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Archives for March 2012

ABA Wealth Management Conference

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Here are the sessions I am looking forward to over the next three days at the ABA Wealth Management Conference in Scottsdale, Arizona. I’ll be back here next week with observations and potential implications on the intersection of leadership, advice an technology. Let me know if you’re going!

1) Financial Services in a Mobile World
Jon Bluth, Senior Vice President of Product Management, SunGard
Eileen VanScoy, Executive Vice President of Product Management, SunGard
The mobile landscape is rapidly evolving, and the financial services industry is striving to keep pace. Similar to the Internet’s early days, fragmentation, security concerns, legacy infrastructure, monetizing solutions and ROI considerations present challenges and opportunities that must be analyzed and addressed to fully capitalize on the sweeping changes brought about by an increasingly mobile world. This presentation looks at financial firms’ emerging and actual opportunities and risks in deploying mobile technology, and discusses various approaches they can take to cost-effectively and responsibly leverage its many benefits to their business and their clients.

2) Leveraging Operational Benchmarks To Achieve Sustainable, Profitable Growth
Michael Kostoff, Partner, WISE Gateway LLC
In these difficult economic times, it is clear that wealth management executives must “do more with less”–they must drive increased revenue growth while simultaneously reducing costs. This presentation will outline how managers can leverage operational performance benchmarking to accomplish this goal, and deliver profitable growth that is sustainable in any kind of economy.   Strategies for improving staff productivity, ensuring support structure cost efficiencies and enhancing sales performance will be discussed.

3) Family Wealth Management
Pat Armstrong, Senior Vice President and Managing Director, Family Dynamics, Wells Fargo
Arne Boudewyn, Senior Vice President and Senior Director, Family Dynamics, Wells Fargo
This breakout is designed to explore strategies for engaging high net worth families in conversations about the qualitative, non-financial dimensions of wealth, sometimes referred to as the human, intellectual or social capital.  Drawing on research and best practices in the area of family dynamics, the presenters will focus their discussion on challenges and opportunities facing wealth advisors as they work with various family profiles on a range of business and estate planning concerns.   The presenters will illustrate how to surface and leverage family motivators through an interactive discussion with participants, highlighting conversation starters that can enhance the planning process.

4) Luncheon with Speaker

The Art of Vision
Erik Wahl

Your best sustainable edge in business is your ability to visibly differentiate yourself from your competition. The Art of Vision is an entertaining and highly practical program that uncovers new ways to make your organization more creative and ultimately more profitable. It is no longer enough to have good customer service and a good product. The truly great companies have altered the landscape to create a unique experience for the customer. Whether its sales, service or leadership principles; professionals at all levels can achieve superior performance by creatively differentiating themselves from the competition.

5) Expert Teams Produce Extraordinary Results

Stephen Doty, Investment Executive, Northeast Division, U.S. Trust, Bank of America Private Wealth Management

David R. McCune, Region Director, Wells Fargo Wealth Management Group 

HNW client demands are clear – they want to be served by a team of professionals. Clients seek a team of advisors with specific roles and complementary skills and talents, aligned and committed to a common purpose of putting the client first, and who consistently exhibit levels of creativity and collaboration that produce extraordinary results.  But how do we get teams to perform at this level? How do we integrate uniquely qualified individuals to think and act as a team? This interactive session will explore the philosophies that make the team approach successful and share actual experiences of a winning team.

6) General Session
Making it Personal – Relationships and Wealth Management

Joseph Michelli, PhD,
Author and Organizational Consultant

Delivering financial performance for your clients is not enough.  Learn the tools that will engage, retain, build loyalty, and grow referrals.

