Most planners have struggled at times to deal with "difficult" clients. Sometimes it's the client who says he's really tolerant of risk and wants 30% returns... until the decline comes. Other times it's the client who refuses to tolerate any risk whatsoever... yet laments the low returns that entails. Accordingly, most planners try to avoid working with clients at the extremes of risk tolerance (or lack thereof). But the truth is, these challenging clients usually do not really have extreme levels of risk (in-)tolerance... instead, the problem is actually with their risk perceptions, and it requires a different solution.
Is The Internet Changing The Value Of Financial Planning?
The members of Generation X and Gen Y have had a unique collective experience, including growing up in the age of computers and (especially for Gen Y) with immersive exposure to the internet and the information resources it provides. Questions that might have required a trip to the library or an Encyclopedia Brittanica can be answered in a 10-second Google search. So if clients can look up a financial question in a few moments on the internet, where does that leave the value of financial planning?
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Percentages Going Up, Dollars Going Down
Most planners doing financial planning reviews with clients have witnessed the phenomenon: when markets go up, clients look at their growth rates; when markets go down, clients look at the dollars they have lost. What can behavioral finance tell us about why we have such an asymmetric view of the market's ups and downs?
The Better The Returns The More We Save… Wait, What?
Recent research on the reaction of investors to the 2008-2009 market downturn has confirmed an interesting tendency of investors that I have long believed - the better our returns, the more we're willing to save. Yet the irony is that theoretically, the better our returns, the LESS we need to save, because we'll have more growth from our investments. Nonetheless, if we don't account for this very human behavior about saving, we can end out with some disastrous financial planning advice.
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AMT Repeal Could Be Coming – But At What "Cost"?
Earlier this week, the National Commission on Fiscal Responsibility and Reform released a draft version of its proposals on how to take control of our nation's deficit challenges, including suggestions for comprehensive tax reform. The good news in the proposal is that it includes a repeal of the highly unpopular Alternative Minimum Tax (AMT). The "bad" news is that the proposal also includes a repeal of many popular tax credits and deductions as well. But the reality is that we can't really have one, without the other.
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Big Shifts Continue in the Long-Term Care Insurance Marketplace
Citing an array of classic problems - including interest rates, morbidity, mortality, and persistency - long-term care and general insurance behemoth MetLife announced this week that it will be leaving the long-term care marketplace completely. And coming on the heels of recent announcements last month by GenWorth and John Hancock of significant premium increases on large blocks of their policies, it would seem that the long-term care insurance marketplace is in a bit of turmoil. Does this mean the industry is in trouble, or is this actually a sign of stabilization?
CFP Board 80% Fee Increase – It’s Official
After taking up the issue at their board meeting yesterday, the CFP Board officially announced this morning that the 80% fee increase for CFP certificants to support a public awareness campaign for the CFP marks has been approved. So now the only question is: Will it work? Will this mark the start of a new dawn for the growth of financial planning as a profession, or an(other) expensive failure in the annals of CFP Board history?
FPA Releases Survey Results on CFP Board Proposed Fee Increase
In light of the ongoing debates and discussion regarding the CFP Board's potential fee increase to support a new public awareness campaign, the FPA last week conducted a survey of their CFP members to poll for views about the proposal. And last night, the FPA has released the survey results in an email to members.
Are We Being Hypocrites About The Value of Financial Planning?
As financial planning fights for its standing as a full-fledged profession, we try to demonstrate its core value to society - that going through the financial planning process has a positive impact on achieving a client's goals. Yet for all we proclaim about our beliefs in the value of financial planning, why is it that virtually none of us think financial planning is valuable enough to pay for it ourselves?
