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 of two major acquisitions in the world of advisor financial technology (FinTech), including Fidelity's purchase of financial planning software provider eMoney Advisor (and their popular PFM client portal) for more than $250M, and SS&C's acquisition of Advent for a whopping $2.7B (raising questions of what the future may hold for Advent Axys and Black Diamond).

From there, we have a few more technical financial planning articles this week, including: a review of the new Section 529 ABLE accounts for disabled beneficiaries; new research from retirement researcher David Blanchett on the optimal asset allocation glidepath in retirement; a look at the emerging use of longevity annuities for retirement (including in qualified retirement accounts); and some ideas of how to generate "tax alpha" for clients.

We also have several practice management articles, from a look at whether it's better to hire a new or more experienced financial planner for your advisory firm, to whether and how advisory firms can really scale as they grow (and the problems to watch out for in trying to do so), and a discussion of how one financial planner has increased her closing ratio for new clients from 20% to more than 90% by focusing heavily into a niche and then refining her services and sales process to appeal to her unique clientele.

We wrap up with three interesting articles: the first looks at whether the debate about how to fund more exams for SEC-registered investment advisers is misplaced, and whether there's really any actual problem with the current (admittedly low but not historically aberrational) exam rate at all; the second looks at new questions being raised about whether two-tier AUM fees (e.g., a lower fee on cash and fixed income, and a higher fee on equities) is creating a problematic conflict of interest for advisors who are now financially incentivized to invest their clients in a riskier manner; and the last looking at a recent report on the world of financial advisors in the UK, which two years ago implemented an industry-wide ban on commissions and finds that the sky is not falling after all (though some early advisory gap is emerging).

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including a further discussion of the Fidelity acquisition of eMoney Advisor, SS&C's acquisition of Advent, and the recently announced (and somewhat dismal) results of the SEC's cybersecurity sweep of broker-dealers and RIAs! 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 recent announcement from White House officials to drop the already-controversial proposal to end the tax-free treatment of Section 529 college savings plans as originally described in the President's State of the Union address (though other education tax reforms are still on the table). Also in the news this week is some interesting coverage from the Inside ETFs conference, including predictions of where the ETF industry is likely going from here (more and more specialized ETFs), and a debate between Ric Edelman and "robo-advisor" Wealthfront CEO Adam Nash about the threat of technology (where Nash downplayed the competition, and it was Edelman who suggested that advisors should be very afraid!).

Beyond the news and conference coverage, there are several practice management and personal development articles this week, including an in-depth look at the Sudden Money Institute and the new "Certified Financial Transitionist" designation (for advisors who work with clients going through significant life/financial transitions), tips on how to keep client information safe from data thieves, a discussion of the value of revenue-based bonuses for advisory firm employees, how (and why) clients can make the big decision about which advisor to work with based on remarkably small and seemingly trivial differences (hint: the more similar the firms, the more likely it is the deciding factor will be a trivial one!), the importance of making yourself "vulnerable" with clients by talking about your own personal/financial mistakes (it helps them to get comfortable king about theirs!), and the importance of having "grit" to succeed as a financial advisor.

We wrap up with three interesting articles: the first looks at whether it's time for the financial planning profession to pursue state regulation (perhaps even as an alternative to supporting the CFP Board); the second is a fascinating discussion why it's a good thing to "steal" other people's ideas (give credit for the idea, then build upon it further and make the implementation your own); and the last is excerpt from the upcoming book "The Opposite Of Spoiled" (by NY Times personal finance columnist Ron Lieber) about how to raise financially responsible children, and makes the case for why parents should tell their children more about their financial situation and how much they make.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end; with the TD Ameritrade national conference underway, Winterberg highlights the technology vendors featured in the "Veo Village" this year. 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 statistics from Cerulli Associates on the number of financial advisors, finding that while the industry headcount fell another 2% to about 287,000 advisors in 2013, it is now projected to begin rising by 1%/year as the advisor finally begins to step up its efforts to bring young/new advisors into the business. Also in the news this week is a new study from TD Ameritrade on Millennials who inherit wealth, finding that the overwhelming majority of high-net-worth Millennials actually are retaining their parents' advisor (despite years of warnings to the contrary).

