Posts Tagged "advisors"

‘Finglish’ Is the Problem

All the headlines about “financially illiterate” Americans miss something important. The language financial professionals use can be incomprehensible.

In this humorous video, David Saylor, whose job is basically “word consultant” for Invesco Van Kampen Consulting, walked around downtown Chicago and asked people to define industry terms such as “dollar-cost averaging” and “beta.”

One person got one answer right. (After watching the video, readers may need to consult Saylor’s glossary, below.) Even a seemingly simple concept – “transparent fees” – was misinterpreted. It means that fees are fully disclosed but was interpreted to mean “invisible.”

No wonder people are confused by the “Finglish” – financial English – thrown around by their mutual-fund companies, 401(k) managers, and other investment professionals, Saylor said.

His work also explores the subtle distinctions people make when the industry attempts to use familiar terms, such as “guarantee” or “nest egg.” …

NWNE Heard On The Street from Center for Retirement Research on Vimeo.

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Expert Offers Advice About Advisors

J. Michael Collins, faculty director of the Center for Financial Security at the University of Wisconsin – Madison

People often have a tough time deciding whether they would benefit from hiring a financial advisor.

J. Michael Collins, who specializes in consumer decisionmaking in the financial marketplace at the University of Wisconsin – Madison, attempted to answer some questions on the topic in an online interview by a Chicago money manager.

Most agree that fee-based advisors are preferable to those who earn commissions by selling products to their clients – being a broker or a salesman conflicts with giving advice. This troublesome conflict is eliminated by paying an advisor a fee for his or her work.

But even the prospect of hiring a fee-based advisor typically raises more questions than answers. What do advisors do? Is the service worth the fee an advisor charges? What exactly am I paying for?

Read here what Collins had to say on the topic.Learn More

Retirees: Focus on the Monthly Check

To help retirees choose the best way to spend down the 401(k) savings they have built up over a lifetime, Nobel Prize laureate William Sharpe urged them to focus on a single outcome: the size of their monthly check.


This video was created by Professor William Sharpe of Stanford University.

Financial advisors should say to their clients, “Don’t worry about the strategy or model. Look at the outcomes that matter: what you can spend year by year in retirement,” he said.

Speaking at a conference this week at Boston University’s School of Management, which brought financial practitioners together with top minds in academic finance and Washington think tanks, Sharpe said advisors should present clients with various payout schedules and then explain the probability of success for each one they’re considering. Learn More