Archives Of Weekend Reading For Financial Planners

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with an announcement that there's a new "fiduciary registry" being launched by the Institute for the Fiduciary Standard, with public support from TD Ameritrade and Pershing Advisor Solutions. The new registry aims to highlight firms that proactively embrace a more holistic fiduciary standard than the still-limited versions currently adopted by both the SEC (pertaining to RIAs) and the Department of Labor... and in the process, raising the question of whether firms can still compete by trying to be the 'most fiduciary' as a differentiator at all.

From there, we have several articles on advisor technology this week, including a recent study finding that if advisors want to reach younger "HENRY" clients (High Earners, Not Rich Yet) it's essential to serve them in a more tech-savvy manner, software reviews of new retirement tools Last Advisor and Nest Egg Guru, and a look at the recent announcement that eMoney Advisor is aiming to build out a substantial suite of DoL compliance tools to complement its core financial planning software.

We also have a series of articles looking at the continuing evolution of DoL fiduciary's impact on advisory firms, from a prediction by Ric Edelman that as many as half of all of today's financial advisors will be driven out by the DoL fiduciary rule (clearing the way for more fiduciary- and client-centric advisors to take their place), a look at whether some advisors are selecting applying fiduciary rules in today's environment (e.g., by building fiduciary portfolios but ignoring the more holistic demands of the fiduciary standard on the business), a prediction from Cerulli that the fiduciary standard will lead to more 'cookie-cutter' portfolios and less freedom/flexibility for most advisors, and a prediction that despite the push for economies of scale to handle compliance concerns a look at other industries suggests solo financial advisors and small RIAs will continue to survive and thrive going forward.

We wrap up with three interesting articles, all focused around the theme of the wealthy: the first is an excerpt from a new book entitled "Capital Without Borders", that studied how ultra-high-net-worth clients engage with family wealth managers; the second is a look at how the "pentamillionaire" (with more than $5M in investable assets) is becoming the new millionaire, as there are now more than 1,000,000 US households that have reached the pentamillionaire status (having grown by 38% in just the past 5 years); and a fascinating exploration of how in theory it's the poor who have to work extreme hours and the rich who have time for leisure, but in practice it's turning out that 1-in-5 men in their 20s without a college degree is long-term unemployed (and that 3/4ths of their newfound 'leisure time' is being spent playing video games!), while higher income individuals have experienced the greatest decline in leisure time over the past generation.

And be certain to check out Bill Winterberg's "Bits & Bytes" video at the end, which this week recaps the highlights of a new hackathon for advisor technology development, hosted this week at the 2016 eMoney Advisor Summit.

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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 State Farm is pulling the ability of over 12,000 of its insurance agents to sell securities products (mutual funds and variable annuities) next April when the Department of Labor's fiduciary rule takes effect, implicitly acknowledging their agents are not providing (fiduciary) advice, and redirecting customers to a "self-directed" customer call center instead... a precedent that may or may not be repeated in the coming months as more major firms reveal their DoL fiduciary plans as the April 2017 effective date looms. Also in the news this week was an announcement the Financial Engines, the massive provider of 401(k) managed accounts and retirement investment advice, is pivoting fully into financial planning as it rebrands its 125 Mutual Fund Store branch locations into "Financial Engines Advisor Centers" to provide personal financial advice.

From there, we have several technical articles this week, including a reminder that with open enrollment coming on October 15th it's a good time to review retirees' Medicare Part C and Part D plans, a discussion of why it's so important to ensure that retirement account beneficiary designation forms are up to date (and how it may be impossible to fix a botched stretch IRA after the fact), and a look at all the different ways that long-term care insurance can potentially be deducted for tax purposes (depending on whether it's purchased directly as an individual, or under various types of business entities).

