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Weekend Reading For Financial Planners (July 25–26)

July 24, 2026 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that Treasury Department officials this week expressed concern about various "tax alpha" investment strategies, including Section 351 exchanges, "box-spread" ETFs, funds designed to generate ordinary losses, and ETFs that trade in and out of other ETFs to avoid dividend distributions. While Treasury hasn't yet taken action to restrict any of these strategies (though one official said that "all the tools are under consideration" in addressing them), the comments highlight that certain tax-aware products and strategies that don't explicitly have the government's blessing might not be available for the long haul.

Also in industry news this week:

A report from Russell Investments puts the value of a financial advisor at 4.92% (a figure that exceeds many other estimates of this elusive figure), with an advisor's ability to keep clients invested during turbulent market periods identified as a particularly valuable service
CFP Board has submitted a proposal for public comment that would explicitly allow its Disciplinary and Ethics Commission to consider the expungement of a criminal conviction as a mitigating factor when considering an individual's fitness for certification

From there, we have several articles on retirement planning:

Fidelity's latest estimate of retirees' lifetime health costs jumped 7.5% this year to $185,500, though the fact that many of these expenses are often spread out over the course of a retirement could make them more manageable outlays to plan around
Why dental expenses can be an underestimated part of a retiree's budget and how advisors can help clients evaluate potential solutions to mitigate them
How advisors and their clients can balance the relative unlikelihood of experiencing an extended long-term care event with the potential costs if one does occur when it comes to saving for and/or insuring against this contingency

We also have a number of articles on client communication:

How advisors can handle a client's 'hot' investment idea tactfully and in a way that demonstrates respect while keeping them on track to meet their investment goals
While portfolio diversification is a core tenet of many advisors' investment strategies, clients might have a different understanding of what it actually means for their investments
How creating a communications matrix can help advisors organize the different types of client communications they produce during the year and better meet particular clients' needs

We wrap up with three final articles, all about technology and modern society:

While hybrid workplace arrangements appear to represent a 'sweet spot' between working in the office full time and fully remote work for many employees (with potential productivity boosts for their employers as well), experiences can vary significantly based on an individual's unique circumstances
How the rise of algorithmic-based recommendations could be driving real-world cultural trends (and leading some individuals to spend significant time waiting in lines)
Why "skill nostalgia" can develop when technological innovations lead to a reduction (or even elimination) of certain occupations, and how this isn't necessarily a modern concept

Enjoy the 'light' reading!

The Client Engagement Trap And Balancing Touchpoints Vs Rapid Responsive Service: Kitces & Carl 195

July 23, 2026 07:03 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces & Carl Ep The Client Engagement Trap

In the time between review meetings, advisors are often busy doing work for clients (such as portfolio analysis or reviewing insurance needs). This cadence of work is crucial, but it’s also often invisible, especially when no action is needed. The antidote for many advisors is some sort of communication between meetings – from birthday cards to phone calls to email newsletters. Yet this may be met with a lukewarm-at-best reception from clients, leaving advisors to wonder… what sort of communication touchpoints (if any) actually make a difference to clients?

In this 195th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how to choose the method and frequency of client touchpoints. There is a balance to be struck: if an advisor under-communicates, then clients may not know if or how to contact an advisor between meetings. On the other hand, overcommunication can quickly drown an advisory team’s capacity as a client base grows.

The latest Kitces Research on Advisor Productivity suggests that successful advisors had frequent contact with their clients, but it was almost all standardized, such as newsletters and webinars, that allowed efforts to amplify on a one-to-many basis. This allows touchpoints to scale with the client base… and can provide an organic place for an advisor to both provide guidance and commentary to their client base. Similarly, sending brief messages that affirm that a component of a client’s plan was reviewed (even if no action is needed) can reassure the client that their plan is being monitored.

This approach has two benefits: first, it can illuminate the otherwise invisible work of the advisor. Second, it can free up the advisor’s time so that when the client does reach out, the advisory team can provide a thorough and timely response. The latter is particularly important as the capacity to automate all communication continues to grow – in other words, the advisor will need to carefully determine where it is important to have human, one-to-one availability. Advisors may be surprised by just how differentiating it is to have a blend of consistent communication that accumulates in fast, human-centered interaction.

