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 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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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with an announcement that the CFP Board and Rick Kahler have reached a resolution regarding his publicly controversial "fee-only" situation, with the odd conclusion that Kahler can avoid declaring that he receives any commission compensation directly or through a related party by transferring his commission-based business to... his wife, who inexplicably is not being treated as a related party. Also in the news this week was an updated regulatory notice associated with the Department of Labor's fiduciary proposal, suggesting that the next draft is still on track for release in January.

From there, we have a number of practice management this week, including a discussion of how advisors might plan to adapt (in advance) to survive the next big market downturn, a look at how advisors can create a "shock plan" to plan in advance for potential shocks to the business, a guide for advisors looking to change broker-dealers about how to do it properly to maximize the retention of clients and minimize business disruptions (to the extent possible), and an interesting profile of an independent RIA Wetherby Asset Management that has grown to over $4B of AUM in just over 20 years with a whopping $10M client minimum yet even while nearly 75% of its staff are under the age of 40.

We also have a couple of technology articles this week, including a review of the new financial planning software Advizr, a look at some advisor technology tools being adopted on mobile devices, and a (favorable) early look at the major client portal overhaul coming for the Black Diamond portfolio performance reporting software.

We wrap up with three interesting articles: the first is a detailed look from the RIA's perspective at the recent Barrons cover story on Schwab CEO Walt Bettinger that suggests the company is still conflicted about the fact that it is simultaneously the largest independent RIA custodian and also a massive consumer retail brand; the second looks at client trust, and makes the interesting point that just because clients do business with an advisor doesn't mean they fully trust the advisor (which may explain why the clients still have other outside advisors, and are not referring despite saying they are "happy" clients); and the last explores how the amount of available alpha in the investment markets may be shrinking, despite the fact that active managers have more tools and resources that ever at their disposal, because paradoxically the higher the average skill level of all active managers, the harder it is for any one of them to materially outperform.

Enjoy the reading, and Happy Thanksgiving!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with coverage of the newly shortened computer-based CFP exam that was administered for the first time this week, and also an announcement by the CFP Board in its recent business webinar that the public awareness campaign, and the additional $145/year fee that funds it, is expected to continue "indefinitely" (as long as the campaign results continue to be positive). In addition, the FPA also released this week a new study about advisors and growth, finding that advisory firms are struggling to achieved their growth goals, with only 9% of all firms reporting that their business development efforts are "very effective" in achieving their goals.

From there, we have a number of technical articles this week, including: a discussion of the current status on Social Security benefits for same-sex married couples; how early retirees can maximize premium assistance tax credits for getting health insurance during the "gap" years from retirement until Medicare eligibility; some key details to know about how non-transparent "active" ETFs will work; a discussion of what kinds of assumptions are (and are not) reasonable when clients are pitched on equity-indexed universal life strategies; a new court case in Pennsylvania on "filial support" that raises the question of whether long-term care facilities may become more aggressive in pursuing adult children for the unpaid expenses of their indigent elderly parents; and a summary of the current state of dependent care accounts, and the opportunities they provide, even though they are not often utilized.

We wrap up with three interesting articles: the first provides a good overview of some of the latest research on whether money really can buy happiness or not (hint: it's not just about having wealth, but about how it is spent); the second explores some new research on the behavioral biases that impact not only investors, but also advisors and even fund managers; and the last is a (not entirely positive) review of the recent Tony Robbins book that finds the book may not have as clear of a fiduciary message in practice as it purports in theory.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including the launch of a new financial planning software solution called Advizr, a new "robo-planning" solution iQuantifi, and more! 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 recent interview with the CFP Board where it reiterated its focus on growing the number of CFP certificants (as there are still more CFP professionals over the age of 70 than under the age of 30!), but also that the organization is committed to not lowering its standards in the process of pursuing growth. Also in the news this week are some highlight articles of the recent T3 Enterprise conference for advisor technology in large firms (which included some new product launches relevant for independent advisors, too).

From there, we have a few practice management articles this week, including an interesting look from the latest FA Insight benchmarking study showing how the challenges that advisory firms face are quite different depending on the size of the firm (reinforcing the notion that what got the firm to where it is may not move it forward from there), a discussion from Philip Palaveev about what advisors should be thinking about when they consider whether to merge with another advisor and form an ensemble firm (or not), a profile of some advisor study groups and their value (even and especially for firms that are already growing), and a discussion of how financial planning software is starting to change to allow planning to be done quicker and faster.

We also have several more technical articles, from a new study showing that long-term care needs may be more frequent but much shorter duration than typically thought (which raises the question of whether today's long-term care insurance is the right type of coverage), to a discussion of IRS Announcement 2014-32 which discusses transition rules to the new once-per-year IRA rollover rules taking effect in 2015, and a look at the new Society of Actuaries 2014 Mortality Table that could impact everything from more favorable RMD calculations for retirement accounts to making lump sum pension rollovers more valuable for those who wait a few more years.

We wrap up with three interesting articles: the first looks at how once you include the volatility of career earnings for Millennails and the relative stability of Social Security and pension income for Baby Boomers, the reality may be that the ideal portfolio should actually be quite similar for young adults and retirees; the second discusses how it's not enough for advisors to have clients who are "satisfied" but that ideally clients should be "engaged", which requires advisors to adjust from thinking about what they offer to clients and instead consider what they can create with clients instead; and the last looks at how it can actually be a good business idea to wear the same kind of outfit every day (and yes, it will give you insight into why I always wear a blue shirt!).

And also be certain to check out the videos at the end from Bill Winterberg, highlighting some of the news and buzz from this week's T3 Enterprise advisor technology conference! Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with an article highlighting the recent dispute between the CFP Board and (former) CFP certificant Nigel Taylor, who surrendered his CFP certification after an allegation that his firm was in violation of the "fee-only" compensation disclosure rules... and has, in the process, highlighted a critical concern regarding whether the CFP Board has the same scope to enforce its compensation disclosure rules against a firm in the way it does against individual CFP certificants.

From there, we have a large number of practice management and career development articles this week, including: how the effort that potential employees put into the process of applying for a job with you may be more important than their resume and background and experience in the hiring decision; a pair of articles that provide suggestions and tips on how to hire (young) advisors, and build a process around doing so; how advisory firms must learn to shift from focusing on rainmakers to grow and instead adopt firm-wide marketing strategies that allow everyone to participate and support the growth process; tips for young advisors who find themselves rising in their firms and becoming a Millennial manager for the first time; a look at how many young advisors are adopting a "career portfolio" by diversifying income streams across multiple business and freelance endeavors; suggestions on how to evaluate whether your client service team is actually doing a good job servicing clients; and a look at how different "mercenary or missionary" cultures in advisory firms can impact their growth and success over time.

We wrap up with three interesting articles: the first looks at how the financial blogger conference FinCon may be a good template for how advisor conferences need to change to gain better engagement and attendance from young planners; the second look at why it is so difficult to get new clients to make a change to a new advisor, and how the biggest key to success may not be about better communicating your value (although that matters too!) but simply showing them how you will make the process of change itself as easy and hassle-free as possible; and the last provides an interesting reminder that while it's important to be conservative in helping clients to their financial goals, planners should be cautious not to superimpose their own risk and concerns as planners onto their clients' lives, or the advisor risks causing the client to leave a large inheritance but fail to enjoy their wealth with the time they had to enjoy it!

And also be certain to check out the videos at the end from Bill Winterberg, highlighting some of the news and buzz from this week's Schwab IMPACT conference! Enjoy the reading!

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