Archives Of Weekend Reading For Financial Planners

Enjoy the current "Practice Management and Tech" installment of "Weekend Reading for Financial Planners" - this week's edition kicks off with the latest announcement by the SEC of its new "Never Before Examined Initiative" and the details of its push in 2014 and the coming years to ramp up the pace of examinations on SEC-registered investment advisers who have been registered for at least three years but have never actually been examined. The new initiative will include both a general risk assessment of the potential threats the RIA's business poses given its model and how it is structured, along with a more focused review of key examination areas.

From there, we have several practice management articles this week, including a look at a younger advisor who decided to build his business by buying a practice rather than just building it one client at a time, a growing advisor network called "Protected Tomorrows" for advisors who wish to serve special-needs clients (with a training program to get advisors who wish to work in the niche up to speed), a discussion from Angie Herbers about the importance of having a clearly articulated direction for your firm (and how to communicate to employees if you really don't have a clear direction in your own mind as the firm owner!), and a great reminder from Mark Tibergien that while compensation can play a role in managing your staff it should not be used as a primary motivation tool and is not a substitute for more active employee management.

We also have a number of advisor technology-related articles this week, including a detailed review of the new portfolio risk analytics tool RiXtrema, the new "socially-powered" advisor CRM Wealthbox, the relaunched cloud-based version of Money Tree financial planning software, and an overview of several popular (and one new) advisor tech tools to improve the operational efficiency of your practice and your staff.

This week's reading wraps up with three interesting articles: the first is a great reminder that in today's world where your website is increasingly your first impression to clients (even those referred to you), it's absolutely crucial to have a good photo/image of yourself (so if you don't have a professional headshot, spend a few hundred dollars and get one!); the second looks at how, when it comes to employee performance, the bell curve is not a very good description of the landscape, as in practice the distribution is more like a "Power Law" where there are a larger number of good performers, most employees are actually slightly below average, and the truly subpar employees actually may be fewer than anticipated (but more extreme as well); and the last article provides a great reminder that there's a real difference between doing "data gathering" with clients (which is purely quantitative) and having a real "discovery" process that learns more about who they are and what motivates them, which is crucial to actually being able to help clients implement your recommendations.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end! 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 by FINRA that it is re-proposing its rule that would require all broker-dealers to include a link on their websites to BrokerCheck so consumers can check up on the regulatory record of their prospective advisors; the move has been and remains controversial, as consumer advocates suggest it may still not be thorough enough (the links may not necessarily be required on every single part of an advisor's website and digital presence), while others note that it may increase the number of requests to FINRA for expungement of prior regulatory infractions as they receive more attention.

From there, we have several technical financial planning articles this week, including updated rules on the employer "pay or play" insurance mandate that will delay the rollout for some firms another year until 2016 (and provide some leniency to the rest on the thresholds where the penalty will apply), and a look at the recent CBO report projecting that Obamacare will reduce worker hours by the equivalent of 2 million jobs not because firms will lay off employees but because early retirees will have more financial planning flexibility to retire early with greater access to health insurance. There's also a look at whether peer-to-peer (P2P) platforms like Prosper or Lending Club might have a role in generating higher yield for clients, some research on how delaying Social Security is similar to buying TIPS bonds but at much better real yields, and how the idea of not saving for college in order to qualify for financial aid may be a myth that produces far more harm than benefit.

We also have several practice management articles this week, from some ideas about how to improve your seminar marketing approach (hint: focus more on the time you spend before and after the presentation, and not just on the presentation itself), to how to craft a "pitch book" to communicate your services to prospective clients, to a discussion of how to address clients that are being "overserviced" by not cutting the work that you do for clients but figuring out in collaboration with them how to charge more for what you do.

We wrap up with three interesting articles: the first is a profile of a new advisor CRM software called Wealthbox that debuted at the T3 Advisor Technology conference this week; the second is a profile of financial planner Harold Evensky, an advisor and advisory firm owner who has long been a leader in the financial planning profession, and is now shifting to focus more of his time developing and advocating for research that will be more relevant to financial planning practitioners; and the last is an interest discussion by industry commentator Bob Veres on whether in the end oversight of RIAs - when you include oversight of the custodians they use - may not actually be much less than the oversight of FINRA-regulated advisors after all. And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end!

