Nerd's Eye View blog

Weekend Reading for Financial Planners (May 2-3)

May 1, 2020 02:59 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with a new industry study from Broadridge finding that the coronavirus pandemic is just further accelerating the industry's shift towards more holistic financial planning as a way to demonstrate and add value in the midst of the turbulent market environment (particularly amongst advisors under age 40).

Also in the news this week is a new study finding that nearly 1/3rd of consumers still don't understand how financial advisors are compensated (undermining their trust in working with an advisor) and that getting a clear understanding of how the advisor is paid is even more important than the actual payment mechanism itself (e.g., commissions, AUM fees, fee-for-service, etc.), a discussion of whether advisors should be cutting fees in the current environment (particularly for their clients facing their own difficult financial situations), and the opportunity for advisors to work with their more affluent clients to make distributions from donor-advised funds to help charities that are trying to serve those most in need right now but may be struggling in the current environment.

From there, we have several articles on behavioral finance and helping clients through difficult environments, including tips on how to handle calls from clients who want to go to cash, how to (and how not to) position your 'behavioral coaching' as a value to clients and prospects, recent research showing that the more familiar an investor is with a stock, the more rapidly they tend to trade it (and the worse the results tend to be), an overview of the legal defensibility of various risk tolerance software tools (where some are far more robust than others if the advisor even had to defend their use of the tool in court), tips on what to look for (and what to avoid) in finding a valid and reliable risk tolerance assessment tool, and some guidance on what conversations to have with clients now while markets are calmer (to prepare for the possibility that they could become much more volatile again before the recession is over).

We wrap up with three interesting articles, all around the theme of how the industry itself is changing: the first looks at how in the last (financial) crisis, it was the firms that reinvested the most for growth despite the scary environment that ended out having the most success in the decade that followed; the second looks at the evolving trends in the industry that were already underway but may be accelerated by the coronavirus pandemic; and the last, a send-off from the soon-to-be-retiring Mark Tibergien, explores what financial advisors and the industry at large can do to make ourselves even more valuable in the aftermath of the coronavirus pandemic and the decade to come!

Enjoy the 'light' reading!

How RIAs Can Determine If They Need To Disclose PPP Loans on ADV Part 2A

April 30, 2020 08:47 am 11 Comments CATEGORY: Practice Management

Last month, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, providing Americans with $2+ trillion of emergency fiscal stimulus funding in response to the economic damage caused by the Coronavirus pandemic. Part of the Act included the Paycheck Protection Program (PPP), which initially authorized up to $349 billion in forgivable loans intended to be used by small business owners to pay their employees during the crisis. However, the overwhelming demand for PPP loans depleted funds in a matter of just a few weeks, leading to an additional round of funding of $310B made available in late April 2020.

Accordingly, small business owners still have the opportunity to apply for funding, leaving many financial advisors faced with the decision over whether to apply for a PPP loan themselves. As while loans are intended for small businesses (with 500 or fewer employees) experiencing economic uncertainty resulting from COVID-19 who need the funding to continue business operations, advisors who receive loans also need to determine whether their loans are disclosable events.

For brokers regulated by FINRA, PPP loans are not considered disclosable events for purposes of Form U4 Question 14K, as FINRA determined that forgiveness of the PPP loan does not constitute a “compromise with creditors” because the potential for loan forgiveness is part of the original terms of the loan.

On the other hand, RIAs must disclose their PPP loans on Item 18 of the ADV Part 2A if the loan constitutes a “material fact” pertinent to the advisory relationship. In most cases, if PPP loans are used for the intended purposes of covering payroll expenses for persons performing primarily advisory functions, the loan would be considered a material fact relating to the advisory relationship. Accordingly, RIAs should be prepared to disclose their PPP loans on their ADVs.

However, while PPP loans should likely be disclosed in most circumstances, RIAs may be able to avoid such disclosure in limited situations. For example, a firm could try to avoid disclosure by claiming that the funds were obtained primarily due to the economic uncertainty posed by COVID-19, but not necessarily because they were “required”. This argument, however, may be difficult to make given the Small Business Administration’s requirement of certifying a PPP loan as necessary due to the current economic uncertainty cause by the COVID-19 crisis.

Another way that an RIA may be able to justify not disclosing receipt of a PPP loan on their ADV Part 2 would be by claiming that funding was used for the payroll of employees who were not directly involved in advisory functions (e.g., staff involved in marketing, events, receptionist duties).

