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Introducing The First Advisor Symposium On Social Media And Blogging, And The XYPN15 National Conference

February 10, 2015 07:01 am 22 Comments CATEGORY: Industry News

While the financial services industry – and financial advisors in particular – are relatively slow adopters of technology, the world of “Advisor FinTech” is beginning to accelerate, from an explosion in the number of technology vendors serving independent advisors, to the growing number of advisors adopting digital “inbound” marketing, blogging, and social media.

However, while there is a conference dedicated to Advisor FinTech – the Technology Tools for Today (T3) conference, getting underway later this week! – there has never been enough interest in advisor blogging and social media to justify a standalone conference. Until now.

This week, I’m excited to announce that I will be helping to co-organize the first Advisor Symposium on Social Media and Blogging. Running in conjunction with the popular (Personal Finance) Blogger Conference “FinCon”, the Advisor Symposium will launch in September in Charlotte, NC. And notably, we will also be running our first XY Planning Network national conference in the days leading up to the event as well, for those who are interested in learning more about how to serve Gen X and Gen Y clientele effectively and profitably. I hope to see you there!

The Challenge Of Selling The Invisible: How Do You Make An Intangible Service Like Financial Planning More Compelling?

February 9, 2015 07:01 am 13 Comments CATEGORY: Marketing

When it comes to buying a product, most are relatively straightforward to evaluate. They have a physical presence that can be examined. We can ask others who have purchased and still have the product what they think of it. And there are usually many ways to assess quality. With a service, on the other hand, what the prospective client buys is intangible, and the service provider – like the financial planner – is effectively forced to be “selling the invisible” to a prospective client.

Accordingly, Harry Beckwith’s book “Selling The Invisible” tackles the interesting challenge of how best to sell an intangible service (like financial planning)… with the conclusion that in the end, because there’s no real way for most consumers to evaluate the quality of a service or the depth of someone’s expertise in the first place, the driver in the end is usually not about the skillset of the financial planner. Instead, decisions are often made based on far more “mundane” factors like whether the prospective client feels a personal connection and relationship to the advisor, to even simple details like how the advisor dresses, the look of the office, or the way the receptionist answers the phone.

On the one hand, the fact that an advisor’s actual expertise may rarely be the deciding factor in whether he/she is fired may be dismaying to some. Yet on the other hand, the reality is that the factors that prospective clients may rely upon instead are generally under the advisor’s control as well, and there aren’t even that many (the firm’s website, the person who answers the phone or greets people when they enter, the physical office, etc.). And in the end, Beckwith makes the key point that ultimately the real challenge that advisors face is not convincing clients to work with them over other competitors, but simply that it’s worthwhile to “buy the invisible” instead of doing nothing at all!

Weekend Reading for Financial Planners (Feb 7-8)

February 6, 2015 03:01 pm 13 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the big news of two major acquisitions in the world of advisor financial technology (FinTech), including Fidelity's purchase of financial planning software provider eMoney Advisor (and their popular PFM client portal) for more than $250M, and SS&C's acquisition of Advent for a whopping $2.7B (raising questions of what the future may hold for Advent Axys and Black Diamond).

From there, we have a few more technical financial planning articles this week, including: a review of the new Section 529 ABLE accounts for disabled beneficiaries; new research from retirement researcher David Blanchett on the optimal asset allocation glidepath in retirement; a look at the emerging use of longevity annuities for retirement (including in qualified retirement accounts); and some ideas of how to generate "tax alpha" for clients.

We also have several practice management articles, from a look at whether it's better to hire a new or more experienced financial planner for your advisory firm, to whether and how advisory firms can really scale as they grow (and the problems to watch out for in trying to do so), and a discussion of how one financial planner has increased her closing ratio for new clients from 20% to more than 90% by focusing heavily into a niche and then refining her services and sales process to appeal to her unique clientele.

We wrap up with three interesting articles: the first looks at whether the debate about how to fund more exams for SEC-registered investment advisers is misplaced, and whether there's really any actual problem with the current (admittedly low but not historically aberrational) exam rate at all; the second looks at new questions being raised about whether two-tier AUM fees (e.g., a lower fee on cash and fixed income, and a higher fee on equities) is creating a problematic conflict of interest for advisors who are now financially incentivized to invest their clients in a riskier manner; and the last looking at a recent report on the world of financial advisors in the UK, which two years ago implemented an industry-wide ban on commissions and finds that the sky is not falling after all (though some early advisory gap is emerging).

