Archives Of Weekend Reading For Financial Planners

Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that a recent survey indicates that 70% of affluent financial advisory clients who believe their advisor is always obligated to act as a fiduciary indicated they are satisfied with their relationship and aren't seeking out a new advisor, while only 41% of clients who believe their advisor may put their own interests first indicated they are satisfied with their relationship. Which suggests that, amidst ongoing debate over fiduciary-related regulations, an advisor's status as a fiduciary could both lead to greater client trust (both in their individual advisor relationship and perhaps in the financial advice industry as a whole) and, ultimately, higher client retention rates.

Also in industry news this week:

• A recent survey indicates that younger "DIY" investors are more likely to be interested in working with a human advisor than their older counterparts, suggesting an opportunity for advisors to tap into this demographic (perhaps by setting minimum planning fees that ensure these clients can be served profitably today while they grow their assets over time)
• While a full repeal of the estate tax has the support of key Republicans in Congress, a (more limited) extension of the current exemption level could end up being part of major tax legislation expected this year, given the budgetary tradeoffs involved

From there, we have several articles on retirement planning:

• Research into how "sequence of return risk" tends to decline over time, particularly for clients who make it through their first five years of retirement with investment gains in their portfolio
• How using a "bucket" approach to building a retirement portfolio can help manage sequence risk and give clients greater confidence that their retirement spending needs will be met
• Why rebalancing is a key element of ensuring sustainable retirement income, whether an advisor uses a 'total return' or 'bucketing' approach to portfolio management

We also have a number of articles on advisor marketing:

• How advisors can use images, audio, and text found online in their own content without running afoul of copyright laws
• Why video content can be particularly effective in helping advisors connect with their ideal target clients and best practices for creating videos that will attract viewers
• A six-step process to creating and distributing blog content to maximize its reach

We wrap up with three final articles, all about getting better sleep:

• A recent study provides an additional data point connecting low-quality sleep to potential negative health effects
• How to arrange a bedroom to promote better sleep throughout the night, from bed positioning to managing the amount of light that enters the room
• Seven common assumptions about sleep and why they might be counterproductive to a good night's rest

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that a report from Cerulli Associates found that, amidst an industry-wide trend towards comprehensive financial planning and away from pure transaction-based investment management, asset-based fees currently represent 72.4% of advisor compensation, while commission-based revenues have declined to 23% of an average advisor's revenue. Which reflects similar results from recently released Kitces Research on Advisor Productivity, which found that asset-based fees are used by 92% of surveyed advisory teams (and are the primary revenue source for 86% of respondents), with 42% using hourly or project fees, 37% offering retainer or subscription fees, and 34% receiving commissions (with some firms offering more than one fee model to attract different client segments).

Also in industry news this week:

• While inter-channel advisor moves often make headlines, a recent study from Diamond Consultants found that most advisor transitions occur between firms in the same channel
• The number of disciplinary cases and restitution orders from FINRA increased in 2024 (the total amount of fines declined) as the self-regulatory organization focused on violations in areas including trade reporting, options trading, and Regulation Best Interest

From there, we have several articles on investment planning:

• A review of historical market crashes shows that the 'pain' for investors is felt not only in the depth of each drawdown, but also in their duration
• While investors might view investment success as the product of active decisions they make, it is often the mistakes they avoid that lead to meeting their long-term goals
• Why making political bets with investments can be a risky, and challenging, proposition

We also have a number of articles on client communication:

• How applying the "ABC model of stress" can better allow advisors to support clients facing stressful situations and also demonstrate their value to prospects
• While the constant barrage of news headlines can give clients plenty of reasons to panic, advisors can add value for their clients not only by serving as a steadying voice, but also by being opportunistic when downturns do occur
• The key differences between client stress and anxiety and the communication approaches advisors can use to best respond to each

We wrap up with three final articles, all about leadership:

• How a "Constant Gentle Pressure" approach can lead to more consistent levels of client service and better relationships between managers and employees
• While operating remotely allows firms to access a broader pool of managers (and staff), doing so effectively can require more proactive methods of employee engagement on the part of leaders
• How leaders can get better at delegating, from regularly searching for tasks that they don't necessarily have to complete themselves to identifying next-generation leaders whose development could be accelerated by taking on new responsibilities

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that Securities and Exchange Commission (SEC) Commissioner Hester Peirce suggested in a recent interview that she would like to see the SEC give advisors more leeway to provide customized solutions to clients (rather than feeling required to take a regulator-prescribed "check-the-box" approach) and would like to ease the compliance burden on smaller investment advisers (perhaps expanding the SEC's definition of small firm in the process) to reduce the entry and operational barriers for these firms. Which, if implemented under the new administration, could provide relief for investment advisers, particularly smaller firms that already have to balance compliance with client service, marketing, and the other duties that go into running a firm.