Ultimately, the key point is that because RIA firms and brokers have different criteria for disclosure events, the requirements to disclose PPP loans are different for each. For brokers, the principal question is whether a compromise with a creditor has been made, whereas for RIAs the question is whether the event has a financial impact that materially (or potentially) impacts the ability to fulfill obligations to the client. As such, FINRA brokers are not required to disclose PPP loans on their U4 Forms (assuming they are used according to the original terms of the loan) but RIAs, regulated by the SEC, should lean heavily towards disclosing their PPP loans on Part 2A of their Form ADV.

Student Loan Interest Forbearance Planning Strategies Under The CARES Act

April 29, 2020 07:07 am 4 Comments CATEGORY: Debt & Liabilities

With the recent turmoil driven by the coronavirus pandemic, people across the country are faced with tremendous uncertainty about their financial situations. In response to the crisis, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion emergency fiscal stimulus package, in order to offer much-needed relief for both individuals and business owners to meet their short-term cashflow demands. For borrowers of Federal student loans, in particular, Section 3513 of the CARES Act offers a full suspension of Federal student loan payments with no interest accrual on those loans through September 30, 2020.

In this guest post, Ryan Frailich – Founder of Deliberate Finances, a fee-only financial planning firm in New Orleans, Louisiana – breaks down the key features of this relief provision and how the suspension of payments plays into forgiveness plans. Additionally, he offers strategies that advisors can use to help their clients leverage available CARES Act relief benefits as they relate to their student loans.

For instance, clients with direct student loans and Federal Family Education Loans (FFELs) owned by the U.S. Education Department can take advantage of suspended payments during the relief period, with no action required from the borrower. Importantly, though, FFELs that are not owned by the Education Department do not qualify for relief under the CARES Act, nor do other types of privately serviced student loans. Additionally, borrowers can confirm that the interest rates on their eligible loan accounts are set at 0% throughout the relief period, during which time any unpaid interest on loans will not be capitalized.

Meanwhile, for borrowers in forgiveness programs in which the forgiven amounts will be considered tax-free income, such as the Public Service Loan Forgiveness (PSLF) program, the relief period during which payments are suspended will count for payment periods; accordingly, borrowers in such forgiveness programs should be encouraged to stop payments during the relief period. Some forgiveness-eligible loans that don’t offer tax-free forgiveness, like Income-Driven Repayment (IDR) plans, may pose more complex challenges about whether to pay during the relief payment period, and the best choices will largely depend on anticipated future income levels and whether any forgiveness will actually be pursued.

Other clients with unique student loan situations may also benefit from relief efforts. For example, borrowers with FFEL or Perkins Loans that are not owned by the U.S. Department of Education, which will not qualify for CARES Act relief, may be able to consolidate their loans into a Direct Loan, which will qualify for CARES Act relief. Clients who may be expecting a reduction in income might benefit from entering into an IDR plan, which, after the relief period, may potentially reduce their payments by substantial amounts. And finally, clients who have stable income levels not impacted by the crisis and with no high-interest debt might be better off not taking advantage of the option to suspend payments, and may instead benefit more by making regular payments as usual in order to reduce their principal loan balances as quickly as possible (still taking advantage of interest rates while they are set at 0% during the relief period).

Ultimately, the key point is that the relief provided by the CARES Act for student loan borrowers is yet another way advisors can help their clients cope with the current crisis. Especially in light of the rapidly changing legislation, clients will need their advisors to help them determine if their loan payments are eligible for suspension, how loans that do not qualify for relief can best be managed, and how the rules may impact those in more complex financial circumstances.

#FASuccess Ep 174: Leveraging Zapier And PreciseFP To Weave Together Independent Advisor Open Architecture, with Shanna Tingom

April 28, 2020 07:09 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 174th episode of Financial Advisor Success Podcast!

My guest on today's podcast is Shanna Tingom. Shanna is the founder of Heritage Financial Strategies, a dually registered advisory firm located near Phoenix, Arizona, that oversees $50 million of assets under management for nearly 250 middle-market clients. What's unique about Shanna, though, is the way she's been able to weave together her advisor technology stack to heavily automate key processes throughout her firm to service 250 clients efficiently and did so by not using industry-standard CRM systems.

In this episode, we talk in-depth about Shanna's unique advisor technology stack. Why she chose to use marketing automation provider HubSpot for not only her website, but her core CRM system and business workflows, the way she's adopted Zapier as a solution to integrate HubSpot into industry or software providers, and why she selected PreciseFP and not her own CRM system to become the core data hub for her advisory business.

