesscontinuation, succession planning, ortax law challenges are all examples oftopics where advisors might deliverinsight to members.
Check for a publishedschedule of meetings you
might attend to connectface-to-face with opinionleaders and decisionmakers (“Conferences,”“Meetings,” and “Events”are sections under whichyou’ll usually find these).Find out if nonmembers arewelcome to attend so you cansee the group in action.Joining the group, even asan associate member,
usually earns you a member directory, asubscription to the association’smagazine (and local newsletter), and theright to attend meetings. Mostimportantly, it gives you a platform fordeveloping all important networkingrelationships.
With the right tools and knowledge ofwhere to look you can uncover greatintelligence in minutes! The harder part iscultivating the relationships. Developingrelationships with centers of influenceat trade groups is a long-term strategynot a quick hit solution. But they can payhuge dividends if you set your timehorizon realistically.
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What to Look For&
Where to Find It
The Register • January 2006 Page 13
of an investor/claimant in 2004.• 15% the number of investor awards that
went unpaid in the first half of 2004.
With NASD arbitration under attack, we,interviewed four industry experts, withextensive arbitration experience, for aninsider’s look at what really goes onduring arbitration.
In this article, to be continued next month,we will focus on these areas:• Arbitrators, their competence
and fairness.• Problems inherent in the process.• The right to appeal.• How to get competent counsel,• Problems with E&O coverage.• Lessons learned.
Our arbitration experts are:
• Attorney Jim Eccleston, partner in thefirm Shaheen, Novoselsky, Staat,Filiposki & Eccleston. He can bereached at: [email protected]
• Attorney Terry Lister, Chief RegulatoryOfficer, Waddell and [email protected].
• Bud Bigelow, President of CambridgeAlliance. Bigelow can be reached [email protected].
Arbitrators, what about theircompetence and fairness?Recent attacks in the Wall Street Journalhave put NASD arbitration under the spotlight. Certain industry pundits, includingthe Public Investors Arbitration BarAssociation (PIABA bar), have allegedthere are serious problems with theprocess. This group sees the arbitratorselection process as one of the mainproblems that prevent investors fromobtaining fair decisions.
PIABA asserts the mandatory industryarbitrator should be eliminated and threepublic arbitrators, who are truly public andhave not ever had any ties to the industry,should hear cases. In their opinion, theindustry arbitrators are inherently biasedand tend to favor industry practices andrespondents over investor claimants. In
A Peek Inside the Arbitration Box — NASD Arbitration 101By Katherine Vessenes, JD, CFP®, RFC®
What is Arbitration? Arbitration is analternative means for investors to resolvetheir disputes in lieu of traditional courtlitigation. The investor, or claimant, files aclaim with the NASD, where an impartialpanel of three for larger cases, or a singleperson for smaller ones, studies theevidence and then makes a final andbinding decision.
The arbitration process is generallyquicker and cheaper than pursuing thesame claim in court. The decision issubject to appeal in a very limited numberof cases and only a small number ofcases are reversed on appeal.
Although the NASD does not require anyinvestor to arbitrate a claim against abrokerage firm or broker, since 1987 mostfirms have investors sign a bindingarbitration clause when they becomeclients of the firm.
Three person arbitration panels consist oftwo public arbitrators and one industryarbitrator. Arbitrators are required todisclose any conflicts of interest andextensive background information,including past awards to parties to helpthem select their arbitrators.
Participants are asked to completea “satisfaction survey” at the end oftheir case and the NASD has anextensive process for maintainingcompetent, unbiased arbitratorsincluding peer review, staff observationand party feedback.
NASD Arbitration by the numbers:• $750,000 the amount of money three
firms were fined for failing to complywith their discovery obligations in 20arbitration cases.
• 8,201 the number of arbitrations filedin 2004.
• 6,626 the number of NASD arbitratorscurrently approved for taking cases.
• $400 typical daily pay for an arbitrator • 146 average number of days to turn
around a case in 2004.• 86% the number of mediation cases
settled in 2004.• 60% the number of investor awards that
went unpaid in 1998.• 46% the times arbitrators ruled in favor
addition they claim that many publicarbitrators are not truly public becausethey had ties in the past to the industry.As a result, PIABA is lobbying for the NASDto remove the industry arbitrators in thepanel and just have public arbitratorsdetermine every case.
Eliminating Industry ArbitratorsAttorney Jim Eccleston takes theopposite view. The industry expert isa necessary part of the process,according to Eccleston, because youneed someone on the panel whounderstands the intricacies of the case.“One of the theories used to bolsterPIABA’s argument is that most casesnow have a paid expert for bothclaimants and respondents, thereforethere is no need for an industry expert tobe on the panel.” Eccleston does notfavor eliminating the industry memberbecause it would require all claimants tofind an expert to help them explain theircase to the arbitrators. “This can beexpensive burden on investors,particularly for smaller cases,” he says.Some investors or even smaller firms maynot be able to afford the services of anexpert witness. This would jeopardizetheir case and make it more difficult forthem to get a fair hearing.
Attorney Terry Lister believes many of thecases are just too complicated to be leftsolely in the hands of public arbitrators.Take a case involving the minutiae ofcertain derivatives. “Most industryarbitrators would have a difficult timesorting through the evidence withoutthe help of an expert witness to explainthe details, says Lister. “Therefore, it islikely it would be much too complex for apublic arbitrator.”
Lister is comfortable with two publicarbitrators so long as there is at least oneindustry arbitrator on the panel. Theindustry arbitrator can help explain theindustry-specific details of the case to theother panel members. Also the industrymember can be a big help when it comesto a battle of the experts.
