feed - Part 25

The RISA Framework: A Systematized Approach To Personalizing Retirement Income Strategies For Clients

April 20, 2022 07:07 am 19 Comments CATEGORY: Retirement Planning

As average life expectancy has increased over time, so too has the importance for retirees to ensure that they have sufficient income to cover their needs throughout what could be a 30-year (or longer) retirement. While some advisors may rely on a single ‘favorite’ income strategy to recommend to clients, recognizing that retirees actually have a range of preferences on how to source their retirement income can help advisors better develop sensible strategies that clients may be more inclined to follow. And the starting point for understanding a client’s income preferences to help them choose the right retirement income strategy is to identify the client’s retirement income style.

In this guest post, Retirement Researcher CEO Alejandro Murguía and Founder Wade Pfau share their recent research examining different retirement income styles that can be determined by assessing an individual’s preferences for growing and using their retirement assets. Their study identifies the two strongest constructs that help to determine a client’s income preference style, consisting of Probability (depending on market returns) versus Safety (sources of income less reliant on market returns), and Optionality (having flexibility to respond to economic developments or changing personal situation) versus Commitment (being dedicated to one retirement income solution). Together, these constructs were used to create a framework that can be used to identify an individual’s Retirement Income Style Awareness (RISA) profile.

For advisors, the RISA framework can be used to determine a prospect’s or client’s preferences, which can then help them design an appropriate and practical retirement income strategy. For example, an individual who expresses a preference for Probability and Optionality would likely appreciate the potential upside from strong market returns and the option to change course as necessary that are offered by a Total Return income strategy. Those who prefer Safety and Commitment may align better with an Income Protection approach, which would involve building a lifetime income floor with simple income annuities. And for those favoring Probability and Commitment, a Risk Wrap strategy (i.e., building a lifetime income floor with deferred annuities offering lifetime withdrawal benefits) could be more appropriate. Finally, those with preferences rooted in Safety and Optionality would likely appreciate a Time Segmentation strategy (e.g., bucketing strategies that use less volatile assets for shorter-term expenses, and more volatile assets offering higher growth potential for future expenses).

Ultimately, the key point is that by having a structured process around assessing retirement income preferences (whether by using a standardized RISA Matrix assessment or informally assessing where a prospect or client will be on the Matrix), an advisor can begin to develop a retirement income strategy that will most likely appeal to a particular prospect or client. By doing so, advisors can not only add value to current clients by ensuring that the client’s retirement income strategy matches their preferences, but can also attract new clients by offering a more personalized approach to generating retirement income!

#FA Success Ep 277: Crafting A More Unique Value Proposition By Investing Into A More Focused Clientele, With Lauren Oschman

April 19, 2022 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Lauren Oschman Podcast Featured Image FAS

Welcome back to the 277th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Lauren Oschman. Lauren is the CEO of Vestia Personal Wealth Advisors, an independent RIA based in Nashville, Tennessee, that oversees $600 million in assets for nearly 500 client households.

What's unique about Lauren, though, is how she and her firm not only serve a unique niche of physicians, but have also built practice groups within the firm that serve niches within the niche, including female physicians and orthopedic surgeons, and have developed hyper-specialized services for their unique clientele that allow them to truly differentiate.

In this episode, we talk in-depth about how Lauren and her partners built a firm dedicated to providing a high-touch, customizable client experience that still fits into the busy lifestyles of physicians, how Lauren’s firm developed services that help their physician clients with the unique challenges they face when it comes salary contract negotiations, and mortgages and disability insurance for doctors with highly variability income, and the way Lauren’s firm has further specialized in student loans and helping physicians understand when they may qualify for potentially six-figure Public Student Loan Forgiveness for their non-profit hospital work.

We also talk about how starting her career at a male-dominated advisory firm gave Lauren a better understanding of the importance of inclusivity and diversity for women advisors, how Lauren, immediately after having her first daughter, took a risk to leave the firm she outgrew and launch her own in order to pursue better leadership and ownership opportunities where she could have a much greater impact on change, and why Lauren believes learning to communicate and working on human connection as a financial advisor are equally as important as learning the technical skills in how to build a financial plan.

