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Weekend Reading for Financial Planners (Aug 12-13)

August 11, 2017 02:57 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the Department of Labor's announcement that it is working on a new delay proposal for the full implementation of the fiduciary rule, that could extend the current transition period by as much as 18 months to July of 2019... though it remains unclear what legal basis the DoL has for postponing full implementation so much further, and whether OMB will actually approve its proposal.

In the meantime, DALBAR's Lou Harvey has proposed a new "Seller's Exemption" that would make it easier for salespeople to avoid the fiduciary rule - on the condition that they do not provide any actual advice, nor hold out to the public as "advisors" - and given that the delay would still just delay full implementation (but not repeal the fiduciary rule itself), we also feature coverage on what procrastinating advisors should do to get caught up on their upcoming DoL fiduciary compliance obligations.

From there, we have several practice management and personal productivity articles, including: how to achieve a state of "Flow" and peak productivity; the ways that we as financial advisors sometimes sabotage our own growth as we try to change our businesses to better fit our own lives; what to focus on if you're a "reluctant manager" who just wanted to serve clients but now increasingly find yourself in a managerial role with your advisory team; common conversational traps that advisors fall into with clients; why it's crucial to understand your financial planning "weaknesses" and limitations on your technical knowledge (and don't say you're "comprehensive" when you're really not!); and a reminder that financial planning can take an emotional toll on us as advisors, which means it's especially important to have strategies to manage your own stress!

We wrap up with three interesting articles, all looking at emerging trends in the advisory landscape: the first looks at whether advisory firms need to stop focusing on increasingly commoditized investment (and even comprehensive financial planning) advice, and instead try to figure out how to expand their services to also include solutions their clients more proactively seek out; the second examines the aftermath of the "new" fiduciary rules (and outright commission bans) that rolled out in the UK and Australia in the past 5 years, which ultimately did not disrupt financial advisors (but did force them to shift their business models); and the last is an interesting look at whether the new term for advice-centric advisors to differentiate themselves is to not just be "fee-only" but to be an "advice-only" fee-for-service advisor, where by definition the only thing the client pays for is the advice itself (and nothing else)!

Enjoy the "light" reading!

#FASuccess Ep 020: Building A Successful Business By Giving Away 99% Of What You Do For Free with Michael Kitces

May 16, 2017 07:01 am 9 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the twentieth episode of the Financial Advisor Success podcast!

This week’s guest is… me! In celebration of our twentieth episode of the podcast, I decided to fulfill what has been, by far, the most popular request from our podcast listeners… to hear my own story. And so Alan Moore, my co-host on the XYPN Radio podcast, serves as our guest host for the week as I talk about my own journey through the world of financial planning and how I got to where I am today.

In this episode, I go all the way back to my start in the industry, and share why it was the job my grandmother took, almost 50 years ago after my grandfather unexpectedly passed away, that ultimately got me into the financial services industry straight out of college at the peak of the tech bubble as a pre-med Psychology major and Theater minor. And how my first job – as a life insurance agent – turned out to be a colossal failure, to the point that I couldn’t even get a position as a paraplanner for $24,000/year, and the path I eventually found that turned it all around.

In addition, we talk about how I made the transition from working full-time in an advisory firm to my current path as a blogger, speaker, and serial entrepreneur, why I think digital marketing is so much more effective at building a business than traditional marketing (especially for an introvert like me!), and the highly strategic philosophy that I’ve used to build my entire business model: by trying to give away 99% of what I do entirely for free.

And be certain to listen to the end, where I talk about my “big rocks” approach to time management, and how I handle allocating my time across what are now half a dozen different businesses, from XY Planning Network, to New Planner Recruiting, our advisory firm and outsourced investment management services for other RIAs… on top of speaking at more than 60 industry conferences, podcasting, and publishing this Nerd’s Eye View blog!

So if you’ve ever been curious to hear my own path through the advisory world, why I do what I do, how I manage my time, and the “secret” to my business model that allows me to give away so much of what I do for free (and still ultimately make the money I need to raise a family and put my kids through college)… I hope you enjoy this latest episode of the Financial Advisor Success podcast!

Weekend Reading for Financial Planners (Aug 22-23)

August 21, 2015 02:01 pm 13 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the second edition release of the CFP Board’s “Financial Planning Competency Handbook”, a nearly-1,000-page tome that aims to capture the entire comprehensive financial planning body of knowledge (for both students learning financial planning and practitioners to use as a reference).

From there, we have several practice management and technology-related articles this week, including a review of digital estate planning software solution EverPlans, a first look at a new “matchmaking” site for consumers to find a financial advisor (where advisors pay to be listed and featured on the site), and a review of the new T. Rowe Price “MarketScene” app designed to provide market insights and information that advisors can use with their clients. There’s also an article about time-saving tips and ‘productivity apps’ for advisors, a discussion of the issues to be aware of if you’re looking to merge your advisory firm (from the perspective of other advisors who have gone through the process), and some advice from practice management consultant Angie Herbers about the experience of merging a firm after she merged her own with marketing consultant Kristen Luke to form their new advisor consulting business Kaleido.

