feed - Part 18

Weekend Reading For Financial Planners (March 25-26)

March 24, 2023 02:25 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" - this week’s edition kicks off with the news that the CFP Board of Standards launched its 1st ad campaign, dubbed "It’s Gotta Be A CFP", following its transition to a 501(c)(6) organization. In a change from previous campaigns, the first ad directly recommends that consumers seek out a CFP professional for financial advice, and future ads could more directly explain the benefits of earning the CFP marks.

Also in industry news this week:

Top Democratic Senators are urging the Treasury Department to crack down on a range of estate planning strategies for high-net-worth individuals, including GRATs and IDGTs
Amid fallout from recent bank failures, both Republicans and Democrats are considering whether current FDIC insurance limits should be increased

From there, we have several articles on retirement planning:

Why contributions to Roth accounts can sometimes have greater uncertainty than traditional contributions in terms of their after-tax accumulation despite not being affected by future tax rate changes
How the 'funded ratio' metric can help advisors create effective retirement spending recommendations
A comparison of a range of variable spending strategies in retirement, from a 'floor-and-ceiling' approach to a 'ratcheting rule'

We also have a number of articles on advisor marketing:

How to optimize the 5 most important pages on an advisory firm website
4 tools advisors can use to improve their website’s search visibility
How advisors can create and deploy effective keywords to help consumers find their websites when searching online

We wrap up with 3 final articles, all about changes to professional credentials:

The CFA Institute has unveiled a slate of changes to its certification process, from incorporating practical skills modules to new job-focused pathways in private wealth and private markets
Why some states are considering reducing the higher education requirements to become a CPA
CFP Board has announced the members of its new standards commission, which will review and evaluate its competency requirements for Education, Examination, Experience, and CE to earn and maintain the CFP marks

Enjoy the 'light' reading!
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Kitces & Carl Episode 108: Crafting A (Marketing) Manifesto To Show What You Really Stand For

March 23, 2023 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces Carl Ep Crafting A Marketing Manifesto To Show What You Really Stand For

Offering financial advice can mean many things for different financial advisors, and there are many reasons that advisors choose to join the planning profession. But for many advisors, the process of articulating their philosophies about financial advice and what it is the advisor stands for can be much more challenging than learning the technical aspects of financial planning. Clarifying these ideas and developing a mission statement, or ‘manifesto’, can be a rewarding exercise that resonates with prospects and clients and can also be useful to create impactful marketing collateral – not only to express how and why advisors believe financial advice should be provided on a broader level but also to support their business growth by attracting the right types of prospects and clients.

In our 108th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can communicate and market their own philosophies on financial planning and how the process of crafting a ‘manifesto’ can help advisors clarify and realize their most fulfilling vision of what it means to be a financial advisor.

Advisors who are looking for ways to articulate what it is they stand for can start by identifying who their ideal clients are and what they enjoy most about helping them. Having frank conversations with clients and prospects and asking them about how they have been served well (or not so well) by other financial professionals in the past, their most important successes, and the common mistakes they most often see others make can help advisors clarify their clients’ specific priorities, unique needs, and commonly experienced pain points. Furthermore, by connecting how their financial advice addresses their clients’ most common concerns, advisors can better understand the key elements that can serve as the foundation for a meaningful and relevant manifesto.

While there is no set rule on how long or short a manifesto used for marketing purposes needs to be, it is generally useful to provide it in a format that can be easily read and distributed. A small pamphlet or booklet can serve as a tangible deliverable for prospects, just as a website page can be easily accessible and can communicate the advisor’s beliefs just as clearly. Regardless of the format, a well-written, earnest manifesto can help advisors market their services to prospects while communicating their sincere beliefs about financial planning.

Ultimately, the key point is that by understanding and articulating what they stand for, advisors can more easily connect to prospective clients who will benefit the most from their services. Furthermore, doing so through a manifesto used as a marketing tool can also support the organic growth of the advisor’s business, and connecting with more of the right prospects upfront means the advisor will have more opportunities to establish and sustain more rewarding client relationships in the long run!

