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 ongoing chatter about the fallout of the announced Schwab acquisition of TD Ameritrade, from Schwab relocating its headquarters to Dallas, the uncertain fate of TDA's VEO, how Schwab will handle smaller RIAs that, in the past, may have joined TDA specifically because they didn't meet Schwab minimums, and whether it will be necessary to repaper accounts as a part of the merger (which could put all the RIAs on TDA's platform 'in play' for competing custodians).

Also in the news this week is a newly proposed rule from the SEC that would potentially limit the use of leveraged and inverse exchange-traded products as regulators grow increasingly concerned about inappropriate uses of such vehicles and whether investors (whether clients of a broker-dealer or an RIA) truly understand the risks involved.

From there, we have several tax planning articles, including new Final Regulations from the Treasury clarifying that there will not be a 'clawback' of gift and estate taxes even if the Tax Cuts and Jobs Act lapses in 2025 and the current $11.4M estate tax exemption falls back to lower levels, a look at how states are becoming increasingly aggressive on "residency audits" to determine whether those claiming to have relocated (to avoid the state's high income tax rates) really changed their state of residence or not, and a reminder from IRA guru Ed Slott that with the beginning of a new year fast approaching the once-per-year 60-day rollover rule for IRAs does not reset and is still based on a rolling-365-day blackout period (but trustee-to-trustee transfers remain safe either way!).

We also have a few articles on advisory firm mergers and acquisitions, including a reminder of the key levers that drive the valuation of an advisory firm beyond just its revenue (as two firms with the same revenue may still have a drastically different valuation based on the stability and profitability of that revenue), the rise of bank funding options for RIAs that want to sell internally but not seller-finance the transaction, tips from successful acquirers of what it takes to close on a transaction (and get the seller to pick your firm as the chosen buyer), and some interesting research on the realities of today's M&A market for advisory firms that is increasingly driven by large firms that are paying ever-higher levels of upfront cash or in-kind stock exchanges as a part of the transaction.

We wrap up with three interesting articles, all around the theme of customer/client service and interacting with clients: the first explores the concept of "aesthetic intelligence", and that how an advisory firm and its services are aesthetically staged can have a significant impact on the client experience; the second explores how, amongst the affluent, human contact that eschews screens and computers is becoming a form of 'luxury good'; and the last is a powerful reminder that at some point spending money as a business on good customer service isn't just an overhead expense but a 'marketing' expense that drives word of mouth (and that it's important to be strategic in how you allocate resources to client service recognizing its potential marketing impact).

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 mega-news that Charles Schwab is apparently in talks to acquire TD Ameritrade, in what would create an absolute juggernaut in the brokerage industry with nearly $5 trillion in assets and as much as a 70% market share of RIA custody... which in turn is already raising concerns about whether, at least when it comes to RIAs, creating "Schwabitrade" might actually go too far in reducing competition and industry innovation (not to mention the challenges of integration and managing advisor service at such scale).

Also in the news this week is an indication of the growing "turf war" emerging as everyone from private banks (e.g., Goldman Sachs) to robo-advisors converge on serving the mass affluent that historically were the bread-and-butter client of the independent RIA but are now increasingly hard to attract in a more competitive landscape, and an indication that the SEC may be preparing new Proposed Regulations on both the definition of an Accredited Investor and the RIA Custody Rule (both of which are badly in need of updating for the modern era).

From there, we have several articles on behavioral finance, from a look at the value of a financial advisor as one who helps to minimize potential regret of the few big irreversible financial decisions in life (where it's crucial to have the right advice to ensure the right decision is made in the moment), the emerging rise of "financial therapy" as a complementary value-add for financial advisors (or possibly even the future of the financial advisor's value proposition), and a look at how thus far Artificial Intelligence is still struggling with the sheer breadth and complexity of interpreting human emotions (and suggesting that AI may still be a very long ways off from really being able to replace human-to-human interactions on emotional topics and issues).

We also have several marketing-related articles this week, from exploring why RIAs often have difficulty getting clients to read their email newsletters (and what are realistic stats to expect for client open and click-through rates), the importance of storytelling to both convey a financial advisor's value proposition to prospects and their recommendations to clients through a financial plan (which arguably should be more of a 'storytelling aid' than an analytical document), and the key pages that prospects actually focus on (and therefore every financial advisor should have) on their financial advisor website.

We wrap up with three interesting articles, all around the theme of making good career decisions: the first looks at how most people seek out the wrong kind of career advice (asking people in similar roles or other 'successful' people who tend to give advice from their perspective, instead of asking people who know you well personally or are in the company/role in question already who can really validate whether you understand the role and how good of a fit it really is, or not); the second explores how to find the right community of peers to help get that professional sounding board and support; and the last looks at how, because the best firms end out being exponentially (1,000X) more successful, the key to career success is less about finding the right dream job and simply about finding the right company ("rocket ship") to get on board with... and figure out later how to get into the best role/seat on the rocket ship!

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 announcement that independent broker-dealer network Advisor Group is acquiring fellow IBD network Ladenburg Thalmann, which will create the 2nd largest independent broker-dealer (behind only LPL), with more than 11,500 advisors overseeing $450B in assets across 9 broker-dealer subsidiaries.

