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 big news that Edmond Walters, founder and CEO of the popular eMoney Advisor financial planning software, has abruptly resigned from the company, barely 6 months after being acquired by Fidelity, in what is rumored to have been a significant culture clash between the aggressive entrepreneur and Fidelity's more conservative and traditional corporate culture. In the wake, questions now abound regarding the future fate of eMoney Advisor, in the hands of Fidelity's leadership to execute, but without eMoney's visionary founder.

From there, we have a few more articles on industry technology news and practice management advice, from an announcement that account aggregation provider Quovo just raised a fresh $4.75M round of venture capital to expand its solutions for advisors, to a look at the "new" (to North America) financial planning software Figlo, a great reminder from Mark Tibergien that if your advisory firm's greatest asset is its people then the firm should be investing in them that way, and a discussion from Kelli Cruz reinforced the point by noting that most firms have a remarkably mediocre process for recruiting and hiring new staff members despite the incredible importance of building a good team!

We also have a couple of technical planning articles this week, including: a reminder of the prohibited transaction rules for IRAs and how a small mistake can not only trigger a small distribution but disqualify an entire IRA account; a look at some of the latest research and policy discussions in Washington about retirement, including a growing recognition that solutions may need to become more sophisticated given the significant gap in life expectancies across higher vs lower income individuals; and a look about whether it's really possible for an investment strategy that produces favorable returns to continue to "work" even after it is widely known and "everyone" starts doing it.

We wrap up with three interesting articles: the first looks at a new book by Barry Schwartz entitled "Why We Work" and whether the idea that human beings are "lazy" and unmotivated to work and will only do so when financially incentivized to do so could actually be the very thing that is damaging our motivation to work and leaving us so disengaged; the second is a brief reminder of the importance of balancing work and rest, and that while working excess hours is a fine way to get through a crunch, but on a sustained basis can actually result in less total productivity even with more hours; and the last is a 'mea culpa' from Bob Veres on behalf of all industry journalists, noting that our industry media may have become so obsessed with the idea of growing the biggest advisory firm that it has failed to remember that we all have our own definitions of success, which may be as much about what happens in our personal lives, and the quality of the service we provide our clients, beyond just trying to finish with the largest pile of AUM.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including the 'surprise' announcement that eMoney Advisor's founder and CEO Edmond Walters has resigned, and big news about account aggregation provider Quovo that both raised $4.75M of venture capital this week and also announced a major integration with financial planning software provider Advicent (makers of NaviPlan and Figlo).

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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 the world's largest asset manager, Blackrock, decided to buy the #3 robo-advisor FutureAdvisor for $150M, with plans to pivot the company from its current direct-to-consumer focus to instead become a robo-advisor-for-advisors solution for Blackrock's institutional partners (i.e., banks, broker-dealers, insurance companies, and perhaps RIAs).

From there, we have a few articles on this week's market turmoil, including a discussion of the unusual market volatility in ETFs that occurred on Monday morning (when many ETFs traded at materially different prices than their intrinsic NAV), a second article from ETF.com looking at the details of how an "ETF flash crash" occurs (important to understand if market volatility picks up again soon!), and a separate article discussing the unrelated but also problematic technology outage this week at BNY Mellon that left hundreds of mutual funds and ETFs unable to properly price their value for several days this week!

We also have several practice management articles this week, including: a discussion of a smarter marketing (or "smartketing") process that integrates both prospecting and sales efforts in an advisory firm; a look at how some advisors are adopting video as a part of their marketing and/or client communication process; a discussion of some practice management "gotchas" to watch out for that can undermine the value of your business (e.g., remember that unlike talking to a compliance attorney, communication with your compliance consultant is not privileged and can be used against you!); a warning that growth rates, referrals, and profitability are declining at many advisory firms (and how it can be resolved by focusing on a narrower target clientele to differentiate); and a reminder of how important it is to communicate complex concepts to clients visually and not just verbally (and better yet, make a standardized graphic to illustrate key concepts that you can use over and over again!).

We wrap up with three interesting articles: the first provides some good reminder tips of what to do and what to say when market volatility occurs (hint: proactive communication and active listening are essential!); the second provides an interesting look at the history of the Investment Company Act of 1940 (which just recently celebrated its 75th anniversary!); and the last is an article from the Harvard Business Review reporting on an interesting study that finds the rise of technology is actually making social skills more important than ever for career success (and the best jobs are those that require social skills and include high-level cognitive challenges, like financial planning!).