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7) Client Acquisition in a Wired World
Kathleen Pritchard,  Director, Head of Program Marketing and Customer Insights, Legg Mason
In today’s competitive business landscape, financial professionals who fail to leverage the power of the Internet to acquire new clients are doing themselves a serious disservice. By cultivating an online presence that showcases your specific expertise and service offering, you not only create opportunities to meet qualified prospects, but also build credibility and rapport that increases your chance of winning their business. Key topics include best practices for websites and email campaigns; building a network of contacts to facilitate referrals, both as an individual and a professional; using online search tools to identify potential clients, understand their individual needs/interests and use that information in initial meetings to open more new relationships; managing your online reputation; delivering a consistent message that reflects your value proposition; recognizing compliance concerns; and more. Also featured is a discussion on how financial professionals can enhance their client acquisition efforts by using popular online “social networking” services like LinkedIn, Facebook, and Twitter.



Top Ten Geek Week Sneak Peeks – Part 2

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Today: The GeekWire Summit

Startup technology news site GeekWire held its first birthday party on March 7 with the GeekWire Summit. Speakers included former Microsoft Chief Software Engineer and Cocomo co-founder Ray Ozzie, former Swype CEO Mike McSherry, Hulu CTO Richard Tom, T-Mobile CMO Cole Brodman, Rhapsody President Jon Irwin, venture capitalist/serial founder Oren Etzioni and other great technology minds. Nothing was focused on FinTech per se, but nonetheless here are some highlights and potential implications on the intersection of leadership, advice and technology in financial services:

“How do large companies innovate? They buy small companies.”

– Oren Etzioni

  1. On the rise of social collaboration in the enterprise, Ray Ozzie paraphrased Ethan Zuckerman (who also has a lot of interesting things to say about how we tend to interact with people who are most like us, but that’s another post) in describing the “scopes of voice” as public/private/secret/self :“I think when you get into enterprise and business scenarios, there are some organizations where speaking publicly in a public voice is very useful. Professional services firms promote an internal culture where speaking openly and being known as the professional who knows something about something works a lot better than certain manufacturing company, where the internal norms might be different in terms of secrecy and confidentiality.”  There is still lots of opportunity, but also lots of work to do, since only 27% of financial professionals use LinkedIn, and less than 4% use any other social media methods at all.
  2. Do you think that building a massive base of clients/users/followers is in direct conflict with customizing your messages to be relevant individual users or subgroups? Consider that Hulu  has 1.4 BILLION ad impressions per month, but they offer some innovative ways for users to customize their ad content. Ad Selector allows viewers a choice of three ads from one brand or one ad from a selection of three different brands. Ad Swap allows viewers to find ads that are most relevant.
  3. Great discussion on the state of mobile technology. All on the panel had praise for the Windows Phone platform, but noted that they have a long way to go with a 4.4% market share to Android’s 49% and Apple’s 30%. (IMHO, I think that RIM’s enterprise-centric 15% share is the most vulnerable to Windows, and it’s already down 2% in the last three months.) Former Swype CEO Mike McSherry said that Apple’s Siri natural speech style will help improve text entry over time too. This evolution to more natural interfaces and input styles was also noted at Micosoft Research on the prior day.
  4. Startup investor and advisor Hadi Partovi noted that the cost of sequencing the human genome has gone from $1 billion to $1,000, and predicts it is heading to $100. If that can be democratized, how naive are we about “big finance”?
  5. Facebook’s Director of Engineering Jocelyn Goldfein said that the company rolled out the new Timeline with a team the size of a startup. Facebook video chat? One guy. In Seattle. Although, that may be taking the lean approach a bit too far. (As someone retorted on Twitter “That explains a lot.”) Still– how many consultant engagements, project managers and steering committee meetings do we need to make meaningful change in our business?

“It’s not enough to encourage employees to innovate.

You have to protect them from the cost of failure.”

– Jocelyn Goldfein, Facebook

(P.S. – I live tweeted my new startup idea from the conference: Embedded QR codes in public carpeting. Remember, I get a 20% Founders Fee.)

