The Word on L’s-worth Street

This summer, working as a marketing intern at a wealth management firm doing marketing, I’ve seen and learned a lot about the different facets of this booming industry. In fact, I’m actually starting to think that maybe marketing is the part I’ve actually explored the least.

Wealth management marketing seems to be pretty straightforward: savvy media presence, extensive private seminars, and endless networking. It really is one of those fields that is more about who you know than what you know. With the sheer number of Structured Investment Products (SIPS), portfolio optimizers, financial planning software, and all the jive – it is extremely difficult to royally screw over a client. I’m not saying that it doesn’t happen, but it’s more easily avoidable now, than ever. And with an additional 10-20 trillion dollars poised to enter the high net worth market in the next 20 years, it’s a great field to work in.

I’ve had a chance to explore some financial strategies, such as tax-loss harvesting and long-term, non-sector specific mutual fund investing. But, I plan to talk about that in a future post.

Mutual funds never really interested me much until this summer, when I had the opportunity to work for a firm that specializes in and tries to work exclusively with mutual funds. I had never considered them to be an exciting investment strategy, but the combination of my coworkers’ knowledge of funds and endless hours of research on Morningstar have caused these investments to grow on me, even though they’re not growing in value at the moment!

Even in terms of what to look for in stocks-studying funds can help you get a good idea of what kinds of stocks are performing well, so you maximize your chances of picking stocks of the right kind, in the right sector. For example, if you looked at the best performing funds in the last three months you’d see 99% of them being either small or mid cap funds. Traditionally, small and mid cap stocks outperform large cap stocks during a recessive period. You could then, if you are choosing to hold long positions, plug your money into Cowen Group versus Goldman Sachs during the recession. To see their three-month comparison, click here.

Last Friday, I had a chance to talk to a pro about expanding business for wealth managers, both by adding new clients and increasing funds from existing clients. It was a truly enlightening call and provided me with tangible ideas and scripts to implement in conversations I may, one day, have with clients and prospects.

I’m having a great summer thus far and I’m sure it will only get better from here on out as I get exposed to and absorb more and more knowledge every day. I think I’ll ask them to change my title from Marketing Intern to Everything-Under-The-Sun Intern.

Financial planning tools and portfolio construction links:

http://www.moneyguidepro.com/

http://www.gravityinvestments.com/