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Book Summary: “Leadership & Self Deception”, by Arbinger Institute

November 15, 2009 | Comments Off on Book Summary: “Leadership & Self Deception”, by Arbinger Institute

leadership and self deceptionThis is a book summary I have written for “Leadership & Self Deception”, by Arbinger Institute. The book uses the fiction format to discuss two concepts: “In the box” and “out of the box”.

“In the box” refers to when people see others as the source of problem. They see themselves as the center of the world and view others as objects, whose needs are secondary and less legitimate than their own. This mentality demotivates people around them. When people act contrary to what they feel they should do (self betrayal), they go in the box and blame others. By blaming others, you invite others to do the same, and get others to get into their boxes (pointing fingers and finding faults).

“Out of the box” refers to when people see others as people. They can see that others too have cares, fears, hopes and needs. It motivates people around them. When people are out of the box

People always can tell when they are coped with, manipulated or outsmarted. People skills are never primary and people can detect the real emotions within. Trying to smooth insincerely creates resentment.

Being out of the box doesn’t mean one has to delay hard urgent messages. It is possible to deliver the hard messages, and still be out of the box. Success and influence depend on being out of the box. There is no need to accuse others of being in the box, just make sure you stay out of your own. Instead of focusing what others are doing wrong, focus on what you can do right to help.

Book Summary: “Career Empowerment, Executive Recruiters on Leveraging Your Talents & Making The Right Decisions Around a Rewarding Career”, by Various Authors

November 12, 2009 | Comments Off on Book Summary: “Career Empowerment, Executive Recruiters on Leveraging Your Talents & Making The Right Decisions Around a Rewarding Career”, by Various Authors

This is a book summary I have written for “Career Empowerment, Executive Recruiters on Leveraging Your Talents & Making The Right Decisions Around a Rewarding Career”. The book was written by various experienced HR experts and recruiters, each contributed a chapter. Each chapter, although written by a different HR expert, touches on similar topics, therefore for clarity purpose, I have organized and summarized their points by topics.
career empowerment
On Job Hunting Preparation & Interview

Doing due diligence, and researching about the company, is essential for a successful interview. Read the annual report. Learn about the people, culture, opportunity, and products. See interview as an opportunity to learn about yourself and the company. You have to know your priority and what trade offs you are willing to make.

Employers usually look for several things in candidates: (1) Chemistry (2) The right portfolio of skills (3) Integrity. For certain high potential employees, employers may be willing to give a little even if they don’t have all the required skill sets. It is also possible for companies to hire someone who does not have all the required skills but are willing to learn quickly. Sometimes being too eager will not only look desperate, it may also inhibit your ability to communicate.

Questions to ask employers:
Why doing the search? / Why is this job open?
Why are you hiring from outside?
How do you measure success? What are some of the metrics?
What are the expectations of the job?
What are the goals and priorities?
What are the burning issues today?
Any impending M&A that will affect the position?

Key closing question: From our conversation today, it seems to me my core competencies really match up & align with your core competencies. How do yo use my background fit?

Be well groomed, well dressed. Try to connect with the person on the other side of the table.

On Today’s Working Environment
The biggest challenge today is to maintain the integrity of career development, as corporations are no longer took responsibility for helping individuals to grow. There are several things to consider when evaluating a job offer:

Doable learning curve
Sense of belonging
Reality based expectation
Sufficient resources and authority
Understanding of performance metrics
Fair relocation package

On Networking

It is advisable to have some mentoring relationships. One way to build relationships is to have informational interviews when you don’t need something.

On Self Improvement

It is advisable to do self assessment every year, to check whether you are happy in the current role. During early years of career, it is acceptable to focus on building skill sets, during the later years, in the second half of the career, change less and be specialized. Remember you are the best person to be accountable your career.

Book Summary: “The Courage To Be Rich” by Suze Osman

November 8, 2009 | Comments Off on Book Summary: “The Courage To Be Rich” by Suze Osman

suzeosman the courage to be rich

This is a book summary I have written for “The Courage To Be Rich”, by Suze Osman

Part 1: Acts Of Courage

Chapter 1. The Courage To Look Within
The way we think and feel about money can affect how much we have, some thought patterns can be internal obstacles. Fear of investment, shame of having debts, and anger at not having what we want are common toxic emotions people have with money. We are not getting rich by feeling afraid, ashamed or angry. Forgive the past & present. Replace thoughts of powerlessness to thoughts of “I can”.

