Archives Of Weekend Reading For Financial Planners

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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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with three articles highly critical of the CFP Board. The first is a warning from FPA Board President Michael Branham that the CFP Board's consideration of becoming a CE provider and competing against the 1,200 CE education providers it regulates is an untenable conflict of interest that could cause "irreparable damage" to the credibility of the CFP marks. The second article is a discussion of the latest CFP Board debacle when it granted amnesty to hundreds of wirehouse brokers who had violated CFP Board rules in their compensation disclosure on the CFP Board's own website, even while it publicly and privately disciplined other advisors - including former CFP Board Chair Alan Goldfarb - for similar offenses. The third article is from a CFP certificant who works with clients strictly on a fee-only basis, but because of an unrelated ownership interest is not permitted under CFP Board rules to state that he is "fee only" - and declares that if necessary, he will drop his CFP certification rather than cause client confusion by stating he is "commission and fee" when in reality no clients will ever pay any commissions.

From there, we have several practice management articles this week, including one that provides an overview of the 10 types of online investment startups that may impact financial advisors (some favorable, some complementary, and some competitive), a second that provides some coverage of this week's T3 Enterprise conference for advisor technology, and a third that provides an interesting process about how to craft a client value proposition statement (without all the data, numbers, and target client demographics typical of so many client value propositions).

There are also a few technical articles, including one looking at potential tax law changes that may be coming as a part of the December 13th Congressional budget negotiations (high on the list for planners: potential changes to the favorable payroll tax treatment of S corporation dividends), a second explaining the recent judicial challenge to the premium assistance tax credits that could have a significant "surprise" impact on the Affordable Care Act, and the third providing some excellent advice from 529 guru Joe Hurley about how to properly handle grandparent-owned 529 plans while preserving favorable financial aid treatment for the grandchild/student.

We wrap up with three interesting articles: the first provides a fascinating analogy that compares low- versus high-cost investing to joining gyms that have donut-eating requirements; the second points out that just as planners recognize that financial planning should be about the clients and their goals and not the numbers, financial planners themselves should focus less on numbers-centric business coaches and more on holistic-goal-centric life coaches; and the last provides a humorous look at the so-called "robo advisors" by putting forth a list of 10 questions that consumers can ask to vet their robo-advisor (a riff on the all-too-common "10 questions to ask to vet your financial advisor" articles). 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 IRS announcement of 2014 inflation adjustments, which will move everything from the top 39.6% tax bracket to the AMT to a new Federal estate tax exemption (up to $5.34M next year), though many key areas will have no change, including IRA contribution limits (still $5,500) and the annual gift tax exclusion amount (still $14,000/year). There was also a second big tax announcement this week - the Treasury is relaxing the "Use It Or Lose It" rules for flex spending accounts (FSA), and instead will now allow up to $500 to be carried over to the following year.

From there, we have several articles related to the new health care exchanges and the shifting landscape for health insurance decisions, including one about how to counsel clients if they're just finding out their individual health coverage is being cancelled (hint: doesn't mean they can't get coverage, just that they have to get new coverage that meets the new requirements), a second providing a workaround for many financial planning clients and advisors who are struggling with the technical glitches on Healthcare.gov (if you don't need a Premium Assistance Tax Credit, just go through a health insurance agent!), and the last looking more broadly at how many financial planners are starting to develop an expertise in health insurance and Medicare as a specialization (especialy for retirees trying to navigate health care through their 50s and 60s).

We also have an array of technical and practice management articles this week, including: new foreign tax reporting requirements for clients who live (or retire) abroad under FBAR and FATCA; a reminder of the importance of having a privacy policy for your advisory firm (and the easy model templates available to craft one safely); a warning from the SEC that it is going to focus in 2014 on examinations of RIAs that have been around at least three years but have never been examined in the past; a list of reasons why it might be a good job to quit your advisory firm as an employee (along with an important reminder to try to work through problems first, and only view quitting as a last resort!); and a look at the industry trends around wirehouses (while there's been much discussion about the breakaway broker trend, it still amounts to little more than a trickle based on the amount of wirehouse advisors and assets).

