Weekend Reading For Financial Planners (July 6-7)

Supreme Court Muddies Regulatory Authority Of SEC And DoL (Stoking New Challenges To DoL's Latest Fiduciary Rule)

(Emile Hallez | InvestmentNews)

While the U.S. Congress is in charge of drafting and passing legislation, the implementation of these laws often falls to Executive Branch agencies (e.g., the Securities and Exchange Commission [SEC] and the Department of Labor [DoL]). Since its 1984 decision in Chevron U.S.A. v. Natural Resources Defense Council, the U.S. Supreme Court (as well as lower courts) gave significant latitude to these agencies to interpret (the often ambiguous) laws, under the auspices that Congress doesn't necessarily have the domain knowledge to legislate specific details, and instead defers to the regulatory agencies in those domains to fill in. However, in its June 28 decision in Loper Bright Enterprises v. Raimondo, the Court reversed this practice, moving authority from Federal agencies to the judicial system to evaluate whether they "really" got it right in interpreting what Congress meant when it wrote the law.

The Supreme Court's decision in the Loper Bright case could lead to a significant increase in legal challenges to regulations coming from a wide range Federal agencies, as the Court will now no longer defer to agencies' interpretations of law (which could lead to more regulations being struck down). While certain regulated businesses might cheer the prospect of fewer regulations, the Loper Bright decision could create compliance headaches for all firms, as some regulations go into force but are then reversed by legal challenges (potentially requiring firms to first implement changes required to comply with a regulation, and then have to decide whether they want to reverse these actions if the regulation is invalidated by the courts). Though on the other hand, the decision is also anticipated to slow the overall pace of regulation, as agencies would be far more restricted in trying to reinterpret existing laws for the modern era, and instead have to rely on Congress to pass new laws to mandate and specify updates to otherwise 'outdated' regulations.

Within the financial advice industry, the Loper Bright ruling could have significant impact on DoL and SEC rulemaking. For instance, while some groups representing the product sales industry had already filed legal challenges to the DoL's Retirement Security Rule (which increased fiduciary standards on those providing retirement-related advice, including one-time recommendations to roll over assets from employee retirement plans to IRAs) before the Loper Bright decision, additional parties (including the Financial Services Institute [FSI] and the Securities Industry and Financial Markets Association [SIFMA]) joined onto this litigation this week following the Supreme Court's ruling (perhaps sensing that the decision to reverse Chevron would increase the likelihood of success for the legal challenge against the DoL). For the SEC, proposed rules affecting financial advisors, from amendments to its Custody Rule (that extend custody obligations beyond securities and funds [subject to the current rule] to encompass all assets in a client's portfolio, including private securities, real estate, and other assets) to its proposed 'outsourcing rule' (which would establish formalized due diligence and monitoring obligations for investment advisers who hire third parties to perform certain functions) could also see more vigorous legal challenges in the wake of the Supreme Court ruling… or may even deter the SEC from trying to finalize those rules out of fear that they may be struck down anyway.

Altogether, the Supreme Court's Loper Bright ruling not only could lead to renewed challenges of current regulations, but also could have the follow-on effect of making agencies more conservative when it comes to crafting regulations given the greater risk that they could be challenged about whether they really have the legislative authority to do so (and avoid passing new regulations only to have them overturned by legal challenges). Within the financial advice industry, a lighter regulatory touch could lead to fewer restrictions on the activity of industry participants (particularly those engaged in product sales, which have led the charge against regulations calling for higher standards for financial advice), though it might also provide an opportunity for firms already operating under a fiduciary standard to differentiate themselves from other sources of financial advice in the eyes of consumers?     

Supreme Court Decision Weakening SEC's Administrative Law Judges Could Boost Settlements, State Regulators' Roles

(Patrick Donachie | Wealth Management)

The Securities and Exchange Commission (SEC) has enjoyed broad regulatory powers, granted by Congress, covering a wide range of securities investments, and the investment advisers who manage them. Of course, those regulations must be enforced, and to handle some matters in an expedited manner, the agency in the past has had the option to use 'in-house' Administrative Law Judges (ALJs) (rather than a 'traditional' Federal court with a jury trial) to hear cases… a practice that the SEC maintained was valuable to expedite the adjudication of cases, but critics claimed was unfairly biased in ruling favorably for the SEC with its "own" judges.

