No More Bull

Merrill Lynch was acquired by Bank of America in the fall of 2008. It’s probably too soon to tell what the new Merrill will be like but this past week Bank of America premiered the new Bank of America Merrill Lynch logo and much to my surprise, there’s no bull.

Merrill Lynch


The penetration of the Merrill brand signified by the bull was so thorough that Merrill’s bull became a veritable symbol of the brokerage industry. To me, the bull was a symbol of strength; not in a head down charging at you kind of way but in the, “I’ll get you through the tough times” kind of way. In retrospect, I guess it’s no surprise that in the current economic environment, we’d lose the bull.

In addition to what’s going on in the market; mergers, consolidations and acquisitions in the financial industry are occurring more quickly than I can track.

A.G. Edwards became Wachovia which became Wells Fargo. The AG Edwards flame logo is gone and I’m sure that the Wachovia wave (I think it’s a wave) can’t be far behind.I must admit, I kind of like the Wells Fargo horse and carriage. It reminds me of the pioneer spirit that we could really use right about now.

Wells Fargo

Smith Barney and Morgan Stanley are now one company. I wasn’t able to find a flame or a wave or a carriage type logo for either of those firms; just words and they’ve apparently decided to keep all of them calling the new firm Morgan Stanley Smith Barney.

Margan Stanley Smith Barney

All these changes have presented challenges to clients and employees alike and I’ll leave the opinions on whether or not all this consolidation is good for shareholders to the investment bankers and analysts. But I hope as clients all this transition reminds us to focus on the advisor relationship rather than the name on the building because clearly, the name on the building is subject to change.

As clients we need to focus less on “the bull” and more on the man or woman that we’ve entrusted with our finances. Don’t wait for them to call you they may be a little distracted by the realization that they work for a whole new firm even if they’re in the exact same office with all the same people.

Unless you were really fortunate or really lucky over the past few years, it’s time to get down to business.

No more bull.

Love Letter

As someone who's been married for only six years, I'm constantly looking to those that have been in the game a little longer for wisdom. I recently had the pleasure of talking to such a woman who shared details a love letter from her husband. As she spoke of the content, I could feel my eyes well up and my heart begin to race.

She didn't call it a love letter. That's my term. The content of her letter didn't include any of the things that we often view as romantic. In fact, it was just a list. There was no "My Darling Jessica" and it's wasn't signed "All my love Joe". It was just a list.

Those of you who know me won't be surprised at all to hear that it was a list of all their personal financial information; where to find things, who to talk to and what to do when he was no longer there. In my opinion Joe's list is a thoughtful and truly loving gesture that says, "I'm thinking of you and I want to take care of you even when I'm not here anymore."

What's more romantic than that?

Find the Money to Make Financial Goals Reality

As I began to deliver a speech to a group of my peers at my 20th college reunion this past weekend, I listed the things that I’d be covering in my presentation.

When I got to number four, “Find the Money to Make Goals Reality”, I heard a faint, “Hope you’ve got a magic trick for that one” from the front row.

I always enjoy audience participation but that comment was a gift (I know you weren't expecting the word gift there). It gave me the opportunity to focus on number four for a while.

My reply went something like this, “We all know that we have limited resources and many of us believe that that we should subtract fixed costs from income to “Find the Money to Make Goals Reality”.

I go a step further. My contention is that nothing is fixed and if your so called fixed costs (mortgage, taxes, high end vehicles etc.) are preventing you from achieving your goals, then you either need to reevaluate your goals or your lifestyle.

People come to America from all over the world. Many of them share housing and live modestly while they save and invest in futures together; in true pioneer fashion.

Many of us that are born here have no sense of the pioneer spirit, couldn’t imagine sharing a living space and are out there all alone trying to make a business a success.

In light of the current economy maybe we she revisit the pioneer spirit that made America ~America.”

That may not have been my most popular response of all time. But as much as I’d like to be popular, that’s not my purpose. My purpose is to educate and be an advocate for financial security.

To that end, I encourage you to spend a few minutes listing your goals and your fixed costs and making sure that they are in sync so that you can create the life you want for yourself and your family.

I finally understand why people don't open financial statements and it has nothing to do with the market.

I had a long chat with a friend yesterday and since then I’ve been thinking about how much she’s has evolved.

We met shortly after she finished college. She always been good at saving and even then she had quite a chunk of cash saved. Beyond that, she paid little attention to her finances.

