This past week was the NAPFA 2011 National Conference in Salt Lake City. Pulling almost 500 attendees from across the country, it's one of the top financial planning events of the year. Unfortunately, though, many did not have the time or opportunity to attend the conference. The good news, however, is that a growing cadre of Twitter users "live-Tweeted" the conference for all to enjoy, using the #NAPFA11 hash tag. So for those of you who missed the conference, here's a quick synopsis of the entire 3-day conference from start to finish... from those who Tweeted it!
NAPFA Throws Down The Gauntlet For Leadership Of The Profession
NAPFA has long been at the front vanguard of the profession, carving a path to advance financial planning forward. And for the most part, it has been incredibly successful. It put fiduciary in the center of the debate, and organizations from the CFP Board to the FPA have adopted fiduciary into their own Codes of Ethics and Practice Standards. It put comprehensive in the center of the debate, and now the CFP Board’s public awareness campaign is anchored around the comprehensive nature of financial planning to pull together all of life’s intricacies. It put fee-only at the center of the debate, and now methods of compensation, conflicts of advice, and objectivity of advice are being evaluated by Congress and government agencies to determine future regulation of the profession. It put the importance of competence at the center of the debate, and now the public media openly acknowledges the value of having the CFP certification as a cornerstone of financial planning knowledge. With so many victories in its core missions, NAPFA had to some extent begun to render itself less relevant, as its successes brought all parts of financial planning closer to its own ideals and diminished its own differentiation. And so at NAPFA National 2011, the organization announced a new branding effort and vision for 2020 – once again, throwing down the gauntlet for leadership of the profession.
Just Because Social Security & Medicare Are In Trouble Doesn’t Mean (All) Your Benefits Are!
Once again, the Social Security and Medicare Boards of Trustees have released their annual report on the fiscal health of the Social Security and Medicare programs, and once again the Trustees report shows that the fiscal health of the two programs has further deteriorated, a combination of primarily slower-than-projected growth, upwards adjustments to long-term costs (Medicare), and increases in estimated longevity (Social Security). With the latest projections, the Social Security trust fund is projected to be exhausted in 2036 (last year it was anticipated to last until 2037), and the Medicare trust fund will be depleted in 2024 (compared to last year's estimate of 2029). But while it's true that the systems are both headed for serious trouble as the trust funds potentially go "bankrupt" - the reality is that the actual depletion of the trust funds may still have a far less severe financial planning impact than many assume, for one simple reason: the overwhelming majority of Social Security and Medicare benefits will actually still be funded, via our ongoing Social Security and Medicare tax system!Read More...
Top 40 Tweets From FPA Retreat
Earlier this month the Financial Planning Association hosted FPA Retreat, one of the leading cutting edge conferences on the art and science of financial planning. Drawing hundreds of attendees from across the country (and around the world, with participants coming from as far away as Australia!), the conference never lacks for interesting ideas and conversations, both within the sessions and out in the hallways. This year, though, those who didn't attend still had the opportunity to enjoy some of the content virtually, thanks to an active group of participants who "live Tweeted" highlights throughout the conference on the #FPARetreat11 hashtag. For those of you who missed it, here are some of the highlights...Read More...
Is Social Media A Tool For Deepening Client Relationships?
As the popularity of social media rises - from Facebook to LinkedIn to Twitter - advisors are increasingly asking "what's all the buzz about" and "why should I care?" As many point out, planners develop new clients primarily by getting referrals from existing clients, and having face-to-face meetings to get to know them better. No one makes a decision about who to give their life savings to based on a Facebook page, right!? Perhaps, but a focus on the new business development opportunities from social media misses an important but crucial point - there's already plenty of value to be derived from social media, just by connecting to your EXISTING clients, to deepen the personal relationship you already have with them!Read More...
It’s Not Just About Telling Clients What To Do, It’s About Motivating Them To Do It!
Being a good financial planner is not just about having the knowledge and information to direct clients on how to best achieve their goals and financial success.
Ultimately, most would agree that the true measure of success is to look at how effective the planner is in actually helping clients achieve those goals; in other words, does the client actually have an improved path to success because of the planner's involvement. In turn, this means that the planner's true success hinges not only upon having the right advice, but also depends upon the client actually implementing that advice, and the planner's ability help those clients make the required changes!
There's just one problem: it turns out that telling people what to do is actually a terrible way to get them to do it!Read More...
Are Some Financial Planners Unwilling To Take Their Own Investment Advice?
If there's one piece of investment advice that's almost universally agreed upon by financial planners, it's this one: don't bail out of stocks after a bear market. In fact, the entire foundation of wealth accumulation in the financial planning world is predicated on a healthy exposure to stocks for the long run, especially during the accumulation phase.
The planning world has attached itself to this stocks-for-the-long-run focus over the past two decades with its shift to an assets-under-management (AUM) business model, where revenues and value for the firm are tied to the markets in a similar manner to the client's wealth and (future) income.
Yet in recent years - and especially since the 2008-2009 bear market - some planning firms have been starting to shift away from the AUM model, opting instead for more stable income business models like retainers. Yet this raises the question: if clients are supposed to stick with stocks for the long run and stay the course through temporary market downturns, are planners being hypocritical by not doing the same thing with their AUM business model?Read More...
Should Planners Have A Responsibility To Report The Wrong-Doing Of Other "Bad" Planners?
One of the most common complaints within the industry about the state of financial planning is that it is marred by so many practitioners who say they are financial advisors, but do not really do financial planning... or worse, do it badly, wrong, or outright deceitfully. Yet although so many planners state that they have come across such "bad" practitioners, virtually none state that they have ever reported a bad practitioner, either to regulatory authorities, or to the CFP Board if the individual holds the CFP marks but doesn't do financial planning "right." Yet how will the financial planning industry be cleaned up of its inappropriate practitioners if we do not take a part in it? So there's the question: what is - or should be - the responsibility of financial planners to report the wrong-doing of other people who hold themselves out to be financial planners?Read More...
Just How Much Do You Assume Mass Affluent Clients Will Pay For Retirement Medical Expenses?
With the cost of health care just continuing to spiral higher and higher as the years go by, it becomes increasingly difficult to advise clients about how much to save to handle those future costs in retirement.
On the one hand, it's crucial not to undersave, such that ongoing health care costs devastate and deplete the retirement portfolio; on the other hand, excess conservatism can be bad too, forcing clients to unnecessarily constrain their lifestyle with more saving than is necessary, or working longer and retiring later than was actually needed.
So just how much do you assume your mass affluent clients will pay in projected future health care costs during retirement?Read More...
If The Fiduciary Fight Wins, Does Your Marketing Plan Lose?
The Financial Planning Coalition is fighting the advocacy fight for a fiduciary standard for financial planning. While this certainly is a consumer-centric direction for financial planning, the firms today that practice financial planning may need to be careful about what they wish for. After all, for many firms, the fact that they operate as fiduciaries has become a central message of their marketing to prospective clients.
So what happens if the Coalition wins the fiduciary fight? If everyone who practices financial planning must operate as a fiduciary, do a number of currently successful firms lose their key marketing differentiator and have to rewrite a new marketing plan?