“It is not unusual for both sides to have
continued on page 14
Page 14 The Register • January 2006
paid expert witnesses. They might look atthe facts and come to exactly oppositeopinions depending on who paid them,the investor or the broker/dealer.” saysLister. With at least one industry memberon the panel, they can sort through theexpert testimony and help decipher it forthe other panel members.
Dave Markun says just because theyqualify as an industry arbitrator does notnecessarily mean that are “experts” oreven more knowledgeable than anyoneelse with respect to the particular issuesthat arise in an arbitration. “I havehad many industry arbitrators who didnot know anything about suitability oroptions or the other issues in a case,”said Markun.
Arbitrator Competence and BiasThere are other problems with thearbitrators. Markun, who hasrepresented both claimants andrespondents in hundreds of cases,thinks there are two main issues witharbitrators that make it difficult to geta fair result. They are: Many arbitratorsare incompetent and biased.
According to Markun, the arbitrators, astrier of fact, are only marginally betterthan a jury, even though they have hadextensive training by the NASD to qualifyas arbitrators. Given similar facts,Markun says he has had dramaticallydifferent results before different panels.
“I have seen arbitrators who were so oldor tired, they nodded off during theproceedings,” said Markun. This puts theattorneys in a difficult position. If theybring it to the attention of the otherarbitrators, they risk bringing down the ireof all the arbitrators and ultimatelypenalizing their client. “Usually I justpress on and pretend they are just restingtheir eyes so I don’t jeopardize my case,”he explained.
According to Markun the system hasinherent biases. Take the professionalarbitrator, the one who may be retired andneeds to continue receiving arbitrationassignments as a way to maintain hisincome in retirement. That arbitrator isgoing to be very careful about awardingpunitive damages, even in the mostegregious situations, said Markun. Thereason is the selection process.“Attorneys will be looking at previousawards,” Markun explained. “Anyarbitrator that has ever rendered anaward for punitive damages would be
struck by the attorney representing therespondent,” he stated. Mostrespondents’ attorneys would blackball these arbitrators because theywould not want to take a chance on theirclient being hit with a large punitivedamage award.
With a jury, they can just walk away fromthe case. Jurors are not worried abouttheir future livelihood. In general, jurorstry to do the right thing, because they willleave the courtroom and go back to theirregular employment, according theMarkun. “Professional arbitrators maywant to do the right thing,” Markun stated,“but their own future financial needs mayaffect their judgment.
The arbitrator pay of about $40 per houris appealing to young, inexperiencedattorneys who do not have any otherwork. So many of the arbitrators,attorneys, retirees and others areusing this as a way of boosting theirpersonal income. Although there isnothing wrong with increasing yourincome, this means there is a goodchance any panel will have one or moreinexperienced or unqualified arbitrators,whether they are from the public or theindustry sector. “In my mind this type ofarbitrator, the ones just looking tosupplement their income, are just notqualified to render a decent decision,”stated Lister. “In fact, I would guessabout 40% of all arbitrators are notqualified,” according to Lister. Markunwould agree with that assertion but putsthe number at closer to 50% who are toobiased, uninformed or incompetent torender a fair verdict.
According to Lister, one of the majorproblems with both public and industryarbitrators is they have no training thatassists arbitrators in understanding thebusiness and the specific issues they willbe asked to evaluate. Also, Listerrepeated a complaint common amongour experts: the NASD does not payenough to attract arbitrators who aretrained in alternative dispute resolutionor have any real experience with theprocess or the industry.
The Time Commitment Has IncreasedThe time commitment is another problemwith attracting qualified public andindustry arbitrators. In years past,arbitration would take one or two days.This was a reasonable amount of time toexpect experienced arbitrators to offertheir services to the investmentcommunity to resolve disputes. Nowcases can take months. “I heard aboutone arbitration case involving derivatives
that was so complicated, it went off andon for two years,” said Lister. Thisexpenditure of time, which can easily gofor numerous sessions over a period ofmonths, is not attractive to experiencedand qualified arbitrators, particularly atthe low pay.
Selecting ArbitratorsEach party to an arbitration receives a listof potential arbitrators. There will be fiveindustry candidates and 10 publiccandidates. Each side ranks their choicesand sends it back to the NASD whomakes the final selections.
It is very important to do your duediligence on potential arbitrators,according to Eccleston. Many arbitratorsare older and from the old school ofbrokerage. They may not up to speed withthe newer investment techniques likeasset allocation and using hedgestrategies to reduce risk, he explained.“We always look at the history of previousawards, their age and experience,” statedEccleston. He pays particular attention totheir previous experience. “If they are acommodities trader, they are probably toomuch of a risk taker for some of ourcases,” Eccleston stated.
To combat some of these issues, theNASD has participants complete a“satisfaction survey” at the end of theprocess. The NASD had procedures inplace that are designed to disqualifyincompetent or biased arbitrators.Lister has not found these procedureshelpful in the past. “It is important thatwe only have competent and fairarbitrators,” asserts Lister “Becauseit is important that the public haveconfidence in the system.”
Problems with the ProcessEvidence and Discovery. One issuementioned as a problem by all of ourexperts was the means of gathering andadmitting documents and testimony intoevidence. What is considered evidence,documents and testimony, is the same inan arbitration or a court case. However,the standard of what is admitted orexcluded is much different.
The standards for admitting and excludingevidence are far more strict in a courtcase than they are in arbitration.Arbitrators can admit hearsay or even outof date evidence. This would not usuallybe allowed in a court case, except incertain limited circumstances. Thismeans evidence that might not beallowed in court could be easily admitted
continued from page 13 Arbitration 101
continued on page 15
The Register • January 2006 Page 15
in arbitration. This can have a big impacton the outcome of the case, sometimeschanging it completely.
Also, most arbitrators will admit just aboutany evidence “for what it is worth”,according to our experts. Parties willnever know if the arbitrators gave theevidence a lot of weight, or no weight atall in deciding their case.
