A Once in 30-Year Opportunity to Build Your Practice in 2014
By Jeffrey Dunham, Financial Advisor | Volume 2, Issue 1 (January 2014)
As The End of the Great Migration into BondsSM continues, it is presenting financial advisors with a unique opportunity to build their practice while simultaneously helping investors avoid a destruction of wealth that we feel may rival the 2008/2009 financial crisis.
This opportunity exists because of two very simple yet crucial facts. The recognition of these facts can be the difference between a financial advisor having an average year or making 2014 a career year.
First, is the vast amount of money currently invested in bonds. Since 2008, nearly $2 trillion went into bond mutual funds. Keep in mind this total does not include unit investment trusts, closed-end funds, lifestyle funds, variable annuities, or any other investment that may use bonds as their principal investment vehicle.
To provide you with some perspective so that you can appreciate how large 2 trillion actually is, consider the following example.
Hypothetically, let us say that your family started a business 2,014 years ago, in the year 0 AD. Let us also assume that this business flourished. In fact, it was so successful that your family has been earning $1 million a day, every day, since the first day that the business began.
To appreciate how large 2 trillion actually is, consider the following:
If starting in the year 0 AD you were earning $1 million a day, for 365 days a year; what year would your family have actually accumulated a total of $2 trillion worth of earnings?
- The year 49 AD
- The year 1037 AD
- The year 1989 AD
- The year 5480 AD
Do you realize that today, if you had earned $1 million a day, every day since the year 0 AD, you would not even be a half way to $2 trillion? In fact, you would not get there until the year 5480 AD!!!
The point is that $2 trillion is a large amount of money. So is the opportunity for you to grow your practice in 2014.
The second important point we would like you to consider is that a thirty-year bull market in bonds has left many investors unaware of the risks they may potentially face in their bond portfolio.
Recently, Edward Jones surveyed U.S. investors and found that two-thirds of the respondents do not understand how rising interest rates can affect their investment portfolios. Of those surveyed, twenty-four percent said they “feel completely in the dark about the potential effects.”
Typically, investors view bonds and other fixed income investments as a more conservative investment than equities. However, with the prospects of rising interest rates, we believe that bonds have the potential to realize equity type losses over the next three to five years.
This may give financial advisors an opportunity to see significant growth in 2014, provided they can develop an aggressive plan to market to this group of seemingly unsuspecting bond investors and also create a common sense approach to providing income while managing the risk of fixed income portfolios.
This and the next two issues of Ultimate Estate Planner will exam three elements that we feel are needed to succeed in developing and executing a marketing and investment plan focused on this group of investors.
These three elements will include:
- Marketing collateral to help you find prospects and referrals invested in bonds;
- Investment strategies for managing risk in bond portfolios (February 2014 issue of The Ultimate Estate Planner’s monthly e-mail newsletter); and
- Since many of today’s assets in bonds came from equities sold in 2008 and 2009, we will examine ways of managing risk in equity portfolios (March 2014 issue of The Ultimate Estate Planner’s monthly e-mail newsletter).
Marketing Collateral
One of the key elements of your marketing plan will be comprised of FINRA-reviewed marketing pieces to help you execute your business plan. With these pieces, you can create a plan that will avoid squandering valuable time, money, and resources chasing one opportunity at a time. Instead, you will be able to mass market your expertise in the fixed income area.
As a way to help you potentially grow your practice, Dunham & Associates has created a distinct marketing campaign called The End of the Great Migration into Bonds℠ that provides different ways to talk to potential clients about how to position their investment portfolios for the long-term. We believe that this campaign has the potential to help you convert prospects and referrals to clients and also gain more from your existing client base.
These FINRA-reviewed pieces are customizable, allowing you to personally brand each piece with your logo and contact information noting that custom branding is always subject to your Broker/Dealer’s compliance approval.
These pieces include:
- Articles to share via:
- Social media
- Email campaigns
- Snail mail campaigns
- A video presentation that can be:
- Posted on your website, or
- Embedded in an email campaign
- Seminars and seminar invitations
- Letters:
- For Clients
- For Prospects
- For referrals
- As well as other pieces for a “drip” campaign
We have placed this material on the “Dunham Cloud” to allow you easy access to all of these marketing materials and to facilitate the review of each piece with your compliance department.
To review the video that can be placed on your website or used for an email campaign, please see below:
For more information on Dunham’s End of the Great Migration into BondsSM marketing campaign, click on the link below to download a 2-page guide for financial advisors.
Financial Advisor Guide: The End of The Great Migration Into Bonds
This is a once in a 30-year opportunity to build your practice.
Focus and commitment to this campaign could pay you big future dividends!
Important Disclosures
The End of the Great Migration into BondsSM is a Dunham & Associates FINRA-reviewed marketing campaign. Dunham & Associates is not responsible for its approval or use with clients. All materials that comprised this campaign must be reviewed by a financial advisor’s compliance department prior to custom branding or use.
This document is provided for informational purposes only by Dunham & Associates Investment Counsel, Inc. solely in its capacity as a Registered Investment Adviser and should not be construed as individual investment advice.
All examples are hypothetical and are for illustrative purposes. We encourage investors to seek personalized advice from qualified professionals regarding all personal finance issues. The solution for an investor depends on their and their family’s unique circumstances and objectives.
For Financial Professional and Broker/Dealer use only. Not for use with the General Public.
Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA/SIPC.
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ABOUT THE AUTHOR
Jeffrey A. Dunham is Founder, President and CEO of Dunham & Associates Investment Counsel, Inc., a wealth management firm based in San Diego, California. Mr. Dunham is also Chairman and CEO of Dunham Trust Company based in Reno, Nevada, and serves as a Trustee, Chairman, President, and Principal Executive Officer for the Dunham Funds. Mr. Dunham’s investment expertise spans over 30 years, including building a private client book of business with High Net Worth and Ultra High Net Worth clients.
As an industry visionary, Mr. Dunham started what he believes is one of the only mutual fund families where 100% of its Sub-Advisers are paid based on their ability to outperform their stated benchmark. In Mr. Dunham’s view, performance-based Sub-Adviser compensation provides investors with a level of accountability that is as important today as when he founded the firm in 1985.
Wanting to expand the concept of asset management accountability nationally, Mr. Dunham altered his business model to one that allows financial advisors to invest in Dunham Funds on behalf of their clients.
Other innovations include creating a performance-fee based advisory wrap platform and a Nevada-based trust company that is designed specifically to work with financial advisors and their clients. In addition, Mr. Dunham has extensive experience in real estate investing and has managed private placement funds for investors.
Mr. Dunham earned a B.S. degree in Business Administration with an emphasis in Finance from San Diego State University. He holds FINRA Series 3, 4, 7, 24, 53, and 63 registrations.