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including the announcement that Blackrock is acquiring the robo-advisor FutureAdvisor, the Salesforce launch of their new Financial Services Cloud, and the latest practice management white paper "X-Cell" from Kaleido.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the second edition release of the CFP Board’s “Financial Planning Competency Handbook”, a nearly-1,000-page tome that aims to capture the entire comprehensive financial planning body of knowledge (for both students learning financial planning and practitioners to use as a reference).

From there, we have several practice management and technology-related articles this week, including a review of digital estate planning software solution EverPlans, a first look at a new “matchmaking” site for consumers to find a financial advisor (where advisors pay to be listed and featured on the site), and a review of the new T. Rowe Price “MarketScene” app designed to provide market insights and information that advisors can use with their clients. There’s also an article about time-saving tips and ‘productivity apps’ for advisors, a discussion of the issues to be aware of if you’re looking to merge your advisory firm (from the perspective of other advisors who have gone through the process), and some advice from practice management consultant Angie Herbers about the experience of merging a firm after she merged her own with marketing consultant Kristen Luke to form their new advisor consulting business Kaleido.

We also have a few technical planning articles, from a discussion of the new regulations from the IRS and Treasury Department cracking down on sales of a Charitable Remainder Trust (CRT) income interest, to a look at the recent expansion of the Repaye program that can adjust student loan repayment amounts to be a smaller percentage of (discretionary) income, and a look at the estate planning considerations of the emerging new 529A ABLE accounts for disabled and special needs beneficiaries.

We wrap up with three interesting articles: the first is from Professor Robert Shiller, who explores the concept of the “Financial Singularity” (where markets potentially become perfectly efficient with technology automation); the second is a discussion from experienced angel investor Tucker Max about why angel investing is really not a good idea for most investors; and the last is a discussion from industry commentator Bob Veres about how advisory firms who want to serve younger clients and the middle market must go further than “just” adding in robo-advisor technology tools on their website.

And be certain to check out Bill Winterberg's "Bits & Bytes" video at the end, covering the latest news and developments from this week's LaserApp technology conference!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a summary of this week's Department of Labor hearings on the fiduciary proposal. While arguments were heated on both sides (which variously argued that fiduciary duty will either drive costs down for investors by eliminating conflicted advice, or drive them up by raising compliance costs!), the rule still appears to be on track for implementation in 2016, with perhaps just some adjustments to make it more "workable" in practice.

From there, we have several practice management articles this week, including: a look at how despite the rise of technology solutions Cerulli finds that the number of self-directed investors has significantly decreased in the past 5 years and the number of "advisor-reliant" consumers is on the rise; a summary of the latest FA Insight benchmarking study on People and Pay in advisory firms, which finds that RIAs are enjoying record profit margins and productivity, but that the lack of young talent may soon begin to take a toll; a discussion from industry practice management guru Philip Palaveev about how "flat" organizations with little hierarchy sounds good in concept but fails in practice, especially in advisory firms; tips from Mark Tibergien on a different approach to strategic planning; and a look at how the aging advisor population is leading to an increased number of practices that have to fold due to the sudden death of the owner, and how custodians are often compelled to act quickly, especially when the firm lacks a continuity plan, which may include cutting off the advisory firm's staff access to clients, and even shifting clients over to the custodian's self-directed platform, retail branch advisors, or even other firms.

We also have a few technical planning articles, from a look at the rise of "private exchanges" for health insurance in mid- and large-sized firms, the latest research from S&P that finds actively managed funds are so struggling to generate outperformance that they're not just underperforming net of fees but the majority in most categories (especially equities) are even underperforming before fees, and a discussion of the current research on how much retirees really need for retirement income and how the common 70%-80% replacement rate may actually be significantly overstating what most retirees really need (especially those with above-average household income).

We wrap up with three interesting articles: the first covers some of the latest polling research from Gallup, which finds that adoption of financial planning is on the rise across the country, especially amongst those who are still saving and aren't yet retired (perhaps a result of the pressure of technology on commoditizing the value of investment-only solutions for accumulators?); the second is a discussion of the new Schwab Executive Leadership Program, which is taking cohorts of 30-35 future leaders from advisory firms and putting them through a year-long MBA-style program in management (and getting rave reviews for the quality and beneficial impact of the program from its participants); and the last is a discussion of how the market's sustained inability to make materially new highs since last Thanksgiving could be a troubling sign that the positive feedback loop for investors is breaking down, which risks culminating in a fear-driven bear market if the bull market cycle doesn't underway again soon.

