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 big industry news that the SEC has finalized new advertising and marketing rules for RIAs that will, for the first time, openly permit advisors to use client testimonials (and also to highlight third-party ratings) in their marketing materials.

Also in the news this week is a deep-dive look at the new "Coronavirus Stimulus 2.0" legislation that is winding its way through Congress (with everything from stimulus checks, to a new round of forgivable PPP loans, and a bevy of financial-planning-related changes from a lower AGI threshold for medical expense deductions to a coming reworking of the FAFSA form for student financial aid), and a look at the final version of the Department of Labor's fiduciary rule (and whether it may be delayed or unwound when the Biden administration takes office, given its controversial provisions permitting ERISA fiduciaries to begin to receive commission compensation for advice recommendations).

From there, we have several articles on client communication, including a discussion of how virtual/online meetings with clients are likely to evolve in 2021 (when they're no longer a requirement, but may still be a proactive choice for many client meetings), a look at what the research says about how best to engage prospective (and current) clients in meetings, and why one of the biggest drivers in creating positive rapport with clients and prospects is not how the advisor presents themselves or what they say but the energy they bring to the meeting in the first place.

We've also included some articles on gathering client feedback to refine your advisory firm, including some tips on how to gather client feedback (hint: surveys are great, but so are old-fashioned 'spontaneous' phone calls to check in with clients about how the firm is doing), the benefits of creating a Scorecard to track client feedback over time (and be able to spot trends), and why it's especially important to gather client feedback on sensitive subjects (even though it may feel awkward because of the sensitive topic... if it's potentially going to upset clients anyway, better to do so in a format where you can still get their feedback to shape a better outcome!).

We wrap up with three interesting articles, all around the theme of charitable giving (during this holiday season!): the first is a look at the recent announcement that MacKenzie Scott has donated a whopping $4 billion in just the past 4 months to organizations in need (and highlighting the unique data-driven approach taken to identify 384 different organizations that received financial support); the second explores the social dynamics of sharing your charitable giving and similar good deeds with others and when "virtue signaling" is a positive (or not); and the last shares the fascinating story of Chuck Feeney, who accumulated nearly $8 billion of wealth building a business empire (in the form of the Duty-Free Shops you see at international airports around the world!)... and has spent the last 38 years giving it all away, living now as an 89-year-old in an apartment he rents in San Francisco, and having inspired other billionaires (including Bill Gates and Warren Buffett) to create the Giving Pledge to donate the majority of their wealth to charitable causes as well!

Enjoy the 'light' reading, happy holidays, and Merry Christmas (to those who celebrate!)!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the industry news that the CFP Board is reversing its prior decision to remove compensation disclosures (e.g., "fee-only") from its Let's Make A Plan website and soon will begin to include even more information to consumers about how they will be charged for the advice they receive (e.g., commissions, AUM fees, hourly fees, subscription fees, etc.), after an internal consumer research study affirms that the most important factors for prospective clients evaluating an advisor are how they pay, whether they can afford it, and what the value will be (i.e., whether the service is worth the cost).

Also in the news this week is the unfortunate announcement that the SEC is tabling its long-anticipated proposed changes to RIA advertising rules that would have expanded guidance around the use of social media and (finally!) permitted advisors to use at least limited client testimonials (pushing any potential changes to a future yet-to-be-determined SEC Commissioner under Biden?), and the release of the Department of Labor's final new fiduciary rule that would for the first time allow ERISA fiduciaries to receive commissions (but has been issued so late that it will not take effect until after Biden's inauguration, raising the possibility that the controversial new fiduciary rule will be delayed and killed before it can be fully enacted).

From there, we have several articles around investment trends, including a look at the rise of "custom" direct indexing as an alternative to ETFs and mutual funds, an announcement that mega insurer Transamerica is halting all sales of fixed indexed annuities and variable annuities with living and death benefit riders due to the limited opportunity to offer compelling products to consumers in a low-interest-rate environment, and a fascinating look at the emerging work of Ole Peters who is challenging the traditional view of economics by taking a hard look at the "ergodicity" assumption and suggesting that perhaps investors aren't actually irrational but simply using a different framework to evaluate decisions than what economics has long presumed.

