Weekend Reading For Financial Planners (September 7–September 8)

Treasury Department Finalizes Anti-Money Laundering Rule For RIAs

(Patrick Donachie | WealthMangement)

Under the Bank Secrecy Act (BSA), banks and other major financial institutions are required to fulfill certain "Know Your Customer" (KYC) requirements to prevent criminals, terrorists, and other unsavory actors from using the financial system to pursue their illicit ends. Notably, though, despite managing billions of dollars in assets (and potentially being an attractive medium for illicit actors to park or invest their money), investment advisers until recently have not been on the list of financial institutions under the BSA.

That is changing, though, for many RIAs, as the Treasury Department last week finalized new rules that would add certain SEC-registered RIAs and those reporting to the SEC as exempt reporting advisers (thought notably not state-registered RIAs or certain SEC-registered RIAs with less than $100M of AUM), as well as residential real estate advisors, to the list of "financial institutions" under the BSA and would require them to implement risk-based Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) programs, including a requirement to report suspicious activity to Treasury's Financial Crimes Enforcement Network (FinCEN). Further, affected RIAs will have to conduct an ongoing customer due diligence program that includes developing a customer risk profile and conducting ongoing monitoring to identify and report suspicious transactions. Firms will have until January 1, 2026 to comply and FinCEN delegated its examination authority to the Securities and Exchange Commission (SEC), suggesting SEC examiners could raise this topic during exams after that date.

In the end, while the new rule will add additional compliance (and paperwork) obligations for certain RIAs, advisers offering comprehensive planning services (as well as their investment custodians, though the rule does not permit RIAs from completely outsourcing these responsibilities to their custodian) are likely already conducting a certain level due diligence on their clients, as understanding their background and circumstances is an important part of preparing a financial plan. Which could be a 'defense mechanism' for these firms against criminals, as these actors might instead try to park their money with more investment-centric advisers and fund managers that spend less time getting to know their clients?

GAO Undercover Probe Finds "Many Complex Conflicts" In Recommendations Being Made To IRA Owners

(Tracey Longo | Financial Advisor)

While potential conflicts of interest are present in many parts of the financial planning process and for different types of purveyors of financial advice), the U.S. government has taken a particular interest in mitigating conflicts of interest related to advice regarding retirement accounts such as IRAs and 401(k)s given its desire to protect consumers' retirement savings and prevent abuses in these tax-advantaged accounts. Amidst this backdrop, 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 updating its "fiduciary rule" governing the provision of advice on these plans. The DoL fiduciary standard, first formally proposed in 2016 under the Obama administration, took a relatively stringent approach (where commission-based conflicts of interest had to be avoided altogether), but encountered numerous delays under the Trump administration and was ultimately vacated by the Fifth Circuit Court of Appeals in 2018.

Amidst the introduction of this "fiduciary rule" (and the fact that it was ultimately vacated), several members of Congress asked the U.S. Government Accountability Office (GAO) to study the current state of conflicts of interest related to investment advice for retirement accounts. The resulting GAO study, which was developed based on a review of 2,000 advisor conflict disclosures and calls by GAO staff posing as potential clients to 75 financial professionals, highlights several potential weak points related to the conflicts of interest investors face when working with financial advisors or product salespeople.

To start, GAO found that that many written conflict disclosures are confusing and that even when GAO researchers called advisory firms (posing as a prospective client), these conflicts sometimes remained unclear (suggesting that consumers will frequently have a hard time understanding the full implications of a salesperson's conflicts of interest). Further, looking at a common conflict of interest, product-based compensation, the report found that mutual funds that compensate financial professionals based on whether their clients invest in those funds is associated with lower average returns before fees, indicating that this conflict can cost investors hard dollars through fund underperformance (and perhaps through higher fund fees as well).

Looking specifically at IRAs, the GAO report also noted challenges in penalizing IRA fiduciaries who engage in prohibited transactions in client IRAs. This is due in part based on the IRS's reliance on IRA fiduciaries self-reporting violations and paying the applicable excise tax (or finding out via referrals from DoL). Though, according to the report, the DoL doesn't even have authority to audit IRAs for prohibited transactions, and is generally unable to refer IRA fiduciaries to the IRS.