Yesterday: Microsoft Research TechFest 2012

Top Ten Geek Week Sneak Peeks – Part 1

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This week I really got the chance to embrace that inner geek that’s just dying to break out of my pinstripe suit. On Tuesday I had the chance to visit the Microsoft Research TechFest 2012, and celebrate twenty years of Microsoft Research (Shout out to my host Juliane Carlson). Then on Wednesday I attended the GeekWire Summit and got to hear and meet all kinds of interesting people doing all kinds of interesting things. Here are some highlights and potential implications on the intersection of leadership, advice and technology in financial services:

Today: Microsoft Research TechFest2012

“The unanticipated results are often as important as the anticipated ones.”  

– Peter Lee, Microsoft Research

  1. Multilingual text-to-speech (TTS) conversion. The demo was oriented around an American using GPS to navigate around Beijing, but imagine being able to serve non-English speaking clients in situations where multilingual employees might not be available or practical.
  2. Lots of projects involving Big Data, including FetchClimate, a massive mash-up of global historical climatic data made instantly accessible. Easily useful as-is to assist in assessing branch locations, client real estate projects, etc.
  3. Another Big Data project is ChronoZoom, which is a “…dynamic cloud based data visualization tool where educators, researchers and students can easily consume, compare and understand the history of the cosmos, earth, life and humanity. Where they can easily consume rich media sets like: audio, video, text, pdfs, charts, graphs and articles in one place and discover new possibilities.” Imagine a financial markets version of this product with every price and correlation of every financial instrument for the past 80+ years.
  4. IllumiShare is desk lamp with camera that allows people to share physical or digital objects across the internet. Imagine a client who has questions on their trust document (or paper statement from your luddite competitor, because of course your institution has a secure digital document exchange with e-statments…). They could flip this on from the kitchen table of their beach house and you can see it all on your screen, even mark it up or highlight key areas.
  5. Multitouch is still evolving, and the Wearable Multitouch Projector can turn virtually any surface into a touchscreen, including the palm of your own hand. The current prototype looks a little bit like  first generation home camcorders with a shoulder bag processor and a shoulder mounted projector, but it will undoubtedly evolve. No touch is evolving too, building on the Kinect interface, including potential touchless interaction in surgery.

Tomorrow: The GeekWire Summit

Free Advice From a Mentor

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(Note: When I wrote this early in my blog’s history, when I was a senior executive for a Fortune 150 financial services firm. Now with the added perspective of an entrepreneur and consultant, I find the words truer than ever.)

I have mentored dozens of young professionals over the years, and even though each situation is unique, I always end up giving these three pieces of advice. It’s not like I planned it all out, or even wrote it out before now, but here they are:

  1. There is no secret handshake
  2. Focus on getting better, not getting credentials
  3. It all starts with you

There is no secret handshake

The CEO of a venture-backed technology company whom I know well once asked me: “Do you ever get the feeling that when someone comes to you for career advice, what they’re really looking for is the secret handshake?” 

Yes, I have gotten that feeling.

My best mentoring relationships have involved mentees who truly want to improve their performance, learn new skills, take on more responsibility or just learn more about what a potential career path might look like for them.

The best way to ensure that a mentoring relationship with me is short (and not particularly rewarding for either of us) is to mistake it as an opportunity to simply learn the secret handshake.

Do you really think I’ll hire you or connect you with someone merely because you want more money or a better title?

Put some clothes on that naked ambition, you’ll catch a cold.

Focus on getting better, not getting credentials

I often get questions like “Should I get an MBA (or any one of the alphabet soup of certifications in the financial industry: CFA, CFP®, CIMA, CTFA, etc.)?”

My consistent answer to all who ask is that if you want to learn more about that particular area and want to study it deeper, go for it. I’m a big believer of continuous learning, and earlier in my career I worked to get an MBA and put a few initials after my own name.

On the other hand, if you think that simply tacking those initials after your name will open a whole new world for you, you will probably be disappointed.

I still remember a soon-to-be-freshly-minted MBA who wanted to ‘remind’ me that he would have this very important graduate degree by the time of his next performance review, and that he hoped that would qualify him for a promotion.

I ‘reminded’ him that he was still the same person with the same level of performance, so probably not.