#FA Success Ep 325: Building Success In The Financial Advice Business From A Financially Challenged Upbringing, With Brenda Hiscock

March 21, 2023 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Brenda Hiscock Podcast Featured Image FAS

Welcome back to the 325th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Brenda Hiscock. Brenda is a financial planner with Objective Financial Partners, an advice-only advisory firm based in Ontario, Canada, that works with clients on project-based financial plans, and also offers outsourced paraplanning to other Canadian advisory firms.

What's unique about Brenda, though, is how she not only came to the financial services industry without any financial background, but did so despite a very financially challenging upbringing, and while navigating challenges of homelessness, bankruptcy, and alcoholism in her 20s, through which she not only persevered and rose through the ranks as a financial advisor, but has been able to leverage those real-world experiences and challenges to provide an even deeper more meaningful level of engagement with her current clients and how their financial pasts can impact their financial behaviors in the present and future, too.

In this episode, we talk in-depth about how, while Brenda was still in high school, her mother died suddenly and she was left with the responsibility of caring for her younger sibling which created a large financial burden that Brenda couldn’t handle despite working 2 jobs and eventually led to her becoming homeless and beginning a cycle of alcohol addiction as a coping mechanism, how Brenda learned after her early struggle with alcoholism and 2 failed stints in rehab before finally getting sober 19 years ago that being able to work from home with a flexible schedule wasn’t just a nice-to-have for work/life balance but essential for her to have the space she needed for her mental health, and how Brenda’s perspectives on financial planning and especially the benefits of insurance were so deeply shaped by both her financial struggles as a teenager after her mother died without life insurance, and her financial stability after disability insurance kept her from falling back into homelessness when she was diagnosed with cancer just 1 year after getting sober and had to take a year off from work to get the care she needed.

We also talk about how, when Brenda realized she would have to take care of her younger sibling, she asked for help and her high school placed her in a cooperative education program that got her a job as a teller at a credit union which began her career in the financial services industry, how, later in her career, Brenda began a job in insurance (because she knew how important having insurance can be) but ultimately found that her first-hand experiences in the benefit of insurance didn’t make it any easier to sell insurance and prospect for new clients, and how Brenda’s effort to find the right position for her in the financial services industry ultimately led her to financial planning where she realized that she could have a greater impact in the lives of clients as she could use her personal experiences and life lessons to educate them on how to properly handle their finances and break through their emotional issues with money.

And be certain to listen to the end, where Brenda shares how she found she enjoys financial planning because she can combine her intuitive math skills with her love of working with people, educating, and having deep conversations that can impact the future of clients’ lives, how Brenda is continually working on making peace with the struggles she has endured through her life but feels that they were necessary to get her where she is today and to become a living life lesson to others in the importance of having insurance, support from others, and a good financial plan of your own, and why Brenda believes it is important for younger, newer advisors to not only find mentors but be ready to proactively ask their mentors for help in achieving their career goals to ensure they get the support and wisdom they want and need.

So, whether you’re interested in learning about why Brenda feels it is vital and beneficial to have life and medical insurance, how Brenda overcame her addiction and cancer diagnosis, or how Brenda helps her clients get past their emotional connections with money, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Brenda Hiscock.

Weekend Reading For Financial Planners (March 18-19)

March 17, 2023 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that just weeks after introducing its own self-clearing platform, RIA custodian Altruist announced this week that it is acquiring fellow custodial platform Shareholder Services Group (SSG), a move that will make the combined RIA custodial platform the third-largest in terms of RIAs served. This is significant, as most ‘upstart’ RIA custodians have struggled to gain material traction in a hyper-competitive RIA custodial landscape, but Altruist appears to be winning small-to-mid-sized firms in particular by cutting down on their outside technology costs with its unique ‘all-in-one’ that has the core portfolio management and performance reporting components built in directly to the platform.

