feed - Part 37

Weekend Reading for Financial Planners (Mar 27-28)

March 26, 2021 02:59 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a look at the new health insurance planning opportunities that have emerged under the American Rescue Plan, from the potential to receive several months of "free" (tax-credit-subsidized) COBRA coverage to new rules for Premium Assistance Tax Credits that can produce thousands of dollars in tax savings for those who buy health insurance from state insurance exchanges in 2021.

From there, we have several articles on advisor marketing:

What is a "Retargeting Ad" and why retargeting can be an especially efficient way for financial advisors to spend their marketing dollars
Why "Email" continues to be the #1 most popular marketing channel for financial advisors (and is becoming more popular with the rise of email marketing automation tools)
What it takes to become "an authority" where your expertise attracts your ideal prospective clients
The rise of website providers dedicated to working with financial advisors to produce websites at a "reasonable" (i.e., not $20,000+) cost

We've also included a number of articles focused on retirement planning:

Why new retirees are beginning to look at taking a "gap year" between the end of work and the beginning of retirement (to better figure out what they want to do, and where they want to live, in retirement)
How "retirement" itself isn't just a phase, but continues 6 sub-phases in retirement (that advisors can help their retired clients navigate through)
A new approach to thinking about more "flexible" retirement spending strategies and why "spending flexibility" itself is a continuum along which retirees can choose an optimal spending strategy
The rise of new Social Security training programs, from the National Social Security Advisor (NSSA) program to the new Registered Social Security Analyst (RSSA) certification

We wrap up with three final articles, all around the theme of (re-)drawing the line between work and home life:

How work itself is increasingly becoming "omnipresent", where "are you available" isn't a question of whether you're actually available and have time, but whether you're ready and willing to give attention to work at that moment
How the pandemic gave rise to the staycation (taking a vacation but staying at home), and now the work-from-home work is leading to the rise of the "workcation"
The ways that businesses are (re-)designing Paid Time Off programs in the modern environment, from more flexible sick-plus-vacation time, to "forced" vacation days, and floating holidays

Enjoy the 'light' reading!

Updating Advisor Marketing For A New Niche Without Alienating Existing Clients

March 22, 2021 07:05 am 5 Comments CATEGORY: Practice Management

Historically, financial advisors have worked with any and every client they could (or at least, any client who was interested in buying their company’s products or could afford to pay their fees), and in turn, advisor websites (and other marketing collateral) were developed to be appealing to anyone and everyone. The caveat, though, is that in an increasingly competitive advisor landscape, it is more and more difficult for advisors to differentiate themselves amongst a sea of sameness, leading to an increasing focus on developing niches and specializations as a way to stand out and attract ideal clients. Except for advisory firms that have already built a broad-based “generalist” clientele, creating a more focused niche offering – and updating the advisor’s website and other marketing materials accordingly – can make existing clients who may not fit the advisor’s more specialized future question their own fit with the firm today. Which raises the question: how exactly can an advisory firm start to focus more on their niche specialization of the future, without alienating existing clients in the process?

The starting point of making a firm’s marketing more niche-focused – without alienating existing clients – is simply to recognize how ineffective most generalist-based advisor marketing is today. Because in practice, most advisory firms struggle to get more than a few hundred visitors to their website each month, and even amongst those visitors, few get more than 1-2 prospects per month from their website (and many get none at all!). Which means, ironically, that by trying to avoid alienating any existing clients or prospects by being so broad-based, the firm is already losing out on most or all prospects who visit their website. By contrast, “just” having a message that connects with a mere 1% of prospects – with several hundred website visitors each month – could actually produce 3 qualified leads every month. Which means the approach doesn’t alienate… it’s actually a significant improvement from the status quo!

In the process of actually becoming more niche with an advisor’s marketing, there are several factors to consider, depending primarily on the size of the existing firm, how many advisors it has, and how focused it already is (or not). For solo advisory firms, the reality is that once the founder/owner/advisor decides to go niche, that’s all the buy-in it takes, and solo advisors who want to get started simply have to choose whether they want to rebuild their current website into their new niche, or alternatively create a “microsite” that is separate from their existing website, target that very specifically to their niche, and over time as their new niche grows, shift to make the new niche-focused site their primary business website over time (while keeping their existing website to avoid making existing clients feel alienated).

