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Enjoy the current installment of "weekend reading for financial planners" - this week's issue is drawn entirely from blogs and bloggers I read who deliver content that has relevant for financial planners. We start off with a relatively new blog, which shares a great guide in how to write an attractive "bio" page as an advisor; in a world where we are often focusing on storytelling to communicate planning strategies and solutions, it's time to better apply the same techniques in communicating about ourselves, too! 

From there, we have a few technical articles, including a great discussion of what is (and isn't!) really guaranteed when clients say they're considering a variable annuity with a "5.5% guaranteed growth rate," and a look at whether clients should consider skipping employer-based health insurance as the new health insurance exchanges open up later this year.

Beyond that, there are several articles related to technology and social media this week, including whether the Google Apps platform is a viable solution for a growing advisory firm, a due diligence checklist of questions to ask when evaluating a potential CRM system, some "advanced" tips to getting more productive value out of Twitter, and a look at how advisors might use Pinterest to help grow their business. There are also a few practice management related issues, including a great look at some tips and opportunities in trying to self-publish a book (it's a lot easier than you think and there are lots of resources to help!), some things to consider if you're considering a podcast, and some guidance from Angie Herbers about how to fend off and resolve employee problems without resorting to just firing and replacing them.

>We wrap up with three final articles that look a bit more inward: the first is from Ronald Sier, and looks at whether it is appropriate and ethical to try to influence your clients' decisions (his conclusion: as long as it's done in their interests, yes it's appropriate, and in fact you should be trying to do it!); the second is from Tim Maurer, and his new "Financial Common Ground" initiative that is trying to establish what he calls the "unifying principles of personal finance" that hopefully all experts can agree on, regardless of their business model; and the last is a review of the recent Robert Cialdini book "Yes! 50 Scientifically Proven Ways To Be Persuasive" that includes some fantastic ideas on influence and persuasion that could be used to tweak an advisory firm's communication techniques to improve their business results. Enjoy the reading!

(Editor's Note: Want to see what I'm reading through the week that didn't make the cut? Due to popular request, I've started a Tumblr page to highlight a longer list of articles that I scan each week that might be of interest. You can follow the Tumblr page here.)

Weekend reading for June 29th/30th:

How To Write An Attractive Bio Page - This article is from a relatively new blog, Foundation Room Finance by David Leszczynski, but provides some excellent perspective on what really goes into writing a good "Bio" page about yourself for your advisory practice. The problem, perhaps not surprisingly, is that most advisors' bios sound relatively canned and boring; just as storytelling can be effective for describing services and offering solutions to clients, the same principles apply when crafting a compelling bio as well, though unfortunately most advisors fail at this. Instead, they end out with relatively boring and "cheesy" bios, using cliche statements like "help you set your goals" and "unparalleled service" (when everyone says it, it's not a differentiator!); similarly, talking about your licenses are not terribly relevant either, as consumers were probably already assuming you had them anyway and don't really need to hear it! And definitely don't talk about your awards for sales/growth/business revenue! The goal instead is to craft a bio that will resonate with your target audience (whether it connects with everyone is unnecessary and unproductive), to give them a feel for you even (or especially) if they're never met you in person. Accordingly, the bio should communicate who you work with, the benefits of working with you, and should get a little personal about yourself as well (people connect with people, not a list of business jargon and professional accomplishments!). The article wraps up with a great checklist of great items to think about as you review (and perhaps, start re-writing!) your own bio.

Variable Annuity With A 5.5% Guaranteed Growth Rate? - From Michael Piper's "Oblivious Investor" personal finance blog, this article provides a great simple explanation of the so-called "5.5% guaranteed growth rate" that is often attached to variable annuities, and what it really offers (which is NOT a 5.5% guaranteed growth rate on your cash value!). Piper explains that ultimately, the distinction is that there are actually two values; the first is the actual cash value of the annuity (what you'd get if you surrendered it and walked away, after any surrender charges), and the second amount is what you'd get if you turned on an income stream. The 5.5% growth rate applies only to the amount used to determine the income stream, NOT your cash value, and that matters because you can ONLY get the money AS an income stream, not as a liquid amount. In other words, you can't actually cash in that 5.5% growth rate, because it's not actually the cash value that's growing; it's simply a growth rate used to calculate the amount of systematic income or withdrawals you can get, which even adjusted for the guaranteed growth rate may actually be inferior to what you could get by just going out and buying an immediate annuity with part of your money!

