The 8 Best Books for Financial Professionals in 2023
From the ultimate cautionary tale to managing risk and preserving family wealth
From the ultimate cautionary tale to managing risk and preserving family wealth
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As financial professionals, honesty, trustworthiness, skill, and knowledge matter to clients, as you help them make important decisions about their lives and future. However, in your professional world, there’s also hype and bravado and, yes, criminal activity and fraud, which may litter your journey. Our book choices help you navigate what’s before you.
We begin our list with the best overall book, which lays out a cautionary tale of a once-respected financial professional who was leading a double financial life, duping his clients worldwide to the tune of $65 million. Jim Campbell’s Madoff Talks: Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History tells the story of Bernard “Bernie” L. Madoff in Madoff’s own words. The book is part confessional and part an attempt by Madoff to rewrite his role in the narrative.
Ellen Carr and Katrina Dudley’s Undiversified: The Big Gender Short in Investment Management makes the case for having more women in investment management, which now stands at a scant 10%.
Then, as you know, assets under management (AUM) rule the world of financial professionals. Mitch Anthony and Paul Armson make the argument to transform your practice into one that considers the goals and lives of clients first in Life Centered Financial Planning: How to Deliver Value That Will Never Be Undervalued.
“Bernie would never screw you” or a variation of that phrase is what was often conveyed about Bernard L. Madoff, the largest Ponzi schemer of all time, whose swindle against often deep-pocketed and unwitting individuals, families, and organizations was worth about $65 billion. Often referred to affectionately as “Uncle Bernie” by his clients, Madoff defrauded some 40,000 people or institutions worldwide, who turned over millions to him, thinking he was investing it well for them.
Before Madoff’s 2008 arrest, he was known as a respected Wall Street financier, who spearheaded the computerization of made markets, which led to the creation of Nasdaq, and ran a successful broker-dealer firm headquartered in midtown Manhattan. Unbeknownst to those at that legitimate firm, there existed an elaborate Ponzi scheme operation two floors down in the same building, which took in billions and pumped out false gains on paper to his “investors,” often reflecting better returns each year, even when the market was down.
Those who lost their money to their “financial advisor,” Madoff, failed to ask him if he was fiduciary, how he was investing their money, how he got paid, what their all-in costs were, what asset allocation he had selected for them, what investment benchmark he used, or what the tax cost was to them. It turned out that a lot of other people and institutions skipped those critical questions, too—including the U.S. Securities and Exchange Commission (SEC), which investigated Madoff’s legitimate business four times without uncovering his illegal operation.
Madoff, who died in federal prison in North Carolina in 2021, decided to talk with radio host Jim Campbell candidly and waived his attorney-client privilege to give the author more access, after Campbell met with Madoff’s wife, Ruth, and son, Andrew. Campbell’s book is the only one that exposes the felon’s unfettered thoughts about his crime.
According to Campbell, Madoff saw himself as a do-gooder and hard worker who built a global business, and believed, in part, that he was corrupted by his clients’ greed. “The greed that is latent in all of us raised its head,” Madoff told Campbell. “The millions and then billions were not enough for some of these clients. My design of a strategy to fulfill their greed for more tax savings, together with my own ego and need to continue to prove my investing prowess, as well as my own insecurities and mistaken trust, led me down a path of destruction. This may be too simple a story for everyone, but that is the story.”
Business writer Vaughan Evans slims down his message about strategy into three points in Strategy Plain and Simple. He previously wrote the Financial Times Essential Guide to Developing a Business Strategy: How to Use Strategic Planning to Start Up or Grow Your Business and the Financial Times Essential Guide to Writing a Business Plan: How to Win Backing to Start Up or Grow Your Business.
In this 60-minute-or-so read, Evans lays out how to forecast and anticipate demand, target the strategic gap and bridge it, and balance risk and opportunity. The book features compelling examples of well-known businesses that faltered and then bounced back after instituting an effective strategic plan.
While Evans’ book is for a general business audience—not specifically those in the financial professions—the advice is relevant, actionable, and efficiently delivered.
Financial professionals are all about weighing risks for their clients to help grow their portfolios—and for themselves, to help grow their business. Economist, author, and journalist Allison Schrager has written a smart, joyful book with an irresistible title that spells out how people in brothels and elsewhere make or avoid risky decisions, and how to weigh risks.
As the book opens, Schrager is at the Moonlight BunnyRanch in Nevada to research the risks encountered by sex workers, of which there are many, including many life-threatening ones. She also interviewed a paparazzo who stakes out celebrities for hours and days in hopes of coming up with a well-paid shot, and surfers (“Big wave surfers are just like actuaries, only with better tans”) of giant waves, who at times must wait in shark-infested waters for the big one to come. There are many dangers in all of those situations, but potentially huge rewards.
“Using risk measurement and management when you make a decision, big or small, is similar to taking a road trip with a map,” Schrager writes. “The map certainly increases the odds of a successful journey, but it can’t tell you if a truck will smash into your car.” As a financial professional, you must take the trip anyway.
“Diversity is a core principle of investing,” write authors Ellen Carr and Katrina Dudley in Undiversified: The Big Gender Short in Investment Management. “Yet money managers have not applied it to their own ranks. Only about 10% of portfolio managers—those most responsible for investing your money—are female, and the numbers are even worse at the ownership level.” Throughout the financial services industry, women are in the minority.