However, the U.S. Supreme Court's June 27 decision in SEC v. Jarkesy will now limit the SEC's ability to use ALJs in trials with civil penalties (e.g., monetary fines), with the Court majority arguing that the SEC's use of its own judges to assess such penalties violated the Seventh Amendment right to a jury trial. Notably, the ALJs can still be used if both parties agree to do so (as while defendants might prefer to have their case heard by a court unaffiliated with the regulator, they might agree to use an ALJ to avoid a potentially expensive, drawn-out legal battle in Federal court). Further, the Court's decision does not currently affect situations where the SEC seeks to bar an alleged bad actor from the industry (altogether though that circumstance could be the subject of a future legal challenge as well).

In practice, one potential impact of the Court's decision is an increase in the number of settlement offers from the SEC if the regulator believes it would not be able to win a larger penalty in court (or perhaps if the penalty would be small enough that it would make more sense to spend legal resources elsewhere). In addition, state regulators might step in further to prosecute cases (perhaps including some referred to them by the SEC) in situations where defendants don't have a right to a civil jury trial in state court (though some state supreme courts, inspired by the U.S. Supreme Court's decision, might limit the use of administrative judges in state cases as well).

In the end, the Supreme Court's Jarkesy decision will give those accused of wrongdoing by the SEC the opportunity to defend themselves in front of a jury, rather than in front of a judge employed by the regulator. At the same time, if the ultimate result of the ruling is that the SEC increases its use of settlement offers (which might be less than what an ALJ might have ordered if the defendant were found guilty), certain actors in the financial industry could be less deterred from engaging in wrongdoing (to the potential detriment not only of their victims, but also to the reputation of the industry as a whole?). Though in the end, an effective regulatory structure relies on confidence that those who are accused will have a fair trial to defend themselves, which is the very foundation of the Seventh Amendment to begin with. And given at least perceptions from the accused that that wasn't always the case with the SEC's ALJs in the past, confidence in the system should improve with the ALJs' diminished use… which is arguably why the Supreme Court ruled against them in the first place?

Wall Street Cop FINRA Goes Quiet On The Beat As Its Caseload Plunges

(Austin Weinstein | Bloomberg News)

Actively pursuing a robust caseload of enforcement actions, and publicizing the penalties that come from those enforcement actions issued, can both help regulators reassure the public that their interests are being protected, and deter bad actors from engaging in nefarious activity. For instance, the SEC has enforced and publicized violations of its Marketing Rule (particularly its measures related to performance advertising) to signal its expectations for investment advisers under its purview and the penalties a firm might face if they don't comply with the regulation.

However, FINRA, the self-funded regulator of the brokerage industry, in recent years has issued far fewer fines and has been less likely to publicize its enforcement actions, despite seeing its staff headcount and budget expand, calling into question how effectively it is regulating the broker-dealers and registered representatives it oversees. For instance, while total fines from FINRA ticked higher in 2023, they are down by about half since a peak in 2016. Further, the regulator only issued press releases on 10 of its 426 enforcement actions last year, compared with 63 press releases in 2015.

In addressing these concerns, a FINRA spokesperson said that it is not letting up on its regulatory focus, but rather that its previous actions have reduced the number of bad actor firms and individuals over time and that it has improved rules that keep bad actors from becoming brokers. In other words, FINRA claims that it is not enforcing more laxly, but simply that there are fewer bad actors to enforce because of its prior enforcement successes. Further, the spokesman said that issuing more press releases would dilute their impact, and that the regulator's actions are published in databases and a monthly newsletter.

Nonetheless, the recent trends in FINRA fines and press releases come 5 years after the release of Regulation Best Interest (Reg BI), which was intended to lead to higher standards amongst broker-dealers. In fact, it was broker-dealers themselves that claimed Reg BI would result in "increased costs to consumers due to expanded liability exposure", by providing FINRA (and plaintiff's attorneys) with additional regulations to enforce. Which raises challenging questions about why FINRA's caseload has fallen… either potentially calling into question the regulator's level of enforcement of its measures, or demonstrating that the industry's claims about higher standards were false and that in reality raising the standards really has reduced consumer harm and resulted in lower regulatory fines and penalties!?

Ultimately, the key point is that because regulations are only effective if they are enforced (and their deterrent power is enhanced if penalties are widely publicized), the recent trends in FINRA enforcement suggest that fewer bad actors are being punished for violations of Reg BI and other regulations meant to lift standards in the brokerage industry and protect consumers. The question is whether that is because FINRA, and the higher standards of Reg BI, has successfully "cleaned up" the industry and there are fewer bad actors in the first place, or if FINRA is simply not regulating as proactively (which could provide additional fuel for criticisms of the self-regulatory model for the brokerage industry)?   

