By Steve Sanduski, CFP^®

The Green Bay Packers are famous for their devoted fans. In fact, more than 268,000 of them just paid $250 for a share of stock in the Packers that is—in financial terms—essentially worthless. There’s no dividend, no capital gain, and you cannot sell the shares. All you can do is transfer them to an immediate family member.

So, what do you get for $250? You receive admission to the annual stockholder meeting expected to be held at Lambeau Field. Of course, the actual benefit of owning a piece of the Packers is not financial. It’s the connection you have with one of the most storied teams in professional football.

Can you imagine creating a financial planning practice and having 150 clients who are as devoted to you as these 268,000 fans are to the Packers?

Here are three things you can do to create this Packer-like fan appreciation:

1. Really understand your clients. This goes way beyond the numbers. Sure, they have a “number” they’re shooting for in retirement, but numbers are cold. You need to know, understand, and appreciate what your clients want to do with the financial security you are helping them achieve. Help them see their vision. Help them make the second half of their life even more meaningful than the first half. Inspire them to “live the music in them” while they still have time.

2. Be uplifting. We live in an entertainment-obsessed world. Maybe it’s because with all the bad stuff that goes on, we need the distraction of entertainment. Regardless, make working with you something your clients look forward to. Make your office an upbeat, positive (yet professional) environment. Even if the markets are down, your clients should feel uplifted after meeting with you. Life is so much bigger than the number on the statement and you should model that by being grateful, positive (but not Pollyanna-ish), and in the moment.

3. Solve their problems and do it with extraordinary service. The first two items above are the “softer” side of the business and that will only get you so far. Clearly, if the Packers weren’t winning Super Bowls and pounding on the Bears (sorry Bears fans), they would have a lot fewer raving fans. Likewise, you have to do a great job with the nuts and bolts of being a financial advisor. This doesn’t mean you have to “beat” the market, but you better at least be close. You don’t have to be an expert in everything, but you better surround yourself with subject matter experts. You don’t have to be all things to all people, but you better be all things to a select group of people. And service, well, you better be obsessive about it.

I’m essentially describing a one-two punch here. You connect with your clients emotionally through understanding them and being uplifting. Then you cement that relationship by delivering on their goals and doing it with extraordinary service. You’re fusing each half of the brain so you fully connect with your clients. Follow this plan and you’ll not only have clients for life, but you’ll get referrals for life.

By Steve Sanduski, CFP^®

Playing cards is about as American as baseball, hot dogs, and apple pie. So, here’s a trivia question for you: How many times must you shuffle a deck of 52 playing cards in order to ensure it is truly scrambled?

Mathematicians have studied this problem and determined that even after six shuffles you can still find patches of non-random sequences. It’s the seventh shuffle that does the trick. At seven shuffles, you reach a tipping point and the deck turns into chaos, according to the book Magical Mathematics by Persi Diaconis and Ron Graham as reported in The Wall Street Journal. So, if you are concerned that one of your table mates is a skilled cheat, make sure you shuffle at least seven times!

By Steve Sanduski, CFP®

Rip Van Winkle slept for 20 years and awoke to discover that his world had changed dramatically. The U.S. stock market has been “asleep” for about 13 years now and, in another seven, we may find our world is much different, too.

In the nearly 13 years between January 11, 1999 and November 11, 2011, the S&P 500 index rose as high as 1,565 and dropped as low as 676. During that volatile period, we witnessed numerous impactful events including the following:

• The bursting of the dot-com bubble
• The rise of the euro
• 9/11
• The war on terrorism
• The rise and fall of the real estate bubble
• The spectacular rise of the price of gold
• The Southeast Asia tsunami and the Japan tsunami
• The rise of social media
• The Great Recession
• The sovereign debt crisis

Yet, with all those world events and the tremendous moves in the S&P 500—both up and down—during those nearly 13 years, guess how much the S&P 500 price changed between January 11, 1999 and November 11, 2011?

Exactly zero!

That’s right. The S&P 500 closed at 1,263 on January 11, 1999, and at 1,263 on November 11, 2011.
 