Also in industry news this week:

How the collapse of Silicon Valley Bank could impact Federal Reserve policy and market performance going forward
Why advisors could soon be an important access point for consumers looking to add private investments to their portfolio

From there, we have several articles on the collapse of Silicon Valley Bank (SVB):

A play-by-play of how SVB went from a rapidly growing regional bank to a failed one in mere months
How banking practices could change for consumers in the wake of the SVB collapse
How government officials have attempted to balance the stability of the banking system while avoiding ‘moral hazard’

We also have a number of articles on cash flow and spending:

How advisors can help clients create a cash management plan that keeps their bank deposits within FDIC limits and earns them a relatively strong return
Why being ‘rich’ goes well beyond where one stands in the national income distribution
A new study suggests that while happiness increases with income on the whole, unhappy people are less likely to see happiness gains once they reach higher income levels

We wrap up with 3 final articles, all about living a healthy lifestyle:

Recent research upends previous assumptions about how one’s metabolism changes over time
Why walking can bring many of the health benefits of more strenuous exercise routines
How short bursts of exercise throughout the day can lead to significant health benefits

Enjoy the ‘light’ reading!

Kitces & Carl Ep 107: The Strategic Planning Process And Coming Up With (New) Ideas To Try

March 9, 2023 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces Carl Ep The Strategic Planning Process And Coming Up With New Ideas To Try

For many financial advisors, annual strategic planning is an essential process that establishes clear and specific business goals for the year, along with the steps necessary to achieve those goals. Additionally, it helps advisors make informed decisions about the future direction of their business. As important as strategic planning is to the evolution of the business, coming up with new ideas to implement as part of the strategic plan can be difficult, and choosing which ideas to develop and implement can be even more challenging.

In our 107th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss ways for advisors to find new ideas, the process of narrowing down their options and choosing the best ones, and how advisors can vet and test the viability of their ideas before implementing them on a larger scale.

Generating new ideas is essential for individuals looking to innovate and grow their businesses, but the reality is that good ideas don’t always come easily or quickly. A good way for advisors to stimulate the ideation process is to increase their exposure to new information – whether it be through reading books, engaging in more conversation, attending conferences, or joining study or mastermind groups, experiencing new perspectives can give advisors a fresh outlook and help them come up with their own new ideas. And as a collective of new ideas is gathered, identifying the 2 or 3 ideas that resonate the most with the advisor can help them narrow down their options to those that will most likely help them progress toward their goals.

Once the advisor has chosen 2 or 3 of their best ideas, vetting the ideas with trusted – and unbiased! – mentors, coaches, colleagues, and/or friends can help the advisor gain useful feedback and insight, which can help them develop a better sense of whether they have a sensible, fully formed idea worth pursuing. Next, analyzing the required steps to implement each idea and the potential outcomes can help narrow down their options further, determining which of the ideas is best to pursue on a long-term basis. While making a long-term commitment to an untested idea can feel scary, figuring out how to break the idea into smaller, testable steps can make the process easier and less risky.

Ultimately, the key point is that implementing new ideas is an important and exciting part of strategic planning, and while finding the right ideas to implement can be challenging, it can be facilitated by following a systematic idea-gathering framework. Such a process can involve multiple steps that focus on information gathering, brainstorming and gut-checking, asking for feedback from various sources, and devising ways to test drive ideas on a smaller scale to evaluate their viability and to save time, money, and resources. This process allows advisors to pivot and course correct when necessary, relieving the pressure of having the ‘right’ idea right away and avoiding ideas with less chance of success, which, in the end, creates opportunities for the advisor to investigate and pursue even more worthwhile ideas!

#FA Success Ep 323: Sustaining A $5B Advisory Firm To The Third Generation Of Leaders, With Yonhee Choi Gordon

March 7, 2023 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Yonhee Choi Gordon Podcast Featured Image FAS

Welcome back to the 323rd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Yonhee Choi Gordon. Yonhee is a Principal and the Chief Operating Officer of JMG Financial Group, an independent RIA based in Chicago, Illinois, that oversees nearly $5 billion in assets under management for close to 1,500 client households.