The 2 Types Of Retirement Spenders

(Ben Carlson | A Wealth Of Common Sense)

A financial advisor looking over their client base can likely identify certain retired clients who have no issues spending their money (and perhaps some who like to spend a little toomuch), and others for whom spending beyond the basics is a challenge (perhaps feeling mental strain every time they take a portfolio withdrawal and see their balance shrink).

In a 2008 Journal of Consumer Research paper, "Tightwads and Spendthrifts", researchers Scott Rick, Cynthia Cryder, and George Loewenstein identified 2 groups based on this idea: "Tightwads" are those who experience a significant amount of 'pain' when spending money and who end up spending less than they would ideally like to, while "Spendthrifts" experience too little 'pain' and end up spending more than they would ideally like to (notably, this can be thought of as a spectrum, as there are likely very few individuals who are purely "tightwads" or "spendthrifts"). For example, while "spendthrifts" tend to have fewer inhibitions about spending their money, for "tightwads", there is no shortage of potential uncertainties that can make them reluctant to spend down their money, from longevity risk (i.e., the chances that they will outlive their assets), healthcare costs, long-term care costs, sequence of return risk (as well as sequence of inflation risk), and more.

Ultimately, the key point is that while having a client with overspending challenges might seem to be a more serious situation for an advisor (as the client might run out of assets and severely inhibit their lifestyle if they spend in an unsustainable manner), advisors could also add value by helping clients who are reluctant to spend by encouraging them to enjoy their wealth – responsibly – by spending on the things for which they really do want to use their money (if it weren't for the 'pain' of doing so). Notably, advisors have many options to support clients in this situation, from 'framing' strategies (e.g., by explaining the dynamic nature of Monte Carlo projections, segmenting spending into "core" and "adaptive" buckets, or increasing sources of 'guaranteed' income) to behavioral tactics that can encourage these clients to boost their spending (e.g., 'practicing' retirement to reduce the pain of spending, exploring different 'types' of spending [e.g., spending to buy "time" rather than on "things"], or creating a "Financial Purpose Statement" that can help guide their spending decisions)!

5 Ways To Help Hesitant Clients Spend More In Retirement

(Christine Benz | Morningstar)

While some individuals retire with little available savings (and might end up relying heavily on Social Security benefits to support their lifestyle), others leave the workforce with a sizeable nest egg that could support a healthy amount of spending throughout retirement. Nevertheless, researchers have identified a "Retirement Consumption Gap", whereby many retirees (particularly those in the upper end of the wealth spectrum) spend significantly less than they otherwise would be able to afford to (even accounting for financial uncertainties, such as longevity or medical costs).

With this in mind, there are a variety of potential options that could help hesitant retirees (who would otherwise want to spend more) increase their spending. To start, some retirees might feel better about accessing funds from their portfolio generated from investment income (e.g., dividends and bond income) rather than from capital gains (by selling an asset), which could suggest a greater allocation to income-generating assets for such clients. Alternatively, a client could choose to boost their 'guaranteed' income, for example by delaying claiming Social Security benefits or annuitizing some of their assets. Another option for clients who don't want to see their portfolio balances fall as a result of withdrawals is to increase spending when the portfolio sees gains (so that the portfolio could still grow, or at least remain steady, after accounting for the investment gains and the client's withdrawals) and cutting back when it faces losses. Finally, advisors could introduce data demonstrating that retirement spending tends to decline (in inflation-adjusted terms) over the course of a retirement (before sometimes ticking higher at the end of life due in part to medical costs), which could encourage clients to spend more early on in retirement, with the understanding that this spending might naturally decrease later on (e.g., as physical issues limit their ability to travel).

In sum, financial advisors can add significant value for clients not only by analyzing how much they can sustainably spend in retirement, but also, more broadly, by giving them 'permission' to spend on an ongoing basis, perhaps by delivering regular income to clients through monthly 'paychecks' derived from their portfolio (or from 'guaranteed' income sources) rather than through more infrequent client-requested withdrawals (which they might be hesitant to make!). 

The Income Strategy That Gives Retirees A "License To Spend"

(John Manganaro | ThinkAdvisor)

Retirement is often framed as one's "golden years", a time to enjoy the fruits of several decades of hard work. And for many retirees who have planned accordingly, this transition is not a problem as they might spend generously on travel, hobbies, or other pursuits. Nevertheless, some retirees can find it emotionally challenging to bring themselves to splurge in retirement, even though they have the resources to do so. This can be due to 'rational' factors (e.g., not wanting to prematurely deplete their retirement savings) as well as 'behavioral' ones (e.g., the challenge of seeing their portfolio balance potentially decline over time as they draw down their portfolio).