It all starts with you

This is kind of a two-for-one. First, I mean that before you start on any exploration of future paths, you need to understand your strengths, your passions, what gives you energy and what saps you dry.

I also mean that the whole process of working with a mentor isn’t a passive activity of absorbing second-hand knowledge through osmosis.

I was very proud and excited when my company asked me a few years ago to participate in the pilot of a program called MentorConnect, kind of an internal match.com to put mentors and mentees together based on specific skills and experiences.

I learned to start by asking mentees to share any relevant standardized test results they may have taken recently (Meyers-Briggs, PDI, StrengthsFinder, DiSC, etc.), and if they didn’t have any, I had them start with StrengthsFinder 2.0. Not only did this help give the mentee and me a logical starting place, it helped to quickly identify those who were only looking for the secret handshake. Those types often would not do the work.

I also recall the bright young assistant who was referred to me by her boss for some career advice a few years ago. She wasn’t sure what she wanted, but she was sure she should be higher in the organization by now. I took her to lunch, and we talked for an hour and a half. I gave her a couple of books to read for our subsequent meetings. I must have followed up three of four times when I ran into her, but she hadn’t quite found the time to even buy the books, let alone read them.

I guess I wasn’t completely surprised when she dropped by a couple of months later to let me know she was quitting the firm.

She was going to work on her MBA.

And no doubt continue her quest for that elusive secret handshake.

You Do Realize This is a People Business, Don’t You?

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Bankers sometimes have a hard time understanding why their industry has satisfaction ratings right down there with utilities, cell carriers and bankrupt airlines. Maybe it’s because they sometimes have more in common with these business models than they would really care to admit. Companies and industries that score poorly in customer satisfaction tend to treat customers like replaceable cogs in their profit machine, rather than empowered consumers with unmet needs and lots of alternatives.

Source: flickr.com via David on Pinterest

David Armano has an amazing knack for boiling down sometimes complex concepts to compelling and easy to grasp infographics. And while the one above was intended to depict a much broader economic view, I think it works just as well in the narrower context of financial services.

It’s not a Wonderful Life any more

Financial institutions have long since evolved from the folksy image of It’s a Wonderful Life‘s Bailey Building and Loan. Competitive forces drove the financial industry to embrace consolidation, standardized underwriting, securitization, more consolidation, credit cards, ATMs, broader product offerings, specialized segmentation, data analytics, even more consolidation, and countless other changes. Over the long run, much of it was good, and the industry has improved efficiency and profitability over time.

But somewhere along the way, too many institutions (and too many advisors) came to believe in that seductive fiction that has fooled so many other industries– that customers are easily locked in with real or perceived monopolies, contracts, terms and conditions, EULAs, whatever– and that the path to profitability is to leverage that servitude with a cascade of new (and usually involuntary) revenue streams from the indentured.

Many bankers are truly puzzled by the virulent public reaction to their attempts to defray the costs of delivering deposit accounts. After all, they have cost accounting on their side. It has been a well-known fact amongst bank executives for at least 25 years that most checking accounts are unprofitable in a fully-loaded cost analysis. A similar Pareto Principle has long existed across client cohorts as well– the “vital few” subsidize the “trivial many”.

Why recapturing costs alone doesn’t work:

So why not focus on reducing the unprofitability of a large percentage of your clients? Managing the cost to serve is a very real issue for most firms, and I am a firm believer in the need to focus marketing efforts on clients who have a high probability of being profitable in reasonable amount of time.

What I think most firms and advisors misunderstand is that many clients at every tier actually are willing to pay more– if they receive something of value in exchange. And here’s where it get’s a little tricky– the clients get to decide what provides value and what does not– and not every client will choose the same things.

What does work:

This is where data analytics can really add the most value. Finding clients who will willingly choose to consume additional services for additional cost. (If you do it right, you can add $5 in revenue for every $1 in added cost.)

Firms that really do it right focus their efforts across all of the client segments, not just on reducing unprofitability in the lower tiers. Further improving the profitability of the top 20-25% of your clients can improve their subsidization of the masses and reduce the temptation to annoy the majority of your clients. (Banks and checking accounts may have been the original “freemium” business model.)