What's unique about Yonhee, though, is how, through her nearly 4 decades with JMG Financial Group, Yonhee has been a part of not only the firm’s succession plan to its second generation of owners but now to its third generation of leaders… and along the way, has personally recruited, trained, and retained the majority of the firm’s employees, by implementing stringent assessments in her hiring process to ensure that new employees are in alignment with the firm’s expectations and values to be able to succeed and grow with the firm for the long run.

In this episode, we talk in-depth about how during Yonhee’s 36 years with JMG, she has not only seen the evolution of the firm and its three generations of ownership and leadership, but has been integral in building the hiring, training, and development systems that has allowed the firm to transition to its current generation of partners and owners (most of whom have been with the company for over 20 years, after first being hired and trained by Yonhee herself), why Yonhee creates and implements a unique kind of work sample assessment for all prospective employees based on the actual duties of the position she’s hiring for so that she can evaluate how the candidates think, process information, and approach problem-solving with the actual tasks of the job, and how JMG structures its leadership roles, where Yonhee not only oversees the training and development of newer advisors, but also coordinates and supervises the Accounting, Operations, Human Resources, and IT departments as well as working with the firm’s Chief Talent Officer.

We also talk about how JMG developed their own proprietary CRM internally more than 25 years ago because they realized they would need better capabilities to input tax preparation data than CRM systems had at the time, and in the years since have been able to further customize the software to their precise needs as the firm grew, why JMG implements strict criteria for who can own shares of the firm, including a limit on ownership size with a cap of 20% of shares, and a rule that requires owners over the age of 70 to sell back their shares to keep ownership fresh and more closely connected to the current state of the firm, and why JMG implements a client capacity of 50-80 clients per advisor and how it keeps detailed track of the time it takes for employees to complete clients tasks to both avoid burnout and continually develop better and more efficient processes.

And be certain to listen to the end, where Yonhee shares why she believes that a portion of the industry’s rising level of M&A deals is really a result of inconsistent definitions of advisor titles and insufficient career paths that are failing to nurture newer advisors into the next generation of owners, why Yonhee advises younger, newer advisors to first understand the culture and values they feel are most important to them personally, and then use those standards to find their ideal role at a firm (to ensure it’s a firm that will take the time to support them and help them grow), and why Yonhee’s own definition of success has changed over time, where at this stage it's less about her personal career growth and more about the impact and value she can provide in the lives of the employees that she leads and the pride she feels knowing she is developing the next generation of leaders in the financial services industry.

So, whether you’re interested in learning about how Yonhee and her firm have remained successful through 3 generations of leaders, the unique way Yonhee thinks about finding the right employees and training them for success, or how Yonhee navigated being a Korean women in a male-dominated field and rose into a partnership role, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Yonhee Choi Gordon.

The Latest In Financial #AdvisorTech (March 2023)

March 6, 2023 07:04 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the March 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that Conquest, a Canadian financial planning software provider (founded by the prior founder of NaviPlan) has raised $24M (CAD) of private equity capital in preparation for expanding its reach into the US – for which it hopes its technology-aided ability to analyze a client’s plan and suggest “next-best decision” strategies for advisors to recommend to their clients will allow them to break into the crowded US market. Which at best will still be a substantial uphill battle, given the hassle of switching from one financial planning platform to another (and the fact that most advisors are generally satisfied with their current financial planning software in the first place!).