On the other hand, these scheduled communications may receive relatively low engagement. Clients may not open emails or log into their portals as frequently as advisors would like, which can make advisors wonder if the effort to continually provide some level of communication is worthwhile. This is where discernment is crucial for what types of communication really make difference… yet it can be helpful to remind clients that the advisory team is actively monitoring the situation and is available.

Ultimately, the key point is that an advisor has many avenues through which they could communicate with clients, but it may be more effective to do a few things consistently than many things infrequently. A cornerstone of communication, combined with great, accessible service, is the key to delivering exceptional advice that scales with the firm!

An Advisor’s Guide To Opening 530A “Trump Accounts”

July 22, 2026 07:01 am 0 Comments CATEGORY: Taxes

July 4, 2026 saw the official launch of Sec. 530 "Trump Accounts" (TAs), a new type of 'starter' retirement account designed to be opened and funded on behalf of minor children so they can start accumulating tax-deferred retirement savings at an early age. Under the rules for TAs, parents and other individuals, employers, and government and charitable organizations can make contributions to a child's TA up until the year before their 18th birthday, after which the account effectively converts into a traditional IRA – giving the account's owner an incentive not to touch the account for many years, since distributions prior to age 59 ½ will be subject to a 10% penalty tax.

But although TAs may be similar to standard IRAs in many aspects (and effectively become IRAs after the pre-age-18 "growth period" ends), the process of opening and funding TAs is very different. Because unlike IRAs, which can be opened at any major broker-dealer or custodian and have no limits on the number of different IRAs that any individual can have open at one time, TAs can only be opened in a single location (a website and app administered by the retail broker-dealer Robinhood), and while other institutions will eventually be able to offer TAs of their own, they will only be available for 'rollover' purposes (i.e., to transfer into once the initial account is opened at Robinhood's site).

The process of opening a TA starts by filing IRS Form 4547, a form that can be filled out (generally by a parent or legal guardian) either on the government's official Trump Account app, online via the IRS's website, or as an actual tax form to be filed along with the account opener's tax return. Next, after the IRS approves the Form 4547, the account opener must 'activate' the account on the Robinhood-administered website, www.trumpaccount.com. Finally, when the account is open, the parent can contribute and invest funds on the child's behalf (with the only current investment option being an S&P 500 index ETF, although broader U.S. equity funds will purportedly be available in the future).

After the TA has been opened, funded, and invested, the account can be kept at Robinhood or, likely starting sometime in 2027, transferred to a different custodian. However, once the account beneficiary reaches age 18, the TA will be automatically rolled over to a traditional IRA, at which point the responsibility for choosing investments, tracking the account basis (since there will likely be a mix of 'pre-tax' and 'after-tax' funds in the account), and designating a beneficiary shifts to the now-18-year-old account owner. In other words, at age 18, the TA beneficiary will 'get' not just control over the account and its funds, but also a new set of responsibilities for maintaining it as they cross into adulthood.

The key point is that although TAs may look in some ways like the IRAs that many people are familiar with, the real mechanics of opening, funding, and maintaining a TA (not to mention the eventual 'handoff' to the beneficiary at age 18) are much different than what many parents have likely encountered. For financial advisors, it's worthwhile to understand how these mechanics work and where parents are likely to get tripped up along the way – because while not every parent will want to open a TA for their children (since other options like 529 plans or UTMA accounts might be a better fit for their goals), the ones who do will appreciate their advisor being able to walk them through the process and get them started smoothly on saving for the next generation!

And if you want to go deeper on this topic, hear directly from the author on the Financial Advisor Technician podcast.

4Xing To $200M AUM In 4 Years While Staying Lean By Leveraging AI, Technology, And Outsourcing All You Can Let Go Of: #FASuccess Ep 499 With Ryan Townsley

July 21, 2026 07:06 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Ryan Townsley Podcast Featured Image FAS

Welcome everyone! Welcome to the 499th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Ryan Townsley. Ryan is the owner of Town Capital, an RIA based in Bel Air, Maryland, that oversees approximately $200 million in assets under management for 155 client households.