When it comes to larger multi-advisor firms going niche, though, determining a niche often requires consensus from multiple advisors willing to narrow their focus and excel in one area. If the multi-advisor firm can come to a consensus, the firm can begin to rebrand accordingly. More often, though, multi-advisor firms end out with multiple niches – rather than choosing just one – which requires the firm to adopt an approach more akin to regional law or accounting firms, which create “Practice Leaders” to lead each niche within the firm, and the firm’s website then highlights its list of specialized “Practice Areas” (not just a list of all types of clients, but a menu of dedicated services each specifically crafted for a particular type of client, with a dedicated Practice Leader with specialized expertise to lead it). Alternatively, for firms that can’t even decide or commit to a particular group of niches – or even whether to niche, because some advisors wish to and others don’t – a multi-microsite approach is more effective, where each advisor specialization creates its own microsite targeted to its own clientele, as a standalone offering “Powered By” the parent firm.

Ultimately, the strategic shift of becoming niche is not an easy or simple one—gaining marketing momentum, experience, and trust takes time. However, transitioning into a niche can – and often is –accomplished incrementally anyway, precisely because it takes time to be known, liked, and trusted in a new area of specialization. And the framework of developing Practice Areas and/or microsites allows advisory firms to make the transition as gradually as they want or need to. Though ironically, the reality is that for firms that already serve their clients well, the risk of alienating existing clients with a new niche focus is low, as in practice it’s more often the clients who are concerned about whether they will be rejected by the firm, and upon being told of the new niche focus, won’t declare they’re leaving and instead will simply ask “will we still be allowed to keep working together, too?”

Weekend Reading for Financial Planners (Mar 20-21)

March 19, 2021 03:00 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big tax planning news that the IRS is delaying the standard April 15th tax filing deadline until Monday May 17th instead... providing some welcome relief to tax filing deadlines, and more time to implement recent tax law changes (from Recovery Rebate checks to non-taxable unemployment insurance), and creating a quagmire of misaligned deadlines as Q1 2021 estimated tax payments (and many state tax return deadlines) remain with the original April 15th deadline!

Also in the news this week are a few other industry headlines, including:

Sorting through the confusion of how RMDs will work in 2021, between the 2020 suspension of RMDs under the CARES Act, new life expectancy tables taking effect in 2022, and the new age 72 onset of RMDs under the SECURE Act
The ongoing rise of state fiduciary rules is creating a growing patchwork of dissimilar regulations troubling both small firms with clients across state lines and large firms with entire branches that span multiple states

From there, we have several articles on personal and team productivity:

How real productivity is not about getting 'more efficient' with your time, but getting clearer about what the Most Important Thing (M.I.T.) is to be doing with the limited time you have
The results of one company that has been testing out a 5-hour workday to balance productivity and employee satisfaction
How author John Steinbeck achieved epic levels of productivity (including 33 books and a Nobel Prize) by staying largely inactive most of every day

We've also included a number of articles focused on personal finance tips:

The most popular Password Managers to use to keep financial (and other) accounts in good order
Tips on what to keep, shred, or scan as financial records increasingly move online
A profile of Mint.com and how it has unfortunately languished in recent years of non-development (yet remains astonishingly popular)

We wrap up with three final articles, all around the theme of what it takes to become and remain "rich":

How often the pathway to becoming rich involves taking concentrated risks but staying rich is almost always about diversifying away from them
Why being "rich" is a relative phenomenon that's all about comparing who you spend time with (making most of us feel not-rich even if we are!)
The difference between being "rich" and being "wealthy" (and why it takes different skills for the latter than the former)

Enjoy the 'light' reading!

Kitces Webinars Speaker Submissions

Welcome Prospective Webinar Speakers!

At Kitces.com, our primary goal is to deliver high-quality and relevant content to the financial advisor community. As a part of our strategy, we curate a variety of the industry's leading experts and thought leaders to deliver monthly presentations on the topics that matter most to financial “advicers”.