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 Envestnet's acquisition of Yodlee, a new integration of up-and-coming financial planning software Advizr with Orion Advisor Services, and a look at whether automated investment services (i.e., direct-to-consumer robo-advisors) are losing their exclusivity as established financial services firms increasingly launch their own.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the announcement that Jeff and Kim Camarda have decided to appeal the unfavorable ruling they received in their case against the CFP Board, alleging that there are serious issues with the CFP Board's disciplinary process that still haven't come to light and that they believe they can ultimately prevail in court, even as the CFP Board insists that Judge Leon's ruling was appropriate and will be upheld.

From there, we have several technical articles this week, including: a Morningstar discussion of the recent Wells notice the SEC served to PIMCO alleged mispricing issues with certain non-agency mortgage-backed securities held within their BOND ETF; why affluent clients may wish to implement a GRAT sooner rather than later (if they're thinking about doing one at all); ongoing trends to watch in the long-term care insurance industry; how despite their early hype, adoption of QLACs in retirement accounts continues to be slow; and a discussion by Wade Pfau of how portfolios that combine stocks and immediate annuities (i.e., partial annuitization) may be superior for retirement income and wealth accumulation over just buying traditional stock-and-bond balanced portfolios.

We also have a few practice management articles, from a look at the latest industry trends research on the continued rapid growth of RIAs (which drove hiring of 31,000 non-clerical financial services jobs last year, and added a whopping 2 million clients in the aggregate), to a discussion of how despite recent growth of advisory firms there are concerns that profitability is slipping (which does not bode well for when the next real bear market occurs), and a look at how the ongoing evolution of the financial services industry (especially thanks to technology) will increasingly put pressure on advisors to add (more) value or be put out of business.

We wrap up with three interesting articles: the first looks at several new studies coming out suggesting that the "midlife crisis" phenomenon may not just be a "first-world problem" but that instead the "U-shaped curve" of happiness throughout life is something found across the globe, and even in other species; the second is a fascinating futurist look at whether small/solo law firms will survive in our increasingly technology-driven world, and the implications it raises for financial advisors who are following a similar path to the legal profession; and the last is a good reminder that for advisory-firm owners in particular, the ego that may have given you the courage (or stubborness!?) to go out and start your own firm and succeed in the first place may well be the same ego that is now limited your ability to continue to grow and succeed from here.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including a look at LPL Financial's recently revealed intent to offer a "robo" solution for its advisors, the announcement from Wealthbox CRM that it will be the first advisor CRM to integrate with popular business communication platform Slack, and a new service from Smarsh that will archive web-based Office 365 email and documents!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the release of Judge Leon's opinion memorandum in the case of Camarda vs CFP Board, which reveals that the Judge's decision in favor of the CFP Board was based not on the merits of the case, but simply that the courts wouldn't intervene in the 'private internal affairs' of the CFP Board's disciplinary process... raising the concern that no CFP certificants may have any recourse in a court of law to hold the CFP Board accountable in situations where there is a future disciplinary dispute. Also in the news this week was the announcement that Schwab is aiming to significantly expand its branch office network and ramp up hiring of its own advisors, raising questions of whether it may increasingly find itself competing with the RIAs using its platform. And rounding out the news this week is an article by Knut Rostad offering suggestions of how the Department of Labor can improve its "BICE" rules to ensure the fiduciary standard is not undermined.

From there, we have a few technical planning articles this week, including a discussion of whether managed payout funds are better retirement income vehicles than immediate annuities (the results don't look good for those who top priority is retirement income!), a look at how most people with access to an Employee Stock Purchase Plan (ESPP) are underutilizing them and leaving "free" profits on the table, and some suggestions on how to modify the way Power of Attorney documents are used to cut down on the rising trend of elder financial abuse.

There are also a few practice management articles, from a reminder that the slow summer season is a good time to do strategic planning for your advisory business (or personal career!), to a look at the rise of "advisor blogging" as a means to market and grow an advisory firm, and a discussion of the issues that advisors should consider when it comes to compliant storage of digital client documents (from encrypting your computer, to the encryption capabilities of your cloud storage service, and how to ensure secure transmission of the data between the two!).