We've also included some articles on client retention, from a look at how clients may actually want to connect with each other through their advisor (from in-person social events to the virtual world of online networking or even message forums for clients), how driving client retention often isn't about having all the answers for clients but being able to ask better questions that engage them and make them feel understood, and some research on what really drives client retention that shows even very small increases in retention can have an outsized impact on the economics of an advisory firm (and suggests that advisors may still be "under"-investing in retaining existing clients over trying to get new ones?).

We wrap up with three interesting articles, all around the theme of advisor burnout and taking time off to rejuvenate (as we enter the holiday season!): the first looks at how often advisors can only recover from burnout by making a substantive change in their work (from taking on an entirely new role at the advisory firm, to leaving altogether and starting their own firm to better control their own time and focus); the second explores the rising phenomenon of employees not even using all of their vacation (and the potential ramifications of trying to "force" employees to take more time off in a busy work environment); and the last explores some of the data-driven research into the impact of taking vacation on the ongoing productivity of a firm's top employees.

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 industry news that the Financial Planning Association has hired its interim CEO Patrick Mahoney (who took over after prior CEO Lauren Schadle departed earlier this year) to become its new permanent CEO, the first to be hired from outside the organization since the FPA's creation more than 20 years ago, but with a depth of executive experience that can hopefully engage a successful turnaround of the beleaguered membership association as the number of CFP certificants continues to grow?

From there, we have several articles around the theme of succession planning, including a 'Letter from a Successor' to help founding firm owners better understand the mindset of a prospective successor, a discussion of why a good succession plan should be both 'concrete' (to be executable if unfortunate circumstances dictate) and also 'flexible' (to be able to adapt and be changed as circumstances change), a look at why shifting valuations of RIAs versus broker-dealers is causing a growing number of brokers to convert to an RIA as part of a future succession/exit plan, and some tips on how to manage the transition process as a successor when taking over a retiring advisor's clientele.

We've also included some articles on client communication, from a look at how to better communicate the advisor's fiduciary obligation to clients, why it's problematic for financial advisors to market by saying they provide "Peace Of Mind" to their clients, the importance of getting clear on your target audience of prospects and who you're really trying to reach and communicate with, and a look at how to bring together a Client Avatar profile to better understand who exactly the firm is trying to communicate with in the first place.

We wrap up with three interesting articles, all around the theme of getting more efficient in handling the 'administrative tasks of life' that can weigh us down after an already-busy workday: the first looks at the rise of virtual assistants, not just for work tasks but to use in our home lives as well; the second provides some tips on how to be more efficient and productive in handling our "Life Admin" tasks; and the last provides a good reminder of all the reasons why delegating and outsourcing are valuable not only in the workplace, but also and especially in our personal lives because it allows us not only to potentially be even more financially successful (by freeing up time for lower-expense tasks to do higher-earning work), but also to better enjoy the limited time we all have with your friends and family and take care of our own mental health!

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 industry news that NASAA has approved a new Model Rule that would, for the first time, impose an annual Continuing Education requirement for advisors at RIAs (regardless of whether they have a professional designation)... or at least, at the state-based RIAs that are subject to the individual states that may adopt the NASAA Model Rule in the coming years?

Also in the news this week is the news that the CFP Board has hired a 20-year veteran of the SEC's Enforcement leadership to become its new Managing Director of Enforcement as the organization signals a growing focus on actually enforcing its new fiduciary standards of conduct, and a new consumer research study finding that investors are more comfortable with human advisors over robo-advisors and are (slightly) more likely to follow their advice... but were also more likely to be dissatisfied in the recent pandemic market volatility earlier this year (in particular, for all those advisors who advised their clients to "do nothing" and simply stay the course!).

From there, we have several articles on practice management and growth, including tips on the next positions to hire for as an advisory firm grows (from Client Service to Operations, Investments to Compliance), the importance of visioning exercises as an advisory firm leader to truly envision the future growth of the firm (and the organizational chart it would take to get there), and a look at how advisory firms are increasingly rethinking their approach to compensation and benefits (in particular, the ongoing shift from revenue-based compensation to salary-plus-incentives instead).

We've also included some articles on employee performance reviews (as that time of year queues up!), including one strategic approach on how to run the annual employee review process, another highlighting the importance of benchmarking employees not against one another but their own past selves (to measure personal improvement over time, not competitiveness against others in the workplace), and a look at how the 'emotional culture' of an organization can help drive employee success and retention.