With this in mind, researchers David Blanchett and Michael Finke explore in a new paper, "Guaranteed Income: A License To Spend" (an update to a previous paper by the authors exploring similar issues), whether the sources of a retiree's income (i.e., investment accounts versus 'guaranteed' income sources) can affect how much a retiree decides to spend. Leveraging data from the University of Michigan Health and Retirement Study, the researchers find that investment assets generate about half of the amount of additional spending as wealth held in the form of 'guaranteed' income (e.g., Social Security benefits, a defined-benefit pension, or a private annuity). In addition, using current annuity pricing data, Blanchett and Finke suggest that risk-averse retirees in particular could benefit in terms of greater spending from transforming some assets into guaranteed income (with these retirees potentially spending 66% more per year than they would drawing down their portfolio; risk-tolerant retirees also could benefit, with a 29% spending boost). Further, they conducted a survey that found 59.4% of respondents would feel more comfortable spending on non-essential activities (e.g., vacations) if they received an extra $10,000 of income rather than an additional $140,000 of retirement savings (with this amount representing the average cost of $10,000 of annuitized retirement income).  

Altogether, this research suggests that the amount a retiree will spend is not necessarily just a matter of their total wealth, but also about how their income is generated. Which suggests that for advisors working with clients who might be spending less than they could afford to (and would otherwise like to spend more), considering ways to boost sources of 'guaranteed' income (e.g., delaying claiming Social Security benefits, taking a defined-benefit pension in monthly installments rather than a lump sum, or annuitizing a portion of their investment assets) could provide these clients with a "license to spend" that might provide them with a more enjoyable retirement (alternatively, for clients who want to keep more assets in their investment accounts [e.g., because they have a strong bequest motive], an approach that generates regular income through sustainable portfolio withdrawals [e.g., a "guardrails" approach] could potentially encourage them to spend more as well).

An RIA's Guide To The 3 Types Of Firms Trying To Buy Them

(Tobias Salinger | FinancialPlanning)

A notable trend in recent years has been the increase in the number of RIA Mergers and Acquisition (M&A) deals, as larger financial companies seek to grow by acquiring RIAs (along with their clients and advisor talent) and retiring firm owners (or those who would prefer to monetize some of their ownership and operate within a larger firm) look for opportunities to sell. However, with many types of buyers (from RIA "aggregators" that frequently buy smaller firms to non-RIAs that want to expand their business lines), navigating this collection of potential buyers (and the implications for their business if they do sell) could be confusing to firm owners.

With this in mind, a report from research firm Datos Insights categorizes RIA acquirers into 3 buckets. The first are "rookies", firms that started an acquisition campaign in the last few years thanks in part to an influx of Private Equity (PE) capital to help fund deals. These dealmakers often look to acquisitions to build scale, including capabilities they might not already possess. The second group are "veterans", RIAs who are "serial acquirers" with in-house corporate development and firm integration teams and who are often looking to M&A for geographic expansion. The third group, "strategists", are some of the largest firms and offer complementary financial services (e.g., broker-dealers, banks, and insurance companies) to RIAs. While they tend to be less active in RIA M&A deals than the other two groups, the deals they make are often larger in size.

Ultimately, the key point is that an influx of PE capital into the RIA space, the continued rise of "serial acquirers", and interest in RIAs from other financial firms have combined to increase the number of RIA M&A deals (and, often, the valuations selling firms can attract) and the options available to selling firm owners. Though, in addition to evaluating the 'type' of acquirer, firm owners thinking about a sale will have other factors to take into consideration, from the purchase price to the cultural fit, to increase the chances they (as well as their clients and employees) have a positive experience (and hopefully, minimal regrets) once the deal closes!

RIA M&A Participants Beware As Business Brokers Flock

(John Furey | Citywire RIA)

The high client retention levels and recurring revenues enjoyed by many RIAs can make them attractive acquisition targets. And while some buyers and sellers meet organically (e.g., at a financial planning conference), others are connected through intermediaries, often on an unsolicited basis (with a report from M&A advisory firm Advisor Growth Strategies [of which Furey is the founder] finding that 96% of RIAs surveyed had received at least 1 unsolicited inquiry from a buyer or transaction advisor in the past month).