Also in industry news this week:

• A recent survey finds that while advisors are increasingly using passive investment vehicles, many are taking the time to look beneath the hood to examine the makeup of different indexes in order to choose the best option for their clients
• A survey of advisors working at enterprise firms shows a significant increase in their adoption of artificial intelligence tools over the past year, with common use cases including predictive analytics, marketing, and summaries of meeting notes

From there, we have several articles on Social Security:

• The Social Security Administration has reversed a policy enacted last year that limited overpayment 'clawbacks' to 10% of monthly benefits, which will have the effect of reducing the monthly payments of some Social Security recipients to $0 until the overpayment is recovered
• How the relationship between income and longevity could play a role in policy efforts to raise the Full Retirement Age in order to help shore up the Social Security system
• A white paper shows the impact (in dollar terms) for clients of various proposals to put Social Security on sustainable footing

We also have a number of articles on practice management:

• As growth-driven (rather than retirement-driven) RIA M&A activity increases, deal terms and cultural fit (and not 'just' headline valuations) are becoming increasingly relevant
• Why a "curated cultural competition" with limited suitors rather than an "auction" focused on price could better serve the interests of RIA buyers and sellers alike
• How firms can approach unsolicited acquisition offers, from analyzing the different compensation elements being offered to assessing whether the buyer shares a similar approach to financial planning

We wrap up with three final articles, all about building better habits:

• 12 ways to build better habits, from breaking big goals down into smaller chunks to sharpening the ability to say "no" to opportunities that might distract from the goal at hand
• How "commitment strategies" can reduce the amount of willpower required to start and maintain new habits
• How running "tiny experiments" can help individuals build better habits while viewing their progress from a more impartial perspective

Enjoy the 'light' reading!

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Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that Congressional Republicans, who recently voted to set a $4.5 trillion target cost for their planned tax bill to replace the Tax Cuts and Jobs Act (TCJA), are currently debating whether the “baseline” for that cost should be the current law where TCJA’s provisions will expire in 2026, or if it should assume that TCJA doesn’t expire – the answer to which will largely dictate whether the next bill will ‘just’ extend TCJA (with few additional tax cuts), or whether it could go even further to include tax-free treatment of tips, an increase in the state and local tax deduction limitation, or even a repeal of the estate tax (among many other potential Republican tax priorities).

Also in industry news this week:

• A recent survey by Citywire found that one of advisors’ biggest perceived threats to the industry is the potential for private equity ownership of RIAs to degrade the quality of service provided by advisory firms
• The Corporate Transparency Act, which just last week had appeared to be back in effect, is now effectively on hold again after the Treasury Department announced it will not be enforcing the law’s Beneficial Ownership Information (BOI) reporting requirements

From there, we have several articles on AI productivity tools:

• How advisors can craft a good prompt for creating effective written content using AI tools like ChatGPT
• AI research tools can be an improvement on finding information via a Google search, though with the constantly shifting technology landscape it might be necessary to re-evaluate how they compare with one another on a regular basis
• Why AI tools that automate many of the manual tasks currently done by younger advisors can free up more time for those advisors to learn the skills that will help them advance in their careers

We also have a number of articles on investing:

• The growth of the biggest handful of U.S. stocks has outpaced the rest of the market by so much that the number of companies categorized as “large cap” has shrunk from nearly 500 to only around 150 over the last 15 years
• Amid fears that U.S. stocks are in a speculative bubble owing to their high price-to-earnings ratios, an analysis shows that a reversion to historical averages would result in U.S. equities underperforming international stocks over the next 10 years
• Why today’s high U.S. stock prices (as measured by the Shiller CAPE ratio) could be less about U.S. companies being overvalued and more about them simply having better growth prospects today than they did throughout the 20^th century

We wrap up with three final articles, all about health and energy:

• Why taking regular naps can improve peoples’ energy and productivity levels (although the effects aren’t always the same for different people)
• How humans’ origins as hunter-gatherers, and our evolutionary preference to conserve energy, can explain why it’s so hard to exercise solely for its own sake
• With Daylight Savings Time starting again this weekend, people can reduce the impact of shifting forward one hour by making more gradual changes to their own schedules

Enjoy the ‘light’ reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that CFP Board this week released a checklist of ethics guidelines for the use of generative Artificial Intelligence (AI) tools. The guide notes the promise of AI-powered tools for a variety of functions, including generating meeting summaries and ideas for public-facing content, but warns against reliance on these tools for work that requires a reasonable understanding of assumptions and outcomes (e.g., developing recommendations for clients) given the chance of mistakes or 'hallucinations' by AI tools, suggesting that advisors who take a systematic approach towards the use of generative AI (e.g., by establishing firm-wide policies for its use) could benefit from the efficiencies and creative power that can come from these tools while ensuring the accuracy and security of client data!

Also in industry news this week:

• The Department of Labor's (DoL) Retirement Security Rule remains in limbo as the Trump administration has been granted time by a court to decide on its approach to the Biden-era rule
• The Corporate Transparency Act (CTA) is back in effect (at least for now), with a deadline of March 21 for affected businesses (including some RIAs) to file the required Beneficial Ownership Information (BOI) report

From there, we have several articles on retirement planning:

• How advisors can help hesitant retired clients spend more by transforming portfolio assets into regular income streams
• How stress testing retirement plans (and leveraging flexible income strategies) can help build client confidence to spend more in retirement
• While sequence of return is often a focus of advisors and clients alike, a positive sequence of returns can allow clients to increase their retirement income over time

We also have a number of articles on client conversations:

• Why a combination of open- and closed-ended questions can help advisors explore clients' goals and pain points as well as focus them on potential planning solutions
• How advisors can reframe client questions to unearth hidden assumptions and expand the range of planning possibilities available to them
• A scorecard that can be used to assess an advisor's ability to make clients feel understood during planning conversations

We wrap up with three final articles, all about interpersonal communication:

• Why asking for "advice" rather than "feedback" can provide more actionable information for those looking to improve their performance
• Six (and a half) components that make up a good apology, from taking accountability head-on to identifying ways to ensure the subject of the apology doesn't occur again
• How honesty, credibility, and sincerity are at the heart of the best compliments, which can boost workplace productivity and relationship quality

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that a recent study by Cerulli Associates finds that while financial planning clients (particularly high-net-worth clients) are overwhelmingly satisfied with their advisors, many advisors face client acquisition challenges despite investors being increasingly willing to pay for advice services. The study identifies a potential cause as confusion among some prospects about how their advisor would be compensated, suggesting that increased transparency from advisors (and linking their fees to the value they provide) could help remove this barrier to seeking an advice engagement.

Also in industry news this week:

• A majority of married women are their family's primary financial decision-makers, according to a CFP Board study, which also identifies the sometimes-differing planning priorities of female and male clients
• A report from AdvisorTech firm Orion finds that while a majority of advisory firms plan to increase their tech spending in the coming year (by an average of 19%), many advisors aren't taking advantage of the full suite of software and features available to them

From there, we have several articles on financial advisor value:

• A new study finds that clients working with an advisor would see a 2.39%–2.78% annual return premium (based on investment and tax planning services) over those without an advisor, after accounting for inflation and fees
• How offering client 'touchpoints' during the year can help an advisor demonstrate the work they put in for clients between regularly scheduled meetings
• Nine ways advisors add value to clients when it comes to portfolio management, from leveraging tax-efficient investment strategies to freeing up the client's time and mental bandwidth

We also have a number of articles on college planning:

• How legislation from the past few years has made saving for college in 529 plans increasingly attractive
• How advisors can help clients with children in college understand and correctly apply Forms 1098-T and 1099-Q
• A review of non-traditional pathways to an undergraduate degree, which can offer money and time savings for interested students and their families

We wrap up with three final articles, all about company culture:

• The importance of leadership access, transparency, and camaraderie when it comes to building a strong company culture
• How firms can establish team rituals that are both durable and promote employee engagement
• A step-by-step process to bring a (virtual) team together for an in-person retreat

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news of a recent survey indicating that while overall client satisfaction with their financial advisors remains high at 95%, potential threats to client retention lurk beneath the surface, particularly amongst clients who experience a major windfall or a life transition. Which suggests firms that can meet clients' evolving needs as they advance up the wealth spectrum (e.g., advanced tax and estate planning) and ensure that both members of client couples remain engaged in the planning process (to encourage a surviving partner to stay with the firm in case of a death of their spouse) could have more durable client satisfaction and, ultimately, higher client retention rates.