Beyond the news, we have a few practice management articles this week, including: why finding a successor today requires using a recruiter (due to the competitive talent shortage and the crucial importance of getting the "right fit" candidate); how a number of advisors are abandoning AUM fees for retainer fees instead (especially amongst higher-net-worth clientele where the competitive cost differential is significant); and the factors to consider in deciding how to step up your office (including whether to even have a permanent office, versus a part-time office space, or simply operating virtually and/or running from a home office).

There are also several more technical planning articles this week, from a look at the looming new Supreme Court case that may require same-sex marriage to be legal and recognized in all states, to the growing trend of retirees taking on "Encore" careers and an organization that is sprung forth to support and inspire them, to an interesting look at how technology is changing the process of helping clients get life insurance (including a no-exam fully-digital application process), and a final piece that looks at how more dynamic spending policies for clients may support greater spending with little increase in risk (beyond the danger of the moderate spending changes themselves).

We wrap up with three interesting articles: the first provides an overview of a wide range of recent studies that look at how we determine whether someone is credibly intelligent, and how ineffective we are at trying to appear more intelligent; the second is a look at how the robo-advisor trend may ultimately be a plus for financial advisors, expanding the market of consumers, offering technology useful for advisors, and pressuring today's custodian (and broker-dealer) platforms to step up technologically; and the last makes the interesting point that if your company isn't growing, the first step should be to focus on the quality of the product/solution itself, and not just throw more marketing dollars at the problem (as told through the parable of McDonalds versus Chipotle).

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including coverage of the newest Riskalyze dashboard, recent Advicent integrations to allow Schwab balances to be imported into their financial planning software, and advisor tips for better cybersecurity. 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 formation of a powerful new coalition, including the Consumer Federation of America, AARP, the AFL-CIO, and more, to support the "imminent" release of the Department of Labor's newest fiduciary proposal; the coalition has created a new online petition to mobilize consumer support as well. Also in the news this week is a new petition to the Supreme Court in a case questioning whether BlackRock is keeping too much of its securities-lending-based income from its popular ETFs, and not providing enough of the income back to the ETF investors themselves.

Beyond the news, we have a number of practice management articles this week, including: a look at the emerging trend of "robo-advisors-for-advisors" solutions (an explosion of new technology choices for advisors); an interview with Fox Financial Planning Network and Genesis Smartware founder Deborah Fox about the importance of having systems and workflows in a firm (and how to create them); how a good executive assistant (which is far more than just a "secretary") can improve your life; the importance of having a "hire slow, fire fast" mentality when bringing on staff in an advisory firm; the importance of matching leadership style to the culture of your firm (and how the needs may change over time); a look at whether privately-owned broker-dealers are a dying breed as the industry continues to consolidate (and whether that's a good or bad thing for advisors overall); and a look at how the booming compensation for employee advisors and advisory firm staff is great in the short term but in the longer-term reflects a talent shortage that could create a profit-margin-squeeze for advisory firms.

We wrap up with three interesting articles: the first raises the interesting question of why the CFP Board would hire an experienced litigator to become its General Counsel, and whether it is gearing up for more aggressive enforcement or litigation issues in the coming years; the second examines the use of "motivational interviewing" as a technique for advisors to help clients change (and the ethical issues that can raise, given how effective it is); and the last looks at whether it is time for the profession to coalesce around the creation of a new, higher certification for financial planners, especially as the CFP Board continues to relax its minimum requirements to obtain the marks.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including coverage of the latest big updates from eMoney Advisor financial planning software and Redtail CRM! Enjoy the reading!

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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 top "watch list" priorities from FINRA in the coming year, including new scrutiny on floating-rate bank loans, alternative mutual funds, and the dramatic increase in recent years of "securities-based lending" where affluent investors are using their portfolios to get access to faster, "cheaper" money to buy everything from real estate to luxury items (and raising concerns of what happens if there is some market volatility and the loans must be repaid quickly!).