And be certain to listen to the end, where Lauren shares how she views the adversity she experienced in her career as learning opportunities and uses those moments as inspiration for her own future and for future generations in her firm, how building a team within her firm has helped Lauren feel more fulfilled by having more people around her that she can uplift and impact the lives of, and how, while Lauren is still striving to further improve the workplace that she has created, it’s looking back on how far you’ve come and how much you’ve achieved that really reflects the impact you’ve had on the world.

So whether you’re interested in learning about how Lauren integrates her “made for you” philosophy into her branding and marketing, how she simplified her fee structure to create scalability in problem-solving, and how Lauren fosters community and work/life balance with high demands on both sides, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Lauren Oschman.

#FA Success Ep 276: Integrating Tax And Legal Services Under One Roof To Truly Scale A ‘One-Stop Shop’, With John Hagensen

April 12, 2022 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

John Hagensen Podcast Featured Image FAS

Welcome back to the 276th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is John Hagensen. John is the founder of Keystone Wealth Partners, an independent RIA with offices in Arizona and North Dakota, that oversees $650 million of assets under management for nearly 1000 client households.

What's unique about John, though, is how he is one of the first non-lawyer financial advisors in the nation to build, own, and operate a law firm, which he then leverages, along with his own tax firm, to create a truly one-stop-shop wealth management experience of financial planning, tax, and estate, for his mass affluent clients.

In this episode, we talk in-depth about how the unrealized predictions of fee compression in the financial industry inspired John to concentrate on adding more measurable value for his clients with tax and estate services, how John has been able to leverage his all-in-one service offering to gain a faster pace of referrals, and how John has been able to grow to nearly 1,000 clients in barely more than a decade through a multi-prong education-based marketing strategy that utilizes informational webinars, in-person events, and making a big investment into a weekly radio show.

We also talk about how John transitioned from a career as an airline pilot but still incorporates the same systematized checklist-oriented mindset to build standard processes for his own businesses, how he has become comfortable with the idea of not being a right fit as an advisor for every prospective client, and how he found a sense of renewal after a trip to Ethiopia made him look internally and evaluate his purpose in life and the potential impact of his money.

And be certain to listen to the end, where John shares how the growth of his business led to a mindset shift to focus more on the collective team after realizing how dependent he had become on hiring the right people, how he believes in utilizing the talents and resources afforded to us to help uplift others rather than just himself, and how his plans for the future are centered on a potential merger to scale up even further to expand his all-in-one services across the country.

So whether you’re interested in learning about how John created a true one-stop-shop experience for his clients, how he uses slower, ‘older’ marketing techniques to attract prospects, or how he measures the success of new ventures and avenues explored, then we hope you enjoy this episode of the Financial Advisor Success podcast, with John Hagensen.

FPA Defines Its New Roadmap: Serving CFP Professionals And Building (Trust With) Local Chapters

April 11, 2022 07:08 am 3 Comments CATEGORY: Planning Profession

Leading up to the arrival of new CEO Patrick Mahoney in 2020, the Financial Planning Association (FPA) had experienced a rocky few years. From the continued decline in membership (including a 25% cut between 2018 and 2020) to the angry backlash among members regarding the OneFPA initiative (not to mention challenges brought on by the COVID pandemic), the FPA was in need of a fresh start. With this background in mind, Mahoney has taken several steps since his arrival to revive the FPA’s relationship with its chapters and members and could help the organization grow for the first time in years.

