Weekend Reading For Financial Planners (April 20-21)

Number Of U.S. CFP Professionals Crosses 100,000 Threshold As CFP Exam Turnout And Pass Rate Grow

(Melanie Waddell | ThinkAdvisor)

In the mid-20th century, the first phone call for a person who needed guidance on saving or planning for retirement was likely to be to a stockbroker or a mutual fund or insurance salesperson. Yet while some of these salespeople may have certainly been able to provide sound advice, there was really no way at that time for a consumer to know which among the many brokers and agents out there were actually capable of giving true and sound advice that would help them reach their goals. So, in the late 1960s, a movement began to organize a formal financial planning body of knowledge, and promote best practices that would establish financial planning as a true profession. As a result, in 1973, a group of 35 planners became the inaugural recipients of the Certified Financial Planner (CFP) marks.

Over time, more and more financial advisors have obtained CFP certification, in part due to the CFP Board's setting of increasingly rigorous educational and examination requirements that established a high bar of competency for those who wished to use the CFP marks and made the marks more credible to consumers and thus more desirable to pursue. Gradually, the CFP Board also raised the ethical standards for CFP professionals, introducing a fiduciary standard on financial planning in 2008 and, in 2020, an expanded fiduciary standard that applies whenever the certificant is giving financial advice. And despite occasional setbacks (such as the 1999 introduction of an "Associate CFP" designation, which was poorly received because it was seen as lowering the standards applicable to those who called themselves CFP certificants) and a highly publicized 2019 Wall Street Journal article that found numerous CFP certificants with undisclosed disciplinary histories (which exposed the limitations of allowing certificants to merely self-report their own disciplinary events, leading to an overhaul of how CFP Board oversees the investigation and enforcement of disciplinary cases), CFP Board's efforts to expand public awareness has led to widespread recognition of and preference for CFP certification among the audience of potential consumers.

And this week (soon after the 50th anniversary of the first class of CFP certificants), the CFP Board announced that it had crossed the milestone of 100,000 CFP professionals in the United States, representing about one-third of retail financial advisors (indicating there is still plenty of room to grow in the financial advice industry!). The milestone came amidst a record number of candidates taking the CFP exam during its March administration (3,683), with an overall pass rate of 68% (72% among first-time exam-takers, and 54% among repeat takers), the highest rate since 2015. According to the CFP Board's post-exam survey, 87% of those taking the exam said the main reason they were pursuing CFP certification was to demonstrate expertise in their job, while 73% wanted to distinguish themselves as fiduciary. Notably, 59% of exam takers indicated they were receiving financial support from their employers during the CFP certification process (as this support could represent a win-win situation, as firms can leverage the CFP brand in marketing that their advisors are CFP professionals and the advisors themselves can reap the income and other benefits of CFP certification).

Ultimately, the key point is that even though the CFP marks are already 50(!) years old, more and more financial advisors (and consumers) appear to be recognizing the value not only of the CFP brand itself, but also the rigor of the certification process and the standards required of CFP professionals and the enforcement of them (though CFP Board itself recognizes that there is still room to grow in this regard). Such that the CFP Board is only now setting new highs on the number of people pursuing the CFP marks each exam cycle! And for candidates looking to take the CFP exam during future administrations (and be a part of the next 100,000 CFP professionals!), creating a study plan of action and potentially taking an exam review course could help them pass on their first attempt!

Release Of Final DoL Fiduciary Rule Expected Soon

(Melanie Waddell | ThinkAdvisor)

The Department of Labor (DoL), in its role overseeing retirement plans governed by ERISA (e.g., employer-sponsored 401(k) and 403(b) plans), has gone through a multi-year process across 3 presidential administrations in efforts to update its "fiduciary rule" governing the provision of advice on these plans (as well as IRA rollovers in/out of these plans). Amid this backdrop, the DoL released a new proposal in October 2023, dubbed the "Retirement Security Rule: Definition of an Investment Advice Fiduciary" (a.k.a. the Fiduciary Rule 2.0), which would again attempt to reset the line of what constitutes a relationship of trust and confidence between advisors and their clients regarding retirement investments and when a higher (fiduciary) standard should apply to recommendations being provided to retirement plan participants.