In a court case, a judge could make anerror in admitting evidence but it would beappealable. You do not get that luxury inan arbitration.
In arbitration, admitting and excludingevidence should be a simple andstreamlined process. However, as thearbitration practice is moving closer totypical litigation, gathering evidence hasalso come to look more like gatheringevidence during a court case.
Document Delivery. It is not unusual forboth parties to present a lengthy list ofpossible documents to the other side fordiscovery. This can be an expensive andtime-consuming process to locate andreproduce documents that are manyyears old and stored in offsite locations.In a court case a few years pack, theplaintiff requested emails from thedefendant broker/dealer. The b/destimated it would cost about $175,000just to retrieve the emails, an expense theb/d claimed should be incurred by theplaintiff. After a lengthy court battle andappeal, the plaintiff was only ordered topay 25% of the cost of the email retrievalsand the defending firm picked up theremaining 75%.
Many times this lengthy list of items is noteven required for the case, but used toharass the opposing party. “Parties willmake outrageous requests for documentsand testimony,” explains Lister, “Then theyhunker down and get nothing.” Somebrokerage firms have sought to evade andavoid discovery obligations and thwart theintention of the rules. This practice offailing to deliver required documents canstymie a party’s chance of getting a fairdecision. Both sides are not cooperatingand it is causing problems, accordingto Lister.
Markun also believes the discoveryprocess is unfair. He says there is no realaccountability for a b/d who withholds adocument that is necessary for a claimantto present his case. To combat thisproblem the NASD has issued a new list
of sanctions for failing to comply withlegitimate evidence requests. Althoughthere are sanctions available for willfullyavoiding the rules, Markun has never seenthem imposed against an offending firm.Even worse, without being able to deposethe person responsible for producing thedocuments, many abuses undoubtedly goundiscovered, Markun explained.
Another problem with discovery isinconsistent rulings. “I have seen theexact same evidence in five cases, andget five different decisions by differentarbitrators,” said Markun. Eccleston alsomentioned similar problems.
To combat this criticism the NASD hasproposed a new type of arbitrator, anEvidence Arbitrator, that only rules onevidence. Most of the experts interviewedliked this solution and felt it would help toget more consistent evidence rulings.
Markun would amend the arbitrationrules to allow for one deposition. Hewould depose, under oath, the personwho is most knowledge about productionof the needed documents. He felt usingthe deposition process parties would beable to get honest testimony aboutevidence and it would reduce thelikelihood parties would destroy or alterdocuments or just fail to produce them.Many attorneys favor this change becauseit would allow them to bring criminalactions for perjury.
The Right to AppealWhen it comes to comparing arbitrationto litigation, most industry professionalsprefer arbitration for most of theircases. With arbitration, it is generallyfaster and less expensive and taking thesame case to court trial. AlthoughMarkun said one of the changes hewould like to see in the system would bethe right for parties to opt for going tocourt if the amount in question were overa certain dollar limit.
One of the trade offs for speed andreduce cost is the right to appeal. Mostarbitration cases are not appealed for tworeasons: first the grounds for appeal,under the NASD rules, are very limited,and second, most awards do not containenough information in them on which tobase an appeal. Bigelow believes thisinability for an effective appeal is unfairto everyone.
Few cases are appealed. Ecclestonestimated only one in ten were appealed,and out of those maybe one in 10 werereversed on appeal. Markun, who haswon many arbitration cases, said he has
never seen a successful petition to setaside an award.
Getting the Right CounselGetting an experienced and competentattorney to represent you has alsobecome more difficult over the last fewyears. The reason is most firms haveerrors and omission insurance. However,it is the insurance carrier, says Bigelow,not the broker or the broker/dealer whohas the right to pick the law firm to defenda particular case.
It has become a widespread practice forthe carrier to request bids from differentlaw firms for this type of work. Mostcarriers will select the least expensivefirm — and they are rarely the mostqualified. With law firms actively seekingthis kind of business, usually the new andinexperienced attorney wins the bid.Rarely are the experienced attorneyswilling to reduce their fees to become thewinning bidder.
Under the terms of the policy, brokers orbroker/dealers are not usually given theright to select their own counsel. Thisrarely bodes well for the party with theinexperienced counsel. “Although I havehad clients who made sure my firm waslisted in their policy,” said Markun.“These broker/dealers wanted to besure they had someone representingthem whom they knew and could trust,”he explained.
Insurance defense attorneys havemoved into the security litigation arenain a big way and have won a lot ofbids from E & O carriers. “What theydon’t understand says Eccleston,“Is this is a much different and verycomplicated area of law.” He goes onto tell the story of one long timelitigator taking on his first NASDarbitration. “During the entireproceeding he kept referring to theNASD as the NSAD!” Eccleston saidwith a smile. “I knew we wouldsucceed,” Eccleston explained,“Because it became apparent hehadn’t even read the rules.”
When selecting your attorney, Markunrecommends doing your due diligence onyour potential candidates. Interview themabout the number of cases they havehandled and the results. Be sure to getreferences from other firms, too.
The problems with E&O CoverageMany brokers and firms have beenlulled into a false sense of security with
continued from page 14 Arbitration 101
continued on page 16
Page 16 The Register • January 2006
their E&O policies. This situation came tomy attention recently when I had anumber of advisors tell me the samestory: a financial planner spent over$100,000 to successfully defend a caseand then his E&O carrier refused toreimburse him.
Bigelow explained this unfortunatesituation could happen to any broker orfirm whose policy says the insurer has theoption to defend. In those cases, theinsurer can legally decline to defend,sometimes without a good reason.
“What you want in a policy,” Bigelowadvised, “Is the duty to defend.” If yourpolicy is written to include the duty todefend, then the insurer must defend you,Bigelow explained. Unfortunately, almostnone of the broker/dealer policies havethe duty to defend. They have the optionto defend. These leaves you at the mercyof the insurance companies.
