Advisor Blog

Schwab Performance Technologies Q&A


At a recent session of the Financial Advisor Webinar Series, Mike Williams of Schwab Performance Technologies (SPT) talked about what developments in PortfolioCenter and PortfolioServices.



While we usually don’t invite vendors to talk about their products at our webinars, we made an exception because Schwab is so influential; SPT is used by 3,300 advisory firms and its parent provides custodial services to 6,000 RIAs.



Despite allotting 25 minutes for questions, attendees at the session had more questions than Williams could answer. So we passed along to Williams the unanswered questions chatted in by attendees. In this post, Williams answers those questions.



Do you use ByAll Accounts to connect to custodians that you do not have direct interfaces with?

Yes. Both our PortfolioCenter and PortfolioServices products can leverage ByAllAccounts to acquire account information from financial institutions with which there is no available direct data feed.



When will the custom report enhancements you talked about at the webinar be available?

The first general release of the new report presentations will be in mid-2010. Subsequent releases will occur later this year and throughout 2011.



For the new graphical reporting: will a PortfolioCenter user need the Enhanced Reporting Module (ERM), and what is the cost of the ERM for a current PC user?

Yes, the new report presentations require a PortfolioCenter Enhanced license. The Enhanced Reporting Module is $1,500 year one and carries an annual maintenance fee of $500. Please contact SPT Sales at (800) 528-9595, option 2 for further information.



To see answers to 12 other questions, please sign into www.advisors4advisors.com.



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5420 Hits

FINRA Notice On Social Media Reveals Regulators’ Struggle

Guidelines issued by FINRA yesterday governing how registered reps use social media websites are constructive but highlight the challenge regulators face in structuring advertising rules that keep up with technology.



One can only cheer the suddenly enlightened view of FINRA in releasing the Notice. FINRA has stood silent for several years while social networking exploded. As the FINRA release points out, 46% of American internet users logged on to a social networking site in 2009.



With FINRA issuing no guidance as social media exploded in popularity in recent years, registered reps were absent from the online scene out of fear that they would break undefined rules. So FINRA in to be commended for finally bringing some clarity to this issue.


Where the guidelines go wrong and muddle the rules, however, is in an effort to distinguish “static” and “non-static” content.



To read the rest of my post, please sign up for membership at Advisors4Advisors.



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3 Hits

A Magazine For People Named Fred

When I was in graduate school in 1978, one of the members of Monty Python Flying Circus was a guest lecturer at journalism school. He was there to talk about a parody paper he published called Not The New York Times. It was an exact replica of the real newspaper, but it was all fake news.



That summer, Pope Paul VI died and was succeed by Pope John Paul I, who died 33 days after being elected. This led the faux paper to write a fake news story saying the third Pope that month, "John Paul John Paul," died 18 minutes after he was elected. "Pope Dies Yet Again," read the headline, "Reign is Briefest Ever," said the subtext, which added, "Cardinals Return From Airport."



I am not sure whether the speaker was Graham Chapman or John Cleese. But I do remember clearly that he told us that the fake New York Times was a new business idea called custom publishing. "Someday, there will be a magazine called 'Fred,'" he said, "dedicated solely to people named Fred."



That line about Fred magazine has always stuck in my mind. As ridiculous as it sounded, the idea of personalized publishing tantalized me.



Thirty-two years later, I can tell you that Advisor Products is making that prediction a reality.



Client Portals from Advisor Products lets an advisor create a personal electronic newsletter for each individual client. You can profile each client as retiree, pre-retiree, or business owner, and you can choose from a list of topics that would interest each client from our list of 100 wealth management topics.



Those two settings determine which stories from Advisor Products' proprietary content library of hundreds of articles will appear on the client's personal web page. Those settings also filter the topics of wealth management articles we do not write but that we allow into the client's personal portal.



In addition, you can bring in RSS feeds about entertainment, sports, health, food, and myriad other topics from other websites.



Personalizing financial articles is only one small part of the Client Portal platform. It also integrates with many CRM, financial planning, and performance reporting applications and includes a personal vault for each client. To learn more, call us at 516 333-0066 ext. 223.










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5595 Hits

Power Of Social Media Seen In Haiti Earthquake


The tragic events in Haiti are being recorded and reacted to live on Twitter. To see the live feed, click here.



Text YELE to 501501 to give $5 for earthquake relief in haiti. Your cell phone will be charged $5.


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5052 Hits

Answers To Roth IRA Conversion Questions

At the Financial Advisor Webinar Series on December 11, Ben Norquist of Convergent Retirement Plan Solutions delivered a presentation that was highly rated by attendees about how advisors can seize the 2010 Roth IRA conversion opportunity.



Norquist showed a simple web-based application he developed that makes it easy for advisors to calculate complex conversion scenarios to show the net benefit of conversion.



The tool's strength is that it allows you to dynamically on-the-fly change variables affecting a client's conversion options. The variables include future tax rates, the amount of cash available to pay income taxes incurred on the withdrawal of assets being converted from traditional IRAs or qualified plans, the monthly withdrawals of the IRA owner for living expenses, what you'll earn on a traditional IRA that's not converted, required minimum distributions on the traditional IRA, and the amount left for beneficiaries.



While the software is a one-trick pony and is only good for Roth IRA conversion calculations, the opportunity to advise on Roth IRA conversions justifies the software’s $600 perpetual license fee. I don't believe any of the financial planning applications can make these dynamic calculations and illustrations on the fly, making it a great app to work with live in front of clients.



To receive CFP CE credit for this session and dozens of other webinars, please join Advisors4Advisors.



You can also see a replay of the session (without getting CE credit) at the Financial Advisor Webinar Series page on Advisor Products’ website.



At Norquist's session, we had more questions from attendees than we could answer. So Norquist sent me answers to some of the questions we did not have time for. Below are four of the 15 questions he sent me answers for. To see the rest of the Q&A, please join Advisors4Advisors.







Q: Does the five-year rule apply to distributions made from Roth Conversions after age 59½?

A: No. The five-year rule that applies specifically to Roth IRA conversion assets is only pertinent in situations where an individual under age 59½ takes a distribution of conversion assets within five years of the conversion transaction.



Q: Can an individual with a 401(k) plan convert even if he is still employed? Must the plan allow for in-service distributions? If allowed, can this be converted directly into a Roth IRA or must it first go into a traditional IRA?

A: A 401(k) participant can potentially take a distribution of 401(k) assets for Roth conversion purposes provided the plan he is covered under contains some type of in-service withdrawal provision. If an individual is able to request an "eligible rollover distribution" from his 401(k) plan, he can elect to roll over (i.e., "convert") the distribution directly to a Roth IRA without first going through a traditional IRA. (If the 401(k) distribution occurred during 2009, the individual would be subject to the $100,000 income restriction on Roth IRA conversions.)



Q: Can you address re-characterization options if the market should go down after the point of conversion?

A: The re-characterization option basically allows you to "rewind" a Roth IRA conversion and treat the transaction as if it never happened. In situations where the market value of your IRA assets declines following a Roth IRA conversion, the re-characterization option can provide you with the opportunity to undo your original conversion, thereby avoiding an income tax liability on the value of the assets at the time of original conversion. It should be noted that you cannot re-convert the same assets until the latter of a) January 1 following the year of original conversion, or b) 30 days following the date of re-characterization.



Q: What about the impact of estate taxes on Roth IRAs as Income in Respect of a Decedent?

A: Both traditional IRA assets and Roth IRA assets are included in a decedent's overall estate when assessing potential estate tax liability. Part of the beauty of Roth IRA conversion is that, by paying taxes up front, an individual is able to reduce the overall value of his or her estate, thereby potentially decreasing the amount of estate tax liability. While it is true that the beneficiaries of deceased traditional IRA holders are potentially eligible to take subsequent tax deductions due to Income in Respect of a Decedent (IRD), some financial planning professionals believe it is often more beneficial to reduce the aggregate estate tax liability rather than depending on recouping taxes over a period of years through the IRD deduction.








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5956 Hits

4Q09 Quarterly Market Summary Available To RIAs


Advisor Products’ Quarterly Market Summary becomes available Monday for the fourth quarter of 2009.



QMS is a comprehensive analysis of activity in stock and bond markets and examines a range of asset classes.



It is utilized as a companion piece with quarterly performance reports provided by RIAs.



Written by a veteran financial reporter and edited by one of the nation’s leading financial editors, QMS is delivered to subscribers as an eight-page Microsoft Word document 10 days after the end of every quarter. You can cut, paste, and edit QMS to fit your needs.



Each quarterly release of QMS typically covers performance of:





  • S&P 500 large cap stocks




  • Russell 2000 small cap stocks




  • Growth versus value stocks




  • Corporate earnings




  • Foreign stocks




  • Emerging markets




  • U.S. Dollar versus Euro




  • Fixed income markets




  • Two versus 10-year Treasurys




  • Corporate bonds




  • Economic growth




  • Fed interest rate policy




  • U.S. Retail sales




  • Consumer confidence




  • Unemployment




  • Consumer Price Index







Because of the time sensitive nature of the content, QMS is submitted for review by FINRA only after it is distributed to RIAs. Registered reps, therefore, should consult with their broker/dealer about its use.

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5427 Hits

Website Compliance System Upgraded For Broker/Dealers And Advisors

Advisor Products this week upgraded AdvisorSites Compliance Engine to streamline advertising compliance for independent advisors and broker/dealers.



Advisor Products hosts websites for 1,200 independent advisory firms, and provides them with AdvisorSites BackOffice, a content management system that enables technology novices to add new text, graphics, and pages to their websites.



AdvisorSites Compliance Engine (ACE) is a component of the BackOffice content management system. When an advisory firm changes tax, graphics, or pages on its website, ACE automatically notifies the advisory firm's compliance specialist, typically at an independent broker/dealer. ACE can be enabled on any firm’s website and provided to broker/dealer or compliance consultant.



With ACE, a compliance specialist can accept, reject, or require revisions to the content, and the changes made by the advisory firm must be submitted and then approved by the compliance specialist before they are displayed on the firm's website.



The upgrade to ACE eases the workflow and organizes information between the advisory firm and its compliance officer when changes are needed to the advisory firm’s website. Here's a summary of the new features.



Attach Notes. An advisory firm can attach a note to any new content it submits for approval and the note is visible to the compliance analyst reviewing the content. An advisor can attach a note to a submission telling the compliance analyst that the content was previously approved and providing a reference number for the earlier submission, or an advisor can simply attach a note to a submission for his own reference.



A compliance analyst can also attach notes to a submission. If, for instance, content submitted by an advisory firm is rejected and requires changes, the compliance officer in rejecting the content can attach a note about changes required for approval.



Compliance History. The entire compliance history of each page of the advisor's website is saved and available to the advisor and so are all notes attached to each submission. The Compliance History Report lists dates of all content submissions and their results. An advisor and B/D can go back and see when a page on the website was last changed, or how long it takes for a compliance analyst to review submissions.



The Compliance History Report creates an ongoing record that the advisor and B/D compliance officer can make available in the event of an audit by FINRA, or state or federal securities regulators. The report displays the compliance history an advisory firm's entire website or the history of a particular page.



ACE has been used by scores of independent broker dealers for over a decade. It also automatically creates archives of advisory firm websites whenever changes are made to a site.



While ACE is used predominantly by independent broker/dealers to streamline compliance workflow, it can also be used by Registered Investment Advisers to outsource advertising review to a compliance consultant.



Advisor Products added the new features to ACE after a compliance analyst at a broker/dealer suggested ways to ease his workflow. If you are an independent broker/dealer or RIA and have suggestions for improving Advisor Products systems, please let me know.








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5927 Hits

Is This New Tool What Life Planning Needs?


Life planning has influenced financial planning enormously over the past decade but it is still in its infancy and not widely embraced by the independent advisory industry. I doubt the new tool I am about to tell you about will change that single-handedly, but it may be a step in the right direction.



While leading financial advisory firms have embraced life planning, the vast majority of financial planners do little or nothing to incorporate the “soft” side of planning in their practices.



