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Timely Alert for CPA/PFS Investment Advisors

Start now with a powerful new way to recruit investment clients from your tax client base. Recruiting investment advisory clients from among your own tax return clients can be explosively supercharged with the ProRRT℠.   Here’s how.​ If you are a CPA, accountant, or are otherwise engaged in preparing tax returns, you are now beginning to meet with your tax prep. clients to do their returns. If you are also an investment advisor, it’s likely that only a small minority of your tax return prep clients are also investment advisory clients. Here’s why this is a critically important time for new investment client recruitment. Tax return preparation will give you access to your clients’ brokerage account statements, and you can use that information to score and rank their mutual funds and ETFs against all other available ones in each asset class, while they watch and even participate. Involving them in the process is very important, since they will have never experienced anything like this. Want a way to distinguish yourself from other advisors? This is it! In most instances, the top ranked choices will have produced substantially higher average annual returns with often less volatility than theirs. In other words, they’ll often see significant return premiums with no equivalent risk premiums, and those return premiums can often be quite large. After performing this analysis for several of their holdings, you can say this: “I can do this for all of your investment choices, and we’ll likely get similar results. But, at this point, one thing is looking pretty clear . . . it looks like ‘you’re leaving a lot of money on the table.’  Do you want to stay with your current advisor or would you like to come over to us, where we’ll use this new technology to help keep your investment choices optimized and help you make more money?”      We know from experience that this will get you new clients, As good as our new client recruitment strategy is for those with whom you have had no prior relationship (it certainly works), recruiting from among your existing tax clients (with whom you already has a relationship and who trust you) is obviously even better and more powerful. And you don’t need the purchase the full ProRRT℠ to do this. You can use the free “Checkup” version (which doesn’t show the names of the funds) to do it. The client doesn’t need to see the names of the fund choices to see that there are much better choices possible. Try it and see the value for yourself. Of course, if the client switches to you because of what you’ve showed them, you’ll need the full ProRRT℠ to be able to provide the service you’ve promised them. As tax season is ramping up, the timing for equipping yourself to do this is very important . . . it’s NOW.  We thought it important for you to see and benefit from this, or at least pass this along to any friends who are CPAs and/or

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“Decision Paralysis” – The one reason why it’s so hard to pick great mutual funds that is worse than you may have imagined.

Having too many choices and too much information about them can make deciding which to choose paralyzingly difficult, if not practically impossible. On January 10th, we were surprised to see this brief article on Analysis-Paralysis, stating that: “By 2031, there could be one million managed investment products.” The article also points out that: “As of June 30, 2023, there were more than 742,000 products available.” Wow! That’s dramatically more that we had estimated. In many of our earlier posts, you’ll see us point out there are estimated to be well over 20,000 mutual fund and ETF choices. We believed 20,000+ to be a conservative under-estimate. What we didn’t expect was finding out that we might have been under-estimating by a factor of 10X or more! The article points out the largest single group of these investment choices is mutual funds and that the number of ETFs is also very large and rapidly growing. However, whether it’s a total of 20,000 or 200,000+ mutual funds and ETFs, there are so many choices and so much information about each as to make trying to evaluate which ones are best for your clients, especially individually customized recommendations, virtually impossible. What’s needed is a way to effectively use and benefit from such an overwhelming and growing number of choices and volume of information. Fortunately, there has been a significant advance in information technology – the ProRRT℠ – that now enables investment advisors and brokers to objectively score and rank any number of mutual funds and ETFs, within any asset class, in mere moments. Importantly, for Reg. BI compliance, it also effectively filters out all conflicts of interest, both known and unknowable. It gives you the ability to provably demonstrate to regulators that what you are recommending to clients are in your clients’ best interests. The ProRRT℠ utilizes Decision Technologies Corporation’s patented decision-assistance technology that enables you to select any blend any of 48 different performance parameters and individually weight them to match their degree of importance to your clients and you. Using this blend of weighted performance factors, the ProRRT℠ will enable you to score and rank all of the funds within any asset class. It will show you (and enable you to show your clients) just how theirs (those you’ve recommended) did compared to all of the other choices you could have recommended and not just to a benchmark index. It is also important to understand that a simplified version of the ProRRT℠ is now available to individual investors (your clients). It’s called the Retail Investment Tracking Application℠ (aka “Rita℠”). Why is that important? Well, with Rita℠ (and the 24 performance factors it provides), individual investors will now be able to score and rank, for themselves, the mutual fund and ETF recommendations you’ve been giving them. If they see that one you’ve recommended ranks 176 or 227 out of 677 choices within the asset class, with average annual returns (of perhaps 5%, 6%, or more) less than the top ranked funds and with higher

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RITA℠ Is Now Here.  Are You Prepared for “The RITA Effect℠”?

