Is Cash’s Crown Askew?

Mobile applications are changing everything about the American experience, and money is no exception.

The Pew Research Center’s Internet & American Life Project recently released a report on the future of mobile money. One of the issues the study addresses is the extent at which mobile technologies facilitate financial transactions, and the speed at which consumers are adopting the technology.

Consumers are getting increasingly comfortable with the greater access mobile technology provides to their finances. Pew’s study shows that 21% of mobile phone users use mobile banking services. Those who use mobile banking services mostly do so to check account balances and review purchase activities.

The comfort level, however, seems to have its boundaries.

Consumers show reluctance when it comes to using their mobile devices to conduct financial transactions. In Pew’s study of mobile banking service users, only 12% used their mobile device to make payments.

While the mobile payment sector races to make the technology available and easy to use, consumer concerns about privacy and security stall its adoption rates.

Unlike cassette tapes that bumped 8-track tape players into oblivion, only to experience a similar fate when CDs were introduced, cash has demonstrated incredible resilience.

There was a time when merchants only accepted cash. Then came along checks. Next it was credit cards. Now, we are entering the mobile payment era, which will emerge as another form of payment that co-exists compatibly with its predecessors.

As mobile payments gain in popularity, cash needs to watch its back. It has already lost ground. According to an April 11, 2012 Rasmussen Report survey, 43% of Americans have gone a full week without using cash or coins as a means of payment.

While many argue that cash will always have relevancy in our society, its days as king are numbered.

Springboard Collaborative’s Alejandro Gac-Artigas works with Brinker Capital on a Video about his Initiative with written Commentary by John Coyne

Every once in a while you meet a young person who is so bright, energetic and dedicated to his or her calling that you want to do everything you can to help them succeed.

That’s how I felt about Alejandro.

I first met Alejandro Gac-Artigas through my relationships with Teach for America. I just knew that he would grow to be a great educator.

Brinker Capital provided financial support to help Alejandro earn his master’s in education from the University of Pennsylvania. We felt that it was an investment in not only Alejandro, but also the thousands of lives we knew he had the potential to impact.

It was a good investment. Alejandro has made us very proud.

After Alejandro’s first year teaching, he noticed something that caused him great concern. His returning students’ reading skills were about 20% behind where they had left off at the end of the prior year. When he shared his observation with other teachers, they put a name to it. They called it, “the summer slide.”

The Summer Slide

With limited access to books or computers and fewer high-quality educational interactions with their parents, elementary-aged students in low-income communities regress academically over the summer. Through his research, Alejandro discovered that summer reading losses amount to a two-year wedge between low- and higher-income peers by eighth grade.

The Springboard Collaborative

Determined to make sure his students didn’t fall behind, Alejandro founded the Springboard Collaborative. Springboard Collaborative combines targeted student instruction with parent training in an incentivized system that closes the literacy gap. He piloted a summer enrichment program in 2010. It was a tremendous success. The Teach for America organization was so impressed with Alejandro’s efforts, it named him, Social Entrepreneur of the Year.

We’re delighted to support Alejandro’s efforts to expand Springboard Collaborative in an effort to equalize the educational opportunities afforded to all young people.

Website: springboardcollaborative.org

Follow on Twitter @SpringboardPHL

Rising DIY Trend in Wealth Management

 Earlier this week, another mobile application was introduced to help clients gain control over their financial lives.  The app is called Lifetime Financial Planning and it demonstrates a new way to meet shifting consumer preferences.

The Lifetime Financial Planning app has a calculator that suggests a spend-rate, savings level, and amount of insurance needed each year to achieve a stable living standard.  It features a live stream of retirement newsfeeds and contains advertisement, tips and educational content.

The subtle message is this:  consumers are on their own to play around with the technology, but if they want advice they can turn to the app’s sponsor, Northwestern Mutual.

While technology increases the Do-it-Yourself appeal, financial companies and advisors need to find new and different ways to stay top of mind.

You are probably not in a position to develop competitive technology yourself.  Instead, you may consider following the lead set by Northwestern Mutual and partner with a technology provider.  You build brand awareness and maintain your status as the trusted financial professional, while client gets the latest tools to help them gain financial control and make better decisions.

Personal and Time Management by Beverly D. Flaxington

Do you ever have a day where you sit and wonder, “What shall I do with all of my free time?” If you are like most financial professionals, that day hasn’t come along in quite a while! Running a financial advisory firm requires client management, investment management, people management and general business management. And with your free time, you can always add in some business development, too!