Does this mean you should never invest in the stock market because it’s been flat for so long? Of course not. As an advisor, you know that the market can go through long dry spells. However, your clients may get very impatient. Here are five things that you can share with them to help them stay the course and follow your plan:

1. Dividends matter. While there was no price change between these two time periods, reinvesting dividends, or owning investments that pay dividends, may have generated a positive return.

Action Item: Make sure your clients reinvest their dividends.

2. Diversification matters. The S&P 500 was flat, but some other asset classes did fine over the past 13 years, so it’s important to search far and wide for investment opportunities.

Action Item: Make sure your clients understand that you’ve expanded the set of asset classes that you invest in to include “alternative” investments.

3. Perspective matters. It’s easy to get caught up in the large day-to-day swings in the market, but understanding the broader trend or context of the market is important to help prevent day-to-day volatility from causing you to make bad investment decisions.

Action Item: Make sure your clients realize that you take a big picture and historical view of the markets and know how to place market frustration in context. 

4. Patience matters. As long-term investors, we’re more like the tortoise than the hare. Short-term, rapid traders create a lot of noise and may lead the pack from time-to-time, but we’re focused on winning at the end, not at each checkpoint.

Action Item: Make sure your clients know that you place high importance on winning at the end and not necessarily winning each inning.

5. Valuation matters. The bubble-like values placed on some companies in the late 1990s were so out of whack with normalcy, that it’s taken the market many years to work off those excesses. So, while patience is important, it’s also necessary to understand that valuation at the time you make your investment could have a major impact on how long it takes to get a return on your investment.

Action Item: Make sure your clients know that you have a process to evaluate “value” in the market and are willing to pass when things get out of whack.

Nobody knows if the market will remain “asleep” for another seven years to match Mr. Van Winkle. Regardless, you can tell your clients that, “The world will be different and we’ll keep searching for ways to help you reach your destination without nightmares.”

By Steve Sanduski, CFP^®

Back in the early 1970s, pundits fawned over some of the era’s fastest growing, industry-leading companies who seemed to defy the sluggish overall economy. Dubbed the Nifty-Fifty, these glamour stocks were well-known “one-decision” stocks that institutional investors clamored to own. So, how well did these stocks do over the last 40 years? Were they truly “one-decision” stocks?

While there was no official list of the Nifty-Fifty, two competing lists of 50 stocks are commonly cited, according to a research report titled, “The Nifty-Fifty Re-Revisited,” by Jeff Fesenmaier and Gary Smith of Pomona College. For today’s purpose, we’ll look at the 24 stocks that made both lists and were dubbed the “Terrific 24” by Fesenmaier and Smith.

Some of the household names on the Terrific 24 list include: McDonald’s, Walt Disney, Avon, Johnson and Johnson, and Coca-Cola. These companies are still doing well. However, some other household names on the Terrific 24 list performed poorly. Consider the following:

Xerox: It’s still around, but is a shadow of its former self and trades for about $8 per share.

MGIC Investment Corp.: It went through various corporate restructurings throughout the years, but is still around as a private mortgage insurer. However, it got battered in the mortgage insurance meltdown of recent years and trades for about $4 per share.

Polaroid: The inventor of instant film couldn’t make the transition to a new world and filed for bankruptcy in 2001. It reorganized and is now trying to reinvent itself.

Eastman Kodak: Perhaps the saddest story of the bunch, Kodak has struggled for years to make the transition to a digital world and is now rumored to file for bankruptcy as early as this month, according to Reuters. Its stock sold for less than 50 cents per share last week. Ironically, Kodak invented the digital camera in 1975, but was never able to capitalize on it.

With 40 years of history, here are three key lessons we can learn from the Nifty-Fifty story:

1. Some “glamour” stocks do remain glamorous for many years, e.g, McDonald’s, Walt Disney, and Coca-Cola (although each had its “rough periods” over the past 40 years).

2. Promoting “one-decision” stocks is more of a headline-grabbing marketing strategy than a sound investment strategy.

3. Even the “best” stocks can fall to zero so it’s important to have a sell discipline. 

As the British statesman and philosopher Edmund Burke said, “Those who don’t know history are destined to repeat it.”