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Asset-Map has raised $6M in Series B funding as it scales up its financial visualization tool for enterprise use amid growing demand for advice engagement tools
Wells Fargo Advisors debuts LifeSync, an app-based tool combining features of goal-based planning and monitoring of financial “vitals” as the megafirm moves further into its own advice engagement at scale
Orion launches BeFi20, a behavioral finance assessment to support client conversations around money psychology (and identify how financially “aligned” couples are in their money attitudes)

Read the analysis about these announcements in this month’s column, and a discussion of more trends in advisor technology, including:

Merrill Lynch has rolled out a new turnkey video creation platform allowing its advisors to record short videos with a quick compliance sign-off (and more impressively, has apparently solved for the challenge of centralized compliance approval of individualized advisor content at scale)
The popularity of ChatGPT has opened up a discussion about the potential role of artificial intelligence in the advisory world – and while some predict it may replace advisors entirely, the evidence of past technological advances suggests it will prove to be one more tool to automate repeatable back- and middle-office tasks and allow advisors to focus on more planning at a higher level!

And be certain to read to the end, where we have provided an update to our popular “Financial AdvisorTech Solutions Map” (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

Framing Prospect Conversations Around What Motivates Them Today (And Not Their Future Goals)

March 1, 2023 07:06 am 0 Comments CATEGORY: Client Trust & Communication

When holding discovery meetings with a prospective client, financial advisors often ask the prospect about their goals. The hope is that these conversations will help the prospect ease into a positive frame of mind (by thinking about a vacation, retirement, or another future aspiration) and, at the same time, present the advisor with an opportunity to show how their services can help the prospect achieve their goals. However, the reality is that asking about goals has the potential to set prospects up for disappointment or dissatisfaction down the line, especially when achieving the goal is not financially attainable based on the prospect’s current situation, in which case the advisor might be seen as a ‘dream killer’. Even when a goal is achieved, it might not feel as good as the prospect imagined (e.g., feeling a lack of purpose after retirement). Consequently, finding meaningful ways to frame discovery-meeting conversations that don’t focus on the prospect’s future goals can sometimes be a better way to engage and motivate new clients.

By identifying a prospect’s current concerns and pain points and exploring strategies to address the issues that the prospect is facing now – instead of on future dreams that may still be far off into the future (and that are much vaguer to the client than the current situations faced today) – advisors can discover powerful motivators that can help the prospect to act more decisively (in fact, a particular problem the prospect has been struggling with might have been the reason they scheduled the discovery meeting in the first place!). Of course, diving right into a conversation to learn about a prospect’s particular pain points could make for an awkward discovery meeting. However, there are several ways to broach the subject indirectly, which can help advisors ease into the conversation more naturally. One approach is to ask the prospect about current concerns instead of pain points and explore what they would like to see as an outcome of working with the advisor (which could reveal pain points without framing the question in those terms). Another option for financial advisors is to solicit the client’s “anti-goals”, which are the things a person wants to avoid (e.g., financial regrets), as these can serve as powerful incentives for the prospect to take action (perhaps by becoming a client of the advisor!).

The first step to structuring discovery meetings that don’t address goals is to make a list of questions (e.g., “What do you want to ensure you won’t regret?”) that can be used to unearth a prospect’s pain points, anti-goals, current concerns, and aspirations. Lists can be important because asking non-goal questions can take some practice before asking them feels natural. In addition, advisors can consider sending some of the questions to the prospect in advance as part of an agenda for the discovery meeting (or perhaps adding a few questions to the meeting invitation itself) to help them be better prepared to respond. Further, in addition to the core questions the advisor wants to raise, asking appropriate follow-up questions during the meeting can also play a vital role in discovering what’s most important for the prospect to act on right now.

Ultimately, the key point is that while asking prospects about their financial goals might seem like a logical strategy for a discovery meeting, an alternative approach that indirectly brings out the prospect’s pain points can be more effective at motivating them to action. And for advisors, this method not only can help them identify what really matters to the prospect but also can potentially increase the chances that they will become a client!

#FA Success Ep 322: Developing New Advisors To Grow Their Books Of Business With A (Supported) Focus On Activity, With Kent Skornia

February 28, 2023 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 322nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Kent Skornia. Kent is the Founder of Krilogy, an Independent RIA based in St. Louis, Missouri, that oversees nearly $2 billion in assets under management for 1,800 client households.