Employer Based Coverage Or Obamacare Plan? Which Is Better? - On her Forbes blog, financial planner Carolyn McClanahan shares some insights about the emerging decision for many of whether to obtain employer-based health insurance or seek to purchase it directly on the health insurance exchanges as they roll out later this year. In the past, employer coverage was appealing because it was guaranteed issue regardless of health problems, though notably now individual policies will have the same rules under Obamacare. Similarly, employer coverage historically has had stronger coverage (or at least better minimum coverage) due to Federal law, but this gap too is now narrowing with Obamacare (although in turn, this will eliminate what was often a cost benefit for young people to purchase direct health insurance, at least if they were healthy). A third benefit of employer coverage is that it effectively is paid pre-tax by the employer (and without being included in the employee's income); this benefit actually remains in favor of employer coverage, as purchasing health insurance directly as an individual has limited deductibility due to the 10%-of-AGI threshold for medical expense deductions. Of course, ultimately the bigger driver for employee cost is not just the tax treatment, but the fact that many/most employers pay at least some portion of the outright health insurance premiums as well, and this will not end with Obamacare (at least for large employers subject to the "Play or Pay" tax penalty rules). Ultimately, McClanahan suggests that most clients should still take employer coverage when available, not only for the likely cost difference (at least after employer premium support) and the more favorable overall income tax treatment, but also because declining "affordable" employer coverage also disqualifies the individual for premium assistance tax credits anyway.

Is Google Apps Right For My Financial Advisory Firm? - In this article, Jennifer Goldman of MyVirtualCOO looks at Google Apps, and whether the solution and its rather seamless integration between desktop, laptop, tablet, and smartphone is effective as the core hub for an advisory firm. Ultimately, Goldman is not upbeat; the real hub to your firm should be your CRM, and Google Apps is not truly a CRM system. Yes, while it might be appealing to use all the functionality of Gmail to label and manage emails, it's better to pull your emails into your CRM and interact with them there (where they can be connected more directly to client records, action items, and workflows); yes, Gmail folders and labels may be fine for personal email where we don't have another solution, but that doesn't mean it's a good business solution, especially once there are multiple employees who each need to interact with clients and see what other communication has happened. Similarly, while the calendar functionality of Google Apps may be great for business use, it's not necessarily in-depth enough for business use, especially once multiple people are involved in the business who all need to touch and interact with the information; instead, if you really want to use the Google calendar personally, find a CRM that will integrate with it. Google Drive has the same failings - fine for personal use, but lacking the robustness (including potentially in terms of SEC and FINRA guidelines on document retention) for real business use. So ultimately, while Goldman acknowledges that Google Apps continues to be appealing for personal use, be cautious about using it for business, as it may be less effective in larger firms, and even if adopted in smaller firms may become more complex and costly to migrate away in the future if/when/as the business grows.

8 Things To Consider When Selecting A CRM System - From practice management consultant Tony Vidler, this article provides some great tips for due diligence questions to ask when selecting a CRM system as an advisor. The questions include: Do you really understand who owns what data, and what the CRM vendor agreement says about the ownership and portability of data (for Vidler, anything less than full control and portability of client data is a dealbreaker); if the software has integration with other providers, what privacy safeguards are in place to make sure that only the "right" information comes and goes, and that client data privacy is not breached; to what extent can the software tools and templates be adapted and customized for your individual business needs; will the CRM work with your email solution, or require you to work within the CRM solution (or is there no email integration at all?); to what extent can the software manage and customize workflows to improve your office efficiency; how integrated is the software with your business financial reporting (e.g., can you pull in client financial information, can you track client fees and billing, etc.); does the CRM integrate with social media; can you back up your data independent of the software supplier, just in case; can you track meaning sales and marketing data; is the CRM accessible and really useable on a mobile device? Although Vidler works in New Zealand and Australia, the questions and discussion is incredibly relevant for US advisors as well.