For example, George Kinder, a founding father of the life planning movement, and his organization, The Kinder Institute of Life Planning, the leader in the training life planners has trained only about 1,000 of the nation’s 60,000 CFP licensees. Why has this style of planning, which has been embraced by many leaders of the industry, not achieved deeper penetration?



Largely because it takes a significant effort to enter life planning. For instance, Kinder Insitute’s program involves an intense five-day training program and six-month mentorship, which can earn a practitioner a Registered Life Planner designation. Money Quotient, a relative newcomer to training advisors in life planning, offers a three-day training program that incorporates practical tools and processes that can be implemented by its licensees. These programs require a major commitment.



It's difficult to change your business model and invest the time and resources to revamp your practice in even the best of times. Doing so in the wake of the financial crisis is even more difficult.



Now, in a move that is likely to be derided by advisors who have been trained as life planners by one of the established educational programs, let me introduce you to a new life planning solution for advisors who want to dip their toe in life planning without making a huge commitment in time and money.



To read my full article, please join Advisors4Advisors.

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6104 Hits

A Powerful Search Engine For Advisors



A4A aggregates news for advisors. Every business morning by 8:30 a.m., we post the major news stories advisors need to read and email it to members. Now all of that, along with our own content, is searchable.



Essentially, Advisors4advisors' news aggregation is a searchable database for advisor information.



The power of that is big. We're reading all of the trade magazines, and many sites that are off the beaten path, to create a reading list for advisors every business day. It's the best of the best articles for advisors, a huge time saver.



Mary Rowland, who wrote a personal finance column every Sunday in The New York Times for about a decade, aggregates the market and economy news. Bob Casey, former Editor of Bloomberg Wealth Manager, aggregates the industry news each morning, and I aggregate technology news.



All of the news we aggregate is indexed by our site’s search engine. So when you run a search on A4A, you're searching our collective database of major stories from many trade publications and industry-related websites.



For instance, A search of the term "rebalancing" turns up 16 results from a range of websites frequented by advisors plus a few that advisors probably don't read, like the SEC's website.



If you compare A4A's search results to other sites frequented by advisors, you'll also see how our tight focus on practice management provides information not available anywhere else.



Of course, the search feature is only one small part of what Advisors4Advisors delivers. Among the many other benefits you get by joining Advisors4Advisors:






  • Reviews by advisors of all software products used in the industry—like product reviews on Amazon.






  • Blogs by experts on compliance, technology, operations, document management, and other topics.






  • A social network of advisors using the same CRM, financial planning, and portfolio reporting systems as you.






  • A way to compare advisor software applications feature-by-feature, side-by-side.






  • Free CFP CE credit 24/7 for replays of the weekly Financial Advisor Webinar Series.





At $60 a year, we're providing a lot of value. But don't take my word for it.



Check it out yourself. Register now for a free one-month trial.

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5496 Hits

Attendees Comment On Roth IRA Conversion Webinar


While we normally average a 4.2 rating from attendees, last week’s session of the Financial Advisor Webinar Series received a 4.4.



The session offered ideas about how to advise clients on Roth IRA opportunities. While entitled, Seizing The Roth IRA Opportunity,” it was not so much about jumping on the marketing bandwagon for Roth IRA conversion as it was about the complexity of the conversion decision.



Featured presenter Ben Norquist of
Convergent Retirement Plan Solutions illustrated the dynamics of the conversion decision using a tool he recently launched, the Roth IRA Conversion Optimizer.



Here are the unabridged comments attendees provided us in the exit survey:





· It was one of the best Roth seminars I have attended.

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5595 Hits

Hardware For Protecting Client Data: A Highly Rated And Fun Webinar

Advisors who attended last Friday’s webinar on secure hardware generally gave the session very high ratings.



We managed to have some fun with this very serious topic when we raffled products provided by each of the vendors. Before the session, I wrote down a series of numbers between 1 and 100 and attendees chatted in guesses. (Though I momentarily feared the chat surge might crash the webinar, we averted disaster.)



Seagate donated a Dell Latitude D620 Notebook with a self-encrypting hard drive, which was won by Ross Heart of Heart Capital.



IronKey provided three of it 4 GB USB drives, which were won by Linda Cordoba of John Lyman Wealth Advisors, Mary Rose Sanger of Legacy Capital Partners, and Art Papale of QS, Inc.



Five one-year licenses to Lo-Jack For Laptops were awarded to Gene Gurley of Miller Equity Capital Advisors, Jason Kley of Vector Wealth Management, Susan Burns of Hall & Burns Wealth Management, Cheryl Morhauser of Cheryl Morhauser & Associates, and Adam Mosely of Charles Schwab.



While we normally try to avoid product pitches at the Financial Advisor Webinar Series, presenters were asked to talk about their products because that was the best way to tackle a topic so far afield from wealth management. Judging from the attendee comments, the direct approach worked just fine.



The three presenters each had a different security solution for advisors, but advisory firms probably need all three to begin to create a secure environment for client data.



Seagate’s Joni Clark talked about self-encrypting hard drives that come built into Dell, Lenovo, HP and other PCs and provide encryption without degrading performance. Hardware-based encryption is very different from drives secured by adding software and it is widely regarded as the strongest protection from traditional software attacks because the full drive is always encrypted and the encryption keys never leave the drive.



IronKey’s John Jefferies talked about his company’s secure USB drive that essentially self destructs if someone incorrectly enters a password repeatedly, and it also has a password management program, is waterproof, scans for malware, provides protection against key loggers, and other features.



Absolute Software’s Pam Seale spoke about LoJack for Laptops, a product that can be found at Best Buy and other retail outlets and that is an add-on option for many new computers. If your computer is lost or stolen, not only can police track it down but you can disable the drive remotely.



Join us this Friday, December 11 at 4 ET for our next webinar, when our presenter will be Ben Norquist of Convergent Retirement Plan Solutions. Ben specializes in teaching and training advisors about all aspects of the qualified retirement plan business and is focusing this session on how advisors can talk with clients and prospects about the Roth IRA conversion opportunity. This is the biggest strategic financial decision clients have had to make since the financial crisis. Norquist says that if you do not by the first of the year have a strategy for approaching and advising on a Roth conversion, you’ve probably missed the chance to get it right.



Below are the unedited comments submitted by attendees who were kind enough to fill in our survey and provide feedback about last week's session. Apart from one person who thought the session was “boring” and a couple of advisors who thought it was too technical, attendees appreciated our deep dive into a technology topic that does not get much attention in the trade press because it is so technical.



Here are the comments we received.



· Very good except for audio on the first speaker.



· Excellent. I will be purchasing each presenter's products in the near future.



· Improve it......make me a door prize winner :-)



· Very practical solutions to an important problem.



· It was great. Thanks for the opportunity to win things we can use in the office.



· Please create a compliance security checklist and the appropriate devices/software to implement compliance. Also cover using and securing Blackberrys and netbooks.



· Great information!



· Very Good



· Very good and informative to the risk and solutions in insurance and advisor maket.



· Very good, Needed more time to address all questions. Thanks



· Very timely info and very key to my needs of secure devices.



· Too long of commercial at the beginning.



· Good overview of a complicated subject. I didn't realize how much we were missing



· Would not accept access code when called in by phone.



· It was great!



· How can I think of any improvement when I hear my name winning a new laptop?! Fantastic! Seriously, it was a great topic that I have very little knowledge in but concerns with. (Guessing many other advisors as well.)



· Good but too technical. Not sure how the USB drive works. Do you put all your data on it? Just your secure data? Isn't that then easier to lose? Was really looking for a way to secure my existing data. The Seagate drive seemed to be the only automatic option.



· Great overview of three relevant products. I appreciate that the presenters offered lots of info while sticking to their allotted times.



· Improvement: put slides on AP website, not just a bit.ly link



· Lots of great information.



· Would have given 5s had there been more advisor-centric security discussions, such as responsibilities and notification requirements after security breaches and/or lost/stolen equipment.



· This was a great one. Highly relevant. Thank you.



· It was great, even though a lot of it went over my head. I'm not a techy.



· This was a very useful and informative webinar. Safety of client information is a top concern and this gave me some good info for follow-up



· This webinar seemed to be for IT folks who serve our industry or for advisors that really enjoy diving into the tech stuff. It was for the average advisor as I hoped it would be.



· Volume of the first presenter was very low. Everyone else was fine.



· I did not know that there were so many options for encryption



· Keep it simple -without the long speeches.



· It was not interesting - very boring.



· Excellent information, very eye-opening. Nice touch with the giveaways.



· Great info, rapidly communicated. Good speakers. Nice to have several speakers to fill the time!

These webinars are constantly improving. Many thanks.



· It was very good, but honestly over my head. I am going to share the information with our IT Manager.




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5393 Hits

Alliance Builder From Advisor Products Increases Referrals And Link Popularity On Advisor Websites



Using the Advisor Products BackOffice, financial advisors can now add a new type of page to their sites that’s preconfigured for exchanging links with allied professionals.



Alliance Builder is a great way for a financial advisor to build referral relationships with other professionals and also increases an advisory firm website’s “link popularity,” an important factor in boosting search engine rankings.



“Your site's ranking in Google search results is partly based on analysis of those sites that link to you,” according to Google’s guidelines for webmasters. “The quantity, quality, and relevance of links count towards your rating. The sites that link to you can provide context about the subject matter of your site, and can indicate its quality and popularity.”



Alliance Builder makes it easy to add an “Alliances” or “Partners” page to your site in minutes.



A lot of firms would probably want to exchange links with your firm, including:









































· Estate planners · CPAs
· Business valuation experts · Bankers
· Mortgage lenders · Geriatric care specialists
· Life insurance agents · Health benefit consultants
· Business consultants · Divorce lawyers
· Labor attorneys · Psychologists
· Elder care attorneys · Architects
· Contractors · Auto insurance brokers






Alliance Builder not only lists the names of companies and colleagues who refer business to you, but it also enables them to submit the information that they want posted on your site.



You simply email or call your referral sources with the URL for the “Alliances” page on your website.



Your alliance partners come to the “Alliances” page and can input their company’s name, a brief description of their firm, and their website URL.



You are notified by email whenever an alliance partner submits a request to create a link on your site’s Alliances page. You can edit the text they wrote, approve it as is, or reject it.



This makes it really easy for referral sources to be listed on your site.



While Advisor Products wants to make it easy for you to gain link popularity, some important caveats must be mentioned.



Just because you post a link to your colleague’s firm on your website’s Alliances page, doesn’t mean he or she will reciprocate. For you to gain link popularity, your alliance partner must follow through and link to your website.



Moreover, you don’t want to abuse a link exchange program by allowing just anyone to post a link on your site.



Like most search engine optimization techniques, link popularity is not as simple as exchanging links with just anyone on the Internet. In fact, Google, the dominant search engine on the Web, penalizes you if you engage in “link schemes” and you could actually hurt your search engine visibility by engaging in gimmickry.



“Some webmasters engage in link exchange schemes and build partner pages exclusively for the sake of cross-linking, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites,” ,” according to Google’s guidelines for webmasters. “This is in violation of Google's webmaster guidelines and can negatively impact your site's ranking in search results.”



We’ve seen some advisors create link exchanges with other advisory firms and we do not want to encourage this.



While linking to other financial advisory firms—even if they’re a few hundred miles away and don’t compete with you—you may sound like a clever way to gain link popularity, excessive use of such a gimmick is bound to catch up with you. Such search engine optimization tricks have been around for years and eventually the search engines get wise to it.



Also, don’t think you can link to the local barber shop, dress designer, or auto mechanic and benefit from it. Google is smarter than that.



Instead of gimmickry, keep it real. Exchange links with referral sources and other professionals with which you do business or want to do business. Look for firms that have content on their sites that is related to what you do, even if it may not be directly related to your financial advisory practice.



For instance, a local builder may not seem to be directly related to a wealth manager like you. But builders know that people doing construction need loans and financial advice and they may be interested to add a page to their site about the personal financial aspects of constructing a new home or office building even if they do not link to any advisory firms now.



Please also keep in mind that search engine optimization is a complicated field. Search engine algorithms are complicated and take many factors into consideration in ranking your site and link popularity is just one them.