What's unique about Ryan, though, is how he has grown his firm to $2 million of revenue largely as a solo (only recently making a new hire to provide planning support), in part by leveraging an AI-integrated tech stack and outsourcing tasks that he doesn't necessarily need to do himself.

In this episode, we talk in-depth about how Ryan moved past IT and compliance bottlenecks by using outsourced providers (which offers a secondary benefit of greater peace of mind that these functions are performed correctly by experts), why Ryan decided to make a hire to take on planning-related tasks in his firm (which he found to be a harder bottleneck to solve), and how Ryan has achieved greater efficiency by engaging in mass communication with his clients (for example, by conducting webinars during market declines so he can relay his perspective and action plan without having to repeat it individually for each client).

We also talk about how Ryan has achieved an efficiency boost by leveraging the Zocks AI automation system alongside Claude and Wealthbox to help him prepare for client meetings quickly, draft effective follow-up emails, and create checklists based on common tasks for his clients, how Ryan uses the workflow platform Hubly to create repeatable processes so that nothing falls through the cracks (and why it's important to create and describe processes in a way that future employees can pick up quickly), and how Ryan combines tax data access tool TaxStatus with tax planning software Holistiplan to efficiently gather client tax data and prepare tax planning recommendations.

And be certain to listen to the end, where Ryan shares how he approaches creating retirement income plans for his analytically minded clients (including the value of creating a 'slush fund' that they can tap for one-time expenses), how Ryan has found that becoming an enrolled agent and earning the Tax Planning Certified Professional designation has been a powerful combination by giving him more advanced tax-planning knowledge and the ability to provide tax advice, and how Ryan has managed an influx of referrals to his firm in part by maintaining a waitlist (allowing him to continue to provide a high level of service to current clients while allowing for continued growth for his firm).

So, whether you're interested in learning about outsourcing certain tasks to free up time for more high-impact activities, building a tech stack that creates further efficiencies, or providing significant value by upping your game when it comes to tax planning, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Ryan Townsley.

Why A 14X EBITDA Sale Price In Headlines Often Really Isn’t By The End

July 20, 2026 07:03 am 0 Comments CATEGORY: Practice Management

For most of their history, advisory firms were incredibly illiquid small businesses, and founders had to spend years or even a full decade training a successor in the hopes of having someone, anyone, to pay for the value of the equity that had been built. But over the past 15 years, a combination of low interest rates and an expansion of private markets and their access to capital has led to an explosion of mergers and acquisitions (M&A) amongst advisory firms, turning practices into remarkably liquid businesses, transacting at ever-higher multiples as a plethora of buyers bid up the prices for sellers. Yet as the media has increasingly reported on sometimes-eye-popping multiples, the reality is that because of how deals are actually negotiated and terms are written, the "headline" multiple is often not actually a fair reflection of what sellers are receiving in the end!

In this guest post, Rich Chen, founder of Brightstar Law Group, explores how real-world M&A deals are negotiated for advisory firms, and what, exactly, can lead to material divergences between the valuation multiple externally reported in a deal, and what the seller actually gets for the business, with the aim of helping sellers better prepare how to negotiate with buyers.

The starting point is to recognize that when a buyer offers a seller a multiple of revenue or profits (EBITDA), the buyer and seller still have to agree on how to actually calculate revenue or profits. And as it turns out, determining exactly what the revenue base or EBITDA base will be – against which the multiple is then applied – is not as straightforward as simply looking at the firm's profit-and-loss statement for the trailing-12-month period.

When it comes to determining a revenue base, trailing-12-month revenue may be a common starting point, but buyers generally only want to pay for revenue they will receive after the purchase is closed – i.e., recurring revenue that will perpetuate in the future. As a result, any one-time receipts are often discounted or removed entirely from the valuation process. Similarly, any other revenue streams that come "off the top" of the advisory firm – revenue-sharing arrangements to referral sources, fees paid to a sub-advisor, etc. – are also commonly removed, as buyers want to pay for net revenue, not the gross that they won't get to keep anyway. And to the extent that revenue is set, buyers will often apply a haircut to the revenue calculation for any clients who don't actually consent to the acquirer's advisory agreement (often with a 1-percent-not-retained-equals-2-percent-reduction-in-value penalty).