At the end of the day, you want to feel like you did the most with what you were given in terms of time and effort. Unfortunately, in many cases, the time seem to have slipped away and you are left with a to-do list that has only lengthened!

How do successful people best manage their time and get the most accomplished? Here are 7 tips for maximizing time and personal efficiency for financial advisors:

  1. Have written plans. You need an overall business plan, a marketing and business development plan, a client management plan and an employee development plan for each individual. If you didn’t have a plan for investing a client portfolio, you’d be hard pressed to know which investment selections were right for that client. Similarly, you need a plan for each aspect of your business. Make sure it is written – not just “I know what I need to do.”
  2. Set priorities for the week, and then for each day. Take time to pick out the top three, four, or five most important things you want to accomplish each week, and then for each day. Keep focused on what’s most important.
  3. Eliminate the “fire drill” culture or mentality. If you or your firm seems to constantly be in a reactive, fire-drill mode, it’s time to examine your processes. Employees should have their priorities clear, and your firm should have a standardized approach to dealing with daily events. The unexpected always happens, but if you have processes and priorities in place, they won’t disrupt your firm such that nothing else happens while you respond to them.
  4. Schedule those things you know you need to do, but perhaps don’t want to do. Hate giving an employee negative feedback? Don’t like focusing on sales and business development activities? Hate balancing the checkbook for your firm? We all have something we’d prefer not to do but that needs to get done. Don’t wait for the right time to do it – schedule it in and put it on your calendar.
  5. Outsource and delegate. Find those things you are not particularly good at or don’t enjoy, and find a competent resource to assign them to.
  6. Know your own Achilles heel. We all have behavioral preferences that get us in trouble. Some of us are too quick to act and don’t think enough. Others get into analysis paralysis. Identify your own weakness and plan for it. Don’t be surprised by something you know is going to happen!
  7. Break down your to-dos. Don’t keep a general list with lots of high-level things that need to happen. Break them down into a manageable, step-by-step plan with assigned resources, timeframes and costs. The smaller the task, the more likely you are to do it!

Try just one or two of these things this week and see if you don’t experience more productivity. Keep adding one in each week until you are running your advisory firm like an efficient machine!

There is a Name for it_#34timesaday

Your mobile device isn’t in its usual spot … your back pocket.  It’s not on the charger.  It’s not in your back pocket.  It’s not on the charger.  You check your pocket again.  Then you head to the car.  Then, back to the charger.

Sound familiar?

If you have trouble functioning without your mobile device, you are not alone.  In fact, you might be suffering from Nomophobia.

Nomophobia describes the anxiety many feel when they are without the use of their mobile phone.  The phrase was coined after the findings of a 2008 British study.  The researchers found that 53% of survey participants suffered anxiety that was on par with wedding day jitters and dental examinations, when they are without usage of their phones.

Fifty-five percent of those surveyed said the need for constant connectivity was driven mainly by a desire to keep in touch with friends and family.  Ten percent said that work demands required them to stay reachable at all times.  More than half of the nomophobes never turned off their phones.

This phenomenon has spread at an even pace with mobile adoption rates. SecurEnvoy’s more recent study found that the number of nomophobes has risen to 66%.

Interestingly, more women worry about loss of mobile connectivity than men – 70% of the women surveyed compared to 61% of the men.  However, the men were more likely to have more than one mobile device to maintain connectivity.

Not surprising, 18-24 year olds were the most nomophobia-prone.  This is not, however, an epidemic of the young.  People over the age of 55 were the third most nomophobic lot.

It’s debatable whether anxiety caused by mobile disruption rises to a phobic level.  Irrefutable is the extent with which mobile devices have changed our world and our experiences.

The 2008 study was sponsored by a UK Post Office who commissioned YouGov, a UK-based research organisation to look at anxieties suffered by mobile phone users.

Thisislondon.co.uk. April 1, 2008

Change the Conversation

A subject that retired clients never seem to tire of revolves around how long their portfolio will last.  The conversations inevitably center on the short-term market fluctuations and ignore the role that spending plays in the overall equation.

We have discovered an effective way to steer those conversations in a productive direction.

“If you don’t like what is being said, change the conversation.” 

Don Draper, the protagonist and advertising wizard in AMC’s smash hit Mad Men, is the Leonardo DaVinci of the art of changing the conversation to increase the likelihood of a positive outcome.

His skill is best demonstrated by, what is now just referred to as “the letter.”  Don’s letter, “Why I am Quitting Tobacco” was actually a full-page ad in The New York Times.  He ran it when he found out that his firm was losing its top account, Lucky Strike.