Strong insurance companies with goodfinancials and integrity will probablydefend the suit. If you get an insurancefirm that is in some financial trouble andthey don’t have a strong sense of integrity,they may decline to cover you.“Regrettably says Bigelow, there is notmuch you can do about that.”
Having an insurance company declinecoverage can be devastating. Mostcompanies and brokers have no idea whattheir policy says, Bigelow said. It is a goodidea to review your policy now and makesure you won’t be surprised later. “Ourpolicies always have a duty to defend,”Bigelow explained, “And this is prettyunusual in the industry.”
Lessons LearnedEach of our experts had some greatadvice for avoiding arbitrations, or if youare in one, how to improve your chancesof a successful decision.
1. Better training. The process is socostly, as a financial professional you wantto avoid it if at all possible. Markun saysspend the money on litigation prevention.It is much better to invest in educating thefront line and making sure they comply,than spending the money on an expensivearbitration. When training your reps,make sure they know what suitability isand what it is not, and they takecompliance seriously.
2. Eliminate your problem brokersupfront. Markun also suggests weeding
out the bad brokers. If you have reps withfour or five claims, absent unusualcircumstances, cut them loose. They willcause you problems in the future, he says.
3. Choose new brokers carefully. Manyfirms do not spend enough time selectingtheir new reps. “Your most important lineof defense is the broker,” stated Markun.“Make sure you choose them carefully.” Abroker/dealers most important line ofdefense is the broker — choose themcarefully and don’t be afraid to spendmoney on good reps.
4. Negotiate for the right to your owncounsel. Do not let the insurance carrierpick your attorney. Chances are they willnot choose someone who is asexperienced as you would like. Reviewyour insurance policy and negotiate theseterms when it comes up for renewal.
5. Always do what is in the clients’ bestinterest. “I tell my broker/dealer clientsthey should treat every customer like theyare your mother,” says Eccleston.
6. Think before you act. Eccleston hasgreat advice. “I believe brokers should doeverything as if three strangers will bereviewing it down the road,” he explained.There is a good chance that one day threearbitrators will be deciding if you didthings properly. If you can picture themreviewing your files, it helps you makebetter choices up front.
7. Don’t ignore angry clients. Many timesangry clients can be calmed down if youhandle their complaint fairly and honestlyup front. Eccleston says almost everycase he has defended involved someoneresponding callously to an unhappyinvestor. They frequently will blow themoff with a stock letter that says somethinglike “Too bad. We are not responsible.Everyone lost money.” Eccleston says thiscan be one of the worse things you cando, because it just inflames an unhappyclient. You have then missed anopportunity to keep them happy andsettle for a smaller amount of money.Instead, you find yourself in an expensivearbitration case where the firm will havemuch larger losses.
Eccleston reminds firms not to delay. Thesooner you can work this out, the lesschance you have of the investor hiring anattorney.
8. Come clean with your attorney. It isimportant to tell your attorney everything,good and bad, about your case. “One ofthe worst things that can happen to us isto discover something that hurts our case
during the arbitration,” Ecclestonexplained. “If we had known about it inadvance we can usually mitigate theproblem. However, when we are blindsided right in front of the arbitrators thereis usually not much we can do,” accordingto Eccelston.
9. Branch office Managers need to becareful when testifying. SometimesBranch Office Managers get involvedbecause there is a failure to superviseclaim. “One of the worst things I see iswhen a BOM testifies something alongthese lines: “I have known this broker foryears and I trust him. I seldom inquireabout what he does because he is such awonderful person.” What they have justdone is shoot themselves in the foot,Eccleston explains. The BOM basicallyjust confessed to failing to supervise.Eccleston advice: not matter what a greatperson the broker is, the BOM should stillbe doing his duty.
10. Review your policies insurancecoverage advance. Bigelow says now isthe time to become familiar with limits,exclusions and whether your firm has aduty to defend you.
This article first appeared inBroker/Dealer Magazine
Katherine Vessenes, JD, CFP®, RFC®,according to Bloomberg Press, isAmerica’s best known authority on thelegal and ethical issues of financialadvisors.
Katherine and her husband Peter are theprincipal presenters of the Managing theMillion Dollar Practice workshops.
As president of Vestment Advisors, shehelps financial advisory firms of all sizesbuild better, more profitable businesses.She can be reached at 952 401 1045 [email protected].
continued from page 14 Arbitration 101
Katherine Vessenes, JD, CFP®, RFC®
The Register • January 2006 Page 17
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This is another new scam technique. Aman went to the local gym and placedhis belongings in the locker. After theworkout and a shower, he came out, sawthe locker open, and thought to himself,“Funny, I thought I locked the locker.”
After dressing he just flipped the walletopen to make sure all was in order.Everything looked okay — all cards were inplace. A few weeks later his credit cardbill came - a whooping bill of $14,000!He called the credit card company, sayingthat he did not make the transactions.Customer care personnel verified thatthere was no mistake in the system andasked if his card had been stolen.
“No,” he said, but then took out hiswallet, pulled out the credit card, and aswitch had been made. An expired, yetsimilar, credit card from the same bankwas in the wallet. The thief had brokeninto his locker at the gym and switchedcards.
Outcome of Dispute: The credit cardissuer said since he did not report thecard missing earlier, he would have topay the amount owed to them. Howmuch did he have to pay for items he didnot buy? $9,000! Why were there nocalls made to verify the amount swiped?Small amounts rarely trigger a “warningflag” with some credit card companies.
Make sure the credit cards in your walletare all yours. Check the name on thecard every time you sign for somethingand/or the card is taken away for even ashort period of time. Many people justtake back the credit card without evenlooking at it, “assuming” that it has to betheirs. It would be easy for an employeeat a busy restaurant to just return asimilar card, but with an invalid name.