Chapter 2. The Courage To Have More & Be More
Thoughts of ‘I can’t’ are thoughts of poverty. Such thoughts of defeat, if not corrected, can pass down for generations. Think of thoughts as actors in our mind, we are the director, we are the one in control of where they’ll be and when they speak. We must use words of abundance, wealth and bounty.

Words of poverty:
I can’t
I’ll never
I don’t know how
I wish I had

Words of power:
I can
I always
I am learning how
I will have

Chapter 3. The Courage to Make Room for More Money
Unopened bills, statements are financial clutters. Bank & credit card statements that you don’t understand are costing us and blocking us.

Part 2: The Value Of Money

Chapter 4. The Courage to Value Money
Law of money: People First. Then Money. Then Things. Careless spending on luxury designer items, and items that are seldom used could turn into substantial savings.

Chapter 5. Defining Value & Worth
Our self worth must rise along with our net worth.
Law of money: When you undervalue what you do, the world will undervalue who you are. Ask more of yourself and of others. We should not feel guilty about wanting more money, the same way we shouldn’t feel guilty for loving our family.

Chapter 6. The Courage to Face The Unknown
When we are in credit card debt, our self worth are in a kind of free fall. Having excessive credit card debt often means that we are living a lie, owning things we can’t afford and being dishonest about our future. Overspending to satisfy desire for traveling, eating out and entertainment are the most dishonorable kind of debt.

We can get free credit report within 30 days if we have been denied credit. It is recommended that we review this report regularly to check for incorrect and out of date information. Apply for reinvestigation if needed.

Remember you are more than your negative balance. The less self esteem we have, the more debt we have. Face your credit card debit problem by telling others about it. We must pay more than minimum.

Chapter 7. Rich Thoughts
Rich thoughts about children: Be forthright about money to children, the sooner we have a saving or investment plan that pay for college, the less anxious we and our children are.
Rich thoughts about cars: Buy a reliable model, pay it off in 5 years, and own it for 8-10 years.
Rich thoughts about taxes: Learn to use tax software or hire a tax preparer.
Rich thoughts about tomorrow, today: Scale back on luxuries can free up a lot of money to save.

Part 3: For Love And Money

Chapter 8. The Courage to Open Your Heart, The Courage to Open Your Hands
Couples need to assess how compatible they are in terms of:
Investment style: Aggressive or conservative?
Bills: Who will pay what?
Prenuptial agreement: Do you want one?
Child rearing: Private schools or public schools?
Any past issues such as debts?

We are, in most cases, not liable for debts incurred by our spouses before marriage.  But we are liable for debts incurred after our marriage even if it’s only in our spouse’s name. Even when your spouse, or ex-spouse files for bankruptcy, you may still be liable.

Chapter 9. The Business of Love
Do the unconventional: Plan for what-ifs while you are still totally in love. Draw up prenuptial agreements or cohabitation / property agreement. Even we may not have assets right now, we may one day have assets that’s why we need an agreement.

What do traders and trade support pros do?

September 21, 2009 | Comments Off on What do traders and trade support pros do?

Many successful investment bankers know little about investment banking when they first apply for the jobs. The training programs offered by the banks are often enough to introduce newbies to the complex world of finance and transform them into professionals.

Despite the fact that candidates often know little about the inner working of investment banks, many do know that front office roles, such as sales and trading, are generally more lucrative than middle office roles such as client service, trade support and compliance.

The financial tsunami of 2008 impacted the well heeled financial community in more ways than previously imagined. Firstly, many junior and senior financiers alike lost their jobs; secondly, related industries such as financial publications and high end entertainment establishments see dramatic decrease in sales from their clients. The recent close down of the industry magazine Traders Monthly is a perfect example of how the turmoil has rippled to other sectors and industries.

What do traders do
Traders belong to the front office – the revenue generating part of the business. Their daily responsibilities include:

  • Create and maintain pricing models
  • Make markets
  • Trade for commission (flow traders) or trade for profit (prop traders)
  • Search for new trading strategy
  • Liaise with institutional clients
  • Create task automation tools, therefore, Excel, Visual Basic and C++ programming skills are required

Traders usually are required to generate excellent return on capital, which is above 20%. Traders have P&L responsibility for their book. In some rare cases, traders may have to write research reports, although this is not a common expectation.

