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 President-Elect Trump has selected Wall Street attorney Jay Clayton to take over as Commissioner of the SEC for Mary Jo White... signaling a potential shift of the SEC's focus away from rulemaking and enforcement, and putting into doubt whether the SEC is likely (or not) to move forward on its own fiduciary rule in the coming years.

Also in the news this week is progress from the Department of Labor to carve out a Financial Institution exemption for IMOs to qualify for the Best Interest Contract and oversee independent annuity agents selling indexed annuities, and a new study from Cerulli finding that despite their tech-savvy inclinations, younger consumers are actually the most likely to be willing to pay for financial advice (but still necessitating a different business and service model than the traditional AUM-centric comprehensive-wealth-management approach used for retirees).

From there, we have a number of articles on marketing and business development this week, including: how to make 2017 the year you generate a better "return on effort" by better focusing your marketing activities; the importance of managing your digital first impression to prospects who check you out online; the core information than any/every financial advisor website must convey to prospects (but most don't); how a "Now" page on your website can help humanize you and make a better connection to prospects; a study that found the fastest-growing RIAs really are more likely to effectively check the boxes on digital marketing strategies; and a look at how many advisors may be self-sabotaging by separating "business and friendship" when in reality they should focus on conveying their passion and let friends and colleagues who want help come to them and work together.

We wrap up with three interesting articles: the first is a call from Don Trone of 3Ethos to the CFP Board to stop holding out as a fiduciary champion when the CFP Board's practice standards still allow many CFP certificants to avoid a fiduciary duty, and the organization's opaque governance and limitations on its own accountability make it look hypocritical in calling for higher standards for advisors; the second is a look at how the world of mutual funds also faces an odd double-standard, where 401(k) plan administrators can be sued for using high-cost mutual funds that they don't even profit from, but the mutual fund companies themselves face no accountability for trying to sell those high-cost funds in the first place; and the last is a fascinating look from the Wall Street Journal at the evolution of the 401(k) plan, and how even its original creators are not happy with how the 401(k) plan has largely replaced the defined contribution pension plans it was originally supposed to just supplement.

And for those who may be interested, at the end you can check out what I've done to implement my own New Year's Resolution to get healthier in 2017 – by supplementing my existing standing desk with a new under-desk treadmill. In fact, all the background articles for this week's Weekend Reading were curated for you as I walked (in place) for several miles while reading and typing!

Enjoy the "light" reading, and I hope you had a safe and happy New Year!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the big news that a Court of Appeals has ruled the SEC's process of hiring Administrative Law Judges (ALJ) into its in-house court system is unconstitutional, setting the stage for a potential Supreme Court case to decide its fate (with the possibility that Republicans will preemptively intervene to legislate against them first!). Also in the recent news is the announcement that a new Registry for Fiduciary Advisors from the Institute for the Fiduciary Standard has launched, and gathered its first member: former FPA president and CFP Board Disciplinary chair Dan Moisand.

From there, we have several practice management articles this week, including: a look at how Schwab's standard account agreement could actually trigger custody for the RIAs that use its platform; how a white-label ETF provider works (for any advisors curious about what it takes to launch their own ETF!); and the differences between 3(38), 3(21), and 3(16) fiduciaries under ERISA as the new DoL fiduciary rules loom large in 2017.

We also have several technology-related articles, from a review of the new financial planning software provider RightCapital, to a new retirement planning solution called the "Big Picture App" that finally makes it possible to illustrate the 4% safe withdrawal rate strategy with clients (under various time horizon and asset allocation assumptions), to a look at how video conferencing and other technology tools are making it possible to "untether" financial advisors from the geographic location of their clients (or even needing to be physically at an office at all). There's also a good article from Ryan Neal of Wealth Management on whether the real technology threat to financial advisors wasn't "robo" automation, but the next stage of Artificial Intelligence (AI) that may come next.

We wrap up with three interesting articles: the first is a look at some of the questions you should ask yourself if you're feeling "stuck" in your advisory career and business, and need to figure out how to take the next step forward; the second is a striking look at the real-world challenge of work-life balance, as told through the Four Burners analogy (that ultimately, we have to balance work, health, friends, and family, and there just isn't time to support more than 2 or 3 burners at any given time without sacrificing them all); and the last provides some great tips on how to get "unstuck" in 2017 by making incremental changes to improve your business or career throughout the year... and recognizing that the biggest opportunity for a breakthrough is not about finding a magic bullet solution, but about making the commitment (of time and focus) to begin working on those needed changes as 2017 gets underway.

