Kitces.com - Advancing Knowledge in Financial Planning

The One Skill That Has The Biggest Impact On Being A Successful Financial Planner

December 27, 2011 02:59 pm 7 Comments CATEGORY: Client Trust & Communication

Developing your skillset as a financial planner is complex. From learning the financial planning body of knowledge itself, to the analytical skills to apply it to specific client situations, to the written and verbal skills necessary to communicate recommendations to clients, to the interpersonal skills required to actually motivate and support clients on implementing those action items, there's a lot to learn. Not to mention the skillset necessary to find and attract new prospects to become clients in the first place.

But if there is one skill that seems to have a bigger impact above all else for the success of a financial planner, it's the ability to listen. To REALLY listen.Read More...

Weekend Reading for Financial Planners (Dec 24-25)

December 23, 2011 11:12 pm 5 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition highlights a number of articles on interesting industry trends, from the ongoing movement towards tactical asset allocation (now used by a majority of advisors), to the difficulties in the variable annuity marketplace suggesting that perhaps annuity expenses have not been too high but in fact were too low in recent years, to the rapid growth of independent advisors in recent years that threaten to overtake the wirehouses by 2013. In addition, we look at the latest from John Hussman on a looming US (and global) recession regardless of recent positive data "surprises", along with John Mauldin on US Federal deficits and the problems in Europe, another piece on Europe by PIMCO's Mohammed El-Erian, and a fascinating - albeit scary - piece about what's really been going on with the "missing" customer funds at MF Global. We wrap up with what is sure to be a controversial article by Bill Bachrach, suggesting that the primary reason financial planners lack trust with the public is because too many don't have the integrity to walk their own talk and use a financial planner themselves. Enjoy the reading!Read More...

Is There A Minimum Below Which Financial Planning Advice Isn’t Relevant?

December 18, 2011 05:30 pm 14 Comments CATEGORY: Planning Profession

For most, the question of "minimums" in financial planning is a practice management issue from the firm's perspective: how much in fees must a client generate to be economically feasible, based on the firm's particular service model?

Yet as financial planning seeks to broaden its scope and serve more people, a question arises from the opposite side of the table: is there a certain amount of income or net worth necessary to even make financial planning advice useful to someone?

Is there such thing as having too little money, income, or wealth, for financial planning to even be a worthwhile thing to pay for in the first place? In other words, is there a minimum for a financial planning relationship, from the client's point of view, below which the prospective client just doesn't have enough income or assets for a financial planner's advice to be relevant?

Weekend Reading for Financial Planners (Dec 17-18)

December 16, 2011 07:27 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - the major highlight this week is the release of the Financial-Planning-Coalition-sponsored study on the costs of various regulatory oversight options, with some pretty shocking costs for FINRA or a new SRO to take over. Other articles include a discussion of Schwab's first franchise branch opening, the emerging field of financial therapy, an analysis of annuity guaranteed withdrawal riders and their limitations due to ongoing inflation, and two great investment pieces on last week's European Summit by John Mauldin and GaveKal, along with a somewhat disturbing warning by John Hussman that the market may be in significant near-term danger. We wrap up with a brief article that was written for entrepreneurs, but translates in my opinion to virtually anyone in professional services, taking a hard look at what your time's really worth, and what you should - and shouldn't - be doing yourself versus outsourcing to others. Enjoy the reading!

What’s The Real Difference Between Financial Planning And Private Wealth Management?

December 11, 2011 09:10 pm 8 Comments CATEGORY: Planning Profession

In the nebulous space where financial services firms decide what to call themselves and how to hold themselves out to the public, there's not necessarily a very clear distinction between a "financial planning" firm and a "private wealth management" advisor. Often, the difference is little more than the perceived marketing distinction of the labels to certain target clients.

Nonetheless, there is some evidence to suggest that the services delivered to very high net worth clients can be quite different than those provided to the average American, and accordingly may require a different set of knowledge and skills to deliver effectively.

As a result, there is an effort underway to try to study the real differences between what it takes to be a successful financial planner versus a private wealth management advisor, in order to develop certification that is unique and appropriate to the distinct specialization.Read More...

Weekend Reading for Financial Planners (Dec 10-11)

December 9, 2011 06:00 am 1 Comment CATEGORY: Financial Advisor Success Podcast Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - highlights this week include two great year-end wrap-up articles on technology, including an overview of Financial Planning magazine's huge annual tech survey, and technology highlights from consultant Bill Winterberg in MorningstarAdvisor. Also included in a striking interview with research and planning pioneer Bill Bengen, who suggests that safe withdrawal rates are still valid, but that buy and hold isn't, and an interesting article from Angie Herbers in Investment Advisor about some owners who may be experiencing "owner's guilt" over the profitability of their business, and making some bad decisions as a result. Then there's a quick look at some thoughts about the new cost basis reporting rules that are being implemented by the IRS, and two somewhat non-traditional investment and economic pieces from some industry stalwarts, Howard Marks of Oaktree Capital and Jeremy Grantham of GMO. Enjoy the reading!Read More...