What do trade support professionals do

Trade support professionals, sitting in the middle office, have the following responsibilities

  • Book trades
  • Ensure compliance by keeping complete record of trades, margin lending etc
  • Document any portfolio restrictions, which varies by client
  • Communicate with clients
  • Escalate any unresolved trade breaks and other urgent issues to traders

This is a book summary I have written, by chapter, of an excellent peak performance book “Harvard Business Review on Bringing Your Whole Self to Work”.

hbr bringing your whole self to work

Chapter 1: Why smart people underperform
Attention deficit trait is epidemic in organizations. Unlike ADD, ADT springs entirely from environmental factors, such as overloading information & orders. Frontal lobe is in charge of complex planning, fluid learning, decision making and uniquely human managerial tasks. Lower region of the brain is in charge of survival and it is primitive, it fires signals of anger, panic and irritability. When under constant stress, the lower region takes control, intelligent dims, impulse, anger and black-and-white thinking takes over. Ways to manage ADT includes:

  • Have adequate sleep
  • Eat complex carbohydrates (whole grains, vegetables & fruits) and Omega-3 fatty acid supplements
  • Set aside a “think time” that is free from emails, calls and other distractions

Chapter 2: The human moment at work
The lack of human contact can result in isolation. Human moment has two prerequisites: (1) Physical Presence; (2) Emotional & Intellectual Attention. Regular human moments can stimulate creative thinking, team cohesiveness. The lack of human moment in electronic communications can lead to oversensitivity, self doubt, toxic paranoia, ambiguity and boorishness. Anecdotal evidence also favors the need for human moments: scientists hypothesize that face to face contact stimulates two important transmitters: dopamine (enhances attention & pleasure) and serotonin (reduces fear).

Chapter 3: The making of corporate athletes
Ways to build capacity:
Physical capacity: Exercise, manage glucose level by eating small meals several times a day
Emotional capacity: Music can have a huge physiological and emotional effect on human. Conciously create the look on the outside that you want to feel inside. Develop close relationships with others also enhance productivity at work.
Mental capacity: Visualization.
Spiritual capacity: Find deep purpose.

Investing in China Series: The Basics

August 13, 2009 | Comments Off on Investing in China Series: The Basics

If you are thinking about investing in China, you are definitely not alone. Legendary investor Jim Rogers has been investing in the Chinese stock market since 1986, in his book “A Bull in China: Investing Profitably In The World’s Greatest Market”, he compared the modern Chinese stock market to America in the late 1800s, where “it was a time of unbridled expansion and enterprise and the formation of key industries”. While many hedge funds and institutional investors agree that the prospect of Chinese stocks looks very promising, the Chinese equity market is different to other markets in many ways. Before you jump into investing your money into one of the world’s fastest-growing stock market, make sure you educate yourself on the fundamentals first. Today I am going to introduce the classification of Chinese shares.

3 types of stocks: A-shares, B-shares and H-shares

A-shares are shares that are only available to Chinese citizens (with exceptions, see below) and are settled in Chinese yuan (reminbi). A-shares are traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. From 2002 onwards, a small amount of foreign investors are allowed to trade A-shares through the Qualified Foreign Institutional Investors Scheme. There is a quota of US$30 billion. Settlement is T+1.

B-shares are shares that are exclusively available to foreign investors and are settled in foreign currencies. Settlement is T+3.

H-share are issued by Chinese companies listed in Hong Kong, the transactions are done on the Hong Kong Stocks Exchange. Many investors who want to invest Chinese companies trade H-shares. H-shares is by far much more popular than B-shares.

IPO and the exchanges in China
The China Securities Regulatory Commission maintains statistics on IPOs in the 3 legal stock exchanges (Hong Kong, Shanghai and Shenzhen). However the website is only updated irregularly and the last update was done over a year ago in 2008. It seems to be the only official information available on the internet on this matter.

The three major exchanges (Hong Kong, Shanghai and Shenzhen) have different listing requirements. The Shanghai exchange, for example, requires RMB $50 M (US $7.3M) of capital among other things. The exchange website has the specifics regarding listing.

Shanghai Stock Exchange

Zhengzhou Commodity Exchange

China Securities Regulatory Commission
(Governing body of the Chinese world)

Hong Kong Stock Exchange

2009 is a year to remember for many private banking professionals. Hedge funds failed, Bernard Madoff convicted, clients withdrew assets from private banks. The global financial crisis has fundamentally changed how the HNWI clients invest and the wealth management business itself. As part of an orginal research, we study financial data and key events in 2009 to identify the emerging trends in private banking 2010. They include:

Trend 1: Growing Chinese market
Many “new money” acquire their wealth through IPO. According to Ernst & Young’s recently published Global IPO Update, Brazil and China accounted for two-thirds of global capital raised in Q2 2009. This not only means that the economy is growing rapidly in these countries, more importantly it shows that there is a growing demand for private banking and wealth management services in the region.