Also in industry news this week:

• The financial advice industry is facing a potential shortage of 100,000 advisors in the coming decade, according to a recent study, though this is due in part to (the good news) of greater consumer demand for human-provided financial advice
• Charles Schwab is planning to raise the fees on its custodial referral program, indicating continued interest in this lead generation tactic despite its steep price for firms

From there, we have several articles on IRA planning:

• 20 potential mistakes prospects and clients might make with regard to their IRAs, and how advisors can help fix them (or avoid them in the first place)
• The potential financial and psychological benefits of spousal IRAs for married couples
• How advisors can help clients and their tax preparers correct 'misleading' reporting regarding IRA distributions on IRS Form 1099-R

We also have a number of articles on practice management:

• A blueprint for how firms can create employee career paths that encourage staff to grow and advance within the firm, promoting retention and a more consistent client experience in the process
• How firms can establish and operate a successful internship program to create a solid pipeline of next-gen talent
• The value of hands-on training for newer advisors in giving them more confidence in applying their technical knowledge to actual client interactions

We wrap up with three final articles, all about workplace trends:

• How companies that integrate Artificial Intelligence (AI) tools while promoting collaboration among employees could see greater success in the years ahead
• Why employee engagement (on a national level) has sunk to a multi-year low and how building a strong firm culture and making a commitment to management training could help reverse this trend
• American workers are becoming more productive, according to recent data, creating new opportunities for employees and firms alike

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that CFP Board CEO Kevin Keller this week announced his plans to retire and step down from his position at the end of April next year. During his nearly two-decade tenure, Keller oversaw a near-doubling of the number of CFP professionals, the establishment of a new 501(c)(6) professional organization to promote the benefits of financial advice and planning careers, and updates to the CFP Board's investigation and disciplinary processes, among many other changes.

Also in industry news this week:

• Financial Planning Association CEO Patrick Mahoney died this week after a battle with cancer, leaving behind a legacy that includes rejuvenating the relationship between FPA National and its chapters
• A group of advisory trade groups and broker-dealers have sent a letter to Congressional committees requesting that the IRC Section 199A deduction (more commonly known as the Qualified Business Income, or QBI, deduction) be extended and expanded to remove the "specified service trades or business" designation that limits the deduction for financial advisors (and clients in certain professions) with income over designated thresholds

From there, we have several articles on retirement planning:

• How advisors can incorporate a client's Social Security benefits into their broader retirement income strategy to match client preferences for lifetime income and/or legacy interests
• Why a TIPS-based strategy could be an attractive way to meet clients' 'core' spending needs while protecting against future increases in inflation
• Why RMDs can potentially affect safe withdrawal rates and how advisors can help clients minimize any potential negative effects

We also have a number of articles on advisor technology:

• How using a "core and satellite" approach can help advisory firms build their tech stacks in a cost-effective manner
• The potential value for firms in auditing how they use their CRM software, as well as ways they can maximize its effectiveness
• One expert makes his selections for the 'ultimate' advisory firm tech stack, covering a broad range of AdvisorTech categories

We wrap up with three final articles, all about maximizing vacation days:

• Why "unlimited PTO" policies can sometimes backfire and how firms can ensure that their PTO policies reflect their goals and allow employees to take sufficient time away from the office
• How linking PTO days to holidays and weekends can turn 15 days off into more than 50 days of vacation
• Why research into vacations and happiness suggests that incorporating novelty into (longer) vacations can make them more enjoyable

Enjoy the 'light' reading!

(Michael's Note: It is with a heavy heart this week that we pay our respects and bid farewell to Patrick Mahoney, the CEO of the Financial Planning Association, who passed away this week after a long battle with cancer. Patrick and his leadership was a breath of fresh air for the FPA, as he worked proactively to repair the national organization's relationships with both its internal chapters and external allies, refocus the organization's staff on supporting its chapters and its core (CFP certificant) member, and stabilize its membership after prior years of declines. It is a tragic loss for the FPA that Patrick's ongoing work was cut short, and he will be greatly missed. Farewell, Patrick.)

