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 investigative journalism report from the Wall Street Journal this week that the CFP Board's "Let's Make A Plan" website was including thousands of CFP brokers who had a history of disciplinary misconduct and/or other material disclosures on the FINRA website that were not communicated on the CFP Board's website... leading the CFP Board to immediately make changes to its site to link to BrokerCheck and IAPD, to increase its reviews of CFP professionals' disciplinary records during the renewal process, and to appoint a new Task Force chaired by former Texas Securities Commissioner Denise Voigt Crawford to "strengthen and modernize" CFP Board's enforcement.

Also in the news this week are several articles about the increasingly controversial 12b-1 fee, from a lawsuit from the SEC against Commonwealth Financial alleging that the firm received more than $100M in not-properly-disclosed 12b-1 fees as part of a revenue-sharing agreement with NFS (that may have directed investors towards higher-cost share classes that paid such 12b-1 fees to NFS and Commonwealth), and a look at how Vanguard itself competes by not paying 12b-1 fees to other platforms even as Vanguard's own brokerage and Personal Advisor Services solution may be collecting 12b-1 fees from other mutual funds in order to fund their own platform costs.

From there, we have a few articles on cash flow and budgeting issues, from a look at the recent Equifax settlement for $125 cash or up to 10 years of credit monitoring (and how to claim them, and why the credit monitoring may be a far better deal than the cash), to a takedown of why consumers should ignore Suze Orman's recent admonition that "wast[ing] money on coffee is like peeing $1M down the drain", and an interesting framework to help figure out when it is a good idea to "go cheap" and when it's better to still spend up for quality.

We also have a few articles on mergers and acquisitions in the advisor space, including the latest "Deal Book" report from M&A consultant David DeVoe that finds record highs in both the volume of RIAs selling and the valuations that advisory firm sellers are commanding in the marketplace, a breakdown of the common components of an advisory firm deal (from Deal Structure to Financing to Tax Treatment), and some "must-know" items to be mindful of when you receive an unsolicited inquiry to sell your advisory firm and now must suddenly decide whether to consider the buyer's offer.

We wrap up with three interesting articles, all around the theme of maintaining a productive office workspace: the first looks at the increasingly popular rise of "phone booths" (but without the phones) as a form of 'privacy pod' in open floor office plans; the second explores the research on how having multiple monitors really does make us more productive at work; and the last looks at how the physical layout of an office space matters not only for its visual and aesthetic appeal, but because it can impact the sound of the space, which in turn can impact everything from our productivity to even our mood in the office.

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 number of big industry shake-ups, including the sudden news that TD Ameritrade CEO Tim Hockey is out (for what may have been a failure to pay enough attention to the company's RIA channel), and a management restructuring at Schwab that elevates its Schwab Advisor Services RIA division to report directly to CEO Walt Bettinger at the top of the organization, as the RIA channel continues its rise (and even the attention and resources it commands at historically-retail-oriented brokerage firms).

From there, we have several practice management articles this week, from the latest Schwab RIA Benchmarking Study that shows RIA growth remains solid (but not huge), averaging a 5.4%/year growth rate in clients over the past 5 years, the dynamics of what happens when an advisory firm decides to close its doors to new clients after growing to be "big enough" to satisfy the owner's needs, how equity-sharing is becoming increasingly common at large advisory firms as a way to attract, but especially retain talent, and a new Risk Alert from OCIE that advisory firms are not doing enough to run their own independent background and disciplinary checks on new hires (and thus failing to properly report disclosable events to prospects and clients).

We also have a few marketing articles, from why it may be better to help prospective clients conduct a "fee audit" of their current advisor (before trying to convince them of your own value for the fees you charge), how trademark law works when it comes to advisory firms and the names of their businesses, and how the targeted advertising capabilities of search engines and social media is making outbound paid advertising an increasingly lucrative channel for advisory firms to pursue for getting new clients.

We wrap up with three interesting articles, all around the theme of trying to make good decisions on the path to self-improvement: the first looks at the fascinating phenomenon that successful systems are often "complex to make [but] simple to break," which means at some point in the process of success (from business to investing), the focus shifts from building the complex system to work, to simply trying to make sure it doesn't die a simple death; the second looks at how to think about potentially complex decisions not as an all-or-none "it's right" or "it's not," but on a "confidence meter" scale from 0% to 100%, with a threshold for when a bet is at least "sure enough" to be worth making (while also recognizing that the threshold cannot be 100% because virtually no decision is entirely assured); and the explores how we often try to improve by making something bigger or better, but in practice some of the best improvements can come simply by reducing the leaks and fixing the tiny errors and mistakes that take away from compounding growth along the way.

