Archives Of Weekend Reading For Financial Planners

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a slew of notable "robo-advisor" news, including Betterment raising a whopping new $100M round of venture capital as the company positions itself as the 'leading' robo-advisor, the announcement that Wealthfront is launched the "3.0" version of its platform with an increasing focus on using artificial intelligence to power advice, and the news that Fidelity is expanding its new robo-advisor "Fidelity Go" to a wider group of beta users with the plan to roll out to the broader public later this year.

Also in the advisor technology news this week was the 'surprise' announcement that Schwab would be discontinuing its own custom version of Salesforce that was bundled into its OpenView Integrated Office platform (in what is being dubbed a failure of bundled proprietary software over open architecture solutions), and the rollout of LinkedIn's new "ProFinder" service where financial advisors can list themselves (amongst other types of freelancers) for other LinkedIn users to find.

From there, we have several technical articles, including: a look at whether we've gone "too far" in using Monte Carlo analysis for retirement planning (from an early Monte Carlo analysis champion, Moshe Milevsky); a discussion from Wade Pfau about his 'guiding principles' in his own retirement planning research; an analysis of whether deferred income annuities (DIAs) are actually better than single premium immediate annuities for retirement planning (or not); the rise of a "no-gift" loan strategy for funding an Irrevocable Life Insurance Trust (ILIT) to avoid dealing with Crummey powers; and an analysis of whether actively managed small-cap funds really add long-term alpha or not.

We wrap up with three interesting articles: the first is a look at how the Exchange-Traded Fund (ETF) came into being, a solution indirectly proposed by the SEC in its post-mortem analysis of how the crash of 1987 could have been avoided (an ironic origin, given that the SEC is now concerned about the mini-ETF-crash from last August!); the second is a great overview of the leading research on the links between money and happiness, which finds that money really does have a role in increasing our life satisfaction, but with less and less impact as income rises, and with less benefit than other non-money changes we can make in our lives (e.g., improving our health and relationships); and the last is a powerful reminder of how self-improvement is not something that happens all at once (even if we want it to and try to mentally commit to it), but instead is a process of gradual improvement, where getting just 5% better every year, compounded, can make us 400% wiser and better over the next 30 years!

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 discussion of Betterment raising $100M of venture capital at a $700M valuation, Fidelity's testing of Fidelity Go, and the Schwab Advisor Services decision to discontinue its OpenView Integrated Office custom version of Salesforce.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the big industry news that the CFP Board is modifying its Terms and Conditions, and beginning in May will require all CFP certificants that have a dispute with the CFP Board to go through mandatory arbitration, forever ending the possibility that the CFP Board will have to defend another case like Camarda in court. Also in the news this week is the continued escalation of life insurance companies changing internal costs to make up for losses due to low interest rates, which has now triggered a class action lawsuit being filed against Transamerica (though it's certainly not the only company engaging in the practice!).

From there, we have a couple of technical articles this week, from a discussion of the importance of Active Share (the more unique the portfolio, the greater its upside and also downside potential), to a look at how to read through a Financial Aid Award letter (as many have just started going out to college students matriculating in the fall), as well as a look at the practical challenges of using an HSA as a supplemental retiree medical savings account, and the growing concern from the "father of Smart Beta" Rob Arnott that parts of the Smart Beta universe may be in a self-induced bubble that could lead to a Smart Beta crash (even if the underlying concept remains structurally valid when done properly).

We also have a couple of financial technology articles this week, including the launch of a new portfolio design and risk analytics tool called Totum Wealth, some helpful reminders about how to stay on guard against potential cyberattacks, and a discussion of the big #FinTech news that Intuit is going to be shutting down its APIs, potentially leaving a number of account aggregation and client portal services in search of a new partner (and while there are alternatives to choose from, including Intuit's suggested replacement Finicity, advisors using software relying on Mint APIs may still find their clients soon have to reconnect all their accounts just to get up-and-running again!).

