Archives Of Weekend Reading For Financial Planners

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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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with a "no-news" article... that after four months since the CFP Board's "fee only" controversies began, there are still not yet any formal talks amongst NAPFA, the FPA, and the CFP Board about how to resolve the differences in compensation definitions, or address the fact that a number of FPA and NAPFA members appear to be currently out of compliance with the current rules.

A number of other practice-management and industry-related articles are highlighted this week as well, including: the first practice management study released by the FPA's new Research and Practice Institute which found that only 46% of financial planners even have a retirement plan for themselves; a renewed push by the Financial Planning Coalition (along with AARP, CFA, IAA, and NASAA) to advocate for legislation to assess user fees on RIAs to enhance oversight (in lieu of allowing FINRA or another SRO to take over); rising scrutiny by the SEC on so-called "reverse churning" where advisors put clients into AUM fee arrangements but have so little trading that clients may be charged far more than they would have been by just staying in a commission-based account; new fees that many custodians are charging to advisors who try to trade away to get better price execution on ETF trades; and an announcement by BrightScope that its Advisor Pages offering will now be free to advisors who want to update the essential information, with premium features available for those who want to pay more to further engage in marketing through the platform.

From there, we have a several more technical financial planning articles this week, including an analysis by Wade Pfau comparing variable withdrawal rate strategies from Jon Guyton and David Blanchett, a look at how recent changes for reverse mortgages may make them less appealing to financial planners even as reverse mortgages are becoming more recognized in research as a financial planning tool, and a look at how for many financial advisors their health insurance premiums may go up next year as premiums are shifted to be based on each plan participant's individual age (which means older advisors who saved on premiums by having younger employees who brought down the average age of the plan will no longer enjoy such savings).

We wrap up with three interesting articles: the first looks at how some big trends, from industry consolidation and pressured profit margins to generational shifts and technology will threaten advisors to "adapt or die" (with lessons from Blockbuster video as an example of a company that failed to recognize their own industry trends and adapt accordingly); the second is a satire article from Vanguard announcing new "AlphaBet" ETFs as a demonstration how simple data mining and research biases can create new ETF products that have no reasonable expectation of sustaining their results (advisors beware of backtest-based new ETF offerings!); and the last is a discussion from the NY Times of Britain's new "Ministry of Nudges" that is applying behavioral finance and research principles to help better implement government policies, with some very notable successes. 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 2013 annual advisor tech survey, with some interesting results showing that advisors are starting to really shift to the cloud (and show a preference for cloud-based solutions). There's also an interesting bit of news about Fidelity announcing that it going forward it will charge more to purchase Vanguard and DFA mutual funds (and a few other low-cost providers) compared to the other 99%+ of the marketplace.

From there, we have a number of technical planning articles, including a discussion of how clients who use the Social Security "file and suspend" strategy can actually undo it years later, a look at some of the rules for 529 plans that are relaxed when a beneficiary designation change occurs, a harsh look at whether nontraded REITs are really all they're cracked up to be, and some recent research from the Journal of Financial Planning about how to achieve higher withdrawal rates using a standby line of credit via a reverse mortgage.

We also have several practice management articles, including a bit of a point-counterpoint discussion about the how easily advisors can get started with blogging, but a note that just because advisors can blog doesn't mean they should unless their practice is really focused and specialized enough to create content that has unique value from all the other "tripe" being pushed out (spammed out) to consumers. There's also a discussion of how some advisors have struggled with the execution of website re-design projects (though most seem happy with the final outcome, even if the process of getting there was a challenge!).

We wrap up with three interesting articles: the first is an interview with financial planner, blogger, and speaker Tim Maurer about the wide range of activities he's involved with and his secret for how he's achieved such good relationships with the media (hint: give it away); the second is a look at some of our behavioral biases in making decisions as advisors, and how we can better navigate our own decision-making challenges; and the last is an interesting look at how, despite all the negativity about the state of the US these days, we've actually made astonishing improvements over and above the days-gone-by when we already said times were great (which means we should be even happier now, right!?). 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 interesting regulatory articles, including the big announcement late last week of an SEC panel encouraging the regulator to move forward with RIA user fees to fund better oversight and to adopt a uniform fiduciary standard for investment advisers and brokers, along with a discussion of whether the SEC's fiduciary rulemaking may ultimately result in two kinds of fiduciaries, and an interesting look at how recent regulatory recent in the UK that took effect at the beginning of the year has already resulted in a 20% drop in the number of advisors (but mostly concentrated in large institutions that may have been the most commission-centric in the first place).

From there, we have a long array of technical financial planning articles this week, including: a recent court case supporting the use of Medicaid-compliant annuities when trying to qualify one member of a couple for Medicaid; an overview of the recent research on more dynamic retirement income/withdrawal strategies; research looking at what the optimal timing for annuitization might be (hint: annuitizing a significant portion later is about as efficient as annuitizing at the start of retirement, especially when balanced amongst competing longevity/liquidity/bequest goals); a fresh look the so-called "annuity puzzle" (if annuities as so economically optimal, why don't more people buy them?); and a Journal of Financial Planning study suggesting that making asset location decisions should be done based on a client's "after-tax" asset allocation (which yields some different results than the 'traditional' approach!).