Scam # 2: Using cell phones to takepictures of your credit cards.
A couple went to a local restaurant topick up an order that had been called in.The customer paid by using a Visa Check
Card which, of course, is linked directlyto the holder’s checking account. Theyoung man behind the counter took thecard, swiped it, then laid it flat on thecounter as he waited for the approval,which is pretty standard procedure.Then the clerk takes a picture of theCard with a cell phone.
He set his phone on the counter, leavingit open. About five seconds later, thecouple heard the chime that tells thatthe picture has been saved. Now, theyare standing there struggling with thefact that this clerk just took a picture oftheir credit card. Yes, the clerk playedit off well, because had the couple nothad the same kind of phone, theyprobably would never have known whathad just happened.
Notice who is standing near you andwhat they are doing when you use yourcard. Be aware of phones becausemany contain a camera phone thesedays.
When in a restaurant and thewaiter/waitress brings your card andreceipt for you to sign, make sure youscratch the credit card number off.
Protect Your Vital Data.
Truncation — only displaying last fournumbers of a credit card number — isnow the law under the revised FairCredit Reporting Act/Fair and AccurateCredit Transactions Act.
However many establishments, especiallyrestaurants are still putting the wholecredit card number on a receipt.
The author, Paul Richard, RFC® , theExecutive Director of the ICFE, foundedby Loren Dunton.Paul is the authorof the CertifiedCredit ReportReviewer and is ahighly regardedidentity theftpreventionspecialist.
New Credit Card Fraud Schemes to Guard Against!
CONSUMER FOCUSPaul Richard, RFC®
Institute of Consumer Financial Education [email protected] 239 1401
www.ICFE.info
Page 18 The Register • January 2006
Seven Communication Strategies for Doubling Your Sales in Half the Time
Teresa Easler
Creating a message that is relevant,powerful and engaging requires that youspeak to the issues that really matter tothe intended target. That means gettingto know as much as you can about youraudience or market.
How to “know” your audience?
1. Write down as much as you can aboutwhat you know about your audience.Define them in terms of their age,gender, likes, dislikes, hopes and fears.What are some of the challenges theyface? What are their concerns? Moreimportant is to understand how theydefine themselves. While you may seethem, for example, as middle agemales with a high net worth, they maydefine themselves differently. It isimportant to understand how theythink of themselves.
2. Avoid making assumptions about youraudience. In other words, it’s not whatyou think their concerns, likes, dislikes,fears, or hopes are that matters, onlywhat they think and say.
3. If you are unable to easily describeyour audience, contact the person whomade the introduction, referral, orarranged the meeting to uncover more.Ask questions to get a greater sense ofwho you will be communicating with.
4. Determine whether they are individualswho require a great deal of informationto make decisions or if they prefer thatyou get right to the point? This willhelp you in deciding how to designyour communication, what to include,and what supporting materials youmay want to leave at the end of themeeting.
5. In the case of a large grouppresentation, get to the room early andspend time meeting and chatting withpeople beforehand. This will give youa sense of the group’s personality andenergy. It also provides you with“friendly” faces in the crowd and oftenyields information and anecdotes thatcan be used in your presentation.
Remember to always do your duediligence on new audiences andreacquaint yourself with familiar ones. Youthen will be able to create yourcommunication with them clearly in mindand avoid the “one size fits all” trap.
The ability to get great results whencommunicating with your clients,prospects, and staff requires that:
• You have the right message for youraudience.
• Your message addresses what’simportant to them.
• You deliver the message in a powerful,effective manner.
Each of the 7 simple communicationstrategies we’ll be introducing over thenext few months are designed to help youand your organization always confidentlycommunicate the right message to theright audience at the right time.
LAST MONTH: Strategy #1, Alwaystake the time to prepare for yourcommunication situation.
Strategy #2: Always focus yourcommunication on your audience.
Have you ever been in the situation whereyou had to buy a gift for someone youdidn’t know well? You wander aimlesslyfrom store to store, spending stressfulhours trying to think of something thatperson would really like. Then, you endup settling for a generic item that could fitthe bill for anyone, but doesn’t make anindividual statement?
This situation is similar to communicatingwith an audience you don’t know well.You end up keeping your messagegeneric, a “one size fits all”, in an attemptto appeal to anyone and everyone. Theresult is you don’t connect in ameaningful way and you get a watereddown version of the desired response.
Teresa is the creator of The Power toConnect® workshop, author of the book,A Guide to Breakthrough Presentations,co-author of the book The Power toConnect® — Creating Communication thatgets Results and co-creator of the BravoPresentation Coaching® program. Shehas helped groom many successfulprofessionals to extend their speakingcapacity and has personally addressedmany associations, including the MDRTand CAIFA. You may learn more abouttheir services at: www.cvcomm.com, andyou can contact her at: 416 696 2020 orby e-mail: [email protected]
Get Involved: We welcome thesubmission of articles from IARFCpractitioners. This is a great way tocontribute to the profession.
Professional Articles: The Journalis seeking articles by practitionersthat may deal with the applicationof financial planning techniques,marketing and practice management.These are expected to be very highlevel papers or articles.
Publicity Opportunities: Naturally, weencourage published authors to adviseboth their clients and the media oftheir being published by sending apress release.
Call for Papers
Reviews, and practitioner insights on the assessment and measurement of financial risk
tolerance for a special issue
IARFC Quarterly Educational Publication
John Grable, Ph.D., Editor318 Justin Hall, FSHSKansas State UniversityManhattan, KS 66506Phone: 785 532 1486 E-mail: [email protected]
The Register • January 2006 Page 19
Unlike the federal judiciary, or America’spolitical process, many industries actuallymake good faith efforts to be self-policing.Some people in the financial professionapparently have never been told, orlearned, what most of us consider “plainold common sense.” Some of the clowns,without any malice in their hearts, hurt theprofessional image of your industry and asa result they cause you to suffer.
