feed - Part 31

Weekend Reading for Financial Planners (Aug 21-22)

August 20, 2021 02:58 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a recap of the CFP Board's latest update to its 5-year strategic plan, which includes an ever-greater focus on its standards of conduct and enforcing them... but raising the question of whether the CFP Board is ready enough to enforce its standards even if it means the total number of CFP certificants might (temporarily) decline in order to clean its own house and build a more trusted foundation for growth in the future?

Also in the industry news this week are a number of other interesting industry headlines:

A new study finds that almost 25% of SEC-registered investment advisers took PPP funds, and an estimated 6% of those may have claimed more than they should have (and those who did are disproportionately advisors who already had a history of client complaints, misconduct, or outright fraud, reinforcing the view that a small number of 'bad apples' are engaging in a disproportionate amount of bad advisor activity?)
The majority of advisory firms (51%) report that the pandemic didn't have any impact on their culture, but of those where it did, nearly 4/5ths reported that it was a detriment to their employee engagement

From there, we have several investment-related articles, including:

Talking points on how to persuade clients to rebalance when they're hesitant due to embedded capital gains
The ongoing rise of alternatives as a substitute for ultra-low-yield fixed income allocations
Why the real 'investing nightmare' is not a 40% bear market or a 'lost decade' in stocks, but a scenario where markets are down 40%+ even after a decade (which hasn't been experienced in the US, but does occur periodically in other countries around the world!)

We've also included a number of articles on client communication:

Why even good advisors can end out with regulatory complaints if they allow a gap to emerge between client expectations and reality (and fail to address it before the dissatisfaction escalates)
How big life changes can affect client behavior, and lead to situations where advisors must dig deeper in client communication to unearth the underlying issues
Why giving 'blunt' advice can turn off prospects... but it is also an effective way to screen out those who aren't really ready to work with an advisor and implement their advice

We wrap up with three final articles, all around the theme of being decisive in our focus:

Why the most successful businesses are not just the ones who take action, but are the ones that most often take decisive action
How fear of our own mortality often stokes us to cram as much as we can into our time, instead of encouraging us to better focus that time instead
Why sometimes the best decision we can make is to stop trying to be bigger 'just for the sake of', and instead focus on being better for those we want to serve most (from our family to our most ideal-fit clients)

Enjoy the 'light' reading!

#FA Success Ep 242: Navigating A Family Succession Plan As The Successor To Build Your Own Future Vision, With Charlotte Geletka

August 17, 2021 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 242nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Charlotte Geletka. Charlotte is the owner and managing partner of Silver Penny Financial, where Charlotte personally manages $140 million for 150 families.

What's unique about Charlotte, though, is that she purchased her father’s financial advisory firm, at a time when the firm’s existing business model was no longer really viable, in order to build her own vision for the next stage in the firm’s future.

In this episode, we talk in depth about the lessons Charlotte learned from the experience of buying the business from her father, understanding that, while she would have to make some substantive changes, she was still buying, as she puts it, “someone’s business child that they built from nothing”, the process Charlotte went through to determine a fair price for an advisory business with a number of different business segments (each requiring their own multiple), and how she deliberately structured the seller-financed deal with an accelerated payback in order to put pressure on herself to grow revenue quickly.

We also talk about Charlotte’s mindset shift away from viewing financial planning as simply a means of generating business and to offering financial planning as a stand-alone service as a way to serve clients who aren’t a good fit for the AUM model, why Charlotte leverages TAMPs for portfolio management (and how she integrates the TAMP fees with her own AUM fee structure), and how Charlotte created a one-page deliverable for clients explaining all the value-added services she provides beyond “just” managing their investments.

And be certain to listen to the end, where Charlotte shares her own pathway into the industry, from being vehemently opposed to working in financial services to realizing that a career as an advisor would offer her the opportunity to receive compensation that was directly correlated with how hard she worked, Charlotte’s growing appreciation for just how important leadership qualities are when it comes to the success of her business, and the important lesson Charlotte learned about the benefits (both professional and personal) of surrounding herself with other like-minded advisors.

So whether you’re interested in learning about Charlotte’s experience buying her father’s practice, about the valuation process she used to settle on a price for the business, or how she integrates TAMPs into her fee structure, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Charlotte Geletka.