Enjoy the "light" reading, and have a safe and happy New Year!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a discussion of the latest RIA benchmarking study from Fidelity, which again finds that advisory firm fees are holding steady against robo-advisors, but that growth rates are falling... and suggests that perhaps growth rates are down precisely because advisors aren't paying enough attention to industry pricing pressures. Also in the news this week is an SEC announcement that they will be putting more scrutiny on independent RIAs with multiple office (i.e., "branch") locations. And the mutual fund industry still appears to be scrambling to find common ground regarding share classes for broker-dealers as the DoL fiduciary implementation date looms large in April.

From there, we have several practice management articles this week, including: why the "pitchbook" is dead, but advisors should consider making a "Capabilities" deck to present to prospects; tips on what to say in a bad prospect meeting to turn the conversation around; and tips to finding a financial advisor business coach (from a financial advisor who went through the process).

We also have a few more technical articles, from a look at how the combination of SPIAs to guarantee essential expenses and withdrawal-smoothing strategies for the rest fares better than using either technique alone, to a look at where it makes sense to use an ETN (exchange-traded note), and a recent Morningstar meta-analysis finding that SRI portfolios do not actually require the investor to sacrifice returns to meet sustainable investing objectives.

We wrap up with three interesting articles, all around the theme of improving and easing the management of household finances: the first is a series of tips from a financially independent retiree about how he's simplified his financial life; the second is a look at personal finance tips from a meeting of ultra-wealthy investors; and the last is a series of 20 personal finance "rules" that, while relatively simple and straightforward, can be remarkably powerful in the aggregate to get any household on a better track towards financial independence.

And be certain to check out the video at the end... an interesting exploration by Myra Salzer of the topic of "Wealth Prejudice", and how those who inherit substantial wealth actually face significant social challenges, as they are effectively "born into" a form of social minority that has a number of unfavorable stigmas associated with it!

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 yet another legal victory for the Department of Labor, as the request from the National Association of Fixed Annuities (NAFA) for a preliminary injunction to stop the DoL fiduciary rule was denied (though NAFA's appeal for its original loss to the DoL is still pending).

Also in the news this week was the launch of Schwab's new Intelligent Advisory service, an expansion of its "robo-advisor" program for the mass affluent that will provide access to a CFP certificant who provides a personalized financial plan (in addition to investment management), all for a mere 0.28% AUM fee (plus the cost of the underlying ETFs) with a $25,000 minimum - a bold competitive shot across the bow of Vanguard's Personal Advisor Services (with a 0.30% AUM fee and a $50,000 minimum), but also to a wide swath of independent financial advisors who also work with mass affluent clientele (some on Schwab's own Institutional platform!).

From there, we have a slew of advisor technology articles this week, including: the latest results of the annual Financial Planning tech survey (though unfortunately, this year FP magazine is limiting access to the survey results!) and only highlighting the top few companies in each category; a review of new advisor marketing tools Snappy Kraken and Twenty Over Ten; a discussion of the new PFM app Moven, which competes primarily in the banking space but could see adoption from the clients of financial advisors; a look at "sleeve accounts" in portfolio accounting software and why they can be more efficient than just creating multiple accounts to separate clients' assets; a review of the latest (and pending) tech developments at the major RIA custodians (Schwab, Fidelity, and TD Ameritrade); how Riskalyze intends to deploy its new $20M of private equity (by pivoting from "just" a risk tolerance assessment tool to a broader "robo" solution that supports acquiring and onboarding new clients); and a look at the explosion of new DoL compliance technology tools (and why there may already be "too many" for what most advisors really need).

We wrap up with three interesting articles, continuing the technology theme: the first is a look at the ever-expanding impact and power of social media tools, which aren't just a marketing channel but are allowing people to organize new social and political movements in ways that simply weren't feasible in the past; the second is a review of several financial-oriented websites and apps that are increasingly pivoting towards becoming "automated financial assistants", from Digit to Mint to Credit Karma, which could begin to compete with financial advisors, or simply complement areas they don't typically advise on anyway; and the last is an overview of the empirical research that still suggests, in the end, that technology and automation really don't cause mass unemployment, and can even boost employment in some sectors (as the number of bank tellers increased after the introduction of the ATM), but with the accelerating pace of technology change, suggests that at a minimum we need to get better about helping people prepare for new jobs and industries (which has both job training and financial planning implications!).