This two-part article is an effort to offerconstructive criticism. This may also be afutile attempt to educate the clownsamong us, from the perspective of aprofessional financial industry image-maker who has 25 years of experience.During this time I have worked for some ofthe finest people on earth. I have alsoenjoyed interacting with some great andwonderful financial professionals.
The former United States Marine, Lester W.Anderson, MBA, RFC®, of Duluth, Georgia,still reflects his Marine Corps bearing.Today Les is one of America’s leadinginfluencers of financial planners andauthor of the book You Are The Product.Les Anderson is a financial planner whom Iadmire, simply because Les has helpedmany real financial professionals (notclowns) to enter the big leagues.
Les Anderson told me, “Some financialplanners need a Drill Sergeant to instructthem on what not to do or say so they canavoid making clowns of themselves.” TheDrill Sergeant or the First Sergeant in anyarmed service is seldom very popular —but he saves the lives of far more troopsthan anyone else in the military.
The Drill Sergeant knows that if his soldiersbecome clowns they will be “easily shotdown.” The job of a Drill Sergeant is notan easy one. Military history shows us thatmany of the troops who do not listen toand learn from their Drill Sergeant, orremember what their Drill Sergeant taught,end-up defeated or worse yet, dead afterbrief encounters with enemy combatants.In this two-part article, I am using theDrill Sergeant’s blunt approach to asensitive subject.
This Article Was Painful To Write, andMay Be Difficult To Read. Obviously anarticle like this — saying don’t do this anddon’t do that — will make some peopleuncomfortable. Copy like this is notpleasant to write and I must anticipate the
negative response from the clowns. Noone wants to be scolded, or hear someonelecture in a critical manner. But there arefinancial planners out there who areclowns. These clowns cause you harm!You may know some of these clowns. Thisarticle is about those clowns who makeyour work more difficult. I’m writing thisarticle as if I was talking to the clowns.They are unlikely to read this, since manyare not active in the premier associations.But, you can send them a copy…
Don’t call yourself a “financial planner”when all you do is sell investments oronly insurance products. People who dothis are clowns who hurt all the realfinancial planners. Financial planning isreviewing the client’s entire emotional andfinancial situation and making appropriaterecommendations, including, but notlimited to, income taxes, family protection,spendable income, income protection,asset protection, wealth transfer, collegefinancial aid, asset diversification, assetsuitability, … and, as you know, the listgoes on. This is all supposed to be done inthe client’s best interest and in the mostappropriate time period.
Included among the people I have met whocalled themselves “financial planners” arethe following professions: real estateagent, yacht salesman, artist manager,bank teller, singer’s business manager,wedding consultant, debit agent,motivational speaker, stock broker, free-lance writer, mortgage broker, taxappraiser, and various other business andindustry people. I once met a strugglingsongwriter in Nashville who claimed to bea financial planner for country singers. Hetold me that he “almost had some clients.”None of these people held any type ofappropriate designation.
Too many “so-called” financial plannersare placing all of Middle Americanfamily’s assets at risk in the market withstocks, bonds, etc., based solely on tryingto reap the highest investment returns.This is totally wrong and highly unethical.Most Middle American families can’t affordto lose any of their money. MiddleAmerican families are worried about savingenough of their money so they won’toutlive it during retirement. There is adefinite need for safe money. Vehiclessuch as fixed, indexed, and immediateannuities, along with cash value lifeinsurance, are appropriate savings choices
in many cases. There is also a verydefinite need for life insurance, LTC, and DIprotection. The only money that should beput at risk is money that your client canafford to lose!
Don’t be afraid to say “No” — but say itthe proper way! When anotherprofessional person makes a proposal toyou, don’t pretend to ignore the proposaland cowardly fail to reply. Don’t be lazy ordeliberately forget to respond with thecourtesy of an answer. There is a correctway you should act. Didn’t your motherteach that to you? There should be moreto your work life than just grabbing whatyou can get. Show some class and stylerather than leave the impression of aclown. How do you like it when yourprospects fail to reply to you? If someoneinvites you to join an association, or toaddress their Rotary Club for no pay, or totest-drive some new financial planningsoftware, etc., it would not kill you toacknowledge receipt and respectfullyexpress your thoughts or decision.
If something does not involve immediatelyputting money in your pocket that does notautomatically mean it is unimportant!Joining, speaking, or testing, may putmoney in your pocket later. Respond!React! Don’t be a clown.
Don’t purchase books and software andcopy them — then return the productsand ask for your money back! I guess thefinancial planners and agents who do thisare the lowest of the low. Talk about a lackof class, ethics, honor, etc. I suspect thatthose people will not last long as plannersor as anything else. At least I hope not.Don’t you fear for the person or personswho might be their clients? The word willget around, eventually.
Don’t fail to pay your dues. Honor yourobligations and professional commitments.Give something back. Contribute value.Be a team player and share. Contribute toyour specialty discipline. Make the world abetter place because you were here. Don’tbe a cheating clown.
Don’t just grab for your own pocket. Payyour dues as you go through life. If youjoined an association then pay your dueson time. And why not contribute somethingrather than just “taking.” If you promised
Cato Comments – About Your Image...Beware of the Clowns!
continued on page 20
Page 20 The Register • January 2006
something to someone then deliver as youindicated. You are a financial professional!If you need continuing education credits,then earn them.
Show some class. Remember thefinancial planner (Bill was actually aninsurance agent! I have changed his realname to Bill for use in this article) whoalways hired only big breasted youngwomen to work in his office and had themwear T-shirts on which was printed thewords Bill’s Girls. As anyone would suspectfrom this no-class practice, Bill was a majorjerk in many ways. He had almost all of theclown traits listed in this two-part article.