We also have a series of articles on retirement trends around spending and (continuing to) work, from one study that found we're materially happier when we have a substantial account balance in a checking or savings account (even if the cash is 'idle' and not invested), to another that notes new research studies are finding the 'traditional' even spending plan throughout retirement is actually a terrible way to maximize our happiness, how more and more advisors are talking about at least part-time work in "retirement" to help handle today's low-return environment and the uncertainties of a long retirement time horizon, and a look at whether the growing number of retirees choosing to continue work suggests that perhaps a multi-decade retirement shouldn't be the goal in the first place and that instead it's better to simply plan for a series of "Acts" punctuated by "Work Intermissions" instead.

We wrap up with three interesting articles: the first is an article by John Bogle about how the DoL fiduciary rule is here, it's time to get used to it, and its arrival was really just the inevitable culmination of growing consumerism as businesses increasingly have to respond to consumer demands; the second is a fascinating profile of Robert Moses, who was arguably the most powerful figure in the history of New York City, responsible for building many of its most famous bridges, parkways, and landmarks, and who simultaneously exhibited an incredible Competence to achieve results and terrible personal behaviors that made him widely hated (yet still incredibly successful); and the last is a look at the rising role of technology in financial planning, and how artificial intelligence may be able to help advisors have better conversations and create more engagement with clients... an inevitable future that we'll eventually get used to, despite the fact that now it still seems a bit "creepy"!

And be certain to check out Bill Winterberg's "Bits & Bytes" video showing the awards announcements for all the Best In Show winners of the 2016 Orion Fuse hackathon, including Best Work Saving Development from Orchestrate, Best Business Intelligence from industry newcomer Sisense, and the overall Best In Show winner from compliance provider RIA In A Box!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the announcement that the FPA is forming a new Member Advocacy Council, intended to poll its CFP professional members and advocate on their behalf when there are concerns regarding the activities of the CFP Board and other regulators. Also in the news this week was the decision of Morningstar to expand its five-pillar qualitative Analyst Ratings to ETFs, which will be evaluated together with mutual funds in the same investment category... and further blurring the already disappearing dividing line between mutual funds and ETFs (which may only accelerate further with the looming DoL fiduciary rule).

From there, we have several financial advisor marketing articles this week, from tips on how to use content marketing to attract referrals, how financial advisors can write and promote a book, the importance of having a formal structure in how you respond to a prospect inquiry (especially via email), and how to better manage situations when a client refers you to a prospect who isn't actually a good fit (given that it can be very awkward to say "no").

We also have a few more technical articles, including: a look at the ever-growing range of retirement income strategies using reverse mortgages; the problem with some liquid alternative mutual funds, that are using swap arrangements to mask their true expense ratio costs; how aggressive allocations to volatile small cap stocks can actually enhance a client's sustainable withdrawal rate (often quite materially); and the key details that advisors must know about the new once-per-year IRA rollover rule (which just took effect in 2015).

We wrap up with three interesting articles: the first looks at how getting more physically active with exercise can not only help to improve physical health, but can improve mood and stir creativity and a cognitive spark; the second is a good reminder that the challenge where some clients don't even know their goals (which makes it hard to plan for them!) is not unique to clients, and that in reality financial advisors often get stuck in their own ruts of not being able to clearly articulate their goals and vision (which makes it hard to build the right business); and the last is a fascinating exploration of the idea that the very nature of setting goals may be fundamentally flawed, and that the real focus should be on continuous improvement and growth without actually setting goals (which just make you feel like you're failing until you reach them, only to usually be unsatisfied upon achieving the goal anyway!).

And be certain to check out Bill Winterberg's "Bits & Bytes" video showing the highlights of Fuse 2016, a hackathon coding event hosted by Orion Advisor Services that brings together the developers from a wide range of advisor FinTech companies to spend three days coding newer and better integrations for advisors to use!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a celebration of the index fund, which turned 40 years old this week, as "Bogle's folly" of launching an index fund in the era of stock-picking "gunslingers" is now decimating the very same world of actively managed mutual funds and stockpickers several decades later, as Vanguard passes $3 trillion in AUM and shows no signs of slowing!