Despite the rule's expansive (and contentious) provisions, the DoL has moved the proposal forward quickly (at least compared to other regulations), possibly to ensure it could go into effect before a potential change in presidential administration next year. Last week, the proposal cleared its final hurdle before being published, as the Office of Management and Budget (OMB) announced that it completed its review of the rule. Observers suggest the rule could be published in the Federal Register at any time, with a potential effective date of January 1 (notably, the final version could include changes from the original proposal if the DoL decided to make alterations based on the feedback it received).

The expedited approval has drawn the ire of brokerage and insurance industry groups (as well as some Republicans in Congress), who have argued, among other things, that the approval process has been rushed, that the rule would create high compliance costs for their members, and that existing regulations such as Regulation Best Interest and the National Association of Insurance Commissioners (NAIC) 's Annuity Suitability & Best Interest model rule. On the other side, supporters of the rule include groups such as the Institute for the Fiduciary Standard as well as a number of Congressional Democrats, who have argued that it would impose stronger fiduciary standards in the financial services industry.

In sum, it appears that the final version of the DoL's Retirement Security Rule will be announced in the coming days or weeks. And while it would represent a significant shift toward greater fiduciary standards in the financial services industry, its final disposition will likely play out in the courts, which would decide whether the DoL is 'overreaching' or appropriate in its expansion of fiduciary duty (in particular as it pertains to brokers and insurance agents recommending product sales in IRA rollover transactions). Which means the ultimate questions are not only what is contained in the final DoL fiduciary rule but also whether it actually survives its anticipated court challenge from the product manufacturing and distribution firms that were able to strike down the last DoL fiduciary rule!

Once Again, IRS Waives RMDs For Beneficiaries Subject To The 10-Year Rule

(Ed Slott | InvestmentNews)

The original SECURE Act, signed into law in December 2019, changed many of the long-standing rules governing IRAs and other retirement accounts, and no single measure in the legislation had a more seismic impact on planning than the changes to the post-death distribution rules for retirement accounts. Specifically, the law stipulated that "Non-Eligible Designated Beneficiaries" (i.e., designated beneficiaries who are neither surviving spouses nor fall into a limited number of other categories) would need to empty the inherited retirement account by the end of the 10th year after the decedent's death (and would no longer be able to 'stretch' the distributions over their own life expectancy).

While many observers expected that Non-Eligible Designated Beneficiaries would not be required to take annual distributions during this 10-year period (as long as the account was fully distributed by the end of the 10th year), the IRS in February 2022 issued Proposed Regulations that would make a subset of these beneficiaries (those who inherit accounts from decedents who died on or after their Required Beginning Date) subject to both the 10-Year Rule and annual Required Minimum Distributions (RMDs). The caveat, however, was that these were merely proposed regulations, and the IRS issued notices in 2022 and 2023 waiving any potential penalties for Non-Eligible Designated Beneficiaries in those years (and for 2021) without offering guidance for future years (or indicating when the Proposed Regulations might be finalized).

Mirroring previous years, the IRS this week issued Notice 2024-35, excusing affected Non-Eligible Designated Beneficiaries subject to the 10-year rule from having to take RMDs again in 2024 (just as they were in 2021, 2022, and 2023). Perhaps more notable, though, was a suggestion in the notice that Final Regulations might be coming soon, with the agency anticipating that the Final Regulations will apply to RMDs beginning in 2025. Which would provide financial advisors with needed clarity as they craft distribution strategies for clients subject to the 10-year rule.

Despite the continued RMD relief for affected Non-Eligible Designated Beneficiaries subject to the 10-year rule (which can allow them to continue to defer taxes on the assets in the accounts), many inheritors (and their advisors) might consider making distributions this year, even though they are not required. For instance, taking an individual lump-sum distribution at the end of the 10-year period could put the client in a higher tax bracket than they are today (and if clients expect their income to increase over time, they might be in a higher tax bracket then anyway!). Further, the scheduled sunset of many provisions in the Tax Cuts and Jobs Act (including the more favorable tax brackets included in the law) after 2025 means that a broader range of taxpayers could face higher marginal tax rates if they wait to distribute the balance of their inherited IRA. Which means that financial advisors could help clients who are Non-Eligible Designated Beneficiaries realize significant tax savings by creating a distribution strategy based on their current and future expected tax brackets (though given the pending IRS Final Regulations and potential Congressional action regarding the TCJA tax brackets, this will likely be an inexact science)!