Advisor Products hosts websites for about 1,200 independent advisory firms and Alliance Builder is just our latest innovative feature. For more information about our services, go to www.advisorproducts.com or call us at (888) 274-5755.








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5538 Hits

New Features In AdvisorVault 2.5 Increase Advisory Firm Productivity

Increasing productivity at independent financial advisory firms, Advisor Products Inc. today released AdvisorVault 2.5.



AdvisorVault is an online platform for secure communications between advisors and their clients. It can be added on to any advisory firm website.



The free upgrade streamlines routine tasks to promote client service and increase efficiency. New features include:



Track Client Activities. An advisory firm can track files downloaded by clients from the vault system. When a client reads a PDF portfolio report, for example, an entry is created in the log.



Collaboration. An advisor can add an accountant, attorney, or other outside professional to the vault and enable access to all of his clients’ vaults, a single client’s vault, a specific folder in a client’s vault, or a single file in a client’s vault.



Document Search. An advisor can search for a file or folder by full or partial name of the file. For instance, if you name all clients’ third-quarter portfolio reports “3Q09_AccountNumber,” you can search all of your firm’s client vaults for “3Q09” to retrieve a list of all the third-quarter 2009 portfolio reports.



Help Videos. Clients can access video help for using the vault. A series of one- and two-minute videos show clients how to drag and drop documents from their desktop to the vault, enable access for other professionals or family members, and view portfolio reports. (A separate series of videos is also available to advisors showing how to administer AdvisorVault.)



Incremental Portfolio Uploads. An advisory firm using Advent Axys® or Schwab PortfolioCenter® can upload only the most recent portfolio data without affecting previously uploaded reports. For example, you can upload holdings and transactions daily, but performance data only quarterly. This reduces the size of the upload and speeds up the process of batch uploading reports.



Email Templates. A firm can now create and store customized template emails that notify clients when portfolio reports and other documents become available in their vault. Template emails for routine tasks, such as posting a performance report, provisioning a vault for a new client, and changing vault passwords can be sent in bulk or one client at a time. Text for many routine tasks are already written for advisors to use and can be edited. Each template merges the client’s name into the salutation and includes your firm’s branding.



Disclosures. Advisors can upload a disclosure that will appear on the bottom of every page of every client’s vault.



Client-Vault Audits. An advisory firm can export a list of client accounts associated with vaults. This makes it easy for firms to audit whether they have properly mapped each client’s portfolio reports to the correct vault.



AdvisorVault 2.5 can be added to any website, whether or not it’s hosted by Advisor Products, for $1,000 a year or purchased with an Advisor Products Platinum website for $2,100 a year.



For additional information, please call our sales department at 888-274-5755.










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5763 Hits

Advisors Can Now Post Articles On Advisors4Advisors

Empowering independent advisors to share ideas, Advisors4Advisors (A4A) today started allowing advisors to post links to articles, videos, and other online content.



The three news sections on the A4A home page
Market & Economy News, Industry News and Technology News—now accept advisor submissions.



To post news items, an advisor clicks on “Post An Article” and submits a headline, description, and link. The item must be approved by an editor before it is posted.



This is the latest integration on A4A of advisor-generated content. A4A recently enabled advisors to rate the industry’s practice management applications.



Advisors every day are adding new ratings and reviews of software applications for portfolio reporting, financial planning, and customer relationship management.



A4A also networks independent advisors who practice the same way. Advisors using the same three portfolio management, financial planning, and CRM applications they use in their practice are placed in groups.



In addition, A4A provides detailed reviews of dozens of advisor applications. All major vendors providing software to independent advisors have access to a site where they fill in matrixes detailing their specifications. The matrixes are displayed in the Review section of A4A and enable advisors to compare apps feature-by-feature, side-by-side. A4A is the first and only website to make this information easily accessible.



A4A has about 1,000 members and is in beta. Additional information and a 30-day trial membership are available at www.advisors4advisors.com. If you’re interested in becoming an A4A sponsor, please email This email address is being protected from spambots. You need JavaScript enabled to view it..










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5578 Hits

What Advisors Said About Last Friday's Privacy Law Webinar

The Financial Advisor Webinar Series has been a lot of fun for me and now I am going to start sharing the comments advisors make every week about each session.



The comments are not always flattering. In fact, they're often humbling for me. But I appreciate that you care enough about what we're doing to give us feedback.



Below you'll find the comments advisors gave us after last Friday's presentation, "Privacy Law, Data Security & Advisors," featuring Brendon Tavelli, a privacy law expert at Proshauer Rose LLP.



Before reading the comments advisors gave us, here's some background.



The Financial Advisor Webinar Series started in early October 2006 when advisors—along with just about everyone else—feared the world financial system might collapse.



Advisors were gracious in their thanks and we've kept doing it every Friday at 4 ET.



We've now produced about 55 sessions. Almost all of them are available for replay, and CFPs are eligible to receive CE credit for replays of many sessions.



The success of the series was a key factor in my decision to start Advisors4Advisors (A4A).



At the end of every webinar, I ask attendees to fill in a survey to give us feedback.



We plan to automatically feed the ratings and comments into the A4A Event Center but have not yet attacked that project. Until we do, I'll publish the comments from the exit surveys here in my blog every week.



You can view the replay of the session on privacy law and advisors and receive get CFP® CE credit for viewing this session if you’re a member of advisors4advisors.



If you don't care about the CE credit, you can see it for free at
Advisor Products.



Please also join us for the next session on Secure Hardware For Advisors on Friday, Dec. 4 at 4 ET. Our presenters will be product managers from IronKey, LoJack For Laptops, and Seagate. Registering for that webinar lets you receive a free six-month membership in A4A.



  • Interesting topic with lots of information that was new to me.




  • Brendon was very knowledgeable and well prepared. Great presentation. I like the way Andrew approaches the seminars; he is easy going and professional. No sales here!




  • Excellent as always!




  • Very useful information.




  • Excellent presentation.




  • I found it very informative and the takeaway slides are completed in a manner that will allow me to remember what was said during the webinar as I reference them now and in the future.




  • This was a clear, articulate guy. Good delivery, good information, and willingness to disclose when not certain.




  • EXCELLENT - EXTREMELY WELL PRESENTED. VERY HELPFUL.




  • Excellent and timely information.




  • It was very informational. The changes in technology happen faster than any one person can keep track of them so the enforcement follows right behind.




  • I enjoyed this one. It didn't end "right on time" when there were questions & other items to discuss.




  • All good. Maybe include a few practical examples (in some detail) of actions firms are taking to comply with the new rules.




  • Very good. We have a good privacy program in place although the info on Nevada regs was new to me.




  • Audio sometimes fades out.




  • I found it had timely, relevant information and was able to take away some good bits to share with my office. It would be great to have those slides if they are available.




  • Very good.




  • Great webinar - thanks!




  • Recommendations for software solutions.




  • Need more live examples of how to implement these new laws. Being an attorney, Brandon went for the max. In the real world, there has to be a reasonable method.




  • Thank you - I had no idea about these requirements in Massachussetts and Nevada. Keep up the good work.




  • Great! Things we'd not thought of before.




  • Very good.




  • Good, but left with more questions than I had before the webinar. To some extent it sounds like it is still fluid in terms of the ongoing evolution of regulations.




  • More specific references on how implement security measures.




  • More specific actionable items for advisors, less overview, particularly first half of the call.




  • Very generic. I was hoping for more specific information and best practices advice.




  • More Q+A.




  • Too technical. Boring presentation.








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  5357 Hits
5357 Hits

Troubling That More Advisors Did Not Attend Webinar About Privacy Law & Data Security


Call me nerdy, but I was excited to get an attorney from a national law firm who specializes in privacy law to present an overview on this topic geared to advisors. So I’m a little troubled that more advisors did not attend yesterday’s privacy law webinar.



Since starting the Financial Advisor Webinar Series in October 2008, in the throes of a world economic calamity, attendance to the live sessions has held steady. We attract 150 to 225 attendees to each webinar (and another 250 or 300 view replays every week). But yesterday’s live session attracted only about 140 attendees.



Massachusetts and Nevada recently enacted new privacy laws and advisors face growing responsibilities to protect personal data about their clients. Meanwhile, security breaches now occur daily. (The New York Times featured a front-page story about a data breach today.)



Data security, or lack thereof, is a dirty little secret right now among independent advisors. My guess is the problem is already quietly stinging advisors. Hackers are rampant and employees can pretty easily steal client data to set up their own practices. But admitting you had a data breach is kind of like confessing you had an STD. You just don’t hear about it.



I’m not saying the sky is falling and don’t mean to sound alarmist. I’m just saying it’s an important issue that advisors need to learn about.



Advisors commonly carry laptops with client data and use unencrypted VPNs to connect to their offices from their homes. And these are just a couple of the obvious ways advisors are exposed.



I’ve been trying to include reports of security breaches in the Advisors4Advisors Daily Digest to keep members informed and will redouble my effort in the months ahead.



My disappointment that more attendees did not show up at yesterday’s webinar should not diminish the value of the information imparted by the presenter, Brendon Tavelli of Proskauer Rose LLP.



Please view the replay of this session. You can get CFP
® CE credit for viewing this session if you’re a member of advisors4advisors. If not, you can see it for free at Advisor Products.



And sign up to attend the next session, which deals with a related issue--Secure Hardware Systems For Advisors, on Friday, Dec. 4 at 4 ET. Our presenters will be product managers from IronKey, LoJack For Laptops, and Seagate.




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  5267 Hits
5267 Hits

Organizing Marketing Copy On Financial Advisor Websites


David Lucs, a project manager here at Advisor Products, has worked with scores of advisors over the past two years to help build their websites.



David cares deeply about our clients and wants Advisor Products to be great. He’s great.



In talking with him recently about the challenges of his job, he told me that one of the most difficult areas advisors struggle with is organizing the marketing content on their sites.



So David and I wrote this post together about how advisors can organize their website marketing copy. We’ll collaborate again soon on some other areas that can help you in building your site.



Home Page Text. Two or three short paragraphs on your home page should present your services, ideal clients, and why people should trust you to manage their money. Add a link in the text where people can get more in-depth information about your services.



Detailing Your Services. Use the “Services” page to define your services in detail. Start with a one-paragraph summary about your firm’s overall client experience and all its services. Follow that information with a paragraph about each of your specific services.





· Use bold text lead-in text to make it easy for a reader to skim and find the service in which he or she is most interested.

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  5301 Hits
5301 Hits

Advisors Feeling The Power Of The Internet


JasonV510 says Act! is “flexible for client tracking and management but not great for the true financial professional.”



TaylorF519 says MoneyGuide Pro “really takes its job seriously and wants to put the best and most innovative product out there!”



Of PortfolioCenter, TerryH770 says: “I was originally skeptical of Schwab owning the software, but to this point it has only been beneficial.



These comments aren’t quotes from a reporter’s interviews.



They’re comments from real advisors talking about software applications for advisors.



They’re not made up. They’re not filtered. And they’re as close you come to truth about an advisor’s practice management applications as you can get.



As a reporter who had to become an entrepreneur to do my job the way I wanted to, I’m excited to be living in the middle of the information revolution.



Most reporters aren’t so happy, however. With regular people reporting the news instead of professional reporters, man daily bites dogs and regular people cover it without journalists.



Sure journalists are still going to be needed to give us insight into big news stories. But much of the content once created by newspapers and magazines can be replaced and made better by empowering people to report the news.



JasonV510, TaylorF519, and TerryJ770 are more important than anything I can say as a reporter.



Sure, I’m pretty smart, and I write well. But what you say matters more, and the collective intelligence of a group of users of an advisor practice management application is more important than my assessment.



That’s what’s happening now at advisors4advisors.com. Advisors are logging in every day and rating the applications they use in their practices. That's why we called it advisors4advisors.



Members of advisors4advisors see the average rating of an advisor app from a group of advisors who use that app and they can also see each individual rating by an advisor for financial planning, customer relationship management (CRM) and portfolio management software (PMS) applications.



We cover just about every PMS, CRM and planning application, and we’re adding new categories of apps every week. Last week, we added rebalancing software and this week we’re adding account aggregation systems.



We also have asked all of the major providers of practice management apps to fill in detailed specifications checklists about their products in the advisors4advisors review section.



