Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with the latest news on the fiduciary front, that the Department of Labor may have delayed its latest rule reproposal to next August because incoming Labor Secretary Tom Perez is trying to rally support in Congress for the rule and preemptively address Democrat concerns about whether middle-income families may be cut off from financial advice as a result of higher regulatory costs. Also in the news was the striking announcement that Vanguard has collected a whopping 98% of all net inflows to U.S. equity funds this year, and rumblings continue about the recent Schwab announcement that they will offer a money-back guarantee for the last quarter's AUM fees for any advisory clients who are unhappy and whether this will set a new accountability precedent for advisors.
From there, we have a number of practice management articles, including some suggestions on how to handle the situation when an advisor/employee leaves, when it's time to think about hiring a professional manager for an advisory firm, the emerging rise of regionally-dominant "super ensemble" RIAs that have $5M+ of revenues and often $1B+ of AUM, and the 2013 "Best In Technology" awards from advisor tech guru Bill Winterberg.
We also have a pair of technical financial planning articles this week: the first looks at some of the traps and pitfalls of properly valuing life insurance policies that are being transferred to ILITs (given that the gift valuation rules are 50+ years old and life insurance has evolved greatly since then!); and the second is a discussion of the prospective benefits and caveats of a Department of Labor proposal that would require all defined contribution account statements to show an estimate of lifetime income that would be available at retirement given the current value and ongoing savings.
We wrap up with three interesting articles: the first is a look at some of the latest research on how we make choices, the fact that more choices can actually make it harder for clients to move forward, and the role that planners can play to help clients make better choices; the second examines the typical marketing of financial planners, noting that most appeal to a prospective client's analytical side, despite a growing base of research that makes it clear that people are more compelled to buy a product or service that appeals to their emotions instead; and the last is an interview with Ric Edelman about his firm, which now boasts a whopping $12B of AUM and 22,000 clients, focused entirely on the mass affluent, with plans to grow significantly more in the coming years... notwithstanding the fact that most large firms still insist that the mass affluent cannot be served profitably! Enjoy the reading!