Warren Buffet, who has successfully navigated through many market cycles, predicted that China’s growth will outstrip US. While this may be good news for private banks who have a strong APAC presence, wealth management professionals should understand that the Chinese market is not easy to penetrate. First of all, client advisors need to be fluent in Mandarin and have local connections. Secondly, guanxi (relationships) still plays an extremely important role in the modern Chinese business community, private bankers without access to key relationship brokers as references will find it very difficult to convince Chinese HNWIs to open accounts. Private banks that hire locals will have a definite advantage over expats trying to cover Chinese clients.

Private bankers should also note that the growth of the Chinese market is not uniform across all Chinese cities. While Beijing, Shanghai and Shenzhen will spearhead growth, Hong Kong, on the other hand, will likely to have a tough 2010. Hong Kong actually suffered a huge reduction in HNWIs of 61% in 2009, because of the near 50% drop in market capitalization.

Trend 2: Rising compliance cost and lower profit margin

The Bernard Madoff $65 billion Ponzi scheme, among other scams exposed in 2009, alerted regulators in many countries. In order to crack down on false trading activities and tax evasions, governments worldwide demand more oversight of banking operations. This affects not only the investment banking business but also the private banking side. The account opening process, KYC and offshore banking activities are under tighter scrutiny than ever before. As a direct result, banks have to spend more money on compliance and risk management. With advocates such as Alan Greenspan proposing higher capital ratio for banks, the cost of doing business is bound to increase. With a stagnant market in most countries it is almost impossible to increase fees and banks are likely to have to absorb the rising cost. This means lower margin for private banks and flat compensation for bankers.

Trend 3: Diversifying clientele
As the society progresses and becomes more diversified, so is the wealth management market. Customers today are more fragmented than ever before, and banks which are quick to respond benefit from the changing demographic. Islamic private banking, for example, is gaining momentum. HSBC Amanah is promoting Shariah compliant portfolios. In June 09, Morgan Stanley Wealth Management hosted a wealth planning seminar for same sex couples in Beverly Hills. It is likely that other private banks will become more aggressive in targeting demographic segments that have previously been ignored.

Trend 4: Rebuilding client trust will remain a top priority for bankers

The 2009 Capgemini Wealth Report found that more than a quarter of HNWI clients withdrew assets from their firms due to a loss of trust and confidence. There are several high profile client-advisor fallouts in the past 6 months, such as Singaporean tycoon Oei Hong Leong suing Citigroup private bank for a $684 million loss, and US investor Andrea Barron suing UBP for negligence. In Hong Kong, entrepreneur Joyce Tsang (founder of listed beauty salon group Modern Beauty) sued Goldman Sachs advisor for her $2 million loss, which she claimed the investment was made without her consent. The Securities and Futures Commission in Hong Kong later barred the ex-Goldman advisor from the financial services industry for 2 years. All these lawsuits inevitably make people question the ethical standard of private banking professionals.

HNWI clients are likely to remain extremely skeptical of private bankers and advisors in the midst of financial turmoil. How to rebuild trust remains a top priority for private bankers. Proper disclosure of conflicts of interests can address some concerns. True private bankers are professionals who should act like doctors, who can be relied on to give impartial expert advice. Private bankers who can instill confidence are likely to remain top performers.

Trend 5: E-trading and online customer service will become key differentiators
While some of HNWIs prefer to deal with their advisors face to face and seldom use email, it is easy to see why the “new money” group, often in their mid thirties and forties, are increasingly turning to online self service. Many mid tier Swiss based private banking firms, especially boutiques, are not up to speed in this area. Their e-trading capabilities and the online statement functionalities can not be compared to more established private banks. It is logical to predict that private banks that provide comprehensive and user friendly online services will continue to stand out, while those that are ill-equipped will find themselves having difficulty to attract and retain clients.

Trend 6: Singapore will remain a key player in the private banking industry
Singapore is known as “Switzerland of the East”. There are many reasons why it will stay this way for at least another three years. On top of the excellent international reputation and the $300 billion private banking assets the region currently manages, the Singaporean government is aggressive in making the country more attractive to private banks and HNWIs worldwide. Singapore officials are planning to amend the Income Tax Act, which is likely to help the country to make Organisation for Economic Cooperation and Development‘s “white list”, further establishing itself as Asia’s private banking stronghold.

