Broker Dealers and Clearing Houses

I have been calling financial planners this week to ask them if they would like to help us test some new software . On of the things I ask them is what firm they use as a custodian. I am mainly talking to financial planners who manage their clients assets for them. That means that the planner is able to trade and manage assets in the client’s account. Planners custodian their accounts with companies like Schwab, TD Waterhouse, and Ameritrade. What is confusing is that there is also the concept of a broker dealer, and a clearing house. It is important to know who the clearing house  is because that will be the source of account downloads. If I understand it correctly big companies like Schwab and Waterhouse do both the broker dealer function and the clearing house function. But there are broker dealers who use  a separate clearing house like Pershing. In talking to planners it  is important for me to know the difference  because it will impact our testing. I am enjoying learning all this new stuff.

A’s Baseball

Duke and I are going to the A’s vs Mariners game tonight.  Every year I become more of an A’s fan. Thanks to Duke’s boss we have gone to 2-3 A’s games a year for he past few years.  The book MoneyBall by Michael Lewis greatly increased my interest in the team. It is much more than an A’s book or a baseball book. It is a book about thinking outside the box  and running an organization based on what you measure not on your preconceived notions. I also enjoyed the book because it tells some great player stories. I like knowing something about the backgrounds of the players.

The human side of the story is one of the reasons I really liked the  Josh Suchon story about the A’s reliever Ron Flores that ran in yesterdays Argus. Flores was the 870th pick in the 2000 baseball draft and he is one of only 47 major league baseball players who have a college degree. It is an inspiring story and Suchan tells it well. It is well worth reading.

Financial Planner Research Project

Intuit is looking for financial planners who would be interested in participating in a research project over the summer, late July through October. We would like you to try out a new product and tell us what you think about it. The product focuses on helping you manage your clients’ portfolios. If this sounds interesting to you please send me an email at marion_vermazen at intuit dot com. Give me your phone number and I will give you a call back to give you more information.

Blink and Teams

I finished reading Blink by Malcolm Gladwell today. It is a thought provoking book and worth reading but I found it some what unsatisfying. I am not sure why. He talks about how powerful first impressions can be but he also talks about how prejudices  or adrenaline levels can make snap judgments wrong.  It is definitely worth reading if only because it reinforces how powerful the mind can be.

I once had a boss tell me that I should trust my gut more often. He said I often over think things. His advice was good advice. I had lunch with a friend Friday and we were talking about how one of the advantages of getting older is that more and more you feel confident trusting your instincts.

I spent the rest of the day today  between doing laundry and cleaning the house  reading  The Five Dysfunctions of a Team by Patrick Lencioni. It was recommended to me by a friend at Intuit whose opinion I really respect. I started it and finished it today so you know it is an easy read.  I’ve always liked  team related books and I really enjoyed  this one. I think part of why I liked it is that  it resonated with  me and got me thinking about a still painful management failure I had many years ago. Most of the book is what the author calls a management fable and a key part of the fable is very similar to what happened to me.

I was leading a customer support team that included one very smart, very productive manager who was constantly undermining the team. He wouldn’t address issues he had with another team member head on. Instead he would  constantly criticize her behind her back. One of my weaknesses was that I tended to avoid conflict. I should have insisted that he commit to the success of the team. But I didn’t. Instead for months I tried to make us into a team in spite of him. I tried and tried for way too long. Eventually we were faced with a crisis. A significant update to our flagship product shipped with  a lot of bugs. Our team failed to rise to the occasion and eventually I was replaced. There were other contributing factors but I think if I had removed the divisive person months earlier we might have regrouped and overcome the problem. I learned a lot from my failure. I still don’t like conflict but I  don’t avoid it any more and if I ever have a divisive person on a team again and they don’t want to change I will not keep trying to make the impossible happen.  The first two dysfunctions in Lencioni’s team model are absence of trust and avoidance of conflict. I have the scars to prove that they are critical factors.

As I said the Lencioni book is a simple book. Another more complex book about teams that I really like is The Wisdom of  Teams by Jon R. Katzenbach and Douglas K. Smith. It has been a while since I read it but I remember that it was very inspiring.

The Moon

Last night as I was driving home listening to the San Francisco Bay Area’s all jazz station KCSM they were playing all moon related songs. This week the full moon is hanging lower in the sky than any full moon since  June 1987, so the moon illusion is extra strong. The moon illusion is  about how the moon looks extra big when it is near the horizon. It is all explained here. What is fascinating is that it is all  something our eye creates not something a camera sees and no one is really sure what causes it.

Duke and I love admiring the moon so last night just before moonrise we went out to the Hayward shoreline away from the trees and buildings. We went for a walk. When the moon came up it was absolutely amazing. Not only did look big but there was some fog on the horizon so the moon was an amazing orange. Then as it rose it changed to butter yellow and then a creamy white.

Materiality

I was part of a conversation today about materiality and blogging. One of the participants, 
a lawyer, was explaining all the SEC rules concerning disclosure of forward looking
information by public companies and how dangerous blogging can be. Someone else laughingly
said he had heard it said that blogging can destroy a company just be sure it is not ours.

Obviously if a blogger starts talking about things like future product strategy or mergers
and acquisitions it is material information. But where do you draw the line? If you say we
are going to fix this bug in our next release is that material information?

It occurred to me that this is probably a discussion that has happened before. In fact I
would imagine that whenever a public company talks about blogging this comes up. I'm sure
there have been some good posts addressing this question. I'll do a bit of keyword
searching but if anyone is aware of good blogs on this topic please let me know.