All Archives Of Weekend Reading for Financial Planners

Weekend Reading for Financial Planners (Jun 11-12)

June 10, 2016 02:01 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a deeper look at the SIFMA lawsuit against the Department of Labor's fiduciary rule, which is looking more and more like an Alamo-style futile last stand, as the details of their legal complaint appear to be little more than rehashing the same arguments they have already presented and lost at each prior step of the rulemaking process.

We also have a few technical planning articles this week, from strategies to plan around maximizing step-up in basis (and especially avoiding a step-down in basis) at death and the new Form 8971 cost basis reporting rules, to tactics that advisors should consider when helping younger clients make good student loan decisions, and a review of a newer company called Vest Financial that is providing an outsourced options overlay service to help design risk management strategies for client portfolios.

From there, we also have several practice management articles, including: looming anti-money-laundering (AML) rules that could hit later this year and put significant new compliance burdens on SEC-registered investment advisers; a list of 13 "true" differentiators that advisors can use to think about what really differentiates their own client services; how to reframe your value proposition to clients by shifting from just talking about your job title and what you do to helping clients understand how you'll actually improve their situation; a review of "startup friendly" RIA custodians TradePMR and Scottrade Advisor Services, which have actually been cracking down a bit on the smallest "hobbyist" RIA firms; and a look at how you can improve your engagement with clients over the next 2 months by taking a one-week-at-a-time fresh look at key aspects of your advisory firm and how your clients experience it.

We wrap up with three interesting articles: the first raises the question of whether our current 'obsession' with the philosophy of "always be your authentic self" may be going too far, because in the end people may care more than we're sincere and do what we say, than whether we authentically share every last thought in our heads; the second is a great reminder that while we're often told to "follow our passion", most of us aren't actually sure what our "passion" really is, and in most cases really understanding that takes years or even decades of a career to find, so the better approach is to try to "foster your passion" and just keep moving in the direction of the work that most inspires you; and the last is an interesting look at how the media views financial advisors and recommends that consumers find an advisor, where consumers are recommended to look at everything from how the advisor is compensated, to whether the advisor has "humility in large doses" when it comes to describing their own abilities.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, which this week includes interviews from the recent Envestnet Advisor Summit on the latest Envestnet Advisor Portal technology developments with Tamarac and Yodlee, along with the new Open ENV initiative!

Enjoy the "light" reading!

Weekend Reading for Financial Planners (Jun 4-5)

June 3, 2016 02:44 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the announcement of the widely anticipated series of lawsuits against the Department of Labor's fiduciary rule, with filings this week from both SIFMA and FSI (representing Wall Street and broker-dealer firms), as well as NAFA (representing the fixed annuity industry). However, legal experts are already suggesting that the industry's lawsuits appear weak, especially given how much the Department of Labor already conceded to the industry in its final rule compared to the previously proposed one. Also in the news this week was the revelation that advisor tech guru Bill Winterberg is embroiled in a lawsuit with fellow tech consultant Joel Bruckenstein over the profits of the recent T3 Enterprise conference (and tech vendors are taking note of the conference's substantial $458,000 reported profit).

From there, we have several practice management articles this week, including a look at the new overtime rule for employees in professional positions that may impact a number of advisory firms and the compensation they pay their paraplanners and associate planners, a look at why a niche based on personality type may be more appealing than a profession-based niche, how not billing on a client's cash balance could actually be a DoL fiduciary violation for advisors who manage portfolios with discretion, and a discussion of the "dark side" of becoming an independent advisor where the challenges of entrepreneurship can lead to depression.

We also have a few more technical articles this week, from a review by Bill Bengen of how the 4.5% safe withdrawal rate is holding up given the 2000 and 2008 bear markets (the short answer: it's doing just fine!), to a look at what advisors should discuss with clients about Medicare as they approach age 65, and a review from Social Security's Chief Actuary about the current state of the system, how much in benefits really will still be paid even if the trust fund goes "broke", and how the system will likely be fixed from here (without raising the Federal deficit).

We wrap up with three interesting articles: the first is a look at recent consumer surveys finding that investors are less interested in being do-it-yourselfers and are becoming more interested in at least working collaboratively with an advisor to 'validate' their advice, but why advisors should be wary about taking on such clients; the second looks at how technology can be so effective at solving our problems, but its design can also be manipulated (intentionally or accidentally) in manners that make us addicted to the technology in very unproductive ways; and the last covers the financial advisory industry's landscape for young advisors, where there are still not enough coming in to replace all the baby boomer advisors who are retiring, but a shift appears to be underway as firms establish better training programs and a more constructive team approach to supporting new advisors, and both membership associations and independent advisor networks increasingly step up to fill the void as well.

