1. Manage Expectations

2. Educate Clients on their situation

3. Constant interaction with client

4. Help clients understand the goals they are working towards, and not to become obsessed with what the Street did that day.

These are a few things that help to minimize the potential for a client ripping an account away due to a poor quarter or 6 months.  If we sell purely on performance then we set ourselves up for losing accounts and valuable clients..

[quote=Cuffy_Meigs]

So it all comes down to this: Put Trader is trolling the forum for a free stock tip.

Listen, Methusula, I don't know about the other advisors on this board, but $200,000 ain't jack to me. If there isn't $2 million plus on the other end, I don't pick up the phone.

Go get a stock tip from the Costco greeter, you crotchety old fossil.

[quote=Put Trader] [quote=Put Sucks]

Well genius, let's first assume that your prediction is accurate and we experience a truly flat market as we did from '66 through '82.  To that end let us say that the stock doesn't decline.  The dividends paid and reinvested give you more shares of XYZ stock.  The newly acquired shares also pay dividends.  Now, we have a nice compounding effect.  Obviously, if XYZ instead declines markedly, we have a different story.

[/quote]

OK, let's see.  I pay $10,000 for 500 shares of ABC at $20.  It pays $1 per share dividend.

At the first payment date I reinvest my $125 dividend in 6.25 shares--I now have 506.25 shares which I could sell for $10,000--don't lose sight of the fact that the stock will be adjusted down for the dividend.

We cold do this mental masturbation for twenty years and what we would get is $10,000 worth of stock.  It's impossible to experience growth in the stock market if stock prices do not advance--even if you reinvest the dividend till the cows come home.
[/quote]

Wow... how could someone be in the business that long and still be ignorant of the effects of dividend reinvestment???????

Put,



I never said I knew it ALL. I simply dispute the fact that YOU do, and moreover that you know substantially more than me.



I have never had a client file arbitration for ANY reason. My clients realize they have risk, and they appreciate all that I do to minimize it while adding alpha (I assume, reluctantly, that you understand the concept of alpha and beta). I have experienced the same markets everyone else have. What you cannot grasp is that this are more than one market out there. There are many markets to participate in that ARE making money. So if you’d like for me to assume the day of armaggedon when EVERY market and EVERY investment loses money, then yes, that will be a tough day for brokers and investors. But that isn’t reality, now is it?



Do you dispute the fact that those investments I previously mentioned are profitable? Of course you won’t. You can’t.



Then you attack my income. Laughable. Just keep watching the mailbox for that social security check to come so you can continue your trips to Costco.

"You're right the average Joe is not equipped to manage his own finances--but he will leave you in a heartbeat if you send him a statement showing that he has less than he did the last time a statement dropped."

Were this true "Joe" would have been leaving a great many of us since March of 2000.....

[quote=blarmston]

1. Manage Expectations

2. Educate Clients on their situation

3. Constant interaction with client

4. Help clients understand the goals they are working towards, and not to become obsessed with what the Street did that day.

These are a few things that help to minimize the potential for a client ripping an account away due to a poor quarter or 6 months.  If we sell purely on performance then we set ourselves up for losing accounts and valuable clients..

Put Trader said: "Insipid responses such as “buy more, average down” are going to go nowhere. Do you actually believe the rules have changed, that gravity has been neutralized and the market will never go down again?"





Who has said this on this thread??? You are trying to create your own material to argue against. You must really be lonely.

[quote=Put Trader] [quote=Cuffy_Meigs]

So it all comes down to this: Put Trader is trolling the forum for a free stock tip.

Listen, Methusula, I don't know about the other advisors on this board, but $200,000 ain't jack to me. If there isn't $2 million plus on the other end, I don't pick up the phone.

Go get a stock tip from the Costco greeter, you crotchety old fossil.

[/quote]

I need advice from the likes of you like I need a dose of clap.

What I was doing was seeing what you nimrods can come up with for a bear--and your idea was exactly what I expected.  Nothing.
[/quote]

OK, I'll bite: if you're truly a bear, put your $200k in AAA-rated short term muni certificates. 4.5% tax-equivalent yield, resets every 30 days. Rates are rising. Your Treasuries will get crushed. Short munis ride the yield curve.