We wrap up with three interesting articles: the first looks at how "99%" of networking events are a waste of time, and the real ways to leverage networking value and opportunities (first hint: when it's time for sessions, take a nap, so you can be awake and refreshed for the actual social time for relationship-building!); the second is an interesting hypothetical letter from a Millennial to her parents' advisor, providing a great reminder of the ways that advisors could (and often fail to) engage the children of their clients; and the last is a discussion of the challenge in figuring out, when you're raising children, how to define what is "Enough", particularly for a family that is affluent enough to afford whatever their kids want, and have to introduce an "arbitrary" line to tell them no, create some financial discpline, and hopefully instill values of fiscal responsibility.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a new industry study from Fidelity, finding that the looming Department of Labor fiduciary rule isn't just stressing out broker-dealers, but is making RIA firms nervous too, as more and more wonder exactly what the new burdens of compliance will be, and whether new investments in technology will be necessary to bridge the gap. At the same time, also in the news this week was a fresh warning from FINRA that it is beginning to scrutinize how firms are adopting "robo-advisor" tools, pointing out that automated technology doesn't eliminate a firm's due diligence obligations to understand the algorithms being used, how solutions are recommended, and whether they are really suitable for the investor.

From there, we have several practice management articles this week, including: a look at the different types of advisor leadership styles, which matters more and more as an advisory firm grows and the role of the founder shifts from advisor and business developer to true CEO and leader; a discussion of the recent regulatory change that some RIAs are no longer required to issue annual privacy notices to clients (but why it's so easy to do they should continue to provide them anyway); a look at the new Investopedia Advisor Insights platform that aims to pair financial advisors up to answer consumer questions (and whether it is really likely to generate any business for advisors or not); and a handy checklist of what you should have in the "introductory package" of marketing materials that you provide to prospects and centers of influence.

We also have a couple of technical articles this week, from a discussion of which clients will be impacted by the coming changes to Social Security claiming strategies (with the first deadline kicking in on April 29th), to an analysis of how the line of credit is calculated for a reverse mortgage (and why it's better to establish one sooner rather than later, especially if you think interest rates will rise), and also a look at how the way advisors are using Monte Carlo analysis may be inappropriately biasing the results in an overly favorable manner (by failing to consider the potential sampling error of using historical data in the first place).

We wrap up with three interesting articles: the first raises the question of whether the real robo-advisor "unicorn" (a startup that achieves a $1B valuation) may not be the popular startups of Wealthfront or Betterment, but the lesser-discussed Acorns that may has a paltry $73.6M of AUM but is currently on track for a whopping 2 million users by the end of 2016; the second looks at the popular "mandatory arbitration" clause in advisory firm agreements, and raises the question about whether this is really a valid consumer protection (or in the case of an RIA, an outright breach of fiduciary duty but not allowing clients at least the option to go to court); and the last is a look at how, even as critics suggest the Department of Labor has acted "too fast" in its fiduciary proposal, the movement towards a fiduciary duty for financial advisors is actually a global phenomenon, already enacted in the U.K. and Australia, and pending in Canada, for which the current fiduciary proposals in the U.S. are actually "mild" by comparison (which in turn suggests that the DoL's fiduciary rulemaking may just be the beginning of the changes to come!).

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the big announcement of Salesforce Financial Services Cloud, a new contender in the world of advisor CRM as Salesforce looks to build on its success in financial services by building its own proprietary customized solution for financial advisors.

From there, we have several technical articles, including some good reminder tips for those doing "last-minute" IRA contributions in the coming weeks, and a review of the issues to consider for early retirees who want/need access to health insurance after work and before being eligible for Medicare at age 65 (now more feasible than ever, thanks to the new health insurance exchanges). We also have two investment-related articles, one discussing the launch of Eaton Vance's new "exchange-traded mutual fund" (the ETMF) and how it's similar-but-different to an ETF, and the other looking at how high-dividend strategies may have strong performance but value-oriented strategies (regardless of the dividend) appear to perform even better.

There are also a few technology-related articles this week, including software reviews of a new digital content marketing service called Financial Media Exchange (FMeX), a new platform for advisors to engage in options trading called Vest Financial, and the looming emergence of facial recognition software that advisors might use to help understand their prospects and clients better (and how they emotionally react to money and financial issues). There's also a good review of the technology offerings of the "smaller" and start-up-friendly RIA custodians, including TradePMR, SSG, and Scottrade Advisor Services.

We wrap up with three interesting articles: the first is a look at why investors tend to stray from their investment principles (hint: they convince themselves it's "close enough" to their principles that it's ok to fudge a little, even though it's often quite a material divergence); the second is a look at how our world is becoming so abundant, from free media and entertainment to excesses in many commodities, and how it may be driving malinvestment (and that a 'healthy' recession to purge the excesses would be good, before the real economy is harmed!); and the last is a discussion of whether the explosive rise of indexing over the past decade may be approaching the point that it's starting to distort the market prices for stocks and commodities, and what we might need to do in the future to correct the situation if we want to preserve cost-effective investment strategies but ensure healthy markets.