Dramatic, yes.  Effective, absolutely.  His phone started ringing with new prospects.

While this is fictional example, it can serve as an object lesson for advisors.

Changing the Conversation with Retirees 

While it is important for advisors to discuss market conditions and portfolio construction, it is equally important for clients to understand the role spending plays on a retirement portfolio.

Spending habits can be a touchy subject.  If handled incorrectly, the client becomes defensive or shuts down.

To facilitate conversations about spending, Brinker Capital has made a small but incredibly effective change to its quarterly reports on its retirement income solution.

A client reviewing a Brinker Capital Personalized Distribution Strategy report gets two valuable bits of information in addition to investment performance.  The first is communicated with a simple icon.   A traffic light.  The light’s color – red, yellow or green – changes in relation to the planning assumptions made, market performance and spending patterns.

The client is instantly oriented with the meaning behind the data, and knows what to do.

The other valuable piece of information that engages the client in discussion is a forward-looking estimate as to how long their money is going to last.  For example, a quarterly report might indicate that under current market and spending conditions, Client X’s portfolio will last 23 years.

It’s the number of years that grabs their attention.  They can connect with a number far better than they can with a percentage.

While the icons may not be as dramatic as Don Draper’s letter, they are effective. Sometimes by saying something in a slightly different way, you can ignite greater understanding among clients and increase their likelihood of success.

A subject that retired clients never seem to tire of revolves around how long their portfolio will last.  The conversations inevitably center on the short-term market fluctuations and ignore the role that spending plays in the overall equation.

We have discovered an effective way to steer those conversations in a productive direction.

“If you don’t like what is being said, change the conversation.” 

Don Draper, the protagonist and advertising wizard in AMC’s smash hit Mad Men is the Leonardo DaVinci of the art of changing the conversation to increase the likelihood of a positive outcome.

His skill is best demonstrated by, what is now just referred to as “the letter.”  Don’s letter, “Why I am Quitting Tobacco” was actually a full-page ad in the New York Times.  He ran it when he found out that his firm was losing its top account, Lucky Strike.

Dramatic, yes.  Effective, absolutely.  His phone started ringing with new prospects.

While this is fictional example, it can serve as an object lesson for advisors.

Changing the Conversation with Retirees 

While it is important for advisors to discuss market conditions and portfolio construction, it is equally important for clients to understand the role spending plays on a retirement portfolio.

Spending habits can be a touchy subject.  If handled incorrectly, the client becomes defensive or shuts down.

To facilitate conversations about spending, Brinker has made a small but incredibly effective change to its quarterly reports on its retirement income solution.

A client reviewing a Brinker Personalized Distribution Strategy report gets two valuable bits of information in addition to investment performance.  The first is communicated with a simple icon.   A traffic light.  The light’s color – red, yellow or green – changes in relation to the planning assumptions made, market performance and spending patterns.

The client is instantly oriented with the meaning behind the data, and knows what to do.

The other valuable piece of information that engages the client in discussion is a forward-looking estimate as to how long their money is going to last.  For example, a quarterly report might indicate that under current market and spending conditions, Client X’s portfolio will last 23 years.

It’s the number of years that grabs their attention.  They can connect with a number far better than they can with a percentage.

Our icons aren’t as dramatic as Don Draper’s letter, but they are effective. Sometimes by saying something in a slightly different way, you can ignite greater understanding among clients and increase their likelihood of success.

Social Media Makes Scammers More Believable

Social media has made it easy to discover personal details to add credibility to the scheme. Take the Grandparent Scam, for example.

The Grandparent scam goes something like this.

Telephone call or e-mail:

“Grandma, it’s me Mikey. I’ve been arrested on bogus drug charges during spring break in Mexico. I need money quick. Could you wire me some? A few thousand should do it. And, please don’t tell mom and dad. They’ll kill me.”

The caller has an urgent tone. Sometimes the phone is handed over to a scammer who impersonates a police officer. The calls persist, often late at night or early in the morning to catch the victims’ off-guard. Once money is wired, demands intensify.

First reported in 2008, the Grandparent Scam has become increasingly sophisticated and effective at duping retirees.

Here’s why.

Nestled in the lies are typically some elements of truth.

Mikey is the victim’s grandmother. At the time of the call, he just so happens to be on spring break in Cancun. And, yes, his parents would kill him if they found out he was arrested for using drugs!