We wrap up with three interesting articles, all around the theme of how financial advisors manage their own money: the first is a recap of the recent new book by Josh Brown and Brian Portnoy aptly titled "How I Invest My Money: Financial Experts Reveal How They Save, Spend, and Invest"; the second is the personal story of the Chief Investment Officer of a multi-billion-dollar RIA about how he invests his own money; and the last is an interesting look at how there's often a gap between what financial advisors say their clients should do, and what they do themselves... and the debate about whether that is a sign of advisor hypocrisy, a recognition of how hard it is to follow advice (even our own, as we're human beings too), or simply an acknowledgment of how varied our goals are and the paths that we take (which is why financial planning is so important in the first place)?

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 industry news that mega asset manager Blackrock is making a "billion dollar bet" on the future of direct indexing by acquiring SMA provider Aperio (the #2 provider of direct indexing solutions, behind #1 provider, Parametric, that itself was acquired last month as part of the Morgan Stanley acquisition of Eaton Vance), as interest grows in both the tax-optimization benefits of direct indexing and also the ability to "customize" index allocations to clients' ESG or other individual preferences (e.g., the S&P 500, but excluding tobacco stocks and with an overweight to renewable energy?).

Also in the news this week is an interesting J.D. Power survey that finds consumers during the pandemic are perhaps, not surprisingly, more likely to use mobile apps on their smartphone to manage their wealth but, surprisingly, are even more satisfied when they can use the app as a means to contact and communicate with their advisor (not in lieu of their advisor!), and the announcement that the Department of Labor is sending its controversial new fiduciary rule (that would begin to allow ERISA fiduciaries to receive commissions in certain circumstances) to the Office of Management and Budget to finalize... but it may already be too late to finalize the rule before the Biden administration takes office (and is expected to pause the rule for further review in what may ultimately send it back to the drawing table for a more fiduciary revision).

From there, we have several articles on marketing and client communication, including tips on how to make emails more engaging with colleagues, clients, and prospects, using a simple two-sentence directive approach, some thoughts on how to revise our approach and use of virtual meetings as it becomes clear they're likely not temporary but here to stay permanently (at least in some form as part of the annual advisor-client relationship), and a look at whether compliance rules actually require video meetings with clients to be recorded and archived for compliance purposes (hint: probably not, as they're treated like telephone conversations, but any written communication delivered as part of the video meeting does have to be captured and archived!).

We've also included some articles on cash flow and spending strategies, including a look at the immense opportunity of mortgage refinancing in the current environment (as mortgage rates continue to hover below 3%), some suggestions for cash flow/budgeting apps that clients can use to track and manage their own finances, and some ideas on how to engage children with (stock) investing from an early age to get them to begin appreciating the value of compounding (and the benefits of investing in long-term companies for long-term growth!).

We wrap up with three interesting articles, all around the theme of holiday gift-giving as we enter the December holiday season: the first two both explore some year-end gift-giving ideas that are "classy" but not budget-busting (important both for the economic cost to the business, and to avoid running afoul of the FINRA [and often RIA] $100 gift-giving limit!); and the last looks at how, in the end, we're happier when we spend money on experiences and others rather than "things", which can hold, not only for how we spend our own money, but also in how we use it to help others (which means giving services like TisBest or DonorsChoose) or spend on experiences that remain memorable long after the event has passed (available through services like Excitations and Xperience Days)!

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 a striking new consumer survey showing that demand for automated investing is on the rise... and so is increased use of human financial advisors as well, as consumers (especially younger consumers) look to both automate what technology can automate and see the value of financial advisors that go beyond what technology alone can provide.

Also in the news this week is a call from the Foundation for Financial Planning that pro bono financial service should become a standard part of every CFP professional's life as a professional (suggesting the CFP Board implement a recommendation of 25 hours/year of pro bono service), and a new Fidelity study finding that 40% of advisors believe that switching firms will be easier than ever as digital adoption in the aftermath of the pandemic makes e-signature and digital onboarding (or digital signing of ACAT transfers!?) easier than ever.