The 4 Unique Risks In Decumulation

(Peter Neuwirth | Advisor Perspectives)

Those saving for retirement face several risks as they accumulate assets to support their lifestyle after they leave the workforce. For example, individuals face investment risk (i.e., the risk that their investments will decline in value) as well as inflation risk (i.e., the risk that inflation will erode the value of their assets). Nonetheless, because these investors are cash flow positive (i.e., they are contributing to, rather than withdrawing from, their portfolio), these risks are mitigated to some extent. However, the transition to retirement (where the individual flips from contributing to their portfolio to withdrawing from it) can introduce unique risks that can threaten the sustainability of one's portfolio.

First, sequence of returns risk is the concept that, even if short-term volatility averages out into favorable long-term returns, a retiree could still be in significant trouble if the sequence of those returns are unfavorable (i.e., with the bad returns occurring at the beginning of retirement). Because while the sequence of returns doesn't matter when there are no cash flows in and out of a portfolio, once cash flows occur (e.g., portfolio withdrawals to support retirement spending needs), the sequence of returns can play an important role in determining the ultimate sustainability of a portfolio (notably, while advisors often focus on the impact of a poor sequence of returns, there is significant upside for clients who experience a positive sequence of returns).

Next, retirees also face longevity risk, or the risk that their portfolio will not be able to support a lengthy lifespan (with this being a particularly important issue for client couples, as the portfolio typically will have to last until the second spouse dies). Further, retirees face tax risk, for example from future changes to tax brackets (that could increase the amount of taxes they pay and the amount they need to withdraw from their portfolios). Finally, retirees face the risk of unexpected spikes in expenses (e.g., extended long-term care needs) that could derail a portfolio withdrawal strategy that assumes a relatively steady spending pattern.

Notably, there are potential solutions for each of these risks. For instance, reducing a client's allocation to more volatile assets in the years leading up to and immediately following retirement (e.g., by creating a "bond tent") can help mitigate Sequence Of Return risk. For longevity risk, lifetime guaranteed income sources like annuities can help protect against a longer-than-expected lifespan. Tax risk can be mitigated by making contributions to Roth accounts (given that qualified withdrawals are tax-free) or potentially engaging in a (partial) Roth conversion strategy, as doing so allows an individual to 'control' the tax rate at which taxable withdrawals from a 'traditional' IRA or 401(k) are made. Finally, individuals can consider insurance products that can reduce the risk of certain major expenses in retirement (e.g., long-term care insurance).

In sum, while some of the factors that will determine the sustainability of a client's portfolio in retirement are outside of their control, financial advisors have many tools at their disposal to help mitigate these risks, from managing a client's asset allocation to ensuring they are properly insured. Advisors can also add value for their clients by communicating the potential risks and rewards of each of these strategies, as they tend to come at a price (whether it is reduced upside potential of a more conservative asset allocation or assets that are annuitized, the tax cost of Roth conversions, or the cost of insurance), and help them decide on and implement the best option for their needs!  

Younger Baby Boomers Face Deep Shortfall In Retirement Savings

(Nathan Place | Financial Planning)

Researchers often measure the financial health of individuals across generations, for example comparing the income and wealth of those in the Baby Boomer and Millennial generations, to identify whether younger generations are better off than their older counterparts when they were the same age. In addition to inter-generational differences, however, there can be notable differences between the experiences of individuals within the same generation.

According to research from the Center for Retirement Research at Boston College, within the Baby Boomer generation, there is a sharp difference between the experience of "late boomers" (i.e., those born between 1960 and 1965) and "early boomers" (those born between 1948 and 1953). For instance, when individuals in each of these groups reached age 56, "early boomers" had an average of about $75,000 in their retirement plans, while "late boomers" only had an average of approximately $37,000. Further, when taking into account defined benefit pensions (which were more prevalent among the "early boomer" cohort) and Social Security benefits, "early boomers" had about $345,000 in retirement savings available to them, compared to approximately $280,000 for "late boomers" at the same age.