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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 CFP Board has decided to delay enforcement (but not the rollout itself) of its new fiduciary standard, allowing brokerage firms another 9 months (from October of 2019 until June of 2020) to adjust their policies and procedures... while reinforcing that the CFP Board's new fiduciary standard will be enforced once Regulation Best Interest is also effective after June 30th of 2020.

Also in the news this week is the announcement that Salesforce is rolling out a new low(er)-cost version of its Financial Services Cloud, in an effort to reach the small-to-mid-sized independent advisor marketplace that is currently dominated by industry-specific competitors like Redtail and Wealthbox.

From there, we have several articles on regulatory topics, from a look at what's coming for advisors with the new 2-page Form CRS that must be provided to prospects and clients starting next year (and how hard it may be to fit all the required information onto "just" 2 pages), to a discussion of why it's so important to read the Privacy Policies of the FinTech vendors that advisors use (some of which actually do share portions of client and/or advisor data with third parties!), some tips on text message compliance, and technology strategies on how best to facilitate file-sharing with clients.

We also have a few behavioral finance articles this week, including: recent research suggesting that the bulk of investors (at least who go direct to Vanguard) actually are relatively patient, prudent, and calm (and that the "dumb money" retail investor may actually be less common than previously believed); research on whether "smart" people with a high IQ are really better investors (or perhaps just better at not making behavioral mistakes); and why it's important to evaluate your decision-making process properly and not engage in "resulting" that can lead to repeating bad decisions and underappreciating good ones (that happened to not work out as well as anticipated).

We wrap up with three interesting articles, all around the theme of the opportunities of compounding returns (in sometimes unanticipated ways): the first is a fun look at the town of Quincy, Florida, which has the highest rate of millionaires per capita due to the advice of a local banker during the Great Depression that the local community invest in the consumer durable stock of Coca-Cola... which over its lifetime has compounded its original $40 shares into $10M/share (split-adjusted and dividend reinvested back to its original IPO in 1919!); the second looks at the emergence of "non-linearity" in earnings, especially in professional services jobs, such that couples can often earn more by choosing to have one spouse work significantly more hours and the other work part-time or less, instead of a "traditional" dual-income (two-full-time earning) household; and the last explores how the rise of the internet has facilitated the rise of "microbrands," ultra-targeted niche solutions that leverage social media and digital advertising to not only reach a unique segment of consumers, but to pre-test their business offering to affirm a niche clientele will purchase before the product is ever made (which is increasingly relevant for the rise of niche financial advisors, too!).

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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the big Advisor #FinTech news that Orion is acquiring financial planning software Advizr for a whopping $50M in an effort to expand its platform towards more holistic wealth management and provide advisory firms a more planning-centric portal for clients to engage with.

Also in the news this week is the announcement that just 3 months after its launch, Schwab's monthly subscription service has raked in a whopping $1B of AUM, and AdvicePay crossed 20,000 advisors under enterprise contract facilitating financial planning fee payments, as consumer interest in the monthly subscription model of financial planning continues to heat up.

From there, we have several industry-related articles, including a surprising call from the FPA that the CFP Board should delay enforcement of its new fiduciary Standard of Conduct (but just until next June, to take effect alongside the new Regulation Best Interest), the announcement from the FPA that its OneFPA Network Plan has been finalized by the Board and will be proceeding forward with a 10-chapter beta test (despite generating positive Public Comment letters from less than 0.02% of its membership), an Op-Ed from former CFP Board chair Ray Ferrara disputing at least some of fiduciary advocate Don Trone's allegations that the CFP Board needs to improve its own fiduciary governance processes, and the news that Fi360 has become (only) the 10th financial advisor designation to earn (ANSI) accreditation for its AIF (Accredited Investment Fiduciary) designation.

We also have a few marketing-related articles this week, from tips on how advisory firms can differentiate themselves on their websites once Reg BI eliminates "fiduciary" as a differentiator, how to improve your Advisor Bio page so it doesn't "suck," and basic tips on how to improve the SEO (Search Engine Optimization) of the articles you do publish to your website.

We wrap up with three interesting articles, all around the theme of figuring out what is really fulfilling and "enough" to make us happy: the first looks at how more and more research shows what really makes us happy in our jobs, yet in practice people are less and less happy at work; the second explores the ways that we tend to pursue money, but when faced with difficult time-vs-money trade-offs (e.g., would you take all of Warren Buffet's money if you also had to take on his current age of 87?) we virtually always choose the time over the money; and the last examines how often the biggest returns we can get on the path to financial success aren't actually about earning money at all, but about getting comfortable that what we have is "enough" (and then saving all the rest).