With this in mind, the GAO report recommends that the IRS develop an independent process for identifying non-exempt prohibited transactions (e.g., by checking Form 5330 filing compliance during income tax audits of financial services firms) and coordinate with the DoL through a memorandum of understanding or other formal means on prohibited transactions involving IRA fiduciaries that owe excise tax to help identify such individuals and firms. Which means there could be new scrutiny coming to fiduciary recommendations to IRAs that result in conflicted compensation… this time with regulation coming from the IRS!?

In sum, the GAO report finds that those providing financial recommendations to retiree could be doing a better job of clearly disclosing potential conflicts of interest to prospective and current clients, with compensation-based conflicts of salespeople offering products to IRA owners at the forefront (given the potential impact on the growth of clients' retirement portfolios). Though at the same time, the GAO report suggests that the IRS itself could better scrutinize a wider range of potentially prohibited conflict-of-interest transactions that occur between IRAs and their fiduciaries, which could bring a fresh wave of scrutiny to a wider range of IRA advisory practices (e.g., when financial advisors receive advisory fees for managing the accounts for family members, which is technically a related party prohibited transaction!).

Notably, DoL this year has again attempted to raise standards for financial advice on retirement accounts through its Retirement Security Rule, though enforcement of the Rule has been temporarily halted by the courts amidst pushback from the product sales industry, and its ultimate fate remains in limbo. But the new GAO report provides Congress and regulators even more firepower and validation that some improvement in fiduciary regulation is still necessary, whether the Department of Labor's rule finally goes through… or the IRS joins into the fray with its own fiduciary oversight of IRAs?

Accountability, Marketing Spend Keys To Advisory Firm Organic Growth: Study

(Philip Palaveev | Financial Advisor)

Years with strong stock market performance (such as 2023) can allow advisory firms to grow their AUM (and, for firms charging on an AUM basis, their revenue) without having to add new clients. Nevertheless, given that advisors cannot control market performance, a focus on driving organic growth (i.e., attracting assets from new clients or additional assets from current clients) can allow a firm to grow more sustainably over time and weather potential market downturns.

According to a recent study by Ensemble Practice and BlackRock that surveyed 240 advisory firms, respondents saw an average of 18.2% AUM growth in 2023, though market returns were responsible for the majority of this figure (contributing 11.4%), with net organic growth (additional assets brought in by new and existing clients minus client distributions and departures) providing the remaining 6.8%. Firms identified referrals from existing clients as their top source of new clients (responsible for 56.7% of new clients), followed by referrals from Centers Of Influence (COIs) such as attorneys and accountants (14.9%), and networking with other advisors (13.1%). While these growth methods tend to be relatively low in cost (at least in hard dollar terms), the study notes that firms that spend more than 3% of their revenue on marketing grew median revenue twice as fast as other firms (with the average firm spending 1.5% of revenue on marketing). In addition, firms targeting clients with between $500,000 and $1 million in assets grew their net new AUM at a 44% faster rate than average, suggesting that working with "mass affluent" clients could be a viable growth strategy (particularly if their assets are likely to grow in the years ahead).

Palaveev also argues that firms that hold their advisors more accountable for new client growth tend to grow faster than other firms. For instance, firms with institutional ownership (e.g., have been acquired) grew their net new assts by 9.2%, almost double the 4.7% growth of firms owned by advisors. He suggests the cause of this could be the added discipline of having a corporate parent putting pressure and resources towards growth. Further, another way to drive accountability could be to set individual business development targets for advisors (according to the study, only 42% of firms do so), though firms will need to strike a balance between driving growth and maintaining strong culture and service levels.

Ultimately, the key point is that organic growth is the lifeblood of many firms, whether they are seeking a fast growth pace or are content where they are (as this latter group will inevitably face client asset drawdowns and some client departures over time), with this latest study suggesting that having a intentional growth plan (whether in terms of the prospective clients targeted, business development goals for advisors, and/or a defined [and funded] marketing strategy) could be a driver of new client and AUM growth through an ever-changing investment market environment.

Planning For Changes In Client Marginal Tax Rates After TCJA's (Possible) Sunset

(Ben Henry-Moreland | Nerd's Eye View)

From an advisor's perspective, the Tax Cuts and Jobs Act's (TCJA's) impending expiration raises the importance of planning for clients who will potentially be impacted, which, given the law's broad scope, could be nearly every client. And yet, the timing of the sunset provision at the end of 2025 means that the actual fate of TCJA will largely hinge on the uncertain outcome of the 2024 U.S. elections. In reality, any law that extends or replaces TCJA would likely not pass until well into 2025, creating a very limited window (potentially only days long) in which to implement any planning strategies. And so even though there's uncertainty today about whether or not TCJA will sunset as scheduled, it's still not too early to start making plans for either contingency so they can be triggered quickly once there is more certainty.