Private banking due diligence checklist

July 11, 2009 | Comments Off on Private banking due diligence checklist

Before you open an account with an advisor, make sure you conduct your own due diligence and know the answers to the key questions on topics such as conflicts of interests and fees. This special due diligence checklist has been created to help you understand your risk.

Private Banking Due Diligence Checklist (pdf)

How the private banking industry is changing

July 7, 2009 | Comments Off on How the private banking industry is changing

For most investors and financial professionals, 2009 is a year to remember. The collapse of Lehman brothers, the conviction of Michael Madoff, the massive layoff within the industry and the dramatic drop in equity value make 2009 a year to remember, for all the wrong reasons.

Two Harvard Business School professors, Michael Porter and Jan Rivkin, wrote an excellent note on industry transformation. This groundbreaking piece of note first published in 2002 touched on the triggers of industry transformation, 3 factors were identified in the process: Technological advancement, Changing customer needs and Changes in regulations. If we look closely we will see that all these forces are reshaping the private banking industries right now.

Changes in regulation
The bailouts / TARP funds offered by the US government require banks to be more prudent and transparent. In the next 5 to 10 years, I foresee that governments will play a bigger role in regulating private banking and the financial industry in general. The massive losses some private banking clients suffered during the 08 financial tsunami will trigger a series of lawsuits that result in  stricter rules on how private bankers can do business. This will post important impact on the profit margin (more money goes to compliance and KYC) and client acquisition rate (customers are more concerned about the conflict of interest).

Changes in customer taste
“Old money” in Europe often focus on wealth preservation. Their investment goal tend to be preserving family wealth over time instead of meeting aggressive targets. Clients in other parts of the world may have a slightly different investment preference.

There is significant growth in the BRIC area. For the past 20 years, the emerging markets in Asia, Russia and Latin America produced many “new money” clients who are first or second generation high net worth individuals. These clients have different risk preference and expectations. Some of these clients are more interested in using complex derivative products such as options, futures or interest rate swaps, in order to earn a higher potential return. Instead of just investing in bonds and equity,  they may want to put their money in real estate or antiques. Banks that can offer a wide selection of products will ultimately outperform those that can only offer basic asset classes.

Changes in technology
With the advancement in e-trading capabilities, many savvy investors can place stock orders at home. While some of them still prefer to work with private bankers and have them to place orders, some are already seeing private bankers as redundant middlemen. Compared to placing orders directly online, calling a private banker to place orders is more expensive. (Clients have to pay annual account management fees plus transaction fees for each trade). While private banking services will continue to reinvent itself and remain relevant, online trading will inevitably take some of the PB clients away.

Summary: “The relationship edge: the key to strategic influence and selling success” by Jerry Acuff

July 6, 2009 | Comments Off on Summary: “The relationship edge: the key to strategic influence and selling success” by Jerry Acuff

This is a book summary I have written for “The relationship edge: the key to strategic influence and selling success” by Jerry Acuff.


Selling success comes from meaningful dialog and meaningful dialog in turn comes from trust. Good relationship itself doesn’t sell, people still have to explain benefits and features in order to close a deal. In order to facilitate effective selling, we need to think well of others whenever possible. 20 tested and true ice breaker questions that warm up all selling are:

  1. What do you do when you are not working?
  2. Where did you go to school? (and how did you choose it)?
  3. Where did you grow up and what was it like growing up there?
  4. What was your high school like?
  5. What do you enjoy reading when you have the time?
  6. How did you decide to do [whatever it is he or she is doing] for a living?
  7. Tell me something about your family
  8. Where is your favorite place for a vacation?
  9. What kind of vacation would you like to take?
  10. What community associations, if any, do you have time to be involved with?
  11. What sports, if any, do you enjoy participating in?
  12. What sports do you enjoy watching?
  13. If you could have tickets for any events, what could it be?
  14. How did you decide to settle in this area?
  15. Tell me something about yourself that would surprise me.
  16. What things would you want to do more, if you have time for?
  17. What challenges in your work might I, or my company, to be able to help you with?
  18. What is the most frustrating thing about being in your business these days?
  19. In your opinion, what two or three qualities make a top notch sales representative?
  20. If all work paid the same and you could go around again, what would you do?