And be certain to check out Bill Winterberg's "Bits & Bytes" video at the end, which this week includes coverage of the new Schwab Intelligent Advisory solution, the news that Finicity has raised $42M of venture capital to begin development again on the "old" Intuit Financial Data APIs, and the rollout of Yodlee account aggregation capabilities on the Envestnet|Tamarac Advisor Xi platform.

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 comments from President-Elect Trump's former campaign manager and now senior advisor Kellyanne Conway that Trump's views on the DoL fiduciary rule "don't necessarily jibe" with the oppositional views of his advisors... and when coupled with Trump's recent selection of Andrew Puzder as his new Labor Secretary, suggest that a Trump repeal the DoL fiduciary rule really may not be coming once he takes office.

From there, we have a number of marketing-related articles this week, including: how to craft your 2017 marketing plan; tips to improve client communications (particularly via email and social media); the marketing advantages (or not) in writing a book to establish your credibility as an expert; how to refine your prospect and new client experience to be of consistent quality (especially when it's delivered by more than just the founding advisor themselves); and the announcement of a new "Mystery Shopper" service that Fidelity is making available to RIAs that will allow them to engage a market research firm to pose as prospects and provide feedback on their marketing and sales process.

We have a few more technical articles this week as well, from a look at the ongoing struggles of traditional LTC insurance (with the recent news that LTC insurer Penn Treaty will have to be liquidated, in what may be the largest insurance insolvency in 25 years), to a recent new study that finds life expectancy actually declined last year in the US (for the first time in over 20 years), and the results of an analysis of the predictive value of Morningstar star ratings which finds they have slightly positive predictive value, but only very slight.

We wrap up with three interesting articles: the first is a look at new economic research quantifying, for the first time, how likely it is someone achieves the "American Dream" by being more financially successful than their parents, and finds that the odds of generational improvement have plummeted since World War II from a high of 92% to what today is no better than a 50/50 coin flip, driven partially by slowing economic growth but even more by rising income inequality; the second is a discussion of the increasingly popular retirement strategy of "retiring at sea", and making a cruise ship your second or even primary home in retirement (with a growing number of large cruise ships offering "residence at sea" apartments to accommodate extended-term travelers, in some cases at prices even lower than a local assisted living facility!); and the last is a good discussion of the ever-present question "how much is enough", which despite being a core focus of financial planning, faces a challenging reality that figuring out the answer to the question has both a quantitative and a highly qualitative component.

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's leading news is that the Department of Labor has won yet another of its cases on the fiduciary rule, as indexed annuity provider/distributor Market Synergy Group has failed in its attempt to have the rule blocked or repealed. While there are still many cases left to resolve, and the potential for appeals, the DoL going 2-for-2 in the past month is a promising sign that the fiduciary rule may be here to stay.

From there, we have several practice management articles this week, specifically around the hiring and compensation process that often comes at the end of the year, from a look at when it makes sense to hire another advisor, to the importance of creating a career track and compensation plan for employees (which is better than the "compensation crisis management" approach of only addressing the issue when an employee reports he/she is about to leave!), and a look at how firms are starting to formulate career tracks and long-term compensation plans to retain the best talent.

We also have a few more technical planning articles, including: a reminder to look at potential year-end capital gains distributions from mutual funds and whether clients should switch to another investment before the distribution happens; how HSAs are starting to gain real momentum (but disproportionately amongst "older" workers aged 55+, who may be contributing to the HSA more as a retirement supplement than simply to cover upcoming health insurance deductibles as originally intended); factors to consider when a client has a potential NUA distribution; and how lifetime immediate annuities can still make sense, even in a low-yield environment, because the reality is that the annuity "income" is actually a combination of interest, principal, and mortality credits (which means interest rates alone only play a moderate role in setting the payouts).

We wrap up with three interesting articles: the first is a look at Julie Littlechild's research on how when advisors make personal breakthroughs in their business, it tends to follow a consistent three-stage process to change; the second is a reminder that while lots of us have work and obligations to do, the greatest success comes to those who are initiators, getting ideas off the ground and going above and beyond the bare minimum required; and the last is a fascinating look at the research showing that most of us have tens of thousands of thoughts that flitter through our heads all day, of which a whopping 80% are negative... which means our success will be determined heavily by our ability to silence the voices and change our beliefs and focus on the positive that allows us to really move forward.