That’s “good news” for investment advisors using the ProRRT℠ – Rita℠ could prove to be a source of new clients. Early in our development of our Professional RapidReview Tool℠, one of the people assisting us in new business development (let’s call him “Albert”) called to ask if I would be willing to meet online with his “significant other” (let’s call her “Rita”) to use the ProRRT℠ to score and rank some of her mutual fund investments in advance of a meeting with her investment advisor. I happily agreed since Albert had been of great help in making introductions. When I met online with Rita, she had her brokerage statement handy. So, I opened the ProRRT℠ and began to use it to score and rank her mutual fund investments, with her not only watching but also participating in the selection and weighting of performance factors important to her. We started with the mutual funds in which she had the largest balances. Altogether, in about 45 minutes, we scored, ranked, and discussed her four largest holdings. One scored well and was relatively highly ranked. So, there was no compelling reason to recommend a change.  The other three, however, ranked way down in their asset classes and it appeared clear that there were choices that had performed much better and better matched her needs, goals, and preferences within their asset classes. It’s important to understand that Rita, while a very sophisticated and highly educated lady, has been a largely passive investor and was not knowledgeable regarding the comparative analysis of mutual funds and ETFs. However, she clearly understood what she was seeing. She stated that she had not seen anything like this . . . nothing that provided her with a way to see for herself the full range of choices and how they compared to her own holdings.  She pointed out that she had been relying on the recommendations of her investment advisor, with no meaningful way to determine if those recommendations were good, much less the “best,” for her. At the end of our meeting, she surprised me by asking: “Should I just go ahead and fire him?” I suggested that she not do so, but to see if he would get her what she wanted. I pointed out that, because her account wasn’t large, if she proved to be too much trouble, he might actually fire her. With that bit of advice, Rita thanked me, we ended the meeting, and I thought no more about it. Several days later, I was talking with Albert, and, toward the end of our conversation, he asked: “Would you like to know what happened with Rita?” I said: “Sure, I’d love to know.” He then told me that Rita had fired her advisor. “Really?” was my surprised response. “Yes,” he continued, “she came back and told me that she would be willing to go to a different advisor (one with which Albert was working) but only on the condition that he license and use

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How to Recruit New Clients Using the ProRRT℠ “Checkup Tool”

One of the key uses of the free ProRRT℠ Checkup Tool is to enable investment advisors to check how well the mutual funds and ETF’s they are recommending compare to others they could be recommending. If you are an investment advisor, using the Checkup Tool in this way will help you determine how much room for improvement there is in your investment recommendations. It will also let you know how vulnerable you may be to losing clients to competing advisors with better recommendations. While that’s a purely defensive use of the free Checkup Tool, it can also be used “on offense” to recruit new clients, including the clients of your competitors.  In fact, that was one of our original goals in developing the ProRRT℠. Here’s how it’s done: Simply contact the prospective client and arrange to meet; anywhere will do – e.g., a coffee shop. Ask him or her to bring their most recent brokerage statement or quarterly investment report with them, explaining that you have something important that you’d like to show them. When you meet (and after buying them a cup of coffee, etc.), ask him or her to pull out their brokerage statement or investment report and tell you what their single biggest investment holdings are (you don’t need to see their report or how much money they’ve invested), Then open your laptop or pull out your iPad and log onto the free ProRRT℠ Checkup Tool and explain to the prospect how the technology works as he or she watches you score and rank what they are holding against all other available choices within that asset class. It is important to show them the factors that can be used, and to ask which ones are most important to them and how much weight should be placed on them.  Involving them in the process is very important, since they will have never experienced anything like this – the transparency, objectivity, and most importantly, the feeling of empowerment in now being included in the review and selection process. When he or she is happy with the factors and weightings, compare the multi-period returns and multi-period volatility of theirs against the top scorers. In most instances, the top ranked choices will have produced substantially higher average annual returns with often less volatility – in other words, they’ll often see significant return premiums with no equivalent risk premiums . . . and the return premiums can often be quite large. After performing this same comparative analysis for a few more of their holdings, say this: “I can do this for all of your investment choices and we’ll likely get similar results. But, at this point, one thing is looking pretty clear . . . it looks like ‘you’re leaving a lot of money on the table.’  Do you want to stay where you are (with your current advisor) or would you like to come over to us, where we’ll use this new technology to help keep your investment choices optimized and

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“MoneyBall” For Mutual Fund & ETF Selection