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 discussion about the new release of Salesforce Financial Services Cloud (and his skepticism of its significance!), and the announcement that Betterment is adding account aggregation to its retail and institutional platform.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a controversial new industry study finding that not only do 7% of all "financial advisors" (those registered in FINRA BrokerCheck) have a serious misconduct event in their records, but the overwhelming majority of them remain in the industry even after committing their infractions, with some firms reported to have as many as 1-in-5 advisors with a misconduct disclosure. Also in the news this week is the launch of Morningstar's new ESG sustainability ratings for 20,000+ mutual funds and ETFs, as the rise of impact and socially responsible investing continues.

From there, we have a slew of articles related to business development and growing an advisory firm, including: a discussion from Mark Tibergien about whether advisors are paying too much in using solicitor agreements to get referrals; how some advisors have had great success hosting a radio show to build their clientele (but that many advisors have found radio to be an expensive failure, too); what surveys of clients who refer tells us about why they refer and how to increase referrals (hint: asking them for referrals is not the way to do it!); how to develop strategic alliances to try to generate more high-quality high-net-worth referrals; the importance of letting your own personality and "style" shine through in your marketing and business development; and how one 26-year-old woman succeeded in getting ultra-high-net-worth clients after joining Goldman Sachs by embracing a business development attitude across both her professional and personal life.

We wrap up with three interesting articles: the first is a look at how people who feel powerful and confidence are more creative, process information better, and focus more effectively... until they're put in a group with other powerful people, where the results get worse as the leaders jockey for leadership status and lose focus on the purpose of the group; the second is a Journal of Financial Planning study showing how some people have a naturally high propensity to plan, while others will struggle to engage with a financial planner until/unless they are better trained on how to plan for themselves; and the last is the review of a survey study of financial advisors and their own tendencies towards financial planning, which finds that fewer than half of all financial advisors even have a financial plan of their own, and a mere 4% engage an outside financial planning professional to assist them, suggesting at the best that advisors are like the proverbial "cobbler's children with no shoes" neglecting their personal situation (and at worst may be hypocrites about the value of financial planning itself?).

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 discussion about the rise of "ransomware" cyberattacks on financial advisors, LPL Financial's coming robo-advisor tool, and the new Morningstar ESG sustainability ratings tool!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a new industry study from PIABA that finds a whopping 1/3rd of all FINRA arbitration settlements went unpaid, often because the related brokerage firms were undercapitalized and underinsured to be able to make good on any client harm that might have been caused (which is, notably, an issue for many RIAs as well!). Also in the news this week is a recap on the total merger and acquisition (M&A) activity for independent RIAs in 2015, which found a 37% jump in deals and a veritable 'explosion' of mega-RIA ($5B+ AUM) transactions (as well as a growing number of small-to-mid-sized advisory firm acquisitions).

From there, we have several practice management articles this week, including: a discussion of the slowly growing trend of compensating employees in advisory firms with equity as compensation; how to grow an RIA firm with formal paid-solicitor referral agreements (and the applicable compliance rules to consider); the importance of considering not just what your advisory firm value proposition is, but whether you're effectively demonstrating and reminding clients that you're actually delivering on it; and a look at the growing issue of advisory firms struggling to deal with their clients impacted by dementia (and how ultimately the advisor may be in the best position to help clients and their families through such situations).

We also have a couple of technical articles this week, from a discussion of how many Social Security Administration offices are mishandling or outright refusing to process file-and-suspend requests ahead of the looming April 29 deadline before the rules change (such that the SSA had to issue an "Emergency Release" last week to provide guidance for its field offices), to a deep dive into Fidelity's Health Care Cost Estimate for retirees, and how the growing demand for securities lending for hedge fund short sellers is becoming so profitable that a number of small-cap ETFs are now beating their indices and effectively have a negative expense ratio (where the short-sellers "pay" the investor a positive fee just to invest in the index fund!).

