Tuesday, September 27, 2011

Smallish Obstacle-Biggish Impact


Ever have one of those days where the smallest little setback seems to set a negative tone for the rest of the day?

You’re not alone. It can happen to all of us. Regarding the battle of Setbacks vs. Wins, it’s Setbacks…in a cakewalk!

I’m reading a terrific new book, The Progress Principle, by Teresa Amabile and Steven Kramer.

Amabile and Kramer cite extensive research that indicates that the emotional effect of setbacks to diminish happiness is twice as strong as the power of progress to boost happiness.

Additionally:

  • The power of setbacks to increase frustration is more than 3X as strong as the power of progress to increase frustration.
  • The connection between mood and negative work events is about 5X stronger than the connection between mood and positive events.
  • Negative team leader behaviors have a much broader and critical influence, than do positive team leader behaviors.
  • In general, people expend much more cognitive and emotional energy on bad events than good ones. (When looking at diary narratives, researchers found that the recounting of negative events, was much longer and more detailed than recounting of neutral or positive events.)

So, what's the answer?

  1. Be aware that this bad event vs. good event asymmetry is pretty typical for most people. Don’t think that it’s just happening to you.
  2. Try to ensure that good events outnumber bad events. (Obvious!) Put yourself in situations where good things are more likely to happen to you.
  3. Remove any obstacles that might impede the progress of yourself and/or your team.
  4. Make sure that YOU aren’t the obstacle!

Hope this helps. Have a nice day!

Tuesday, September 20, 2011

Be the Quarterback!


I stole this title from a good article written the other day by Thomas Coyle, provided by Dow Jones Adviser. (Link not available.)

The gist of the article is how financial advisors might position themselves towards investors who work with multiple financial advisors.

In the article, Coyle cites a number of financial advisors who place themselves in the conversation with their clients who have significant assets “held away” with other financial institutions. They have done so by positioning themselves as the “quarterback advisor”, i.e. the advisor who takes a broad, holistic view of the entire field of play; or all of the client’s assets, regardless if they are held/managed directly by that advisor.

As one of the financial advisors in the article says, he meets “very little resistance” when he asks his clients to discuss investments that he doesn’t manage directly.

However, another advisor cited in the article takes a cautionary note. He says that most financial advisors
do not do enough to earn the trust of investors, in order for them to reveal their held-away assets.

This whole concept of “earning trust” is an interesting one. To continue the quarterback metaphor, let’s consider the importance as to why the quarterback must earn the team’s trust. No surprise, but it is imperative for a football squad to trust their quarterback implicitly. (Google “quarterback+trust+team" and see how many articles come up!)

For financial advisors who are working to build trust with their clients, one approach might be to first engage the client in an expansive discussion about the client's goals and dreams. As the advisor guides the discussion with thoughtful questions, e.g. What are you really trying to accomplish financially? Can you paint a picture of the way you want your future to look? When you visualize your future, what is the one thing that concerns you most?, it will become obvious that more information will be needed for the discussion to be completely honest and helpful.

Indeed, in order for the client to finish painting the picture of their desired future… the advisor will need a complete picture of the client's entire financial life as it exists currently, in order to help them in a professional and comprehensive manner.


The three main benefits for investors to consolidate holdings with one advisor are:
  1. Better asset allocation,
  2. Streamlined reporting,
  3. Reduced portfolio risk.
The last point is especially meaningful for those investors who have the misguided sense that having multiple advisors is a good means to achieve portfolio diversification. (Quite the opposite is true. I've addressed this before. See this link.)

However, cagey and wary investors will not appreciate these very real benefits of portfolio consolidation...if the financial advisor hasn't earned their trust.

Making the effort to see the entire field of play, and engaging in a thoughtful, curiosity-filled discussion that compels the client to think about what they really want to achieve...is a good first step.

by Chris Holman

Thursday, September 15, 2011

Like...does this make sense?


“Fillers” are the empty words and phrases that slip into our speech…that minimize the impact and import of all the other good things that we say.