Creating Hockey-Stick Style Growth By Taking The Uncomfortable Leap

August 16, 2021 07:08 am 1 Comment CATEGORY: Personal/Career Development

It is a fundamental part of human nature to aspire to a future that is better than what we currently have. To the point that for those in even the most dire of situations, “hope” is what keeps us alive and going. After all, if there’s no hope that things could someday be better, there’s no reason to even bother trying to make it happen. Yet the reality is that hope alone is not enough to actually change our situation for the better. It’s hope, combined with action – and the sometimes scary moment of ‘taking the leap’ – that is necessary to lead us down a better path.

In this guest post, Stephanie Bogan of Limitless Adviser shares what it is that leads us to inaction and getting “stuck” – even and despite having an aspirational hope of making our advisory practices and our lives better – and why our ability to take the leap (or not) isn’t driven by figuring out the “right” methods and tactics to make the change, but changing our mindset and thinking differently about what’s possible in the first place.

So how do you find a path to better – or exponentially better hockey-stick-style growth – from where you are today. The starting point is to simply write down your revenue, income, hours worked every week, and time off per year. Then write down what you hope it could be if there were no constraints. And then double those goals… and reflect on all the negative thoughts that come to mind telling you it can’t be done, it won’t be possible, or that it’s too good to be true.

Because it’s only by facing our demons – those ‘limiting beliefs’ that we tell ourselves about what can’t be done, even though it clearly can because other advisors have – that we can get clear on what we’ve just been ‘tolerating’ (or outright avoiding), why we’ve gotten stuck in that pattern, and what steps we need to start taking if we really do want to achieve a different and better outcome instead.

Ultimately, the key point is to understand that what limits our success is not actually figuring out how to get to the next level, but the stories we tell ourselves – sometimes unwittingly or entirely subconsciously – that lead us to deny ourselves what’s actually possible. Of course, that doesn’t mean that the path of making a change won’t still entail challenges and a potentially significant amount of discomfort. But if the reality is that you’ve already allowed yourself to become “comfortably-uncomfortable” with your current level of under-success… why not at least redirect that discomfort towards your advantage?

Weekend Reading for Financial Planners (Aug 7-8)

August 6, 2021 02:48 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the industry buzz about a financial advisor who was called out by a popular TikTok influencer for "racist hiring practices" after suggesting that her mostly-white clients wouldn't want to work with an advisor of color... leading to the advisor's termination by her broker-dealer, and a broader industry discussion about what advisors should do if they have racist clients (from trying to accommodate them as best the firm can, to outright terminating the client).

Also in the industry news this week are a number of other interesting industry headlines:

A State Street study finds that nearly half of investors think financial advisor fees include the underlying cost of the mutual funds and ETFs they recommend
An Oliver Wyman study highlighting that the four frontiers of differentiation for investment management are now customization (i.e., direct indexing), private markets, ESG, and crypto

From there, we have several investment-related articles, including:

Examples of how some advisory firms are beginning to implement direct indexing strategies with clients, from ESG to tax-loss harvesting
One advisor's experience in angel investing in pursuit of the infamous 100-bagger (an investment that produces a 100X return)
The benefit of having a 'too-hard' pile for investments (opportunities that might be compelling, but just aren't worth the time and effort for their incremental return opportunity)

We've also included a number of articles on better engaging clients and articulating the value of the advisor's advice:

How to get clients more engaged with the financial planning process itself, from an "Initial Engagement Plan" one-pager to having "Get Organized" meetings
How to handle the fact that clients often need behavioral coaching even as they state that they don't want it
Breaking apart the value advisors provide into the domains of "useful knowledge" and "avoiding mistakes" (and translating that value into client-specific examples based on their own circumstances and prior experiences)

We wrap up with three final articles, all around the theme of finding your own path to advisor success:

Why it's "OK" to be profitable (even and especially as scrutiny grows on the fees that advisors charge)
Reflections from one advisor on what he got right and wrong in his own multi-decade journey of building an advisory business
Why it's so important to avoid looking to others for success and define it in your own terms instead, so you can "play your own game"

Enjoy the 'light' reading!

#FA Success Ep 240: Driving Client Growth By Communicating Solutions In Practical Terms, With Thomas Gau

August 3, 2021 07:04 am 10 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 240th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Thomas Gau. Tom is a financial advisor at Materetsky Financial Group, a hybrid-RIA located in Boynton Beach, Florida, that manages $525M in assets under management for just over 500 clients.

What's unique about Tom, though, is the way he translates abstract financial planning strategies into very concrete and practical terms that he can enthusiastically communicate to address the very specific tax and estate planning needs of his retiree niche clientele.