For many clients, one of the biggest questions is whether they'll have a higher or lower marginal income tax rate after TCJA expires than they do today, and whether it is therefore reasonable to accelerate income – i.e., to recognize it before the end of 2025, such as by converting pre-tax retirement funds to Roth – or to defer income to be recognized in 2026 or beyond. And although TCJA's reputation as a broad tax cut might give the impression that everyone's tax rates would increase after its expiration, comparing the current Federal tax brackets with their estimated post-TCJA equivalents shows that a fair number of households will actually see their tax rates decrease.

Beyond the tax brackets themselves, however, households will also see significant changes to how their taxable income is calculated post-TCJA. First, the combination of a lower standard deduction and the elimination of the $10,000 cap on deductible state and local tax payments means that many more people will be taking itemized deductions instead of using the standard deduction. Second, the reinstatement of personal exemptions means that households will be able to take an estimated $5,010 exemption per taxpayer or dependent, meaning that larger households could see a large reduction in their taxable income. With the caveat that the expiration of TCJA will also bring back the Personal Exemption Phaseout (PEP) and "Pease limitation" on itemized deductions above a specific income threshold, both of which effectively create a surtax on income within the threshold range, increasing the household's marginal tax rate above their nominal tax rate based on the tax brackets alone.

For owners of pass-through businesses like partnerships, S corporations, and sole proprietorships, the biggest concern around TCJA's sunset is the elimination of the Section 199A deduction on Qualified Business Income (QBI), which allowed for a deduction equal to 20% of the lesser of the taxpayer's QBI or their taxable income. For most pass-through business owners, the end of the QBI deduction will result in much higher marginal tax rates in 2026 or later, with one exception: Owners of Specified Service Trades or Businesses (SSTBs) like lawyers, consultants, and financial advisors, whose QBI deduction phases out above certain income thresholds, will have a much higher marginal tax rate on any income earned within the threshold range – meaning that while it might make sense for most business owners to accelerate income in 2024 and 2025 while the QBI deduction is still in effect, SSTB owners within the phaseout threshold range would be better off doing the opposite and deferring income until after TCJA expires.

In sum, different households will experience the end of TCJA in a wide variety of ways, with income level, filing status, number of dependents, and QBI all factoring heavily into the impact that the TCJA sunset will have. And although TCJA's ultimate fate may still be undecided, for at least some clients the potential benefit of taking action today (e.g., to recognize income at a lower marginal tax rate today versus after TCJA expires) may be worth taking the risk that TCJA is ultimately extended – since in that case the client would have simply recognized income at the same marginal rate that they would have later on, merely 'costing' them the value of a few years of tax deferral. And so, by understanding how each client stands to be affected, advisors can narrow their focus on the planning strategies that will have the biggest benefit for their clients.

How A Client's Location Will Affect Their Taxes If Sunsetting TCJA Provisions Expire

(Richard Rubin, Max Rust, and Anthony DeBarros | The Wall Street Journal)

While the 2017 Tax Cuts and Jobs Act (TCJA) applied to taxpayers nationwide, its effects were not felt uniformly across the country, as factors such as average income and state and local tax rates affected the average tax reduction felt in different locations. Which means that if sunsetting provisions under the TCJA are allowed to expire at the end of 2025, taxpayers could feel these effects in reverse.

According to estimates from the Tax Foundation, the average taxpayer nationwide would see a 2.4% tax increase following the expiration of the TCJA's sunsetting provisions. Notably, though, this impact can vary significantly by geography, with those in the least affected counties (Maryland's Charles and Prince George's counties) seeing an average 1.2% tax increase and those in the most affected county (Pitkin County, Colorado, home of Aspen) experiencing an average jump of 5%.

Part of this effect is based on average income, with counties with a lower average income seeing a smaller potential increase in averag taxe burden compared to wealthier counties (e.g., residents of relatively higher-income San Francisco would see an average 3.9% increase while those in relatively lower income Scott County, Kansas would have an average 1.8% increase). Another geographic factor is local and state tax law, with those with low State And Local Tax (SALT) burdens seeing an greater-than-average increase in their taxes if the TCJA provisions expired (particularly due to the resulting lower standard deduction, as taxpayers in these states would have fewer SALT expenses to claim as itemized deductions), whereas those in relatively higher-tax states could see a lower-than-average increase (due in part to the lifting of the cap on SALT deductions imposed by the TCJA and the resulting increase in itemized deductions).