We also talk about Shanna's journey through the advisory business itself. Why she's thankful she started out at a large financial services firm for their training and infrastructure, why she ultimately chose to make the transition to become an independent advisor instead, the difficult challenges that Shanna faced when going out on her own and losing the existing infrastructure and premier brand that a large firm provides, and how she selected Cambridge to become her new independent broker-dealer platform for the future.

And be certain to listen to the end, where Shanna shares the moment where she was so unhappy in her advisory firm that she was about to quit altogether, how delegating investment management to third-party TAMPs helped restore her own happiness and well-being, the way she now structures her AUM and planning fees to incorporate investment advice, financial planning advice, and the cost of third-party providers, and the mental trick of drawing lines in the sand that Shanna uses to help herself make changes that she knows will be difficult to make.

Elevating Client Service To Actually Drive Growth Through Client Referrals

April 27, 2020 07:03 am 4 Comments CATEGORY: Practice Management

Financial advisors who want to grow their firms faster can examine a wide range of advisor marketing strategies and sales tactics. But the reality is that if an advisory firm is struggling to grow, often the problem isn’t actually a matter of better marketing; instead, it’s about developing a better client service process. Because while the most significant value proposition of a real financial advisor is ultimately to help their clients live better lives, having a consistently remarkable client service process is what allows a financial advisor to successfully elicit the positive feelings experienced by their clients, which are essential in establishing lasting trust and driving the referrals necessary to bring about growth. And simply put, the fact that an advisory firm has high retention of existing clients doesn’t mean its client service process is good enough to bring new client growth as well.

In this guest post, Angie Herbers – Chief Executive and Senior Consultant at Herbers & Company, an independent management and growth consultancy for financial advisory firms – explains how the Client Service Process is actually the key to growth, and how it consists of not only the client service experience itself, but also the Operations Experience – the behind-the-scenes activities that clients may or may not see directly, but that they can certainly feel the effects of through every interaction they have with the firm. And in order to create an exceptional client service process based on cultivating trust, there are four components that must be mastered, in the following order: 1) Understanding, 2) Control, 3) Discipline, and 4) Stability.

The first stage of trust is Understanding, and involves the advisor not just having a solid grasp on what the firm does and who it works with, but also a deep connection to and alignment with the firm’s motivation, of why it does what it does and chooses to work with the clients it has. Next comes Control, in which financial advisors decide what services they will (and will not) provide for clients, with the confidence that those services align with the firm’s (and their own) motivation and purpose. In this stage, advisors also help clients realize that they, too, have a level of control in choosing to follow the advice they are given (or not), and this autonomy serves to deepen further the trust being cultivated between client and advisor. The next stage is Discipline, in which advisors and their staff need to continually uphold all the details, big and small, of the client service process promised to clients, which, over time, create the “living client” who trusts the firm culture and process so intrinsically that they essentially mirror the actions and feelings of the firm at all times. The last stage involved in cultivating trust is Stability. For the advisor, stability represents a solid belief that, whatever transition the business may face, it will maintain the integrity it needs to continue to grow. Similarly, the client has full faith that, whatever transitions they themselves face in their lives, their advisors will provide the stability to always guide them through the experience.

Ultimately, the key point is that the client service process is the primary area where advisors should focus in order to grow their firms. And while other components like marketing, sales, and human capital are all very important, they will not mean much if the client service process is faulty. Because it is the client service process, which includes both the client service experience and the firm’s operations experience, that is most crucial in establishing positive emotions between the client and advisor, on which long-term trust and a strong, lasting client-advisor relationship are built.

Weekend Reading for Financial Planners (Apr 25-26)

April 24, 2020 02:49 pm 5 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the news that the Senate and House (and imminently, the President) are signing into law the next wave of coronavirus pandemic stimulus, a $484B bill that includes another $310B of funding for the PPP (along with another $60B for the EIDL program) as small businesses continue to seek capital to stay running and keep employees on board.

Also in the news this week is a fascinating study that the coronavirus has driven nearly 1-in-4 Americans to seek out a financial advisor for the first time (resulting in a surge of new client inquiries for many advisory firms), that TD Ameritrade (and Schwab) still see the Schwabitrade deal as being 'on' for the second half of 2020, feedback to a NASAA proposal that all IARs of RIAs be required to earn 12 hours/year of CE credit and that NASAA should permit other types of CE (from CFP to FINRA) to also count, and a FINRA proposal to aggregate the SEC's Investment Adviser Public Disclosure data into FINRA's own BrokerCheck site so consumers can have a one-stop shop at BrokerCheck to see the regulatory and disciplinary history of dual-registered brokers.

