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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the big news that the first independent study on the SEC's proposed Form CRS disclosures on the relationship differences between working with an advisor or a broker... finds that not only do consumers fail to understand the differences in obligations between the two as "explained" by Form CRS, but they misinterpret Regulation Best Interest as being comparable to a fiduciary standard when it's not, and couldn't even articulate the differences in costs and services between brokerage versus advisory accounts after reading Form CRS in depth.

Also in the news this week was fresh buzz about the potential for "Tax Reform 2.0" legislation, including a push to make all of the "temporary" sunsetting provisions of the Tax Cuts and Jobs Act permanent... with the caveat that the legislation (or what is actually a combination of three different bills in the House) is viewed as likely being dead-on-arrival in the Senate, and that, realistically, any further momentum on tax reform won't likely happen until 2019 at best (and then will depend on the outcome of the midterm elections).

From there, we have several more articles about the Tax Cuts and Jobs Act and recent IRS guidance and planning strategies, from a discussion of the new Kiddie Tax rules and how they work for dependent children, to new IRS guidance on some of the 529 college savings plan provisions of TCJA (in particular, that any type of public, private, or religious school counts for the new opportunity for up-to-$10,000/year of tax-free distributions for K-12 expenses), and a look at how a 50-year-old crackdown on Controlled Foreign Corporations (CFCs) may suddenly be experiencing a revival as a proactive tax planning strategy in a world where top individual tax rates are 37% but the top corporate tax rate (including on CFCs) is "just" 21% now.

We also have a few practice management articles, including: how to tell when advisory firm owners may be "starving" their advisory firm's growth opportunities by taking too much out of the business (hint: if the owners extract more than 40% of revenue in some combination of compensation and profits, it may be getting "over-milked"); how to formalize the structure of a firm-wide compensation plan for employees so they better understand their upside career opportunities; why the biggest blocking point to better advisor technology is no longer the lack of advisor tech innovation but the struggles of individual advisory firms to effectively adopt the software; and why large financial services firms should consider establishing a "Chief Planning Officer" (CPO) role to better shepherd the transition from traditional financial services product sales to an advice-centric planning business.

We wrap up with three interesting articles, all around the theme of working with couples where the wife outearns the husband: the first explores how marital strife and divorce rates appear to be higher amongst the nearly one-third of couples where the wife earns more; the second covers another recent research study finding that when wives earn more, they tend to downplay her income while overstating his income to narrow the perceived gap (even when reporting to government entities like the Census Bureau!); and the last provides some recommendations of what to consider and bear in mind when providing financial advice to and working with couples where she earns more (and the importance of not making any assumptions about their money dynamics based on who happens to be the primary breadwinner).

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the recent announcement that President Trump has issued an Executive Order for the IRS and Department of Labor to review (and ease) the rules around Multiple Employer [retirement] Plans (MEPs) as a way to expand small business access to employer retirement plans, ideally bringing down costs through greater economies of scale, and at the least giving 401(k)-centric advisors a new way to work with small business owners (by creating and offering their own Open MEP solution?!).

From there, we have several articles about advisor marketing this week, from a look at how it's not enough to just have a good value proposition for clients if you can't also explain the process you'll use to achieve it and provide some "proof" (e.g., sample deliverables) to show your results, to how to engage in a formal "marketing makeover" for your firm (which starts with crafting your own one-page marketing "messaging brief" before you hire anyone to help you implement it, why it's so important to keep asking "why" (literally, over and over again) to prospects to truly understand their needs, and the reason that advisory firms doing in-person seminar marketing are now turning to Facebook digital advertising as a more cost-effective path to get prospects to attend their seminars in the first place.

We also have a few practice management articles, including: how to think through different types of financial advisor business models based on what's actually being provided to clients (e.g., investment-only, investments with some planning as needed, planning with some investments as needed, or financial consulting only); why it's crucial for advisory firm owners to separate out their compensation for the work in the business from their profit distributions for the income from the business; what it takes to successfully take a 6-week sabbatical away from your own advisory firm; and the issues to consider when your multi-advisor partnership actually has to "vote a partner off the island" and remove a partner from the business (without collapsing the business itself in the process!).

We wrap up with three interesting articles, all around the theme of better understanding our own motivations and focus: the first explores fascinating research that finds one of the best ways to help people improve their situation is not for them to receive good advice but actually for them to give it to others, which actually cements their own confidence in their knowledge and helps them formulate a specific plan of action (the one they're recommending to others as well!); the second looks at how, in the end, there really are no "natural born salespeople," just people who have a natural desire to help others and learn the very learnable sales skills and conversations it takes to succeed; and a fascinating look at how the popular wisdom to "find and pursue your passion" is awful advice, because, in reality, passions are more likely to evolve from something we actively do, not be something that already exists that we decide to pursue and do more of (which means it's better to just start doing something you're interested in and let the passion develop, rather than trying to intuit your passion in the first place).

