Next Generation RIAs

A handful of local Registered Investment Advisory (RIA) firms are invited to participate in a Charles Schwab summer intern education program. We’re proud to say Perspective Financial Services is among those selected to help educate next generation RIAs in this program.

next generation RIAs

Mike McCann (right) reviews office operations with the Schwab RIA interns. (Summer 2016)

The Schwab Advisor Services RIA Internship Program is a hands-on eight-week rotational internship designed to prepare undergraduate students for employment within RIA firms. Students apply and come to Phoenix from across the United States to learn about the investment industry, the advisory profession, and how advisors and Schwab work together to accomplish the goals of risk management and client asset protection.

About midway through the program, the group of interns disperses for their “on-site experience” at RIA firms across the Valley. They gain corporate work experience and are introduced to fundamental areas of the RIA business, such as client service, trading support, portfolio construction and financial planning.

Kelsey from Ohio and Andrew from Texas spent several days at Perspective Financial in 2016. Colin from Utah and Davis from Florida were our interns for 2017. We shared an overview of our service philosophy, business model, office operations and strategic marketing to help these next generation RIAs understand the wide range of expertise our firm encompasses.

We’ve been impressed with the enthusiasm and professionalism of all the interns we have hosted, and we wish them well on their educational and career journey.

next generation RIAs

Mike McCann (left) reviews portfolio rebalancing protocol with the Schwab RIA interns. (Summer 2017)









Article updated July 14, 2017
By |July 8th, 2016|Advisors, Company News|

365 Days of Gratitude

McCann-webThanksgiving came and went. We all said our thanks and then moved on to prepare for the next round of holidays – Hanukkah, Christmas, New Year’s Day. Yet, wouldn’t it be great if we embraced the spirit of giving thanks all year long?

Many of us take time in December to review goals and make plans for the coming year. That’s an important part of achieving success. At the same time, let’s plan to take a moment every day to reflect on our efforts and give thanks for what we’ve experienced.

A few years ago, I read a slim memoir by John Kralik, 365 Thank Yous: The Year a Simple Act of Daily Gratitude Changed My Life. The premise was simple. Kralik was facing the end of a terrible year and bleak picture of his life – a failing business, two divorces, distant relationships with his adult children, health issues due to being 40 pounds overweight. He knew something needed to change, but he didn’t have the wherewithal to take on anything big.

Inspired by a simple thank you note he received in the mail, Kralik committed to a simple experiment. He would write one thank you each day in the coming year.

He began by writing thank yous for Christmas gifts he’d received. Easy enough. As the year progressed, however, he struggled to find something daily for which he could be thankful. He had to dig deep. He wrote a note of gratitude to a client who paid her bill on time. He penned a thank you to the barista who greeted him with a smile. He sent a note to a friend who met him for a Friday lunch after a hard week.  Kralik realized over time that thinking about small blessings each day improved his attitude and made life’s challenges easier to overcome. His life improved in ways he never expected.

The connection between gratitude and success has been touted by many – from John F. Kennedy and Oprah Winfrey to Charles Schwab and Willie Nelson. It’s something we all can embrace.

“Develop an attitude of gratitude,” said Brian Tracy, international entrepreneur and best-selling author, “and give thanks for everything that happens to you, knowing that every step forward is a step toward achieving something bigger and better than your current situation.”

By |January 4th, 2016|Advisors, Books, Current Affairs|

Adjust the Sails of Your Portfolio

McCann-webChoosing investments is only the beginning when it comes to managing a portfolio. The financial markets are changing all the time. This fluctuation in performance alters the values of the different asset classes in a strategically diversified portfolio. Thus, as the wind inevitably will blow, it’s important to adjust the sails of your portfolio from time to time through rebalancing. This involves reviewing the portfolio and buying or selling assets to maintain the original, desired level of asset allocation.

Different asset classes – domestic stocks and bonds, real estate, international funds – yield returns at different speeds and have different levels of risk.  Therefore, diversification means more than simply dispersing one’s eggs into many baskets. The goal is to balance risk and return within a portfolio of investments. The best way to reach that balance is through strategic asset allocation based on modern portfolio theory.

Modern portfolio theory explains the benefits of portfolio diversification and demonstrates quantitatively why and how it works to reduce risk. First documented in 1952 by Harry Markowitz, who later won a Nobel Prize in Economics for his work, the theory has become widely accepted by institutional investment managers during the past 50 years. Markowitz was also the first to establish the concept of an efficient portfolio. Simply put, if efficient is defined as more output for less input, then an efficient portfolio can be defined as more return for less risk.

 “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” ~William Arthur Ward

sailboatHow often should you review and rebalance a portfolio to achieve and maintain this efficiency? There is no official rule or industry standard that determines when or how often a rebalance is required. Some advisors believe an annual review is sufficient. Others review quarterly. At Perspective Financial, we review our client portfolios monthly. While a rebalance may not always be necessary, we believe consistent frequent review is a key to long-term success.

Your portfolio’s overall progress should be enough to support and achieve the financial goals you’ve set. The objective is to see steadily increasing value of the portfolio, even if one or more of the investments may have lost value. The proven method of achieving this objective is not to complain about market fluctuations or to hope the markets will calm. It is to keep an eye on the horizon and adjust the sails when needed.

By |August 3rd, 2015|Advisors, Investing|

Results Matter More Than Performance

Eng-webOn a recent due diligence trip to Los Angeles, Mike McCann and I had the opportunity to engage with the Capital Group, the investment manager for American Funds. I walked away from that visit with three strong impressions that I believe benefit our clients:

1. Unique corporate culture

2. Process + Consistency = Results

3. Results vs. Performance

The Capital Group was founded in 1931 and has distinguished itself as one of the few actively-managed mutual-fund companies that has consistently provided above-average results. Their unique corporate culture has enabled them to do things differently than many of their competitors. For example, they’ve been able to recruit and retain top talent. This is evidenced by the long average tenure of their investment professionals, which is more than twice that of the industry average (11.6 years vs. 5 years). An experienced investment team ensures there are professionals who have managed through many different market cycles, especially the difficult ones.

Another important aspect of the culture – borne out of this longevity – is the consistency of their process. The Capital Group emphasizes rigorous fundamental research, long-term decision-making, low fees and independent thinking, all of which have helped produce favorable long-term results for their clients. Such results, in turn, provide reassurance for current investors as well as future investors of their products.

The final distinction I realized during our time with Capital Group was the difference between performance and results. They made it clear that within their organization they do not focus on performance. Performance is something that may sound good in an advertisement. Yet, it is the results that are important, because the results are the money in the bank, the resources that clients can live on.

Knowing the investment professionals at American Funds view results in this way, and knowing they are not “chasing performance” to publish in their next brochure, gives me peace of mind.

This part of the Capital Group process enables me to feel comfortable and confident that we at Perspective Financial are investing our clients’ hard-earned money with a company that is also putting their clients’ interests before their own.

By |July 20th, 2015|Advisors, Company News, Investing|