Don’t write an exaggerated bio-sketch.When the many lines (phrases of praise orlisting of accomplishments) are too lengthyor excessive, the reader’s loses belief.Then truths (if there are any) becomesuspect. As an editor of four financialmagazines and three newsletters I see thisclownish excess almost every week. Nocompetent or professional editor wouldprint such drivel. I frequently see inflatedbio-sketches that are embarrassing. Belowis an actual example of a three paragraphbio-sketch that I recently received. Thisbio-sketch is inflated to such an extremethat it is totally meaningless. I changedthe real name to a fictitious name.
“Sam Dokes Smith is a nationallyrecognized sales aficionado and masterstoryteller. He makes it possible forfinancial advisors and insurance agents,plus other sales professionals, to prosperand gain unlimited success, by using hisworld-famous results oriented strategiesand exclusive dynamic techniques. Sam isinternationally famous. He gives power-packed, exciting, and multi-mediapresentations all over the globe! This greattalent is envied in most western countries.He is beloved, admired, hugely honored,and highly respected. To date Sam hasreceived most of the awards given in thefinancial industry.
Sam believes it is important to deliverquality platform presentations. He believesalso that each person is especiallyimportant and deserves his full attention.Sam reads over a hundred magazines amonth. A movie is being written aboutSam’s life. He is the author of four best-selling books that are highly entertaining,results oriented, and cover strategic sellingtechniques, including his most recenthighly acclaimed sales manuscript. Hetravels over ten thousand miles a yearsharing his vast knowledge on how to
become far more successful.
This powerful consultant and writer is trulymulti-talented. An avid reader, Sam makesit a point to read ten books a week. Samis rated as the “most asked back” speakerin the financial industry. He received theAmerican Leadership Institute Award in2003. This TV and radio personality haswritten more words than Shakespeare. Heis also rated as one of the best keynotespeakers in the world. Sam has beenhighly praised by government officials,church leaders, university educators, andfiremen. He holds seven licenses. Phone123-456-7890 for Sam.
You will note that the above bio-sketchdoes not contain one single fact aboutanything other than the subject’s nameand phone number.
Having a name and phone number hardlymakes one qualified or outstanding. Thewriter’s complete contact information is noteven given. Only worthless hype abounds!Nothing is specific in this phony-baloneybio-sketch except the person’s name andphone number! Apparently the author hasnothing real to say so he says nothing. Hesimply provides unclear, misleading,incomplete, exaggerated and grandioselies. This is all very amateurish. Anyschool child has written more words thanShakespeare! What TV and radio?Unlimited success is impossible? Whatfour best-selling books? And whopublished them? His “multi media”presentation consists of using PowerPointand a tape recorder!
Who rates Sam and gives him thisgrandiose praise? Miles traveled in a yearhave nothing to do with the quality of aspeaker’s content or delivery. Readinghundreds of magazines a month is not anindication of anything specific. Were theseall porn magazines? Do they even exist?Who are those government officials?Church leaders? Etc.? Etc.? What sevenlicenses? How can an unpublishedmanuscript be highly praised, except forsolicited endorsements?
The bio-writer simply created the AmericanLeadership Institute — it does not actuallyexist. The movie being written about Joe’slife — is being written by Joe! There is nohope that this proposed movie willeventually be commercially produced. Joehas never before written a produced or un-produced movie. In all honesty Joe is mostlikely not really writing a movie. He doesn’teven know the format of a screenplay. His3-paragraph bio-sketch is all bull from aclown, except for his name. Yet this clown
is hired to speak to responsible plannersand agents. But I doubt that Ole Samis hired by any knowing or competentevent bookers!
Exaggerating biographical sketches is acommon practice among financialspeakers and writers — even though thepractice of exaggerated bio-sketches istaught against and preached against, (forover 25 years), by the National SpeakersAssociation, the International PlatformSociety, the Pacific-Rim Speakers Network,and Toastmasters International.Competent bookers never hire a speakerwho uses a clown’s bio-sketch.
In Journalism 101 a college student learnsto be specific and publish only that whichis specific. Do not say “thing” when youcan say “animal.” Do not say “animal”when you can say “dog.” Do not say“dog” when you can say “Collie.” Do notsay “Collie” when you can say “elderlyCollie.” Do not say “elderly Collie” whenyou can say an “elderly Collie with a blindright eye.” You get the point. Be asspecific with facts as possible. Nevergo on-and-on without being specific. If youare not specific you are saying nothing.When a non-specific and exaggeratedbio-sketch is published, you can be certainthat the editor was not professional andmost likely the publication is not important.
Don’t claim your self-published book is abest seller! As Director of the FinancialPlanner’s Book Club, I often see best-sellerclaims that are laughable. If you have self-published a book, that is sufficient. Whatmight have more reality is some limitedmention about how the book wasmeaningful to some group, or that it wasdistributed to some organization.Excessive praise becomes meaninglessand makes the book author look like aclown. Exaggerated nonspecific claimsare absurd! I do not believe doctors orlawyers or dentist or architects, self-publishbooks to suggest that they are wonderful.But this is a common practice in thefinancial planning industry.