Over the past year, the popularity of Kitces webinars has grown dramatically with typical turnouts of 800 – 1,000 participants for each session. In light of our continued growth, we are looking to broaden our roster of speakers and presenters.

Interested in being one of those speakers? Then read on!

How We Evaluate Kitces Webinar Speakers

We don’t care how well-known you are or how big your social media presence is. (If you do have a big following and want to share out, that's fine too!)

What do we look for in a potential webinar presenter? Three things: 1) The quality and relevance of your content as it relates to financial advicers, 2) The expertise you possess on the topic, and 3) Your ability to effectively engage an audience virtually and through video.

The Content We Are Looking For

Kitces webinars are intended specifically for financial advicers. Therefore, the content should directly relate to the issues and challenges faced by those in the business of providing financial advice and/or provide advanced education on a technical topic pertinent to practitioners.

Accordingly, Kitces.com's webinars are typically delivered by industry experts who work on a full-time basis as financial planning practitioners, academics, or consultants and have specialized knowledge about advisor needs and concerns.

A Little Bit About Kitces Webinars

Our Kitces webinars have a slightly different format than other webinars you may have seen or participated in. We work with our presenters to produce a pre-recorded educational video presentation before the event itself. The video is then used in two ways:

We will live stream the video at a prearranged event time to our financial advicer audience. Following the presentation of the recorded video, the presenter will participate in a 30-minute interactive Q&A with attendees.
We will post the recording in our private Kitces.com Members Area, where viewers can take quizzes (which we prepare) to earn continuing education credits.

We will post the recording in our private Kitces.com Members Area, where viewers can take quizzes (which we prepare) to earn continuing education credits.

How To Become A Kitces Webinar Speaker

Through our webinar submission form, you can provide us with information regarding the specific presentation that you would like to deliver, as well as some details about yourself. (Only presentations that have already been created will be considered. If you are still in the creation stage, please develop your idea into a full presentation before submitting for consideration.)
If selected, the Kitces.com Team will review your content, provide feedback, and may make recommendations for changes. Presenters must be open to possible changes to their content to ensure it meets Kitces.com standards for depth and style. (We do, however, aim to work productively and collaboratively with our presenters to ensure all parties are comfortable with the resulting Webinar.)
We will provide you with the equipment (including camera, lighting, and sound) and the instruction necessary to film yourself. The one exception is a computer, which you must already own. (Note: Though our team assists in the process, presenters must have the ability to set up and learn to use basic filming equipment, which can include lighting, web or device cameras, and be able to upload and use new software and upload rough cut videos.)
Our Kitces team will take it from here. We will produce the video (including sound, video, and other edits as necessary), and create any additional resources or handouts for attendees. (Note: Kitces.com maintains consistent branding in our webinars. Which means while we gladly highlight the expertise of our presenters and their associated organizations, works, and accomplishments, all video and handout materials will be created in Kitces branding.)

Speaker Compensation

Compensation ranges from $1,000 to $3,000 for presenters based on their speaking experience.

Submit Your Information

Still interested? We hope so! If you want to partner with one of the most respected brands in financial planning and share your skills and expertise with the advisor community, please fill out our webinar submission form.

Watch sample submission videos here.

Webinar Submission Form

If still have questions, feel free to email us at [email protected]. However, please make sure to read through this page and the submission form thoroughly to ensure your questions have not been addressed already.

#FASuccess Ep 220: Taking A Tech Startup Approach To Building And Pivoting Your Advisory Firm, With Shane Mason

March 16, 2021 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 220th episode of the Financial Advisor Success podcast!

My guest on today’s podcast is Shane Mason. Shane is the co-founder of Brooklyn FI, a fee-only RIA that Shane and his partner AJ founded in 2018 in Brooklyn, NY (but has since shifted to being fully virtual), that serves 159 next-generation clients charging a monthly subscription fee of almost $500 per month for their ongoing financial planning services.