Given the number of inbound inquiries, advisory firm owners (who have many other day-to-day responsibilities to deal with!) might be unsure about whether an intermediary is a potential trusted source of advice or is merely looking for a quick deal. Furey suggests that advisors be skeptical when an intermediary (often M&A brokers that serve a wide variety of industries) starts their pitch with the valuation the firm might receive, as such a figure not only might be inaccurate (given that they likely haven't learned all of the details about the firm they are contacting), but also could be a signal that, if they are engaged to broker a deal, they will focus primarily on price, perhaps to the detriment of other potentially important considerations (e.g., cultural fit). In contrast, an M&A advisor putting the selling firm owner's interests first will be more likely to ask about their firm, the firm owner's goals for a potential sale, and the role the owner would like to play after a deal is consummated. Which can allow the M&A advisor to provide a more accurate picture of a potential valuation for the firm and make it more likely that a deal would be a net positive not only for the firm owner, but also for their employees and clients.

Altogether, at a time when there is significant capital available for acquirers looking to buy RIAs, firm owners might find themselves targeted for a potential deal (by acquirers themselves or possibly M&A brokers and advisors). But by first conducting due diligence on potential intermediaries (and not being lured quickly by sky-high valuations suggested by them), firm owners interested in exploring a sale can increase the likelihood that the deal will be a positive experience, both during negotiations and after it is closed.

What To Consider When Selling Minority Stakes In Your Advisory Firm

(Richard Chen | Advisor Perspectives)

Advisory firm dealmaking is often discussed in terms of the complete sale of one firm to another. But sometimes, a firm owner might not be looking to sell their entire stake in their firm, but rather sell a minority interest in exchange for cash that could be used to help scale the firm (e.g., by funding new hires or technology). However, given the potential for such a deal to turn sour (e.g., if the firm owner and the minority investor have different views on the firm's direction), advance due diligence on the part of the firm owner can help ensure the deal and their ongoing relationship with the investor go smoothly.

Advisory firm owners might evaluate potential minority investors on several levels, including the alignment of interests (i.e., does the investor's investment horizon, risk tolerance, and strategic objectives match the long-term vision of the firm?), whether the investor is financial or strategic (i.e., only contributing capital, or also offering additional benefits such as industry knowledge, professional networks, and/or operational support), the terms of the investment, the investor's reputation and credibility (and how it might rub off, positively or negatively, on the advisory firm), and cultural fit (e.g., whether the values and communication styles of the investor match those of the firm).

Looking specifically at the terms of the deal, there are several areas that can be up for negotiation, including the purchase price, economic rights for the investor (i.e., an investor might ask for a pro-rata distribution of firm profits, or potentially a minimum return), management rights for the investor (or possibly consent rights over major firm decisions), terms relating to the investor's exit from their investment (e.g., the firm might have a right to buy out the investor for a certain price, or the investor might negotiate for the right to sell its stake back to the firm), and potential restrictive covenants (e.g., the investor might require key personnel at the advisory firm to sign non-solicit agreements).

Ultimately, the key point is that while taking on a minority investment can provide a firm with needed capital that can help it grow, 'the devil is in the details' when it comes to selecting an appropriate buyer and the terms of the deal to ensure the firm owner can continue to guide the firm according to their own vision and that the partnership will be a fruitful one for both parties!

Set These 5 Boundaries Before You Go On Vacation

(Marlo Lyons | Harvard Business Review)

Vacations are traditionally viewed as a time to relax and get away from the hustle and bustle of work life. Nevertheless, the temptation to 'peek' into what's going on back at the office and make sure things are getting done, whether it is checking email or any instant messages that came in, can be strong, even when you're "officially" out of the office.

With this in mind, Lyons suggests a 5-step plan that can ensure you can take a work-free vacation while feeling confident nothing is being neglected in your absence. To start, once the time off has been approved, creating a plan of who will handle what tasks (and any emergencies that might pop up) in your absence can ensure that teammates and managers know any roles they are expected to fill. Next, putting the time off on your company's calendar (and labeling it as "out of office") will let teammates know you will be unreachable while you are away. In addition, sending "pre-notices" for any standing meetings can ensure the organizers know you won't be attending and give them an opportunity to ask for any input you could provide before you leave. Right before leaving, setting an out-of-office notification on email and other communications tools not only lets colleagues and clients know you are away and who they can reach out to if needed, but also can be used to set expectations for communication while you are gone (e.g. if you say "I will be slow to respond to email", colleagues and others will expect a response, while saying "I will have no access to email" will ensure they do not expect you to write back). Finally, sending a final reminder to colleagues about your absence, who will be covering your responsibilities, and where they can find needed information can further prevent unwanted calls or emails during the vacation.