Read Steve Sanduski’s latest article, for Financial Planning magazine’s The Prosperous Advisor, Do You Have the Right ‘Why?’

Steve Sanduski, The Prosperous Advisor, says it’s important for financial advisors who want to succeed to understand the “why” behind each of their goals and ask themselves if they’re setting these goals for the right reasons and whether or not they’re in the best interests of their clients.

Read Steve Sanduski’s latest article, for Financial Planning magazine’s The Prosperous Advisor, Simple Power Phrases That Turn Prospects Into Clients

Steve Sanduski, the Prosperous Advisor, says advisors should use the English language in inspirational ways to motivate prospects and get them off the fence to become a client. He’s not talking about slick manipulation but about choosing your words carefully so you succinctly impart your message and create a positive feeling and mental picture in your prospect’s mind.

What Advisors Can Learn from Steve Jobs, a.k.a. “The Comeback Kid”
By Steve Sanduski, CFP®

With the passing of Steve Jobs, we wanted to reprint this article which highlights some of his key ideas and applies them to your work as a financial advisor. He set an example for innovation, product perfection and style that advisors would be well-served to emulate.

Steve Jobs's business career is remarkable by any standard. His ability to go from boy wonder co-founder of Apple Computer, to Chairman and CEO of Pixar, to the largest individual shareholder of The Walt Disney Company, to ousted executive who returned to save Apple and turn it into a seemingly unbeatable brand, is simply amazing. While he made plenty of mistakes in his youth, he matured into a very successful businessman with some profound thoughts on business success. While Jobs’ ideas are applicable to broader business, upon close examination they seem tailor-made for the financial advisor in particular.

“Connect the dots.”
Over time, all of us have incredible life experiences—some positive, and some not. Regardless of the outcome, they ultimately shaped the person you are today. Everything that has happened to you in your past has the ability to positively affect you in the present—if you connect the dots. Jobs relates a story about how on a whim, he dropped in on a calligraphy class while he was attending Reed College back in the early 1970s. At the time, he found the class utterly fascinating, but totally useless. It wasn’t until 10 years later, when he was designing the Macintosh computer, that he was able to connect the dots. The result…the Macintosh became the first computer with beautiful typography and it became a huge hit in the desktop publishing industry.

Think for a moment about some of your life experiences. What lessons have you learned? What stories can you create from these lessons that you can share with your clients to deepen your relationship with them? Stories are the best way to turn a complicated idea into an understandable teaching point, so don’t be afraid to leverage your life experiences, even those you think have no bearing on your current reality – connecting the dots can be a powerful method of uncovering your inner innovator.

What dots can you connect to make your business better?

“Say no.”
There is no shortage of opportunities in this business. However, there is a shortage of conviction. The easy thing to do is to go to a meeting, hear a few good ideas, then go out and try them. When that does not work, you go to another meeting or hear another speaker and repeat the process with similar unacceptable results. Soon, you find yourself literally trying everything, and successfully completing nothing. Jobs does the opposite. He’s an obsessive focuser on a small number of things that are truly important to him.

How many major products does Apple sell? Essentially four: the Macintosh computer, the iPod, the iPhone, and the iPad. With just four main product lines, Apple has a market capitalization of more than $300 billion. Despite pleas from analysts and other pundits, Jobs has resisted the call to offer lower-end products and milk the company’s great brand. He said, “It’s only by saying no that you can concentrate on the things that are really important.” Having a well thought-out and focused mission statement is a great place to start. A quality mission statement can act as a “not to do” list. If you’re considering new opportunities, check your mission statement. If the new opportunity doesn’t fit your mission, move on.

What can you say “no” to so you have room to say “yes” with complete conviction to something else that’s more important?

“Quality, not quantity.”
Many of the advisors that I’ve worked with over the years had more than 500 clients. By financial measures, these advisors had successful businesses that generated substantial revenue and comfortable profits. Yet who got shortchanged in that deal? The clients! None of those advisors would ever go on the record as saying they did a great job of taking care of all of their clients. Typically, 20 percent received great care and the other 80 percent were mainly an entry in a database.  This is not due to a lack of good intentions; it is simple math and human capacity. These advisors did not have the time to meet once or twice a year with 500 clients let alone have a meaningful advisor to client human connection.