Mahoney’s efforts started with trade and national press outreach efforts, offering interviews to tell the FPA’s story and to communicate the value of the organization – and, more generally, financial planning – to the broader public, emphasizing the efforts made by FPA chapters to drive professionalism among their ranks. Mahoney then focused on rebuilding trust between local FPA chapters and the national FPA headquarters by meeting with FPA chapter boards across the country and reinforcing that the main goal of the FPA home office is to support its members and the profession (in stark contrast to the FPA’s previous message that its members existed to support the FPA). This shift in attitude prompted changes to the FPA staffing structure intended to better serve its chapters and members, and gave rise to a new Chief Membership Experience Officer position, as well as a new membership experience department and chapter experience team whose roles are to help chapters better serve FPA members on their level.

Perhaps most importantly, the new FPA Advisory Council (that originally arose from the initial OneFPA initiative) has brought the leaders of 80 FPA chapters together with Mahoney and key board members, who have been actively brainstorming ways to reverse the organization’s membership decline and put the FPA on what would be its first growth path since its inception. As a result of the Advisory Council’s recommendation to identify the organization’s core members, the FPA has determined that the FPA’s marketing and membership benefits will be oriented to making the lives of CFP practitioners – the organization’s formally defined ‘core member’ – easier and more convenient.

Ultimately, the key point is that while the FPA’s turnaround is going to take time, the first steps have been taken. By focusing on CFP professionals as its core members and restructuring the organization to focus on how it can serve its chapters and members (rather than on the support of members required to sustain the organization), the FPA and its leadership have built a foundation for the organization to grow and thrive in the years ahead!

Weekend Reading For Financial Planners (Apr 9-10)

April 8, 2022 02:03 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the Biden administration will be extending the current moratorium on Federal student loan payments, originally scheduled to end on May 31, until August 31 (which, while welcome to many borrowers, also leaves many in financial limbo as they try to plan for when – if ever – the payments will restart).

Also in industry news this week:

A new study by Charles Schwab and Ariel Investments shows that participation in the stock market is near an all-time low among Americans amid declining trust in markets and financial institutions (with the effects most acutely seen with Black investors)
How focusing on client experience (rather than simply client service) can help firms generate more revenue by creating emotional engagement with the firm’s most important clients

From there, we have several articles on the current stock market environment:

What advisors can do to keep client investment portfolios on track in the current turbulent market and geopolitical environment
What the recent yield curve inversion means for stock market returns going forward and how advisors might respond
Why investing in international stocks could still provide diversification benefits even as they lag U.S. equities in performance

We also have a number of articles on direct indexing:

While the number of direct indexing platforms has proliferated, one industry observer is skeptical of several of its advertised benefits for advisors and their clients
In the latest sign of direct indexing growth (and its potential to disintermediate ETFs and mutual funds), Charles Schwab plans to launch its direct indexing offering for RIAs and retail investors in late April
Fidelity has gone live with its Fidelity Managed FidFolios direct indexing platform, and its $5,000 account minimum has the potential to bring direct indexing to a wider range of investors (who may not even benefit from it if they’re already eligible for 0% capital gains rates!?)

We wrap up with three final articles, all about productivity:

How the rise of remote work has created a late-evening “peak” of productivity for some workers (which on the positive side could mean more workers are optimizing their schedules to their preferred hours, or on the negative side could mean workdays are simply getting longer)
Why many employees spend at least half of their days “working on work”, including following up on tasks, giving status updates, and searching for information (which comes at the cost of actually getting work done and can prevent organizations from strategizing for the long term)
How workers can optimize their schedule for productivity by grouping meetings together and leaving the remaining time free to work without distractions

Enjoy the ‘light’ reading!

The Latest In Financial #AdvisorTech (April 2022)

April 4, 2022 07:04 am 3 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the April 2022 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 big news that Wealthbox has raised a new $31M Series B round to capitalize its efforts in moving further ‘upmarket’ to challenge Redtail and especially Salesforce’s hold on the largest advisor enterprises. (As advisor adoption of CRM systems is now so high, it’s a virtual certainty that current CRM systems can only grow by capturing market share away from competitors!)