This allows advisors to compare different practice management apps feature-by-feature, side-by-side.



The independent advisory industry’s vendors have filled in their specifications on advisors4advisors so far, including EISI, E-Z Data, MoneyGuide Pro, Schwab Performance Technologies, SunGard, Morningstar, Orion and Redtail.



Just about every major vendor in the industry is participating or planning to do so in the next few weeks.



Please contribute to the discussion. Join us at
advisors4advsors.com. Come feel the power of the Internet.











  5406 Hits
5406 Hits

See Three CRM Workflow Engines Today At 4 ET


At this afternoon’s webinar at 4 p.m. ET, Blane Warrene, an operations consultant, is going to talk about how advisory firms can embed their processes in their CRM.



This is the single most important way to improve your efficiency, scalability, and client service.



To help Blane illustrate how you do this, I asked three of the leading CRM vendors specializing in the independent advisor market (Junxure, Redtail, and XLR8) to provide two-minute videos showing how you use theirn software to embed your workflows.



We’re going to show each of the two-minute videos at Blane’s presentation today and post them for members of advisors4advisors.



Register for today’s webinar here.


  5102 Hits
5102 Hits

Advisors Sound Off On Financial Advisor Webinar Series


It's been just over a year since we started the Financial Advisor Webinar Series in the throes of the global financial crisis, and I have to say it's been one of the most fulfilling experiences in my career.



The Series started out as a way to support advisors at a time when it looked like the global economic system was about to collapse, and it was originally known as The Financial Crisis Webinar Series. Over the past year, as we backed away from the edge of the abyss, we've continued the webinars every Friday at 4 p.m.



We've been privileged to produce sessions that inform advisors about how to run their businesses better and cope with the upheaval of recent months. And advisors have responded.



About 200 advisors attend the live sessions and another 300 listen to replays every week. And more advisors steadily continue to participate.



Last week's session featured compliance specialist Chris Winn, of AdvisorAssist, offering tips on 2010 compliance planning for RIAs. He was great. (See comments from attendees below.)



We ask advisors to fill in a survey after each webinar. The average rating of attendees at this session was 4.4, putting it among the highest rated of the 49 sessions we've produced.



What amazes me is that from last February, when we started systematically tabulating the ratings of each session, through the end of August, only two sessions had better than a 4.4 average rating. However, five of the last eight sessions has a rating of 4.4 or better. (And we're getting these high scores despite my clumsy skills as a moderator!) Your feedback is genuinely appreciated.



Please remember that many of the sessions are eligible for continuing education credit from the CFP Board of Standards. Also, keep in mind that you can receive free CE credit by attending any of the live sessions, and you can get CE credit on replays of many sessions by becoming a member of our new advisor practice management portal, Advisors4Advisors.com.



Below is feedback from attendees of last Friday's session about RIA compliance. Please join us at an upcoming session or log in to A4A to discuss any webinar with other advisors.



Comments and feedback from advisors who attended 2010 RIA Compliance Planning with Chris Winn of AdvisorAssist:




  • Thank you - just keep doing it.

  • Very informative. My first look at Advisors for Advisors.

  • Excellent

  • Great timing for a compliance webinar. Thank you for the presentation.

  • Good topic coverage

  • It is refreshing to have someone who can speak compliance language in easily understandable terms. Chris obviously knows his stuff.

  • Great session. One of your best yet.

  • Terrific content! Wish we had time for more questions.

  • Very informative, good supporting visuals, well presented.

  • Really great info...too much for one hour!

  • Great webinar. The best one that I've seen from Advisor Products

  • This one was fantastic

  • No complaints

  • Excellent, Chris made the subject matter very understandable. Thank you

  • Very informative

  • Great webinar! Gets you started thinking about the different issues to address.

  • This was truly a great webinar and I thank you so much for providing this to us. Great job!

  • Excellent presentation. Very helpful.

  • Excellent content

  • Considering the amount of potential info and the time available it was very well done.

  • I thought it was great, would love to get copies of the slides.

  • Well done and useful

  • Fantastic + extremely useful - one of the BEST you have ever hosted. full of very useful + actionable items.

  • Great Webinar. Can't think of anything you could have done to improve it.

  • Excellent - very good topic choice - obviously, a topic like this will have many basic components to it as well as some issue some just venturing into the fray may think are overwhelming, but the presenter did a nice job of balancing so there was something for everybody (more than likely) to take away

  • It was helpful. thank you.

  • Outstanding informative and very comforting.

  • I learned a few new things such as the potential for the SEC to raise the minimum assets under management to $100,000,000 to be registered with them

  • Important issues most advisors don't work with on a daily basis

  • Nice outline of issues.

  • Covered a lot of material I already knew but was good to be reminded anyway.

  • Good overview for office manager, though went fast and I'll need to review the replay

  • Good coverage of some of the basics of compliance. The idea of a Compliance Calendar is useful.

  • Good information. Condense and do more frequently.

  • I thought it was very well done. Chris is knowledgeable and shared that information well. I appreciated his willingness to spend extra time answering questions afterward.

  • It is a dry subject, but overall it was packed with important info.





  5379 Hits
5379 Hits

Advisor Products Responds To The Need For Speed

If we host your firm’s website and use our BackOffice content management system, you may have noticed a boost in speed.



That’s because we replaced the main server that powers Advisor Products’ websites and BackOffice last week.



Your website is loading faster for prospects and clients now.



In our drive for constant improvement, we’ve instituted a policy to replace aging web servers before they reach the end of their useful lives.



This means that if, Advisor Products hosts your website, the server housing your website gets replaced on a regular basis.



Your site, thus, is always running on the latest hardware and software.




We’ll keep you posted as we continue to upgrade hardware for other systems.
  5262 Hits
5262 Hits

2010 RIA Compliance Calendar At Advisors4Advisors.com

The 2010 RIA Compliance Calendar was posted for free distribution to members of Advisors4Advisors.com, a practice management portal site for independent financial advisors.



Advisors interested in getting a copy of the 2010 RIA Compliance Calendar can email me for a free six-month membership in advisors4advisors. It will take 10 minutes to register and fill in your profile and then you can download the 2010 RIA Compliance Calendar.



The RIA Compliance Calendar was created by Chris Winn of AdvisorAssist, a compliance consulting firm serving RIAs and B-Ds. It lists 27 key compliance activities for RIAs month-by-month, helping organize RIA compliance responsibilities on a timely basis.



Winn delivered a presentation entitled, “2010 Compliance Planning For RIAs” last Friday at the Financial Advisor Webinar Series. You can replay the session at advisorproducts.com. (Members of AdvisorsforAdvisors.com are eligible for free CFP CE credit on the replay.)



At the session, Winn answered about 15 questions from attendees. But we ran out of time and could not answer many questions chatted in by attendees. Winn, who writes a blog about RIA, B-D, and Registered Rep compliance issues at Advisors4Advisors.com, will be answering many questions that we did not have time to answer at the webinar.



Please join us at advisors4advisors.com to access Winn’s blog, obtain CE credit for the webinar, and download the 2010 RIA Compliance Calendar.




  5400 Hits
5400 Hits

Business Development Conference Next Week


Advisors seeking to capitalize on post-financial crisis business development opportunities may want to attend a three-day conference produced by Advisor Solutions Network starting Thursday, November 5 and running through Sunday, November 8.



I'm one of the speakers along with PR guru Marie Swift, business devleopment coach Steve Saenz, and many others. You can listen to brief interviews of each of the speakers.

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  5366 Hits
5366 Hits

Account Aggregation For Advisors

An Advisor Products client emailed us yesterday asking about our account aggregation capabilities. Specifically, the question was about CashEdge.



Since we receive a lot of questions from advisors who would like to provide aggregated account information to their clients, I am going to answer some questions here.



The aggregation interface offered by Advisor Products comes with our Client Portal system.



Feeds from two account aggregation companies currently are integrated into Client Portal: ByAllAccounts and Advisor Exchange. CashEdge is not currently integrated with Client Portal.



ByAllAccounts is a Woburn, Mass. company founded by James Carney along with Martin and Ellen Dickau in 1999. Carney is the President and CEO. An entrepreneur who had succeeded in two previous tech start-ups—a systems integration firm sold for $50 million in 1992 and an engineering technology software company that went public in 1996—Carney was not involved day-to-day in the early years of BAA. The company, along with just about all of the aggregation vendors, foundered for a few years after the tech bubble burst in 2002.



About six years ago, Carney became more involved in day-to-day operations at BAA and it was purchased by State Street Bank in August 2004 at a time when State Street was considering opportunities in the wealth management business. But BAA was not a good fit for State Street after it backed away from the wealth management backoffice support business and in 2008 Carney and his partners bought back BAA.



Since then, BAA has grown by focusing on feeding reconciliation-ready data from held-away accounts into portfolio management software (PMS) systems, including Schwab PortfolioCenter and Advent Axys. By focusing on aggregating data clean enough for a PMS system, BAA has gained traction with about 475 advisory firms and is currently bringing in about 15 new advisory firms monthly.



Advisor Exchange of Glenview, Ill. was founded in 2006 by D. Keith Ross, a successful options trader. Ross
began his career as an options analyst in 1976 after graduating from Princeton University. In 1979, he became a member of the American Stock Exchange and a registered options trader on the floor of the exchange. In 1983, Ross formed Ceres Partners, specializing in risk arbitrage and options market making. In 1988, he became a member of the CBOE and was a market maker until 1999.



With a background in electronic trading, Ross was drawn to the account aggregation business by its potential for growth. Ross struck a deal to license aggregation interfaces from Cash Edge, an account aggregation vendor, and has been building a platform for advisors leveraging CashEdge interfaces with about 7,000 banks, brokerages, credit card companies, qualified plans, and other sources.



Ventures like Advisor Exchange always take longer than expected, however. Advisor Exchange has been building its advisor platform for the last three years and is expected to release a new version over the next three months. About 125 firms now use AE’s aggregation system.



CashEdge, meanwhile, is showing renewed interest in the advisor market. In 2006, when it licensed its feeds to Advisor Exchange, CashEdge displayed little interest in the independent advisor market. CashEdge had been almost singularly focused on a successful system it built for cash management at banks. However, about 18 months ago, CashEdge hired Tom Roberts as a senior VP of its wealth management business and Roberts has expressed renewed interest in developing better systems for advisors.



The Client Portal system enables a revolutionary new way to manage clients: straight-through processing of client-associated tasks from your CRM, financial planning, and portfolio management software to your clients’ portals.




  5757 Hits
5757 Hits

Email Templates For AdvisorVault Released


Advisor Products today released Email Templates For AdvisorVault, enabling automatic email notifications to clients when portfolio reports and other documents are posted.



You can customize and save these template emails in AdvisorVault, and they'll be branded with your firm logo and each client's name merged into the salutation. This enterprise-wide console for communicating to clients en masse streamlines required recordkeeping for financial advisors.



With advisory firms battered by the global financial crisis, increasing efficiency is a central focus and Email Templates For AdvisorVault saves time and money.



With Email Templates for AdvisorVault, an advisory firm sets up a mass email to its clients one time and then uses it over and over again. This streamlines notifications when posting a batch of documents or reports. For example, if an advisory firm uploads all of its clients’ reports from Schwab PortfolioCenter or Advent Axys to AdvisorVault, a template email can be sent in seconds to all clients at once. The same branded email also can be sent when a single client’s report is posted.



AdvisorVault is integrated with Advent Axys and Schwab PortfolioCenter, the two most popular portfolio management software applications used by independent advisory firms. When an advisory firm using Advent Axys or Schwab PortfolioCenter batch prints all of its clients’ reports to Adobe PDFs, the resulting file can be uploaded using AdvisorVault’s 256-bit high encryption. Based on an identification code unique to each client, each report automatically posts to each client’s vault. In addition to PortfolioCenter and Axys, many other applications used by advisors can leverage AdvisorVault’s batch-document capability.



Advisory firms can also batch upload a custom report in Axys or PortfolioCenter and AdvisorVault converts that data into HTML reports that contain links and are more dynamic than PDF reports. Email templates can also be set up to notify clients en masse whenever these reports are uploaded.