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 CFP Board's announcement this week of its newest "fun, edgy and creative" commercial for the ongoing $10M/year public awareness campaign. As incoming CFP Board chair Ray Ferrara recently took the leadership mantle, there's also an interview with Ferrara about the CFP Board's strategic initiatives, including an ongoing focus on growing the ranks of CFP certificants (to 81,000 by 2017), and a restatement that the CFP Board believes its compensation disclosure definitions are clear and do not need to be adjusted (despite the ongoing disparity between its own fee-only definition and that of NAPFA). And wrapping up the news this week was the SEC's announcement of its 2014-2018 strategic plan, which includes an intention to "continue to analyze" a potential fiduciary rule... and the potential that if the SEC is "just" in the analysis stage, that there may be no rule coming at all in the near future.

From there, we have a number of practice management articles this week, including: how to keep your data private from prying eyes when working on your laptop in public; a new tool to help you do a "Do It Yourself" valuation of your practice (with far more accuracy than traditional industry rules of thumb); an interesting discussion of how advisors create value for clients, focused around the three core areas of Planning, Implementation, and Monitoring; and some ideas about how to create a better client experience (a la "the Disney experience"). There are also two technical articles this week, the first discussing a recent IRS announcement that it will grant a reprieve for those who missed the opportunity for filing a portability election since it was first established at the end of 2010, and the second reviewing a recent Tax Court case that illustrates the hazards of using IRA dollars to invest in a personal business.

We wrap up with three interesting articles: the first looks at a big change coming to the credit card system to combat rising credit card fraud - by October 2015, the entire US system will be switching from the current swipe-and-sign approach to the structure used in most of the rest of the world, where credit cards have security chips and purchases are authorized by an individual PIN in addition to the swipe action; the second article provides a fascinating deep dive into how exactly to best deliver an apology in a business like financial planning where mistakes are inevitable and will happen (but how you handle it determines how big or small the problem will ultimately be!); and the last is an interesting article from practice management consultant Angie Herbers who notes that while advisory firms are often founded by visionary owners, it takes an "integrator" to really make the business grow and come to life... though ultimately once the integrator takes over, replacing the founding visionary with the next generation can actually be the hardest step of all for the long-term viability of the firm. And be sure to check out the latest advisor tech news with Bill Winterberg's "Bits & Bytes" video segment at the end!

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a summary of the key details of President Obama's newly proposed "MyRA" accounts, a new form of "starter IRA" account for those who may only be able to save small dollar amounts. In addition, there's also some coverage of the latest AALTCI survey on long-term care insurance showing that premiums are up by 12% for females in 2014 but actually down almost 10% for males as gender-based LTC insurance pricing has taken effect. And an interesting survey of advisors in the UK after the first year of their RDR reforms - which banned commissions for advisors - finding that in fact the transition to a commission-free world has gone more smoothly than many first feared.

From there, we have a few practice management articles, including a look at how advisory firms are onboarding and training new advisors, new research on what generates referrals finding that the greatest predictor of whether clients refer may simply be that some are more "hard-wired" to do so that others, and the last a summary of advisor tech guru Bill Winterberg's keynote session at this week's TD Ameritrade conference on how advisors need to focus more on their digital presence and the first impression it may be making on prospective clients.

We also have a number of more technically-oriented articles this week. There's one that looks at how the world of estate planning is changing now that no more than 3,000 - 4,000 Americans each year are actually passing away subject to Federal estate taxes, a second that provides an interesting rebuttal to the recent criticisms about the Shiller CAPE ratio and suggesting it may still be more valid than many give it credit for, and the last is the latest for investment guru James Montier of GMO that seeks to critically debunk several recent new investment trends, from "smart beta" to "risk parity" strategies to investing in real assets.

We wrap up with three interesting articles: the first is an insightful article about blogging itself by advisor and blogger Josh Brown, who makes the important point that advisors shouldn't worry about being the first to cover breaking news and that instead trying to be last - giving the ultimate and final word on an issue - may actually be the better (and less pressured) way to go; the second is a predictive look from industry commentator Bob Veres at the advisory profession in 20 years, noting that the changes we witness may be far more dramatic than what anyone has been predicting so far (remember, 20 years ago the "internet" was little more than dialing up to America Online or CompuServe!); and the last explores whether the financial planning profession - and the regulators who oversee it - still has too much "marketing myopia" with a nearsighted focus on products and not enough on recognizing that advice itself is our primary value proposition. 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 discussion of an interesting new trend: financial "wellness" programs, which are employer workplace financial programs oriented primarily around education (and not necessarily advice), that are on the rise and may create new demand for young planners, potentially facilitating a new career track for the profession.