I’ve spent much of the past ten years, convincing her to get organized, set goals and get a handle on her investments. Yesterday was one of my proudest moments not just as her friend but as her financial mentor.

She told me how she had found a “real” accountant and explained that she would be taking advantage of the tax credit for first time homebuyers, even pointing out that last year’s credit was different from this year’s credit. And I practically feel off my chair when she told me that she had been encouraging her younger co-workers to start saving, exclaiming, “They’re crazy if they don’t save now. They’re twenty-somethings living at home with their parents.” I felt like a proud mother.

We talked about how far she’d come and how she used to have months worth of unopened financial statements piled on her desk. And after fifteen years in the financial services industry, I learned something new yesterday when she said to me, “Those papers made me feel stupid.” This is a solidly middle-class woman with two college degrees and she felt stupid because her financial statements were difficult to understand. As someone that has always been into this stuff, I had dismissed what I’m now calling “pile phobia” as procrastination and yesterday I got it. Other people avoid financial statements for the same reason I avoid puzzles. I’m horrible at them and they make me feel stupid. Thank God, there’s nobody sending me three to four puzzles to get through every month. I wouldn’t open my mail either.

Personal Financial Management isn’t generally part of the curriculum for students that are college bound. Once we’re in college, many of us study Economics but there is little if any reference to personal finance. If we’re lucky, we have a good advisor or a friend or parent that teach us. If not, we do the best we can or leave it to someone else hoping that they are competent and have our best interest at heart.

My friend recognized her phobia (long before I did) and faced it. She sought my advice and took it. She was patient and listened even when I criticized. Now she opens her mail, asks questions when she doesn’t understand and feels empowered enough to share what she’s learned.

Kudos to her! Hopefully, she’ll be able to say the same about those “twenty-somethings” one day.

Too Much Stuff

We’ve been blessed with incredibly generous friends and family but I never realized just how generous they were until our son was born.

These wonderful people have given our son far more gifts than we can keep track of and saved us thousands of dollars. We appreciate the generosity and realize that the gifts are an expression of love and our challenge now is to balance our gratitude with our desire to keep our son grounded.

These days, he’s convinced that every guest is coming to bring him a gift and it’s getting harder and harder to elicit a sincere, “Thank you”.

I’m puzzled by how hard it is for me to convince people that quality time is by far the best gift. We even tried a “no gifts” birthday party for his second birthday. We decided that our gifts, a new sand box, a set of golf clubs and the party itself were enough. But things didn’t’ work out the away we planned. We could’ve filled a small truck with the loot that he got for the “no gifts” party.

Thankfully, our little guy is warm, friendly, and social. But I’m really concerned that he spends at least a few minutes every day reviewing his train brochures and asking, “Have this train”? My response is a simple, “No, you can’t have that”, and he nonchalantly responds with a “Maybe Aunt Paula”, or “Maybe Uncle Joe”. How do you we respond when he’s probably right?

Even more interesting as we’ve just celebrated Holy Week is the pressure for us to buy him even more stuff. You expect peer pressure among children but what amazes me lately is the spending pressure that comes from other adults.

I lost count of the number of people that asked our son if the Easter bunny was good to him. I am not anti-Easter bunny. He’s very cute but during Holy Week he’s just not our focus. Myth aside, my husband and I are the Easter bunny and I’d like to think we are very good to our son all the time. And sometimes the best thing a Mommy bunny or Daddy bunny can do is say, “No”.

When we celebrate our son’s next birthday, once again I’ll say, “’No gifts please.” To all our friends and family, I’ll say, “Please give him time. Come to his party. Come before. Come after. Look into his eyes and tell him a story or play a game. Those gifts are always the right size. They are good for the environment. They are fiscally responsible. Those are the gifts that will last a lifetime and those gifts will make him a better man. Stuff will not.

Ten Questions to Ask when Interviewing a Financial Advisor

Before you ever talk to an advisor, there are a few things that you need to do to prepare. We'll get to the "Ten Questions" very quickly but first, take these four steps:

1. List your top three to five financial goals in order of priority.
2. Assign a time frame to each goal.
3. Calculate the amount of money that you have available to apply to each goal.

Example: After all bills are paid, you have $500.00 each month. You have three financial goals and would like to apply $250.00 to the first, $150.00 to the second and $100.00 to the third.

4. Understand the differences between different types of advisors, full service discount, fee based, and advice only planners. Decide which type of advisor suits your needs and then you can start interviewing.