In addition saving the template text and firm logo, an advisory firm can set up a disclosure that will automatically be inserted into the bottom of every template email as well as an introduction. An advisory firm can define the “reply to” and “from” addresses that are displayed in each template email. In addition, all template emails can be previewed before they are sent and all mass template emails must be confirmed and approved before they are sent.



Email Templates For AdvisorVault includes text for common client communications associated with AdvisorVault, such as resetting a client’s password, enabling a vault for a new client, and provisioning an outside professional, such as an accountant or attorney, to access specified folders of a client’s vault. The dashboard for Email Templates For AdvisorVault allows an advisory firm to associate specific workflows or tasks with a specified email template. Features in Email Templates For AdvisorVault are explained in a 2½-minute help video.



AdvisorVault can be added to any advisory firm’s website for $1,000 a year. It is also bundled with a marketing website that includes a database of wealth management news articles, 10 email accounts, eight hours of support, and a website content management system for $2,100 a year. Online Portfolio Reporting for Axys or PortfolioCenter is an additional $1,500 annually.

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  5602 Hits
5602 Hits

Visit Us At Schwab IMPACT


Please stop by the Advisor Products booth (No. 145) at the Schwab IMPACT® Conference next week to say hello.



We'll be talking about advisor marketing and practice management and showing demos of new features in AdvisorVault, Online Reporting For PortfolioCenter® and Axys®, and our Video Library System.

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  6373 Hits
6373 Hits

Schwab PorfolioCenter On A4A


Schwab PortfollioCenter, a leading portfolio accounting and reporting application used by about 3,500 independent advisory firms, has posted its specifications to the Advisor Software Database at advisorsforadvisors (A4A).



A4A is a new practice management portal for independent advisors. A4A features an Advisor Software Database that allows advisors to compare the most popular professional software applications side-by-side and feature-by-feature. Just about all of the major software vendors in the industry are now participating in the Advisor Software Database by posting detailed specifications of their products. Advisors can write reviews and rate all of the software packages.



I’ve wanted to create the Advisor Software Database for about 10 years. It’s a totally unique tool that is not available anywhere else. It summarizes in minutes everything you need to know about different practice management applications. Basically, If you like my magazine column or this blog, you’ll find A4A helpful.



PortfolioCenter, a desktop application, owns a major share of the portfolio management software market among advisors serving high-net-worth individuals. According to the specifications Schwab filled in the Advisor Software Database, PortfolioCenter has 70 reports, including 10 graphical reports. You can run a report showing a client’s current asset allocation versus the target allocation, and you can report on Treasurys, corporates, zeroes, and mortgage-backs but not TIPS.



Schwab executives are going to be showing enhanced client reporting tools at the upcoming Schwab conference. We’ll keep you updated on details.



If you click on the screen shots in this post you’ll see an enlarged view of the Advisor Software Database showing you a comparison of PortfolioCenter, InterActive Advisory Software, and Portfolio Director. A4A is still in beta and we’re giving advisors a 30-day free trial right now.





Continue reading
  6339 Hits
6339 Hits

Recovering From The Meltdown

One year ago, America’s financial system teetered on the edge of ruin. Happily, we avoided the worst. However, in the year since the crisis erupted and securities prices collapsed, even the most successful advisory firms suffered decimated fees and are earning a lot less. Worse still, confidence in all things financial—including advisors—has been similarly debased. Are you planning your comeback yet?



With Labor Day behind you and the final quarter of 2009 closing in, it’s time to start planning your firm’s recovery. It’s a good time to think strategically about you’re going to make 2010 a better year.



Part of your 2010 recovery plan is likely to focus on serving existing clients, and that what this post is about. It’s about making sure you know what your clients think about you and aligning your services and marketing with what clients want.



Julie Littlechild, the CEO of Advisor Impact, took me on a tour of Client Audit, a tool to systematize the client feedback process. Click on the image to the right to see a two-minute video about Client Audit or see my full review and a nine-minute demo at A4A.






  5218 Hits
5218 Hits

SunGard WealthStation On Advisors4Advisors






SunGard WealthStation, a leading financial planning application with 125,000 users, has posted its specifications on advisorsforadvisors, a practice management website for independent advisors.



Posting of the specifications enables advisors to compare WealthStation to 10 other financial planning apps feature by feature, side-by-side.



With annual revenue exceeding $5 billion, 20,000 employees and customers in 70 countries, SunGard is the world’s largest financial services technology firm. Its WealthStation product for financial planning is used by many banks and brokerages as well as about 1,500 RIAs.



According to the specifications SunGard posted, WealthStation:






· Provides an interface that is meant to be shared with clients

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  5570 Hits
5570 Hits

Boost Your Blog’s Search Engine Ranking


On advisorsforadvisors, the new practice management website, advisor blogs are being aggregated, which makes it easy for advisors to see what other advisors are blogging about. This can give you ideas for your own posts or inspire you to start writing your own blog. More importantly, being listed on the blogroll can help boost your blog's search engine rankings.



One of the factors search engine algorithms use for ranking your blog site is “link popularity,” a measure of how many sites link to your bog combined with how much traffic those sites attract. Since
advisorsforadvisors is a portal for advisors, being listed on the blogroll can boost your blog's ranking by search engines.



To further leverage the
blogroll's effcts on yor search ranking, you might ty blogging about posts by other advisors. The web of connections among blog posts can be very influential in boosting traffic to your blog.



For example, let’s say your blog is listed on the
advisorsforadvisors blogroll and you post about using Section 72(t) of the Internal Revenue Code to take IRA distributions. If another advisor listed on the blogroll posts a comment on his blog about what you wrote—clarifying something you said in your post or perhaps disagreeing with you—and links to your blog in his post, that’s going to boost your blog’s search ranking. When a consumer Googles "Section 72(t)," your post is more likely to come up.



Algorithms used by Google and other search engines place more weight on link popularity when links are based on content. (They also can penalize link popularity schemes, as mentioned in my previous post.) Creating a web of links based on other advisors' blog posts
can be effective way gain traffic..



advisorsforadvisors makes it easy to track what other advisors are blogging about. We list advisor blogs and display the most popular posts on all the advisor blogs. The list of advisor blogs is just one art of the "Research" section of the site, which includes blogrolls covering 25 topics advisors want to follow.



If you’ve been a member of advisorsforadvisors for more than 30 days, please email me the name of your blog and its URL and we’ll add it on our advisor blogroll.



The blog section is only one small way
advisorsforadvisors is helping independent FAs. Sign up for a free trial.









  3 Hits
3 Hits

Link Exchanges And Advisor Websites


From what I can piece together, an ongoing thread on the discussion board of the National Association of Personal Finance Advisors has been for months creating excitement about NAPFA members engaging in a link exchange program.



I feel obliged to clarify the benefits of a link exchange program, which may have been overstated by some NAPFA members on the discussion boards. (Please keep in mind that I don’t have direct access to the NAPFA discussions and have to piece together snippets of information relayed to me.)



A link exchange program among groups of advisors allows one advisory firm to display on its website links to other advisory firm websites.



You may ask: Why would an advisor want to link to another advisory firm? The answer: To increase your website’s “link popularity,” a factor in a site’s search engine ranking.



What advisors must realize is that link popularity is just one of many factors that determine your natural search engine ranking. Many other factors, such as your site’s content and your URL are more influential in the algorithms used by search engines to rank your site. Moreover, search engines discourage gimmicks to enhance search rankings.



“Some webmasters engage in link exchange schemes and build partner pages exclusively for the sake of cross-linking, disregarding the quality of the links, the sources, and the long-term impact it will have on their sites,” Google says in addressing link schemes. “This is in violation of Google's webmaster guidelines and can negatively impact your site's ranking in search results.”



Advisors who expect a link exchange program to bring a lot of new traffic to their sites are likely to be disappointed.



Despite all this, Advisor Products is creating a link exchange program for advisor websites. While the potential for abuse exists, we want to respond to requests from advisors asking for this feature and we will try to educate advisors about how to best utilize the tool.



We’re now programming a new feature in our content management system, BackOffice, to enable your firm to add a “Link Exchange” page to its website. This will allow you to quickly add links to other firms that will be displayed on your marketing website. The page on your site will be pre-formatted to look attractive and easy to read.



While enabling link exchanges with other advisory firms is unlikely to greatly enhance your site‘s search engine ranking, we want t be responsive to advisor requests for this feature and do believe a link exchange program that expands beyond advisory firms can be used productively as long as it is not used excessively.


If you have suggestions about how you would like the link exchange page to be created on your website, please let us know.












  4874 Hits
4874 Hits

Money Tree Moves Ahead Even As Its Leader Steps Back


Mike Vikauskas, who quit being a financial planning in 1981 to start a financial planning software company, is taking Money Tree Software forward even as he plans his exit from the company.



Vitkausas is stepping down from day to day activities to spend more time on volunteer activities in his church. It’s part of a succession plan that Vitkauskas has envisioned for years.




But even as he leaves, Money Tree is moving forward on the path set by Vitkausas over the past three decades by launching a new advisor application, Distribution Solutions, which helps advisors create retirement plans for baby boomers.


To see a video about Distribution Solutions and read more about what's happening at Money Tree, please register for a free trial of advisorsforadvisors, our new practice management website for advisors.

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5032 Hits

Important Content For Advisors


The launch of advisorsforadvisors this month is moving ahead and our growing list of bloggers began providing important content for advisors. Some of the posts:






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  5170 Hits
5170 Hits

A "W-Shaped" Recession


Last Friday, at the Financial Advisor Webinar Series, economist-turned-money-manager Rob Stein, predicted a "W-shaped" recession.



Forecasts of a W-shaped recession are drawing attention. See the Carlos Lozada commentary in The Washington Post on April 19, FT Columnist John Authers’ on May 17, or economist Nouriel Roubini on July 16
.



Stein, who heads
Astor Financial LLC, predicted that technology will be among the sectors that gain disproportionately from the coming economic rebound. Stein’s also bullish on China.



Stein, who began his career at the Federal Reserve in 1983, believes The Great Recession of 2008-2009 has combined two recessions in one: a traditional V-shaped recession and a credit-bubble recession. While the US economy is now slowly coming out of the traditional recession and economic growth starting up, a second downturn is likely to follow in the next couple of years because of continuing losses from the credit crisis.



Using a macroeconomic approach, Stein actively manages three styles of broadly diversified ETF portfolios: a long/short balanced fund, growth fund, and low-volatility program.








You can view a reply of Stein's presentation, "Actively Managing An ETF Portfolio." It's free, but you need to register. You can also download his slides.



Next week, CFPs will be able to get continuing education credit on replays of the Financial Advisor Webinar Series at advisorsforadvisors.com.



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  5953 Hits
5953 Hits

Changes In My Blog


Those of you who regularly read this blog know that I cover a mix of news for independent advisors—technology, compliance, marketing and a wide range of other topics. I also write about what's new at my company, Advisor Products, which makes websites, newsletters, and brochures for about 1,800 advisory firms.



Apropos of my schizophrenic role as reporter and service provider to advisors, I am splitting this blog in two.



This blog will now only cover what's new at Advisor Products. Articles I write about industry issues will now be posted in my blog at
advisorsforadvisors.



advisorsforadvisors is a new practice management website. It's in beta, but you can sign up now for a 30-day free trial. (Advisor Products clients will receive an email next week about how to sign up for a free one-year subscription.)



Two veteran financial journalists have teamed up with me to create advisorsforadvisors. Mary Rowland is a former columnist at The New York Times who now writes a monthly column for Financial Advisor, and Bob Casey started up and ran Bloomberg Wealth Manager and is now a managing director of the Family Wealth Alliance.



advisorsforadvisors has strong social networking and provides crucial information to run an advisory business, including:



· Links to all important market and economic news stories by 8:30 a.m. EDT every business day

· A way to objectively compare advisor software applications feature-by-feature, side-by-side

· Social networking features that connect advisors who practice the same way as each other

· Advisor reviews of software applications

· User groups for software applications

· Daily analysis of industry and financial news by veteran reporters and industry experts

· Free access to weekly webinars with CE credit for many sessions and replays of all webinars 24/7

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5725 Hits

Jon Stewart’s Double Play


In a hilarious double-play, comedian Jon Stewart last night hammered Lenny “Nails” Dykstra, a former Mets centerfielder turned financial-advisor-in-bankruptcy, and then tagged TV financial personality Jim Cramer with a jarring comedic blast.