At Pixar, where Jobs built the firm from peanuts into a company that he sold to The Walt Disney Company for $7.4 billion, there is no 80/20 rule. It’s simply what I call the Rule of 100™—every effort gets 100% support. Accordingly, Pixar delivered an average of only one movie every 18 months; a weak pace by major movie studio standards. However, the result was anything but weak. Pixar has generated more than $6.8 billion in worldwide box office receipts since 1995—and they’ve had no bombs.

How can you restructure your business to deliver 100 percent quality to 100 percent of your clients 100 percent of the time?

“Hire the best.”
Quality work starts with quality employees. For many advisors, finding and retaining quality staff members is a perennial issue. Advisors are tempted to hire the first person that marginally fits the bill. Unfortunately, that’s a recipe for long-term pain. It’s better to bite the bullet now and continue pursuing the right person, rather than settle for an average candidate who is destined to deliver mediocre results. Like other notable business leaders, Jobs devotes a material amount of his time to “working the phones” and talking to prospective employees that he thinks can be A-list players on his team. At the end of the day, there are no weak links in his executive suite.

If you currently have no support staff, then go out and hire your first person. Without staff, you’ll have a job, but you’ll never have a business. In fact you and your clients will find yourselves perennial victims of the afore-mentioned 80/20 rule. If you have existing staff, continue to support and nurture your “A” players. For your weaker links, work with them to try to get them to “A” status. If they can’t make the jump after you’ve given them every opportunity to do so, it’s time to let them go. While letting someone go is never easy, I’ve found that if their employment is not working for you, it’s not working for them either. By giving them a compassionate push out the door, you’ll enable them to find another job that’s a better fit for their interests and skill set.

How can you upgrade your staff and which A-list players should you be calling to add to your team? 

“Don’t settle.”
It’s a pattern that I've seen repeated over and over again. An advisor rises to a level of production that makes them comfortable and then they coast. They have the house, the cars, the vacations, the club membership, and the kids’ college education pre-funded. It’s the American dream. No need to push yourself any further by asking for a referral or making more calls, right?

Recently, our company, Peak Advisor Alliance, delivered a three-day True Wealth Institute for approximately 65 advisors. The attendees were highly successful financial advisors who wanted to add life planning to their practice. Interestingly, by material standards, these advisors had it all—they were an embodiment of the American Dream. Yet, here they were, spending three full days in Omaha, Nebraska learning how to keep growing. What they were seeking was not just business growth; it was personal growth, too.

When you get to a point in your life where you are comfortable, coasting is the worst thing you can do. You’ll get stale, disenchanted, and start feeling that indefinable ache. The key is this—if growing your business is no longer satisfying, it’s time to start growing your self.

When I talk about growing your “self,” I don’t mean this in a self-absorbed, egoistic way. I’m talking about using your life’s wisdom to reach out to the world in new ways; stretching yourself in terms of how you can impact others. Perhaps you do this by adding life planning to your practice. Perhaps you start giving back to the industry by teaching or mentoring industry newcomers. Perhaps you start volunteering more.

Jobs says, “We’re just trying to make great products. We do things where we feel we can make a significant contribution.” To him, it’s about staying focused. It’s about creating products that are, “insanely great.” It’s about loving what you do and doing it with all your energy. Don’t settle for anything less.

Instead of settling, where could you start growing?

In a 2004 BusinessWeek interview, Jobs reflected on his personal growth that resulted from him successfully bouncing back from cancer. He said,

“I realized that I loved my life. I really do. I’ve got the greatest family in the world, and I’ve got my work. I love my family, and I love running Apple, and I love Pixar. And I get to do that. I’m very lucky.”

By following this simple plan—connecting the dots, saying no to the unimportant and yes to the most important, focusing on quality, not quantity, hiring the best, and not settling—you too can end up with a life you love. Do that and you’ll be one of the lucky few in this life who can look back at the end of their days and say with great conviction, “It was a life well lived.”

