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Weekend Reading For Financial Planners (January 20-21)

January 19, 2024 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that a recent study has found that while total financial advisor headcount across all channels only increased by 0.3% in 2023, the RIA space showed significantly more strength, with 10.4% growth, as breakaway brokers and new advisors see the potential benefits of the RIA model. Nevertheless, there is potential for many individual RIAs to expand their staffing further, with the addition of specialized planning and operations roles being seen as a potential avenue to boost firm growth.

Also in industry news this week:

While the total number of RIA M&A deals in 2023 fell short of a record-setting 2022 amidst an elevated interest rate environment, continued interest from private equity firms and creative deal structures could boost deal flow in 2024
While the SEC authorized 11 "Spot" Bitcoin ETFs last week, comments from chair Gary Gensler suggest the regulator will look closely at whether RIAs using these products are abiding by their fiduciary duty to their clients

From there, we have several articles on practice management:

Why the SEC's Investor Advocate and external consumer advocates are urging the regulator to temporarily suspend the use of mandatory arbitration clauses by RIAs
Key mistakes advisory firms sometimes make when creating employment agreements, from not being clear with employee responsibilities to not detailing how bonuses are determined
How to differentiate between different types of non-compete agreements, and how firms and advisors can work together to set the terms for a mutually satisfying agreement

We also have a number of articles on retirement:

How booming stock and housing markets helped the Baby Boomer generation build wealth for retirement, despite earlier predictions that this generation could suffer amid a shift from defined benefit to defined contribution retirement plans
Why company executives face unique challenges when contemplating retirement, and steps that firm leaders and their clients can take to promote a smooth transition
A new survey indicates that a majority of workers would prefer to slowly phase out of work rather than retire completely all at once

We wrap up with 3 final articles, all about career development:

The lessons one advisor learned during the first 20 years of her career
Why thinking about a career transition not only involves the worker themselves, but also their spouse or other stakeholders
The advice seasoned advisors would want to give their younger selves

Enjoy the 'light' reading!

Designing “Custom GPTs” With Advanced ChatGPT Features To Enhance Advisor Capabilities With AI

January 17, 2024 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

In late 2022, OpenAI launched ChatGPT, an Artificial Intelligence (AI) driven, natural-language processing tool that offered the public the ability to conduct seemingly human conversations with a chatbot and generate a seemingly endless array of sophisticated content, including essays, emails, computer code, meal plans, fictional stories, and song lyrics, to name just a few. ChatGPT's introduction set off a wide-ranging public debate around both the transformative power of AI as well as the potential (and largely unpredictable) threats it may pose. While it could be decades before we know those answers, at the moment, professionals across every industry, including financial advice, are working to learn how they can leverage this new and remarkable tool to make their practices more efficient.

In this guest post, David Ortiz, the Managing Partner at the Financial Chef, shares his personal journey around how he gained a practical understanding of some advanced ChatGPT features, how he customized it to generate responses specifically tailored to the needs of financial advisors, and how he's implemented those and other AI-driven tools in his business.

With a background as a software executive, David was drawn to the potential of ChatGPT, prompting him to learn how he could use it to enhance his capabilities as an advisor. After delving into instructional content on YouTube University, he decided that the ideal use for AI in his practice was to improve the processes around client meetings, including generating summaries, extracting pertinent data, creating action items, and staying compliant.

By learning to design "custom GPTs" to create individual bots that could perform specific tasks, David created (and has made publicly available) an advisor-focused tool he calls the "Client Meeting Summarizer", which processes advisor/client meeting transcripts to gather, summarize, and organize key information from any meeting or call through various AI prompts. One of his most used prompts processes discovery meeting transcripts and allows users to gather, summarize, and organize key information, including demographic data, topics discussed, key points, action items, and next steps. Another is designed to extract information from data gathering and financial planning meeting transcripts for easy entry into financial planning software and also to summarize key points and action steps. A 3rd prompt reviews annual review meeting transcripts, capturing client quotes from key review areas, which can then be fed to a CRM. Finally, a 4th prompt reviews transcripts from the perspective of a compliance officer to ensure that David and his team adhere to regulatory standards and their own internal policies.

Additionally, AI tools have allowed David to transform what were once monologue-based planning meetings into interactive, engaging dialogues. By using a mindmap plugin, David and his team create high-level visuals that give clients a clear understanding of how their financial plans were constructed, how their specific issues are being addressed, and the value that David is delivering on an ongoing basis.

Ultimately, David has found that integrating AI into his practice has not only helped him become more efficient, but has also allowed him to ask better questions, gain a deeper understanding of his clients' needs, and hone his own listening skills. The net result has been higher client satisfaction and engagement, better-tailored plans that address each client's unique goals, and greater overall efficiency in his team's planning process. For David, the real promise of AI is in allowing financial advicers to foster deeper and more meaningful relationships with their clients, helping them be better (and more successful) at their craft!