Enjoy the "light" reading!

Weekend Reading for Financial Planners (May 28-29)

May 27, 2016 02:44 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the news that robo-advisor SigFig has raised $40M of new venture capital, from established asset manager Eaton Vance, in its bid to become a leading robo-advisor-for-advisors solution as the company continues to pivot away from its challenged B2C roots.

From there, we have a number of practice management articles this week, from a brief review of the new retirement income software solution "Income Solver", to a look at what the DoL's "Best Interests" requirement really means (now that it appears the rule is here to stay), tips and best practices for doing client meetings virtually via webinar or video conferencing software, and why it's so crucial for financial planning to be done consistently across an advisory firm.

There are also several technical planning articles, including: a look at how the long-term care marketplace is evolving as long-term care insurance (and Medicare and Medicaid) continue to struggle; how the problems of the student loan crisis may actually be understating, by failing to recognize how often low-income students in particular are enticed into colleges they can't afford, fail to graduate due to the financial burden, and then end out with student loans and no diploma; a discussion of common estate planning strategies and assumptions that are changing in today's environment; and a look at how the rise of indexing may make investments more efficient on a relative valuation basis while still leaving them exposed to potentially extreme absolute valuation distortions.

We wrap up with three interesting articles: the first is a look at how social networking is actually on the decline, as companies increasingly adopt social media for business purposes and drown out the less-and-less-common "personal status update"; the second is a fascinating new study discussed in the Harvard Business Review that suggests the "skills gap" in the U.S. may not be due to a lack of availability worker training and STEM programs, but simply that businesses don't (or can't) pay enough in wages to incentivize workers to go get those skills; and the last is an examination of the growing juggernaut that is Vanguard, now taking in nearly $1B of AUM per day and showing no sign of stopping, due not only to its incredible economies of scale and strong brand, but also its unique structure of being owned by its shareholders and the favorable investor-centric incentives that has created for the company's management and leadership.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, which this week looks at Personal Capital's announcement that it raised another $75 million of venture capital (albeit from an established financial services firm) to expand its tech-augmented-humans advisory service, SigFig's announcement that it also raised venture capital this week ($40M, from another established financial services firm) as it pivots its B2C robo-advisor to become a B2B solution for advisors instead, and a look at a recent FINRA fine on an advisor which was triggered in part because he backdated and altered client notes in his CRM to obscure questionable recommendations.

Enjoy the "light" reading!

Weekend Reading for Financial Planners (May 21-22)

May 20, 2016 10:05 am 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the big announcement that UBS is partnering with "robo-advisor" SigFig, which is notable both because it signifies yet another B2C robo-advisor that is pivoting to serve advisors instead, and more significantly because the hunger for better "robo" tools for advisors has now gone all the way to one of the top wirehouses (which may only further accelerate the trend).

From there, we have a number of practice management articles this week, from a look at how advisors can add "student loan planning" as a service to work with younger clients, to tips on how to get a better attendance at your client and prospect marketing events, what advisors should consider if they want to keep working in the financial planning industry but don't want to serve clients anymore, and how even tiny shifts in your advisory business can lead you far off track over time (which is why it's so important to periodically evaluate whether your business is where you want it to be, and if not to reset the path).

There are also several technical planning articles, including: tips on how to broach the long-term care insurance conversation with clients; a cautionary tale on the questionable "PIRAC" strategy to supercharge Roth contributions; how more flexible withdrawal rate strategies make it easier to take advantage of favorable return sequences in retirement (if and when they happen); and a discussion of the rules around the taxation of Social Security and planning strategies to consider.

We wrap up with three interesting articles: the first is a look at the recent research on "grit", which has been celebrated as the new predictive factor that determines success, but in reality may only be relevant in a very narrow set of circumstances; the second is a discussion of how the best techniques to help consumers change their behavior aren't about better disclosures, or education, or giving nudges, but about recognizing that the optimal tactic itself will vary depending on how engaged the consumer is with the decision-making process to begin with; and the last is a fascinating look at how the abundance of information (thanks to the internet and the accessibility of smartphones) is actually bringing an end to the "Information Age" and leading to the rise of the "Experience Age" where the greatest creation of value comes from having the experience to not only gather information but apply it... which means seniors who retire may be stepping out of the workforce at the exact moment that they could actually be contributing the most value of all.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, which this week provides coverage directly from the Envestnet Advisor Summit, including the new "Open ENV" open architecture platform, the announcement that Tamarac is adding integrations to Salesforce CRM, and how Envestnet is starting to capitalize on its Yodlee acquisition with new features for advisors.