There are several industry and practice management articles this week, from a study by Spectrem Group affirming the trend that consumers - especially higher net worth - are increasingly seeking out independent advisors over full-service brokers, to a profile of Schwab's increasing push into financial planning as they delivered 101 thousand financial plans last year (albeit with varying levels of complexity, and often provided for free). There's also an article on social media tips wittily titled "Why Social Media Won't Work For You" (providing guidance on those mistakes to avoid), a nice basic guide from the Journal of Financial Planning on the importance of connecting your website to Google Analytics and what to look at/for, and a good article looking at how to fix your investment committee's decision-making process by "Investment Committee Doctor" Tom Brakke.

We also have a number of more technically-oriented articles this week, including: new research from the Journal of Financial Planning co-authored by Wade Pfau and yours-truly, finding that the optimal asset allocation in retirement may actually be to start more conservatively for clients and slowly increase equity exposure throughout retirement; a look at the trends in cash value life insurance, finding that use of the product actually has declined precipitously in the past 20 years, though the ones still using it today tend to be those who are older, wealthier, and most sophisticated; and a discussion of how to use bond ladders for retirement portfolios (with the caveat that at today's low rates, there's a significant trade-off to doing so).

We wrap up with three interesting articles: the first is a list of the 3 "big issues" that advisors need to examine more carefully when planning for clients (including our spending assumptions, our expectations about the stability of careers and income of our clients, and just how disruptive technology could be); the second takes a look at how the world of financial advice may be different in 2034, when there has been an entire generational turnover of financial advisors; and the last, which I highly recommend, by famed venture capitalist Marc Andreesen, on why Bitcoin is a much much bigger deal than most (advisors) realize, and its importance goes far beyond just being a speculative crypto-currency. Enjoy the reading, and be sure to check out Bill Winterberg's weekly advisor technology "Bits & Bytes" video at the end!

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Enjoy the current installment of "weekend reading for financial planners" with a special focus on practice management and technology topics! This week's reading kicks off, though, with news from the CFP Board's ongoing saga in the Camarda lawsuit; the latest development is that the CFP Board declined to answer a large number of questions in a deposition with its staff counsel, in turn prompting the Camardas to ask a Federal judge to sanction the CFP Board for failure to comply with the deposition and the CFP Board maintaining that the questions from the Camarda attorneys are just a "fishing expedition" beyond the scope of their actual case.

From there, we also have an article on the recently announced SEC regulatory priorities for 2014, which includes a deeper look at "reverse churning" inactivity in fee-based AUM accounts, the activities of dual-registered advisors, how advisors handle IRA rollovers (dovetailing on the DOL's anticipated new fiduciary rules), and a big push for more investment adviser examinations. There's also a discussion of whether robo-advisors may finally start to become a threat to advisors - or not - as Wealthfront announced this week that it has crossed the $500M AUM mark, after being at little more than $100M a year ago.

We also have a number of additional practice management and technology articles this week, including: two interesting industry studies released this week, where the first shows that wealthy clientele are increasingly adopting a multi-advisor approach and not consolidating advice and assets with just one person, and the second study finding that while advisor client retention is consistently high, there is a noticeable dip in retention for advisors 2-4 years after a client relationship begins (suggesting a clear area for focus for advisors who want to boost retention); an article looking at how best to build relationships with centers of influence (based on a live panel where attorneys and accountants were asked to rate advisors' "pitches" to them); some very practical tips about how to dramatically increase how many meetings you're conducting and the amount of face time you're getting with your clients; and two technology articles by Bill Winterberg, the first looking at some helpful productivity apps, and the second a review of how to use the free Google Forms service to conduct based survey and client data gathering activity.