We wrap up with three interesting articles: the first is a good reminder that to really help clients, advisors need to focus on what really motivates them (i.e., clients aren't necessarily motivated by setting goals; instead, figure out what motivates them, and help them to direct that energy towards achieving their goals!); the second is a high-level look at how the entire financial services industry is in transition, driven by both top-down regulatory changes still being implemented since the financial crisis, plus the bottom-up impact of the rising Millennial generation and the increasing intrusion of Silicon Valley and the world of FinTech; and the last is a fascinating roundtable interview with "next generation" advisors, suggesting that the primary problem advisory firms have with retention of younger advisors is not that they're all looking for a handout, but that firms are simply failing to articulate clear goals for young advisors to pursue and then also failing to reward the young advisors with advancement when those goals are achieved.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a look at the landscape for the Department of Labor's fiduciary proposal, now that the public comment period has closed (with a whopping 775 comment letters submitted!), and moves on to public hearings, potential revisions of the rule... and a looming deadline of implementation in 18 months or risk having the rule derailed by the next administration.

From there, we have a few technical planning articles this week, including a look at the woes of energy-related MLP investments that have tumbled this year amidst declining energy prices, a discussion of how lifetime income annuity payouts may soon take a hint as the industry prepares to implement updated RP-2014 actuarial tables, and some tax issues to consider in retirement when coordinating between IRAs (and their prospective RMDs) and the taxability of Social Security benefits.

There are also a few practice management articles, from the latest Schwab benchmarking study for RIAs showing that the typical firm has doubled its revenues since 2009(!), the dynamics for advisors working in wirehouses as the large firms seek to fight the breakaway broker record as post-financial-crisis retention bonuses start to expire, and some issues to consider when running client appreciation or prospective client marketing events (especially from the compliance perspective).

We have a couple of technology-related articles this week too, from practical tips on cybersecurity for advisors, to a look at the big industry news that SS&C has decided to start pushing Advent Axys users over to Black Diamond, and some tips from financial advisor Dave Grant on new technology tools for advisors to check out (including website design providers, new planning software, and more).

We wrap up with three interesting articles: the first is a profile of SigFig, a firm in the "robo-advisor" category that has a whopping $350B of assets loaded into its analytics tools but only a paltry $69M of AUM, as the company begins a pivot towards working with established financial services firms (e.g., banks) to find growth; the second is an interesting new study from the Journal of Financial Planning, which finds that extroversion and agreeableness are (modestly) correlated to higher levels of net worth; and the last is a profile of 29-year-old financial planner Pamela Capalad, who engages clients by meeting over brunch (with a business literally called "Brunch & Budget") and has been able to build a base of almost 100 clients, mostly "hard-to-reach" Millennials, in just the past 3 years.

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a discussion of the newly implemented reductions in the CFP Experience requirement, which quietly took effect earlier this month without any public comment period for CFP certificants, or public comments from FPA or NAPFA. Also in the news this week was the revelation that Vanguard's Personal Advisor Services platform added on another $4B of AUM in just the past quarter as its growth accelerates (potentially threatening both the robo-advisor platforms, and possibly even threatening established independent advisors in the coming years, too). There's also discussion of a new push from PIABA to get the SEC to create its own one-stop-shop database of public disclosure information about brokers and investment advisers for the public to access, as complaints continue that FINRA's BrokerCheck is not getting the job done.

From there, we have a few investment articles this week, including a discussion from Barron's about the challenges of navigating bond investing with the looming potential for rising interest rates, a discussion of ETF liquidity and whether advisors may be overestimating how liquid their ETF investments really are, and a discussion of the recent move by Dimensional Fund Advisors (DFA) to begin offering ETFs through John Hancock (but with fewer solutions and higher costs than its existing advisor-distributed mutual fund lineup).

There are also a couple of practice management articles, from a look at how 2015 is shaping up to be the "year of the mega-deal" for RIA mergers and acquisitions, to a broader look at how the RIA channel continues to be the only segment of the advisory industry that is growing as insurance, broker-dealer, and wirehouse channels all continue to lose market share, and the last is an interesting discussion of what it really means to be an "independent" advisor and whether many advisors may think they're more "independent" than they really are.

We wrap up with three interesting articles: the first is a look at a new book called "Endorphinomics" by advisory industry business consultant Steve Moeller, who looks at the surprisingly common phenomenon of advisors who are "successful yet miserable" in trying to find the right work/life balance with a thriving advisory firm; the second raises the question of when/whether financial planning will ever get a seat at the "big kids' table" in Washington DC and have a role in contributing the unique knowledge and experience of financial planning to public policy discussions; and the last is a look at how the rise of robo-advisors and a new slew of technology solutions have reignited the "fee vs commission" debates as fee-only technology-based platforms show that it really may be possible to serve the middle market without commissions after all.