From there, we have several articles on how COVID-19 continues to (re-)shape our world, from a look at how retirement will likely change in the aftermath of the pandemic (e.g., with 40% of COVID-related deaths occurring in long-term care facilities, will demand rise for more aging-in-place planning that doesn't require leaving the family homestead?), why annuity demand fell during the pandemic despite normally rising in times of market volatility (with indications that the annuity industry's reputation for problematic sales practices may finally be catching up to it even as interest in guaranteed income is on the rise), and a look at how the pandemic may permanently shift consumers to be more likely to use the internet to find a financial advisor (as the shift to the virtual world means it's no longer necessary to look locally for a financial advisor anymore?).

We've also included some articles on client communication this week, from a look at how younger clients are not eschewing financial advisors for technology tools and instead expect to meet with their advisors more often than retirees, to a discussion of how to better communicate with clients 'at scale' by grouping them together for common communication messages, and a broader look at how frequency and responsiveness of communication continue to be the #1 driver of client retention (not investment performance results!).

We wrap up with three interesting articles, all around the theme of trying to manage our time in a world where technology makes work seemingly ever-present: the first explores the phenomenon of "time confetti" where smartphone notifications break up our leisure time and make it feel less rewarding (such that even though we empirically have more leisure time than we did 50 years ago, it feels like far less!); the second looks at how the concept of the "morning routine" may be overpromising and underdelivering; and the last explores what it takes to have a "perfect" day of work, which in the end is all about focusing our time on the few tasks that have the highest and best impact, and really making them a priority to get done... because it always feels good to accomplish our best work in a way that meaningfully moves our business or career forward!

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 a look at what a Biden administration may mean given the increasing odds that the Senate will remain Republican (by winning just one of the two Georgia Senate run-offs), which could stymie major tax legislation from the White House but leaves the way clear for potential new fiduciary regulatory reforms for financial advisors (as a new SEC Chair or Department of Labor Secretary from the White House is all it takes to potentially queue up a new rulemaking process in the coming years).

Also in the news this week is a fresh Risk Alert from the SEC's Office of Compliance Inspections and Examinations highlighting that, as RIAs increasingly expand into multiple locations, they're not always implementing appropriate 'branch office' compliance oversight programs, and the CFP Board has published a new set of "sample" (consumer-tested) Engagement Letters that CFP certificants can use both to describe their services in plain language and also to meet the CFP Board's own new "Duty to Provide Information" obligation that took effect on June 30th.

From there, we have several practice management articles, from a look at how, despite the industry buzz of "consolidate or perish", that small independent advisory firms continue to thrive, and it's some of the largest advisor platforms that appear to be struggling to maintain their size (despite their scale!), to a reminder of the key areas of an advisory business that must be balanced in order to drive (sustainable) growth, and a good discussion of what a COO actually does in a growing advisory firm that has more than 10 employees (and requires an additional level of infrastructure and management to keep the firm organized).

We've also included some articles on client communication this week, from some suggestions on questions to ask new (or prospective) clients to help deepen the relationship, tips on how to make virtual client meetings more collaborative (by not just screen-sharing but creating visuals that the advisor and client can collaboratively fill out and complete), and a good reminder that even though the work-from-home environment may feel more casual it's still important to remember that clients can see you (at least when the video is on!) and that putting together a professional look still matters in a professional services business.

We wrap up with three interesting articles, all around the theme of the ongoing challenges for both teams, businesses, and individuals continuing to work from home: the first explores how effective team communication in a virtual environment is all about "bursty" communication (with concentrated groups of meetings, followed by blocks of focus time); the second explores the ongoing challenge of loneliness when working from home for extended periods of time; and the last looks at what some businesses are starting to do now to head off the growing concern of work-from-home burnout, from 'spontaneous' 3-day weekends to allowing team members the option for 30-hour work weeks or simply having "self-care" days where it's required to turn the computer/laptop off, step away, and unplug from the home office that is otherwise so hard to disconnect from when it's right there in the house!

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 prospective win for presidential candidate Biden may cause regulatory reform of financial advice to become an issue once again in 2021, as a new administration may seek to reign back the expansion of advice at broker-dealers that was permitted by this year's introduction of Regulation Best Interest (or at least, may more actively enforce Reg BI against broker-dealers that overstep the line when switching their RIA and broker-dealer hats).