4 Advanced Twitter Tips For Advisors - From marketing consultant Marie Swift's "Marketing Maven" blog on Financial Planning, this article provides some great tips to advisors who are trying to get more value out of Twitter (and are good to bear in mind even if you're getting started). Swift's first suggestion is to master the "humble brag" - learn how to share information about your business and links to your site in a manner that promotes your value without being too pushy, and include some other content from credible sites too, as it shows you can be a good resource and there's nothing wrong with being known by the 'good company' you keep with other sites. Second, learn how to nurture leads by getting incremental bits of additional buy-in; tweets can lead to free webinars or white paper downloads, which in turn lead to more sharing, which ultimately leads to a call to action to take a step towards becoming a new client; however, make sure you have a way to capture the visitor's information (typically by offering to share something for free in exchange) or you can't build the prospective client pipeline! Third, looks at using advertising services that can customize the content people see on your site based on what they've already visited (though Swift doesn't recommend a specific service for doing this). Finally, make sure that you connect all your social media accounts together - Twitter, LinkedIn,, Google+, YouTube channel, etc. - so you can benefit from some cross-pollination as well!

Pinterest And Financial Services - From the blog of social media consultant Amy McIlwain, this article discusses the somewhat lesser known fifth player of the social media line-up: Pinterest. While the site lags the usage of the other four big all-stars - Facebook, Twitter, LinkedIn, and YouTube - McIlwain suggests that it's worth considering for some. The match to financial services is less clear - as classically, Pinterest has been used as more of a 'scrapbooking' site to share images - though Pinterest is particularly used by women, and thus may be of more interest to advisors target certain niches associated with women. In fact, even large companies have been moving to Pinterest, as 25% of the Fortune Global 100 companies have Pinterest accounts, the site hit 10 million monthly U.S. visitors faster than any independent site in history, and 28.1% of Pinterest users have annual household income above $100,000. So how can you use Pinterest if you want to? It's still an image-sharing site, so you'll have to get more image-focused in your own content, such as developing infographics (check out this article by Bill Winterberg on how to start making infographics for your advisory firm). Pinterest can also be a great way to make a more personal connection, so consider using it to share some of your personal interests, hobbies, aspirations, or values, or share things about your office and staff to help prospective clients connect with them. Another option is to use Pinterest to show ideal lifestyles you want to achieve (or that you help your clients achieve, and engage by having them share their own too). As with anything else in social media, McIlwain suggests the best approach is to just dive in and start trying it out, and find from there what works best for you.

21 Things You Need To Know About Self-Publishing 2.0 - From Copyblogger, this article by James Altucher, provides some great insight for anyone who is considering publishing (or especially, self-publishing) a book, as Altucher is someone who has been through the process many times (now releasing his 11th book!) with great success. Key tips include: be realistic that you're not going to make the big dollars from just the book alone, but you can also use that to your advantage by pricing lower and undercutting traditional book sellers; be focused on education, but also be willing to challenge the status quo, be controversial, and polarize, because the reality is that's how to make a book interesting and not boring like all the others (yes you will upset some, but you will also build more true fans as well); while having a blog is great, be ready to write and guest post on other blogs, to build both audience and relationships, and be engaged on social media; recognize that publishers will get you into bookstores but marketing is still up to you, but if you're good at it you may not need them for the other stuff you can now do yourself and any stigma associated with self-publishing is vanishing quickly; recognize that you can use outside platforms and build a team to better self-publish your book (you don't have to do it all yourself, and in fact probably shouldn't). In the end, you still have to create compelling content for a book to really be successful, but there's a lot you can do to support the credibility and ease the process of producing a book these days, especially going the self-publishing route!

7 Things I Wish I Knew Before I Published My First Podcast - From Ryan Hanley's "Content Warfare" blog, this article provides a great overview of what to keep in mind if you're thinking that audio/video podcasting might be in your future (which for some people is preferrable to writing a blog, as you just need your voice, no images, editing, or text formatting issues!). Based on Hanley's own experience in what he's learned from his first year of podcasting, tips include: buy a quality microphone and make sure you get a pop screen filter to go with it (the pop screen prevents audio spikes during speaking with hard consonants like the letter P or T) so you have good sound quality; have a hook early on, something intriguing to keep your audience engaged so they listen through to the end; use a URL link shortener to make simplified vanity web address for sites that you mention during your podcast so people can remember them while they're listening; ask for iTunes reviews, as iTunes is the largest place people find podcasts, and though unofficial the general consensus is that reviews are the most important factor in good podcast search ranking there; be certain to prepare for each podcast episode (it might be an interview or a free-flowing discussion, but it still shouldn't be seat-of-the-pants!); use a good RSS service (Hanley suggests Feedblitz and NOT Google's FeedBurner); and finally, make sure you pay attention to SEO for iTunes, including keywords in your podcast title, your publisher name, your podcast description, and the episode titles and descriptions. 