Enjoy the "light" reading!

Weekend Reading for Financial Planners (May 14-15)

May 13, 2016 02:44 pm 3 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a somewhat controversial new industry study, finding that brokers who used their home office's packaged portfolio solutions had better investment results than the advisors who tried to do it themselves, with the latter showing both less due diligence in their investment selection and a greater likelihood to get in and out of the market at the wrong times (either making bad calls themselves, or acquiescing more quickly to nervous clients who insisted on making changes instead of staying the course). And while the study was specific to broker-dealers, it has interesting implications for RIAs that have (or have not) adopted standardized firm-wide model portfolios as well.

From there, we have a number of practice management articles this week, including a look at how doing client surveys can open up additional advisory firm revenue (both by finding new business opportunities, and simply better engaging clients to provide referrals), the importance of doing client appreciation events that really engage clients rather than just passively thank them, the reasons an advisory firm should consider using centralized password management tools, and how to approach a conference to ensure you really get the most out of your time to attend.

There are also several technical planning articles, including: a list of key issues that advisors should watch for when reviewing estate planning documents; the situations where a fund's Net Asset Value (NAV) actually does not accurately reflect its true underlying value (which happens more often than advisors might realize!); how new Form 5498 reporting requirements on IRAs will lead to new scrutiny of hard-to-value alternative assets; and a look at the importance of customizing life expectancy assumptions for clients (rather than just assuming everyone will live to age 100).

We wrap up with three interesting articles: the first is a look at how the rise of tech startups is impacting the legal profession, which is witnessing a flurry of startup activity similar to #FinTech, but where the companies seem to have been quicker to recognize that the future is not the "robo-lawyer" but tech solutions that help to make lawyers more efficient and better at what they do; the second is a look at how the rise of platforms and (digital) networks may be spurring a fourth industrial revolution; and the last is an interview with industry luminary and thought leader Dick Wagner, who suggests that financial planning may be the most important profession that will emerge in the 21st century.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, which this week includes highlights of new advisor technology that debuted at the spring #Finovate conference (including a Client Insights tool from IBM and the new Advisor Now platform from Envestnet), what advisors should bear in mind about technology backups given the recent major Salesforce CRM outage, and a look at the future of advisor technology from a recent tech panel at the SSG annual conference.

Enjoy the "light" reading!

Weekend Reading for Financial Planners (May 7-8)

May 6, 2016 02:44 pm 5 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with an interesting new Fidelity study, finding that female and Millennial advisors are becoming more and more likely to change firms as they gain experience... and that it's the most successful advisors who are the most likely to switch, raising serious questions about the ability of advisory firms and platforms to retain the best next generation talent. Also in the news this week is a notable lawsuit filed against T. Rowe Price for "excessive fees", claiming that the otherwise-moderately-priced mutual fund company was taking advantage of its retail investors by not doing more to drop the price of its mutual fund expense ratios to match its institutional pricing as its funds grew their AUM.

From there, we have a number of technical financial planning articles this week, including a look at the shifting buying habits of LTC insurance policyowners when it comes to inflation riders (as the use of 5% compound inflation riders has crashed, replaced by 3% compound inflation, guaranteed purchase options, and rising-premium structures), a discussion of whether it's better to "de-risk" a portfolio by owning less in equities or just owning less volatile equities, and a fascinating analysis of whether the shift towards passive investing really risks making the market less efficient or whether it could actually make the economy as a whole more efficient instead.

There are also several practice management articles this week, including: a Pershing Advisor Solutions announcement that it will be launching an open API initiative similar to TD Ameritrade Veo, and is bringing on 3 new "robo" tools to help advisors (SigFig, Vanare, and Jemstep); how Fidelity is building in the exact opposite direction with its coming new Wealthscape platform, designed to make the process simpler for advisors by constructing a single fully integrated solution (while maintaining some open architecture for those who still want to mix and match); tips for why you should hire an intern for your advisory firm and how to do it; and a look at how the ability to connect with people virtually, thanks to the internet and social media, is leading to a rise of "virtual mentors" as well.