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including a further discussion of the Fidelity acquisition of eMoney Advisor, SS&C's acquisition of Advent, and the recently announced (and somewhat dismal) results of the SEC's cybersecurity sweep of broker-dealers and RIAs! Enjoy the reading!

Modular Vs Comprehensive Financial Plans – Are The Parts Worth More Than The Whole?

February 4, 2015 07:01 am 39 Comments CATEGORY: Client Trust & Communication

As the popularity of financial planning has grown, so too have financial plans grown. Literally. In one recent study, 90% of advisors spend at least 6 hours to produce a financial plan, 40% spend upwards of 15 hours, and the sheer length of the physical financial planning document has grown dramatically over the decades.

On the one hand, a longer financial plan implicitly suggests that the plan must include more extensive analysis, more recommendations, and therefore be a “better” plan. And to some extent, that may be true. However, the caveat is that physical financial plans may have grown so large that the associated list of recommendations is too daunting to actually implement. In other words, the thoroughness of being fully comprehensive may not be a dazzling display of value, but simply overwhelming.

As a result, perhaps the best way to demonstrate the value of financial planning is not to make the plan as comprehensive as possible up front, but instead to make it comprehensive by building one module at a time over a span a weeks, months, or years – whatever it takes to help the client to actually implement, one step at a time, until everything is done. Which means in the end, perhaps when it comes to modular financial planning, the parts are actually worth more than delivering the whole up front, at least when measured by the success of actually getting clients to implement?

Fidelity Acquires eMoney Advisor PFM Dashboard, Gets Financial Planning Software Thrown In?

February 2, 2015 01:17 pm 11 Comments CATEGORY: Industry News

The news this morning is that Fidelity Investments has agreed to acquire financial planning software company eMoney Advisor for an undisclosed sum. The eMoney software is still expected to be available to advisors outside Fidelity – and the company says external integrations and custodial relationships will remain – though it’s not hard to imagine that the tools will likely become available at a discounted rate to advisors who custody with Fidelity in the future.

But the real news of the eMoney acquisition is that from the strategic perspective, it’s not clear if Fidelity was really aiming to acquire financial planning software, or if instead what they really wanted was eMoney’s best-in-breed Personal Financial Management (PFM) tool – a Mint.com style portal that clients can access to see all of their financial information in one place, with the capability to use the portal collaboratively with their advisor. And Fidelity’s new PFM solution can be leveraged in many others ways as well, including offering it to their retail clients, and mining it for a potential treasure trove of big data insights!

In fact, what the eMoney acquisition may ultimately highlight is how woefully far behind other financial planning software tools have lagged in their own capabilities in producing a quality PFM tool for advisors to use with their clients – a PFM solutions gap between eMoney and other financial planning software that has sadly existed for years now. Perhaps with companies like Personal Capital (which built its own high-quality PFM solution) on the rise and now the eMoney acquisition, advisors will finally get the PFM solution we’ve wanted and needed for so long?

Picking The Best CRM For Your Financial Advisory Firm – ActiFi’s CRM Selection Tool And Software Reviews

February 2, 2015 07:01 am 33 Comments CATEGORY: Technology & Advisor FinTech

As the nature of financial advisory firms have evolved over the years, so too have the tools used to support them. In the past, when financial “advice” was mostly about product sales, having a “Contact Management System” was key to tracking all the activity with prospective and prior customers. As advisors have increasingly evolved towards actual advice, supported in an ongoing relationship, so too have the software tools evolved to a far more comprehensive “Client Relationship Management” (CRM) solution.

Yet the emerging problem is that the demands on software, from features and capabilities to integrations, to create productivity gains for advisors have resulted in solutions that are increasingly complex… to the point that now it’s actually become difficult to do effective due diligence on financial advisor CRM software solutions in the first place!

While some advisors will tackle this challenge by hiring a technology consultant, and others will simply invest an extensive amount of their own (or their staff) time to do the analysis, the practice management solutions firm ActiFi has produced a “CRM Selection Assessment Tool” to do the heavy lifting at a fraction of the (time and financial) cost. Leveraging what may be the most comprehensive series of advisor CRM software reviews ever, the ActiFi solution guides the advisor through an extensive questionnaire about the nature of the business, its needs, and some of its other vendor/provider relationships, to provide a personalized recommendation of which of the various advisor CRM tools is the best fit for that particular practice.