From there, we have several articles on investing and retirement planning, including how coronavirus volatility is leading more RIAs to leverage the block trading capabilities of their RIA custodians to reduce trading costs for clients, a Blackrock research finding that advisor portfolios tended to significantly underperform their benchmarks in the market decline (but not due to poor equity selection, and instead due to underweighting government bonds as a safety diversifier against the risk of recession), new research that questions whether there's really any economic value to so-called "bucket strategies", and some guidance about how to think about changing the client's financial plan when an update shows a significantly lower Monte Carlo probability of success.

We wrap up with three interesting articles, all around the theme of our opportunity to (re-)build when/as the country eventually emerges from the coronavirus pandemic: the first looks at how, despite incredible innovation and progress, the country has perhaps focused too much energy on building software and technology and not enough on infrastructure and companies that make things we need (until now, when we realize what we don't have and can't quickly mass-produce); the second looks at how the dynamics of venture capital and its addition to high margins and fast exits may have amplified our lack of building (and what it takes for investors to re-focus on building); and the last looks at how the collective call of the country to fight the coronavirus is itself stimulating a fresh wave of business innovation that may already be creating a lasting positive mark on the country that will remain to our benefit long after the coronavirus is gone!

Enjoy the 'light' reading!

Should Financial Advisors Accept (And Disclose) Paycheck Protection Program Loans?

April 23, 2020 09:52 am 59 Comments CATEGORY: Practice Management

Last month, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2+ trillion emergency fiscal stimulus package, with the intention to mitigate the economic damage created by the Coronavirus pandemic. For many individuals and small business owners who are facing financial hardship, including many financial advisors themselves, the Paycheck Protection Program (PPP), which originally authorized $349 billion in forgivable loans, is a compelling opportunity offered by the CARES Act providing much-needed financial relief.

While the initial round of funding was quickly depleted (as funds were exhausted only 2 weeks after applications were first accepted), Congress is now considering renewing PPP funds with an additional $310 billion. While the opportunity for relief with a loan (potentially one that is tax-free and forgivable, depending on how it is used) is attractive, the question for many financial advisors is whether or not they should take a loan in the first place, as there are many factors for advisors to consider.

First is whether the funds being requested are truly necessary to keep the business running, and whether the advisor really does need the funds as much as the next person in danger of losing their business. PPP funding is forgivable only if used for specific purposes (namely, payroll costs, mortgage interest, rent, utilities, and interest on other loans incurred prior to February 15, 2020); importantly, loans are not intended to serve as a ‘rainy-day’ fund or as reserves for future anticipated hardship.

Another important consideration that advisors should make is around disclosure requirements. As while PPP loans are not required to be disclosed in item 14K on FINRA Form U-4, they may need to be included in Item 18B of the Adviser’s ADV. Furthermore, while the ADV disclosure is not considered a derogatory mark against the advisor by regulatory agencies, clients (or potential clients) may feel otherwise. However, the manner in which the advisor chooses to present themselves to clients can influence their perception of the disclosure (e.g., some advisors who openly talk about the loan with clients have encouraged those who also need financial relief to apply for a loan; this approach has worked well to inspire some clients).

Ultimately, the key point is that the PPP has been (and, if more funding becomes available, can continue to be) a valuable resource that may help financial advisors in financial distress caused by the Coronavirus. While there are many considerations to make before choosing to apply for a loan, advisors should think quickly and be ready to apply for funding should more funds become available.

Fixing Unwanted RMDs Taken Before The CARES Act Waiver Of 2020 RMDs

April 22, 2020 10:05 am 11 Comments CATEGORY: Retirement Planning

With the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act by Congress last month, Americans were provided with a more-than-$2 trillion emergency fiscal relief package that included benefits for many individuals, small business owners, healthcare providers, and government entities. For financial advisors with clients who have retirement accounts or who are beneficiaries of retirement accounts, one particular provision of interest established by Section 2203 of the CARES Act is the suspension of Required Minimum Distributions (RMDs) during 2020.

The suspension of RMDs applies to all IRA accounts (including SEP and SIMPLE IRAs) and defined contribution plan accounts, such as those under 403(a), 403(b), 401(a), and 401(k) plans, as well as the Federal Thrift Savings Plan (TSP). RMDs from 457(b) plans are also suspended, but only from plans offered by government employers.