The researchers link this gap between the wealth of "early boomers" and "late boomers" to these groups' differing experiences during the "Great Recession" of 2007-2009. While "early boomers" were later in their careers (often past their peak earning years, which meant they were able to save more while the economy was strong) when the recession hit, "early boomers" were nearing their peak earning years. As a result of the economic downturn, many in this latter group experienced bouts of unemployment or fewer opportunities to boost their income (when it was supposed to be at its peak), limiting their ability to save for retirement, according to the researchers, suggesting that many might have to increase their saving in their remaining working years, delay their retirement, or perhaps reduce their retirement lifestyle expectations to compensate for the lost savings opportunities earlier in their careers. 

Altogether, while generations can provide a useful window into the experiences of different age cohorts, there can be significant differences in the experiences of individuals within the same generation. And in the case of "late boomers" (who are now nearing retirement age and might be seeking financial advice), advisors might find that they have had a more challenging savings experience (and less accumulated wealth) compared to their clients who have already retired (which might call for different approach to deciding when to retire and what their retirement might look like)! 

Protecting Clients From The Retirement Income "Death Spiral"

(John Manganaro | ThinkAdvisor)

One of the prime concerns for individuals entering or in retirement is outliving their money, whether because they simply draw down their assets too quickly, or because they face a poor sequence of returns with respect to either market performance or when inflation shows up. While retirees might understand conceptually the possibility that a poor sequence of returns (particularly early in their retirement) could inhibit their retirement spending, they might assume that they would have plenty of time to make changes to their spending to ensure their assets are not exhausted and that the time to do so will be clear.

However, a recent paper from retirement researcher James Sandidge suggests that many retirees could enter a retirement income "death spiral" without knowing it. He found that, in contrast to an assumption that the decline in a portfolio's value will be gradual, that the ultimate depletion of a portfolio can occur quickly, suggesting that spending adjustments might need to be made sooner than might otherwise be expected. To help retirees and their advisors better understand whether a portfolio might be in danger of entering the "death spiral", Sandidge offers a rule of thumb he calls the "momentum ratio", which is measured by dividing the sum of negative percentage changes in an account's value by the sum of positive changes. When applying this ratio to historical portfolios since 1900, he found that those with ratios of more than 100% (i.e., the sum of negative returns was greater than the total of positive annual returns) during the first 15 years of retirement, those with a 125% ratio during years 16–20, and those with a 150% ratio during years 21–25 had a high failure rate (while those portfolios with ratios below these percentage values during the respective time periods were more likely to be sustainable in the long run).

Further, while it would be expected that a major downturn immediately after retirement would create sequence of returns risk, Sandidge found that even relatively small declines early on can make a big difference over the course of an extended retirement. For example, assuming a $1 million portfolio, a 50/50 stock/bond allocation, 5% starting withdrawals, a 3% annual inflation adjustment, and a 1.5% in management fees, he found that an individual who retired in 1957 (experiencing a 2.7% loss that year) would have had only $12,352 left in the portfolio by 1982 (the 26th year of retirement), whereas an individual who retired the next year in 1958 (and did not experience the initial 2.7% loss) would have finished 1982 with $514,419 in their portfolio. Notably, the erosion in the portfolio of the 1957 retiree occurred quickly, going from $506,410 after 20 years to almost nothing just 6 years later, indicating that if the retiree (or their advisor) had not identified that the portfolio might be in trouble before 1977 (and made spending adjustments by then), they would have had little time to make changes in the subsequent few years (and those spending changes likely would have needed to be severe).

Ultimately, the key point is that Sandidge's research not only highlights the importance of sequence of returns risk when crafting a retirement income plan, but also the observation that the degradation of a portfolio can happen quicker than one might expect. Which suggests that financial advisors can add value to clients not only by assessing the state of their portfolio on an ongoing basis (rather than making a single withdrawal rate recommendation based on a Monte Carlo projection at their retirement date), but also by explaining to clients how and when adjustments to their portfolio withdrawals might be necessary (perhaps leveraging a dynamic withdrawal strategy such as retirement income "guardrails") so that they are prepared for potential changes to their income, even if the danger brewing underneath the surface of their portfolio is not obvious!