And be certain to check out Bill Winterberg's "Bits & Bytes" video at the end, which this week includes coverage of WisdomTree's $20M capital investment into robo-advisor-for-advisors Vanare (which is also rebranding to AdvisorEngine going forward), a favorable review of new financial planning software provider RightCapital, and an inside look at the capabilities of portfolio performance and accounting software challenger Addepar.

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 growing number of advisor surveys showing that more and more advisors are worried about losing clients over their fees... even though there's little evidence to show that any material number of advisors actually are losing existing clients over their fees. Also in the news this week is an announcement from the CFP Board about changes to the CFP CE rules, which won't impact most people, but will have consequences for those who earn CE by teaching, writing, giving presentations, or self-reporting CE credits from non-registered CE sponsors.

From there, we have a few marketing and technology articles this week, from how to create incentives that build your digital marketing email list, to the most common mistakes that advisors are still making when it comes to social media marketing, how to set up an online calendar scheduling tool on your website (and why it matters), and some interesting thoughts from Joel Bruckenstein on the state of financial advisor technology and where it still needs to improve.

We have several practice management articles as well, including: the 7 phases of the client experience as someone moves from prospect to client to referrer (and the issues to consider at each stage to help clients move forward); tips to become a better listener to clients (and what it really means to truly listen effectively); and common myths about getting client referrals (e.g., that asking more for referrals is the best way to get more, when in reality it usually is not helpful at all).

We wrap up with three interesting articles: the first is a look at five different "types" of retirement, as the very nature of retirement itself morphs from the traditional work-save-retire to aggressive early retirement, part-time permanent semi-retirement, and various forms of on-again-off-again temporary retirement; the second is a review of a new white paper suggesting that the classic "active management is a zero sum game" paper by Bill Sharpe may be flawed and that there is probably at least some slight positive sum for active management (at least, before fees); and the last is a look at another study trying to quantify the value of financial advice, finding that an advisor can add a whopping 3.75% of value... with the caveat that more than half the value is simply helping the client not harm themselves.

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 several big news stories, including a look at the SIFMA/FSI lawsuit against the Department of Labor's fiduciary rule in Texas (where the judge's questions suggest some possibility that the DoL could actually lose), a review of the other DoL rule implemented in 2016 that's at risk under President Trump (the safe harbor for states to create automatic enrollment IRAs without ERISA fiduciary exposure), and the big Advisor FinTech news that robo-advisor-for-advisors Vanare has raised a whopping $20M Series A round from ETF provider WisdomTree (and is being renamed AdvisorEngine in the process).

From there, we have a few technical articles, including a look at how variable withdrawal strategies can both improve average retirement income and reduce the risk of failure, how Medicare Part B premiums are changing next year (and what clients should consider, especially if they're just getting started in Medicare Part B this year or next), and planning strategies for Social Security for divorcees.

We also have several practice management articles this week, all focused on building out your advisory team, including: how to attract great team members by creating a Career Opportunities page on your website (even if you're not hiring right now); what your team members are looking for from the advisor-founder to be happy and successful (and better support the success of the firm); and the benefits of hiring a dedicated operations team member (or creating an entire dedicated ops department) for your advisory firm.

We wrap up with three interesting articles: the first is a preview of a chapter from Nassim Taleb's new book "Skin In The Game", about why salespeople must be separated from advisors, and how the ability of clients to sue (e.g., under a fiduciary rule) is actually a crucial mechanism to ensure advisors have reasonable "skin in the game" for their recommendations; the second is a review of the recent global OECD study on financial literacy, which finds that not only do consumers struggle with a wide range of irrational behavioral finance challenges, but also that more than half the world's adults are just sheerly financially illiterate; and the last is a great reminder of what it really takes to be sustainably successful as a business owner, and how it's not about just creating a great product or service, but also about being able to continually learn, empathize more, communicate better, try (and fail) more, and maintain a longer term view than any of your competitors.

And be certain to check out Bill Winterberg's "Bits & Bytes" video at the end, which this week includes coverage of the news that Wells Fargo is partnering with robo-advisor SigFig, a nasty two-day systems outage at Cetera (and the lessons in business continuity), and a FINRA announcement that Lincoln Financial is being fined a whopping $650,000 for failing to vet the security of a third-party technology vendor.