Ultimately, the key point is that the changing tax burden on individuals of a partial or complete expiration of the sunsetting TCJA tax provisions is not limited to their income, but also is affected by where they live and their unique circumstances (e.g., if they work with a financial advisor, as one of the sunsetting provisions is the suspension of miscellaneous deductions above 2% of Adjusted Gross Income (AGI), which includes investment advisory fees deducted from clients' taxable accounts). Which means that financial advisors can add value for their clients by modeling the impact of any eventual changes to TCJA provisions to determine how they affect their individual tax burden and whether (and by how much) it affects the overall success of their financial plan!

The Budgetary And Personal Financial Impacts Of Extending The TCJA's Expiring Provisions

(Penn Wharton | Budget Model)

The Tax Cuts and Jobs Act (TCJA), passed in late 2017, was the most substantial tax reform passed in many years, covering a wide range of tax areas, from adjusting tax brackets to merging personal exemptions into an expanded standard deduction. However, with many of these measures set to sunset at the end of 2025, the decision of whether to extend (all or some of) these provisions (perhaps permanently) will likely fall to the new Congress (and President) that takes office in January.

Part of the debate over extending the sunsetting provisions is likely to revolve around a combination of how these measures impact different types of taxpayers (e.g., based on income) as well as how they would affect the government's fiscal health (as TCJA included both measures that added to and subtracted from government revenue). With this in mind, the Penn Wharton researchers looked into the impact of extending the sunsetting TCJA measures on both individuals and the government budget, not only on a 'conventional' basis (i.e., the direct impacts of extending the provisions), but also on a 'dynamic' basis (i.e., taking into account how extending the measures would affect individuals' and business' behavior and the resulting impact on the budget and economic growth).

At the government level, the researchers estimate that extending the provisions would lead to a cumulative $4.011 trillion increase in the government deficit for the period between 2025 and 2034 (with the primary cause being the updated individual tax rate and bracket structure created by the TCJA, responsible for $2.369 trillion of the revenue decline). On a dynamic basis, (i.e., including expected economic growth resulting from the tax measures), extending the TCJA provisions would result in $3.834 trillion less government revenue in the same period.

Looking at effects on taxpayers, the researchers found that individuals across the income spectrum have greater income (after taxes and transfers) as a result of the TCJA, with those in the lowest income quintile seeing a 1.2% increase in income (amounting to an average boost of $265), those in the fourth-highest quintile experiencing a 2.0% income gain (an average of $2,870), and those in the 95th–99th percentile having a 3.3% income gain (an average of $19,210). The report notes, though, that the long-term personal financial impact could look very different for certain taxpayers, particularly for future generations, if the government increases taxes in the future (the researchers model the effects of a consumption tax) in order to close the deficit (the report did not look at the dynamic economic effects of potential changes to government spending).

In sum, the debate over whether to extend the sunsetting TCJA provisions is likely to play out over the coming year, with members of Congress weighing the income boost TCJA provided to taxpayers alongside its short- and long-run fiscal and economic impacts. Nonetheless, this policy decision provides financial advisors with an opportunity to add value for their clients by staying on top of the latest developments and considering appropriate tax planning recommendations for their unique needs (in anticipation of a potential sunset and/or after the final policies are known).

11 Factors For RIAs Deciding Whether To Add A Custodian

(Gino DeRango | ThinkAdvisor)

According to research and consulting firm Cerulli Associates, 44% of RIAs work with a single custodian, with relatively smaller RIAs more likely to do so (Cerulli found that 55% of single-custodian RIAs have less than $250 million in AUM, while 65% of dual-custodian RIAs have AUM of $250 million or more), suggesting that firms are more likely to add a custodian as they grow (with about a quarter of RIAs indicating that they plan to explore adding a new custodian in the new year), though deciding to add a custodian (and which one to choose) can be challenging for a firm that has only worked with one custodian since it was founded.

DeRango (senior vice president at RIA custodian Axos Advisor Services) cites several potential reasons an RIA might choose to add a custodian. These include a catalyst (e.g., the custodian was acquired and the RIA is unsure of what post-merger service will look like), service deterioration (e.g., longer wait times for service requests or the loss of a dedicated contact person or team), and/or limited flexibility (i.e., the custodian makes it difficult to find mutually beneficial solutions for itself, the RIA, and its clients when faced with complex client situations).