We also have a few technical planning articles, from a discussion of the new regulations from the IRS and Treasury Department cracking down on sales of a Charitable Remainder Trust (CRT) income interest, to a look at the recent expansion of the Repaye program that can adjust student loan repayment amounts to be a smaller percentage of (discretionary) income, and a look at the estate planning considerations of the emerging new 529A ABLE accounts for disabled and special needs beneficiaries.

We wrap up with three interesting articles: the first is from Professor Robert Shiller, who explores the concept of the “Financial Singularity” (where markets potentially become perfectly efficient with technology automation); the second is a discussion from experienced angel investor Tucker Max about why angel investing is really not a good idea for most investors; and the last is a discussion from industry commentator Bob Veres about how advisory firms who want to serve younger clients and the middle market must go further than “just” adding in robo-advisor technology tools on their website.

And be certain to check out Bill Winterberg's "Bits & Bytes" video at the end, covering the latest news and developments from this week's LaserApp technology conference!

Enjoy the reading!

MailBag: Pursuing An MBA or CPA License After CFP Certification, And Problems With Criss-Cross Continuity Planning Amongst Solo Advisors

August 18, 2015 06:01 am 19 Comments CATEGORY: MailBag

Many readers of this blog contact me directly with questions and comments. While often the responses are very specific to a particular circumstance, occasionally the subject matter is general enough that it might be of interest to others as well. Accordingly, I occasionally post a new "MailBag" article, presenting the question or comment (on a strictly anonymous basis, of course!) and my response, in the hopes that the discussion may be useful food for thought.

In this week's MailBag, we look at a question of whether it’s better to pursue an MBA degree or a CPA license after completing CFP certification (or whether some other post-CFP education would be even better!), and the problems that can arise when solo advisors try to satisfy the recent NASAA Model Rule on continuity planning by arranging a “criss-cross” buy-sell agreement with each other (when they don’t necessarily have the client capacity to actually execute it!).

Typical Employee Benefits, Hiring Trends, And Average Advisor Compensation According To The Latest FPA Benchmarking Study

July 13, 2015 07:01 am 7 Comments CATEGORY: Practice Management

When it comes to industry benchmarking studies, there are a number that look at compensation for advisors, typical spending for advisory firms in various categories, and trends in growth and hiring. However, the recent “2015 Trends in Adviser Compensation and Benefits” study, jointly produced by the Financial Planning Association’s “Research and Practice Institute” and the industry trade publication Financial Advisor IQ, takes a unique look at some of these categories, providing an especially in-depth look at typical employee benefits in an advisory firm and current trends in hiring (including what kinds of positions firms are hiring for).

For instance, the FPA’s research shows that almost 80% of firms that offer ‘basic’ employee benefits like health insurance, also offer reimbursement for licensing and exam fees and a budget for professional education and development. However, ‘lifestyle perks’ like paid parking, health club membership, and telecommuting are still relatively uncommon.

Also notable in the FPA’s research was the ongoing rise of financial planning itself, as advisory firms look to deepen their solutions to compete against the so-called “robo-advisors”. In fact, more than 50% of firms report interest in hiring financial planning staff, from senior advisors to associate planners and even paraplanners – a growth trend we’re seeing within New Planner Recruiting as well.

Unfortunately, though, when it comes to compensation trends, the FPA’s study had a limited sample size that may have been too small for very accurate data – further muddled by inconsistent categorization of jobs that make it hard to rely on the average incomes that were reported. Nonetheless, the FPA’s recent “compensation” study is worth a skim, if only for the non-compensation data it provides. And fortunately, at least this year it’s free to all.

How I Finally Learned To Delegate By Creating Video Tutorials With Screencasting Software

March 2, 2015 07:01 am 43 Comments CATEGORY: Personal/Career Development

As any advisory business grows, eventually the work that was “always” done by the founder has to be delegated, as there’s just not enough time in the day to do everything. Yet speaking from personal experience, delegating can be difficult, as it often feels like it takes even more time to show someone how to do a task and oversee it, than it takes to just do it oneself!

For me, the “breakthrough” in how to delegate effectively came from using screencasting software – tools that record what’s happening on your computer screen, paired with the audio of you talking while you’re sitting in front of it. The end result – in the time it takes me to actually do the task, I can create an entire “how-to” video tutorial for whoever I wish to delegate the task to in the future… and by recording it, I’ve acted once created a guide that can be referenced again and again as necessary for whoever will be doing the task in the future!