We wrap up with three interesting articles: the first is a remarkably good list of all the conventional practice management wisdom that is often repeatedly but rarely implemented in full, presented as a series of potential "mistakes" that advisors should avoid; the second is an article about the latest research on persuasion and how to (ethically) influence clients to act; and the last is a fascinating interview with popular personal finance blogger "Mr. Money Mustache" who retired at the age of 30 and now writes about how to retire early with a modest lifestyle, built around a message not of Scrooge-like frugality but a simple focus on enjoying the things that matter the most in life and letting go of the rest of our spending excesses (and some light chastisement towards financial planners that perhaps we focus too much on saving for old-age affluence and not enough on managing spending). Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with a big announcement from the CFP Board that it will be converting the CFP exam to be computer-based and in the process permanently reducing the length of the exam from 10 hours down to only 6 (and cutting the number of questions by 40% to match it). There's also a striking article reporting on the volume of Roth conversions that occurred in 2010 - the first year it was possible to convert without income limits - as the IRS found conversions increased nearly 1,000% over the 2009 numbers, and were especially concentrated amongst high-income investors (though ironically, they may have benefitted the least from the decision to convert!).

From there, we have a couple of practice management articles this week, including a roundtable interview in the Journal of Financial Planning about technology trends for advisors and the rise of the "robo-advisor", a review of the new financial planning software WealthTrace, and an announcement by financial planning software inStream that it is abandoning its free model and converting to an ongoing subscription model (and rolling out a lot of interesting features as well).

We also have a number of investment-related articles, from a discussion of William Bernstein's new book "Deep Risk" about the unique kinds of long-term risks that can permanently impair client portfolios, to a great summary by Reformed Broker Josh Brown about the current state of affairs in markets (we're somewhat overvalued, but with the animal spirits stirring, there's no reason why the party has to stop anytime soon), to a prediction that the "surprise" event of the year could be a default by Puerto Rico that sends ripples (or shockwaves?) through the municipal bond market as risk is repriced. There's also an article looking at how many elderly variable annuity holders are now having the surprising problem that they can't keep holding their annuity in deferred status and instead must convert it to a stream of income... unfortunately forfeiting what may be a substantial death benefit in the process.

We wrap up with three interesting articles: the first discusses how advisory firms can overcome the "success paradox" where the key things that helped the firm grow to where it is may be the exact factors blocking it from growing further (and the primary issue: usually the bottleneck around leadership at the top); some suggestions from industry commentator Bob Veres about what the top issues are likely to be for advisors in 2014; and a striking internal research study from "robo-advisor" Betterment, that has begun to calculate the behavior gap on its aggregate tens of thousands of customers and found that, through its systems, the average behavior gap is a mere 0.31%/year, barely 1/5th of the behavior gap reported for the typical investor in similar research studies (and raising the question of whether "client behavior gap" is something all advisors and robo-advisors might be expected to start tracking and reporting on in the future?). Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with the latest announcement from FINRA, that they are putting a heightened scrutiny on IRA rollovers, just as the Department of Labor is anticipated later this year to issue its own fiduciary rule on IRA rollovers, and raising the question of whether FINRA is trying to accommodate and prepare for the DOL rule or reassert its own jurisdiction on the issue. There's also an interesting article covering a recent survey from Spectrem Group that suggests prospective clients may have their own views about what "wealth management" means that differs from how advisors view the issue.

From there, we have a couple of practice management articles this week, including a look at how advisors may generate the most clients from client referrals but the best clients come overwhelmingly from Centers of Influence; a story of how one young advisor climbed the ladder from intern to CEO of an independent RIA and what it takes to climb the ladder; and a look at some of the differences in what Gen X/Y clients expect from their advisors versus baby boomer clients (hint: the Gen X/Y clients laughed out loud at the thought of having a 90-minute meeting).

From there, we have several more technical financial planning articles this week as well: a challenging article that questions whether commodities futures funds are really living up to their promise of high ("stock-like") returns with low correlations; a discussion of whether we may already be in another housing bubble, this time driven not by consumers but by private and institutional investors, as affordability hits new all-time lows; a look at whether client fears that their children won't be able to get into any college may be completely overblown; and a discussion of how the file-and-suspend Social Security claiming strategy, typically used for married couples, may actually be an effective approach for singles as well as a form of "delayed benefits insurance."