In this episode, we talk in depth about how Tom’s quintessential client communication and persuasion skills landed him on the radar of Malcolm Gladwell (who profiled Tom in his book “The Tipping Point”), how early in his career, as he expanded his focus beyond his accounting services as a CPA, Tom decided that he needed a niche, focusing first on retirees and then niching down even further to a concentration on the tax ramifications of retirement distributions, and why Tom feels that the best way for financial advisors to differentiate themselves to prospective clients isn’t by discussing investment solutions, but by offering to help with specific tax planning issues, because, as Tom points out, “investments are a matter of opinion, but taxes are a matter of fact”.

We also talk about how Tom utilizes educational workshops to get in front of prospective clients as well as the specific strategies he uses to create awareness for and interest in his workshops, why Tom feels that the three keys to having a successful advisory practice include having a solution to a common pain point felt by a specific target market, being able to easily implement that solution, and making sure that the issue involves a not-insignificant amount of money, and why Tom believes that most financial advisors still underappreciate how addressing advanced planning topics with their clients can be a powerful differentiator against a vast number of advisors in the industry who are still generalists.

And be certain to listen to the end, where Tom shares what led him to turn his business development success into a Coaching Program for other advisors, the surprising consistency in the issues that retirees face regardless of their locale as Tom builds an advisory firm for the third time in a new location after selling the first two, Tom’s philanthropic efforts in less fortunate countries (which also makes him appreciate all the more the abundance in his own life), and how, at the end of the day, Tom finds that it’s his enthusiasm and passion, even more so than his tax and estate planning focus, that gets prospective clients excited about working with him.

So whether you’re interested in hearing the story behind Tom being featured in “The Tipping Point”, the advice he offers around how financial advisors can differentiate themselves, or how he runs his educational workshops to generate new business, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Thomas Gau.

The Latest In Financial #AdvisorTech (August 2021)

August 2, 2021 07:06 am 2 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the August 2021 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 Vanguard has apparently decided that direct indexing is the future, making its first-ever external acquisition of direct indexing platform JustInvest after an initial pilot program with RIAs quickly brought in more than $1B of AUM. Of course, the reality is that if Vanguard is going to put its full scale of resources behind JustInvest and distribute the direct indexing offering to its $3T of assets with financial intermediaries, then it may cause direct indexing to become the future, even if it wasn’t going to be already. Yet on the other hand, with Vanguard deciding to break the mold and acquire externally in an apparent move to quickly “catch up”, it appears that even Vanguard sees both momentum in direct indexing… and an apparent threat to its own core business of index mutual funds and ETFs that it wishes to head off at the pass?

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

Vestwell raises $70M of capital as their 401(k) technology platform for advisors gains momentum
SIMON Markets raises $100M of capital to fund their rapidly growing marketplace of risk-hedged investment solutions for advisors
Harness Wealth raises $15M to fund a new advisor lead generation service focused specifically on consumers with significant equity compensation
Orion launches a new “3-Dimensional” risk tolerance assessment tool that aims to cover tolerance, capacity, and a client’s ability to keep their composure (or not) when markets turn volatile
Morningstar launches its own new Risk Score ecosystem to help translate ‘abstract’ risk tolerance scores into concrete portfolios that advisors can implement

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

RIA In A Box launches a new social media archiving platform to complement its growing suite of compliance tools
The T3 Advisor Technology conference launches a new “WealthTech DevCon” in partnership with INVENT.us to expand the AdvisorTech dev community
Fidelity launches a new “Sherlock” data tool for cryptocurrency, but it’s not clear if advisors will trade it
Carson Wealth gets a ‘tech multiple’ for its RIA business by building its own client portal as large advisory firms increasingly look to add their own layer of proprietary technology value

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 (July 31-Aug 1)

July 30, 2021 02:41 pm 3 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the industry news that the CFP Board is proposing updates to its disciplinary Sanction Guidelines and Procedural Rules, which would make the Failure To Report a disciplinary violation to the CFP Board result in a public censure (not just a private one)... and even more significantly, that the CFP Board is seeking input on whether it should begin to apply monetary sanctions on CFP professionals for violations of its Standards of Conduct, where the fines it levies would be used to fund subsequent enforcement as the CFP Board continues to try to weed more 'bad apples' from its ranks. (For those who are interested, a public comment period will be open until September 21st for those who have something to say about it!)