Also in the news this week is the announcement that Canadian RIA aggregator, CI Financial, is considering a potential public listing on the New York Stock Exchange in what could become the second publicly traded RIA aggregator (alongside Focus Financial) in yet another wave of new buying activity for advisory firm acquisitions (potentially pushing already-record RIA valuations even higher in the coming years?), and a look at recent InvestmentNews Research data showing just how dramatic the shift to independence has been, as both independent broker-dealers and RIAs continue to gain nearly 1,000 new advisors per year from wirehouses, insurance broker-dealers, and banks.

From there, we have several practice management articles all around the theme of leveraging staff hires, from the importance of creating a vision of the firm's future org chart when it grows to better visualize what the next hires should be to keep the growth moving forward, to the benefits of hiring service-minded advisors (in lieu of rainmakers) to scale an advisory firm, and some tips on how to successfully transition existing clients to service-minded advisors without undercutting their credibility.

We've also included some marketing articles this week: a look at some advisory firms that are doing content marketing well, and what they're actually doing that makes it work; a review of 10 advisor websites that are especially appealing, and what they are doing to make the content, design, and messaging so effective at connecting with the prospects they're looking to attract; and some suggestions on advisor marketing strategies that are actually working in the age of social distancing.

We wrap up with three interesting articles, all around the theme of leveraging one's time and efficiency: the first is a look at why Inbox Zero may not be something to aspire to, as being efficient with email can still misfocus an advisor's time on the tasks that don't really matter most; the second explores the challenge of "hoarding" to-dos and the compulsion we sometimes have to keep and check off everything... instead of focusing on just checking off the tasks that truly matter the most; and the last provides some valuable tips to overcome the tendency as financial advisors in a service-minded profession who just want to help people of saying "yes" to everything, because in the end we still only have so much time and have to learn to say "no" to helping everyone in order to have the most positive impact on those we can help the most.

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 Congress is considering a new round of retirement legislation, dubbed the "Securing A Strong Retirement Act" or simply "SECURE Act 2.0" on the heels of last year's 2019 SECURE Act legislation, which could be passed in the lame duck Congressional session this December with a wide range of new benefits (from allowing QCDs from IRAs to be contributed to a charitable remainder trust, to increasing the RMD age yet again to age 75).

Also in the news this week is a rising discussion of new estate planning strategies that may become popular in the last 2 months of the year if there is a "blue wave" on election day (given looming discussions of proposed upper-income tax increases from the Biden campaign), and a recent Dalbar study finding that 83% of investors agreed that their account balance is higher today because of the help of their advisor during the crisis and 9-in-10 investors reported a slight or significant increase in confidence and trust in their advisor (and being more likely to retain their advisor) in the aftermath of the pandemic

From there, we have a few sales-related articles, including why it's so important for financial advisors to tell their own personal story of why they're an advisor in order to deepen a relationship with prospective clients, what to say and how to try to recover if you unwittingly put your foot in your mouth in the midst of a meeting with a new prospect, and why even advice-centric firms may still need to consider establishing sales quotas on business development to create a culture of accountability around growth (or risk being acquired and subsumed by other advisory firms growing faster because they have figured out how to do so).

We've also included a number of practice management articles, from a look at the ongoing rise of incorporating legal and/or accounting services into advisory firms (and some of the complexities that arise), the announcement that eMoney Advisor is piloting an outsourced paraplanner solution to help firms with the back-office work of actually creating their financial plans (so advisors can focus on client meetings), and some tips on how to delegate - what to keep doing and what should be delegated - to focus an advisor's time into its highest and best use.

We wrap up with three interesting articles, all around the theme of financial literacy: the first explores how, finally, financial education is starting to be incorporated more into college campuses as the ability to navigate the financial system is itself becoming an essential life skill in the modern era; the second explores how, despite the obvious appeal of financial literacy, the actual results of providing more broad-based financial education are mixed at best, and that 'just-in-time' focused education when needed most may be more relevant for individuals; and the last explores how to make financial literacy and personal finance more fun, by getting away from jargoned explanations of technical topics (e.g., what is life insurance and how does it work), and instead focusing on more entertaining and relevant ways to teach key financial concepts (e.g., why is life insurance appropriate for Homer Simpson but not Batman!?).

Enjoy the 'light' reading!

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