We wrap up with three interesting articles: the first looks at a time management strategy of deliberately scheduling meetings and conference calls to last 30 minutes (where possible), as the compressed time can actually force people to be more productive and focused; the second is a look at the growing volume of research suggesting that "dressing up" for work can actually help you be more successful (as it both increases our self-confidence, and may positively impact others' perceptions of us); and the last is a nice remidner that just as many of us have morning rituals to get our days started, it's equally important to have an evening wind-down ritual to wrap up the end of your day in a positive way!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a new study out from Aite Group that finds the average CFP certificant is becoming significantly more successful than the non-CFP, with 40% higher average revenue in total and a whopping 70% higher average revenue per client as CFPs are showing themselves more able to attract higher net worth clientele.

From there, we have a couple of practice management articles this week, from strategies to create a retention plan for your advisory firm staff (ranging from bonuses to employee perks), to a checklist of the little things to consider in evaluating whether your physical office space is making a good first impression on prospective clients, and an interesting discussion from Mark Tibergien about whether much of the conventional wisdom about practice management trends for financial advisors is wrong (e.g., despite the buzz on "fee compression" the top advisory firms have actually been raising their fees by 5-10bps in recent years!).

We also have a number of advisor technology articles, including: the big news from the T3 Advisor Technology conference that Fidelity is launching "WealthScape" (which will include a new Fidelity proprietary portfolio accounting and performance reporting solution, in competition with Advent, Black Diamond, Orion, and others); a look at the evolving landscape of RIA custodian technology at Pershing, Schwab, and Raymond James; issues to consider for advisory firms looking to adopt e-signatures in the business; two new technology solutions that can help address compliance issues (including MyRIACompliance from RIA In A Box, and an about-to-be-launched RIAglass from MarketCounsel); and a look at how wirehouses have been reinvesting heavily into technology as well and are closing the gap on the independent advisor technology tools.

We wrap up with three interesting articles: the first is a discussion about how to explain that you're a fiduciary advisor, recognizing that raising the point about how other advisors are not fiduciaries could cause prospects to wonder about your own motives as well; the second explores the challenge that for most advisors, even if their ideal client showed up on their website to check them out, there's no way for the client to know they're the right fit; and the last explores the question of whether advisors are being hypocritical by insisting that "everyone" should have a financial planner to have a third-party perspective on their family financial issues, even as most advisors fail to pay for their own financial planner to get that very service to themselves.

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 coverage of the Technology Tools for Today (T3) Advisor FinTech conference, including Riskalyze's announcement of a new "Check-In" feature, eMoney Advisor's new client experience portal, and the coming new wealth management platform from Fidelity called Wealthscape!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a scathing letter submitted by Senator Warren to the Department of Labor, pointing out that while insurance and annuity companies have insisted that a DoL fiduciary rule would be disastrous, when legally obligated to disclose the rule's true impact to shareholders on earnings calls the major insurance companies have confessed that the rule will have "no significant impact" on their companies and that they're ready to adapt as necessary (which Warren uses as leverage to encourage OMB to quickly approve the DoL rule).

From there, we have a number of practice management articles this week, including: a consumer study finding that consumers might not actually be as resistant to higher advisor fees as most advisors fear (at least, for those providing real value as advisors!); best practices tips for retaining new associate advisors in a growing firm; more best practices advice about setting compensation for advisory firm employees (and dispelling some compensation myths, such as why it's not necessary to automatically give an annual cost-of-living adjustment); how advisory firm owners may be too quick to "embrace failure" rather than taking the time to make prudent business decisions; and how elite advisory firms are echewing traditional wholesaler arrangements with asset managers and instead are looking for more sophisticated support for their businesses and clients.

We also have a couple of technical articles this week, from a look at the recent Bipartisan Policy Center proposal to "fix" the country's long-term care issues with a combination of shorter-term LTC insurance plus a Federal backstop program for large claims, the reasons why clients should consider a revocable living trust besides just probate avoidance, and how Socially Responsible Investing (SRI) actually does appear to provide long-term outperformance (though it may just be because such funds tend to overweight the "quality" factor).

We wrap up with three interesting articles: the first is a discussion of how a subset of robo-advisor investors are actually high net worth individuals (and not Millennials), raising the concern for traditional brokerage firms that they must soon launch competing robo-advisor solutions or risk a rising tide of client outflows; the second is a dive into the research on not just the behavioral finance biases that cause clients to make poor decisions, but also some tips on what to do about it; and the last is some guidance about how advisors who feel "out of control" in their lives and businesses may need to take a hard look at their client capacity and whether they are simply trying to service more clients than they possibly can.