5 Underrated, Low-Cost Advisor Lead-Generation Strategies

(Susan Theder | Financial Advisor)

When it comes to financial advisor marketing, there is no shortage of potential strategies that an advisor could use. However, many of these are expensive, whether in terms of monetary cost (e.g., engaging in a major advertising campaign) or the time cost involved in researching and executing them. Nonetheless, Theder suggests several options for advisors to boost their brand without having to break the bank or their calendar.

First, advisors can review their website copy to make it resonate more with prospective clients (and help differentiate them from other advisors). One key area is the "About" page; rather than use this space with a dry biography of the advisor or a list of the services the firm offers, advisors can instead try to create a connection with visitors by explaining their 'why' (i.e., their values and interests, as well as why they became an advisor) and the emotional payoff for prospects if they come work with the advisor (e.g., saying the advisor helps clients "have the freedom to enjoy life"). Another low-cost strategy is to encourage reviews on third-party websites (e.g., on the firm's Google Business profile) as a form of "social proof" where prospective clients can see evidence of the value of working with the advisor through the testimonials of current clients (though advisors will want to do so within the bounds of the SEC's marketing rule). And while referrals from clients and known Centers Of Influence (COIs) such as accountants and estate attorneys are popular sources of prospects for many advisors, expanding to other COIs that work with clients who could be a good fit for the advisor, such as college admissions coaches, divorce attorneys, mortgage brokers, geriatric care managers, and others. 

In recent years, virtual events have become much more common (and have the benefit of frequently being less expensive and time-consuming to organize than in-person events), offering advisors a range of opportunities to demonstrate their expertise and build their brand. For instance, webinars targeted at the advisor's ideal target client can show not only the advisor's expertise, but also their personality. In addition, virtual client appreciation events (e.g., a virtual trivia night or wine and cheese tasting) that match their common interests have the potential to generate referrals if clients invite friends to join (and these friends might be more likely to come given that a virtual event tends to be less of a commitment than an in-person event that requires them to commute to and from the chosen location).

In the end, advisors have several opportunities to build their brand and attract prospective clients without a significant outlay of time or money. Nevertheless, taking time to consider what makes their firm unique and what messages are most likely to resonate with their ideal target client can improve the chances that the tactics an advisor chooses will be successful (and be worth the time and money they do have to invest in it)!    

18 Marketing Hacks For Independent Financial Advisors

(Jennifer Mastrud | XY Planning Network Blog)

Financial advicers are known for their deep expertise in planning concepts and their desire to act in the best interests of their clients. Nonetheless, the ability to serve clients requires advisors to actually get individuals to become clients in the first place. And even though advisors typically aren't marketing professionals themselves, adopting marketing tactics used across industries can help an advisor grow their audience and client base.

For many prospects, their first 'touchpoint' with an advisor will be through the advisor's website (perhaps after being referred to the advisor by a friend or finding them online). With this in mind, making the website as engaging as possible can increase the chances that the visitor will dig deeper, and, hopefully, take the next step to becoming a client. Ways to boost engagement include the use of a countdown timer (with a tool like MotionMail) on the firm's website to create a sense of urgency (e.g., a countdown to an upcoming webinar hosted by the firm), using visually appealing, magazine-like flipbooks (using a tool such as Publitas) to communicate information rather than colorless, multi-page documents that scroll vertically. At a more basic level, revisiting the fonts and colors used on the website and sizing pictures on the website (and on social media) appropriately can create a more visually enticing experience for visitors.

Another potentially effective marketing approach is to use "Calls To Action" (CTAs) to get a client to engage with the firm beyond just browsing its website. For instance, an advisor might offer a piece of premium content to individuals who provide their email address. To take this tactic to the next level, advisors can consider first crafting an ideal client persona and then targeting both the content provided to this persona to boost its relevance. For instance, an advisor who specializes in working with doctors and tech professionals might consider having separate landing pages (and associated CTAs) for each group. Further, given that many individuals work with financial advisors to save time compared to handling their finances themselves, offering CTAs that will save them time (e.g., a checklist or template) could be particularly attractive to prospects.

In sum, effective financial advisor marketing is not just about the broader strategies chosen, but also how certain tactics are implemented. And so, by creating a visually appealing website and offering relevant, time-saving content for those willing to accept a CTA, advisors can potentially increase the number of leads they generate and, hopefully, prospects that eventually become clients!