In fact, not only can individuals who have RMDs for 2020 suspend their distributions, but individuals who either turned 70 ½ in 2019 or who were older but had retired in 2019 (taking advantage of the provision offered by IRC Section 401(a)(9)(C)(i)(II), the “Still-Working Exception”) can avoid any 2019 RMDs that were delayed to 2020.

Beneficiaries of retirement accounts are also eligible to suspend their 2020 RMDs. Specifically, these include individuals who are Designated Beneficiaries that can ‘stretch’ their RMDs with the life expectancy method and Non-Designated Beneficiaries (e.g., charities, estates, and certain non-See-Through trusts) who inherited the account from a decedent who died on or after their RBD.

On the other hand, accounts that are not eligible for suspended RMDs include defined benefit plans, non-governmental 457(b) plans, annuitized annuities held in an otherwise eligible plan, and 72(t) Distributions. Qualified Charitable Distributions (QCDs) are also not impacted by the CARES Act’s suspension of RMDs (and can still be made normally in 2020 for those who were otherwise QCD eligible).

For financial advisors with clients who have already taken RMDs for 2020 from their retirement accounts (or who have postponed RMDs for 2019 in 2020, as noted above) but who could have benefitted from suspending the distributions, there are a few ways to address the unwanted now-no-longer-necessary RMDs. Individuals can return the funds to the original account or rollover the funds to another retirement account (either through the 60-day-rollover window, or the extended rollover deadline offered through IRS Notice 2020-23), or for individuals directly affected by the COVID-19 virus (e.g., they or their family member has been diagnosed with the illness or has been experiencing financial hardship caused by the pandemic) by using the Coronavirus-Related Distribution Provision outlined in Section 2202(a) of the CARES Act.

However, in the case of IRA owners, it’s important to be mindful of the once-per-year IRA-rollover rule. Effectively, the rule prevents an unwanted RMD (or any other IRA distribution) from being rolled back into another IRA via a 60-day rollover (or using the relief provided by Notice 2020-23) if another IRA-to-IRA or Roth IRA-to-Roth IRA 60-day rollover has been completed during the past 365 days. Though IRA owners ‘stuck’ with multiple distributions may be able to fix them while steering clear of the once-per-year rollover rule by rolling the second, third, fourth, etc. distributions to a non-IRA-based employer-sponsored retirement plan that accepts roll-ins. If no such plan account is available, they may, at least, be able to salvage some tax benefits by timely completing a Roth conversion (which is also not subject to the once-per-year rollover rule).

For non-spouse beneficiaries of inherited retirement accounts, there is, unfortunately, no option to fix an unwanted RMD, as they are not permitted to do rollovers in any case. Spousal beneficiaries, on the other hand, do at least have the option to make spousal rollovers to move distributions to their own retirement accounts (but such rollovers are subject to the once-per-year rollover rule).

Ultimately, the key point is that financial advisors whose clients are retirement account owners can use relief offered through the CARES Act by suspending 2020 RMDs that aren’t immediately needed. For retirees who may already have taken their RMDs for 2020 (or for certain individuals who took 2019 RMDs timely in 2020), there are strategies for them to return these unwanted distributions using the 60-day-rollover rule, the relief provided by IRS Notice 2020-23 (which pushes back the deadline to rollover distributions taken on or after February 1, 2020, to July 15, 2020), or a Coronavirus-Related Distribution (for individuals directly affected by the COVID-19 virus).

#FASuccess Ep 173: Growing To $250M In Five Years By Crafting A More Specialized Client Experience, with Andrew Leonard

April 21, 2020 07:03 am 2 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 173rd episode of Financial Advisor Success Podcast!

My guest on today's podcast is Andrew Leonard. Andrew is the founder of Geometric Wealth Advisors, an independent RIA based in the Washington, D.C. area that oversees nearly $250 million of assets under management for 110 client households.

What's unique about Andrew, though, is his decision to focus into a unique niche serving the partners of the big three strategy consulting firms, Bain, McKinsey, and BCG, propelling his firm to organically add almost $200 million of net new assets in just 5 years almost entirely from a single white paper he wrote for his niche, and the ongoing one-meeting-close referrals he's been able to generate as a now recognized expert in that niche.

In this episode, we talk in-depth about what it really means to customize the financial planning process and experience to a particular type of niche clientele. The unique opportunities and challenges in working with management consultants who may make more than $1 million a year and save $250,000 annually into their portfolios but have been trained to analyze and scrutinize financial models and projections, how Andrew evolved his financial planning process to focus almost entirely on live interactive presentations of financial planning models using eMoney's Decision Center and eschewing the written plan altogether, and how Andrew combines in-person and virtual delivery to a clientele who are largely distance-based and spread across the country, and why Andrew ultimately decided to stick with the traditional assets under management model for a somewhat non-traditional niche clientele.