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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the news that broker-dealers are stepping up their efforts to fight the CFP Board's fiduciary rule taking effect in October, with a formal letter through the American Securities Association asking the CFP Board to accept Reg BI compliance as sufficient, and the CFP Board responding that it won't back down from a full fiduciary requirement for CFP certificants and is willing to lose thousands of CFP certificants if necessary to maintain its differentiation (but may partially relent by delaying enforcement and allowing broker-dealers more time to adapt their compliance oversight).

Also in the news this week was an announcement that Morningstar is engaging in its first major overhaul of its Analyst Ratings since 2011 to focus even more on cost (as one of the few factors that is persistently predictive) and benchmark active managers on both a net-of-fees and risk-adjusted basis when comparing to benchmarks and peers, along with a new study by Spectrem Group about why clients leave advisors besides investment performance alone (hint: failure to respond promptly when clients call is still the #1 reason clients fire advisors outside of investment performance!).

From there, we have several marketing-related articles, including tips on how to take baby steps towards enacting a marketing plan for the first time, strategies to expand the visibility and footprint of your advisory firm's brand, and why it's better to memorize stories to communicate your value proposition and 'pitch' to prospective clients (rather than just trying to memorize the right words alone).

We also have a few practice management articles this week, from the reasons why advisory firms should focus on improving productivity and their systems before just hiring more employees, to what makes billion-dollar RIA standouts more successful than the rest (hint: their speed at which they do reinvest into both their systems and their people), and the concept of "Meta Roles" that employees can (and should be encourage to) take on to help everyone work better together as a team.

We wrap up with three interesting articles, all around the theme of how to take (effective and better) vacation as a financial advisor: the first provides a helpful series of Do's and Don'ts reminders about how to prepare for a vacation (and what should and should not be communicated to clients in advance); the second gives tips on how to craft the right Out Of Office (OOO) message while you're out, to ensure the right tone is set with clients and prospects while you're gone; and the last looks at how the research in behavioral finance can be applied to taking vacations (e.g., focus on experiences over goods, build the anticipation, and always do a big activity at the end given that we most often remember what came last/most recently anyway).

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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the buzz that, once again, the White House is considering an Executive Order that would index cost basis of investments to inflation, effectively eliminating capital gains on the inflation portion of growth and taxing only real dollar returns instead... at least, unless the plan succumbs to a legal challenge.

Also in the news this week was the House of Representatives passing a spending bill that includes a prohibition on the SEC from using any of its money to actually implement and enforce Regulation Best Interest (in what appears to be a delay tactic by the Democrats hoping that they can take control in the 2020 election and unwind Reg BI thereafter, but one that may not get through the Republican-controlled Senate anyway), and the announcement that former DFA co-CEO Eduardo Repetto is launching a new asset manager called Avanatis that will make an alternative version of DFA-style factor-based funds in an ETF form and without being tied directly to an index (allowing the ETFs to respond even more quickly to shifting factor data than just waiting for changes to the underlying indexes themselves).

From there, we have several articles on aging and retiring, including one that explores how financial literacy tends to decline (by an average of 1.5%/year) in our later years but financial confidence does not decline (leading to a growing gap between what we believe we can do, and what we're actually capable of, that may help to explain the rise of financial abuse and exploitation of seniors), a new crop of "apps" that are emerging to help protect the elderly from such financial abuse and exploitation, and a(nother) wave of financial apps emerging to help adult children more easily manage their parents' finances (especially from afar when their parents aren't geographically local).

We also have a few articles on cash flow and budgeting, from one that provides some good starting steps to get clients onto a budget (first hint: don't call it a budget, but a "spending plan," because that has fewer negative connotations!), to another that looks at the rise of apps that help children track their own chores and allowance and begin to learn (digitally-based) financial management for themselves, and a few tools that are emerging to help people get control of the ever-growing number of (sometimes no longer useful at all) subscription fees as seemingly every business converts to an "as a Service" monthly or annual subscription fee.