In sum, while it might be tempting to "check in" at work while on vacation (or for colleagues to reach out to you with "important" questions), preparing colleagues and clients in advance for it can allow you to better enjoy the time off and come back to the office refreshed!

How To Stop Overplanning Your Vacations

(Maddie Burton | On The Cusp)

When visiting a new vacation destination (or even an old standby) it can be tempting to try to 'maximize' every aspect of the trip, from planning in advance not only travel details (e.g., flights and hotels), but also the activities you will do each day and the restaurants where you'll eat. However, doing so can be both stressful (what if I don't pick the best restaurant?!) and potentially counter-productive (if a chosen activity turns out to be less engaging than something else you might encounter by chance during the trip).

With this in mind, Burton suggests several ways "planners" can scratch the planning itch without overdoing it. To start, deciding what you want from the trip first, rather than selecting a destination, can help you frame up your goals for the trip (e.g., restful beach vacation versus active city excursion) and narrow down potential destinations (and spend more time thinking about the ultimate choice once it's made). Next, while the prevalence of online review sights provides detailed opinions of just about every tourist attraction, restaurant, and hotel in the world, it can be easy to get sucked into a time-consuming vortex of starred ratings. Instead, understanding the broader context of the destination (perhaps by reading a long-form article about it, or even a work of fiction that sheds light into the local culture) can help you generate broad ideas of what you might want to do and see there. These can be organized using a tool like Google My Maps, which can serve as a handy reminder of potential sights and dining spots you've found without tying you to a specific daily itinerary.

During the trip itself, you might try to fill up every second of the day with "something" so that no time is wasted. However, without any slack in the schedule, it can be hard to fit in spontaneous (and likely, not well-publicized) attractions you find on the way (e.g., a restaurant recommended by a local you meet or a hidden park that doesn't appear on common travel sites). With this in mind, you might consider creating a loose structure for each day (e.g., visit this museum and have a long dinner at a local restaurant) to give you direction each day but leave room for exploration. Inevitably, though, you will miss out on some activity that was considered to be a "must-do" on the trip; but rather than lamenting the missed opportunity, shifting your mindset to seeing at an opportunity to do it on your return to the destination can give you something to look forward to for a future trip.

Ultimately, the key point is that while some planning typically is necessary when going on a trip (lest the flights or hotels you want be sold out), overplanning a trip can lead to stress in the weeks leading up to it and potentially disappointment during and after if everything doesn't go as planned. Instead, creating a relatively loose structure around your top priorities for the trip can increase the likelihood you will have a memorable (and hopefully low-stress) vacation!

When Your Vacation Wasn't Exactly Relaxing

(Noémie Le Pertel | Harvard Business Review)

When you think of the word "vacation", the first word that comes to mind might be "relaxation" or "rejuvenation". Nonetheless, vacations can sometimes be stressful, whether by trying to visit multiple cities (and sights within them) on the same trip, trying to cater a vacation to companions with different tastes, or just trying to wrangle kids during a week away from home.

While these 'less relaxing' vacations might not be as enjoyable as their counterparts, they can provide opportunities for change, both in daily life and for future trips. For example, even if a vacation wasn't particularly relaxing, the "fresh start effect" suggests that it can still serve as an opportunity to establish new practices that enhance energy and productivity, as it serves as an interruption from your regular weekly routine. For instance, you might start time-blocking to create time during the day or week for deep thinking and/or more relaxing activities (e.g., a walk in the fresh air).

Then, as you contemplate returning to the office, taking inventory of your energy level can help you recalibrate your return to work. For example, if you're coming back recharged from a relaxing trip to the mountains, you might be ready to dive back into work, whereas if the trip was more stressful, easing back in by setting guardrails for the first day back to give you time to catch up (or perhaps taking a day off at home before returning to work?) can help you avoid building stress levels further. Finally, engaging in a 'lessons learned' exercise can allow you to reflect what went right (and wrong) on the vacation to make adjustments the next time you take off (and perhaps inspire you to get another vacation on the calendar).

Altogether, while going on a not-so-relaxing vacation can be frustrating, there are still opportunities to be gained from it, from an opportunity to recalibrate your daily work practices to a chance to better understand what you're seeking from your time off (so that the next trip is hopefully more relaxing!).

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