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that following the change of administration (and a new incoming chair of the SEC), the Investment Adviser Association is seeking to find ways to help RIAs (particularly smaller firms) manage the compliance responsibilities they face. Which could include measures such as additional time to comply with rules that have been adopted but not yet enforced and perhaps, more broadly, an approach from the SEC that focuses more on whether a firm has robust program controls and a strong fiduciary culture rather than seeking out specific, (sometimes minor) missteps and producing enforcement actions.

Also in industry news this week:

• While RIA M&A deal flow hit record levels in 2024 (both in terms of volume and the speed of completing them), firm valuations saw relatively modest gains
• In its latest annual regulatory oversight report, FINRA joined the SEC in flagging the potential risks to firm and client data from the use of third-party vendors and products, specifically highlighting risks associated with generative AI tools

From there, we have several articles on retirement planning:

• A recent analysis considers 46 factors in determining the 'best' states for retirees, revealing potential locations clients might not have otherwise considered when thinking about a move
• The pros and cons for retirees of living near their children (and grandchildren) and how advisors can help them consider the range of financial and emotional implications associated with this decision
• Why moving to a state with relatively low (or no) income taxes doesn't always result in lower state taxes on deferred income (and how advisors can help clients avoid this issue)

We also have a number of articles on advisor marketing:

• How advisors can identify the four types of prospects and tailor their communication to match their preferences
• A simple graph that advisors can sketch during a discovery meeting to demonstrate the value they offer
• How using infographics to explain a firm's planning process can leave a stronger impression on prospects than verbal explanations alone

We wrap up with three final articles, all about attention:

• Why attention has become one of the most valuable commodities in the 21st century
• How a weekend "digital intermittent fast" could lead to fewer distractions and more enjoyable, meaningful time away from work
• The value of truly listening to others and how to avoid common conversational pitfalls

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that while overall financial advisor headcount remains relatively flat, the RIA channel continues to gain share in terms of both headcount (as brokers break away to start their own independent firms and aspiring advisors seek positions that don't rely on an 'eat what you kill' approach) and assets managed (as consumers might be attracted to the differentiated service proposition they can experience working with an RIA that has an incentive to reinvest into service and the client relationship to retain the client and their ongoing fees). Nonetheless, given the scale and brand awareness of the wirehouses, and as their own use of fee-based models increases (as opposed to primarily relying on commissions from selling products), competition for clients (and advisors) will likely remain stiff going forward, even amidst the favorable trends for RIAs

Also in industry news this week:

• A recent survey indicates that trust is the most important factor for clients when choosing an advisor (and the factor most likely to drive them to a different advisor), with an advisor's ability to understand their financial health and goals being a primary way to build this trust (providing an opportunity for human advisors to differentiate themselves from less personal tech-only advice options)
• RIAs appear to be focused on identifying sub-optimal investments and tax savings opportunities as they seek to provide ongoing value to their clients, according to a recent study

From there, we have several articles on investment planning:

• ETF issuers are unveiling increasingly complex ETF products, potentially enticing clients and presenting a challenge to advisors to fully evaluate their pros and cons
• New products and reduced costs have made alternative investments easier to access in recent years, providing advisors with a potential differentiator for their service offering
• While covered-call ETFs might appear attractive to many investors, an analysis indicates that alternate approaches (perhaps as simple as a global 60/40 asset allocation) could provide similar risk management benefits while achieving greater returns

We also have a number of articles on practice management:

• One firm's step-by-step guide to how it made a recent hire, from creating clear, informative job posting to efficiently narrowing down the field of candidates
• Perks financial advisory firms are using to attract and retain talent, from supplemental "family leave" days to time off for pro bono service
• Four common mistakes advisory firms make when it comes to employee compensation and how to design compensation models that reflect employees' true priorities

We wrap up with three final articles, all about the intersection of money and purpose:

• How money can (and cannot) facilitate a sense of purpose and meaning for advisors and their clients alike
• Why the ability to say "no" to opportunities that arise can be a superpower that allows one to focus on what is most meaningful to them
• How identifying a "deeper yes" can help advisors and their clients make tough decisions when it comes to budgeting their time and money

Enjoy the 'light' reading!

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