feed - Part 81

How Video Conferencing Can Put The Face-To-Face (Back) Into Distant Financial Planning Client Relationships

July 27, 2015 07:01 am 27 Comments CATEGORY: Practice Management

Financial planning is a relationship business, but in our increasingly mobile and time-stressed society, it’s harder than ever to maintain face-to-face relationships. Not just because it may be difficult to find a time to schedule an in-person meeting with clients, but also because many clients relocate and aren’t even in the area for a face-to-face meeting!

Yet with the rise of broadband internet access, it is now increasingly feasible to use video to connect with clients at a distance. Of course, many advisors already communicate with clients at a distance via emails and telephone calls, but the significance of video is that it literally puts the “face-to-face” back into a distance-based relationship. You can see the client, the client can see you, and all the non-verbal communication that is lost in a telephone call or an email comes back into the conversation.

And notably, video is relevant not just for maintaining face-to-face relationships with existing clients, but as a means to build a relationship with new clients as well. In fact, arguably it may be even more feasible than ever for advisors to build relationships with new clients at a distance, as video allows even those who have never “met” in person to get to know each other, face to face!

Weekend Reading for Financial Planners (July 25-26)

July 24, 2015 02:39 pm 22 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 landscape for the Department of Labor's fiduciary proposal, now that the public comment period has closed (with a whopping 775 comment letters submitted!), and moves on to public hearings, potential revisions of the rule... and a looming deadline of implementation in 18 months or risk having the rule derailed by the next administration.

From there, we have a few technical planning articles this week, including a look at the woes of energy-related MLP investments that have tumbled this year amidst declining energy prices, a discussion of how lifetime income annuity payouts may soon take a hint as the industry prepares to implement updated RP-2014 actuarial tables, and some tax issues to consider in retirement when coordinating between IRAs (and their prospective RMDs) and the taxability of Social Security benefits.

There are also a few practice management articles, from the latest Schwab benchmarking study for RIAs showing that the typical firm has doubled its revenues since 2009(!), the dynamics for advisors working in wirehouses as the large firms seek to fight the breakaway broker record as post-financial-crisis retention bonuses start to expire, and some issues to consider when running client appreciation or prospective client marketing events (especially from the compliance perspective).

We have a couple of technology-related articles this week too, from practical tips on cybersecurity for advisors, to a look at the big industry news that SS&C has decided to start pushing Advent Axys users over to Black Diamond, and some tips from financial advisor Dave Grant on new technology tools for advisors to check out (including website design providers, new planning software, and more).

We wrap up with three interesting articles: the first is a profile of SigFig, a firm in the "robo-advisor" category that has a whopping $350B of assets loaded into its analytics tools but only a paltry $69M of AUM, as the company begins a pivot towards working with established financial services firms (e.g., banks) to find growth; the second is an interesting new study from the Journal of Financial Planning, which finds that extroversion and agreeableness are (modestly) correlated to higher levels of net worth; and the last is a profile of 29-year-old financial planner Pamela Capalad, who engages clients by meeting over brunch (with a business literally called "Brunch & Budget") and has been able to build a base of almost 100 clients, mostly "hard-to-reach" Millennials, in just the past 3 years.

Enjoy the reading!

Weekend Reading for Financial Planners (July 4-5)

July 3, 2015 02:47 pm 22 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with a look at TD Ameritrade's efforts to expand its Amerivest managed account into a full-fledged "hybrid" advisor solution (robo-technology plus TD Ameritrade retail branch advisors), raising the question of whether, given that Amerivest already has over $11B of AUM, it may become the largest "robo" solution by 2016. Also in the news this week was a discussion of how Schwab and Fidelity have been 'passing through' a portion of the shareholder service fees of certain no-transaction-fee mutual funds to large RIAs on their platforms, and whether doing so creates untenable conflicts of interest for RIAs that will end out being compensated more for using those funds in client portfolios over any others.