From the broader industry perspective, though, the real shift that’s underway is the transition of advisor CRM systems from their roots as the tool that captures client contact information and communication history, into one that drives the advisory firm’s key workflows. Because as advisory firms provide increasingly broad and holistic advice to clients, it’s no longer feasible for the firm to run ‘just’ from its RIA custodian or broker-dealer investment platform as the hub; instead, the advisor CRM system is becoming the hub, around which the rest of the firm’s systems and processes are built. Which is expanding the opportunity set for advisor CRM.

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

Summit Wealth Systems raises a $20M Series A round, as its founder Reed Colley (who previously founded Black Diamond) aims to build the next generation of performance reporting for clients
Advyzon launches a new TAMP offering for the advisor users of its portfolio management + CRM system

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

Goldman Sachs reveals that it is still not quite ready to launch its competing RIA custodian, nearly 2 years after it acquired Folio Institutional to speed up the process, highlighting just how hard it really is to compete in the RIA custodial business
Savvy Wealth raises $7.3M to fund its own tech-based advisory firm (in the hopes of out-competing advisory firms that are struggling to build their own tech?)
IndyFin raises $2.2M of capital to become the next ‘Yelp-for-advisors’ platform as the SEC greenlights client testimonials… but raising the question of whether Yelp itself may still be best positioned to be the Yelp for advisors?

In the meantime, we’ve also launched a beta version of our new Kitces AdvisorTech Directory, to make it even easier for financial advisors to look through the available advisor technology options to choose what’s right for them!

And be certain to read to the end, where we have provided an update to our popular “Financial AdvisorTech Solutions Map” as well!

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

Weekend Reading for Financial Planners (Mar 26-27)

March 25, 2022 02:05 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with new research showing that average asset-based advisory fees increased from 2020 to 2021, suggesting that the phenomenon of “fee compression” from low-cost competition like robo-advisors not only is failing to play out, but may be entirely reversing itself as human advisors create even more value on top of their portfolio management services by offering more and deeper services (and justify charging the same or even higher fees).

Also in industry news this week:

Massachusetts Secretary of State William Galvin is pushing broker-dealers and RIA custodians to increase the interest rates paid on cash sweep accounts in response to the Federal Reserve’s recent rate hike
Despite the popularity of the idea of replacing twice-per-year time changes with a permanent daylight savings time, many sleep scientists believe that such a change could be even worse for our bodies than the current system

From there, we have several articles on retirement planning:

How part-time retirement programs from employers are increasingly available, and how advisors can support clients interested in a phased retirement
How Social Security claiming strategies are becoming more important amid a wave of pandemic-related retirements
Why a 401(k) ‘bridge’ could be a useful strategy for retirees to cover their expenses while delaying Social Security and allowing their benefits to grow

We also have a number of articles on advisor training:

How firms can design training programs that employees will actually implement in their daily work
What goes into effective advisory firm training programs for junior employees, and why consistency is one of the most important elements
How external training programs provide structure and fresh ideas that are more difficult to generate through internal firm training programs

We wrap up with three final articles, all about the way we set and perceive our expectations for the future:

How even the most optimistic predictions sometimes underestimate the eventual outcome of a situation (or vice versa in negative situations), since our tendency to think in linear terms undershoots exponential events
Why people often feel emptiness when they achieve a long-awaited goal, and how focusing on progress towards that goal (and when achieving a goal, setting a new one that can be progressed towards) can lead to greater happiness in the long run
Why setting reasonable expectations is key to maintaining happiness (especially when working toward ambitious goals with a low probability of success)

Enjoy the ‘light’ reading!

Asking ‘Have You Worked With An Advisor Before?’ To Uncover What Prospects Really Value Most

March 16, 2022 07:09 am 1 Comment CATEGORY: Client Trust & Communication

When meeting with a prospective client for the first time, two of the advisor’s primary goals include making a positive impression on the prospect and determining whether the prospect will be a good fit. However, if the prospect feels nervous about the advisor potentially judging their previous financial decisions, they might become uncomfortable or defensive when asked direct questions about their financial situation. And without asking the prospect about their financial history, the advisor might be challenged to determine whether the prospect would be a good fit for their services. Given this delicate balance, one particularly helpful question for the advisor is to ask, “Have you ever worked with a financial professional before?”.

