Investment Writing

Sabtu, 02 Oktober 2010

October updates to the Investment Writing blog

If you’re not visiting my InvestmentWriting blog in its new location, you’ve missed the following posts over the last month:

____________________
Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Selasa, 07 September 2010

New posts on my NEW Investment Writing blog

If you’re not visiting my InvestmentWriting blog in its new location, you’ve missed the following posts over the last month:

Also, you still have time to sign up for "How to Write Blog Posts People Will Read: A 5-Week Teleclass for Financial Advisors" starting Sept. 23.
____________________
Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Rabu, 18 Agustus 2010

What you're missing, if you haven't visited my new Investment Writing blog

Come join me on my new Investment Writing blog! It's part of my website.

Here are links to articles you've missed since the beginning of July:

Senin, 05 Juli 2010

InvestmentWriting blog is moving ...

Please keep reading my Investment Writing blog at its new location on my website: http://investmentwriting.com/blog/

If you have topics you'd like me to cover on the blog, I'm always interested in your ideas. You can note them below in a comment.

Thank you for reading!

____________________
Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Selasa, 29 Juni 2010

Stop! Get a better title, or forget winning readers

Would YOU eagerly read an article with the following title?

Gulf Oil Spill

Impact on State and Local Government

Analysis of original title and introductory paragraph

Thousands of articles about BP's oil spill are fighting for your attention. "Not another oil spill story!" is probably the reaction of many readers who scan this title. The big problem: The title doesn't say why you should read it.

Let's look at the first paragraph to find a reason that you can highlight in a new title.

The Gulf Oil Spill will certainly have long-term repercussions for the fishing and tourism industries as well as the overall environment in the impact areas of the Gulf region. It is early in the disaster to fully evaluate the long-term effect on the states most at risk of contamination: Louisiana, Mississippi, Florida and Alabama. We do not anticipate immediate negative credit implications at the state level for those in question, but feel concerns are more likely to materialize at the local level at this time. We are continuously monitoring developments in the Gulf and considering our credit exposure in these areas.

Aha! Now I get it. Look at the phrases above that I bolded. Readers of this wealth management firm's newsletter should realize that the firm is looking out for the safety of their municipal bond portfolios. Too bad the title didn't tell them that.

The introductory paragraph doesn't help either. It starts with generic information that doesn't relate directly to investments. Even worse, it buries the most important information in the paragraph's second half.

Also, if readers aren't fixed income geeks, they may not realize that "negative credit implications" translates into "possible bond downgrades that could trim the value of your municipal bond portfolio."

Please stop here. Before you read any more, jot down a new title and first sentence for this article.

Looking for a better title

Here are some alternative titles.

Will Your Municipal Bond Portfolio Spill Like BP's Well?
No Need to Worry...Yet About the Oil Spill's Impact on Your Bond Portfolio
Assessing the Oil Spill's Impact on Muni Bonds: The Three Most Important Factors

Which do you like best? Feel free to share your title ideas.

Related posts

____________________
Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Senin, 28 Juni 2010

"Where Are We Heading? The Future of Investment Management in Boston"

The future of investment management in Boston was the focus of a panel presentation to the Boston Security Analysts Society's annual meeting on June 24. The view that Boston is being left behind made the greatest impact on me, but I'll report some of the opinions of all four speakers.

Reamer: Emphasis on actively managed equities hurts Boston
The investment world is shifting toward aggressive hedge funds and passive quantitative funds, said Norton Reamer, vice-chairman and founder, Asset Management Finance LLC. There's also currently an emphasis on fixed income. This is because the public has been discouraged by the stock market returns of the past two years. They want defensive, safe investments. On a related note, large pension funds are moving more toward indexing.

These trends don't favor Boston, the home of the original mutual fund, because local firms emphasize actively managed mutual funds. At least these trends don't bode well in the immediate future.

For Boston to prosper, it must attract assets from around the world, said Reamer. However, he sees the action shifting to New York, London, and even Philadelphia and California. Boston has only one of the 10 largest hedge funds and three of the 30 largest. While Boston has a history of venture capital, venture capital is less important than private equity, which is concentrated elsewhere, said Reamer.

One of Reamer's comments held a glimmer of hope. Universities--along with arbitrage groups, traders, and others--are the source of the new ideas that are changing the investment world. Boston has some great universities. Perhaps the universities can fuel the region's resurgence as an investment center. I'm happy to note that the Boston Security Analysts Society's program committee has a subcommittee devoting to inviting speakers from academia.

Putnam: Four trends will create many losers, few winners
Investment management is a craft, said Don Putnam, managing partner of Grail Partners, who moderated the panel. He emphasized the need to avoid losing sight of the craft before he described the four trends that he believes are changing the industry.

As a result of these trends, there will be many losers and few winners, said Putnam. The winners will be global firms as well as small cadres of capable people. The big challenge for money management will be to connect these two groups.