Stewart began a segment on last night’s show by focusing on the irony of the bankruptcy filing by Dykstra, who touted himself in recent years as a successful investment advisor and was profiled in 2008 as a “financial whiz kid” on the HBO program Real Sports. Dykstra, who told a Real Sports reporter that he did not read books because it was bad for his eyes, reportedly was sued by 20 creditors by the time he filed for bankruptcy on July 7.



Stewart revived his public humiliation of Cramer by playing an interview of Cramer on the HBO show in which he hails former Mets hero Dykstra’s as a brilliant financial advisor, “one of the great ones in this business.”



The irony of the baseball legend turned stock-guru’s misfortune provided Stewart with great material. Dykstra, 46, became a New York Mets hero for hitting a walk-off home run in Game 3 of the 1986 World Series, when the Mets defeated the Boston Red Sox in seven games to win one of baseball’s most memorable World Championship Series.



Cramer, the extremely energetic host of CNBC’s “Mad Money” and founder of TheStreet.com, is a former hedge fund manager. Prone to hyperbolic rants, Cramer was the subject on March 4 and March 9 of scathingly funny blasts by Stewart. Stewart, the popular host of Comedy Central’s “The Daily Show,” assembled a string of video clips in which the self-proclaimed “infotainer” of finance made glaringly wrong investment predictions. Stewart wrecked any credibility Cramer might have had in the financial media by showing Cramer urging stock investors to “be buying things and accept that they’re overvalued, but accept that they’re going to keep going higher” a few months before the global financial crisis caused a stock market collapse. Stewart and Cramer’s public showdown became famous and then faded—until last night.










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4 Hits

Financial Planning Coalition Gets It Right

The Financial Planning Coalition (FPC) released a statement this morning clarifying its position on the Obama Administration regulatory reform proposal.



The FPC applauded the Obama Administration proposal to require a fiduciary standard of care to brokers, repeating a position first articulated in its release of June 18, the day after the Obama Administration’s white paper on regulatory reform was released. However, the FPC now also expressed concern that the fiduciary standard would be “watered down” by the proposal.



The FPC is a recently created group comprised of the Financial Planning Association, National Association of Personal Financial Advisors, and the CFP Board of Standards. Please note that my blog of June 18 swiped at FPC for not mentioning that the fiduciary standard could be watered down by the Obama proposal.



Apart from qualifying its support for the Obama Administration proposal, today’s FPC statement, which I’ve highlighted for quick scanning, clears up an important part of the Obama Administration’s June 17 white paper. The 88-page white paper called for establishment of a Consumer Financial Protection Agency (CFPA) to help protect consumers from bad financial advice. Some observers interpreted this to mean an entirely new regulatory regime would replace the current regulatory framework. Not so.



FPC explained that the CFPA’s jurisdiction “would cover consumer financial products such as credit cards, savings accounts, and mortgages, and possibly insurance, but notably leaving securities transactions and investment advice to the SEC.”



This makes a lot of sense. While coverage in the trade press would have led you to believe that the CFPA was taking over responsibility for regulation and enforcement of advisors, it’s clearly not. Point is, wrangling over regulatory reform is going on behind closed doors and we know little about the structure of what’s to come, much less who the winners and losers will be.



With that qualification, I’ll speculate that our government bodies and existing institutions are likely to be relied on more heavily as reform is implemented. My guess is FINRA will gain power to regulate RIAs advising consumers.



FPC’s effort to prevent the watering down of the fiduciary standard of care for clients is important. If brokers are fiduciaries but can continue to be compensated on commissions, then the fiduciary standard of care has no teeth. And if the U.S. government bans commission compensation of independent financial advisors, as was done last week by Great Britain’s Financial Services Authority, an extremely unlikely reform, then telling the difference between fiduciaries will be difficult.



Clearly, once the fiduciary standard of care is defined under a new regulatory regime, it could be watered down as to be almost meaningless. The reform measures may not make it easier for a consumer to know the difference between an advisor who puts a client’s interest above his own and one who does not.



The FPC’s release today is laudable for pointing this out and for giving advisors tools to speak out. The bottom of the FPC release contains “message points” advisors can borrow to write letters to legislators.









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6092 Hits

Building Client Loyalty


We’ve made it very easy for you to remind clients why they need you.



All the tasks you’ve completed for a client over the past 12 months are now conspicuosuly displayed on each client’s home page.



This important new feature in the Advisor Products Client Portal is integrated with Redtail Technology’s CRM. So when you input an Activity in Redtail, it shows up automatically in a client’s portal.



With advisory firms under financial pressure because asset values have plunged in the past year, showing each client a list of tasks you’ve completed is a way of building loyalty. In light of the bear market and advisor Ponzi-scheme scandals, it is critical to regularly include this information in client communciations.




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5322 Hits

Feds Want All FAs To Be Fiduciaries


Way back on page 72 of the regulatory reform white paper released yesterday by the U.S. Treasury is some pretty big news for financial advisors.



“We propose the following initiatives to empower the SEC to increase fairness for investors,” says the Treasury white paper. “
Establish a fiduciary duty for broker-dealers offering investment advice and harmonize the regulation of investment advisers and broker-dealers.”



Entitled, Financial Regulatory Reform: A New Foundation, the white paper makes official the Obama Administration’s intention to put registered reps and advisors at RIAs under the same set of regulatory rules. That’s not a surprise to anyone.



“Retail investors are often confused about the differences between investment advisers and broker-dealers,” according to the white paper. “Meanwhile, the distinction is no longer meaningful between a disinterested investment advisor and a broker who acts as an agent for an investor; the current laws and regulations are based on antiquated distinctions between the two types of financial professionals that date back to the early 20th century. “



What is a surprise is that the Administration is asking to impose a fiduciary obligation on brokers. Of course, only advisors at RIAs are now fiduciaries, and thus obliged always to do what is in a client’s best interest. That is a much higher standard of care for clients than is imposed on registered reps, who must only ensure they are giving advice suitable for their clients.



The Treasury says in the 89-page paper that RIAs and Registered Reps are the same to retail investors. “In the retail context, the legal distinction between the two is no longer meaningful,” says the Treasury white paper. “Retail customers repose the same degree of trust in their brokers as they do in investment advisers, but the legal responsibilities of the intermediaries may not be the same. The SEC should be permitted to align duties for intermediaries across financial products. “



“Standards of care for all broker-dealers when providing investment advice about securities to retail investors should be raised to the fiduciary standard to align the legal framework with investment advisers,” according to the Treasury Department. “In addition, the SEC should be empowered to examine and ban forms of compensation that encourage intermediaries to put investors into products that are profitable to the intermediary, but are not in the investors’ best interest.”



The Administration is calling for new legislation:




requiring that broker-dealers who provide investment advice about securities to investors have the same fiduciary obligations as registered investment advisers

providing simple and clear disclosure to investors regarding the scope of the terms of their relationships with investment professionals

prohibiting certain conflict of interests and sales practices that are contrary to the interests of investors.

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5258 Hits

CE Credit On Webinar Replays


When the U.S. economy seemed like it might collapse last October, Advisor Products hosted a webinar for advisors in an effort to help to help them cope.



Attendees were so grateful, we did it the following week.



Pretty soon, it became clear that advisors wanted us to bring them this information regularly. Thus was born the Financial Crisis Webinar Series, which brings advisors leading thinkers from the financial advisory profession every Friday at 4 p.m. EDT



We’ve now hosted 32 webinars , replays are always available, and since January we have offered continuing edcuation credit for Certified Financial Planner
® licensees.



Last week, we upgraded our registration platform. As a result, you are now be able to receive continuing education credit when viewing webinar replays.



With the new registration system, you register just once. We’ll drop a “cookie” into your browser—
a short line of texton your computer's hard drive—and you’ll be recognized without registering the next time you return. If you use a different computer, you’ll need to log in again, however. Before this upgrade, you had register your information each time you wanted to view a webinar replay.



The new registration system also allows you to access videos and request more information about our services from the Advisor Products website. Videos explain our client portal system, newsletters, AdvisorVault, and Online Reporting for Advent Axys or PortfolioCenter.



Advisor Products clients will continue to use their existing log-in credentials for accessing the BackOffice for managing your website, email newsletter, and newsletter. That is unaffected by these changes.



It is our privilege to be able to bring you The Financial Crisis Webinar Series. Join us this week to hear Mark Tibergien, CEO of Pershing Advisor Solutions, speak about the link between operational efficiency and human capital.







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5168 Hits

Redtail Technology Integrates With Advisor Products


How would you like to be able to show clients a list of all of the things you’ve done for them lately?



What if you could automatically feed that list of achieved tasks from your CRM system to a secure personal website for each client?



Or how would you like to be able to assign clients tasks from your firm’s CRM system, and feed these To-Dos automatically to each client’s secure personal website?



This is all totally doable right now.



In fact, these are just a couple of the many powerful features in the new Advisor Products integration with Redtail Technology.



Integration between Advisor Products and Redtail extends one of the advisory profession's most powerful customer relationship management (CRM) software applications to a client-facing application.



Redtail’s easy-to-use web-based CRM system helps you manage your internal staff; Advisor Products' secure Client Portal system helps you communicate with clients effectively.



Redtail CRM tracks and organizes all your client activities. Featuring online calendaring as well as task management, Redtail is easy to use and offers a low cost of ownership.



The Advisor Products Client Portal lets you provide each of your clients with a secure financial home page. Information is fed from your firm's applications for performance management, financial planning, and client relationship management. Client Portals also feature a vault and newsletters written by Advisor Products that are personalized to each client’s profile, making a great presentation of all the information clients need from you.



Utilizing eXtensible Markup Language (XML) feeds, data flows automatically from Redtail to Client Portals and vice versa. The XML feeds save you time and money because you don’t need to re-key data from one application to another.



Using the Advisor Products-Redtail integration is simple. In Redtail, which is a web-based CRM, there’s a page where you fill in details about an Activity your firm is performing for a client.



At the bottom of every Activity page is a checkbox to “Share with Advisor Products.” Checking that box automatically sends that activity to your clients' portals.



Whenever your firm completes an activity for a client, you can insert a note about the completed task in the Activity page in Redtail and it will flow automatically into the corresponding client's portal.



Clients, thus, can see all of the work you do on their behalf. That's important since most of the work advisors do is unknown to clients.



The Advisor Products Client Portal system features a “To Do Manager.” The To Do Manager is where all Achieved Tasks are displayed to your clients.



When you click the “Share With Advisor Products” checkbox in Redtail, that activity is displayed in your client’s secure personal portal as an “Achieved Task.”



In addition to showing clients all of the work your firm does for them, you can also assign clients tasks in Redtail that will automatically be fed for display in To Do Manager.



From the Activity page in Redtail, just pull down the Category menu and choose “Portal Client To-Do.”



That Activity in Redtail, as well as any updates to it, will be fed into the client’s portal.






The integration of these two applications means nothing falls through the cracks with clients anymore.



The integration of Advisor Products with Redtail also makes it easy to provision new client portals, as the demographic information from Redtail can be automatically fed into the Client Portal Platform.




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5806 Hits

Reducing The Rate Of Client Failure



Why do some advisors annually get fired by 10% of their clients or more while other advisors consistently lose just 2% or 3%?



With the impact of the financial crisis hitting advisory firms and clients alike, the answer to this question is critical and may not be that complex.



Clients fire you because they feel disconnected from you and your firm. They leave when you lose credibility, when you fail to touch them in meaningful ways, when you fail to confront their crucial financial issues with them.



Clients don’t fire you because of investment performance. They fire you because they feel you let them down and do not provide enough value.



When a client fires you, it’s not just you who loses. They, too, often lose. Clients that fire you may hire an advisor who is not as devoted or competent. Or they may try to manage their money on their own, which may lead to failure. When a client fires you, it’s often not just you who has failed. They also fail.