This versatile question, along with relevant follow-up questions based on the prospect’s answer, can help advisors understand not only what the prospect really wants, but also how much financial planning education the advisor will need to provide to help the prospect identify and attain their goals. For example, many consumers who have never worked with a financial planner before don’t understand what advisors actually do for their clients. Additionally, prospects don’t always understand what a financial plan consists of or how they can benefit from using one. And prospects who have worked with an advisor before might come with unrealistic expectations about what they want from an advisor.

For prospects who previously worked with an advisor, good follow-up questions include asking about the length of the relationship with the previous advisor (which may give insight into when the prospect decided to examine their financial goals); why the relationship with the previous advisor ended (to see whether the advisor did something that made the prospect unhappy); and what the prospect found was most beneficial from working with their previous advisor (which can show the values the prospect finds most important).

And for prospects who have not worked previously with an advisor, helpful follow-up questions include what led them to take action now (to see what motivates them and whether they recently experienced a major life change); with whom they currently talk about their finances (to learn about alternate sources of information for the prospect); and what questions they have about the client-advisor relationship (which can show why the client wants to work together in the first place).

Ultimately, the key point is that the question, “Have you ever worked with a financial professional?” can be a useful tool for advisors not only to illustrate their value to new prospects, but also to determine potential fit. It can help them understand how much the prospect knows about the financial planning process as well as their experiences with previous advisors. And by asking appropriate follow-up questions, the advisor can learn everything from the prospect’s motivations for approaching the advisor to their expectations for the relationship. In the end, this conversation can help both the advisor and the prospect decide if a working relationship together can be beneficial and – possibly even more important! – one that they will both enjoy!
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#FA Success Ep 272: Streamlining Operations And Workflows With The Advisor CRM As The Centralized Hub, With Kate Guillen

March 15, 2022 07:07 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 272nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Kate Guillen. Kate is the founder of Simplicity Operations Management, a consulting firm based in San Diego, California, that specializes in helping advisory firms get the most out of their CRM systems and streamline their internal operations along the way.

What's unique about Kate, though, is the way she utilizes the advisor’s CRM system – not their broker-dealer or RIA custodial platform – as the central hub of their entire business, and then builds multi-system workflows from that base to ensure that everything gets done and nothing falls through the cracks.

In this episode, we talk in-depth about why Kate views the CRM system and its four core components of Calendaring, Task Management, Sales Pipeline, and Contact Management as the center around which all advisory firms should be built, why the key to building good workflows is about not just articulating the steps of a process but also the follow-up to demonstrate that good service to clients, and how firms can start the process of systematizing the key repeatable steps of the business in new client onboarding and ongoing client service.

We also talk about how working for an advisory firm herself and observing their operational systems (or lack thereof) encouraged Kate to first master Redtail and its intricacies, how Kate was inspired to launch her company after discovering how often advisory firms underestimate and underutilize their CRMs operational potential, and why Kate has found that it can take up to 6 months to really go through the process of overhauling an advisory firm’s operations to be more efficient.

And be certain to listen to the end, where Kate shares how her nervousness at launching a consulting business just as the pandemic first broke out (and how her fear subsided once it became clear that the pandemic was actually amplifying the need for advisory firms to better systematize their suddenly now-remote businesses), how Kate believes achieving goals begins with having confidence in one’s own abilities and not being so hard on yourself, and why Kate feels, while it is great to do what you love, she has had to learn to get better at saying “no” to find her own balance between growing the business and enjoying her time with family.

So whether you’re interested in learning about how Kate leveraged her organizational and CRM expertise to start her business, how Kate utilizes Redtail as her operational hub to build and incorporate systems, or why Kate feels it is more important to appreciate the journey in building a business than worrying about the destination, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Kate Guillen.

