Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the news that major ETF providers have been establishing and expanding their lines of credit to prepare for a possible liquidity squeeze that could emerge in a market crisis, where a sell-off could force ETF redemptions that would be difficult to fund if/when the underlying securities are illiquid (e.g., with many types of bond and other fixed-income ETFs, as well as emerging markets). The news accentuates the warnings from some pundits, who have cautioned against the risks of owning "liquid" ETFs that are wrapped around otherwise illiquid securities.
From there, we have a few practice management articles this week, particularly focused around succession and continuity planning for advisory firms, including: a look at the key provisions to watch for in establishing a continuity agreement with another advisory firm that would take over in the event of death or disability; a discussion of the key succession planning issues firms should consider if the SEC adopts a succession/continuity planning requirement similar to the recent NASAA Model Rule on Succession Planning for state-registered investment advisers; how advisory firm owners can regain that "new business" feeling if they've otherwise lost their energy and focus in the practice; and whether there may be a quiet "demographics tsunami" still lurking as the average age of advisory firm owners approaches age 62 and more and more consider potential retirement.
We also have a couple more technical articles this week, from a look at some research suggesting that baby boomers may not actually be so far behind in retirement after all (once you consider their ability to spend less and save more as kids finally leave the home), to a discussion of the benefits of variable retirement spending strategies that "smooth" the spending in volatile years. There's also an article on how Medicare Part B and Part D premiums will be increased in 2018 for certain higher income individuals, and a discussion of a new type of long-term care insurance policy from John Hancock that will use "flex credits" to create a kind of LTC coverage that is "participating" similar to dividend-paying whole life insurance.
We wrap up with three interesting articles: the first examines the history of 401(k) plans and how they have evolved from a supplemental retirement plan to one of the key foundational pillars of retirement, which raises the question of whether the current structure of 401(k) plans is still "right" as such a widespread solution; the second article looks at how the SEC has become increasingly gridlocked over the past decade as the five SEC commissioners have become increasingly partisan; and the last is a story about "10 Young Advisors To Watch", highlighting the inspiring stories of 10 up-and-coming advisors who show how much talent there is in today's emerging next generation financial planner.
And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including a recent Investor Alert from the SEC about the risks of "Automated Investment Tools" (i.e., robo-advisors), the latest efforts of Envestnet to build its "Advisor Now" platform, and a review of the buzz from this week's Finovate Spring 2015 conference!
Enjoy the reading!