What’s unique about Shane, though, is how he and his partner have intentionally built their advisory business in the style of a tech startup, acting as de facto product managers within their advisory firm... where their financial advice service offering is a product unto itself, and they continually iterate on that advice product to quickly respond to new client opportunities in the marketplace.

In this episode, we talk in-depth about how Shane and Brooklyn FI first launched into a niche of serving successful creatives operating as high-income sole proprietors, why they decided to pivot away from the creatives niche to a focus on people who work in the tech industry and have complex equity compensation planning needs, how almost all of Brooklyn FI’s new clients are referrals from tech industry Slack channels and message boards, and why Brooklyn FI has been especially successful by publishing their fees right on their website to maximize the accessibility of their highly specialized expertise to the most highly motivated time-sensitive clients.

We also talk about Shane’s early career as a CPA, and the path he took that eventually led him to decide to launch an independent RIA, why (after long consideration) he and AJ intentionally structured Brooklyn FI as a 50/50 partnership from the start despite the fact that he was the only one bringing existing clients and revenue (and how that partnership has turned out to be the “secret sauce” behind the rapid growth of their firm), and how Brooklyn FI communicates with legacy clients in the niche that Brooklyn FI no longer focuses on and who aren't a good fit for the firm anymore,

And be sure to listen to the end, where we talk about how Shane has moved away from actively seeing clients in order to focus on broader business opportunities that the rapid growth of the firm has created, the firm’s internal initiatives to expand its structure to support more scalable growth in the future, and the key lesson that Shane shares around getting comfortable delegating the things that he’s already mastered.

So, whether you're interested in how Brooklyn FI has grown so quickly since launching in 2018, why equity compensation planning is such a ripe opportunity for advisors, or why Shane and AJ structured their firm as a 50/50 partnership from the start, then we hope you enjoy this episode of the Financial Advisor Success podcast.

Weekend Reading for Financial Planners (Mar 13-14)

March 12, 2021 02:59 pm 4 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 SEC's new Marketing Rule has officially hit the Federal Register, which means it will not be paused or rolled back and is going live (with an effective date of May 4th, and a compliance date of November 4th in 2022), ushering in a new era of social/digital marketing and what is anticipated to be a rapid rise of the use of client testimonials and the emergence of third-party review sites for financial advisors.

Also in the news this week are a few other industry headlines, including:

FINRA is proposing a new rule to help it better clean up "bad actors" after reports continue to emerge of brokers who are even in jail awaiting trial for murder or fraud but still don't have their indictments showing on FINRA BrokerCheck
How the shift to virtual is expected to create a new boom in the move to independence as more advisors seek to capitalize on the flexibility that virtual advisory firms allow

From there, we have several articles on the recent phenomenon of NFTs (Non-Fungible Tokens):

An explainer on what an NFT actually is and how they work
How NFTs allow creatives to monetize their audience and fans in a way that wasn't possible in the past
Why NFTs may be here to stay as a collectible but still aren't necessarily good to view as an investment

We've also included a number of articles focused on practice management and hiring:

Best practices in hiring remote virtual employees (or more generally, the first time the firm hires a new employee in a new state!)
Tips for writing an effective job description to attract good talent
Research on what it really takes to improve the industry's gender diversity (hint: it starts with how firms promote new job openings in the first place)

We wrap up with three final articles, all around the theme of finding more success:

Why it's important to build skills over just looking for "hacks"
How having too many priorities really means having no priorities at all
How the "Common Denominator Of Success" is in making a habit of doing the things that other people don't want to do

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (Feb 27-28)

February 26, 2021 02:50 pm 10 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry news that Apex Clearing is going public via a SPAC and in the process will raise a massive $850M of cash to reinvest into its custody and clearing services, with a particular eye on pivoting away from its roots in serving as a back-end platform for robo-advisors and instead bringing its 'tech-savvy custodian' solution to take on the oligopoly of current RIA custodians including Schwabitrade, Fidelity, and Pershing.

Also in the news this week is some buzz that state regulators are taking a closer look at the rise of 'alternative' advisor business models like monthly subscription fees and scrutinizing whether clients are really receiving services commensurate with the ongoing fees that they're paying... and in the process are discovering that the potential of "fees for no service" may be a problem in the currently popular AUM model as well.