Read Steve Sanduski’s latest article, for Financial Planning magazine’s The Prosperous Advisor, China’s Impact on the World Stage – Part 3.

From the 1960s to the 1980s, Japan was on a roll. They had one of the highest economic growth rates in the world. Their manufacturing prowess grew to be the envy of the world. Their stock market soared 373 percent between 1980 and its peak in 1989. And, like China today, there were predictions that Japan would overtake the United States as the largest economy in the world. But, as The Prosperous Advisor Steve Sanduski points out, times sure have changed.

Read Part 1 and Part 2 of China’s Impact on the World Stage.

Peak Advisor Alliance hasn’t been on vacation this summer! Check out the following articles that have been published about us or we have had published in the past month.

China’s Impact on the World Stage -- Part I – August 4, 2011
From Financial Planning magazine’s, The Prosperous Advisor by Steve Sanduski
I’d like to share with you some personal observations about what’s happening in China based on my recent visit to Beijing, Xi’an, Shanghai, and Hong Kong. While there as a tourist, I made a point of talking to the locals and keeping my eyes and ears open for anything that would help me figure out whether this Chinese growth story will save the world economy or whether it’s a bubble ready to burst.

7 Principles for Gaining Control of Your Day
From the September 2011 issue of Investment Advisor
Advisors often ask us, “What’s the single most important thing I can do to be productive and profitable?” While we’d like to say there is “just one thing,” the reality is there are seven core principles that every advisor should follow.

When They Need Help, Advisers Call: 'Coach!' - August 21, 2011
From Investment News
While on the way to building a successful advisory firm, David Frisch, like many advisers, hit a speed bump.

Use Exponential Difference Makers to Grow Your Business
From the August 2011 Issue of Investment Advisor
As a child, we learned that any number multiplied by itself several times in a row will generate a much bigger number: for example, 2 x 2 x 2 x 2 x 2 = 32. We can also express that as 2⁵ and we call that an exponential expression. Applying this mathematical concept to your business can help you double or possibly even triple or quadruple it.

Read Steve Sanduski’s latest article, for Financial Planning magazine’s The Prosperous Advisor, Are You Doing the Most Productive Thing at Every Given Moment?

You might think that doing the most productive thing at every given moment means that you should always be working or always doing something tangible that moves you closer to your goals. In reality, top achievers realize that there are numerous “things” they can do, that on the surface may not appear to move them closer to their goals, but in fact actually do.

Read Steve Sanduski’s latest article, for Financial Planning magazine’s The Prosperous Advisor, 3 Ways to Grow Your Practice by Excelling at What is “Scarce” and “Useful”.

As an advisor, are you the equivalent of an “economic good” or a “free good?” Advisors who want to succeed in the future must make sure they are an “economic good” type of advisor and not a “free good” advisor.

By Steve Sanduski, CFP®

Two years ago at a broker/dealer conference, a Peak Advisor Alliance member came up to me and shared a story. He said that a couple years earlier, he was in a partnership with another advisor and it was just not working out. He was very frustrated, but, being the junior partner, he had little control over the situation. About his only solution was to leave the partnership, set up his own office, and become his own boss. Intellectually, he knew this was the right route for him, his family, and his clients. Unfortunately, this involved a huge financial commitment and if it didn’t work, he would be deeply in the hole. Knowing the financial risk, he was very scared about making the leap to his own practice despite the desperateness of his current situation. So, he asked me for some guidance.

Long story short, I said to him, “If you aren’t willing to invest in yourself, how can you expect prospects to invest in you?”

As we chatted again at the recent broker/dealer conference, he said that simple question two years ago changed everything for him. He went ahead and made the leap and he was thrilled to tell me that his new practice is thriving and his clients are thrilled.

Like this member, what are you doing to reinvest in yourself? Are you working with a coach who can help you see what you cannot? Are you stepping out of your comfort zone so you can discover the opportunities beyond your current gaze?

If you’re not willing to take that leap, why should your prospects?