From there, we have several technical planning articles this week, including: the newly announced process from the IRS to fix a botched IRA rollover, where individuals can "self-certify" that a rollover should still be eligible, as long as the reason for missing the deadline is one of 11 specified reasons; the trends in long-term care insurance policies, which have become significantly more restrictive in recent years as LTC insurance companies struggle for profitability; how variable annuity companies trying to manage their own risk by requiring "managed volatility" funds and conservative asset allocations are leading to a decline in annuity sales as investors bristle at the restrictions; and how Millennials are introducing a new stage to the traditional investing lifecycle, which isn't just about Growth, Stability, and Distribution, but now also includes a "Recovery" phase where Millennials spend years digging out of long-term debt just to be able to start to save and grow in the first place!

We also have a few articles about the Department of Labor fiduciary rule, from a look at how tech providers are trying to step up to help advisors solve their fiduciary challenges even though advisors aren't asking for new technology solutions (outside of the independent broker-dealer community), to a look at the myths and misconceptions that still surround the fiduciary rule, how large firms are starting to hire third-party independent research firms to help substantiate their investment recommendations (and defend against potential fiduciary liability in the future), and why advisors need to review their E&O coverage to ensure that it will actually cover their potential fiduciary liability once the rule kicks in next April.

We wrap up with three interesting articles: the first provides a fascinating look at the history of financial planning itself, and the origins of the associations and institutions that support financial planning and financial planners today; the second is a new research study on how we decide what to delegate, finding that we're most likely to delegate decisions where we want someone else to take the blame and responsibility for a potential bad outcome (which is great for the delegator, but not so great if you're the financial advisor to whom the client's decision was delegated!); and the last is a review of the new book "Success and Luck: Good Fortune and the Myth of Meritocracy" by economist Robert Frank, which notes that while being talented and hard working still matters to have a chance to succeed, it's increasingly the role of luck to determine who the top winners actually turn out to be (though because "luck favors the prepared", your best chances still come from trying as hard as you can!).

Also, be certain to check out the video at the end, a speech by philosopher Alan Watts about how life isn't like travelling - where it's about the journey and the destination at which you arrive - but is more like music, where the whole point is not to get anywhere, but simply to enjoy the composition itself. Which has profound implications for financial planning, which in today's world is all about treating life goals as a journey to a destination...

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition leads off with the big news that the Department of Labor's new rule on state-run retirement plans is finalized, and is expected to usher in a new era of states providing for automatic enrollment IRAs for employees who don't have access to employer retirement plans... and raising the question of whether businesses may soon stop offering 401(k) plans themselves, and just allow the state to fill the void instead.

From there, we have several practice management articles this week, from Bob Veres' advice about how to evolve your practice to better adopt technology and start bringing in the next generation of clients, to Ric Edelman's guidance on how to work with the media, a Joel Bruckenstein review of Advicent's new Narrator client portal, and a look at the current dynamics of advisory firm buyers and sellers (and David Grau's new book on advisory firm valuations).

We also have a few more technical articles, including: a new study finding that risk tolerance actually is relatively stable (implying that clients with volatile behavior during times of market stress may be doing it for different reasons); a review of the rules for how the Expected Family Contribution (EFC) is calculated for college financial aid; how the Initial and Special Enrollment Periods work for Medicare; and coverage of newly proposed Treasury Regulations that would severely crack down on the use of valuation discounts for family businesses, and curtail most family limited partnership (FLP) planning strategies.

We wrap up with three interesting articles: the first looks at the looming challenges that FINRA faces in trying to justify its existence and deal with a declining membership base of broker-dealers as CEO and Chairman Richard Ketchum retires, to be replaced with a new split-role CEO and Chairman; the second is a somewhat comic look at the things that some "financial advisors" say that suggests they're really still operating as salespeople (and how you need to really change your way of thinking to fully transition to being an advisor); and the last is an interesting historical look at the roots of the fiduciary duty, which actually traces back more than 1,500 years to Roman times, as even then it was recognized that experts in positions of trust need to be held accountable to a higher standard.