What can you do about it? How can you stem your attrition rate and help more people by giving them good financial advice?



The answer doesn’t lie in a new financial product; we have enough products. The answer is not in a new market-timing strategy; we all know diversification is the wise course because no one can predict the future.



The answer is in your communication with clients. It’s in your ability to draw people out, to make it safe for them to share with you their greatest fears, and your desire to actively listen and then meet their demons head-on with reason and intelligent solutions. The way to retain clients is to be deeply engaged in ongoing financial conversation with them about their greatest fears and dreams.



So I asked one of the world’s foremost experts on crucial conversations for help—the authors of The New York Times bestseller, Crucial Conversations: Tools For Talking When The Stakes Are High. To my amazement, the authors were intrigued and have designed a way for financial advisors to better understand how to conduct crucial financial conversations with clients.



Published in 2002, Crucial Conversations, has influenced millions of business leaders. “This is a breakthrough book,” said Stephen R. Covey, author, The 7 Habits of Highly Effective People. “I found myself being deeply influenced, motivated, and even inspired.”



The authors of Crucial Conversations, Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler, established a consulting firm, VitalSmarts, which has developed dozens of corporate training programs for dozens of Fortune 500 companies.



David Maxfield, a respected academic, was named head of research at VitalSmarts. Maxfield has taught at Stanford University and the Marriott School of Management at Brigham Young University. He is the recipient of Motorola University’s Distinguished Teaching Award and Stanford University’s Dean’s Award for Innovative Industrial Education. Maxfield is also the author of the 2007, Influencer: The Power To Change Anything.



Maxfield has been working with me to research how well financial advisors handle crucial conversations with clients. On July 10, at what promises to be a special session, Maxfield will lead a presentation at The Financial Crisis Webinar Series in which he will teach advisors the basic skills needed to conduct crucial conversations with clients.
You can reserve a place at this free webinar now by taking a 10-minute survey designed to measure financial advisors’ ability to conduct crucial conversations with clients.



The full impact of the financial crisis has not yet been felt by advisors. Investors have been paralyzed by fear. Many advisors are likely to be fired in coming months as the shock of the crisis subsides. Please take the survey and join us as we all heal the wounds of the meltdown and try to learn from it.










  13197 Hits
13197 Hits

Password Management And Form Filling


At a recent webinar I conducted, I briefly showed attendess a program I use for password management. An advisor today emailed me a question asking me about that program.



Incidentally, if you have questions for me, please post them as comments on my blog. Don't email them to me. A lot of other advisors who read the blog regularly can probably benefit by seeing your question or may be able to answer it. I'm trying to create a community here and would genuinely appreciate your help by posting your comments and questions. About 1,000 unique visitors come to my blog every day and it would be great if you were all more visible and kept me in line.I've seen a nice increase in the last week or two in comments and appreciate that.

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5296 Hits

Schwab Tech Honcho Skiles Resigns


Dan Skiles, the face of advisor technology to 5,500 RIAs clearing through Schwab Institutional, resigned his post several weeks ago and started a new job today at Shareholders Service Group (SSG).



Why did the affable 38-year-old executive leave Schwab, by far the largest custodian serving independent advisors, for SSG, one of the smallest custodians? Partly, Skiles says, because SSG offered him a partnership stake and partly because SSG reunites him with former colleagues from his pre-Schwab days, but mostly because he wanted to see his two children more.



In March, when Skiles’ seven-year-old son, Luke, set the table for dinner for his wife and six-year-old daughter but set no place at the table for his father, who he assumed was travelling on business, Skiles says he decided his life was out of order.



“SSG is an opportunity to feel challenged and passionate about my work, which I was at Schwab, but also to still make it home for dinner every night,” says Skiles. “My dad went to Vietnam and was away from my brother for an extended period. He didn’t have a choice, but I do.”



Skiles is an expert on practice management and his role at Schwab landed him at the center of crucial advisor technology issues.



As vice president of Schwab Institutional advisor technology solutions, Skiles was responsible for running a department with 10 technology consultants who are stationed all over the country and charged with giving advisors free advice about implementing portfolio management software and other key systems. In addition, Skiles also oversaw Schwab Performance Technologies, a Schwab subsidiary that owns and distributes PortfolioCenter, a leading portfolio reporting software used by 3,400 RIAs.



A San Diego native, Skiles graduated from San Diego State University in 1993 with a bachelor's degree in recreation management and opened a rock climbing gym with several roommates. He worked in that business for only a few months before being introduced to Robert Reed, a senior executive at discount brokerage Jack White & Co., in 1994. At their first meeting, Reed, who was the No. 2 executive at White, asked Skiles to come back later that same day to meet Peter Mangan, who ran White’s mutual fund supermarket and fledgling RIA business. Mangan hired Skiles on the spot. (The rock clmbing business was sold within a couple of years sold but remains a successful company.)



Internet discount brokers like White grew wildly in the mid-1990s and Skiles handled everything from working on the phones with retail clients to manning the trading desk and helping define technology for advisors. In 1998, when TD Waterhouse purchased White, Skiles was tapped to explain the merged firm’s technology solutions to advisors, and he was instrumental in the design and implementation of VEO, a web-based interface for advisors to Waterhouse’s brokerage platform.



In September 2001, I invited Skiles to participate in a panel I was moderating at the FPA Retreat featuring technology chiefs from all three major custodians—Fidelity, Schwab, and Waterhouse. I invited all three executive to lunch, where Skiles met Rich Freyberg, who then headed advisor technology at Schwab. Freyberg told me after that meeting that Skiles was a “Boy Scout” (referring, presumably, to Skiles’ integrity and not his boyish, clean-cut looks). Several months later, Skiles went to work at Schwab Institutional.



Skiles had a tough job at Schwab because the giant brokerage competes with advisors for retail business and makes portfolio accounting software, a critical system in advisor businesses. Many RIAs for years were uneasy about allowing Schwab to provide their core technology system and custody services, a tension that came to a head in 2001 after Schwab announced it would stop selling its CenterPiece PMS system to advisors that did not use Schwab as a custodian. As Skiles rose in Schwab’s ranks and gained influence over decisions about the company's advisor technology, he was able to avoid hitting such hot-button issues, and relations between Schwab and its RIAs have in recent years been less controversial.



Working at SSG reunites Skiles with Reed, an executive VP and chief compliance officer at SSG as well as with Mangan, SSG’s CEO and majority owner. As I wrote in a
recent post, SSG is now a custodian to about 500 RIA firms and it is experiencing a boom amid the economic bust. While the $2 billion amount of assets SSG custodies for RIAs is dwarfed by the big-name custodians—Fidelity, Pershing, Schwab, and TD Ameritrade—SSG has built a profitable business around smaller RIAs that the larger custodians don’t value as much.



According to Mangan, SSG is making inroads with established RIAs with an average of about $30 million of assets under management and who run portfolios of funds, ETFs, and stocks. It’s also gaining traction, he says, with advisors leaving regional and wirehouse brokerages who typically bring no assets initially but garner an average of $15 million in assets from clients within a year of transitioning to SSG. While SSG uses Pershing to clear, and Pershing has its own RIA custody business, Mangan says SSG has differentiated itself by providing diligent service to its advisors and putting together a unique technology platform.



Skiles, who is the 13th employee on the SSG staff, will work on improving internal technology systems used by SSG to service advisors and to help build a technology platform used by its RIA clients. With the broad but undefined title of executive vice president, Skiles' likable personality and natural skills in marketing, communication, and sales as well as his knowledge of advisor technology is likely to help SSG gain a higher profile with advisors even as it is dwarfed by
Fidelity, Pershing, Schwab, TD Ameritrade.




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5616 Hits

What Would FINRA Do?


Investment advisors who have reflexively blasted SEC Chairman Mary Schapiro for saying the government should further regulate RIAs ought to look upon the civil fraud complaint filed against former NAPFA President James Putman as a cautionary tale.



I’m no big fan of FINRA. The Self-Regulatory Organization’s rules often get in the way of communicating with clients and running an honest advisory business. But the SEC’s allegations against Putman are so terribly damning.



Inarguably, additional rules are needed to better protect investors from unscrupulous RIAs. Far less clear, however, is whether being regulated by FINRA would have prevented the fraud Putman is accused of carrying out.



While the case against Putman is but one of a string of SEC enforcement actions targeting RIAs in recent weeks, it’s notable because Putman was a prominent member of the fee-only advisor community and at the moment this once-priestly segment of the advisor world benefits by confronting some ugly realities about the erosion of fidelity within its ranks. With RIAs vociferously protesting SEC Commissioner Schapiro’s stated intention to “harmonize” rules faced by RIAs with those faced by securities salespeople, reps of RIA may be more mindful that something must be done to protect the public’s trust in investment professionals if they understand the facts of the case against Putman.



In reading my summary of the facts stated in the 30-page, nine count SEC civil complaint filed against Putman, his RIA, and his former president and chief investment officer, please think about whether FINRA regulation would have better protected his clients. Leave a comment with your thoughts.



Background

Putman, 57, started Wealth Management LLC, an Appleton, Wis. RIA, in 1985. He served as president of NAPFA in 1996 and 1997. Putman reportedly has not been active in NAPFA in recent years. However, as recently as September 2006, he participated as a panelist at a “NAPFA Cutting Edge Conference,” speaking at a session entitled, “The Search for the (NEW) Investment Paradigm.”



Putman is charged by the SEC with a litany of securities law violations, along with Simone Fevola, 49, who was president and CIO of Wealth Management (WM) from September 2002 to October 2008. The wrongdoing allegedly surrounds six unregistered private limited partnerships created in 2003 by Putman, which significantly changed his firm’s business model. In one of several similarities withthe Madoff fraud, WM took custody of client assets in the pools.



The pooled investments were structured like hedge funds and, as private vehicles, were unburdened by the need to register publicly. Each of the six funds had a specific objective, according to Part II of Wealth Management’s (WM’s) Form ADV ranging on the risk spectrum from capital appreciation to income producing. None was described as speculative. They were to invest in other private funds, funds of funds, debt, real estate partnerships and trusts, and asset-based loans.



As is often the case, the funds wese given an assortment of cryptic names, such as Gryphon, Quetzal, Pantera, and Watch Stone. Putman, who had discretion to invest on behalf of his clients, invested about 47% of his firm’s clients in Watch Stone and 40% of them in Gryphon.



Allegations

According to the SEC complaint, offering documents for Watch Stone and Gryphon, the two largest of Putman’s pools, say their investment objective would be “to achieve a high level of income consistent with the preservation of capital” and the pools would primarily invest in “investment grade debt securities.” However, Putman and Fevola invested in “risky illiquid alternative investments,” the SEC says. It gets much worse.



An April 14, 2009 Form ADV filing by the federally regulated RIA claimed investments in the six pools were worth $102 million and that WM had another $29 million in separately managed accounts. The SEC says nearly 90% of the $102 million in client funds was invested in two of the partnerships, Watch Stone and Gryphon, which respectively had $50 million and $38 million. The SEC says now that the six WM funds “appear to have limited remaining assets.”



The SEC says Putman loaded up Watch Stone and Gryphons with investments in a life-insurance premium financing partnership that was managed by Joseph Aaron. Aaron in 1996 had been the subject of an SEC enforcement action alleging that Aron had committed fraud in selling promissory notes to investors. Moreover, the SEC says, Putman and Fevola knew about Aaron’s disciplinary history by 2004 but they still failed to verify that valuations Aaron placed on his funds were accurate.



Not only did Putman and Fevola fail to disclose Aaron’s shady past to WM’s clients, but the SEC says they also each accepted “undisclosed kickbacks” from him of $1.24 million in 2006.



Thus, even if you believe that Putman and Fevola were victims duped by Aaron, the SEC allegations paint a picture of Putman and Fevola falling in deeper with Aaron instead of blowing the whistle on him and admitting their mistakes to WM’s clients.