Scam artists can hop on the Internet and social media sites to gather intelligence about potential targets. They can find young adults who are vacationing, studying abroad, or on assignments in foreign countries. They can also find out the identities and locations of concerned adults to victimize. The scammers know where their victims’ family members are staying, with whom and for how long. All these details can easily be dropped into a script.

By adding personal details that ring true to the victims’ ears, scam artists become more persuasive and cheat Americans out of more money.

Last year, in New York alone, seniors were cheated out of nearly $450,000 in Grandparent Scams. Individual victims usually suffer losses that amount to thousands of dollars, but typically falls below the FBI threshold for investigation.

Earlier this week, the FBI issued a warning about this scam. Details and reported scenarios are outlined, and the FBI provides guidance as to what to do if you receive one of these phone calls or e-mails. For more information, visit http://www.fbi.gov.

Bottom line: never wire money based on a telephone call or e-mail and institute privacy controls on your social networking sites.

I Do it at Least ___ Times a Day

Stand in line … anywhere … and you’ll notice the same thing.  It doesn’t matter if you are at the Bank, Department of Motor Vehicles, or the Apple Store on release day.  Whenever you are in line, the people in front and behind you are doing the same thing.  They are checking their mobile devices.

A recent study published in Personal and Ubiquitous Computing shows that smart phone users develop “checking habits.”  This describes the act of impulsively checking one’s mobile device.  The checks usually take about thirty seconds and are repeated as often as every ten minutes.  Checking habits, in many cases, are driven by compulsion, rather than need.

In the Personal and Ubiquitous Computing study, participants checked their mobile devices on average 34 times a day.

In another study, British telecommunications company Vodafone asked survey participants what they would give up for a week in place of their mobile phone.  70% would give up alcohol; 63% would swear off chocolate; 33% would abstain from sex.

Those numbers tell the story about how influential mobile computing is and will be in our lives better than any strategist possibly could.

Cyber Fraud: How Do You Know if it’s Real?

Chances are you or someone that you know has been the victim of an email hacking scheme or identity theft.

Recently there has been an uptick in the number of incidents of identity theft, wire fraud and phishing scams.  In January of this year, the FBI issues a fraud alert regarding cyber criminals who were compromising the email accounts of U.S. individuals and businesses by using slightly altered variations of legitimate emails addresses associated with the victim’s accounts to request and authorize overseas transactions.  The victims of these schemes are individuals and businesses that invest significant amounts of money with a financial advisor or financial firm.  According to FINRA, individual unauthorized wire transfers range from $17,500 to $183,000 with a total of $6 million in losses to victims thus far.

These email scams tend to follow similar patterns.  After obtaining the investor’s brokerage information by searching through their email account, the fraudster will typically send an email to the investor’s broker/brokerage firm with instructions to wire money to a third-party account, usually overseas.  The instructions often are accompanied by a fraudulent letter of authorization, all from the compromised account so the broker/brokerage firm would never suspect that it wasn’t the investor himself reaching out and making the request.  Many times the scam will also include some type of sympathy ploy, claiming a hardship or death in the family, and will place a sense of urgency on the request.

So how do your clients know if they’ve fallen victim to one of these scams?

If all of a sudden your client notices some of his contacts claiming they are receiving a lot of spam messages from him or he notices a large amount of bounced email messages from people that the client doesn’t know, these could be signs that their email account has been compromised.  Also, if your client is having difficulty accessing his email account, perhaps receiving a message that says that his password is invalid, or that some account settings have changed; these should all be red flags.  If the client finds that any of these things have happened, they should contact you and/or the financial institution immediately and notify them of the problem so that proper steps can be taken to protect further damage to the account.

How can you help your clients?

Educate your clients on steps that they should take to safeguard their account information.  Advise them never to send account information or personally identifiable information via email.  Inform them that they should review their credit card and bank statements as soon as they receive them to ensure that all transactions are valid.  Emphasize the importance of having up-to-date anti-virus software on their computers and to beware of accessing personal information while traveling as some of the networks may be unprotected and offer the opportunity for fraudsters to gain personal information.

Sources:  Cyber Fraud Threatens Advisors and Their Clients, Fidelity Investments.  Fraud Alert Involving Email Intrusions to Facilitate Wire Transfers Overseas, Jan 20, 2012, Federal Bureau of Investigation, the Financial Services Information Sharing and Analysis Center, and the Internet Crime Complaint Center.  FINRA Issues Email Hack Attacks Advisory, Jan 26, 2012, Financial Advisor Magazine.