Speaking At Face Value: To Build Ties With Employees, Speak Honestly - On her Advisor One blog, practice management consultant Angie Herbers discusses what she calls "speaking at face value," which means speaking openly and candidly with employees, especially when problems arise. Herbers gives an example of a situation where an advisor was venting to her and ready to fire an employee whose performance had declined significantly, and Herbers suggested instead to "speak at face value" to the employee, articulating the problem directly to the individual ("I'm angry about your behavior... we need to be able to depend on you... do you want to be undependable?") in a manner that is not angry or overly emotional but simply open and honest, and allowing for a response (which in this case, was the employee refocusing and committing to the firm). The point here is not to vent or have emotional outbursts to an employee; in fact, the goal is really the opposite, to have open conversations before the frustration bottles up inside to the point of causing an explosion. Herbers also emphasizes that ultimately, it's not just about speaking at face value, but encouraging others to do so as well, as that's what ultimately leads to open two-way communication and better relationships with employees (and friends and family). So make sure you draw others out to speak at face value as well, even if that means asking them more than once "How are you today?" until they really begin to open up and connect.

Why Your Clients Want to be Influenced Even If You Don’t Think So - From the blog of Ronald Sier, this article looks at the interesting question of whether it's appropriate and ethical to try to influence your clients' decisions, and makes the case that ultimately it's not only the right thing to do, it's what clients want their advisors to do (assuming, of course, the outcome is still directed towards their best interests!). Or viewed another way, the point is that clients want more than just getting information from their advisor, especially when too much information can quickly become superfluous and even distract from the desired outcome. Instead, Sier suggests that the conversation should be focused squarely on what exactly answers and solves the client issues, and what can be done to steer them to implementing that solution. After all, clients are talking to you because they want to do business with you (or they wouldn't be having the conversation), and likewise they wouldn't be seeking the assistance of a professional if they didn't want help making a decision! And perhaps most important, the process you go through in trying to determine those solutions - really listening to clients and understanding them - build trust anyway, and connects with people emotionally, and makes it easier to help them than just trying to convince them with facts and logic!

Can Financial Experts Agree On Anything? - From his Forbes blog, financial planner Tim Maurer discusses what he calls the "unifying principles of personal finance" that we can (or hopefully, should!) all agree to, regardless of the particular segment of the industry from which we come. The point is to come together and help bring better clarity to consumers who are often confused when different experts promote different strategies in an attempt to differentiate themselves, where often the true differences are relatively minor but the arguing amongst experts causes consumers to lose track of the key messages and the big picture. The outcome of Maurer's effort - which can be seen on a new site he launched entitled "Financial Common Ground" - is a series of 12 personal finance principles regarding spending discipline, the use of debt, having buffers, managing risk and investments and taxes, planning for the future and legacies and estates, etc. You can read through the principles themselves, and if you agree submit your name; ultimately, Maurer helps that as more experts buy into the principles, that the message can be promoted for the benefit of all consumers.

Yes! 50 Scientifically Proven Ways to Be Persuasive - From Shane Parrish's "Farnam Street" blog on behavioral finance, this article provides a great summary of the recent book "Yes! 50 Scientifically Proven Ways To Be Persuasive" by influence research guru Robert Cialdini and his co-authors Noah Goldstein and Steve Martin. Highlights include: create the impression of scarcity or show people what the majority of others do to encourage action (and can also unwittingly encourage bad behavior); beware the paradox of choice and overwhelming with too many options; repeating what people say back to them helps interaction, and writing things down helps people commit to them; get introduced so you can have someone talk about your credentials without making it sound like you're bragging. The book itself delivers all 50 tips with only a few pages per item, which makes it a light read, but the straightforward nature of many of the techniques makes them readily implementable in your financial planning practice with just small tweaks to what you do! 

And although it's not specifically included here for Weekend Reading, I'd also highly recommend checking out Bill Winterberg's "FPPad" blog on technology for advisors, including his weekly "FPPad Bits And Bytes" update on tech news and developments!

I hope you enjoy the reading! Let me know what you think, and if there are any articles you think I should highlight in a future column! And click here to sign up for a delivery of all blog posts from Nerd's Eye View - including Weekend Reading - directly to your email!

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Michael E. Kitces

I write about financial planning strategies and practice management ideas, and have created several businesses to help people implement them.

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Tuesday, October 13th, 2015

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