We also have a number of investment-related articles this week, from an interesting defense of the benefits of the "maximize shareholder value" philosophy from AQR's Cliff Asness, to some thoughts from Howard Marks about the lessons we can draw about the recent volatility in oil prices, a look at the use of municipal bonds in portfolios, an overview of the coming money market reforms (and how some clients may end out in money markets with floating NAV if they're not paying attention!), and a look at where the next market meltdown and advisor debacle may come from (think non-traded REITs and risky bond funds).

From there, we have a few technical planning articles, including: a review of the FAFSA (Free Application for Federal Student Aid) and some planning opportunities and issues for those sending children to college; a look at the emerging rise of "deferred income annuities" and their potential role in a retirement portfolio; and a nice in-depth explanation of the Social Security earnings test, how it works, and how it can impact the decision about the optimal time to begin Social Security benefits.

We wrap up with three interesting articles: the first looks at how spectacularly bad the 2014 economic predictions were about everything from interest rates to the price of oil, yet notes that people will continue to seek out such predictions anyway... not because they want the accuracy of the prediction, but because they're seeking the reassurance that it implies; the second gives an interesting look at how "time perspective" (one's orientation/focus about events in time) can impact financial planning decisions, and raises the question of whether planners should do more to understand their clients' time perspectives when providing advice; and the last gives an interesting overview of the regulatory advocacy efforts of the FPA of Florida state coalition as a template for how financial planners can and are having some success in lobbying and advocacy.

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 big announcement buried in the slow-news holiday season that the CFP Board is softening its experience requirement for new CFP certificants and offering an alternative to its Capstone course for those seeking to challenge the exam... changes the CFP Board has made unilaterally without a public comment period, even though the current-and-soon-to-be-former rules themselves were only put in place after such a process. Also in the news this week was an announcement by FINRA that it will soon begin sharing with state insurance regulators, on a monthly basis, disciplinary actions that suspend or bar registered representatives, in an effort to ensure that those problematic brokers don't just switch to selling inappropriate insurance products instead of securities.

From there, we have a few interesting investment and retirement research articles this week, including a review of a recent study suggesting that the widespread practice of benchmarking could actually be causing (harmful) distortions in asset prices, to a nice summary of some of the best retirement research in the Financial Analysts Journal for the past few decades, along with a good article describing the key details and features of Master Limited Partnerships, and a brief study looking at how a standby reverse mortgage line of credit could actually be a way of hedging against a poor housing market (and ironically, will function even better if interest rates rise in the future!).

We also have several practice management articles focusing on younger/newer advisors in particular, from tips to earning credibility when getting started, the benefits of getting a "side hustle" to bridge the income gap while you find your initial clients, and an interesting look at the ways to structure succession plans that may have value for both newer advisors who will be the successors and also the advisory firm owners who may be trying to decide how to sell/transition to them.

We wrap up with three interesting articles: the first looks at how advice-centric advisors often fear or entirely eschew the concept of "selling" even though the reality is that they still have to sell themselves, their services, and their advice (and avoiding the sales conversation can impair their opportunity to help clients!); the second is a good cautionary reminder of how some clients go through a "honeymoon" phase with advisors, which needs to be managed or advisors may find themselves losing some clients quickly; and the last is an interesting new study suggesting that a client's willingness to trust others may actually have a strong relationship to their willingness to invest in equities, which implies both that advisors who can build trust better may get their clients more comfortable owning stocks, and also that measuring a new client's comfort in trusting others may actually be a helpful indicator regarding how comfortable they will be holding equities in times of volatility!

Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a look at what kinds of retirement-related legislation and regulation may emerge in 2015 as the Republican leadership takes control of key committees in both the House and now the Senate. In addition, there's a glimpse at the quiet launch of President Obama's new myRA accounts, which are now available to investors.

From there, we have a few practice management and technology articles this week, from a nice To-Do/New-Year's-Resolution list for advisors from practice management consultant Angie Herbers, to a discussion of the ongoing rollout of the new cost basis reporting rules, a review of the latest technology and upcoming developments from the four major RIA custodians, and a profile of the newly expanded Indexing 2.0-style service from Wealthfront (their initial version, rolled out just a year ago, is actually responsible for nearly 1/3rd of the company's AUM now!).

