Chicago: “I’ve been trying to develop a relationship with this particular CPA for a while, but I wasn’t sure if I was getting anywhere,” explained Harold. Then, with a big smile, he added, “I remembered something you said about tax time, so I put together a ‘survival basket’ of all kinds of goodies and dropped it off at their office. The next day I got my first referral, a $1.5 million opportunity.”
Few topics in the financial services industry get as much attention, few topics create as much frustration, and few topics can bring about such marvelous results as developing healthy referral alliances. Beyond the affluent referral he was so pumped-up over, the message Harold was actually communicating was the long, arduous process of developing a personal relationship with a potential referral partner. Unfortunately, many advisors will miss this underlying message and start just delivering “survival baskets.”

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Russell Story learned his lesson the hard way.

About a year ago, he decided what his Douglas, Ga.-based practice needed was a new financial planning program. The old one, in use for about five years, he felt, was slow, cumbersome and generally out-of-date.

Only, Story still remembered just how difficult it had been to introduce new software in the past. Some years earlier, for example, he’d asked his four assistants to start using a different customer relationship management (CRM) program. But, perfectly satisfied with the status quo, they had seen no reason to go through the time-consuming inconvenience of implementing a new program—and had taken more than six months to get it up and running. “I had tremendous resistance,” says Story, whose practice has about $60 million in assets.

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After hours, off the clock, in my spare time—those are all lovely concepts when it comes to the drudgery of any job; on Wall Street, however, you may not have as much downtime as you think. According to a recent Financial Industry Regulatory Authority settlement, registered persons may need to reconsider some activities that go on outside of work.

Jenny Quyen Ta founded Titan Securities and served as its first president when it became a FINRA member firm in August 2004. After she sold Titan in 2006, Ta remained as a registered principal and representative through 2009. Unfortunately, FINRA took a look at a number of Ta’s activities between the date of the Titan sale and her departure from the firm, and the regulator wasn’t happy with what it saw. Without admitting or denying the FINRA findings, Ta entered into a settlement that imposed a one-year suspension and a $10,000 fine. (In the Matter of Jenny Quyen Ta, Respondent; FINRA Letter of Acceptance, Waiver and Consent, No. 2010021538701, November 23, 2010.)

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Reps are turning to index universal life insurance to bridge the risk gap between low-rate permanent life insurance and riskier variable universal life. With variable universal life policies, the cash value is invested, typically in mutual funds.

With index universal life insurance, on the other hand, the interest rate credited to the cash value is based on the performance of a market index, such as the S&P 500. The cash value interest rate, for example, may be 70 percent of the price gain on the S&P 500. Or, it may be the full gain of the index, with an interest-rate cap of, say 12 percent. On the downside, no matter how the stock market performs, the insurers pay a minimum guaranteed rate, often ranging from 1 or 2 percent. As with all universal life insurance, index universal life insurance policyholders can make flexible premium payments.

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The New York Post reported yesterday that Blackstone, one of the world’s most respected asset managers, may have been blackballed by angry city police pension-fund officials because of comments one of its executives made about the generous pension benefits the NYC police union enjoys.

According to the NY Post, Blackstone lost out on a $150 million pension-fund investment because Byron Wien, now Vice Chairman, Blackstone Advisory Partners and a long-time investmet strategist for Morgan Stanley, “told clients during a Webcast [in January 2010] that state and local workers’ retirement benefits ‘are very generous, too generous . . . We literally can’t afford the benefits we have given our retirees in state and local governments.’”

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