We also talk about why and how Andrew decided to pursue this type of clientele in the first place. Why he ultimately found it easier and more personally rewarding to work with high-income management consultants than the traditional retiree with significant retirement assets to manage, how he selected and narrowed down the type of niche clientele he wanted to pursue, the white paper marketing strategy he used to accelerate his growth after his first 10 niche clients, and why he finds that when focused on a niche, the biggest challenge is no longer how to market and attract high-quality clients, but the difficulties in finding the right kind of financial advisor talent to service that rapidly growing base of clientele instead.

And be certain to listen to the end, where Andrew shares why he found it so emotionally draining to work with retired clients, the real-world challenges of deciding to pivot from what had been a more generalist practice for his first seven years into this deep niche focus, and the unique cost-benefit analysis tool that he created on his website specifically to demonstrate the value of a financial advisor to his hyper-analytical clientele.

Client Note-Taking: Frameworks And Tools For Advisors To Improve Client Conversations

April 20, 2020 07:05 am 4 Comments CATEGORY: Practice Management

Financial advisors don’t always take their best notes when meeting with clients, as maintaining the flow of a good meeting and the rapport established through personal conversation is difficult when the advisor interrupts the rhythm of the dialogue by pausing to jot down some notes. Consequently, advisors often end out relying on hastily written fragments taken during meetings to capture (at least some of) the most important details. After the meeting, they may spend more time to reflect and expand their notes into a comprehensive account of the discussion… with the caveat that the longer they wait to complete their notes, the more they will inevitably forget (as much as 50% after a day!).

In this guest post, Michael Lecours – Co-Founder of fpPathfinder (which creates flowchart and checklist resources specifically for financial advisors), and a Financial Advisor with Ohanesian/Lecours – explores the importance of good note-taking and offers tools and suggestions that advisors can use to help them take better notes during (and after) client meetings.

Good notes documenting client meetings are important for several reasons. Most obviously, notes are reminders for both advisors and clients of the conversations and strategies discussed, as well as records of action items that need follow-up attention. Additionally, good notes help advisors and their teams stay updated with a client’s situation, allowing support staff to proactively service the client with account issues and other administrative tasks. Finally, meeting notes are essential should the advisor be accused of wrongdoing or brought to suit; a good, detailed note can be the key to a quick and easy resolution of the issue under investigation.

The best method for an advisor to use to take effective notes is highly personal and will depend on the nature of the meeting. Whether to handwrite or type notes is one consideration. As while studies have found students tend to remember lecture material better with handwritten notes (forcing them to think about material quickly as it is delivered and to summarize key points to simply keep up with the lecture) and that typing tends to be less thoughtful (as much of the information is simply transcribed verbatim), it may sometimes make more sense for advisors to type their meeting notes just to ensure the information is captured at all. Especially since comprehensive notes are generally only created after meetings anyway, when advisors can thoughtfully process what transpired with the client (though taking brief handwritten notes during the meeting still may be most appropriate). Typing notes is also more conducive for advisors to enter such notes, details, and follow-up action items directly into an advisor CRM system.

Regardless of the medium, there are several traditional frameworks for organized note-taking. Two examples include the “Cornell Method”, which divides the page into functional areas for notes during and after a meeting, with space to create an overall summary, and the “Charting Method”, which organizes main points in a columnar format (useful for discussions bouncing back and forth between a few main topics). For advisors specifically, “Guided Notes” are customized templates useful for conducting meetings in a consistent, organized fashion.

Tech tools are also available to help make note-taking easier and more efficient. Redtail has introduced note templates customized for individual clients and that prompt advisors with reminders; MobileAssistant and Copytalk are apps that transcribe recorded notes; in addition to financial planning checklists and flowhcarts, fpPathfinder now offers interactive checklists with pre-populated questions to be used as a discussion guide with clients.

Ultimately, the key point is that, even though it may be difficult for advisors to take detailed notes during meetings, they should still make time to create complete and accurate notes afterward. There are many resources available for advisors to find out what works best for them to capture important details and to transfer these notes into their CRM systems. By developing excellent note-taking skills and habits, not only will advisors reduce the possibility that important details will ever be lost, they also empower their teams to proactively provide the best client service experience with access to well-organized, detailed client information.