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 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!

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a 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!

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a 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!

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a 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!

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a 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!

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the 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.

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a great exploration of why, in these times of market volatility, investors continue to give such credence to pessimists and view them as sages.

Continuing the theme of recent market volatility, other articles this week include: a reminder of the ways to talk with clients about market volatility and reassure them; the latest investment commentary from Howard Marks of Oaktree about the dynamics of investor psychology; a caution from John Hussman that while market volatility has picked up the leading economic indicators are also turning down (and the combination of both can be especially concerning); and a reminder of tax planning opportunities that emerge in a down market, from tax loss harvesting to Roth conversions of IRAs while they're down to Roth recharacterizations of last year's conversions that have declined in value since the original conversion.

We also have a couple of practice management articles this week, from a look at why more clients don't provide referrals (hint: it's not that they don't want to, but that they're not sure how to describe you or to whom), to a look at the ongoing rise of salary-based advisor compensation models and whether they can be successful without fewer business development incentives, a discussion of the importance of engaging both members of a couple (as most advisory firms are at more risk to lose assets when a widow leaves than when the money flows to the next generation), and an important reminder that the SEC is scrutinizing the Chief Compliance Officer role in advisory firms (and warning that it should not be fully outsourced)!

We wrap up with three interesting articles: the first is a review of a recent SEC report on the credit rating agencies, which finds that they are still engaging in many of the questionable practices that led up to the 2008 financial crisis; the second is a discussion of Bitcoin, which appears to be in the midst of a systematic collapse as it reaches capacity limits (and is controlled by a small number of influences who are preventing the capacity from expanding, for their own financial gain); and the last is a great reminder that we all need to say "no" more often, not just to avoid over-committing ourselves in general, but because saying "no" more often ensures that you'll have the time and capacity to say "yes" when it really matters.

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the big news that mega asset manager Invesco has bought "robo-advisor-for-advisors" platform Jemstep, in yet another example of an investment company acquiring a robo technology platform to use as a distribution channel for advisors.

From there, we have a number of technical financial planning articles, including: a look at why most retirees really go broke (hint: despite our focus on Monte Carlo analysis, it's not actually from market volatility, but spending shocks instead); how to proactively use the Roth recharacterization rules for various Roth conversion strategies; a discussion of recent research examining why corporate bonds don't seem to provide the risk premium over government bonds that would be expected given their default risk; and a look at the ongoing rise in various "values-based investing" approaches from SRI and ESG to impact investing (to the point that even regulators and the IRS are making it easier to pursue such strategies).

We also have a few practice management articles this week, from the ongoing decline of client referrals (as affluent clients seem to be increasingly concerned about the "social risk" of making a referral), to a reminder of the importance of updating your LLC operating agreement for your advisory firm (or more importantly, creating one if your LLC doesn't have one already!), the liability issues involved if an advisory firm employee makes a trading mistake, and some reminders of what not to do as you complete the annual Form ADV update process in the coming weeks.

We wrap up with three interesting articles, all focused on the topic of personal productivity: the first is a look at why you might consider getting a personal assistant to help you be more productive in business (even if you have to pay for it out of your own pocket); the second is a reminder of how helpful it can be to create a structured weekly routine for yourself (where client meetings are only scheduled on certain days of the week); and the last is a powerful reminder of the difference between just being "busy" (even if you're very efficient at getting things done!), and truly being productive.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including a discussion of the Invesco acquisition of robo-advisor Jemstep, social media platform Snapchat is rumored to be working on its own robo-advisor offering, BBVA Compass is announced as the first financial services firm to be linked up to FutureAdvisor since Blackrock acquired it, and Wealthfront announced its own Portfolio Review service to analyze fees and performance of a prospect's outside portfolios in an effort to try to amplify its own lead generation.

Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the latest release of FINRA's regulatory and exam priorities in 2016, where the organization has indicated its leading target is "broker-dealer culture" around compliance and the way that conflicts of interest are handled.

From there, we have several practice management articles this week, including: the ongoing rise of social media adoption by advisors (and that the highest adoption is amongst the most financially successful advisors); how despite the rise of social media, "old-fashioned" email remains a remarkably effective marketing strategy; tips on how to manage advisory firm staff members, particularly regarding setting and then monitoring/managing employee goals; a round-up review by advisor tech guru Joel Bruckenstein of leading RIA custodian technology platforms including Fidelity, TD Ameritrade, and LPL; and an article providing a great reminder that the real key to time management is not getting more efficient about what you do but getting better about deciding what not to do in the first place.

We also have a couple of technical articles this week, from a look at how "stress testing" portfolios with tools like HiddenLevers is becoming a popular alternative to analyzing traditional portfolio risk metrics like standard deviation or value-at-risk (VaR), to a discussion of how the structuring of irrevocable trusts has changed in recent years (from the separation of administrative and investment trustees to the rise of distribution committees and trust protectors), and a review of the data on what the true odds really are that a 65-year-old will need long-term care.

We wrap up with three interesting articles: the first is a discussion of the rising battle between banks and other financial institutions, and the account aggregation and personal financial management tools that draw upon and use that data (and potentially overload bank servers in the process); the second is a look at how economics research has been undergoing a significant shift in the past 30 years, from research being dominated by pure theory to increasingly focusing on real-world empirical data (supported by the availability of the personal computer and the rise of the internet and its data accessibility); and the last is a great reminder of the perspective that can be gained when a financial planner actually becomes a financial planning client, and sees the financial planning experience (and how it can be improved) from the other side of the table.

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a scathing investigative report from Ann Marsh at Financial Planning magazine, highlighting how brokers guilty of consumer harm are obtaining settlements in FINRA arbitration and then getting their records expunged on the basis of not being found guilty (due to pre-empting a guilty finding with the settlement!). Also in the news this week was an SEC report reviewing the ETF "flash crash" from August 24th, which disturbingly finds the problem was so widespread that it's still not clear why it happened, nor is it clear what needs be done to prevent it from occurring again in the future.

From there, we have a few practice management articles this week, including: a Bob Veres discussion of whether the typical advisory firm's efforts to impress prospective clients are actually just intimidating them; the first of what will likely be many stories looking at how the Department of Labor fiduciary rule may change the industry; a controversial suggestion from practice management guru Mark Tibergien that perhaps the industry's "talent shortage" problem is actually a shortage of skilled advisory firm management capable of attracting, developing, and retaining Millennial talent; and a profile of Live Oak Bank, which has burst onto the scene in recent years to become one of the primary lenders financing advisory firm succession plans, with more than $250M of loans funded since 2013.

We also have a couple of technical articles this week, from a look at how the recent spending legislation's extension of the solar investment tax credit may spur an explosive boom in solar energy, a discussion of how traditional portfolio metrics fail to capture the benefits of downside portfolio protection (and an alternative way to better measure the impact), and an analysis of why most people should actually consider funding an HSA first for retirement (in some cases even before a 401(k) plan with a match) given that virtually all retirees will have at least some medical expenses in retirement which can be funded tax-free from the HSA.

We wrap up with three interesting articles: the first is an interview with John Thiel, the head of wealth management at Merrill Lynch, who discusses how the firm is preparing itself for the looming Department of Labor fiduciary rule (and that it would rather comply with a fiduciary obligation to clients than walk away from $2 trillion of AUM); the second is a nice turn-of-the-new-year reminder that it's a good time to de-clutter (whether it's your desk, your business, or your clients); and the last is a Wall Street Journal highlighting recent research into consumer spending behaviors, and why the traditional advice to just budget and monitor spending is so often ineffective in practice.

Enjoy the reading, and Happy New Year!

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