As someone that has worked in the brokerage industry for more than a decade, my take on the “Ten Questions”, is a little different than most. In fact, they’re not all questions and hopefully they offer unique insight into the personality of an advisor.

Here they are:

1. "Do you have minimum or maximum account sizes"? Lots of advisors do. Save yourself some time by asking this.

2. Over the years, I’ve observed that advisors’ clients mirror their personalities. My next question/request would be, “Tell me about your favorite and least favorite clients." Their answers will give you a sense of who they are and the type of person they like to work with.

3. Next, I’d ask, “Will you make any money on my account”? The answer here should be, "YES" and it should be an amount or percentage that you’re comfortable with. A good advisor is a great asset and if they don’t make money, they won’t be in business for long.

4. I’d also ask, “Will I make any money on my account”? We all want the answer here to be yes. But there are few guarantees in the investment world. An honest advisor will tell you that and come up with a plan to capitalize on market gains and protect you from market losses while minimizing expenses.

5. So that you’ll know what to expect you should ask, “How often will you call me"? An organized advisor will have a regimen but the best answer here is probably, “Whenever there’s something that we need to discuss." Ideally you and your advisor will talk at least once a year to review your goals and circumstances but you should talk more during times of transition. You should also be calling your advisor. The best client/advisor relationships have two proactive participants.

6. A good follow up to number five is, “Why will you be calling me?" This one is a little tricky but if I had a nickel for every time I’ve heard, “My advisor only calls when he or she has something to sell.”, I’d be retired instead of writing this. Ask the question and listen closely to the answer.

7. There are a million things that an advisor can do to earn a living so to gain insight into how the advisor conducts their business, ask, “What’s a typical work day like for you?"Each person would like to hear a different answer to this question, but I’d like to hear, "I come in and review accounts, keeping an eye on gains, losses, asset allocation, goals and investment strategies. I have lunch, meet with two to three clients and go home." I like the system because it’s simple, organized, shows a balanced life and is mindful of client goals.

8. Next I'd ask "How does your account performance compare to the market?" Good advisors will tell you (truthfully) that there’s no one size fits all approach and that performance varies from account to account. But they should also be able to give you at least two examples of clients like you and how they’ve faired. Generally, the brokerage industry does not measure advisor vs. market performance so you’ll need to get this answer yourself.

9. You should also ask, "How much longer do you plan to work in the industry?" You’ll need to know this if you’re interested in a long term relationship.

10. My favorite question is, "What is the most important service that you provide for your clients?" It will tell you what the advisor brings to the table and you’ll know if it’s what you need.

Th Business of Marriage

As we approach wedding season, countless starry eyed brides and grooms are planning the event of a lifetime.

The venues, gowns, flowers and favors have all been chosen. The guest lists are being finalized. The limos have been booked and the shopping for the all important honeymoon has begun.

At their very best weddings are sacred and beautiful. And men and women enter into matrimony with the best possible intentions as they blend their lives and families.

Having spent more hours than I care to admit planning my own wedding, I can honestly say that I have no regrets. Our wedding day was one of the greatest days of my life. The ceremony was touching, the food plentiful and delicious, and the party was a blast.

Thanks to my dear friend Sharon who insisted that I pack a pair of wedding sneakers, I was able to truly enjoy the celebration.

My husband and I are happily still together despite more than our share of challenges. Though I’ve acknowledged that our wedding day was great it has little if anything to do with the success of our union.

We are bound by our faith and our values and very simply, we made a commitment to take care of our family business long before we were family.

Once we were engaged and before any wedding planning began, life planning began. We took time to plan our marriage. We met at a restaurant, pen and paper in hand and we had a business meeting.

We discussed the fact that we felt very fortunate to have come as far as we had. Neither of us grew up wealthy but by our teens we had come a long way. At age fourteen, I took a job that paid about a hundred dollars a week and he took up tennis which led to national recognition.

My husband earned a Masters in Education. I studied Economics and was in the midst of earning my CFP® designation when we met.

In our meeting, we discussed our goals and dreams in a very practical way. Though we decided against it, we discussed a prenuptial agreement. We talked about, salaries, savings, investments, children, home ownership, joint versus individual assets, vacations and retirement destinations. We decided upon an appropriate amount of life insurance and decided when we would apply.

We’ve had many more meetings of that type since our wedding day and those meetings pen and paper in hand and hearts and minds open have made us a family. The time we’ve spent on them has created a marriage out of the foundation that we lay before our wedding day. I encourage those planning a marriage today to follow in our footsteps.