Trend 1: The long, complicated supply chain is reordering. For example, people are seeing the problems with "the slices taken off for people who deliver golf balls." I assume Putnam was referring to wholesalers and the broader issue of 12b-1 fees and the like, though he said that he was not making a case for fee-only advisors. Changes are coming as a result of regulatory pressures, client demands, and "better mousetraps," such as ETFs and active ETFs. Putnam said he's sceptical about growth opportunities for the mutual fund industry.

Trend 2: The relevance of specialization is declining. Why? Because the efficient frontier--and the need to diversify into many slices of the market--has been challenged. "It has been proven to be nonsense for the client," said Putnam. Clients' "true utility equation" can be delivered more efficiently with quantitative solutions, he added.

Trend 3: The arithmetic of the investment business is changing with the rising importance of asset allocation. As the utility of money management has declined, fees have risen, said Putnam. This can't last. While clients have bought the "myth of comfort and control," the past three years have increased client dissatisfaction.

Trend 4: Technology is increasing in importance. Technology should be woven into every aspect of money management, said Putnam. Technology's influence on money management has barely begun.

Manning: Structure your firm to have an edge over your competition
You must deliver great results to keep assets, said Robert J. Manning, who spoke as CEO of MFS Investment Management, but is scheduled to become the firm's chairman on July 1. This means you must structure your firm to have an edge over your competition. Manning discussed three key elements of MFS' structure.

1. Follow a long-term investment philosophy. The world is preoccupied with short-term investment returns. However, MFS believes that you need a culture of long-term investing backed by an appropriate compensation structure. When MFS conducts performance reviews, it only considers periods of three years or longer.

2. Create a global footprint. If your people are only in Boston, you can't be a winner, said Manning. For example, if you don't have staff in Europe, you can't respond quickly enough when credit default swaps widen in Europe. As part of the global footprint discussion, Manning emphasized the need to integrate the firm's fixed income and equity teams.

3. Analysts are more important than portfolio managers. The old model is broken, said Manning. The most important employees are career analysts who have expertise in specific sectors. MFS has eight global sector heads. These are the people who, if they "see a storm coming" get the entire firm out before it hits.

The increased importance of analysts has been driven partly by the fact that clients want to buy "specialized sleeves of alpha." This is reflected in analysts' compensation. At MFS, analysts earn more than portfolio managers.

We sell the global research platform, not the portfolio manager, said Manning. The portfolio manager simply assembles the alpha streams from the analysts the way that clients want.

Hughes: Confident in Boston's future
Larry Hughes, CEO of BNY Mellon Wealth Management, said that Boston's talent and innovation makes his firm feel confident about Boston's future.

Still, the next decade will pose challenges for wealth managers in terms of how to protect clients against continued market volatility and how to capture the related opportunities. Hughes suggested three areas for focus.

1. Investment innovation--The "set it and forget it" ways of the past won't work any more, said Hughes. It's important to capture trends that develop--and disappear--in months, or perhaps even just weeks.

2. Seamless and dynamic planning--Wealth managers must "plan across silos," considering all aspects of clients' lives, including taxes, estate planning, health care, and more.

3. Better manager-client engagement--It's important to speak in your clients' terms. Clients don't talk about the efficient frontier, standard deviation, or r-squared, said Hughes. So neither should wealth managers. Instead, wealth managers should present issues in straightforward terms, such as "helping you maintain your lifestyle."

Related posts:
* Investment management career advice from industry pros
* "Have mutual fund fees gone up or down?"
* GMO's Jeremy Grantham on "The Ethical Hole in Finance" at #CFA2010
____________________
Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.

Minggu, 27 Juni 2010

Investment management career advice from industry veterans

Investment industry veterans' somewhat gloomy outlook for Boston's asset management firms prompted me to ask, what should the people in this room do to promote their careers?

I asked this question during the Q&A session following "Where Are We Heading? The Future of Investment Management in Boston," a June 24 panel presentation to the Boston Security Analysts Society's annual meeting. You'll find the panelists' suggestions below.

Keep learning, said Donald H. Putnam, managing partner, Grail Partners LLC. As the role of technology accelerates, you can't achieve the same outcomes as in the past using old skills. The great investors spend more time on their own skills as they get older, he added.

Take new challenges and learn new things, said Norton Reamer, vice-chairman and founder, Asset Management Finance LLC.

Be passionate about what you do, said Larry Hughes, CEO of BNY Mellon Wealth Management. If you don't feel passionate, then find something else to do.

Focus on your trade, said Robert Manning, CEO. MFS Investment Management. If you're good at what you do, you'll find a job despite the industry trends.

(Added 6/29) For more information on the panelists' presentations, read "Where Are We Heading? The Future of Investment Management in Boston."

Related posts:
* "You" can help your job hunting "thank you"
* Useful LinkedIn Groups for investment and wealth management job hunters
* Recruiter Ted Chaloner on job interviews that get results
____________________
Receive a free 32-page e-book with client communications tips when you sign up for my free monthly newsletter.