We wrap up with three interesting articles to give you something to think about: the first is one of the more comprehensive overviews I've seen on all the academic research (good and bad) about the fiduciary standard and how such a standard might impact access to advice for the middle class; the second is a discussion from a former NestWise advisor (the LPL subsidiary that was aiming to bring financial advice to the middle class before it was abruptly shuttered a few months ago) about what was and was not working well as a practicing advisor on the platform; and the last is an interview with financial planning professor and researcher John Grable, who advocates for more "applied" research from academics that advisors can really put into practice with their clients. Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with three interesting industry articles: the first looks at some recent strong statements from the FPA at its recent FPA Experience conference against the CFP Board, even while the organization renews its commitment to CFP professionals; the second is an interview with Sheryl Garrett of the Garrett Planning Network and how the network and its advisor members continue to evolve; and the third is a prospective look at how the financial services industry is changing in the coming two decades, heavily influenced by its currently low position on the trust/reputation scale after a decade of financial services scandals and debacles.

From there, we have several practice management articles this week, including: the benefits some advisors are finding in expanding their practices to lower net worth clientele; advice from practice management consultant Angie Herbers about how female advisors need to get comfortable being more "selfish" and acting on their own behalf; and how running a financial planning business is like poker, in that if you're sitting at a difficult table, you can always get up and change tables (and change your business model/target clientele).

There are also a few technical articles, including one about how risk tolerance measures could be improved, another looking at some examples of the size of premium assistance tax credit subsidies for those buying health insurance on the exchanges (which, because the rules are based on income only, can apply for clients even with a very high net worth), and a look at how advisors are increasingly using HELOCs again as home equity levels rise and banks become more willing to lend.

We wrap up with three interesting articles: the first looks at how dramatically life expectancy has increased over the past 150 years, though despite significant medical advances it turns out the driving force of the improvement has been our ability to better manage (and avoid) the spread of disease; the second looks at how you can inspire more creativity and build a "culture of healthy debate" in your advisory practice to encourage growth; and the last is a "manifesto" from blogger and personal finance writer Ramit Sethi, who makes the case that people would be better served by focusing less on traditional financial advice around budgets and trimming little expenses, and more on the "Big Wins" that can really meaningfully impact their finances and more importantly, establish healthy financial behaviors. Enjoy the reading!

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Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with two interesting bits of regulatory news: the first discusses a recently released report from FINRA focusing on broker-dealer conflicts of interest, and advocating that brokerage firms need to do a better firm of focusing on their clients' interests and mitigating or avoiding their conflicts of interest (though the word "fiduciary" isn't actually used); and the second looks at a sharp rise in the number of arbitration settlements that brokers are getting expunged through FINRA, as a redemption process that was theoretically supposed to be used in just "limited, unusual circumstances" is now getting approved in almost 97% of requests over the past several years, in the process obscuring consumer access to important information about an advisor's regulatory record.

From there, we have a number of practice management articles this week, including: some tips on how to prepare clients for what may soon be an onslaught of direct hedge fund advertisements and marketing; how to defend your online reputation from negative publicity (hint: the best defense is a good offense); how some advisors are successfully differentiating themselves as "remote" advisors working virtually with clients; the problem with the "access to principals" paradox where advisors promise clients to have direct access to them, simultaneously promoting the growth of the firm but limited its growth potential and equity value; how to create a tagline for your advisory practice; tips to crafting a good career plan for your advisors (why do we create financial plans for all of our clients but no career plans for our staff!?); and a fascinating article looking at how to build a good partnership/ownership culture in an advisory firm.

We wrap up with three interesting articles: the first looks at a recent study that finds financial literacy may not actually be very effective at helping consumers with their financial problems, and that other techniques (like "just-in-time" education when needed, or even developing more simple rules of thumb) may actually be more advantageous; the second provides a great reminder of the importance of reducing our distractions to focus on our work (and that multitasking isn't really beneficial, despite what many think); and the last is an article from financial advisor blogger Josh Brown that tells the story of why and how he got started as a blogger, and how other advisors can do so, too. Enjoy the reading!

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