Now go upgrade your Costco membership to Executive level with that free morsel I just gave you.

[quote=Put Trader]

Why do you suppose there are not very many brokers older than 60?  Hint, it's not because they made so much money that they were able to quit at age 53 or something.

Nor is it because they retired because they got to retirement age.

They left the business because the clients left them following years of negative inflation adjusted returns.

[/quote]

Then our man of meager brains goes on to tell us that he is age 60, and OUT OF THE BUSINESS (see page 8).  Don't we all know enough about this guy now?

[quote=stanwbrown]

“You’re right the average Joe is not equipped to
manage his own finances–but he will leave you in a heartbeat if you
send him a statement showing that he has less than he did the last time
a statement dropped.”

Were this true "Joe" would have been leaving a great many of us since March of 2000.....[/quote]

Nope, you've been blessed with two extenuating factors.

1.  Everybody knows the tech bubble was a bubble and those who lost are not blaming their brokers.

2.  September 11th has steeled the citizenry with a willingness to make sacrifices--and among those sacrifies is a malaise in the stock market.

However, as the days stretch into months and the months into years people begin to get agitated and anxious that their retirement funds are not coming back.

At best what you can hope for is what was in play when I broke in--accounts moving from one broker to another because any new voice was better than the one they had.  So I got your best account, but you got mine and at the end of the day we were even.

But there are other factors in play too--the siren song of places like Schwab, Ameritade, Waterhouse and the rest of the damn near full service firms that empower educated men and women to take control of their own account.

A day can't go by without me hearing that I should put my money into a Vanguard Index fund--no load and guaranteed to not underperform the market.  Why not?

Put, you are an old fool. Why not in Vanguard? Because the market is flat, by your own admission. So put your money in that Vanguard fund and creep out 5% (maybe) over the next five years…really exciting.



OR



Let me show you, Mr. Prospect, how to make real returns.

[quote=Cuffy_Meigs]

OK, I’ll bite: if you’re truly a bear, put your
$200k in AAA-rated short term muni certificates. 4.5% tax-equivalent
yield, resets every 30 days. Rates are rising. Your Treasuries will get
crushed. Short munis ride the yield curve.

Now go upgrade your Costco membership to Executive level with that free morsel I just gave you.

Don’t answer this guy. He should take his money to TD Waterhouse…they’ll give him all the advice he needs.

[quote=Put Sucks]

Then our man of meager brains goes on to tell us that he is age 60, and OUT OF THE BUSINESS (see page 8).  Don’t we all know enough about this guy now?

[quote=Put Sucks]

[quote=Put Trader]

Why do you suppose there are not very many brokers older than 60?  Hint, it's not because they made so much money that they were able to quit at age 53 or something.

Nor is it because they retired because they got to retirement age.

They left the business because the clients left them following years of negative inflation adjusted returns.

[/quote]

Then our man of meager brains goes on to tell us that he is age 60, and OUT OF THE BUSINESS (see page 8).  Don't we all know enough about this guy now?

[/quote]

I love it.

Dearlord...

Who would have guessed that MensaBroker would change the assumptions in order shoot down a bulletproof bear market idea?

1. As I already stated: I don't work with poor clients. If TEY is not important to you, you are not important to me. All my clients are in the highest bracket.

2. A 30 day muni is nearly as safe and provides much higher return than your 90 day bill. In a rising rate environment, shorter duration wins. ALWAYS. 30<90, Einstein.

So, add some new assumptions like AMT (no that's not one of those 5,000 mutual funds you bitch about being ignorant of) and let's play pattycake some more.

On second though, nevermind.

Cuffy_Meigs, you’d fit in well in my office.

Oh Put,

I'm not attacking your age.  I don't have an age bias, unlike yourself.  I just find it funny that you essentially state, in your typically rigid fashion that brokers who don't stay in the biz past age 60 quit because they failed (clients left them).  Then we find out that you're one of them.  Humorous, that's all.