Kitces & Carl Ep 81: Increasing Client Touch Points With Asynchronous Client Meetings

March 10, 2022 07:01 am 1 Comment CATEGORY: Kitces & Carl Podcast

Kitces Carl Ep Increasing Client Touch Points With Asynchronous Client Meetings Featured Image

Conventionally, meeting with a financial advisor meant meeting in-person, usually at the advisor’s office. With today’s technological advances, though, compounded by changes in social dynamics brought forth by the pandemic, meeting virtually (or mostly virtually) has become increasingly normalized, which has made it easier than ever before to accommodate more meeting time into busy schedules. But while the capacity to schedule more meetings has also given advisors the opportunity to spend time engaging more deeply with their clients, it has also meant that they may have less time to accommodate touch points with a broader range of their entire client base. One potential solution that can help advisors address this time crunch is to consider using asynchronous meeting strategies to help free up more of their time.

In our 81st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss what it means to meet asynchronously, when it is appropriate to utilize, and how advisors can use asynchronous meetings to increase touch points for clients.

As a starting point, it’s important to recognize that while advisors may still need to devote more time to certain clients with complex financial circumstances who simply require more attention, newer clients often need frequent meetings only initially in the relationship. This is because in-person meetings early on provide a space for dialogue that lets new clients build trust and rapport with their advisor in the first place. But, once a certain level of trust is established, many clients often feel that frequent meetings are no longer necessary and may actually request fewer routine meetings; in fact, they may prefer communicating only on an as-needed basis to ensure that they stay on track with their financial plan.

Furthermore, while there may still be times when synchronous meetings are the most appropriate method of contact, they are not the only way to maintain the right level of touch points with a client. For instance, asynchronous meetings can sometimes be more suitable for situations between in-person meetings or video chat sessions, when a real-time connection is not entirely necessary (e.g., answering a question about how to find information on a platform). Using asynchronous meetings to quickly address lower-priority issues helps free up time for the advisor, as it generally takes less time to record a quick, informal video response than it does to write an email or to meet in person. Asynchronous meetings also don’t require the need to schedule or prepare for an in-person meeting, which can be time-consuming and simply unnecessary (especially when a 5-minute video clip can suffice).

Ultimately, the key point is that asynchronous meetings are not meant to replace all meetings; instead, they can be used to communicate more easily and quickly with clients when an actual meeting isn’t really necessary. While there will always be pressure to maintain a certain level of touch points with clients, advisors can rely on advances in technology that have made it easier and much more affordable for them to use asynchronous strategies (e.g., recording a quick video response) to respond to their clients’ needs without having to schedule meetings. And taking less time to schedule meetings means more time for the advisor to create more touch points and provide a better client experience. Because the more touch points an advisor can have with clients, the more opportunities there are to deepen and maintain long-term relationships with those clients!

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Want CE Credit for reading articles like this?

The RISA Framework: A Systematized Approach To Personalizing Retirement Income Strategies For Clients

#FA Success Ep 277: Crafting A More Unique Value Proposition By Investing Into A More Focused Clientele, With Lauren Oschman

#FA Success Ep 276: Integrating Tax And Legal Services Under One Roof To Truly Scale A ‘One-Stop Shop’, With John Hagensen

FPA Defines Its New Roadmap: Serving CFP Professionals And Building (Trust With) Local Chapters

Weekend Reading For Financial Planners (Apr 9-10)

The Latest In Financial #AdvisorTech (April 2022)

Weekend Reading for Financial Planners (Mar 26-27)

Want CE Credit for reading articles like this?

Asking ‘Have You Worked With An Advisor Before?’ To Uncover What Prospects Really Value Most

#FA Success Ep 272: Streamlining Operations And Workflows With The Advisor CRM As The Centralized Hub, With Kate Guillen

Kitces & Carl Ep 81: Increasing Client Touch Points With Asynchronous Client Meetings

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Want CE Credit for reading articles like this?

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Questions?