5 Ways To Create Urgency And Win Planning Business

(Bob Hanson | Advisor Perspectives)

While financial advisors are familiar with the benefits they can provide to clients, for consumers, taking the leap to work with an advisor can be a challenge (e.g., they might be worried that the advisor will judge their previous financial choices or that they might not get sufficient value from the experience). Which means that advisors often have to provide sufficient motivation to get an individual or couple to act, whether it is initiating contact with the advisor or actually signing on to become a client.

One way to motivate prospects is to show how the advisor can address their pain points. For instance, prospects might be concerned whether they have saved enough for retirement, might think they are paying too much in taxes, or feel unsure whether they are drawing down their assets in a sustainable manner. Showing the prospects how a financial planning relationship can answer these questions can go a long way to encouraging them to become clients. Relatedly, focusing on the 'big picture' benefits of working with the advisor (e.g., peace of mind that they are on track to retire comfortably or the knowledge that the spouse will be taken care of if something happens to the other partner) rather than 'in the weeds' details (e.g., how the advisor crafts an asset allocation strategy) tends to be a more effective approach to draw prospects into the planning process. 

Notably, advisors can incorporate these ideas into their initial prospect meetings to increase the chances the prospects will want to take the next step. For example, instead of the advisor talking during most of the meeting (e.g., explaining their planning process and fees), instead taking more time to listen to the prospect's pain points, having them imagine what their future would look like if the problem is solved, and then discussing how the advisor has solved similar problems for other clients (which can draw in their planning process) can create a more compelling discussion for prospects. In addition, when meeting with couples, engaging with each partner will be key, as they might have different pain points and goals; one potential way to approach this situation is to include multiple team members in initial meetings to confirm that both partners have felt heard (advisors can also consider using techniques like the "magic wand" question [i.e., if they had a magic wand, what would they change about their financial situation] as well to open up the conversation).

Ultimately, the key point is that advisors who create a purposeful marketing strategy that shows prospects how the advisor can solve their unique pain points could find more success converting clients than those who take a more ad hoc approach. Further, by crafting questions that can help prospects overcome any hesitance to take the next step and to build trust, advisors can create a more engaging and productive discovery meeting that gives clients confidence that the advisor is the right person to meet their needs! 

Turn On This New iPhone Setting To Protect Your Money And Photos

(Nicole Nguyen and Joanna Stern | The Wall Street Journal)

Smartphones have made life in the 21st century much more convenient, as they can include everything from a mobile wallet to a photo album to a primary source of communication. A downside of this convenience, however, is that if someone were to gain access to the smartphone, they could potentially make unauthorized charges or even drain the owner's bank account. With this in mind, smartphones typically come with different layers of protection.

For those with an iPhone, the primary level of protection is Face ID or Touch ID, where biometric information is used to grant access to the phone and its contents. Nonetheless, as a backup measure, iPhone users typically also set a passcode, which can be used to unlock the phone if the biometric measures aren't working (with the passcode, an individual, among other things, could change the password to the Apple ID associated with the device so the owner could not get back in). But while it would be hard for a potential thief to gain access to an iPhone owner's eye scan or fingerprint, figuring out a passcode can be easier (whether because they look over the shoulder of their victim, or if the owner chooses an easy-to-guess passcode). 

Given this potential vulnerability, Apple earlier this year introduced a feature called Stolen Device Protection that makes it more difficult for unauthorized users to access key data and tools on the device. The setting restricts what an individual can do with just the device's passcode when it is away from a "Significant Location" familiar to the iPhone (e.g., one's home or work), requiring one of the biometric IDs to be scanned, then instituting a 1-hour delay (and then requiring another biometric scan) before implementing more sensitive changes. For those interested, to turn on the Stolen Device Protection feature, first go to "Settings", then "Face ID & Passcode", type in your passcode, then scroll down to Stolen Device Protection and turn it on (notably, users must have two-factor authentication and the "Find My" feature enabled for their Apple ID to use Stolen Device Protection). Next, to add the "Significant Locations" feature, go to "Settings", then "Privacy and Security", then "Location Services", scroll down to "System Services", then "Significant Locations" (notably, the iPhone will not tell you which locations it has determined to be "significant", but this is done so that a thief cannot just go to that location to override the extra security layer).