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 highlighting LPL's technology roadmap after the recent LPL Focus 2016 national conference (including its new "robo"-for-advisors Guided Wealth Portfolios), FutureAdvisor signing a deal with US Bank (the 5th largest commercial bank in the US!), and Betterment's new partnership with Uber that will allow Uber drivers to open an IRA directly from the Uber app!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the news that just two weeks after the Social Security Administration launched a privacy protection initiative that would require seniors to use two-factor authentication via their cell phones to log onto MySocialSecurity, it's backing off the initiative and making it optional, as senior advocacy groups have pointed out a large number of seniors can't even receive a text message. Also in the news this week is a new SEC filing from Vanguard that it's exploring the potential launch of a new series of transparent active ETFs, bucked the trend of competing asset managers who have insisted that active ETFs must be more opaque to prevent front-running.

From there, we have several financial advisor marketing articles this week, from a look at how to find the "perfect" client fit (through specialization), the "must have" elements for a modern financial advisor website, the indirect reasons why many financial advisors are struggling to get new clients (without realizing the turn-offs they're unwitting conveying), and a discussion of whether sponsorship deals really pay off as a form of financial advisor advertising (the short answer: yes, but only if you leverage it for networking purposes).

We also have a few practice management articles this week, including: various types of personality assessment tools you can use when hiring a new financial advisor (from DISC and StrengthsFinder to Caliper and Profile XT); an overview of the marketplace of RIA strategic acquirers and what the different types do (and don't) provide in the deal for those who want to sell; and why an employee "sponsorship" program is even better than just establishing a mentorship relationships for your top employees.

We wrap up with three interesting articles: the first is coverage about a new study that finds it really is detrimental for clients to watch the financial media, as even when we know the quality of the information is low, we still can't help but give a disproportionately high weighting to the "noise"; the second is a critique of FINRA's big push for its BrokerCheck system, suggesting that more promotion of BrokerCheck when FINRA still hasn't resolved issues from expungement of serious complaints to not verifying or giving context to frivolous ones means FINRA's efforts are primarily about helping FINRA show its relevant, rather than actually help consumers; and the last is an striking suggestion from financial advisor Tim Maurer about why it's better to plan to take one long 10-day vacation, rather than splitting up two weeks of vacation throughout the year - most substantively, because with the rapid pace of today's work environment, it takes at least half of a 10 day vacation just to unwind and relax enough to actually enjoy it and harvest its restorative value!

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 two big integration deals that robo-advisor-for-advisors Vanare recently announced (with Redtail CRM and Apex Clearing), and enhanced calendar and contact data gathering features in Salesforce (from its Tempo and RelatedIQ acquisitions).

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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 7 major universities, including Duke, Yale, and MIT, were all sued this week in class action lawsuits over the investment and record-keeper expenses of their 403(b) plans, opening a new chapter in the ongoing ERISA backlash against large employer retirement plans for failing in their fiduciary duty to manage their costs for employees. Also in the news this week was discussion of the ongoing shifts in money market funds, in preparation for new rules rolling out in 2 months that could introduce redemption fees and even floating NAVs for some money market funds.

From there, we have a few practice management articles, including: a review of upstart RIA custodians Equity Advisor Solutions and Folio Institutional; how TD Ameritrade continues to maintain its lead as the RIA custodian with the widest breadth of integrations thanks to its open architecture VEO platform; how the rising tide of ERISA fiduciary lawsuits may be shifting 401(k) plans to prefer 3(38) outsourcing providers over 3(21) plan consultants; and how advisory firms should consider measuring not only the productivity and efficiency of their financial advisors, but also their operations staff.

We also have a several more technical articles, from a look at what questions and issues to consider when selecting a donor-advised fund, to how shifts in the working habits of women and mothers have decreased the relevance of Social Security's "family" benefits (and whether a new caregiver credit should be introduced for working mothers), and whether retirement income strategies that combine portfolio withdrawals and laddered annuity purchases may be more effective than either is alone.