In fact, creating videos of the tasks you delegate can be done so quickly and easily that you may ultimately find yourself forming an entire video library of the key “processes and procedures” of your business… where all you have to do is just do the task you’ve long done already, but record it and then delegate it for good! So if you have trouble delegating, you might want to check out screencasting as a very practical solution!

Mailbag: Home Office Vs Outside Office Space And Credibility As A Startup Financial Planner

January 2, 2014 07:01 am 8 Comments CATEGORY: MailBag

Many readers of this blog contact me directly with questions and comments. While often the responses are very specific to a particular circumstance, occasionally the subject matter is general enough that it might be of interest to others as well. Accordingly, I will occasionally post a new "MailBag" article, presenting the question or comment (on a strictly anonymous basis!) and my response, in the hopes that the discussion may be useful food for thought.

In this week's MailBag, we look at a question about whether it's important and necessary to have a physical office space when you're starting your financial planning practice, or if it's just a waste of money. Can any advisor really establish trust and credibility with clients with only a digital presence, or is that limited to just younger advisors serving younger clientele?

Setting Up An RIA And Starting A New Financial Planning Practice On Less Than $10,000

September 17, 2013 07:02 am 54 Comments CATEGORY: Practice Management

Taking the leap to start your own financial planning practice can be a scary proposition. Not only is there the stress of starting up the business and figuring out how to market and find your own clients, but there's also the responsibility of making a huge number of key decisions about the business model and companies and services to engage, and just the outright cost of setting it up in the first place.

In this guest post, financial planner Sophia Bera shares what she went through in recent months in going out on her own and setting up her own independent RIA financial planning firm from scratch, and managing the expenses to keep them at only $5,000 in start-up costs and another $5,000 in ongoing costs in her first year (which is important, given the lack of startup funding for advisory firms!). Sophia also shares some of her own thoughts about why she decided an entrepreneurial path was right after spending years as a financial planning employee, and other tips she's found useful in helping to facilitate her early success.

If you've been thinking about what it costs to go out on your own - or to make a transition into financial planning for the first time - and wondering what the key issues and decisions are to consider, I hope you find today's guest post to be helpful!

Weekend Reading for Financial Planners (August 24-25)

August 23, 2013 12:01 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's reading kicks off with some turmoil between NAPFA and the CFP Board, which have split on the definition of "fee only" and created the awkward scenario where some "fee only" planners under NAPFA actually don't qualify as "fee only" CFP certificants.

From there, we have several practice management articles this week, including some ideas from Bob Veres about how to fix the industry's regulatory woes, some tasks to target for outsourcing in your firm, and a discussion of whether we need to reframe "succession planning" as "continuity planning" instead (to recognize that many advisors want a more continuous and ongoing role in the transition). We also have a few articles related to technology topics, including a look at how to make sure your client data is safe when you're using your laptop and mobile devices on (public) WiFi networks, and a nice summary of Susan Weiner's "Virtual Book Tour" with a long list of great articles on blogging for financial advisors (great tips whether you're thinking about getting started, or trying to get better).

There are also a few technical articles this week, including on from Ed Slott about the latest proposals for changes to retirement accounts under President Obama's budget (some beneficial for clients, some not so much), and another article about the rising specialty of helping clients through health care and health insurance issues in retirement.

We wrap up with three interesting final articles: the first is from the Research Puzzler blog, suggesting a fresh way to look at the active vs passive debate is to distinguish between "maximzers" and "satisficers" instead; the second about the concept of "negative selling" and reverse psychology, where sometimes clients are more engaged by telling them what they can't have than what they can; and an intriguing discussion by financial planning blogger Ronald Sier about the fact that in the end, most clients don't have financial goals, they have real world goals that have financial ramifications, and we as advisors need to adjust our conversations accordingly. Enjoy the reading!

Nerd’s Eye View Is Reborn

August 22, 2013 06:01 am 27 Comments CATEGORY: Nerd's Eye View

Almost 6 years ago, the Kitces.com website launched, and along with the new site, this Nerd's Eye View blog was born. At the time it was launched, I was quite proud of the site. It was "sharp" and "cutting edge" for its time, and early readers of the blog were quite complimentary (and I'd like to think they weren't just being polite!).

As the years have gone by, though, the technology underlying the site grew more and more aged, and failed to keep pace with the great leaps in blogging and website platforms that have exploded forth since 2007. The visual look of the site began to feel a bit dated, and the explosion of mobile devices turned what was already a "not very large" default font size into reading that was painfully too small.

Accordingly, the time had come this year for an overhaul to bring the Nerd's Eye View up to current standards, and I'm thrilled to announce that today is the fresh launch of the new site. You'll see a number of changes immediately, with many further enhancements to roll out in the coming months as well! I hope you enjoy what you see, and please don't hesitate to share your feedback (good or bad!) as we work out the final kinks!