#FA Success Ep 368: Getting Real Social Media Marketing Results By Focusing On Your (Ideal) Client’s Desire To Learn, With Thomas Kopelman

January 16, 2024 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Thomas Kopelman Podcast Featured Image FAS

Welcome back to the 368th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Thomas Kopelman. Thomas is the co-founder of AllStreet Wealth, a financial planning firm for millennial business owners and those with equity comp based in Indianapolis, IN, that has quickly grown to more than $500,000 of run-rate revenue generated from serving 70 ongoing client households.

What's unique about Thomas, though, is how he's been able to use social media, and Twitter in particular, to attract over 170 new prospects this year alone by educating, nurturing, and making a lasting impression on his followers, with relatively short blog posts that seem rather 'simple' but hit his specific prospects' pain points, so that they when finally decide they need a financial advisor… they wouldn't think about going to anyone other than Thomas for Financial Advice.

In this episode, we talk in-depth about how Thomas has built his social media strategy around generating a steady cadence of relatively short but directly-relevant-to-his-ideal-prospects blog posts that allow him to sustainably create content in less than an hour and without getting stuck trying to make it "picture perfect", how Thomas' ability to maintain his ongoing flow of relevant content compounds his social media impressions and has led to an influx of qualified prospects that maintain through both busier and slower months of the year, and how having a hook in the title of Thomas' posts – that isn't click-baity but truly relates to his target audience through set-up, context, and contrasting – is key to getting conversions from potential clients on the fence about whether they really want to have a planning relationship.

We also talk about Thomas' growth in leads led him to create an increasingly stringent filtering process to ensure he only spends time with the most qualified prospects, and minimize discovery calls that would otherwise turn out to be a bad fit, how Thomas' planning process builds up to what can be a 20 to 40 itemized list of recommendations but uses a quick-wins approach to prioritize just a few upfront and spend literally years helping clients through the rest, and how Thomas used the design platform Canva to craft his own customized financial plan template, rather than using financial planning software output, that not only lay out relevant graphics and action items for each client, but are much more visually appealing and easily digestible than traditional Word or Excel documents.

And be certain to listen to the end, where Thomas shares his journey from barely using social media and forgetting his own Instagram password to leaning heavily into Twitter to generate explosive growth in his firm, how Thomas learned the financial planning process in his early years and used social media to seek out and work with advisors that had leveraged the exact techniques he wanted to emulate while growing their businesses, and why Thomas initially planned to be a solo firm but changed his mind and ultimately chose to hire staff, that he enjoyed being around, to get the support he needed to sustain his firm's growth.

So, whether you're interested in learning about creating content that resonates with your target audience, implementing a social media strategy that will effectively turn readers and impressions into real client prospects, or creating a financial plan that not only is attractive, but also contains actionable items of advanced value to your clients, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Thomas Kopelman.

Sending (Private) Client Newsletters: How Advisors Can Do It Effectively To Reinforce Value

January 15, 2024 07:03 am 0 Comments CATEGORY: Client Trust & Communication

For financial advisors, an ongoing client service model often means finding ways to keep clients engaged and progressing toward their goals outside of the 1 or 2 typical client review meetings each year. For clients, more frequent communication can be a source of behavioral coaching and helpful information that can better equip them to stay the course through rocky markets. Which means that by engaging clients more frequently, advisors can strengthen the client-advisor relationship while providing clients with timely behavioral coaching and valuable information, ultimately leading to deeper trust, fewer worried phone calls or 'emergency' meetings, and potentially even more client referrals. What's challenging, however, is figuring out how to reach each client consistently while delivering insights on subjects that they care about and making it easy for them to engage further.

In this guest post, Ashby Daniels, a financial advisor with Shorebridge Wealth Management and creator of Money Visuals, discusses how a 'private' email newsletter can help reinforce the value that advisors provide in a way that can be scaled across an entire client base.

Although newsletters are made to be sent to many people at once, from a client's perspective, they can be seen as a much more intimate form of communication. That's because people tend to be selective about whom they let into their inbox: They often filter out those who aren't friends or family and those who don't otherwise bring value into their lives. And because (at least from the client's perspective) it feels as though the message is being sent to them directly, an email newsletter can feel like a much more direct and personal mode of communication than other content channels such as blogs, podcasts, and videos that are openly accessible to everyone. Because a client who receives a newsletter from their advisor needs only to hit the "Reply" button to respond and engage with the advisor, any email newsletter really is just 1 step away from a more direct, 1-to-1 conversation.

In terms of choosing what to include in the newsletter, it can make sense to break the content down into several sections that can be repeated in each edition for consistency and repeatability. Topics can vary from market insights to financial planning-related topics to recommended reading to personal and business updates (and many other potential topics), but the most important thing to get across is the advisor's own perspective on what's going on (since that perspective often is what allows clients to feel the most confident about their own situation). Which can even be done when outsourcing newsletter content, so long as the philosophy and communication style of the writer aligns with the advisor's own – a potential option for advisors who lack the time or don't feel as comfortable with writing.