In English, “um”, “er”, and “ah” are the starter fillers …that many of us use without any thought. Amongst the ‘kids’ today, “you know”, "whatever" and “like” still seem to be the go-to fillers for the Millenial generation. (Who remembers “Valley Girl”? Frank Zappa and his daughter, Moon Unit, were mocking “like” and other valley girl-isms way back in 1982.)

For those of us in business and professional circles, we have our own Filler Favorites. “To be honest…”, “At the end of the day…”, and “If you will…” are three meaningless phrases that seem to pop up like weeds, even among those of us who are reasonably articulate.

This all hit close home to me when I read this essay by Jerry Weissman on the HBR blog yesterday, “Never ask ‘Does this make sense?” I happen to know that “Does this make sense?” happens to be in my own personal bag of fillers. As Weissman accurately points out, this phrase sends out two negative messages. It creates uncertainty on the part of the speaker about the credibility of the speaker’s content, and it casts doubt about the ability of the listener to comprehend what the speaker said. Neither of which is good.

A much better question (which I will try to incorporate) is the nonjudgmental query, "Do you have any questions?"

So what?
Why not use fillers? As linguists point out, fillers can ease the flow of conversation. So, why not use them?

In the first place, fillers are meaningless. Presumably, for those of us who are communicators, we want to delete meaningless words and phrases from our speech…leaving that which is meaningful.

Here’s another reason to delete fillers from our lexicon. They’re selfish. Here’s what I’m talking about.

During a two-way conversation, we often speak by taking turns. When someone thinks that it is their turn to talk, they do. Otherwise, they listen (or pretend to.) Inevitably, there are short periods of silence as the speaker pauses to let the other person take over. But, sometimes the speaker doesn’t want to give up the podium…and inserts a filler to signal that they want more time to speak. When the listener hears the “filler”…they continue to listen rather than start talking.

As a coach, I often listen to replays of my coaching conversations, as a means to continually improve how I communicate, coach and listen. I have noticed that, when a speaker is comfortable with silence, they don’t seem to have the need to insert the “filler” words. (There is no better way to improve your conversational speech and “kick the habit” of lazy, interruptive, or bad speech patterns…than by listening to yourself!)


Like I said...does this make sense?

by Chris Holman

Thursday, September 8, 2011

Financial Advisory Paradox: Where Are All the Women?

You may know the ancient Wall Street anecdote about the wide-eyed visitor to a brokerage firm, who was looking down admiringly at all of the brokers' and bankers' yachts that were docked on the Hudson River. His naive question, "Where are all the customer's yachts?"...was an inadvertent illumination of one of Wall Street's inherent contradictions.

With the dismissal of Sallie Krawcheck this week, we might paraphrase this old saw with... Where are all the women (in financial services)?

Consider the following:

  • According to a study by Catalyst, within the financial services industry women account for just 19.1% of executive officers, 17.4% of board directors, and 2.7% of CEO's. (With Krawcheck gone, the 2.7% number is even smaller now!)
  • Looking at the 2010 data from the Bureau of Labor Statistics, the percentage of women who are financial advisors is 30.8%.
Contrast the above, with this:

  • Women control about 60% of the wealth in the U.S., according to a study by Allianz Life.
  • This percentage is likely to increase as there is a growing education gap too, as defined by gender. In 2009, 57% of bachelor's degrees were earned by women...as were 60% of the master's candidates...and 52% of PhD recipients. (Source: U.S. Dept. of Education)
  • Due to significant differences in life expectancies, women are likely to be in charge of much of the $41 trillion that is expected to pass between generations over the next 50 years.
  • In a 2010 study of female investors by the Boston Consulting Group, 55% of those surveyed said that wealth managers could do a much better job of meeting the advisory needs of women.
We don't presume to have any answers to this obvious disconnect in the marketplace. Yet the question remains:

Women control 60% of the wealth in this country, yet only 30% of financial advisors are women?

What's wrong with this picture?

by Chris Holman