The smart job hunter will look at multiple prospective employers and compare them across various dimensions. One of my most unforgettable experiences was when a prospective employer insisted that I look at the competition before accepting their offer.
This was a unique man bites dog type of story. Usually, if you are an attractive potential hire, a prospective employer will try to shut off any further contemplation of alternatives on your part. However, the forward thinking employer recognizes that the most desirable and marketable candidates are apt to be the most footloose, eager to bolt when the opportunity arises, if they see greener pastures elsewhere.
While the use of loss leaders is a time honored marketing strategy, it often is employed with insufficient empirical analysis to back it up. Follow the link for details. The article includes a case study from my days at Merrill Lynch, when too many decisions regarding high net worth clients were based on gut feel and assumptions, rather than on hard analysis.
Additionally, the case study offers an example of how you can use knowledge of expert jargon to smoke out frauds who purport to have expertise that they clearly do not possess.
The European Union already has imposed limits on financial sector bonuses, and now proposes to set hard caps on bonuses. For details on the evolving EU bonus rules, follow this link.
There are numerous implications for financial services firms and financial services personnel in other corners of the globe, particularly in North America and Asia. For one, the EU caps are bound to encourage some top talent to flee Europe for greener pastures elsewhere. For another, the EU initiatives may embolden elected officials and regulators in other jurisdictions to follow suit, especially since this is a politically popular issue.
During an executive education class at Harvard Business School back in the 1980s, a marketing professor asks the classic question, "What business are you in?" One attendee was CEO of a chain of upscale seafood restaurants. His initial response was the obvious: the restaurant business. The professor instructed him to conduct an in-depth analysis of his company by the next semester. After doing this, the CEO revised his answer. He decided that he actually was in the fish business, as a purveyor of top-quality seafood. Restaurants were merely his primary distribution channel.
How should the typical financial advisor respond to that question? Think about it for a bit.
The restaurant CEO was Roger Berkowitz of Legal Seafoods, who shared this anecdote in a lengthy essay for the July 2008 issue of Inc. Magazine. This caught my eye because a mutual friend had introduced us in the late 1970s. Back then, Legal had precisely one location, on Inman Square in Cambridge, MA. It was a no-frills operation with long communal tables, bargain prices and a dizzying selection of the day's catch from the seafood piers in Boston. To speed the turnover of tables, payment was cash only and taken when you ordered. Most servers were no-nonsense Irish ladies. Groups of diners were not fed simultaneously. Instead, individuals got their food precisely when it was ready to eat. The menu was on a huge blackboard, with items erased when they sold out. The place was always jumping.
Roger's dad founded Legal as a fish market in 1950, offering cooked food and adding tables as an afterthought. It soon morphed into a restaurant, and ceased being a market. After taking over the business in the 1980s, Roger transformed Legal into an upscale chain, presently with 32 locations extending south to Florida, and with plans for continued (but slow) expansion. The original location, alas, was lost in a fire circa 1980 and never rebuilt. A commitment to serving only top-quality seafood has been the focus of Legal's ads, including radio spots with Roger as pitchman.
In reading Roger's essay, I was reminded of a memorable conversation I had circa 1992. With his usual insight, Jeff Bennett, then the CFO of Merrill Lynch's Private Client (that is, retail brokerage) division told me that financial advisors essentially are in the business of selling time. How's that? The financial and investing skills of the average financial advisor are well within the mental capabilities of the average person. However, only a distinct minority of people have the requisite time and inclination. Similarly, most people can be decent do-it-yourselfers in a variety of other spheres (auto repairs, home repairs, etc.), but prefer to hire professionals and save themselves the time necessary to acquire the skills and to do the work themselves.
So, if you are a financial advisor or a financial planner, or if you are contemplating entering these or allied careers, bear this bit of wisdom in mind. You are, to a large extent, selling time and convenience to your clients. Indeed, do not forget the harsh reality that only a small minority of financial advisors and money managers succeed in delivering higher investment returns than the market averages. Hence, the key to client satisfaction tends to be in quality of service.