We wrap up with three interesting articles, all around the theme of finding what we love to do (and have a passion for): the first looks at the growing body of research around "finding your passion" (and how in practice, not having a passion doesn't necessarily cause significant unhappiness, and that it's having a passion not pursued that is more problematic); the second explores how there isn't always a connection between your passion and what makes money, but when it comes to financial advisors in particular, there often is a lot of overlap (at least, as long as the advisor adjusts their firm over time to best align with their own skills and strengths); and the last is a fascinating discussion of how, in the end, it's the setbacks we face that really help us identify our passions and what we enjoy... because setbacks that we feel compelled to push through are a sign that we've found a pursuit we really believe in, while setbacks that make us want to do something else might actually be the best clue of all that it really is time to try something different (that we may ultimately enjoy more)?

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 some clarity around the big industry buzz around the question of whether RIAs will still be permitted to call themselves "fiduciary" after Regulation Best Interest and the new Form CRS take effect (short answer: yes, RIAs can still call themselves fiduciaries, including in Form CRS, as the SEC merely removed the word "fiduciary" from its own prescribed templated language).

Also in the news this week are several other developments on the fiduciary front, including an announcement that now Massachusetts is looking at adopting its own state fiduciary rule (after the SEC failed to adopt a fiduciary standard in Regulation Best Interest), New Jersey's fiduciary proposal continues to progress (but the comment period is being extended after strong industry pushback), and professor Ron Rhoades raises the question of whether the industry's organized fight against all forms of fiduciary, from state regulators to the CFP Board, could itself constitute a violation of the Sherman Antitrust Act (particularly with respect to a potential broker-dealer boycott against the CFP Board, which itself is a private organization).

From there, we have several articles on advisory firm practice management, including a study showing that the majority of RIAs either don't have asset/account minimums or don't enforce the minimums they do have (which raises significant efficiency and productivity concerns as firms grow), the issues with RIAs (or any advisory firm) requiring clients to sign mandatory arbitration clauses, tips for conducting an effective summer offsite meeting with employees, how to deal with (and what really constitutes) a "toxic" team member, and why one advisory firm decided early on to break the usual pattern of hiring lead advisors, admin support, and junior advisors, and instead hired a "data geek" to help the whole firm run more efficiently (and figure out where to focus its resources).

We wrap up with three interesting articles, all around the theme of our own time and capacity constraints with clients: the first looks at the research on why it may actually be better to make yourself (as a business owner) a little more "scarce" (recognizing that, in practice, when prospective clients perceive you to be less available and in high demand, it can actually make them want to work with you more, as we tend to want what we can't have!); the second looks at the importance of creating some additional slack in your schedule and business (or what may seem short-term efficient can become long-term unstable); and the long-term value of saying "no" more often to ensure that you focus and prioritize the activities and projects that have the most positive impact on your business (with tips on how to actually say "no" more effectively and without offending).

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 official release of IRS regulations that kill the charitable "workarounds" that many states have been trying to create since the Tax Cuts and Jobs Act capped the State And Local Tax (SALT) deduction at just $10,000... even as many high-income individuals complete their first tax returns (for 2018) and realize that due to the prior impact of the Alternative Minimum Tax (which eliminated SALT deductions entirely), that, in practice, the SALT cap is often not as problematic as many had feared early on.

From there, we have several articles on the SEC's recent Regulation Best Interest now that the dust is beginning to settle and the details are emerging, with one article looking at how Reg BI will cement the "two-track" regulatory approach (of keeping broker-dealers and RIAs separate, rather than merging them under a single uniform fiduciary standard), when certain brokers will no longer be allowed to use the advisor/adviser titles (unless they at least become dual-registered as RIAs as well), and what RIAs will need to do to comply with the new Form CRS requirements.

We also have a few articles around the theme of learning to better do sales and business development (especially as an employee advisor who is not naturally inclined towards sales and business development!), including tips for how to better support "sales" activities for non-sales advisor professionals (by reframing it as how to help the advisor help others with their unique skills and abilities), what firms should consider when employee advisors do want to start marketing themselves, why/how professional designations do (or don't) help make advisors more successful (especially when it comes to getting new clients), what to do to avoid getting brushed off when you do get a referral from a client to a new prospect, and some low-key ways to follow up with prospects after the first meeting to keep them engaged.

We wrap up with three interesting articles, all around the theme of the mid-career crisis and what to do if we feel we've hit a wall: the first explores the phenomenon of the mid-career crisis itself, and how it's similar to a midlife crisis, but requires somewhat different remedies (and mindset changes) to resolve; the second explores the research about why employees ultimately tend to quit their jobs (which is less about the job and company itself, and usually about their direct manager and whether he/she is doing what it takes to support and develop the employee in their career and stage); and the last explores the phenomenon of the "Late Bloomer", and how, in reality, our brains are still developing throughout our teens and 20s, such that, while society today often celebrates the "early bloomer," it's the late bloomer in their 30s, 40s, or even 50s, that may actually be more common and expected. (Which is why it's never too late to start a new career or path as a financial advisor!)

