One Great Issue
Having spent most of the last two decades as an editor covering the financial advisory profession, I'm constantly reminded that money is not the reason most people go into a business that's all about money. Most advisors I know really do pursue their careers for a kind of psychic income that is earned from helping clients restructure their finances in ways that improve the quality of the rest of their lives.
Money and business profitability are secondary sources of motivation. Admirable though that may be, I'm not sure that's the advice most planners would give to their business-owner clients.
But as we close the current issue you are reading, I can see exactly where advisors are coming from. August is never a particularly successful issue in terms of revenues, yet it's rare that I've felt as good about a single periodical as I do about this one.
So if you're taking a little hard-earned time off this month and want to take a few hours to reflect on your business, there are several articles worth reading. For starters there is Caren Chesler's cover story on page 62 about Laird Norton Tyee. This feature explains how the Pacific Northwest's largest wealth management firm, which served families who made their fortunes in the timber business, merged with a younger firm that specialized in the region's growing cadre of high-tech entrepreneurs.
In this month's Big Picture column on page 33, the ever-perceptive Harold Evensky challenges the conventional wisdom of the last five minutes, namely that Modern Portfolio Theory is totally dead after last year's global meltdown in the financial markets. After a disappointing decade for financial assets, some advisors are quick to toss MPT in the dustbin, yet it's questionable whether many of them really understand it.
Evensky then goes on to examine several alternatives to MPT. The analysis reminds me of Nick Murray's comments in our June issue, when he paraphrased Winston Churchill on democracy by calling "buy and hold" the worst style of investing known to man, except for every other style of investing.
With regulatory reform on the nation's agenda, Roy Diliberto describes on page 43 what type of disclosure would be ideal for consumers. And he provides some entertaining personal anecdotes of what the state of Pennsylvania required from him when he became an RIA several decades ago. The SEC's Mary Schapiro and FINRA's Richard Ketchum should take notice.
But our August issue has more articles you shouldn't miss. Jeff Schlegel's take on page 67 of the emerging popularity of managed futures, Eric Rasmussen's look on page 51 at the rapidly expanding number of IARs (investment advisor representatives) and Bruce Fraser's analysis on page 77 of target-date funds and their use of Monte Carlo software are just a few of the many outstanding articles in this issue.
For serious advisors, I have no doubt these represent collective must-reading. Have a great August.
Evan Simonoff, Editor-in-chief
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