Altogether, while it is nearly impossible to make one's smartphone impenetrable, these latest features for iPhones could make it more difficult for a thief to access key information if they steal a phone and know the passcode. Though given that certain iPhone features (e.g., Apple Wallet) still only require a passcode, using a hard-to-guess passcode (perhaps using a combination of letters and numbers; this can be changed by going to "Settings", then "Face ID & Passcode", "Change Passcode", "Passcode Options", "Custom Alphanumeric Code") can futher protect your phone and the data in it (and if your phone is stolen, going to the Find Devices website can allow you to locate the device and/or remotely erase its data)!

How To Stop Your X Account From Getting Hacked Like The SEC's

(Lily Hay Newman | Wired)

Social media posts have the potential to reach thousands, or even millions, of viewers, depending on how popular the account is. Particularly for high-profile accounts in the world of finance, a single message (whether or not the account owner meant to send it) could move markets. This happened earlier this year, when an unauthorized individual gained access to the Securities and Exchange Commission's (SEC's) X (formerly Twitter) account and posted a message indicating the regulator had approved long-awaited Spot Bitcoin ETFs, sending the value of Bitcoin higher. And while the SEC was able to regain access to its account (and would eventually approve certain Spot Bitcoin ETFs), this incident showed what can happen when an unauthorized user gains access to a trusted account.

While a social media post from the typical financial advisor might not move markets, a hacker could use the account to promote a fraudulent scheme or make an embarrassing post. With this in mind, strengthening social media account security measures can reduce the chances of unauthorized access. First, using a strong password (that uses both a large number and variety of characters, including numbers, letters, and symbols) is a user's first line of defense. Next, activating two-factor authentication can provide another level of security. For those using X, this setting can be changed by going to "Settings and privacy", then "Security and account access", "Security", and "Two-factor authentication". In addition, X users might consider removing any phone numbers linked to the account for account recovery; for instance, in the case of the SEC incident, it appeared that the hacker gained access to the phone number associated with the account, which allowed them to post messages form the SEC account.

In sum, given the potential for malicious social media activity to cause reputational or monetary damage, securing these accounts is paramount (for advisors and their clients alike!). And by taking a multi-layered security approach (including strong passwords and two-factor authentication), social media users can make it harder for hackers to access their account and conduct malicious activity! 

Incognito Mode Isn't Doing What You Think It's Doing

(Heidi Mitchell | The Wall Street Journal)

While the internet has revolutionized how individuals shop, the online shopping experience is quite different than shopping at a traditional store. While physical stores have some ways to track the purchases a shopper makes (usually through voluntary loyalty programs that offer their customers discounts and rewards), online retailers use a complicated web of (typically invisible and involuntary) trackers to better understand an individual's interests and then target ads to them accordingly.

To get around this tracking, many internet users use the "private browsing" functions of their web browser (e.g., Google's "Incognito Mode") in an effort to prevent websites from tracking them. For instance, "cookies" (i.e., information stored on a user's device) as well as the search history from a browsing session are deleted once a user closes a window in "Incognito Mode". However, online retailers might still be able to glean information about a browser's preferences, even when using "private" browsing, whether from how the individual accessed the site, their IP address (a unique identifier), ZIP code, and assorted preference settings (also, an individual's internet service provider and network administrator [if using a work device] can still access searches made using "private" browser windows). So whether an individual is trying to avoid ad targeting by retailers or attempting to find a lower price by searching using a combination of regular and "private" browsers or multiple types of browsers (e.g., Safari and Chrome), it is very difficult to have a fully anonymized search experience.

Altogether, while leveraging "private browsing" mode could be a good way to prevent someone else who is using the same device from seeing one's search history (perhaps useful if searching for a present for a partner!), this activity will not be not as anonymous as it seems. That said, for those looking to boost their anonymity online, using browsers and search tools that minimize tracking (e.g., Brave and DuckDuckGo) could provide a more anonymized browsing experience!  

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We hope you enjoyed the reading! Please leave a comment below to share your thoughts, or make a suggestion of any articles you think we should highlight in a future column!

In the meantime, if you're interested in more news and information regarding advisor technology, we'd highly recommend checking out Craig Iskowitz's "Wealth Management Today" blog.