From there, we have several practice management articles this week, from a discussion of how to improve client review meetings by systematically implementing a pre-meeting survey to ensure the meeting is focused on what clients want to talk about the most, to the importance of creating standard processes in an advisory firm to cut down on potential advice mistakes, along with an article on how to get more insight from the results of your client surveys by discussing the responses with your client advisory board, and a look at some common 'myths' in web-based marketing for advisors and how to overcome them.

There are also a few more technical-competency articles this week, from a look at whether today's lifetime annuity products should be replaced with a "tontine" structure that was popular hundreds of years ago, to the portfolio design mistakes that some advisors may unwittingly be making (e.g., having clients hold a mortgage paying 4% interest while keeping a portfolio allocation in bonds paying only 2%!), to whether Deferred Income Annuities should have a role not just in planning for extended retirement longevity but also as a pre-retirement vehicle.

We wrap up with three interesting articles: the first is a discussion from industry commentator about why he thinks "the AUM fee is toast" and that advisors will increasingly migrate towards retainer-style fee structures; the second is a retrospective look at the CFP Board as it celebrates its 30th anniversary as an organization managing the CFP marks since it was spun off from the College for Financial Planning in 1985; and the last is a great summary article of "37 ways to upgrade your practice" that has a number of tweaks you could take and implement now in your advisory firm during the slower summer months.

Enjoy the reading, and happy Fourth of July!

Designing The Financial Planning Software Of The Future – Calculator, Collaboration Tool, And Client PFM

June 29, 2015 07:01 am 19 Comments CATEGORY: Technology & Advisor FinTech

As the world of financial planning evolves, so too does the technology that supports it. And in the coming years, nothing may evolve in the world of advisor technology as much as financial planning software, as it continues its transition from simply being a ‘calculator’ to project the impact of financial planning strategies and recommendations, into an entire platform for ongoing collaborative financial planning for clients.

Yet the evolution of planning software is creating distinct new challenges from a software design perspective, as the tools are increasingly used in three distinct contexts: an interactive collaborative planning tool between advisors and clients in meetings, an ongoing monitoring and personal financial management (PFM) tool for clients, and an advisor support tool for everything from complex analyses to tracking and alerting which clients need assistance. Not to mention the increasing amount of ‘meta data’ available about the advisory business and its clients as well.

In fact, going forward financial planning software designers may need to increasingly view the use of the software through each of these distinct lenses – advisor, client, and advisor-client interaction, as well as business meta-data – to advance the efficacy of planning software, as each use case for planning software is creating its own unique needs and challenges for advisors to work with clients and enhance client outcomes!

The Ongoing Evolution Of Financial Planning Software – From Calculator To Collaboration To Client Portal

June 22, 2015 07:01 am 17 Comments CATEGORY: Technology & Advisor FinTech

For much of its history, financial planning software was basically just an elaborate calculator. Advisors could gather client data, feed it as input to the calculator tool, and the software would spit out the projected results… which were then used to facilitate the sale of a product.

As financial planning has evolved to be primarily about the delivery of advice itself – not just for the sake of a product sale – so too has the software evolved, from a calculator to illustrate the outcome of a product or strategy recommendation, to a collaborative tool that can be used to formulate the client’s plan itself. After all, given the complexity of an uncertain future, it’s hard to really understand what path to pursue, until the client first analyzes a range of scenarios to understand the opportunities. Accordingly, financial planning software has increasingly become a tool for real-time collaborative scenario planning.

In the future, though, financial planning software can and will progress further, from a tool that supports collaboration at a single point in time, to one that truly supports continuous planning for the reality of continuous change we face in our lives. Imagine a holistic personal financial management (PFM) solution for clients, that simultaneously operates as financial planning software for the advisor, all continuously updated from external data flows, making it feasible for the advisor and client to see the milestones and recommendations that have already been accomplished, and whether the client is on track in progressing towards goals of the future.

Weekend Reading for Financial Planners (Jun 20-21)

June 19, 2015 02:39 pm 20 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with an interesting article from Investment News, highlighting that while there's a growing discussion of how advisors can use "big data" to improve their businesses, asset managers may already be using "big data" insights by tracking every metric they can about us as advisors, to figure out which might be interested in using their company's investment products!

