Hold on…this is NOT crisis time. The downgrade was signaled three months ago when S&P declared its long-term outlook on U.S. debt as “negative,” and the financial markets have known for a long time that the U.S. financial house was not in top condition.

So, what supports the minimal effect on banks of a downgrade by (and I quote) “the self-evident declarations of a highly fallible, largely discredited and severely weakened ratings agency”?

Read Neil Weinberg’s August 8 online report for OnWallStreet. His reasoning makes sense; how well the nation tackles the problem will be the determining factor.

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It looks like Schwab is not wasting time in opening franchises with independent contractors. In fact, the San Francisco based broker is making five-year deals with dozens of financial advisors, and hopes to have between 5 and 10 opened by year’s end.

According to RIABiz, Schwab has received interest from more than 100 advisors and plans to have serious negotiations at the end of this month. Franchise owners will pay Schwab startup fees ranging from $25,000 to $50,000.

The gain will be access to Schwab’s technology support and services as well as revenue sharing and corporate support. Interestingly enough, they’re steering clear of Schwab employees and are hoping to nab seasoned financial leaders from wirehouses, independent RIAs and advisors affiliated with IBDs.

Nobody can know for sure whether Schwab’s franchise plans will work; it’s a risk given the regulatory uncertainty at this time. The one thing you can bet on…the industry will be watching with interest.

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Here’s a new twist to developing a pipeline of referrals.

Organizing a workshop for potential clients is “old hat” and successful results are dependent on the advisor’s effectiveness in his “show and tell” presentation; how knowledgeable he is about the products he’s selling, and his ability to convince his audience to do business with him.

A new and novel approach to the workshop is the co-hosted workshop…an approach that Bill Black, president of Exit and Retirement Strategies, Inc. in Orange, California, has had success with over the past two years.

What he does is invite CPAs, bankers and other professional service influencers to what he calls a co-hosted workshop and he asks them to bring four to five business owners with them. Then, using a set of videos which address real life financial scenarios and acting as a moderator, he gets an interactive discussion going to find solutions…read more on his technique and success in building his clientele in Steve Garmhausen’s June 2, OnWallStreet report.

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Mortgage rates are on the rise, leading many to jump into the home buying market sooner rather than later. Rates have risen again to over 5%, a full percentage point higher than they were two months ago.

Still, these rates are bargain basement compared to how they were just a few years ago. Many home buyers who have been waiting or making a prolonged decision should reconsider; most likely the mortgage rates will continue to rise resulting in a higher necessary down payment and obviously monthly payments.

New home buyers may find themselves frustrated since many spend years saving for the down payment, but 5% now is better than 7% six months from now.

Since this trend is most likely to continue, those considering purchasing real estate should accelerate their plans.

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Building a recognizable brand name takes time, but will ultimately keep existing clients loyal and attract new business as well. When developing your brand, you need to think about how you choose to run your business. Make sure when you establish your brand name, to be consistent in how you provide your services.

For instance, many clients like to be able to contact their financial advisors when they need them. Make sure to follow up with your clients in a timely manner. If your sales assistant is the first point of contact, make sure he/she assures the client the issue will be handled in a timely manner.

If an error has been made on an account, be sure to contact the client personally to discuss the issue and explain how it will be resolved immediately. Being honest and upfront with your clients will build their trust.

Brand recognition has worked for many years with any company in any industry. Many people can associate a product right now by a song or advertisement they saw on television. It is a very powerful tool for every employer.

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As if this year hasn’t been difficult for most people in the financial industry, now they have one more day of work that would normally be a holiday. When market holidays fall on a Saturday, the markets close on the Friday before unless it is the end of a monthly or yearly accounting period. This means stockbrokers will have to work on New Year’s Eve and have one less day off in 2011.

Fortunately, this only occurs once every seven years and some companies are even offering a floating holiday to its employees next year. While some workers are not paying attention to the extra work day, most are pretty unhappy.

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There has been a significant decrease in assets under management in the global wealth management industry since 2008. High-net worth clients have lost confidence with their bank and fled to other firms.

The wealth management industry needs to start regaining the confidence of these clients because there is plenty of opportunity for growth out there. According to Scorpio Partnership’s 2010 Global Private Banking study, “there is $10 trillion in high-net worth bankable assets that haven’t been tapped.”

Unfortunately, clients are extremely reluctant to move their assets into this industry because of its tarnished reputation. According to Sebastian Dovey, managing partner for Scorpio, states, “Significantly, our global HNW (high net worth) data shows there are strong signs of wealth creation even in these complex markets and yet new clients are still holding back from opening accounts with the industry.”

It seems the only companies that are capturing this untapped business are the top 10 companies. They control the majority of this industry even when some of these companies have a tarnished reputation as well. These companies include Bank of America, UBS and Morgan Stanley Smith Barney.

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Maybe you recall back in 2007, when A.G. Edwards was bought out by Wachovia, and then in 2008, Wachovia was acquired by Wells Fargo…

Well, last year Benjamin F. Edwards (great, great grandson of A.G. Edwards) turned around and opened his own new firm. Two weeks ago, he opened his newest and seventh office in suburban Chicago. (I might add, taking seven financial advisors from Wells Fargo)

In an article by Lee Conrad of OnWallStreet, and published on March 16, he is quoted in a press release of the future focus for his firm:

“We are interested in building branches in middle market and metro areas around experienced and accomplished financial consultants who are a good fit and share our desire to do what’s right for our clients.”

The “good fit” is essential. Only one in 50 applicants have been hired, he told OnWallStreet.

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Financial advisory professionals now can use social networking to expand their businesses while still being in compliance with the Securities and Exchange Act of 1934.

The new site, http://www.linkedfa.com/ provides free membership to advisors and their clients. The privately owned Coral Springs, FL based allows financial advisors to retrieve records of communications between an advisor and a client, blog posts, comments and instant messages, along with shared documents and other public or private correspondence.

The site offers privacy settings that allow advisors to have one-on-one conversations with clients, which are logged as well. In addition, compliance officers who join the network can monitor client-advisor correspondence by setting keyword alerts.

Sounds promising, but mind that FINRA was not involved in the site’s development and last November established the Social Networking Task Force to look into issues posed by the use of internet based communications.

This scenario will be interesting to follow, especially since most financial services firms either restrict the use of social media sites or ban advisors from using them. I’m confident we’ll see more on this one.

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Well, why should I be surprised? Have heard and seen it all now.

On Friday, June 5, Reuters’ Bangalore reporter Ajay Kamalakaran, reported that the FDIC was looking to replace Citigroup’s CEO Pandit with former U.S. Bancorp Chief Exec Grundhofer, who recently joined Citigroup’s board.

Reason being, of course that the FDIC was concerned about lack of senior executive experience in commercial banking at Citi. It’s just confirmation, that as feared by those wirehouses holding TARP monies, more government regulation.

Obviously this is just the beginning as we see today with the pending legislation to allow the SEC to restrict compensation at companies receiving TARP dollars.

So there you have it….the regulators are going to “name ‘em and pay ‘em!”

No wonder they scramble to repay TARP funds!!

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