From there, we have several articles on advisor compensation and career tracks:

The latest Schwab Advisor Compensation study, which finds there's a rapidly emerging 'war for talent' that is causing compensation for experienced advisors to spike
More and more large advisory firms are beginning to develop internal career paths, as it becomes increasingly appealing for firms to attract and develop young talent themselves
How equity is becoming more common as a component of advisor compensation, but usually still with some level of buy-in attached

We've also included a number of articles focused on improving a firm's client experience, including:

Tips from the "Book Of Wow" on how to create not just good client service but "Wow" client experience moments
How it's the first four points of contact with an advisory firm that set the tone for the entire relationship
The importance of taking a hard look at a firm's initial onboarding experience to help set and manage expectations
A discussion of what really is the "ideal" number of clients for a financial advisor to have (and really be able to serve effectively)

We wrap up with three final articles, all around the theme of what it takes to really create value for clients:

How medicine shows us that some of the best and most impactful advice is really just about helping people actually implement the simple habits that truly matter
Why having difficult conversations is becoming a key skill for financial advisors to hone
Why there's so much value in not just paying for expertise itself but having a relationship with an expert on an ongoing basis... which helps to explain why, despite all the naysayers, the AUM model continues to rise and advisory fees have remained so resilient in the face of the ongoing threat of fee compression?

Enjoy the 'light' reading!

#FASuccess Ep 217: Creating Value For Next-Generation Clients By Focusing On Actions Over Projections, With Sophia Bera

February 23, 2021 07:08 am 5 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 217th episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Sophia Bera. Sophia is the founder of Gen Y Planning, an RIA based in Austin, Texas that serves just under 100 young professionals in their 20s, 30s, and 40s.

What’s unique about Sophia, though, is that she was one of the first financial planners to launch a “location-independent” firm, specifically to serve Millennial clients using an up-front plus monthly retainer model that now averages $400 to $500 per month for each of her new clients… yet uses a one-page financial plan and an Action Checklist – not comprehensive financial planning software – to deliver ongoing financial planning value to her next-generation clientele.

In this episode, we talk in-depth about how Sophia and her fully virtual team help Millennial clients navigate the plethora of changes and decisions they face as they establish their careers and their families. How Sophia structures her initial client meetings around goal and value discovery and then putting together her one-page action checklist before establishing an ongoing meeting schedule, why net worth reporting (and not portfolio reporting) is at the heart of her planning process, and why she eschews more mainstream financial planning with its long-term retirement projections in favor of solutions that focus on shorter-term goals instead.

We also talk about how working with next-generation clients can entail a higher turnover rate than managing portfolios for retirees, why Sophia is less worried about retaining a stable book of clients than she is about having the capacity to work with people who need her help the most, the way that Sophia is starting to offer established clients new options around how they can structure their ongoing planning relationship as their needs change, and how Sophia’s own life experiences drive home just how much the quick-fire pace of life changes make a financial planning relationship so valuable for those still in their 30s.

And be certain to listen to the end, where Sophia discusses the deliberate steps she and her team took to prepare ahead of her maternity leave (to the point where her out-of-office responder made it explicitly clear that she wasn’t responding to emails at all for four months), how she spent the first month after returning from her maternity leave focused on the business rather than meeting with clients, and how she’s been able to intentionally build her firm and structure her schedule to make a good living while still having time to focus on the things that are important to her outside of her business as well.

So if you're interested in learning about Sophia's experience with retention rates within a subscription-based fee model, how she's structuring her fees for longer-term clients, and how she incorporates a one-page action plan as a client deliverable, then we hope you enjoy this episode of the Financial Advisor Success podcast!

How To Study For (And Pass) The CFP Exam

February 22, 2021 07:01 am 21 Comments CATEGORY: Personal/Career Development

Since 1991, the CFP Board has offered the CFP certification exam to establish a high standard of excellence for financial advisors to act as fiduciaries for their clients. The exam is a rigorous, 6-hour test, and is offered only three times a year. Because of the rigorous nature of the exam and the scope of material covered (not to mention the relatively low pass rate generally ranging from 60–65%), candidates aspiring for CFP certification invest an inordinate amount of time to ensure that they pass the exam. And to make sure that they structure the time devoted to test preparation most accurately, candidates need to consider several factors, including the requirements to take the CFP exam, their own learning styles and study habits, the resources available to them, and how to structure a schedule to follow to stay on track to best prepare for the exam.