Also in the industry news this week are a number of other interesting industry headlines:

The SEC announces a series of fines, ranging from $10,000 to more than $90,000, on both RIAs and broker-dealers that still aren't distributing Form CRS to clients and posting it for prospects on their website as required under Reg BI
A new research study finds that more and more consumers are seeking financial planning advice, and that younger clients are actually the most likely to be seeking out a new financial advisor now

From there, we have several articles on advisor marketing:

The latest Schwab benchmarking study shows that the top growth firms are the ones most effectively leveraging digital marketing strategies to outgrow their peers
Why financial advisors need to have a sound financial footing themselves to get clients (or else your need to close the prospect and get the sale will end out killing the deal)
The beliefs that hold advisors back from getting referrals, including that most clients actually do want to refer their advisor, but don't because they're not sure who they know that would qualify for their advisor's minimums

We've also included a number of retirement-related articles, including:

How retirees are increasingly seeking 'non-financial' retirement advice, because the factors that most drive wellbeing in retirement are a function of health and wellness (not finances)
How retirement dreams can quickly cascade down into 'retirement hell' for those that struggle with having too much free time
Confessions of a young tech multi-millionaire about how she struggled greatly when an IPO suddenly brought her an 'unexpected' $6M fortune

We wrap up with three final articles, all around the theme of what it takes to build wealth and how it benefits us:

How 'true' wealth is about being able to control our time, have freedom to say what we want (without fear of reprisal from work), and simply not need to worry about money anymore
A Northwestern University study on siblings and twins shows what appears to be a causal effect between mid-life money (in our 40s) and our subsequent longevity
The "Go Big, Then Stop" approach to saving for retirement (because if you save enough early enough, you literally don't have to keep saving at all to retire, and can simply let the early compounding take over!)

Enjoy the 'light' reading!

#FA Success Ep 239: Creating Advisor Value By Helping Clients With Complexity Regardless Of Assets, With Ryan Frailich

July 27, 2021 07:08 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 239th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Ryan Frailich. Ryan is the founder of Deliberate Finances, an RIA located in New Orleans, Louisiana that serves young professionals using a monthly subscription fee model.

What's unique about Ryan, though, is that he’s intentionally built his advisory business in such a way that allows him to help people in their 20s, 30s, and 40s navigate the inevitable financial complexities in their lives… regardless of whether or not they have liquid assets that need managing.

In this episode, we talk in depth about Ryan’s experience that, while the industry typically assumes clients with limited assets have little financial complexity, in practice, it’s often the journey of getting to the point of actually having assets to manage that is the more complex part of the journey, why Ryan finds that the tendency of financial advisors to not specialize (unlike other professionals, such as doctors, who use different titles to differentiate amongst specialties), makes it challenging for consumers to find someone who can help with their particular pain points, and how Ryan has structured his subscription model with a varying price range specifically to align to the specialized and complex needs of his younger clientele as their own careers evolve and their income grows.

We also talk about Ryan’s commitment to remaining a solo advisor and how that makes focusing on making sure he is serving only his ‘ideal’ client all the more important to the success of his business, the third-party services that Ryan refers clients out to for their estate planning, insurance, and even investment needs (which ultimately allows Ryan to maximize the time he spends in the planning areas where he adds the most value), and why Ryan has implemented surge meetings in order to achieve the sort of work/life balance that is important to him and his family.

And be certain to listen to the end, where Ryan shares why he provides a Client Engagement Standard in his onboarding process as a way to set clear expectations around both his and his clients’ relationship responsibilities (especially given his lifestyle practice), the expertise that Ryan has developed around student loan planning as a way to differentiate himself even further, and why Ryan’s background as a teacher coming into the financial planning business has allowed him to eschew the industry’s ‘traditional’ definitions of success and create his own business goals to maximize his financial and family wellbeing.

So whether you’re interested in learning how Ryan’s structured his business to serve clients who aren’t good fits for the traditional AUM model, how he helps his clients with student loan planning, or why he’s committed to remaining a solo advisor, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Ryan Frailich.

Weekend Reading for Financial Planners (July 24-25)

July 23, 2021 03:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with industry buzz that a new Senate bill would remove the "Specified Service Trade Or Business" (SSTB) limitations on the Qualified Business Income deduction, effectively opening the door for financial advisors to claim the 20%-of-income deduction... with the caveat that those financial advisors under $329,800 of income (as married couples, or $164,900 for individuals) could already claim the QBI deduction, while the new rules would begin to phase out the QBI deduction for everyone above $400,000 of income. Which means high-income advisors who couldn't claim the QBI deduction still won't be able to under the new rules anyway (if they're even passed by Congress, which remains to be seen).