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 several big news stories, including the first court decision of the lawsuits against the DoL fiduciary rule (with the ruling against NAFA and entirely in favor of the fiduciary rule!), an announcement that Morningstar is cutting its benchmark fees to zero for investment managers who want to benchmark against them (in an effort to compete more broadly in the world of index benchmarking), and the decision of John Hancock to stop selling traditional long-term care insurance policies to consumers (despite being one of the three biggest companies providing coverage!).

From there, we have several practice management articles, including a glimpse at how broker-dealers are looking to change grid payout systems in 2017 to comply with the recent DoL fiduciary FAQ, the risk of advisory firms acquiring multiple local advisors where the firm gets the cash flow but doesn't truly 'own' the client relationships (a serious problem when the parent firm wants to sell in the future!), and how advisors are increasingly struggling to differentiate themselves in a changing environment (and what they need to do about it).

We also have a few more technical planning articles, including: a fresh look at the tax policy proposals from President-Elect Trump and Speaker Ryan, which provides a glimpse into the kind of tax reform legislation we could see in early 2017; a discussion of how, despite the popular view that we may all live to age 120 and beyond, life expectancy has actually been declining slightly since 2010; and a look at the newly announced Medicare Part B premiums (up just 4% for those eligible for Hold Harmless, but up 10% for higher income individuals who don't qualify!).

We wrap up with three interesting articles: the first is a reminder that differentiating on service is a challenging way to build an advisory firm, given that everyone has a different (and evolving) view of what "good service" even means, and why it's better to build around relationships instead; the second is a look at what's called the "Goal Gradient Hypothesis", and the idea that we tend to work harder on a goal as we approach its end point (which suggests that clients may be more motivated by a series of short-term goals than one giant long-term goal like "retirement"); and the last is a good reminder from Bob Veres that even if the fiduciary rule does see a setback under President Trump and the Republicans, that in the long run the financial planning profession can still emerge victorious by continuing the "ground war" of winning over consumers to the virtues of a fiduciary advisors, one client at a time.

And in honor of Veteran's Day, be certain to check out the video at the end celebrating the delivery of pro bono financial planning for the military (and how it's being supported by the Foundation for Financial Planning)!

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 news announcement that risk tolerance software maker Riskalyze has raised a whopping $20 million Series A round to fuel its continued growth. Also in the news this week was the announcement that Morningstar has formally launched Analyst Ratings on ETFs (to complement its ratings on mutual funds), and that the latest data from the SEC shows it is still struggling to materially improve its examination rate of investment advisers, because the ranks of the RIA community are growing faster than the SEC's ability to scale up its exams!

From there, we have several practice management articles, including: the challenging "walls" that advisory firm owners must clear in order to transition from "small" solo practices into mid-sized businesses; why defining a niche is about more than just stating you work with a certain type of clientele, and instead is about explaining the unique outcomes you can create for those clients; and a look at how the latest DoL fiduciary FAQ could lead to cuts (or at least potential changes) to the typical broker-dealer grid payout system.

We also have a few more technical planning articles, from a look at how to help clients understand their longevity risk (and why typical life expectancy statistics understate their risk of outliving their money), to a discussion of the favorable tax rules for a personal residence (from the mortgage interest deduction to the capital gains exclusion), and why prenup agreements are becoming increasingly popular for young professional couples.

We wrap up with three interesting articles: the first looks at how the focus of financial planning is shifting from helping clients maximize their dollars and their Return On Investment (ROI), and instead is about helping clients live a better life with the dollars they have (improving their "Return On Life"); the second is a reminder that there's a fundamental difference between being a financial advisor salesperson and a client-centric professional (even if you're a salesperson who tries to do the right thing for clients); and the last is a powerful call to the financial planning profession that its time to step away from the broader financial services industry and find our own place in the world... at least, if the industry and its product manufacturers are willing to let go.

And be certain to check out Bill Winterberg's "Bits & Bytes" video at the end, which this week includes coverage of the latest Schwab technology roadmap, Riskalyze's $20M Series A funding, the announcement that SS&C (owner of Black Diamond) has acquired Salentica CRM, and TD Ameritrade's acquisition of Scottrade (including Scottrade Advisor Services) and the rollout of TDA's new "robo" solution Essential Portfolios!

Enjoy the "light" reading!

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