The key point is that newsletters can be a valuable tool even for advisors who aren't naturally inclined to write. This is because clients don't generally value perfection or exact certainty as much as they value consistency and authenticity. On the one hand, this means that advisors can choose any cadence for sending a newsletter (weekly, monthly, etc.) that they feel comfortable with – so long as they are able to consistently stay with that schedule. On the other hand, a personal note that offers a glimpse of the advisor as a human can often be more interesting and engaging for the client than a technical article on a complex financial topic. In the end, while creating a client newsletter does take time, that time spent can have a high impact on the quality of the advisor's client relationships – and can even bring in more clients in the process – by regularly reinforcing the value that the advisor brings to the relationship!

Weekend Reading For Financial Planners (January 13-14)

January 12, 2024 02:00 pm 0 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 Securities and Exchange Commission this week authorized 11 Spot Bitcoin Exchange-Traded Funds (ETFs), which could provide financial advisors and their clients with a convenient way to invest in the cryptocurrency without many of the security issues or price tracking challenges of other methods (though the new products will still be subject to Bitcoin's notorious price volatility!).

Also in industry news this week:

The Department of Labor (DoL) this week published a final rule delineating what makes an individual an independent contractor versus a company employee, though it did not provide specific guidance for registered representatives of broker-dealers and other financial professionals who have expressed concern that their independent contractor status could be in jeopardy
Vanguard this week opened a high-yield savings product to all investors, adding to the heated competition for consumer deposits

From there, we have several articles on practice management:

How financial advisory firm owners can ensure that managers promoted from within the firm are positioned for success
A recent survey indicates that being proactive with planning strategies and communication could be more important than portfolio performance for financial advisors when it comes to client retention
How advisors who reach the partner level (and their firms) could benefit from a 2nd career path that guides them throughout the rest of their careers

We also have a number of articles on cash flow and budgeting:

11 questions that can help couples get on the same page financially before moving in together
3 options for couples when deciding how (or whether) to combine their finances
How holding regular 'money dates' can help couples improve their relationship with money and each other

We wrap up with 3 final articles, all about health:

The many benefits of meeting the recommended daily intake of fiber and the foods that contain the most of it
Why worrying about getting 8 hours of sleep per night might be counterproductive and why sticking to a regular sleep schedule might be a more effective approach
9 ways to get healthier in the coming year that do not require a major lifestyle change

Enjoy the 'light' reading!

Kitces & Carl Ep 129: How Autonomy, Experience, And Team Drive Advisor Wellbeing

January 11, 2024 07:04 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces & Carl Ep How Autonomy Experience and Team Drive Advisor Wellbeing

As the beginning of the new year invites a fresh start, it's a fitting time to reflect on our own wellbeing and the elements that make us happy in life. While many believe they understand what brings them joy, it can be difficult to recognize the patterns that consistently enhance wellbeing and happiness. The most recent Kitces Research Study on What Actually Contributes To Advisor Wellbeing sheds light on this topic, revealing some of the factors that contribute most to positive wellbeing for advisors and offering insight into the common themes for advisors who enjoy their lives the most. And the truth lies in the data.

In our 129th episode of Kitces & Carl, Michael Kitces and Carl Richards discuss the latest results from the 2023 Kitces Research on Advisor Wellbeing, which analyzes over 87 different variables that contribute to an advisor's state of happiness and reveals a handful of key patterns that contribute to wellbeing.

As a starting point, the research study reveals that the factor reported as most associated with advisor wellbeing was their level of autonomy when it comes to the freedom over how work and business is run and the ability to serve clients in the way one believes they deserve to be served. Having some level of freedom to structure our lives and careers has a strong impact on the happiness of advisors in the industry.

The second biggest driver of advisor wellbeing is experience, as the number of years spent serving clients and climbing the financial advisor ladder was directly correlated with happiness. More specifically, the years of client-facing experience and the ability to structure a career that promotes successful navigation of the early years of the job, which are often the most difficult, were often found to be crucial for advisors' wellbeing and helping them to develop into seasoned industry professionals who were most satisfied with their jobs.

Team support is another vital component of advisor wellbeing, as advisors with a supportive team who they could rely on to delegate tasks were found to be happier in general. By contrast, advisors without such support, working together only with other associates sharing a client list in the pursuit of their own careers, do not exhibit the same level of happiness and wellbeing. Notably, while the advisors without support didn't appear to be less happy, they simply didn't report an increase in wellbeing.

Ultimately, the key point is that advisor happiness and wellbeing are very closely related to an advisor's ability to focus on what is most important to them as individuals, structuring their lives around the ability to call their own shots, gaining the wisdom and experience that comes from sticking with a career path, and having the true support that can allow the other factors to be possible!