We wrap up with three interesting articles: the first is a discussion from an advisor who blogs about the benefits that he/she finds, beyond just the opportunity to develop business, from helping to clarify thinking to a mechanism for accountability; the second is an interesting discussion for technology innovation commentator Vivek Wadwha about how the United States may be poised for a new renaissance driven by real integration of the digital world into all industries that could spur a new wave of economic growth; and the last is an interesting discussion of how financial plans might be made more engaging for clients by inviting them to find images of their goals that they identify with, and then using those images to help them better visualize, connect with, and stay accountable to pursuing their goals. Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with the latest news on the fiduciary front, that the Department of Labor may have delayed its latest rule reproposal to next August because incoming Labor Secretary Tom Perez is trying to rally support in Congress for the rule and preemptively address Democrat concerns about whether middle-income families may be cut off from financial advice as a result of higher regulatory costs. Also in the news was the striking announcement that Vanguard has collected a whopping 98% of all net inflows to U.S. equity funds this year, and rumblings continue about the recent Schwab announcement that they will offer a money-back guarantee for the last quarter's AUM fees for any advisory clients who are unhappy and whether this will set a new accountability precedent for advisors.

From there, we have a number of practice management articles, including some suggestions on how to handle the situation when an advisor/employee leaves, when it's time to think about hiring a professional manager for an advisory firm, the emerging rise of regionally-dominant "super ensemble" RIAs that have $5M+ of revenues and often $1B+ of AUM, and the 2013 "Best In Technology" awards from advisor tech guru Bill Winterberg.

We also have a pair of technical financial planning articles this week: the first looks at some of the traps and pitfalls of properly valuing life insurance policies that are being transferred to ILITs (given that the gift valuation rules are 50+ years old and life insurance has evolved greatly since then!); and the second is a discussion of the prospective benefits and caveats of a Department of Labor proposal that would require all defined contribution account statements to show an estimate of lifetime income that would be available at retirement given the current value and ongoing savings.

We wrap up with three interesting articles: the first is a look at some of the latest research on how we make choices, the fact that more choices can actually make it harder for clients to move forward, and the role that planners can play to help clients make better choices; the second examines the typical marketing of financial planners, noting that most appeal to a prospective client's analytical side, despite a growing base of research that makes it clear that people are more compelled to buy a product or service that appeals to their emotions instead; and the last is an interview with Ric Edelman about his firm, which now boasts a whopping $12B of AUM and 22,000 clients, focused entirely on the mass affluent, with plans to grow significantly more in the coming years... notwithstanding the fact that most large firms still insist that the mass affluent cannot be served profitably! Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with some of the latest industry news, including a new filing from the CFP Board in its lawsuit with the Camardas asking the court to either throw out the lawsuit or at least narrow the scope of the Camardas' information requests as being a "fishing expedition" (if the court declines the motion, depositions of key CFP Board staff members will begin in the coming weeks); there's also an interesting announcement from Schwab that they will begin rebating the last quarter's worth of fees for any unhappy advisory clients (will other financial advisors feel compelled to match the offer for their own clientele?), and an interesting study from TIAA-CREF suggesting that Gen Y may actually be even more receptive to financial advice and willing to change their behavior than baby boomers.

From there, we have a number of "trends and predictions" articles that are so common towards the end of the year, including a white paper about "transformations" that broker-dealers must make to survive and be competitive as the differences between B/Ds and RIAs continue to blur with the movement towards AUM business models, a look at some of the big regulatory changes coming in 2014 (beyond just fiduciary and harmonization, look for increased focus on protecting clients from identity theft and business continuity plans for advisory firms), some of the biggest tech trends coming for advisors (big focus on the cloud and software integrations), and a broader look at four 4 trends that will impact advisors for many years to come (from demographics to technology and more).

We also have a few more technical articles this week, including a discussion from actuary Joe Tomlinson on some of the latest research debates on the best asset location strategies, an interesting (and high quality) analysis of some of the flaws in the Shiller P/E10 ratio and how to fix them, and a broad look at how estate planning is changing in a world of 'permanent' exemptions that have removed most clients from the reach of Federal estate taxes (shifting the focus to income tax planning, step-up in basis opportunities, and asset protection).

We wrap up with three interesting articles: the first discusses the recent acquisition of David Loeper's Wealthcare Capital and their Financeware financial planning software by a private equity firm, which is notable not just because they are investing into growing the company, but because they may also try to re-assert Loeper's patents related to financial planning (which some have gone so far as to call a risk to all financial advisors); the second is an article looking at the challenges that average Americans have with trying to save, and how it may be less a matter of their attention span or focus and more than the sheer urgency of spending interruptions prevents them from ever focusing on the less-urgent-but-still-important financial goals; and the last is an interview with indexing legend John Bogle, who suggests that the ETF industry has taken indexing "too far" and that he wouldn't advocate investing in almost 97% of today's ETFs! Enjoy the reading!

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