Let’s go back to the airlines. The ones thriving, both in customer satisfaction scores and in profitability, are improving the customer experience for all of their clients while they simultaneously raise the bar for their most profitable clientele. Doing only the latter creates ill will that will never be offset by increased profitability for the subsidizers.

You do realize that this is a people business, don’t you?

Open Forum: What is the Disruptive Potential of “mWealth”?

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A recent article in Fast Company magazine (As Smartphones Get Smarter, You May Get Healthier: How mHealth Can Bring Cheaper Health Care To All) described how the technology in today’s smartphones are and could be used in modern healthcare (ultrasounds on the screens, HD cameras for cancer screening, accelerometers to guide physical therapy, microphones as stethoscopes).

It got me thinking…

What is the disruptive potential of mWealth?

…use geolocation to…

…use your HD camera to…

…use existing apps to…

What is the disruptive potential of “mWealth”?

Five Leadership Lessons From The Godfather

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Godfather

Today Paramount and Cinemark are celebrating the 40th anniversary of the release of The Godfather with a one day showing of the iconic film in 55 Cinemark XD theaters. The movie is my all-time favorite (with the possible exception of The Godfather II). In honor of the anniversary (which is actually later this month), I offer these five leadership lessons from the film:

You need a wartime Consigliere

When Michael was plotting his revenge against the other families, he announced that he was replacing his own step-brother as trusted advisor: “Tom Hagen is no longer Consigliere. He’s going to be our lawyer in Vegas. That’s no reflection on Tom, it’s just the way I want it.” Then to Tom: “You’re not a wartime Consigliere, Tom. Things could get rough with the move we’re making.”

Loyalty, history and track record are important factors in keeping people on your team, but don’t confuse them with having the right people with the right skills and experiences in the right positions at the right time.

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Just because some businesses might be OK for other people, they may not be right for you

When Don Corleone sits down with Sollozzo, who is seeking financing and political protection in order to expand  his illegal drug business, Don Corleone tells him: “…I must say no to you and let me give you my reasons. It’s true I have a lot of friends in politics, but they wouldn’t be so friendly if they knew my business was drugs instead of gambling, which they consider a harmless vice. But drugs, that’s a dirty business.”

Credit unions buying fintech companies. Fintech companies getting bank charters. Banks and credit unions partnering with fintech companies to create new offerings. None of these are necessarily bad ideas, but expand your offerings because it makes sense strategically, and because you are sure you understand the risks and are sure you can execute.

Don’t do it because it’s an appealing source of new revenue. If you’re simply looking for a new source of revenue, why not sell hamburgers?

 

“Never tell anyone outside the Family what you are thinking again”

After Sollozzo exits the above scene, Don Corleone tells this to his hot-headed oldest son Sonny, after Sonny had asked a question of Sollozzo about his proposal, revealing a potential rift in the family.

In this era of social media communications and 24/7 open-source networking and crowd sourcing, remember to keep some things just within the company. That’s how competitive advantages are created.

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“Leave the gun. Take the cannoli.”

Experienced hit man Clemenza offers this simple advice to Rocco after he kills the traitor Paulie along an abandoned stretch of highway.

The leadership lesson: Know what’s important to keep close and what is expendable. Sometimes it’s time to move on, and sometimes it’s time to hang on. Know the difference.

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Make them an offer they can’t refuse

When the singer Johnny Fontane comes to Don Corelone for help in getting a movie role he covets, he is worried that it is already too late since the movie starts shooting in a week. The Godfather confidently reassures him that he will be able to influence the film’s producer: “I’m gonna make him an offer he won’t refuse.”

The old horse’s head in the bed routine is typically not recommended, but you should understand that dealing in the currency that’s important to the other party is the key to influence. Understanding their true wants and needs and worries. If you can help them achieve what they really want, you may very well make them an offer they can’t refuse.