From there, we have several practice management articles this week, including a look at the ever-growing breadth of CFP programs for undergraduates (providing students more choices for their CFP education, but arguably making it harder for advisory firms that are hiring to figure out which are the 'best' programs with the best-prepared students), the emerging trend of large advisory firms hiring CTOs (Chief Technology Officers), the new business role of a "Chief Of Staff" that can be used to leverage the efficiency of a founder/CEO (and/or to groom talent for future leadership positions), and an idea on how to better unleash the creativity of your own employees.

We also have several marketing-related articles, from exploring the 'right' way to diversify your marketing (not by diversifying the types of clients you're trying to reach, but instead by diversifying the marketing channels you use to reach a narrower set of target clientele), to tips on figuring out if your niche just isn't working for you yet or if you've picked the wrong niche altogether, the benefits (or not) of hiring a publicist to help an advisory firm with PR (depending on the natural proclivities of the owner towards social media and blogging), and how to build your confidence in your own blogging writing or video abilities to get over the "Imposter Syndrome" of thinking you don't have enough expertise to be valuable (when in fact you do!).

We wrap up with three interesting articles, all around the theme of managing our time: the first looks at how the decade of the 2010s has become the decade we 'lost' control of our time (with the rise of the smartphone and becoming ever-reachable by anyone, anywhere); the second delves into why we seem to have such trouble protecting our time in the modern era; and the last provides some valuable tips on how to get better control of your time by saying "No" more often, and how to change your mindset to get more comfortable with saying "no" more often 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 big industry news that the SEC is looking at finally updating the advertising rules for RIAs after nearly 60 years, which would include allowing advisory firms the ability to use testimonials and endorsements from clients, and even highlight third-party ratings about their work with clients (while still limiting how firms tout their investment performance in particular).

Also in the news this week was an announcement by Schwab at their IMPACT conference that the firm is looking to expand its banking and lending services for advisors on their platform, the rollout of Morningstar's new Analyst Ratings for funds (that are resulting in a substantial number of downgrades for funds, especially in their higher-cost share classes), and an indication that the SEC is gearing up to crack down on hybrid broker-dealers using affiliated money market sweep programs without properly disclosing the conflict to their RIA clients.

We also have several retirement related articles this week, from the IRS' announcement that it is gearing up to roll out new life expectancy tables that will reduce RMD obligations beginning in 2021 (though the actual RMD factors may only be reduced by about 0.21%), a look at the "9 types of retirees" and their psychographic tendencies, how some firms are experimenting with virtual reality to literally help clients better visualize their future retirement (to help them change their behavior to save more), how to help clients have a more financially successful retirement not just by helping them plan for retiree health care costs but actually getting healthier to reduce those costs, and an interesting look at how the discussion of income inequality is raising questions about the nature of retirement and why "the rich" don't just retire once they have "enough" in the first place?

We wrap up with three interesting articles, all around the theme of how we work most productively and what it takes to incentivize us to do so: the first looks at a recent study that finds while we tend to believe financial incentives will motivate others, when we consider our own motivations we usually don't think it will have as much impact (raising questions of whether we overestimate the role financial incentives really play); the second explores the recent decision of Microsoft in Japan to test out a 4-day workweek (which at least temporarily resulted in a whopping 40% increase in productivity after a 5-week experiment); and the last looks at a company that is trying out (just) 5-hour work days for their knowledge workers, on the theory that if employees can really get concentrated deep work done from 8AM to 1PM, they'll accomplish as much as a full work day anyway... and be happier and better rested with all the time they have left over.

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 fascinating look at a new CFP disclosure form from Northwestern Mutual, in advance of the CFP Board's new fiduciary disclosure rules, that not only provides a template for what the future of (more thorough) CFP fiduciary disclosure may look like, but also raises questions anew of whether CFP professionals will find it difficult to comply with their fiduciary obligations themselves when working for firms that are primarily in the business of manufacturing and distributing products. Also in the news this week is the official launch of the OneFPA Network "Beta Test", as more than 80% of FPA's 86 chapters declined to even apply but the organization is still moving forward with its test of new staffing, accounting, and technology systems by accepting 11 of the 16 chapters that did request to be involved.

From there, we have several articles on spending and debt, including a look at the common myths of what does (and doesn't) actually increase or decrease one's credit score, the rise of new online installment notes that are replacing payday lending as the new triple-digit-interest-rate high-risk lending program, and how the "old rules of wealth" to save early and often for retirement are falling by the wayside with a Millennial generation that is still struggling to balance the desire to buy a home, start a family, build a career, and save for retirement... on top of carrying a potential mountainload of student loan debt that in some cases may literally take until retirement to repay!

We also have a few articles on financial advisor marketing, including new research on where financial advisors are spending their marketing dollars that work (hint: increasingly on not just social media, but digital advertisements funneling interested prospects to increasingly targeted advisor websites and landing pages), what it really means to pursue a relationship with a "Center Of Influence" (and how to identify such COIs beyond the typical lawyers and accountants), why you should not use a quick auto-responder with every new LinkedIn connection you make, and how Opt-In Text Messages are becoming a new financial advisor marketing channel.