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the announcement of the CFP Board's latest public awareness campaign, which will kick off this fall with a series of new ads around the theme of promoting a "more confident today and more secure tomorrow... with a CFP professional," as the public awareness campaign completes its 6th year of spending $10M+/year from its $145 assessment on what is now 82,000+ CFP certificants.

Also in the news this week was an interesting private letter ruling from the IRS that may clear the way for employers to provide "matching" 401(k) contributions, based not on an employee's own contributions to the plan, but their payments for their student loans instead (which might alternatively be framed as employers providing student loan assistance for those employees who are also willing to save towards retirement), and a discussion from SEC Commissioner Clayton about possibly expanding the accessibility to private investments for main street investors (potentially through the use of a financial advisor).

From there, we have several articles about investment trends in the industry, from a look at how more and more mutual fund companies are beginning to automatically convert C-shares to A-shares after 7-10 years (ostensibly in response to the SEC's Share Class Selection Disclosure Initiative earlier this year scrutinizing brokers that used higher-cost share classes when equivalent lower-cost alternatives were available), to the rising concern from Morningstar that not all "Clean" shares are equally clean (and why "bundled", "semi-bundled", and truly "unbundled" categories may be a better descriptor), and the discussion of how advisors are becoming even more proactive in seeking out better cash yields for clients who don't want the low-yield cash sweep options available from most broker-dealers and RIA custodians today.

We also have several marketing-related articles this week, including: why it's important to not just explain to clients the benefit of working with you but also the consequences of not working with you; how to change your seminar evaluation firms to get prospects to book more follow-up appointments; and how when it comes to complex services like financial planning, it's not enough to simply show that the advisor has solutions to solve the client's problems, it's also necessary to engage in a conversation to help clients better define what the problems are that they're really trying to solve for in the first place (which clients sometimes don't realize themselves)!

We wrap up with three interesting articles, all around the theme of our very human struggle to be part of the herd and liked by others, and how it can adversely impact us: the first looks at how many advisors find themselves unhappy in their advisory firms because they build towards the peer pressure of what others are doing (e.g., "grow more!" or "get bigger!") instead of focusing on the goals for the firm that will make them personally happy; the second explores how increasingly collaborative work environments are leading to rising employee overwhelm and burnout because it can be so hard to figure out how to say "no" to co-worker requests (especially when our identity is built around being the go-to person in the office that likes to help people as a "good team player"); and the last provides a powerful reminder that to be a good leader, it's crucial to not always try to be "nice", as the reality is that sometimes team members need hard feedback... instead, focus on being honest, consistent, and rigorous, and then deliver those messages as nicely as you reasonably can.

Enjoy the "light" reading!

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Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the big news that Fidelity has launched an entirely free index mutual fund, with an outright expense ratio of 0.0%, in what financially is only a modest decrease in cost from the near-zero expense ratios of many index funds already, but represents a major shift in the industry as asset managers officially begin to focus on generating revenue beyond "just" their investment products alone. Also in the news this week was an announcement that the Trump administration is considering a proposal that would index cost basis to inflation over time, effectively applying capital gains on only "real" gains (above inflation), in what would potentially be a game-changer for the relative value of taxable accounts over tax-preferenced retirement accounts (that would have no such basis adjustment).

Also in the news this week were a number of major industry announcements, including that the CFP Board will be launching a series of public forums over the next 18 months to train CFP professionals on the new Standards of Conduct (and gather feedback on where the Standards Resource Commission should issue additional guidance), the Financial Planning Association announces a newly updated "Primary Aim" for the organization with an increased focus on advocacy for the profession, and the latest FA Insight study shows that advisory firms continue to enjoy strong growth in the midst of an ongoing bull market but that profit margins continue to decline (now to an average of just 20%) as pressure rises on firms to reinvest in their value proposition to justify their fees (which are now also beginning to show signs of competition and compression).

From there, we have a number of regulatory articles, including a surprising SEC action against Schwab Advisor Services that may put newfound pressure on RIA custodians to have a more active role policing the RIAs that use their services (particularly with respect to anti-money laundering regulations), some new guidance from the SEC on what constitutes 'inadvertent' custody for which the RIA will not be punished for failing to adhere to the Custody Rule, legal risks to consider for advisors who are publishing content (e.g., blogs or newsletters) and don't want to get in trouble for plagiarism or copyright violations, and a look at just how far the CFP Board's fiduciary regulations have come in the past 11 years (and where they may go from here).

We wrap up with three interesting articles, all around the role and value of financial advisors in the eyes of consumers: the first is a fascinating look at what leads consumers to switch financial advisors, finding that changes in personal or financial circumstances (from divorce or marriage to significant increases in income or net worth) are most likely to cause a consumer to switch advisors (despite the fact those are often the "money in motion" triggers that cause clients to become more profitable for their existing advisor!); the second looks at how financial planning as a profession has evolved over the past 45 years since the first class of CFP certificants in 1973; and the last looks at new research on the value of financial designations themselves, finding that consumers with higher incomes and investable assets really do tend to pay more to advisors who have such professional designations!

Enjoy the "light" reading!

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