We also have several estate planning articles, including: a look at the rise of online-based attorneys that prepare client estate plans but work virtually (an alternative to do-it-yourself document services like LegalZoom); a discussion of the rise of perpetuity trusts, and whether they may actually be unconstitutional under most state laws; and a discussion of the recently passed "Uniform Fiduciary Access to Digital Assets Act" that should spur state legislation on digital assets in the coming year.

We wrap up with three interesting articles: the first looks at the question of whether Google might someday enter the financial services business (or become a robo-advisor in particular), after rumors that Google had hired a consulting firm to scour the industry for potential opportunities; the second is a review of the interesting new book "The Deluge: The Great War, America, and the Remarking of the Global Order, 1916-1931" by Adam Tooze that looks at how the actions of the United States in the aftermath of World War I supported its rise as a global economic superpower but may have sowed the seeds of World War II in the process; and the last is a glimpse at an interesting new study that reveals reading on a bright screen before bed (e.g., on an iPad) produces an effect equivalent to a 1.5 hour jet lag, disrupting melatonin production and REM sleep, and implying that perhaps we should all consider going back to good 'ole paper books (or at least, a non-light-emitting Kindle Reader) before bed!

Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with two news stories about the CFP Board, the first that disciplinary chief Michael Shaw (who had responsibility around both the compensation disclosure rules, and the ongoing Camarda lawsuit) has left the organization without an immediate replacement named, and the second that the results are in from the CFP Board's first computer-based exam, which scored results reasonably in-line with prior exams (suggesting it was not actually easier in the shorter computer format), but appears to have boosted the number of exam-takers back to a 2-year high.

Also in the news this week is the approval of a Congressional study to analyze the potential link between financial stress and military suicide (which could eventually lead to the Department of Defense expanding programs to provide financial planning for soldiers in a few years), the latest projections from Cerulli that RIAs will continue to pick up significant market share from wirehouses in the coming few years, and a Fidelity benchmarking study that finds advisors continue to struggle with marketing and business development.

From there, we have a few practice management articles this week, from a warning that advisors should be taking steps now (while times are good) to defend their businesses against the next market downturn, to a look at "compensation theory" and why slowing growth at many advisory firms may be a result of (mis-matched) compensation incentives, the things to consider when a large advisor team at a broker-dealer is considering whether to break away, and some things to watch out for if you're looking to sell your advisory firm in exchange for shares of stock in the acquiring firm (especially if it is promising an uncertain liquidity event in the distant and unknown future).

We wrap up with three interesting articles: the first is a review of the Strategic Coach program from an advisor who went through it and more-than-doubled his (already significant) income in just 3 years; the second looks at the emerging concept of "policy-based financial planning" where the goal is less about helping clients make decisions in difficult times and more about establishing policies up front that make it easy to implement the "right" decisions automatically if/when the difficult times come; and the last raises the question of whether the CFP Board has been launching "too many" initiatives lately, that may be positive for what they are doing and meant to accomplish, but shouldn't come at the cost of the CFP Board losing focus on its core purpose of supporting the CFP marks, including ensuring that there is a clear and fair enforcement process backing them.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, covering his selections for the Best Financial Advisor Technology of 2014 in the categories of Back-Office Technology, Client-Facing Technology, and Innovation of the Year! Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with some industry regulatory news, including the potential that Congress may soon approve NARAB (creating the National Association of Registered Agents and Brokers) to better facilitate multi-state insurance licensing, and that the SEC is considering whether to require large RIAs to have a business continuity and succession plan in place (following on a similar proposal by NASAA earlier this year for state RIAs to be subject to such a rule as well).

Also in the news this week are a number of articles related to year-end planning, both for advisors and clients, including a discussion of the rules for determining when a charitable gift is made and "delivered" for end-of-year charitable donations, an overview of why almost 10% of ETFs are actually making long-term capital gains distributions this year despite their typical tax-efficiency, some tips for advisors giving gifts to clients about mistakes to avoid, and some guidance about how to execute good employee performance and compensation reviews.