What's unique about Kent, though, is how, to grow advisors within Krilogy, he created an internal training system that focuses on mentorship, education, and especially the core activities that newer advisors need to learn to gain deeper knowledge of financial planning and to get started in growing their own book of business over time.

In this episode, we talk in-depth about how Kent developed the Krilogy Advisor Development System (or KADS for short), a proprietary training system that pairs newer Krilogy advisors with senior advisor mentors to support the senior advisor’s client base while training on and practicing the activities it takes for them to grow their own book of business (to eventually become senior advisors themselves), how Kent and his firm implement a ‘Zero to One FA’ activity tracking sheet (based on a combination of concepts from the book “Zero to One” by Peter Thiel and the ’75 HARD Challenge’) which compiles a list of fundamental activities that newer advisors in the KADS program should focus on with the intent that, much like building muscles, the scheduling and repetition of the activities will build their business development muscles, and how to help train and grow newer advisors further, Kent and his firm have created Krilogy University, a once-per-week training session open to all advisors of the firm that highlights financial planning concepts (with the curriculum designed by an internal wealth intelligence committee that also teach as in-house experts).

We also talk about how senior advisors at Krilogy can take advantage of the KADS program to gain support for their own books of business and eventually to find a successor for their practices when they want to retire, how Krilogy has established two Director of Advisor Development roles to oversee the training and advancement of newer advisors in the KADS so that senior advisors can mentor their newer advisors in financial planning and relationship building with clients but don’t have to be responsible for managing the associate advisor, and how Krilogy offers liquidity options for its senior advisors to sell a portion or all of their book of business to Krilogy while still remaining as an advisor under Krilogy and continue to serve their clients while taking some chips off the table.

And be certain to listen to the end, where Kent shares how Krilogy sought to instill a values-based approach in the firm that focuses on dedication, abundance, leadership, and respect to create alignment with all employees of the firm, provide excellent service to their clients, and retain their employee talent, why Kent believes a good way for newer advisors to find the right firm for them is to interview other newer advisors at the firm they seek employment to understand if the firm is really a good choice and truly cares about advisor growth and development, and why Kent feels that even though a successful firm is dependent on growth and achieving goals, success for him is building relationships with clients, employees, and those around him, and seeing how those relationships impact the lives of so many as they grow and find success of their own.

So, whether you’re interested in learning about why Kent decided to create an internal advisor training program to grow his advisors within the firm, how the costs of hiring advisors is covered by Krilogy and the ways advisors are compensated, or how Krilogy implements optional succession plans for senior advisors that transitions the retiring advisor over a two-year period, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Kent Skornia.

Weekend Reading For Financial Planners (Feb 25-26)

February 24, 2023 01:27 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that the SEC’s proposed “Safeguarding Rule” would significantly increase the number of investment advisers deemed to have custody of client assets and increase paperwork requirements for advisers and qualified custodians, though the contours of a final regulation remain uncertain.

Also in industry news this week:

Why the behavior of some TAMPs and investment advisers might have led the SEC to propose its new (and potentially burdensome) ‘outsourcing rule’
Why independent broker-dealers could become major players in RIA M&A in the coming year

From there, we have several articles on advisor marketing:

How to craft engaging calls to action on an advisory firm website
Steps advisors can take to grow and manage an effective marketing email list
5 features that can make an advisor’s website a more valuable marketing tool

We also have a number of articles on tax planning:

How advisors can help their clients avoid an IRS audit this tax season
How major life changes, such as a move or a new job, can affect a client’s tax returns
A review of the best tax preparation software tools for a variety of tax situations

We wrap up with three final articles, all about personal development:

Why showing poise, the combination of style and substance, is often at the heart of a successful career
Why it can be valuable to have “permission to suck” when it comes to trying new things
Why a little bit of self-doubt can help individuals make better decisions

Enjoy the ‘light’ reading!