Don’t make other exaggerations, i.e., youare nationally famous! You know damnwell that you are not nationally famous!However, if you have been elected orappointed to some position of leadership,be sure to mention it. But be specific!Having been selected as head of anorganization, however small it may havebeen, is indicative that your peers respectyou. If the group is large, then be sure toindicate that, i.e. “Smith served as
continued from page 19 Cato Comments
continued on page 20
The Register • January 2006 Page 21
Forrest Wallace Cato, RFC®, has over 20-years experience as a local, regional and multi-national media strategist andadvocate serving financial professionals. For financial advisors, he creates, establishes, and maintains, desired imageswithin target markets. This highly proven marketing communications effort leads to increased understanding (broughtabout by desired media exposures) and results in increased consumer acceptance for the financial product or serviceprovider! Annually he presents The Cato Award for “published writing that promotes greater understanding for andappreciation of financial planning,” during the IARFC Financial Advisors Forum. Cato, former editor of Financial Planningand Trusts & Estates magazines, is author of the book Sales And Success Secrets of The Great Motivators. Cato alsowrote the Introduction to the book Financial Planning As I Created It by Loren Dunton, the founder of financial planning.Cato can be reached at: Intergroup II/Atlanta, Inc., 915 River Rock Drive, Suite 101, Woodstock, GA 30188.Phone: 770 516 9395 E-mail: [email protected]
President of the 3,000 member CanadianRetirement Counselors Association.” Donot write: “Smith’s outstanding leadershipability and exceptional talents, nowavailable on audiotapes, enabled him toserve as the most successful and effectivepresident in the history of one of theworld’s largest associations of retirementcounselors. This group of manythousands strives to bla, bla, bla.”
Don’t be a shameless self-promoter.Don’t always hype yourself to everyone towhom you speak. Don’t always be “on.”Force yourself to act like a normal humanbeing during at least some of your time. Itis far more effective when someone elsetells about how outstanding you are. Theclowns praise themselves more often thanthe post office raises the price of postage.I dread seeing the clowns because I knowthey are going to tell me again about howfantastic they are.
Do not try to ride on the fame of another!Don’t name your temporary two-man videoproduction company after something OrsonWells made famous. Don’t claim thatWarren Buffett and Sir John Templeton areyour best friends. Don’t get photos of“names” and fake autographs praising you,then display these. Don’t give yourself aPulitzer Prize or Academy Award. (Yes Iknow planners who have done this.) Donot send out, from time-to-time, a list ofcities and claim that you have spoken(along with some famous “names”) in eachcity during the last three months.
Do not say you have to hang-up to take acall from the White House. Playing withother well-known names and the famoussuccesses of others is not acceptable.This practice is simply misleading anddishonest. This is just plain foolish,something only a clown would do.
Don’t smother someone you want toimpress! Don’t smother a visiting editor(or anyone) to and from the airport andduring the time between. Don’timmediately start regaling an editor abouthow wonderful you are … at least not the
second the editor steps from the arrivingDelta flight. One overly self-centeredfinancial planner met me at the airport andpointed out of his car window at varioustall building we passed on the way to hisoffice. This planner would say, “That’s notone of my buildings.” “Now, that’s not oneof my buildings either.” “I don’t own thatbuilding.” “That’s not one of mine.”
Later I learned that he did not own anybuildings. I also learned that this was astandard practice of his and he was oftenlaughed at about this false representation.By pointing out selected buildings he wasimplying that he owned one or morebuildings. He frequently pulled this stuntand I was insulted upon learning about thismisleading practice of lying to impress byimplication. Later I deleted everything inhis article (about 80%) that I could notconfirm because I did not trust him. I havea responsibility to be honest and accurateto readers. You have the sameresponsibility to be honest and accurate.
Be more careful about what you say,especially your promises, assurances,suggestions, and especially any claimsyou make. This could simply be called —watch your mouth! Didn’t your fatherteach you anything at all? If you say youare going to do something, then do it! Ifyou promise something, then deliver whatyou promised. Don’t say you will send thecheck when you known darn well that youwill not send the check. If you say you willbe there, then be there. Your word is yourbond. Your promise made is your debtunpaid. Don’t say whatever pops into yourhead unless you are being honest andhave at least some intention of doing whatyou say. Do what you indicate your aregoing to do. Do not speak using anunlimited supply of brush-off phrases thatare only lies.
If I had a dollar for every lie a financialplanner has told me, then surely I would beamong the wealthiest people on earth.And don’t get angry with me for mentioningthis truth. Over the years I have done farmore to promote acceptance of financialplanning than anyone I know. I rememberhow embarrassed Loren Dunton often was
over some clowns who claimed to befinancial planners. The founder offinancial planning was appalled! Lorengave me enough examples to add at leasttwenty pages to this article.
Do not abuse others in an effort to makeyourself look good. An Atlanta financialplanner used to phone different tailors tocome measure him for a suit of clothingwhile the planner was with clients,prospects or media representatives. Theplanner thought this made him “looksuccessful” and that the clients orprospects would be “very impressed.” Thetailors finally caught on and told everyonehow they had been “used” many times bythis insincere planner. The planner neverbought even one suit. Incidentally, thisplanner, a long-time insufferable braggart,later went to prison for various offenses.Now out of prison, he is employed asan evangelist.
Don’t brag about your wealth if you havewealth! Don’t brag about your wealth ifyou have no wealth! Nuff said!
Don’t “pretend” you have an office staffworking for you if you do not. Calling anon-existent office “my virtual office” doesnot create an actual office or staff. Avirtual office is not a real office. Do notuse a recorded message that announces,“For administration punch three. Forspeaker bookings punch four. Foraccounting punch five. For DougSingletarry our Marketing Director punchsix.” Do not use a recording like this ifnone of these people exist and all buttonspunched instruct the caller to leave amessage. This is a fraud! Such fraudulentnonsense is not an acceptable practice foran agent or planner. Do not greet thosewho phone you with this fraudulentmessage. And do not try to justify thisfraud by calling it “my virtual office.”
Bottom Line: These clowns do you andthe financial industry an injustice and aserious disservice.
To be Continued In Our Next EditionRead: Don’t Commit The Worst Blunder
A Clown Can Make!
continued from page 19 Cato Comments
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