For firms that are valued as a multiple of EBITDA, the adjustments can be even more complex. If the advisory firm doesn't pay its own founder a "fair market rate", acquirers will typically impute a salary into the business to pay the founder and reduce earnings accordingly… which can materially curtail the valuation of the firm as a whole. (And ironically, in this context, acquirers often want to impute a very high salary for the founder, as they more than make it back in a reduced purchase price when the higher salary reduces earnings being multiplied.) On the plus side, any personal expenses routed through the business are often adjusted out (increasing EBITDA and the business valuation). The most controversial adjustments are expenses that are nominally "one-time" in the business, but that buyers may claim represent a recurring need for reinvestment – from paying for technology consultants, to office transitions, to non-cash compensation for key employees (that the acquirer fears will turn into cash compensation obligations in the future).

The end result of these adjustments is that the final dollars a seller receives on their adjusted EBITDA or revenue base could be substantially lower than what a headline number implies; a firm that thought it was getting 4X revenue that really gets 4X adjusted revenue might only get 3.1X its original revenue, and a firm that anticipated getting 10X EBITDA may only receive 8X after adjustments are done.

The key point is to recognize that buyers don't simply buy an advisory firm blindly; with experienced buyers in particular, it is a meticulous exercise of scrutinizing the financial details of the firm, to ensure what they're paying for will really drive a favorable outcome for their business as the acquirer. So beware putting too much weight into media headlines that showcase seemingly high multiples… as often the reality is that those multiples were calculated after adjustments specific to the business, and are not necessarily representative of the going rate for unadjusted top-line revenue or profits!

Weekend Reading For Financial Planners (July 18–19)

July 17, 2026 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that Charles Schwab's annual RIA benchmarking study found that firms continued to post strong overall growth in AUM (17%) and revenue (13.2%), alongside a continued 97% client retention rate. That said, results varied across firms (particularly when it comes to organic growth net of market appreciation and acquisitions), with RIAs that have a written marketing plan, ideal client persona, and client value proposition gaining 87% more new clients in 2025 and bringing in 127% more new client assets than other firms. Which suggests that considering the range of factors that separated higher-growth RIAs, as well as how (and whether) they might fit within their own practice, could help firms continue their client and AUM growth through future bull and bear markets.

Also in industry news this week:

RIA M&A activity continued its brisk pace during the first half of 2026, though a survey suggests that there could be a widening gap in the valuation expectations of buyers and sellers
A survey suggests that there could be an opening for financial advisors who offer tax planning services related to real estate transactions to build mutually beneficial relationships with real estate professionals (and perhaps receive more referrals in the process)

From there, we have several articles on evaluating the new Trump Accounts:

How the ultimate dollar value of an individual's Trump Account could vary widely depending on the pattern of contributions made during their early years and withdrawals made in adulthood
How the tax treatment of Trump Accounts compares to that of other tax-advantaged accounts
Why some clients interested in building savings for their children might prefer investing in taxable custodial accounts rather than Trump Accounts

We also have a number of articles on generating referrals:

How helping clients understand who their advisor serves best and how to actually introduce a friend or family member can be particularly effective ways to generate more client referrals
Five ways advisors can build a scalable client referral 'flywheel', from providing clients with jargon-free language to describe who the advisor works with to creating a process that offers value to both clients and the individuals they refer
A step-by-step approach for how advisors can build a systematic COI referral partnership program

We wrap up with three final articles, all about intergenerational relationships:

How individuals can thrive when their care responsibilities are gone and become members of the "open sandwich" generation
While having an adult child move back in with their parents can provide financial benefits, managing the privacy and other implications of this arrangement becomes paramount
Why the differing lifespans and 'healthspans' of family members across generations suggest that individuals might consider prioritizing certain activities and goals rather than putting them off for the future

Enjoy the 'light' reading!