We wrap up with three interesting articles: the first is a look at how consumer spending is rising more quickly amongst the top 5% of earners than the other 95%, which is driving rapid growth is a wide range of ultra-elite services to cater to the affluent (even as companies get better than ever at identifying top customers, and figuring out how to better cater to them); the second is a fascinating discussion of "authoritarianism" in American politics, which helps to both explain the sudden rise of Donald Trump's candidacy for President, and suggests that even if Trump loses, the authoritarian voting block may divide the GOP for years to come; and the last is a fantastic reminder than we often remember history as being more modest than it actually is, and that even though the remember with nostalgia the days that the government didn't overspend, markets were less volatile, and everyone had a pension plan, the truth is that the government has run a deficit for most of the past 100 years (except for what turned out to be bubble years in the 1920s and 1990s), monthly market volatility is actually less this decade than any decade for the past century, and even at its peak only 38% of private sector workers were ever covered by a pension (in 1979), compared to a much-larger 64% of people who actively participate in a 401(k) plan today! In other words, even as we lament that times have never been worse, the truth is that they've never been better.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, which this week includes coverage of Wealthbox CRM's five new integration partners (from TD Ameritrade to Office365 and Zapier), a new Orion Advisor Services feature that sends portfolio information to clients via text message, and the launch of a new client portal from Morningstar's ByAllAccounts!

Enjoy the "light" reading!

Weekend Reading for Financial Planners (Apr 30 – May 1)

April 29, 2016 02:46 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a big AdvisorHub expose on the Barron's Top 100 Advisors list, finding that a whopping 60% of the advisors on the list over the past 5 years have had at least one disclosed consumer complaint, regulatory action, or criminal conviction (compared to "just" 7.8% of all brokers who have misconduct records, according to another recent controversial study).

From there, we have a number of technical financial planning articles this week, including a discussion of whether or how the CAPE ratio should be adjusted in today's market environment (and whether reasonable adjustments would show the market isn't as overvalued as the CAPE 10 implies), a new study finding that how stressful a job is may be one of the biggest predictors of whether people keep working well into their 60s, a look at just how ugly the statistics really are for those who play the lottery, and a good reminder that while the data increasingly shows how expensive actively managed funds lag index funds it's still worse to sit on the sidelines and not be invested at all.

There are also several practice management articles this week, including: how the internet made it easier to work virtually, but a surprising number of people still go to the office every day, or are seeking out new "co-working" spaces; the growing pressure on advisory firms to move up the "wealth management pyramid" to provide a greater level of value-add; why the key to success with advisor niches is not just niche marketing but actually crafting niche services; and a look at how the 12(b)-1 fee is in steady decline and being replaced by advisor AUM fees paid directly by the client instead, and how the DoL fiduciary rule may just further accelerate the trend.

We wrap up with three interesting articles: the first looks at how direct-to-consumer FinTech (e.g., robo-advisors) has been the hot area for the past several years, but "InsurTech" may be the next big technology trend (but given the challenges of direct-to-consumer insurance, may be even more likely to go through advisors rather than around them); the second is a look at how even Goldman Sachs is getting into FinTech with a new online bank offering, but that the reasoning may be more about old-world bank liquidity ratios than a next generation consumer push; and the last is a fascinating look at how the entire asset management industry is being disrupted from multiple directions all at once.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, which this week includes coverage of Redtail CRM's announcements of integrations with both Morningstar and Zapier, the new release of MoneyGuidePro's G4, and highlights of the National Association of Broadcasters (NAB) annual trade show with all the latest (easy-to-use and affordable) audio and video equipment that advisors can use to create their own content.

Enjoy the "light" reading!

Weekend Reading for Financial Planners (Apr 23-24)

April 22, 2016 02:44 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the announcement that United Capital is launching a white-label service for advisors called FinLife Partners, intended to offer a form of turnkey financial planning platform that includes United Capital's proprietary financial planning tools, along with a bundled and integrated technology stack of CRM, financial planning software, and more (the solution that United Capital built internally for its own advisors over the past several years!). Also in the news this week was the big release of G4, the newest version of the MoneyGuidePro financial planning software, which has gone through a significant redesign to be able to better facilitate client conversations as an interactive planning tool.

From there, we have several practice management articles this week, including a look at how focusing on "best practices" often leads to just chasing fads and being stuck in the past rather than building towards the future, why it's time for the traditional advisor "elevator pitch" to die (or at least, be substantially reinvented), how the ongoing evolution of advisory firms is making them structure and operate more like large accounting firms, and the emerging battle for the advisor desktop as advisor platforms increasingly position themselves as being first and foremost a technology platform.

