Enjoy the current installment of "weekend reading for financial planners" - this week's edition starts out with the news that Republican Spencer Bachus has signed on as a co-sponsor to Democrat Maxine Waters' proposed legislation to establish SEC user fees that would help fund increased investor adviser oversight; while there still isn't likely to be anything passed into law in the immediate future, the announcement suggests that there may be some traction building for the user fee approach to close the examination gap as the SEC remains underfunded. Also in the news this week was an announcement that the SEC is considering whether to update the definitions for Accredited Investors (which still haven't been updated, or even adjusted for inflation, in more than 30 years since they were first established in 1982!), and a new round of fighting between the American College and the CFP Board as the American College announced updates to its ChFC curriculum to 'compete' with the CFP certification and the CFP Board responded by noting that the ChFC still doesn't require a comprehensive exam (amongst other differences).
From there, we have a firm retirement planning articles this week, including some recent research suggesting how a focus on combining partial annuitization with portfolios may be a better way to frame annuities than the typical all-or-none discussion, a look at how cash balance plans are exploding forth in popularity and are already approach $1 trillion in retirement assets (compared to about $4 trillion in 401(k) plans), and a powerful discussion of how retirement is a joy for many but also a time where the depression and suicide rate for men doubles and advisors may be one of the few in a position to intervene and encourage a client to get help.
We also have several practice management articles this week, including a look at the FA Insight "People and Pay" study that finds team-based firms are growing more rapidly than firms that run in silos, a discussion from Angie Herbers about how the real challenge for existing advisory firms to grow is not about "making rain" and generating new prospects but about improving the closing ratios the prospective clients firms are already getting via referrals, and the last reporting on a recent industry survey that finds - despite all the discussion of the coming wave of retiring advisors - that there are still twice as many buyers as sellers in the next 1-5 years, suggesting that it's actually still very much a seller's market for the few firm owners that are willing to sell at all.
We wrap up with three interesting articles: the first looks at the challenges of businesses that have "co-founders" who struggle to keep their business and personal interests aligned as the business grows (while written in the context of co-founded startup tech firms, the challenge seems equally relevant for advisory firm partnerships as well!); the second examines some of the latest research on motivation, which finds that not only is internal motivation better than "external" factors like incentivizing with money and fame, but that offering too much in external incentives can actually damage the outcomes of otherwise-internally-motivated people (so think through your compensation structures carefully!); and the last is a discussion of the so-called "End of History Illusion" and recent research that finds we're actually terrible at predicting our personality, values, and preferences more than a decade into the future... which raises interesting questions about how to effectively save for retirement in the long run when you really may not have any idea what you'll want to do in retirement until you're almost there!
Enjoy the reading!