For firms that do decide to explore working with another custodian, DeRango recommends conducting thorough due diligence to determine whether the new partner might be a fit. For instance, an advisory firm owner could assess whether the custodian is interested in their firm's business needs and goals or whether it sees the firm as one of many (anonymous) RIAs on their platform. On the technology side, RIAs will want to understand how well the custodian's technology platform integrates with the firm's tech stack to ensure seamless data transfer among the advisor's software tools. Regarding investments, an RIA might assess whether the custodian is product agnostic, allowing the firm to select the best available investment products (rather than being steered towards the custodian's own proprietary products). Finally, understanding the custodian's pricing will help an RIA decide whether the costs involved (to themselves and/or their clients) justify the addition of the new custodial partner.

Altogether, given the time and monetary costs of adding a custodian, having an understanding of why they are considering a second (or third) custodian and whether potential candidates would be a good fit can help ensure that the relationship will be a value-add for the firm and its clients and not just another layer of paperwork and bureaucracy!

Can You Have Too Many Custodians?

(Josh Welsh | InvestmentNews)

Diversification is at the heart of many financial advisors' investment philosophies, as investing across a range of companies and asset classes can prevent a downturn in one of them from dragging down the performance of the overall portfolio. Nevertheless, when it comes to custodians, many firms stick with a single platform, which begs the question of whether adding a second custodian could be a form of diversification (and whether the operational costs of doing so are worth the benefits).

For firms looking to add advisors (and their client books), having a second (or third) custodian could make them an attractive destination, as it would be easier for these advisors (and their clients) to plug into the platform (and not have to completely re-paper and learn a new system and client portal). Another potential reason to have multiple custodians is to have optionality when it comes to serving an individual client's unique needs (e.g., clients with investments that might not be supported by every custodial platform). On the other hand, having multiple custodians can create 'paralysis by analysis' if an advisor has to consider which of (potentially many) custodians is the best fit for a certain client's situation. Further, advisory firm owners and their teams with multiple custodians will likely have to navigate the unique processes of each custodian and become familiar with each of their service teams (which could increase time costs as a firm adds custodial partners).

Ultimately, the key point is that while working with a single custodian is often the choice of RIAs (particularly smaller firms that might not have the operational bandwidth to work with multiple custodians), adding a custodian can provide a measure of diversification and potentially make a firm attractive to new advisors and clients who share the same platform (while being aware of the potential for 'overdiversification' that can lead to operational headaches).

A Strategic Approach To Asset Splitting Among RIA Custodians

(Matt Sonnen | WealthManagement)

As an RIA's AUM grows, it might be tempted to add an additional custodian, in part to keep their original custodian 'honest' by splitting assets among both custodians, assuming it will make the 2 custodians compete for the firm's favor. However, Sonnen notes that because the service levels custodians provide often depend on the amount of assets a firm has on their platform (with larger firms receiving higher service levels), an asset-splitting approach can be counterproductive.

While custodians don't disclose the AUM needed to qualify for different service tiers, Sonnen considers $1 billion to be the approximate level where RIAs receive top-tier service. Which means that if a $1 billion RIA splits its assets evenly between 2 custodians, it might receive 'B'-level service at each rather than 'A'-level service with a single custodian Further, if the same firm split its assets unevenly, say $800 million at one custodian and $200 million at another, they might have significantly different service experiences with each custodian (in addition to the custodian-specific nuances the firm's staff will have to learn). Aside from looking for better service, some firms looking to make acquisitions add a custodian to make themselves more attractive to sellers who use the same custodian (to reduce the time and hassle required to bring the acquired firm's clients onto the platform), though Sonnen notes that an alternative (and perhaps simpler) course of action is to have introductory calls with several custodians to learn about their services and processes to give potential sellers confidence that the acquiring firm is fine with keeping assets at the selling firm's custodian.

In sum, while it might be tempting for firms to add custodians as they grow, splitting assets across multiple custodians can sometimes have the counterproductive effect of a lower level of service (possibly at both custodians!), suggesting that firms will want to assess their goals for adding a custodian upfront to ensure that the operational costs of doing so are worth the anticipated benefits (whether in terms of custodial diversification or being more attractive to advisors or firms who might join the RIA's umbrella)!