The first important key for any CFP candidate to create a workable study plan for the CFP exam is to understand whether they are visual, auditory, or kinesthetic learners. By knowing their own learning style, candidates can implement the most useful CFP exam prep tools to help them retain and apply the information they will need to pass the exam. Understanding their learning style can also help candidates choose the right CFP exam review course to prepare for the test. While review programs can be expensive (generally ranging from $800 to $1,500), they have helped many candidates successfully prepare for (and pass!) the exam by conditioning them to the style and pacing of questions, helping them review material and create a framework to recall important facts, and providing general support and practice materials.

Candidates will find that creating a structured study schedule is critical for successfully preparing to take the exam. The general recommendation is to devote at least 10 hours per week, with a total of 150-250 hours (which means approximately 4-6 months of preparation), to study for the CFP exam. While most review courses guide candidates through creating a structured study plan, candidates should ensure that they actually stick to their plan of action and devote ample time to any areas they may be struggling with, being mindful to learn and understand the material – not just to memorize it – knowing how the breakdown of topics covered by the exam are weighted. Taking practice exams and working through as many practice questions as possible will help candidates get accustomed to the nature and scope of questions that will be on the exam.

During the final stage of exam preparation, candidates should focus on developing confidence in passing the exam, spending time reviewing the basics in each topic area, and getting plenty of rest to mentally prepare for exam day. On the day of the test, candidates should ensure they have their calculator (and a backup, if possible), a valid photo ID, and a packed lunch that can be kept in their car or on-site locker.

Ultimately, attaining CFP certification is no small task; the exam requires a great deal of commitment and requires candidates to build up enough confidence to actually decide – with conviction! – to pass the exam. While preparing for the exam requires hard work, focus, tenacity, and a lot of effort, the payoff is well worth the sacrifice. CFP professionals can confidently set themselves apart as competent and knowledgeable financial planners who can use their financial planning knowledge to positively impact their clients’ lives by helping them achieve their goals!

#FASuccess Ep 216: The Financial Advisor As Curator And Redefining The Value Of Financial Expertise, With Jason Zweig

February 16, 2021 07:04 am 7 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 216th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Jason Zweig. Jason is a financial journalist who wrote one of the first books on behavioral finance and neuro-economics and writes the "Intelligent Investor" column for "The Wall Street Journal." What's unique about Jason, though, is his perspective on the financial services industry, having covered it for nearly 25 years, and why he sees the future value proposition of financial advice as being less of an 'expert' and more about the advisor as a 'curator' who identifies the best solutions and systems for clients to get the answers they need.

In this episode, we talk in-depth about the parallels between the fiduciary ethics of financial journalism and financial planning, the difficulties that consumers face in trying to determine who is a credible journalist or credible financial planning expert, and why being able to say, "I don't know," in response to a client's question can actually be viewed as a litmus test for who is really a true expert in the needs of their clients.

We also talk about the evolving value proposition of financial advisors themselves, the behavioral value that advisors can add to their clients beyond just trying to get higher returns, why even the hand-holding value proposition of helping clients manage their behavior could eventually be replaced by technology, and Jason's views on why the AUM model has been so stubbornly persistent, despite decades of naysayers calling for its demise.

And be certain to listen to the end where Jason shares why he doesn't believe financial planning is yet a true profession and what it would take to get there, why he's written a number of sharp, investigative articles about financial advisors and the CFP Board, in particular, over the past decade, and his guidance about where new financial advisors should focus if they want to be successful in the decades to come.

So whether you’re interested in learning more about how Jason views the "art" of giving financial advice, whether he sees advisory fee models changing, or his perspective on whether financial planning is a profession, then we hope you enjoy this episode of the Financial Advisor Success podcast.