These two experienced financial professionals call up their own experiences and weave in research to spell out the barriers to women in the field at every stage—education, recruitment, and promotions—and proffer the benefits for not only the women who want to thrive in the field, but also to the industry that caters to women now that they hold the majority of personal wealth in the United States.
Work-life balance is frequently cited as a reason that women don’t thrive in the financial services professions. Carr and Dudley disagree and cite a 2016 CFA Institute study that found that a majority of men and women (66% and 63%, respectively) maintained that it wasn’t difficult to take time off when working in investment management.
Financial consultants Mitch Anthony and Paul Armson argue that it’s time to reconsider whether the model of assets under management (AUM) is the best one for financial professionals to zero in on. Considering the whole of their clients as people and their goals is more effective, Anthony and Armson contend:
“How many times have we overhead advisers telling stories prefaced with, ‘I’ve got this $5 million client…’ and wondered to ourselves what would that client think if he or she were standing here and listening to that prefacing of the relationship. It’s difficult to see who clients are when our eyes are so pragmatically tuned to seeing what they have.”
The authors are co-founders of the consultancy Life Centered Planning, which recommends that financial professionals shift their focus, so that their clients realize an abundant life. In three parts, the book:
The experts who wrote this book, now in its 20th year and revised in 2022, are James E. Hughes Jr., a retired attorney and author of several books on preserving family prosperity; Susan E. Massenzio, a psychologist and co-founder of the consultancy and think tank Wise Counsel Research; and Keith Whitaker, an educator and co-founder of Wise Counsel Research.
The trio has merged strengths to come up with a formula for advising rich families on how to retain their money over generations. While the book has been written for the wealthy client, it’s a foundational resource for the financial professional who hopes to develop family clients over multiple generations.
In the book’s three sections, it defines:
This edition includes a new chapter that delves into measures, which are to learn, labor, love, laugh, and let go, that can enhance the lives of well-off family members.
This is an excellent instructional book about managing generational wealth. What’s missing, however, is any discussion of the racial wealth gap in the U.S. and the structural inequality that has created it. Addressing this issue would have provided additional perspective about family wealth and the obstacles that many Americans face in creating and preserving it. For more on that issue for Black Americans, check out Understanding How to Build Black Generational Wealth, below. Unfortunately, a search turned up no books on developing wealth for America’s Native peoples.
Esi Kagale Agyeman Gillo notes that after Native Americans, African Americans have the highest poverty rate, at nearly 21%, more than double that of Whites, who are at about 8%, in her practical, thought-provoking book Understanding How to Build Black Generational Wealth. Agyeman Gillo is the co-founder with her husband, Peter Markeeo Gillo, of DIFFvelopment, a seven-year-old nonprofit that develops “unique ways to foster sustainable global Black empowerment,” the book explains.
Agyeman Gillo lays out how you can build wealth in chapters on economic and employment realities and create generational and communal wealth through what she calls “Afropreneurship,” in which she promotes working for yourself over being an employee, and “Afrophilanthropy,” in which she suggests you give to charities that are meaningful. She presents quizzes and charts throughout to help you determine where you stand and what needs to be done to expand your affluence.
Even when people pay for advice, some don’t heed it. Add money to the equation, and behavior can become even more unpredictable.
In Moira Somers’ Advice That Sticks, the author, a practitioner of financial psychology and an executive coach, notes that, “Most people are at least mildly crazy when it comes to money.” With that in mind, it’s safe to assume that financial professionals have a high mountain to climb when dealing with clients. It isn’t helped by the fact that most in finance have no training on how to speak with clients effectively and may be unwittingly putting them off.
Clear communication is key. For each client meeting, Somers recommends setting parameters that she calls “adherence boosters,” so that clients know what to expect and have the chance to voice what they want to achieve. She also advises financial professionals to listen intently, speak plainly, and connect warmly, and make sure that the client understands what you are proposing, so that they can decide whether to go along with your advice.
Finally, Somers notes, “There can be no good advice without agreement from the advisee.” Only when there’s accord between the parties do discussions lead to deal-closing action.
The world over wanted to know why and how Bernard “Bernie” L. Madoff committed the largest Ponzi scheme. Our pick for best overall book, Madoff Talks: Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History, by radio host Jim Campbell, fits the bill in spades. Madoff gave Campbell carte blanche to interview him and his lawyer, resulting in revealing insights now covered by other books about the convicted felon. Finally, the book lays out the Madoff saga as a case study of how not to be a financial professional.
Michelle Lodge thrives in the book-reviewing world. She has been published in Publishers Weekly and was an editor and writer for Library Journal, both of which cover books and the industry. While a book review editor at Library Journal, which recommends books for public library collections, she selected a number of fine books on a range of financial topics for review. She was also the editor of the On Wall Street Book Club, in which she reviewed books and interviewed authors on a podcast on subjects important to financial professionals.
Seeking out a diverse field of books for financial professionals requires consultations with many experts. Lodge collected recommendations from Investopedia Financial Review Board members and Investopedia editors, business executives, and bestseller lists from the Financial Times, The New York Times, The Times of London, the London Review of Books, and others, as well as her own experience as a book review editor.
Lodge’s goal is to present the reader with factual, actionable books that are well-written and enjoyable to read, and that cover the bases in subject matter and expertise. She also aims to tap into a diverse pool of new writers, whose coverage reveals the many influences and perspectives on financial professionals.