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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 the U.S. District Court has ruled in favor of the CFP Board in its case with the Camardas, without even needing to go to trial... though the details of the judge's opinion will remain sealed for two weeks (and possibly indefinitely), which makes it unclear on what grounds the CFP Board was victorious. Also in the news this week was the revelation that Focus Financial may be preparing for an IPO, which could kick off renewed interest in so-called "roll-up" RIA aggregators and additional mergers-and-acquisitions activity in the industry.

From there, we have several technical articles this week, from a look at how to evaluate the pros and cons of investment-based versus insurance-based retirement income strategies, to the idea that advisors need to look at both sequence-of-return and "sequence-of-consumption" risk in retirement, to the rising frequency of financial abuse of seniors (and the role that advisors can play to help prevent it), and an article looking at how the growth in indexing in recent years is also leading to a growth in the number of firms trying to front-run the periodic changes in the stocks that comprise popular indices which may be impairing index returns by as much as 0.2%/year.

We also have a few practice management articles, including: how to improve your advisory firm's capacity by more proactively engaging and investing in your staff; how advisory firm owners need to be more cognizant of building a strong foundation for their firm before trying to innovate (rather than coming up with innovative ideas first and struggling to implement them); and the last is a retrospective look at how RIAs have fared over the past 3 years since Dodd-Frank forced advisors with between $25M and $100M of AUM to shift from SEC to state registration (the short answer: fears were overblown, though there have definitely been some additional paperwork and compliance hassles).

We wrap up with three interesting articles: the first looks at the value of assembling a "personal board of advisors" that includes both traditional mentors, career guides, and others who can play a role in helping you advance your professional career; the second is a discussion of the rising star of Teresa Ghilarducci who controversially proposed a shift from 401(k) plans to a government-run private retirement accounts system that seems to be gaining renewed interest; and the last looks at whether employee financial advisors who are considering whether to go out on their own need to "redefine [the risks of] failure", as the reality is that today's shortage of advisor talent means that even those who go out on their own and don't succeed are virtually certain to still have plenty of jobs to fall back on if it doesn't work out (and may even be bought out for whatever clients they have by a larger firm in the area).

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including a look at this blog's coverage of the emerging trend of virtual "location-independent" financial advisors, some new tech tools that advisors can use, and the upcoming #FPPadTechTour!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a look at TD Ameritrade's efforts to expand its Amerivest managed account into a full-fledged "hybrid" advisor solution (robo-technology plus TD Ameritrade retail branch advisors), raising the question of whether, given that Amerivest already has over $11B of AUM, it may become the largest "robo" solution by 2016. Also in the news this week was a discussion of how Schwab and Fidelity have been 'passing through' a portion of the shareholder service fees of certain no-transaction-fee mutual funds to large RIAs on their platforms, and whether doing so creates untenable conflicts of interest for RIAs that will end out being compensated more for using those funds in client portfolios over any others.

From there, we have several practice management articles this week, from a discussion of how to improve client review meetings by systematically implementing a pre-meeting survey to ensure the meeting is focused on what clients want to talk about the most, to the importance of creating standard processes in an advisory firm to cut down on potential advice mistakes, along with an article on how to get more insight from the results of your client surveys by discussing the responses with your client advisory board, and a look at some common 'myths' in web-based marketing for advisors and how to overcome them.

There are also a few more technical-competency articles this week, from a look at whether today's lifetime annuity products should be replaced with a "tontine" structure that was popular hundreds of years ago, to the portfolio design mistakes that some advisors may unwittingly be making (e.g., having clients hold a mortgage paying 4% interest while keeping a portfolio allocation in bonds paying only 2%!), to whether Deferred Income Annuities should have a role not just in planning for extended retirement longevity but also as a pre-retirement vehicle.

We wrap up with three interesting articles: the first is a discussion from industry commentator about why he thinks "the AUM fee is toast" and that advisors will increasingly migrate towards retainer-style fee structures; the second is a retrospective look at the CFP Board as it celebrates its 30th anniversary as an organization managing the CFP marks since it was spun off from the College for Financial Planning in 1985; and the last is a great summary article of "37 ways to upgrade your practice" that has a number of tweaks you could take and implement now in your advisory firm during the slower summer months.

Enjoy the reading, and happy Fourth of July!

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