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Weekend Reading For Financial Planners (July 19–20)

July 18, 2025 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that a recent survey by Vanguard found while only 38% of investors reported considering time savings when signing up to receive financial advice, 76% of clients report saving time from working with an advisor (with a median of two hours per week, or more than 100 hours per year), suggesting that advisors can sell their value not only through the financial and emotional benefits that they can provide (which are also reflected in the survey results), but also by showing how working with them could be an effective way for clients to 'buy' time (a practice that has been shown as an effective way to convert money into greater happiness).

Also in industry news this week:

A recent survey finds that next-generation employees at broker-dealers are looking for improvements in branding and social media promotion from their firms as they look to build their own practices and take the reins from a rapidly graying advisor population
RIA M&A volume hit a record in the first half of 2025, with particular demand for mid- and large-sized sellers and amidst continued private equity interest in the space

From there, we have several articles on tax planning:

Why the "One Big Beautiful Bill Act" (OBBBA)'s phase-out ranges for certain deductions might impact financial advisors' Roth conversions analyses going forward
How advisors can offer clients value by correctly timing Roth conversions and Required Minimum Distributions (RMDs) to avoid potential penalties or excess contributions
How annual evaluations of the potential benefits of Roth conversions versus capital gains harvesting can allow advisors to demonstrate ongoing value and help their clients lower their lifetime tax bills

We also have a number of articles on practice management:

Six trends in advisor recruitment, including an increased focus among transitioning advisors on earning equity stakes and finding a good cultural fit with a new firm
Five key roles for firms looking to scale effectively, from a visionary leader to a 'rainmaker' who attracts new clients to technicians who create advanced planning analyses
How using case studies during the hiring screening process can help a firm better analyze candidates' skills and allow candidates to better understand the demands of the position they're considering

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

How AI tools like ChatGPT can serve as a nutrition 'coach' that tracks progress, offers meal ideas, and provides encouragement over time
How engaging in short "exercise snacks" throughout the day can keep the body moving and promote strength even when one doesn't have enough time for a longer workout
Why maintaining good posture can offer psychological and physical benefit and how simple daily practices can help improve it

Enjoy the 'light' reading!

Breaking Down The “One Big Beautiful Bill Act”: Impact Of New Laws On Tax Planning

July 16, 2025 07:02 am 0 Comments CATEGORY: Taxes

After years of anxiety over the scheduled sunset of the Tax Cuts and Jobs Act (TCJA) at the end of 2025, the widely anticipated legislation extending and replacing TCJA – also known as the "One Big Beautiful Bill Act" (OBBBA) – was signed into law on July 4, 2025.

At its core, OBBBA makes permanent many of the provisions of the original TCJA, including TCJA's tax brackets, increased standard deduction, Section 199A deduction for Qualified Business Income (QBI), and increased Child Tax Credit. All of these receive minor tweaks but remain substantially the same as they were under TCJA. However, the $10,000 limitation on State And Local Tax (SALT) deductions is temporarily increased to $40,000 under the new law. Higher-income households may see this deduction phased back down to the $10,000 limit, and all households will again be subject to the $10,000 SALT cap beginning in 2030.

Additionally, OBBBA introduces several new below-the-line tax deductions while amending numerous others. The new law introduces a temporary $6,000 deduction for seniors age 65+, deductions of up to $25,000 of income from tips and overtime wages, and up to $10,000 of interest paid on qualifying auto loans. All of these provisions take effect from 2025 through 2028. Among several changes to itemized deductions, the new law most notably introduces a 0.5%-of-AGI 'floor' on charitable contributions, reducing the deductible value of amounts donated to charity. It also imposes a new limitation for taxpayers in the 37% tax bracket, capping the 'value' of itemized deductions to 35% of taxable income.