“OK, most people are way, way, behind the eight ball when it comes to retirement planning.  What is the average net worth of a fifty year old American couple?”<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

People of average net worth are not my clients…..

”How do you manage their expectations and educate them on their situation?  Tell them that if all goes well they should be able to retire when they're 100?”

Explain that the returns of the 1990s were an aberration. Explain the term, “regression to the mean”. Explain that it isn’t wise to chase the hot dot or attempt to move everything in to what you hope will be “hot next”….

”Constant interaction with the client?  Ever seen the TD Waterhouse ad with the theme of, "My broker call me?  Sure when he wants to sell me something."  How do you avoid appearing to be interested in me as a source of commmissions?”

Two ways; if you’re commissioned based, call even when you’re not selling OR go fee based.

Please be serious. Quoting an ad for a discounter is childish. They aren’t taking my clients, I’m taking theirs.

”What you kids don't get is that we've been on a gravy train for more than twenty years--there are virtually no clients who are asking the tough questions.”

You must have left the business before the double hits of March, 2000 and 9/11.

”Insipid responses such as "buy more, average down" are going to go nowhere.  Do you actually believe the rules have changed, that gravity has been neutralized and the market will never go down again?”

Yawn, markets go down. You seem to believe they never go up….

“1.  Everybody knows the tech bubble was a bubble and those who lost are not blaming their brokers.”

ROFLMAO, you’re delusional……. The Nas is, five years later, at 40% off it’s peak value. Plently of people are steamed at their brokers. Others are steamed at the market as a whole.

“2.  September 11th has steeled the citizenry with a willingness to make sacrifices--and among those sacrifies is a malaise in the stock market.”

Again, you’re either out of your mind or retired long, long ago. Many people simply left the market. Some have moved to "can't miss" things like real estate or commodities.

Have you even been following trading volume or profit rates at the brokerages?

“However, as the days stretch into months and the months into years people begin to get agitated and anxious that their retirement funds are not coming back.”

It’s been five years that those of us that ARE in the business have been dealing with it. Thanks for the heads up.

“But there are other factors in play too--the siren song of places like Schwab, Ameritade, Waterhouse and the rest of the damn near full service firms that empower educated men and women to take control of their own account.”

The saving thing for those of us in the business is that individuals have done even worse in the market in the past few years. I have MANY clients who now deal with a pro because they feel the market ISN’T the easy place it was in the 1990s AND/OR they blew themselves up and are seeking help.

“A day can't go by without me hearing that I should put my money into a Vanguard Index fund--no load and guaranteed to not underperform the market.  Why not?”

The how poorly indexing has done (especially simply holding just the S&P 500) versus managed accounts in the past five years, I consider a prospect that say that to me to be a lay-up. I show them the numbers and they sign.

Seriously Put, this “you don’t know how tough it can be” stuff was fine in the go-go 90’s, and granted we haven’t seen a version of the slow-death of the 1980s, but the past few years have been damned tough for those of us still in the business. Those of you who haven’t been working during that period would be better off silent.

"Constant interaction with the client?  Ever seen the TD Waterhouse ad with the theme of, "My broker call me?  Sure when he wants to sell me something."  How do you avoid appearing to be interested in me as a source of commmissions?"

Put, I was hoping that you, in your infinite wisdom and experience, would educate all us 'kiddies' about how to do just that. One can still communicate with a client without trying to sell them something. For instance, I have a Client Management system where I contact my clients every 4-6 weeks. Even if its a 15 minute phone call or a message left on their machine, it goes a long way to establishing the relationship- one that MORE LIKELY wont be terminated due to a bad quarter.. Most of the time it is simply to touch base, convey to them that I care, and to subtly drop in the referral pitch. Of course, my clients also get the phone call when I am trying to "sell them something". I feel it is the only way to differentiate myself from other reps who fit the more traditional, publicly perceived role ( the TD ad for instance, which pisses me off because it calls out Mother. But oh well, the ad is effective..)

For all out there, what are some ways that you perform these duties...........