Archives Of Weekend Reading For Financial Planners

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the announcement that after 18 months of development, June finally saw the launch of four states' Section 529A "ABLE" accounts, the new tax-free accounts for disabled beneficiaries that are expected to become popular as a supplement to (or in some cases, a cheaper alternative to) special needs trusts.

From there, we have a few technical articles this week, from a look at how various types of retirement spenddown strategies may be impacted if market returns stay persistently low (hint: even flexible spending strategies may be at risk), to a discussion of the rules on Medicare enrollment and the (potentially adverse) consequences of delaying past age 65, and a look at how to coordinate the rules for contributing to and withdrawing from a Health Savings Account (HSA) after reaching age 65 and Medicare eligibility.

We also have several practice management articles, including: why it's crucial for wealth management firms to evaluate their advisors more broadly than just new client assets and business development; strategies to prevent burnout from your advisory firm staff; how the best path to client loyalty is not about avoiding all mistakes but having a process to promptly and effectively fix mistakes when they inevitably occur; what to be aware of when it comes to the new prohibited transaction rules for the Department of Labor's fiduciary rule; and why success for advisors is not just about doing "what you love" but finding the activities you enjoy doing, are good at, and the ones that actually help to move the business forward.

We wrap up with three interesting articles: the first is a look at Schwab's recent announcement to revive its consumer marketing campaign on behalf of RIAs that use the Schwab platform, and whether it's a real business development opportunity for Schwab-based advisors or just a way to appease those advisors even as the Schwab retail offering increasingly competes with them; the second is a look at how the advisory business is shifting from one where firms simply create something of value and offer it to clients, to instead a world where advisors and (prospective) clients actually 'co-create' the value that is meaningful and personalized for the client; and the last is a look at what advisors should be thinking about if they're considering a coach, and the kind of mindset that is necessary to really get the most value out of a coaching relationship.

Also, be certain to check out the video at the end, an excerpt from a two-part series for advisors from Carl Richards of the Behavior Gap called "Your Manual For Scary Markets" on how to talk clients through times of market volatility and be an effective buffer between them and the "scary markets" that can arise from time to time.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a few articles on today's big #Brexit news, including a look from the Economist at what the economic ramifications really are (and why the early market decline may be more of a response to the uncertainty caused by the "Leave" vote than the actual economic impact), and a discussion from Vox about how the establishment framed the Brexit Remain vote as being about the economy but the Leave decision appears to have been primarily about immigration - specifically, a backlash against the explosive rise of immigration into Britain over the past 20 years (and especially the past 10) in the European Union.

Also in the news this week was an eye-popping $415 million fine from the SEC against Merrill Lynch, which found that Merrill had used derivatives trades to mask what was actually using the cash in customer brokerage accounts for its own trading purposes... and although it doesn't appear any customers were actually harmed, they could have been severely impacted if Merrill Lynch had experienced financial distress, and the SEC indicated that this punishment against Merrill Lynch for violating the Customer Protection Rule may just be the start of a sweep to investigate if any other brokerage firms were doing the same thing (and the SEC has even offered "cooperation credit and favorable settlement terms" for firms that quickly turn themselves in).

From there, we have several notable news stories regarding the Department of Labor's fiduciary rule, as it's becoming increasingly clear how companies are positioning themselves for a new fiduciary world. It turns out that major wirehouses have so shifted in favor of fee-based accounts that many actually opposed the SIFMA and FSI lawsuit against the Department of Labor (with Wells Fargo at one point threatening to quit SIFMA altogether), indexed annuity providers have discovered they may need to create a broker-dealer to sign the Best Interests Contract when their annuity agents sell into IRAs (as annuity companies don't want to sign on for fiduciary liability for independent annuity agents they can't even oversee), and Jackson National (the country's largest annuity provider) announced it is creating its first low-cost fee-based variable annuity that will include a wide range of living and death benefit guarantees.

We also have a few practice management articles this week, including: how to evaluate whether your advisory firm is growing sustainably or may be understaffed (or overstaffed), a good reminder (especially for young advisors) about how weighty of a decision it really is to become an owner/partner of an advisory firm, and a good framework to think through how to explain your value proposition as an advisory firm and differentiate yourself.

We wrap up with three interesting articles: the first looks at how the rise of machine learning algorithms mean that in the future we may no longer "code" computers but instead just "train" them like animals (which makes the process more efficient than crafting complex code, but may make computer programs so complex that even as humans we can't figure out how they work anymore); the second is an interesting discussion of how clients having a "scarcity" vs "abundance" mindset can significant impact their financial behaviors; and the last is a fascinating look at how the focus of the "income inequality" discussion has centered on the top 1%, but it turns out the "upper middle class" (incomes of $100,000 to $350,000 in today's dollars) is actually the segment with the most explosive growth in the past 35 years (from 12% in 1979 to nearly 30% today), which both helps to explain why there's so much stress about income inequality in the middle class (which is splitting into a "lower" and "upper" middle class with increasingly unequal incomes), and perhaps the rise of financial planning itself (given that advisors today disproportionately serve that upper middle class segment).

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 3 days of video highlights from the recent 2016 Morningstar Investment Conference!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with an interesting recent interview from Vanguard CEO Bill McNabb at the Morningstar Investment Conference, as he describes Vanguard not as an asset manager or investment company but as a "technology company" instead, possibly implying that Vanguard will be rolling out even more technology innovation or more "robo" tools of its own in the coming years.

From there, we have a few technical articles this week, from another reminder/warning that ETFs cannot be any more liquid than the liquidity of their underlying investments (at least not during times of market distress), to a look at the current Social Security "redo" rules for those who wish to withdraw or voluntarily suspend their benefits, and a discussion of the growing momentum for changes to the retirement laws that would make it easier to enroll more/all workers in automatic enrollment retirement plans with automatic escalation clauses, and possibly the advent of open multiple employer plan (MEP) options in the coming years.

We also have several practice management articles, including: a look at how the new DoL fiduciary rules may bring fresh attention to the issue of "reverse churning" in advisory accounts; a review of 'lesser-known' RIA custodians RBC Advisor Services, Trust Company of America (TCA), and Shareholder Services Group (SSG); a review of the new MoneyGuidePro G4 release and its new "Conversations" feature; a look at the iRebal rebalancing software from TD Ameritrade; and a look at the latest version of Junxure Cloud CRM for financial advisors.

We wrap up with three interesting articles: the first is a look at how improvements in health are leading to a growing number of people retiring "early" in their 60s even as they could work into their 70s, which raises difficult questions about whether our current Social Security and Medicare systems are subsidizing "early" retirement more than they were originally intended (and if they're going to be changed, how to do so in a way that doesn't adversely impact less educated workers in physically demanding jobs who really can't work later); the second explores how the traditional mutual fund wholesaler is being made irrelevant by the availability of online information and how wholesalers are shifting to become value-added relationship managers to survive and thrive (an interesting parallel for financial advisors themselves; and the last is a fascinating look at how the rollout of ATMs impacted the jobs of bank tellers over the past 30 years, as it turns out that ATMs made bank branches so much more efficient that banks opened up more branches, resulting in a net increase in bank teller jobs over the past several decades... which implies that, similarly, the end point of "robo-advisors" may not be the death of financial advisor jobs, but an improvement in financial advisor efficiency that allows for more financial planning jobs to be created in the coming years!

Also, be certain to check out the video at the end, a clip from the popular HBO late-night comedy show with John Oliver, supporting the Department of Labor's fiduciary rule and sharply criticizing the financial services industry's lawsuits against it... an entertaining segment, punctuated by Oliver's usual comedic wit.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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