There are also a pair of practice management/industry articles this week: the first looks at how financial planning programs are struggling to mint quality new financial planners fast enough to meet the demand; and the second looks at how potential changes to Facebook business pages may be a dealbreaker for financial advisors trying to use the social media platform for business.

We wrap up with two interesting articles: the first looks at how the primary reason why prospective clients resist financial planning may have less to do with the trustworthiness and competence of the planner and more to do with the simple fact that people are hard-wired to behave consistently with their prior actions (even if that means sticking with a failing strategy); and the second looks at how smartphone-enabled savings tools may have the potential to help bridge the country's retirement crisis by making it as easy to save as it is to spend. Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" practice management edition! This week's reading kicks off with an interesting interview with "robo-advisor" Betterment CEO Jon Stein, who seems to be shifting in acknowledging that perhaps his platform will be more likely to co-exist with advisors than compete directly with them (though that doesn't slow Stein from a lofty goal for a whopping $100B of AUM in 5-7 years!).

From there, we have a long array of practice management articles this week, including: an overview of the results of the 2013 FA Insight People and Pay industry benchmarking study; a discussion by practice management consultant Angie Herbers of the most common fatal succession planning mistake (focusing too much on valuation) and how to manage it; an interesting survey of new advisors that highlights what a subset of "quick starters" are doing to succeed (growing their businesses to more than $50M of AUM in under 5 years); how female advisors, while still forming a small minority of total advisors, are actually winning on some key advisor metrics for success; how "big data" solutions are coming soon to help advisors better manage their practices and serve their clients, with an initial glimpse at two new offerings; and a review of the latest Redtail Document Imaging software solution for advisors.

There are also some articles specifically about marketing and business development, including: an overview of 3 services that help advisors to better market and grow; how some advisors are having extraordinary new business success by attracting clients through Yelp, albeit while operating in a "grey" area of compliance; and some guidance from Bill Winterberg on how advisors can get started with video on their websites.

We wrap up with three interesting articles: the first is a good discussion from Mark Tibergien about what it really means when firm owners say they want staff and especially future partners to "act more like an owner"; the second is a look at the latest trends in website development for financial advisors and some examples of the advisory world's best advisor websites; and the last is a discussion of how advisors need to look beyond classic business metrics to really measure "success" or risk evolving their businesses in ways they didn't intend. 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 big news from the CFP Board, which announced this week that it will not be pursuing its controversial proposal to offer CFP CE credit, and instead will be offering up a series of initiatives over the next 3-5 years aimed at lifting the overall quality of CFP CE across all programs; in addition, the CFP Board also announced that it will be extending its "Let's Make A Plan" public awareness campaign by another two years, citing better-than-expected results from its public awareness metrics.

From there, we have several regulatory-related articles this week (following on the heels of Tuesday's guest blog post regarding FINRA's significant fiduciary shift with its recent "Report on Conflicts of Interest"), including a new consumer educational program from Wall Street trade organization SIFMA entitled "Our Partnership With You" that advocates consumers should receive best-interests personal investment advice (though the word "fiduciary" was not used), an announcement by FINRA that it is making its BrokerCheck and IARD systems more accessible and consumer-friendly for those who want to check up on their advisors, and a summary of the current state of various fiduciary activity (from the SEC, DOL, and FINRA) presented at this week's Schwab IMPACT conference (along with another article that provides overall highlights from the event).

There are also a few technical articles, including a good summary of this week's proposals to "fix" the Obamacare problems by extending the time period that insurance companies can renew "old" insurance plans without cancelling them (and some of the problems with trying to do so), the potential coming offering of new "R-Bonds" from the US Treasury as a new kind of IRA alternative, a discussion of some of the practical caveats and limitations to the 4% "rule", and an interesting look at just how long it may take for a total return bond fund to recover from various interest rate increases (hint: a while, but not as long as clients might fear, and still with far less volatility than equities).

We wrap up with three interesting articles: the first looks at how bland and sometimes unprofessional the typical "Out of Office" email is, or at best how it's purely "AUTOREPLY" style is at odds with what are otherwise high-touch high-relationship advisory firms (and some suggestions about how to improve accordingly); the second is from Steve Lockshin about trends that are likely to impact the advisory world in the coming years (excerpted from his recently published book "Get Wise To Your Advisor"); and the last provides a good reminder about how important it is to have a clear mission for your firm, noting not only do customers/clients increasingly prefer mission-driven companies, but that employees who worked at firms with clear mission and follow-through were twice as likely to want to stay with their current employer and three times more likely to have high job satisfaction! Enjoy the reading!

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