From there, we have a few investment-related articles this week, including: a discussion of how nontraded REITs really work, their potential conflicts of interest, and why advisors should perhaps be wary of them; a look at a new AQR "alternatives" fund that actually seeks to capture the return premium by investing in risk factors without taking on the underlying risks of the investments; and a look at the explosive growth of "securities-based lending" for higher net worth individuals - often as an alternative to more traditional mortgage lending - and the problems that it may create the next time there's a market downturn.

We wrap up with three interesting articles: the first looks at how as service professionals we tend to underestimate the value of the component parts of what we do, leading us to package together a "value beast" that may be so complex to explain and difficult to deliver that it would have been better to just provide clients the component parts instead; the second provides a reminder that when there's an elephant in the room - like recent market volatility - it's always better to acknowledge the elephant and talk about the issue than to ignore it and wait/hope it goes away; and the last provides an interesting look at how even 5-year periods of returns can drastically differ from what financial theory expects for stocks, bonds, and commodities, yet over the long haul (e.g., multi-decade time periods) financial theory still holds up far better than we typically give it credit for.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including coverage of the 2014 Advisor Tech Survey, Fidelity's collaboration with LearnVest, and a new "Direct Indexing" solution from Wealthfront! 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 results from the industry's top annual financial advisor technology survey, co-produced by Joel Bruckenstein and Financial Planning magazine, highlighting some of the notable changes in the advisor technology landscape, from up-and-comers Riskalyze and Orion Advisor Services, to the ongoing dominance of MoneyGuidePro financial planning software, how incredibly fractured portfolio accounting and performance reporting software continues to be, and which broker/dealers and custodians have the highest (and lowest) technology satisfaction scores amongst their advisors.

There are several additional advisor-technology-related articles this week as well, from an announcement from Fidelity that they will be partnering with "robo" platform LearnVest (following on the heels of their recent Betterment Institutional partnership as well), to an interesting interview on the future of financial planning (software) from InStream Wealth CEO Alex Murguia, and lastly a "new" entrant to the portfolio accounting software world for RIAs called WealthTouch that his historically worked with ultra-high-net-worth clientele but is now looking to come "downstream" to clients with "just" $5M of assets.

From there, we have a number of retirement and planning articles this week, including: a discussion of how annuitization can effectively serve the same "hedging" function as a hedge fund for retirees (but at a fraction of the cost); how delaying Social Security has a natural "bias" in favor of delaying for affluent clients; a look at whether the risk-reduction benefits of individual bond ladders over bond mutual funds may be overstated; an interesting research-based proposal to help shore up Social Security by offering retirees who delay a choice between higher benefits or a(n actuarially fair) lump sum alternative; and a new study from the Journal of Financial Planning showing that, controlling for other factors, those who use a comprehensive financial planner really do appear to save more effectively for retirement than self-directed investors (or those who use an "advisor" who doesn't really do comprehensive planning).

We wrap up with three interesting articles: the first reports on the "surprise" announcement just days before the big MarketCounsel Summit conference that opening keynoter Tony Robbins, who in recent weeks has declared himself the new "voice of independent advisors" will actually be delivering a generic not-RIA-specific speech and will not be allowing any journalists to cover or write about what he says in his 2-hour keynote session, raising at the least a significant amount of confusion about what impact he really intends to bring to the industry; the second is a fascinating research study about the real risks and opportunities involved in holding concentrated stock positions, which have historically provided both a surprising number of "golden swan" events (a large number of improbably good financial outcomes) but also a stunning 40% chance of permanent impairment of capital (a 70%+ decline in value that never recovers); and the last is an intriguing article looking at how "robo-advisor" platforms may co-exist with advisors, where technology solves "simpler" problems and advisors focus on the more "complex" ones, and that the biggest winners may be the "bionic" (or "cyborg") advisors who blend together the human and the technology.

Enjoy the reading!

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