We wrap up with three interesting articles: the first looks at how financial advisors need to burnish their public perception by showcasing the best of what financial advice can provide (to combat the slew of negative perceptions about the broader financial services industry); the second urges financial advisors to be more careful about the language they use to describe themselves, noting that if we can't appropriately distinguish between the profession and the industry, between advisors and salespeople, and between clients and customers, then what chance do consumers and the media have; and the last calls on professional financial advisors to adopt and embrace the DoL fiduciary rule, noting that all true and bona fide professions have a fiduciary duty to clients, and that the implementation of a fiduciary rule for financial advice could mark the starting point for the true emergence of the financial planning profession.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the news that FINRA is beginning an exam sweep of Business Development Companies, raising questions of whether nontraded BDCs may have similar issues to nontraded REITs, which is concerning given how sales plummeted for nontraded REITs after regulators last year applied new rules requiring greater transparency and disclosure. Also in the news this week is a discussion of Andy Millard, a CFP certificant and Democrat from North Carolina who is running for the House of Representatives, who is a long shot running in a district that hasn't voted for a Democrat in the House since 1960, but could become the first CFP professional elected to Congress (which would be very important given the potential for additional regulatory scrutiny of financial advisors in the coming years).

From there, we have a few practice management articles, including: how profession-based niches may be too narrow for some, and whether life-stage-based niches that are a bit broader may be better; how the rise of independent advisor platforms and aggregators may have done much to accelerate the breakaway broker trend, but may be asking too much of a breakaway's revenue or profits to be sustainable; tips for attracting and retaining Millennial financial advisors; and the importance of understanding exactly how "Assets Under Management" is defined for regulatory purposes (and how just giving financial planning advice about a client's whole portfolio doesn't necessarily constitute Regulatory AUM).

We also have a several more technical articles, from a look at how traditional long-term care insurance sales continue to decline (now down a whopping 85% in policies sold since the year 2000) even as hybrid life/LTC policies are on the rise (though they have problems of their own), to an analysis of whether those claiming Social Security at age 62 are making a mistake (or if in reality early claimants are primarily those who have to claim early due to an unexpected employment or health shock), and a good primer on the various types of student loan forgiveness programs (for Millennials with student loan debts who are willing to work in the teaching, government, or non-profit sectors).

We wrap up with three interesting articles: the first looks at how willingness to delay financial gratification, even amongst seniors, is a good predictor of how effective they were at being savers and accumulating wealth (though it remains unclear whether such 'financial patience' is learned or genetic); the second provides a great reminder about how finding a job you love not only can make you happier and more satisfied, even if it pays less, but may be so motivating that it helps you to reinvest in your training and education and become an expert, which can lead to higher income as well; and the last looks at the research on why it's important to set not just goals that guide how you must incrementally change to improve, but to set Big Goals that force you to recognize the substantive changes you may need to make to achieve sustained and large improvements in your business (or personal life) over time.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with news on the Department of Labor's proposal that would clear the way for state-based automatic enrollment into IRAs for employees of small business, which has been sent as a final proposal to the Office of Budget and Management (OMB) and is expected to be approved within a month or two, ushering in a new era of accessibility for automatic-enrollment retirement savings.

From there, we have several additional articles on the ever-shifting regulatory landscape for advisors, including a look at what RIAs will have to do to comply with the Department of Labor's fiduciary rule (which will have less impact on RIAs than broker-dealers, but still introduces new compliance obligations), how the DoL's "grandfathering" rule allowing existing commission trails to continue may have the unintended consequence of limiting the ability for registered reps to change broker-dealers next year, and a discussion of the SEC's looming push for an initiative that would start using third-party examiners to increase oversight of RIAs or whether the agency should wait and study current RIA practices to understand which ones really do (or do not) need greater oversight in the first place given the modern role of independent custodians that RIAs work with.

We also have a few practice management articles this week, including: how advisors can improve their marketing by being more transparent about their services and pricing; tips for dealing with introverted vs extroverted prospective clients, and how to frame questions differently to better engage them; and how connecting with and providing even basic advice services for clients' children is associated with a higher likelihood of getting referrals (though it's not clear if that's because helping the children drives referrals, or if clients who refer are more likely to push their advisor to work with their children, too).