Why 85% Is The Magic Number For Productivity

(Rachel Feintzeig | The Wall Street Journal)

Whether at work or at home, when you don't give 100% effort, it can sometimes feel like you're slacking off. Nonetheless, because going full steam ahead at all hours of the day can lead to burnout (e.g., consider the difficulty of sprinting for an entire 1-mile run!), giving total effort all the time is likely to be infeasible.

With this in mind, several experts suggest that individuals aim for 85% effort, which can manifest in several ways. Part of the benefits are physical; for instance, while aiming for 100% effort and perfection on every work project can lead to longer work hours (and potentially lower-quality work as you get fatigued) and a lack of time to relax and recover, evaluating a project once you consider it to be 85% done can signal to you whether putting in additional effort will result in significant or merely marginal benefits. Operating at an '85% level' can also promote mental health, as always aiming for perfection can create added stress by making you consider whether you've done 'enough' (and a potential internal crisis if you receive a poor evaluation on it).

Ultimately, the key point is that giving 100% at all times not only is almost certainly unsustainable, but also could be counterproductive as well if it leads to stress and exhaustion. Which suggests that dialing effort back a bit could both create more free time in your day and make it more enjoyable in the process!

How To Replace A To-Do List With A Backlog And Timeboxing

(Luciana Paulise | Forbes)

The to-do list is a common part of work life, allowing an individual to get tasks out of their head and on to (digital) paper so they are not forgotten. The problem, though, is that to-do lists can grow ever larger over time. Further, a to-do list is not necessarily prioritized, so starting at the top of the list (or with the easiest task to complete) can leave urgent and important tasks incomplete.

Instead of a to-do list, an advisor could consider using a "backlog". Like a to-do list, a backlog is a comprehensive list of all of an individual's responsibilities. A key difference, though, is that the backlog will allow for prioritization of tasks (e.g., using an online tool like Sunsama or Asana), with those that are both urgent and important at the top of the list. Backlogs are particularly effective when individuals institute a weekly "planning ritual" to organize the backlog and identify priority tasks to complete during that week. Then, on a daily basis, "timeboxing" these tasks by setting defined periods of time on one's calendar to complete each specific task can ensure that sufficient, dedicated time is allotted to complete each task (rather than "winging it" over the course of the day). Notably, timeboxing is not just for major tasks; given the number of 'small' tasks (e.g., email replies) that creep up through the day, setting aside a time block to complete them can be more efficient than spreading them out through the workday (which could distract from higher-priority tasks).

In sum, an approach that uses a backlog with timeboxing can help an advisor better organize and execute their most important tasks. Which not only can help avoid a task from slipping through the cracks, but also ensure that each day is used efficiently!

People Still Want To Work. They Just Want Control Over Their Time.

(Stephanie Tepper and Neil Lewis | Harvard Business Review)

While certain jobs require a worker to operate from an office (e.g., nurse or mechanic), many "knowledge work" jobs can potentially be done from anywhere. The past few years have seen an explosion of alternate work arrangements, from hybrid work (where employees work from the office for a certain number of days per week and from home on the others) to fully remote environments, which provide employees with greater flexibility (and less time commuting!) during their workweeks. Nonetheless, some companies that previously went remote are instituting "return to the office" policies, bringing staff back to the office full-time (whether because they believe employees will be more productive in the office, because they want to promote the kind of collaboration and mentorship that in-office work can facilitate, or because they want to make use of their leased office space) which has led some employees to resign and seek job opportunities that offer more time and workplace flexibility.

Using data from the National Study of the Changing Workforce, which surveyed 1,516 workers in the United States, individuals who had greater control over their time (i.e., greater flexibility in their work schedules) had the highest job satisfaction and overall satisfaction with their lives. Further those who felt a sense of "time scarcity" (i.e., the feeling of not having enough time to get everything done) had less job satisfaction and less satisfaction with their life overall (and separate research has found that feeling time scarcity can mitigate the greater wellbeing associated with having a higher income), though the effect on job satisfaction was more pronounced for those who also had less control over their time.

Altogether, these data points suggest that employers looking to retain staff might focus particularly on time flexibility, which can be achieved not only for remote or hybrid workplaces (e.g., through flexible work hours or asynchronous arrangements), but also for those in the office full-time, perhaps by setting "core" hours in the middle of the day when everyone is expected to be in the office with flexibility at the beginning and end of the day!

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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.