From there, we have several technology-related articles this week, including: a new "platform" bundled-technology partnership between portfolio reporting software Black Diamond and financial planning provider MoneyGuidePro; a review of one advisor's good (and some challenging) experiences using the eMoney Advisor account aggregation portal with clients; issues for advisors to consider as Windows 10 rolls out later this summer; a review of an emerging new financial planning software provider called WealthMinder; and a first look at a coming "Financial Health/Wellness" app coming out soon from FinanceLogix.

We also have a few more technical-competency articles this week, from a discussion of key issues to consider when clients become eligible for Medicare (e.g., when it is, and is not, ok to delay enrolling in Medicare!), to the issues that must be raised with clients who are thinking about retiring abroad, to a first look at how estate planning strategies may change if recent White House proposals are enacted that would eliminate the stretch IRA.

We wrap up with three interesting articles: the first looks at how financial planning services should be offered to younger clients, who actually experience a high volume of major life transitions that necessitate planning advice (from job changes to starting businesses to starting families) but may have little need for "traditional" planning software and its retirement-centric Monte Carlo projections; the second looks at a new open-source "robo" platform called Wealthbot.io, which would allow any advisory firm to hire a developer and adapt the platform for the needs of their particular practice and clientele (think "Wordpress for robo-advisors"); and the last is a call-to-action from FPA National board president Ed Gjertsen that financial planners need to step up and get more involved with the Financial Planning Coalition's advocacy efforts, especially as the Department of Labor fiduciary proposals loom large, and FPA prepares for its National Advocacy Day on Capitol Hill this coming Wednesday, June 24th.

Enjoy the reading!

Weekend Reading for Financial Planners (Jun 13-14)

June 12, 2015 02:30 pm 23 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the news that now TD Ameritrade is joining the "robo" race with a direct-to-consumer offering that will expand its current Amerivest program to compete against the likes of Vanguard and Schwab, including a new "Private Client Services" that may potentially compete against the RIAs who use TDA's custodial services, too. And also in the news this week was the announcement that Pershing is launching its own robo-advisor-for-advisors solution, partnered with newcomer Marstone.

From there, we have a few technical planning articles this week, from a look at important IRA-rollover-related "goofs" to avoid, to a discussion of the potential crackdown coming on Family Limited Partnership (FLP) valuation discounts via new Treasury Regulations that may soon be issued, and also a discussion of how income annuities may better support the fixed-income portion of a retirement portfolio over just using traditional bonds.

We also have several practice management articles, including: how advisors are increasingly adopting "virtual" location-independent business models that serve clients through telephone, email, and video conferencing technology; a discussion of how advisors operating as a sole proprietorship or single-member LLC could be creating client continuity planning problems; a look at the benefits of "reverse mentoring" (where experienced advisors take on a Millennial to get their own mentoring about today's 20- and 30-somethings); how employees at many advisory firms are actually quite unhappy, and why the fix is not just to pay them more; and a discussion of best practices to try to minimize employee turnover and retain to advisory firm talent.

We wrap up with three interesting articles: the first is a look at whether the whole concept of monthly "budgeting" is overrated or outright impossible, as research increasingly shows the reality is simply that our income and expenses are not as stable and consistent as a typical budgeting process would imply; the second is an in-depth look at how a credit bureau "security freeze" works and why advisors might consider it for themselves and their clients; and the last is a discussion of whether Wall Street's threat to abandon small investors if the DOL's fiduciary comes to pass may be both an empty threat, and one that is irrelevant because if Wall Street does abandon small investors, there are other organizations like Garrett Planning Network, XY Planning Network, and more, ready and waiting to fill the void.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including the announcement of Pershing's new partnership with robo-advisor-for-advisors Marstone, recent major growth milestones for advisor-client PFM solution Wealth Access, and a new open-sourced wealth management platform that advisory firms might develop for their own use, called Wealthbot.io.

Enjoy the reading!