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 playlist of all the video highlights from his live coverage of the Technology Tools For Today (T3) Advisor FinTech conference!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a new industry white paper finding the ongoing shift of advisor compensation from commissions to fees has reached a crossover point, where fees now top commissions as the primary advisor revenue source (as trend that may only accelerate as the Department of Labor's fiduciary proposal rolls out later this year).

From there, we have a number of practice management articles this week, including: a look at the history of the Rule 206(4)-1 limitation against testimonials and what to watch out for; tips on communication not with potential new clients but existing ones; a look at what advisors serving ultra-high-net-worth clients are providing as "value-added" services; a review of how some value-added services and "perks" are being adopted by a wider range of advisory firms (not just those serving the super-rich); and a look at how mutual fund fees continue to be squeezed, and whether an advisor's AUM fee may be next (though the short answer is "no", probably not, because it's still so hard to comparison-shop advisors!).

We also have a couple of technical articles this week, from a look at the latest research on retiree spending patterns which finds that affluent clients tend to under-spend in retirement (creating a "consumption gap" between what they could spend and what they actually do), a look at the coming Actuarial Guideline 49 rules next month that will curtail the return assumptions used in sales illustrations of equity-indexed Universal Life (and whether the policies may still be over-projected), and a review of the Qualified Charitable Distribution (QCD) rules from IRAs now that they've been made permanent by last December's "Tax Extenders" legislation.

We wrap up with three interesting articles: the first is a look at why, despite all the ongoing warnings of disruption, big companies continue to get disrupted by start-ups that build on top those big companies' existing technology or service stack; the second is a look at the concept of "Deep Work" and how Bill Gates had incredible productivity by being able to apply an intense focus for extended periods of time; and the last explores how the biggest factor that drives our success is our personal engagement with what we're looking on (and how to refine it if you're not feeling fully engaged yourself).

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 playlist of all the video highlights from his live coverage of the TD Ameritrade LINC National Conference!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the breaking news that the Department of Labor's latest fiduciary proposal has in fact been filed with the Office of Management and Budget (OMB), which means with an expedited review that the final rule could be issued by April. In the meantime, anti-fiduciaries continue to maintain their pledge to fight the rule, but a number of large broker-dealers have announced that they're now re-positioning to prepare for what is increasingly viewed as an inevitable fiduciary outcome.

From there, we have a number of practice management articles this week, including: a look at what you should be aware of if you have an employment contract with your advisory firm (from non-compete to non-solicitation rules and more); an announcement that digital and content marketing platform Vestorly has raised a whopping $4.1M in venture capital to scale up their solution for advisors; tips from Angie Herbers on how advisors need to re-envision their role in a growing firm (transitioning from lead advisor to lead coach for the firm's other advisors); a review of the research on how to help clients in times of "crisis" (including panicked clients about a market crisis); and another article about best practices in talking to clients who are angry and emotional about markets, and recognizing that they may actually be feeling a form of grief over losses in their portfolio and how they expect those losses to impact their personal lives.

We also have a couple of technical articles this week, from a new way to consider the challenge of how long a retirement portfolio will last (considering both how long the funds may last and how likely it is for the client to live long enough to even see the portfolio possibly fail), to issues that must be considered when evaluating Medicare plans (and in particular, pros and cons of choosing a Medicare Advantage plan over 'traditional' Part B coverage with Part D and Medigap supplemental policies), and a new study looking in depth at the track record of popular "market strategists" who give annual forecasts of market returns... who have not only historically been wrong, but have actually been more wrong than the predictions that could have been achieved by just flipping a coin every year!

We wrap up with three interesting articles: the first is a look at how important it is for clients to figure out "how much is enough" to be able to retire, as the research on happiness finds that if we don't have a target for enough, we just inevitably keep seeking more, over-consume, and end out being even less happy; the second is another look at how to draw the line on "enough", and recognizing the significant of taking whatever we have in time and capital that is "over and above" what's necessary, and using it to plant the seeds of a better future (and find meaning and purpose); and the last is a discussion from industry legend Dick Wagner, who challenges advisors to consider what we even know of money itself, which in the past century has transformed from something that was just used by governments to facilitate foreign trade into what has arguably become one of the most powerful forces that impacts our lives, and at the same time is so intimate that it remains one of the greatest taboo subjects in society today.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including the official launch of Betterment for Business (the robo-advisor's new 401(k) solution), the latest iPad app for advisors from Morningstar, and a round of venture capital raising by advisor digital and content marketing platform Vestorly.

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