Meanwhile, in addition to the disastrous investments in Aaron’s life insurance investment scheme, other investments made by Stone Watch and Gryphon also went bad. Three of Stone Watch and Gryphon’s largest investments beyond Aaron’s partnerships are now in bankruptcy. Two are real estate funds, managed by California-based MKA Advisors, that went bankrupt in April 2009 and another investment is in fund called Sagecrest, a Connecticut partnership investing in asset backed loans that went bankrupt in the summer of 2008. While Putman in December 2008 wrote off 50% of the value of Sagecrest, the SEC says Putman has continued to value MKA’s investments at pre-bankruptcy levels in reports to clients.



The SEC alleges Putman had never fully disclosed the risks of the underlying funds invested in by Stone Watch and Gryphon, saying the funds were investing in investment grade securities when the offering documents for the underlying funds said investments were be risky and speculative, such as oil drilling deals. The SEC complaint cites a 70-year-old retiree with Alzheimer’s disease who had signed an investment policy statement targeting a fund with a 95% allocation to fixed income securities.



The Case Now

In the last 10 months, a majority of WM’s staff resigned or was terminated, the SEC says. To a reporter who has read many such SEC complaints over the last 25 years, it seems likely that WM staff, possibly Fevola, is actively cooperating with the SEC investigation and that the SEC is now targeting Putman.



As of December 30, 2008, the SEC says Putman valued Watch Stone at $47 million and Gryphon at $22 million. But according to notes taken by a staffer of the RIA during a recent client meeting, the SEC says, Putman admitted to the client that its investment in one of Aaron’s deals could be worthless.



One investor, whose statement cites an investment worth $1 million, was recently told by Putman that his investment could be worthless. Another investor, with a reported value of $670,000 on his 2008 year-end statement, told SEC investigators that he was recently informed by Putman that his investment could also be worth nothing. The SEC says Putman has continued to collect his 1.25% management fee on the funds based on the allegedly overstated valuations of the assets.



The government says that in February 2008 Putman wrote to clients saying that he was was limiting redemptions to 2% per quarter of the value of each client’s holdings for liquidity reasons. However, the SEC says he has arbitrarily honored full redemption of some investors.



“Absent immediate relief, it is likely WM and Putman will distribute the remaining assets of the WM Funds to a few investors who submitted redemption requests prior to September 3, 2008 and leave remaining investors with little or no recovery.”



What's It Mean?

The SEC complaint against Putman should serve as a cautionary tale to advisors. Those who knew Jim Putman say he was a straight shooter and cannot imagine what could have led him down such a tragic path. It's unlikely that Putman intended to defraud his clients when he started the partnerships in 2003.





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Former NAPFA President Faces SEC Fraud Charges


A former president of the National Association of Personal Financial Advisors (NAPFA) was charged by the U.S. Securities And Exchange Commission yesterday with accepting $1.24 million in kickbacks, dealing a highly embarrassing public relations blow to NAPFA, a champion of consumer rights, advisor integrity, and applying the fiduciary standard to advisors.



The SEC complaint alleges that James Putman, founder, majority owner, and CEO of
Wealth Management LLC of Appleton, Wisconsin, accepted $1.24 million in undisclosed payments derived from investments made by the unregistered investment pools. Simone Fevola, the firm's former President and Chief Investment Officer, was charged along with Putman for taking undisclosed payments from the unregistered investment pools.



The SEC also alleges that Wealth Management, Putman and Fevola misrepresented the safety and stability of the two largest investment pools and placed clients into these investments even though they were inconsistent with some clients' objectives.



According the SEC litigation release
, the agency filed an emergency civil action in U.S. District Court of the Eastern District of Wisconsin to obtain an order to freeze the RIA’s assets.



The SEC alleged Putman and Fevola sold clients the private deals from May 2003 through August 2008. In 2006 and 2007, the SEC says, Putman and Fevola each accepted at least $1.24 million in undisclosed payments derived from certain investments made by the pools.



According to the SEC, Wealth Management claims currently to have approximately $102 million of its clients’ assets invested in the pools. However, the SEC says that the pools have “limited remaining assets and that it appears likely that the reported values of the pools are substantially overstated.” The SEC's complaint alleges that the pools' assets are largely illiquid, and Putman has provided redemptions to investors based on what the agency believes to be overstated valuations.



"As we allege in our complaint, Putman and Fevola put their own financial greed ahead of the safety and stability of their clients' investments," said Merri Jo Gillette, Director of the SEC's Chicago Regional Office. "They abused the trust that their clients placed in them, and emergency enforcement action was necessary to prevent further harm to those clients."



The SEC's complaint charges Putman, Fevola and the RIA with fraud. In addition to seeking emergency relief, the SEC's complaint seeks permanent injunctions barring future violations of the charged provisions of the federal securities laws, disgorgement of the defendants' ill-gotten gains plus pre-judgment interest, and financial penalties.



According to Putman’s biography on his firm’s website, Putman was co-founder and the first President of the Northeast Wisconsin Chapter of the International Association for Financial Planning (IAFP), now the Financial Planning Association. He served on NAPFA’s Board of Directors in 1995 and 1996 before being elected as President of NAPFA and serving his term in 1996 and 1997.



Wealth Management’s website features the cover of Financial Advisor, the trade magazine for which I write, which wrote a story quiting him a year ago. (A previous version of this post incorreclty characterized the FA story as "flattering.") It also features a cover story from Bloomberg Wealth Manager Magazine, entitled “Pooled Assets: Why Some RIAs Are Creating Customized Investment Vehicles,” in which Putman is quoted extensively. The site also features a Worth Magazine (my former employer) cover story from July 2002 in which Putman was selected as one of the “Top 250 Financial Advisors In America,” and the cover from Medical Economics’ November 2006 list of the “Top 150 Best Advisor For Doctors.”



The allegations of wrongdoing against a former NAPFA president could not have come at a worse time for the group, which is part of a troika with FPA and the Certified Financial Planner
® Board of Standards lobbying Congress for creation of a new Self Regulatory Organization to oversee financial planners. Last month, another NAPFA member, Matthew Weitzman of AFW Wealth Advisors in New York City, was caught up in scandal and was reportedly the target of an SEC probe,
according to a story by New York Times personal finance columnist Ron Lieber, who was one of Weitzman’s clients.



In a post here just yesterday, I mentioned that the continuing string of scandals involving RIAs make it unlikely that any effort to further regulate RIAs could be thwarted by NAPFA, FPA and the CFP
Board. But revelations about Putman are particularly sad because he held himself out as a leader of NAPFA, an organization that is dominated by members with great integrity, advisors who have always been at the forefront in campaigning for issues in the interest of consumers. To see NAPFA’s reputation stained by a few bad members is heartbreaking.



For years the "fee-only" brand and NAPFA's brand itself were slowly compromised.The fee-only brand starting about 10 years ago was embraced and then abused by advisors who take hidden sales fees and behave unscrupulously. (NAPFA did try saving it by trademarking the term "fee-only," but was met by harsh criticism and gave up the fight.) Now, however, the NAPFA brand itself has been abused, which will inpsire a new skepticism from the press and cause confusion among consumers.



While NAPFA has remained a beacon of light in the sometimes shrouded world of financial advisors by supporting a fiduciary standard, it also increasingly became a marketing machine for advisors who used the referral network and favorable press garnered by NAPFA to grow their businesses and who were little interested in the high ideals of many the group’s members. Perhaps the news about Putman’s troubles will cause an introspective discussion among NAPFA members and help the group reclaim its high moral ground.



One other good thing that may come of this is that maybe—just maybe—a reporter in the consumer press will write about the idiocy of these “top financial advisor” lists, which sell magazines but stink at figuring out which advisors are really the best. There is no substitute for real research, which these magazine stories always fail to do. While the articles in Worth and Medical Economics were great marketing for Putman’s firm, these publications can’t possibly research all of the nation’s advisors and find the best ones without a massive effort, an undertaking they are unlikely to know how to effecutate or finance.



There ought to be rule prohibiting advisors from using the “top advisor” lists as the centerpiece of their marketing effort when the list is old. Worth has done several new lists since 2002, but Putman’s website does not mention this. It just has the cover from Worth’s 2002 issue on the home page. The same true of the Medical Economics list from 2006 on Putman’s site, which makes no mention of the more recent lists by the magazine, which presumably left out Putman.



Putman-SECComplaint.pdf (1.10 mb)


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More On RIA Regulation Changing


Pat Allen's question about my previous post about RIA regulation touches on an important issue. She wrote:




“I've been thinking that the reason Investment Advisors are more communicative on the Web is that they are not regulated by FINRA. Is that right--would you expect that a different advertising standard will be applied? One consequence of which would be that IAs will be discouraged from blogging, tweeting, etc.?”

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Life Planning Will Be A Winner In The Financial Crisis


While the economy has escaped the most frightening doomsday scenario, the financial crisis is far from done with us. Department stores and malls remain practically empty in Long Island most weekdays. Getting into fine restaurants on a Saturday night no longer requires reservations weeks in advance. Workers at my local Home Depot are so fearful of losing their jobs that they're actually friendly and service-oriented now. Meanwhile, in our corner of the economy, many advisors worry that over the next couple of years clients who have been disappointed by their portoflio's performance will fire them.





However, the setback suffered by clients in their retirement portfolios and the rampant distrust of financial advisors unleashed by the Madoff scandal are likely to cause advisors to rethink the way they practice. Advisors will reinvent the financial advice business. As with earlier financial crises, change will follow. Progress will come inevitably. And a winner when this crisis ends is likely to be Life Planning.




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How Will RIA Regulation Change?


As the number of Ponzi schemes and investment frauds prosecuted by the U.S. Securities and Exchange Commission soared in recent months, so did the odds for change in the way small RIAs are regulated.



You don’t have to be a math genius to understand the calculus. In the last six weeks, the SEC issued press releases about prosecuting 18 fraud cases involving registered investment advisers, hedge funds, and Ponzi schemes. During the same period a year ago, the agency brought just six such cases. It prosecuted one such case during the same period in 2007.



Add to these grim statistics the Obama Administration’s vow to clean up Wall Street, massive mistrust in Wall Street, and the announced intention of the SEC chairwoman Mary Schaprio to “harmonize” RIA and broker regulations. The equation logically leads to one solution: RIAs are likely to be regulated by FINRA.



The coalition announced earlier this year of the Financial Planning Association, National Association of Personal Financial Advisors, and Certified Financial Planning Board of Standards is likely too little, too late. The coalition proposes creation of a new regulatory body to regulate financial planners. However, Congress is unlikely to complicate the regulatory framework further by supporting any effort to create yet another regulatory body that is new and has little history of regulating other than the 60,000 or so CFP designees.



I’m not an expert on Washington affairs but a proposal to create a new regulatory body to oversee financial planners would look wasteful, since a statutorily-empowered self-regulatory organization that regulates retail financial advisors already exists. While FINRA’s bureaucracy and history of being dominated by large Wall Street firms is likely to put RIAs in a bad position, it’s hard to imagine any entity other than FINRA taking the reins in regulating RIAs.



So it’s time to start wondering aloud about what it will mean if indeed FINRA becomes the regulator of RIAs. What will the new regulatory regime mean to RIAs and financial planning firms? Here are my guesses:





  • Compliance expenses for RIAs are likely to rise sharply once FINRA is in charge.

  • RIAs will be required to pay some additional fees to FINRA to help defray the cost of a FINRA examination program.

  • Instead of naming a junior-level employee your chief compliance officer (CCO), your CCO may have to pass an exam as is required by FINRA.

  • IA reps will have to pass a competency exam akin to the Series 7.

  • RIAs will be required to submit for review to FINRA client communications touching on certain subjects, such as limited partnerships, recommendations of stocks, mutual funds or derivatives, or that describe your performance history.






What do you think? Let the speculation begin.

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Correction To My Twitter Webinar


My webinar, Twitter For Advisors, on Friday, May 8, contained an error.



In the presentation, I incorrectly said that if you keep your tweets private and approve all of your followers on Twitter, other Twitter users could not see your followers. That's incorrect.



While approving your followers allows only approved followers to see your updates, any other Twitter user can still see your followers.



It’s important for financial advisors to keep this in mind. I incorrectly advised in the presentation that, if you create a separate profile for clients only, other Twitter users could not see them. Even if you protect your updates using the checkbox in the “Settings” menu in Twitter, any other Twitter user can still see your profile and the list of your followers.

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