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Bear in Mind: We’re Human

GM - I saw this week that a zoo in China had to confirm that its bears are real and not “humans in disguise.”

So I thought I’d take a moment to confirm to you all that the Advisorist team is real and not humans in disguise! 😂

Which isn’t something you can take for granted these days, with AI and all that…

So now, let me get back to writing the next edition - ✍️

Jeremiah “Constantly Fact-Checking ChatGPT” Desmarais

CEO, Advisorist

In Today’s Issue 👇️ 

• New survey exposes ways to convert prospects in 2023

• Copy-and-paste email template for engaging clients this week

• Why financial “gurus” are so wrong with their forecasts & predictions

• A feel-good story that will give you all the feels 😊

Plus, all of the week’s biggest headlines and a couple of memes.

Let’s get started!

2 Things That Are Really Scaring Investors Right Now

The past few years have been a bit of an investing rollercoaster, haven’t they? Turns out the ride is making many people feel woozy. 😵‍💫

Charles Schwab recently did a survey asking investors how they’re feeling about retirement. Let’s just say the results weren’t too pretty…

Just 37% of people thought they were very likely to achieve their retirement goals. Yikes. And two things are scaring investors the most:

Inflation and volatility.

62% of investors think inflation is an obstacle to a comfy retirement, while 42% say the same thing about the stock market.

Those numbers are up big from last year. And while it’s not fun to see people stressing about their Golden Years, these trends are a golden opportunity for the right advisors.

That’s because the best advisors (like you!) don’t just know what to say - they know how to say it. With the right style, we can inspire confidence and help clients relax about their future…

With that in mind, here are some ideas to help you stand out the next time you’re chatting with a client or prospect. 👇

1. Tone down the technicality. People are anxious enough without terms like “covariance” and “Sharpe ratio” being thrown at them. Bonus points if you can talk about recent market movements without mentioning “volatility”!

2. Ask open-ended questions. Give clients a chance to steer the convo towards their own worries.

   What do they think the biggest barriers to a successful retirement will be? When they think about investing their money, what kind of worries creep up? How confident are they feeling about their financial future?

3. Active listening. Figure out why clients are asking what they are!

   Is that inflation question due to anxiety about real returns, or because high prices are eating into the household budget? 🤔

The $1.25 Billion Windfall Giving FAs a Fresh Sales Angle

Earning a billion dollars seems kind of difficult. But wouldn’t it be nice to just scratch a ticket, get the cash, and skip all the hard work? 💰

Sounds pretty good to me!

For one lucky person out there, that dream could become real. The Mega Millions jackpot has been going up and up, and is now at $1.25 billion.

(P.S. If you’re the winner, consider sharing a portion with your favorite newsletter team! 😂)

This story is all over the place, and we can use it as a fresh sales angle that connects with what clients are already seeing in the news.

Check out this email draft we put together that uses the lottery to frame a discussion about financial windfalls to keep your team top of mind!

Subject Line: Windfall planning - inspired by the Mega Millions

Body: Hey [first name] –

Hope you’re doing well! If you’ve been looking at the news recently, you might have seen that the Mega Millions jackpot has climbed to $1.25 billion.

While I can’t advise buying lottery tickets as an investment strategy, I did want to let you know that our team is here to help you navigate any potential windfalls you do encounter – lottery or otherwise.

Windfalls can result from an inheritance, a legal settlement, the sale of a business, or something similar.

But any sudden influx of cash is always best managed with intelligent estate planning, investment management, and tax planning strategies.

If you’d like to discuss windfall planning or anything else related to your financial strategy, I’m just a phone call away.

Best,

[Your name]

Top Headlines: Everything You Need to Know

🏠 Households

• Student loan payments for 28 million borrowers to resume in October (BN)

• Mortgage rates close at 7%; Double 2021 rates (FB)

• New survey: 61% of Americans living paycheck-to-paycheck (CN)

💵 Economy

• U.S. economy added 187,000 jobs in July, fewer than expected (CN)

• Fitch strips U.S. of AAA rating, citing fiscal and governance concerns (FT)

• BofA and Fed both reverse recession calls in sign of optimism (FP)

📈 Markets

• U.S. stocks see biggest daily sell-off in months (FT)

• 10-year Treasury yield hits highest level since Nov. 2022 (CN)

• Oil and gas prices spike as OPEC+ extends supply cut (BN)

💼Industry News

• Twin brothers accused of defrauding 50 clients for $5 million (FP)

• RIA M&A activity slows in 2Q 23, but overall level remains high (WM)

• Focus Financial profits down 40% on high expenses, capital costs (FP)

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Why the Financial “Gurus” Are (Almost) Always Wrong

If you’ve been an advisor for long enough, you’ve probably dealt with the “guru-induced trade.”

A client calls requesting a weird trade - either selling out of a bunch of their positions or taking a flier on a risky stock.

After some prodding about why they want to do this, the answer comes out: “Well, so-and-so was on CNBC and said this and that!”

Financial gurus can be very convincing, especially to retail investors. This can cause some clients to stray from their long-term financial plans.

But in terms of their track record, guru accuracy is… pretty embarrassing.

Some recent research studies evaluated the performance of “top” forecasters. Let’s take a look at the forecasting accuracy of some of the biggest names👇

• Jim Cramer, Mad Money host: 47%

• Jeremy Grantham, founder of GMO LLC: 48%

• Abby Joseph Cohen, former chief U.S. investment strategist at Goldman Sachs (!): 35%

So you’d do better flipping a coin than listening to the biggest names in forecasting.

When I was younger, my parents used to tell me to “shut that TV off and go outside!” - turns out the same advice applies to listening to financial gurus. 😂

👀 The Best Thing I Saw All Week

This definitely made me smile - a group of high schoolers in Arizona helped raise a ton of money for one of their favorite teachers so that his wife could get a critical heart surgery.

The students said their teacher, Clayton Guy, always tries to make lessons fun and engaging. That can be tough when the subjects are government and economics - but Mr. Guy makes it work!

Parker Bond, one of the students, left us with a quote to think about as we start this week: “I think just trying to spread more kindness in the world — you'll get a lot more back."

Impressive maturity for a high school student. In the words of The Who - the kids are alright! 👍

Sharing looks good on you.

When you copy that link at the bottom and share it with a few financial planning colleagues, you look like the smartest advisor in the room by keeping them informed.

Plus, you earn rewards. Sweet.