We also have a few more technical articles this week, including: the latest research on Millennials, and how they may not actually be risk-averse investors after all (but they do appear to be real-estate and debt averse!); an in-depth look at the growing awareness that the typical risk tolerance questionnaire may be doing a remarkably poor job of actually measuring true client risk tolerance; and a great explainer and analysis on whole life insurance, how it really works, and when it's appropriate (or not) to use.

We wrap up with three interesting articles, all around the theme of a growing focus on consumer spending behaviors: the first is a profile of Peter Adeney, also known as the blogger "Mr. Money Mustache", who has built a tremendous blogging platform around the idea that thrifty living isn't about self-denial but being a better global citizen; the second is a fascinating interview with four men, who have incomes varying from the poverty line to over $1,000,000/year, about their financial challenges and goals (and the fact that all of them, regardless of income, are hoping to double or triple their income to meet their goals in the next 10 years!); and the last is a fascinating "confessional" article from a writer who makes a good middle-class income, but is living from paycheck to paycheck, along with as many as 47% of other Americans who couldn't afford a $400 emergency expense without going into debt, but due to taboos of talking about money and debt are so ashamed it's difficult to even talk about the problem, much less get some help.

Enjoy the "light" reading!

Weekend Reading for Financial Planners (Apr 16-17)

April 15, 2016 02:52 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the interesting announcement that LPL (the country's largest independent broker-dealer and 5th largest RIA custodian) is going to partner with BlackRock to offer its FutureAdvisor "robo" platform to advisors (but, notably, using LPL's model portfolios!). Also in the 'recent news' this week is a good recap of where the DoL fiduciary rule stands, now that it's been issued, and the experts are starting to digest and interpret its finer points.

From there, we have a number of technical financial planning articles this week, including a discussion of the looming "final countdown" for the Social Security file-and-suspend strategy, a research study suggesting that "low vol" equities can improve safe withdrawal rates, an analysis of whether it's better to use fixed or inflation-adjusting annuities for guaranteed retirement income, a look at how the IRA prohibited transaction rules work and what to avoid, an examination of how even "buy-and-hold" investors can take advantage of basic momentum strategies, and a discussion of why the popular "stock buybacks are propping up the stock market" view isn't an accurate reflection of how markets set stock prices.

We wrap up with three interesting articles: the first looks at how you need to handle team meetings a bit differently if you're working with your team "virtually" and not in-person; the second takes a dive into the growing recognition that differences in income are associated with significant differences in life expectancy, but why income inequality itself may not be the direct cause; and the last is a good reminder that being able to generate alpha in a portfolio is about more than "just" being able to predict future trends (as difficult as that already is), but also being able to know what expectations are about those trends (which is even harder), and also predicting what the attitudes about those future trends will be in the future (which is nearly impossible)!

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, which this week includes coverage of the LPL deal with BlackRock's FutureAdvisor platform, a new integration between risk tolerance software Riskalyze and financial planning software Advizr, and the Facebook announcement of "messenger bots" and how they may ultimately impact the world of financial advisors.

Enjoy the "light" reading!

Weekend Reading for Financial Planners (Apr 9-10)

April 8, 2016 02:44 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the huge news this week: that the Department of Labor issued its final fiduciary rule, with some final concessions to Wall Street firms but the substantive core remaining intact... although we may not know for years, until the attorneys get involved, whether or how much more protective the rule will really be.

From there, we have several practice management articles this week, from a look at how to engage in data-driven (digital) marketing tactics, to what you should consider in getting started with digital SEO (Search Engine Optimization) tactics, along with how to edit your advisory firm's bio page, who to recruit to your client advisory board, and why it's increasingly necessary for advisors to check their technology stack for duplicative services they might trim (and whether it's time to start pressuring technology providers to better unbundle their services).

We also have a few more technical articles this week, including: the difference in tax treatment between ETNs versus ETFs (and why ETNs are more favorable in some circumstances); how to use Roth conversions to protect clients from higher future tax rates; and the latest research from Wade Pfau on how best to incorporate a reverse mortgage as part of the retirement income picture.

We wrap up with three interesting articles: the first is a look at how sometimes the greatest blocking points to growing an advisory business and being successful come from our own personal challenges that get expressed in the business; the second is a great reminder that an advisory business isn't a business because you earn a living by working in it... it's only a business when it has value beyond the work that you do yourself; and the last looks at the rising phenomenon of the 'workaholic' and why many seem to feel so compelled to work so hard, and can't seem to escape our jobs as a prison, even as the reality is that more than ever we find our sense of identity and purpose in our work (and not merely the activities we do in our off-work hours, as was the case just a generation ago)!

Enjoy the "light" reading!