Weekend Reading for Financial Planners (Jun 6-7)

June 5, 2015 02:29 pm 23 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the announcement that SIFMA is aiming to head off the DOL's fiduciary proposal by putting forth its own new uniform fiduciary standard for broker-dealers, even as critics note that the SIFMA proposal would fail to achieve exactly what the DOL proposal is meant to do: place meaningful restrictions on the worst practices that can cause client harm.

From there, we have a few technical planning articles this week, from a look at senior housing trends and the tendency of seniors to move (or not) when they retire, to a discussion of how to create a 'bridge' portfolio for clients who are delaying Social Security and need to come up with cash flows during the intervening delay years, an article about how to open the conversation about prenups with your clients who are getting married, and a review of the new FBAR rules for reporting foreign financial accounts that all U.S. citizens must comply with or soon face stiff penalties.

We also have several practice management articles, including: how advisors who are dragging their feet about succession planning may need to do some self-reflection to identify their fears and blocking points; tips on how to actually upgrade the quality of your client service; how to ensure you're complying with the RIA requirements for getting "best execution" for your clients; and how to think about whether your advisory firm, if you're hit a growth wall, needs to hire an operations manager or a chief operating officer (COO) instead.

We wrap up with three interesting articles: the first covers a recent high-profile McKinsey consulting report that suggests robo-advisors may not win the day, but that "virtual advice" delivered remotely by human advisors using technology may be the emerging major trend; the second looks at how the emerging "Internet Of Things" could dramatically change retirement, from medication dispensers that remind you if you're behind, to a coffee-maker that can alert your family if your sleep habits have changed; and the last is a look at how advisors are beginning to shift their compensation models... not necessarily because of the "robo-advisor" threat, but simply due to competitive pressures with other advisors, the ongoing evolution of advisory firm business and service models, and a desire to reach new types of clientele.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including John Hancock's acquisition of advisor PFM solution Guide Financial, the release of Fox Financial Planning Network's "AdvisorTouch Symphony" practice management resources to support advisory firms that want to roll out their own online investment service, and the announcement that Wealthminder has raised $1.45M in capital to expand their white-label online-advice-solution for advisors.

Enjoy the reading!

Weekend Reading for Financial Planners (May 30-31)

May 29, 2015 02:29 pm 24 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with recent discussion from Rep. French Hill (R-Ark.) who stated he plans to explore introducing legislation that would give FINRA the authority to examine RIAs, as the regulator originally created to oversee securities dealers continues in its efforts to gain oversight of registered investment advisers as well.

From there, we have a few practice management articles this week, including: guidance for advisors on how to be more secure online; tips on guidance that advisors can give to clients about how to protect themselves from identity theft; a look at how DocuSign is making a big push into helping advisors not only with electronic signatures but creating entire digital workflows; tips on how advisors leaving a broker-dealer can avoid or manage an unfavorable Form U5 filing; and a discussion of how large advisory firms can serve Gen Y profitably today (not just as a feeder system for future AUM).

We also have a few investment-related articles this week, from a look at the ongoing rise of Vanguard and the question of whether their growth may soon slow as the company goes into competition with the advisors it serves via its new Personal Advisor Services platform and as regulators scrutinize whether it is a "too big to fail" company, to a discussion of target-date bond ETFs that have a fixed maturity as a means to invest in a rising interest rate environment, and a look at how the "best" diversifier with a consistent negative correlation to stocks is actually the much-unloved long-term government bond.

We wrap up with three interesting articles: the first looks at the rapidly emerging trend of states creating their own state-based retirement plans to provide a means for small businesses to offer payroll deduction contributions to an IRA or other tax-deferred retirement plan; the second discusses the release of the new book "Misbehaving", a 'professional memoir' of behavioral economics pioneer Richard Thaler that tracks both his own career and the rise of the behavioral economics movement; and the last is a discussion of the little "white lies" we tell ourselves about money, like the idea that money will provide us safety and security when ultimately money can only ever go so far to provide those comforts (and relying on money to do so can mask more significant spiritual and internal challenges we may be facing along the way).

Enjoy the reading!