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 huge news that the SEC has officially passed Regulation Best Interest (by a 3-1 vote), which will require brokers to act in the "best interests" of their clients when making a recommendation but stops short of actually requiring a fiduciary duty or for broker-dealers to mitigate their conflicts of interest... and raising the question of whether the SEC is so expanding the advice exemption for broker-dealers beyond its "solely incidental" roots that, like the Department of Labor's fiduciary rule, Reg BI may soon end out subject to a legal challenge.

Also in the news this week was the revelation that, with the CFP Board's own coming fiduciary obligation for CFP certificants, Edward Jones is considering whether to force its nearly 2,000 CFP certificants to drop their marks to avoid the fiduciary obligation (at the risk of having them recruited away by broker-dealer or RIA competitors who are willing to embrace an obligation to do the right thing for clients), the announcement that Fidelity is working on a new Managed Account Xchange (FMAX) akin to other model marketplaces but wrapping together Wealthscape and eMoney Advisor into a potential head-to-head Envestnet competitor, the official release of the Envestnet Fiduciary Insurance Exchange (FIDx) to facilitate RIA access to no-commission annuity products, and a look at the current landscape of independent broker-dealers from Financial Planning magazine's annual survey (finding that while IBDs are struggling, the largest are growing, in part by increasingly reinventing themselves as fee-based RIA support platforms less reliant on traditional commission-based revenue!).

We also have a few articles this week around the intersection of money and children, including a look at the rise of "allowance apps" that parents are using to dole out allowance and oversee chores in the digital age, Morgan Housel's advice to his newborn daughter on her financial children, a research study on what children of affluent families are really concerned about (hint: carrying on the family legacy matters to them more than most people realize!), and how to find the "Goldilocks zone" of personal finance, recognizing that while it's very stressful for those who don't have enough, it can be similarly very stressful to have "too much" as well!

We wrap up with three interesting articles, all around the theme of having and managing stress: the first looks at how, while we tend to think of stress as being "bad," a moderate amount of stress can actually be a positive that encourages us to step up and achieve more (as long as we get breaks to refresh and recover, too); the second explores a recent FPA study finding that financial advisors, in particular, are very stressed, despite the ongoing bull market, due to the rising challenges of operating an advisory business; and the last explores the "theory of cumulative stress" and how best to recover when you've been carrying too much stress for too long and need some personal relief.

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 revelation that, buried in one of the retirement bills making its way through Congress, is a provision that would allow more retirement advice to be paid for on a pre-tax basis (directly from an employer retirement plan)... a potential boon to those who offer retirement advice (at least when working with/through the 401(k) plan provider themselves). Also in the news this week is the latest Morningstar 529-plans study, which finds growing interest in a new form of "advisor-supported" 529 plans for RIAs (who can't use "broker-sold" solutions without a FINRA license, but need more of a connection to the plan than just using a traditional direct-sold offering).

From there, we have several marketing-related articles, from a look at the different types of content marketing material advisors can publish (from evergreen to timely news to personal interest/humanizing articles and third-party content sharing), the rise of "search intent" as an SEO factor, the look at the opportunities in the podcasting landscape (overall and including for financial advisors), and some interesting examples of "high-converting" fee pages on advisor websites (i.e., how advisors who share their fees on their websites are doing so in a manner that doesn't spook their clients).

We also have a few retired planning articles this week, including: the dilemma that new retirees face once they actually do retire and potentially lose and have to rediscover their sense of purpose (when it's no longer about pushing for the goal of retirement that they just achieved!); the research showing how much of a struggle early retirement often turns out to be personally, with a growing volume of research showing both adverse health impact, cognitive decline, and social isolation that can result from retirement (when we no longer have the purpose and engagement of work); and what retirees should focus on doing in order to thrive in retirement (by finding ways to keep themselves mentally engaged and socially connected).

We wrap up with three interesting articles, all around the theme of coaching and mentoring: the first provides some perspective on the benefits of getting a coach, and how to find/select one; the second looks at the phenomenon of "reverse mentoring," where more senior organizational leaders get mentored by more junior staff members (to better understand the needs and perspective of the next generation of employees and customers/clients); and the last looks at the power of having a dedicated coach over "just" a good mentor... someone who is really willing to roll up their sleeves and get engaged on behalf of the person they're coaching and hold them accountable for making the changes they need to make in themselves to improve.

Enjoy the "light" reading!

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