We wrap up with three interesting articles, all around the theme of the growing awareness of the advisory industries' issues with not only gender discrimination but also sexual harassment and sexual assault in the aftermath of the Ken Fisher incident: the first shares the stories of women in finance who have been sexually harassed or assaulted at a financial advisor conference; the second shares stories of women in finance who have faced gender discrimination challenges or similar sexual harassment or assault in the workplace; and the last looks at how advisory industry conferences are beginning to implement more stringent harassment and assault reporting tools, with actual enforcement mechanisms in place, to finally try to change behavior at industry events and hold accountable those engaging in inappropriate behavior.

Enjoy the 'light' reading!

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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off by diving into the big industry buzz of the past two weeks, where Ken Fisher, multi-billionaire owner of his eponymous $110B+ RIA, made sexually inappropriate comments at the recent Tiburon CEO Summit, spawning the financial advisory industry's version of a #MeToo moment that has led to not only Fisher being banned from several conferences (and the withdrawal of more than $1B of his institutional investors), but a rising focus on sexual harassment policies at conferences and the stories of women across the industry sharing their own experiences of sexual harassment, sexual assault, or outright rape at industry conferences.

From there, we have several more articles on industry news this week, including the FPA's decision to break with precedent and select its first non-CFP vendor representative as the next President-Elect for its National Board (from a company that also happens to be the FPA's largest corporate sponsor, and that directly opposes FPA's fiduciary advocacy lobbying efforts!), the CFP Board's announcement that it is gearing up a new Enforcement Plan for the coming year with its new Standards set to take effect (and in response to the recent WSJ article questioning its current enforcement standards).

There are also a few regulatory articles, from a new PIABA study finding that expungement requests for brokers with problematic disciplinary records has skyrocketed as creative lawyers appear to have figured out how to game the system, a critique from the Inspector General that the SEC is failing in its enforcement efforts (with an average of more than 2 years from when the SEC begins an investigation until it actually issues an enforcement action against a problematic RIA), and an alert from FINRA that it may soon crack down on broker-dealers' lax oversight of their brokers using text messages and social media messaging apps (without properly archiving and overseeing the communications, or failing to monitor their brokers from not using those channels if the broker-dealer states they're not permitted).

We also have a few investment-related articles, including a look at why the SEC's recent ETF rule will likely mean the death of the iNAV for ETFs (and why it may not necessarily be much of a loss in practice), how the industry has focused on declining ETF expense ratios but the average expense ratio that investors pay for mutual funds is also crashing (if only because investors have now put nearly 5X the dollars more into no-load mutual funds than loaded mutual funds as the industry increasingly shifts towards fee-based accounts), and how even as expenses on ETFs continue to lower there may be a floor appearing as recent ETFs that have launched with zero or even "negative" expense ratios are actually not attracting significant new dollars from investors.

We wrap up with three interesting articles, all around the theme of the challenges of burnout: the first explores the concept of "boreout", where an employee isn't necessarily burned out from too much work, but "bored out" from having too little work to do, to the point that it can actually result in deleterious health effects; the second examines the drivers of work motivation, and how compensation only carries someone 'so far' before other more intrinsic motivators become the primary drivers; and the last looks at a recent industry study finding that financial advisors themselves are experiencing far higher stress levels than the average person, for which the solution isn't necessarily about 'work-life balance' and spending more time with family, but being more proactive in taking control of the advisor's time and scheduling to have a more productive work day 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 a slew of news stories spurred by Interactive Brokers' announcement that it was cutting its trading commissions on all US stocks and ETFs to zero, which in turn spawned announcements from Schwab doing the same just two business days later, TD Ameritrade price-matching Schwab at zero just hours after that, E-Trade cutting their trading commissions to zero the next day... and Fidelity notably deciding to hold firm (albeit at just $4.95/trade), and suggesting that it may be better to hold firm on pricing if it keeps Fidelity's revenue up to be able to provide advisors better service as well!

From there, we have a few articles on hiring and leveraging associate advisor talent in your advisory firm, from a discussion about the benefits of delegating (both to free up your time, and give your team more opportunities to excel and rise to the occasion), tips on how to pick the right/best successor for your firm, why associate advisor compensation actually declined in the latest benchmarking study despite an ongoing talent shortage (hint: advisory firms are so desperate that they're hiring those with less experience and less talent... and then paying them less in the process), and some good suggestions on what to ask (and what you may not ask) when interviewing a prospective associate advisor!

We wrap up with three interesting articles, all around the theme of gratitude and sharing (and accepting praise for) our good deeds: the first explores why it's important to learn to accept compliments with gratitude and not just brush them off saying "It was nothing"; the second delves into the research on "virtue signaling" and when/whether it's good to show off your own good deeds; and the last explores what you should actually do to accept a compliment with grace (and make the person giving the compliment feel appreciated for having done so!), including and especially when the compliment is from yourself!

Enjoy the 'light' reading!

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