There are a couple of investment-related articles as well, from a look at how FinaMetrica (known for its academically rigorous risk tolerance questionnaire) is pairing with both RiXtrema and Macro Risk Analytics to provide more robust tools to analyze a client's current portfolio and compare it to their risk tolerance, a discussion of whether near-zero or negative yields could actually be a sign of prosperity and not looming global deflation, and a look at how asset managers are still struggling to gain traction with actively managed ETFs.

We wrap up with three interesting articles: the first is a discussion of how the media's focus on "newsworthy" events, combined with ever-improving access to information about what's happening in the world, may be causing us to mistakenly believe the world is getting worse, when in reality it's never been better (we're just more aware of a smaller number of bad events than we were in the past); the second is an interesting study from the Journal of Financial Planning finding that advice on savings/investments and tax planning really do lead to higher financial satisfaction, but advice regarding debt, mortgages, and insurance does not (unless it's all paired together holistically); and the last is a fascinating look at how those who enjoy their work the most tend to have the best career progress, the most retirement readiness, yet are the least interested in retiring (because they enjoy their work!), while those who are most miserable in their jobs are the ones who most want to retire but may struggle with earning enough to achieve that retirement, suggesting that the real key is not in doing better "retirement planning" but in helping to guide clients to more fulfilling careers in the first place.

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 a flurry of "robo-advisor" news (from the launch of Fidelity Go to announcements that TD Ameritrade and Wells Fargo are working on "robo" tools), along with news from Envestnet/Tamarac on the roll-out of its "Client Portal 2.0", and MoneyGuidePro releasing a new DoL fiduciary software tool called "Best Interest Scout".

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Enjoy the current installment of "weekend reading for financial planners" - this week kicks off with the news that the Department of Labor will soon be issuing some "follow-up" clarifying guidance about next year's fiduciary rule, as the DoL formulates a response to the most frequently asked questions coming in from advisors and financial institutions (relating primarily to advisor compensation and large-firm financial incentives related to the products they make available).

From there, we have a few articles related to advisor technology, including a good overview of the latest trends and developments in the advisor tech landscape from Joel Bruckenstein, coverage of the major deal announced last month between Vestorly (which provides content curation tools for advisors to drip market to clients and prospects) and Dow Jones (which will provide Wall Street Journal and other content to Vestorly users), and a review of financial planning software provider FinanceLogix.

We also have a few investment-related articles this week, from an analysis of the trends in securities lending by asset managers, to a look at how capital market assumptions for retirement planning projections could be adjusted to account for sequence of return risk, an examination of how mutual funds and ETF providers are preparing for the change in September when REITs will be removed from financial services sector and placed into their own sector instead, and two articles looking at how many of the foundational principles of investing and modern finance are breaking down as government bond yields keep trending lower and the "risk-free" rate on government bonds is approaching zero or even going negative in some countries (leading to strange outcomes where bond returns are primarily driven by capital gains, and investors are buying stocks for yield!).

We wrap up with three interesting articles: the first looks at a recent Capgemini study on the behaviors of young millionaires, finding that they are drastically more likely to hold cash (as much as 1/3rd of their net worth!), are more likely to invest in alternatives and diversify out of just holding 'traditional' stock portfolios, and are less likely than older millionaires to engage with a financial advisor; the second is a review of a few "savings" smartphone apps, like Qapital, Digit, Dyme, and Acorns, which are trying to use technology to make saving easier and more frictionless (the technology equivalent of modern 'pay yourself first' savings strategies); and the last is a fascinating study that finds financial stress and economic insecurity can actually lead to increased feelings of physical pain, which may help to explain the country's rising epidemic of prescription pain medications, and also raises interesting questions about the potential role and value of having a good financial planner!

Also, be certain to check out the video at the end, the trailer of an interesting new "documentary" movie from Mark Hebner of Index Fund Advisors and Robin Powell of Evidence-Based Investor, on the issues with Wall Street and active management and the ever-rising role of index funds (somewhat controversially titled "Index Funds: The 12-Step Recovery Program For Active Investors").

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