Let the ProRRT℠ help improve your investment selection the way “MONEYBALL” forever changed baseball player selection. What’s “MONEYBALL”? It’s not just the name of a very popular movie which, if you haven’t yet seen, you should. It’s the name given to a whole new way of comparatively evaluating baseball players – using performance metrics rather than the subjective opinions of baseball “scouts.” The movie tells the story of how this occurred, and the struggles involved in changing the traditional system of baseball player evaluation and selection. It’s definitely worth watching. What’s the connection with DTC’s Professional RapidReview Tool℠ (the ProRRT℠”)? In an almost identical way, we’re improving the way mutual funds are evaluated and selected. The time-consuming, initial screening process for picking funds for further, qualitative due diligence, is no longer about the size and reputation of the fund companies, or the size of their advertising / marketing budgets, or their name recognition, or the opinion of external or internal experts . . . and it’s certainly not about incentives that fund companies may be offering to have their funds preferentially recommended. NO! With the ProRRT℠, it’s now (just like in MONEYBALL) purely about performance! Which of the mutual funds and ETFs, within any asset class, have proven best over time at producing the investment results you’re seeking for any one or more of your clients? Reference to the movie provides clients with an easy-to-understand description of the process you are using . . . a unique process that clients can both actually watch you perform and in which they can participate. But that’s only a part of why the ProRRT℠ is better than the system described in the movie. In the movie, the comparative evaluation had to be done by a hired “Quant”, who created algorithms with which the comparisons were performed. No one but him really understood how to use it and (at least initially) almost no one trusted him or the results and recommendations he was producing. But, as the movie documents, that ultimately changed. Why? It was because of the results – better players, better performance, and lower overall costs. The proof? They were winning. They were beating the competition! How is the ProRRT℠ “better?” What took who knows how much time for the team’s expert “Quant” to comparatively evaluate baseball players, can now be done for hundreds of mutual funds and ETFs in any asset class in mere moments. And, most importantly, you don’t need to be a “Quant” to do it. You can easily and rapidly perform the scoring and ranking of the funds yourself. Just as with the MONEYBALL process, the ProRRT℠ helps you identify and select mutual funds and ETFs that better match the composite investment performance (the desired combination of risk, return, and other factors) you’re seeking and often with lower overall costs. The proof? After more than a decade of testing, we saw that the mutual funds and ETFs picked with the aid of the ProRRT℠ were winning. We saw

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Is “Cognitive Dissonance” Harming Your Business Development Plans and Quality of Services?

The mental and emotional tension of knowing what you should do and yet not doing it is a simple explanation of Cognitive Dissonance. Eric Smith If we look, we can find its negative effects in many areas of our lives. If you are an investment advisor looking to grow your business and better serve your clients, it can be particularly harmful . . . even more so if you are unaware of its existence and its negative effects. Of all of the many things that you ideally should be doing, in this post we’ll focus on just one. If you are reading this, you are likely aware of the ProRRT℠ , the Professional RapidReview Tool℠. Are you using it to recruit clients away from your competition? That’s what it was specifically designed to help you do. Are you using it to improve your investment recommendations and the investment results and satisfaction of your clients? It was specifically designed to do that as well. Would you really not wish to have a compelling competitive advantage in new client recruitment and would you also not wish to improve your investment recommendations to, and investment performance of, your clients? Yet even though this newly available tool was designed to directly assist in doing both, very few investment advisors have made any effort to try it. Have you? If not, why not? Your answer, or inability to logically answer, may reveal how and to what extent Cognitive Dissonance is negatively impacting your business development goals and the quality of the services you’re providing, perhaps dramatically. Cognitive Dissonance is almost always objectively illogical and becoming aware of it is the first step in ending its negative effects. But there is yet another aspect of Cognitive Dissonance that is more general, less visible, and industry specific that may be affecting you. And because it may similarly affect such large numbers of investment advisors (and industry leaders), the resulting illusion of a “strength in numbers” validation can make it difficult to recognize and even more difficult to remedy. The Encyclopedia Britannica, describes it in this way: “Cognitive dissonance, the mental conflict that occurs when beliefs or assumptions are contradicted by new information. The unease or tension that the conflict arouses in people is relieved by one of several defensive maneuvers: they reject, explain away, or avoid the new information; persuade themselves that no conflict really exists; reconcile the differences; or resort to any other defensive means of preserving stability or order in their conceptions of the world and of themselves.” What beliefs or assumptions could be at stake here, in the financial services marketplace? How about starting with these: There’s nothing truly new within the financial services world, There’s no way to determine which mutual funds or ETFs may be best for any client (there are just too many and too much information about them), The process I’m using to select mutual funds and ETFs to recommend to my clients is as good as anyone’s, and My clients like and trust me, I

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