Also in the industry news this week are a number of other interesting headlines:

A Capgemini World Wealth Report highlights that high-net-worth investors are increasingly becoming adopters of robo-advisors... and also increasingly want to hire human advisors for their more complex advice needs beyond what an automated investment platform can provide
Vanguard is ramping up its own push into financial advice, as the 0.30% AUM-fee Personal Advisor Services platform surpasses $200B of AUM (albeit mostly from Vanguard users who weren't likely to hire a higher-cost independent advisor anyway?)

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

The SEC issues a new Risk Alert on hybrid advisors whose brokerage platforms may be 'double-dipping' on wrap accounts by also earning fees on underlying products
Massachusetts charges Schwab with failing to oversee an independent advisor who was billing clients even after his licenses were terminated... raising questions of what role RIA custodians should play in compliance oversight?
The CFP Board's new Managing Director of Enforcement responds to criticism about whether CFP Board is really ready to take enforcement seriously and says CFP Board is stepping up

We've also included a number of articles on advisor marketing, including:

Consumers are reporting that they don't place much trust in media financial personalities, raising questions about media PR as an advisor marketing strategy
Advisors often don't claim enough credit for their own improvements to clients, and should 'market' their new offerings
Tips on which social media platforms really drive new leads to advisors (hint: it depends on the type of clientele you're trying to attract!)

We wrap up with three final articles, all around the theme of productivity and focus:

How to distinguish between being "busy" and really improving your "productivity" (which isn't about efficiently doing more, but finding the focus to do the fewer things that really matter)
Tips to get yourself 'unstuck' if you feel like you're spinning your wheels and can't move forward
How being more willing to change your mind may seem scary (no one wants to be seen as a "flip-flopper") but research shows it is actually associated with greater wellbeing!

Enjoy the 'light' reading!

#FA Success Ep 238: Breaking Away To Independence For Freedom To Serve Clients The Way You Want, With Margaret Dechant

July 20, 2021 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 238th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Margaret Dechant. Margaret is the CEO of 6 Meridian, a hybrid-RIA located in Wichita, Kansas, that has $3 billion in assets under advisement, serving 700 clients.

What's unique about Margaret, though, is that, in 2016, she and her partners broke away from a very lucrative practice at Morgan Stanley to go fully independent, and rather than use one of the popular breakaway broker support platforms, decided to launch their own firm entirely from scratch in order to build the business exactly the way they wanted.

In this episode, we talk in depth about what it was that Margaret and her partners wanted to be able to offer their clients and their team members that they weren’t able to accomplish within a wirehouse, the circumstances leading up to Margaret and her partners deciding to break away, including the realization that, despite investing heavily into their own brand and acting as a stand-alone unit within Morgan Stanley, all the work they were doing within the wirehouse wasn’t truly their own (and instead was considered Morgan Stanley's “work product”), and the decision-making process that Margaret went through when figuring out what the business they wanted to build actually would look like (rather than simply trying to find the best recruiting offer from any number of competitors).

We also talk about why Margaret and her team ultimately opted to go fully independent, divvying up the tasks amongst themselves to launch their new firm from scratch (rather than leveraging the services of a turnkey service platform provider), the tax alpha reasoning that Margaret and her partners decided to actually launch their own family of ETFs for their clients last year, and how Margaret’s focus on reducing the number of centers of influence they sought referrals from and, instead, nurturing deeper relationships with just a few of them who had already provided referrals to 6 Meridian has helped the firm bring in increasingly larger and more complex clients.

And be certain to listen to the end, where Margaret shares some of the lessons she’s learned from being in the business for over 30 years, including the benefit of focusing her own mental energy on only the things that she can control, Margaret’s efforts towards recruiting and developing younger advisors in order to build 6 Meridian into a multigenerational firm, and the additional service offerings that Margaret is exploring as a way to provide even more value to her clients in the future.

So whether you’re interested in the thinking behind Margaret and her team’s decision to break away from the wirehouse model, why they decided not to leverage a turnkey platform when launching 6 Meridian, or the services she wanted to roll out to her clients when creating their own family of ETFs, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Margaret Dechant.