Also included are a host of other tax changes, including (but not limited to) reduced phaseout thresholds and a faster phaseout rate for the Alternative Minimum Tax (AMT) exemption, an expansion of eligible 529 plan expenses to cover K–12 materials and postsecondary credentials, and an extension of the Qualified Opportunity Zone program. The law also increases the gift and estate tax exclusion to $15 million per person and creates a new "Trump account", a type of IRA that can be funded at a young age (and without any earned income).

Ultimately, while many of the individual provisions under OBBBA are relatively minor changes from existing law, together they represent a substantial shift in tax policy – one that adds a significant amount of complexity to tax planning with the number of new deductions, phaseout rules, and effective dates governing OBBBA's provisions. Which will make it all the more valuable for advisors to understand how their clients stand to be impacted by the new rules, so they engage in proactive planning that takes all the new (and old) rules into account and translates them into actionable strategies for their clients!

Getting Known In Your Local (Facebook Group) Community To Quickly Add $30M In The First 2 Years: #FASuccess Ep 446 With Misty Lynch

July 15, 2025 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome everyone! Welcome to the 446th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Misty Lynch. Misty is the owner of Sound View Financial Advisors, an RIA based in Walpole, Massachusetts, that oversees $46 million in assets under management for approximately 100 client households.

What's unique about Misty, though, is how she grew her AUM by $30 million in 2 years in part by being recognized as a financial planning expert within Facebook groups for her ideal target clients of small business owners and families in her local area.

In this episode, we talk in-depth about how Misty gained recognition in key Facebook groups (for example the Boston Business Women’s group) not necessarily by promoting her own business or content but rather by being recommended by group members who were already familiar with her work, how Misty started creating personal finance blog content while she was still working in a corporate role at a broker-dealer (which gave her a running start when she did make the transition to client-facing advisor), and how Misty started a podcast that gave her access to key centers of influence (such as estate planning and student loan planning attorneys) and led to referrals from these professionals down the line.

We also talk about how Misty jump-started her firm ownership journey by buying a firm from a retiring advisor (which helped her avoid the time and effort involved in registering a firm from scratch), how Misty raised the fees on the firm’s legacy clients with little pushback and created an ongoing service and fee model that reflected her desire to (profitably) have long-term relationships with clients, and how Misty made the decision to make her first hire to provide additional support during a period of rapid growth (helping her ensure that current clients remained engaged as she onboarded a number of new clients).

And be certain to listen to the end, where Misty shares how she earned a life coaching certification that has helped her ask better questions to recognize clients’ money mindsets (which eventually led to her writing a book on the topic, further enhancing her reputation), why Misty previously ‘chased’ financial designations in an attempt to make herself more credentialed as a relatively young advisor (but eventually recognized that she was already ‘good enough’ to serve clients even without the various initials listed after her name), and how Misty transitioned from viewing success as a matter of personal and firm metrics and instead as a feeling that she’s doing good work and is living her life in the way she wants to.

So, whether you’re interested in learning about generating prospect leads through Facebook groups, jump-starting the firm ownership journey by buying a retiring advisor’s practice, or creating content across a variety of platforms, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Misty Lynch.

Identifying The ‘Right’ Balance Of Personalization And (Time) Cost Of Client Touchpoints To Boost ROI

July 14, 2025 07:02 am 0 Comments CATEGORY: Client Trust & Communication, Research

For a financial advisor and their new client, the first year working together can be a particularly intense period, typically involving multiple in-person or virtual meetings. After this first year, though, the number of scheduled meetings typically declines, often including only one or two formal meetings per year to check on progress toward financial goals and answer questions.

Beyond these formal meetings, though, advisors still often seek to create additional client touchpoints – interactions that can be either personalized (like one-on-one phone calls) or standardized (like newsletters sent to all clients). These touchpoints convey the ongoing value the advisor offers between meetings, particularly when clients are paying fees on a quarterly or even monthly basis.

In examining how these client touchpoints affect advisor productivity, the 2024 Kitces Research on How Financial Planners Actually Do Financial Planning found a positive correlation between the number of touchpoints and average revenue per client. In the study, advisory teams with less than $5,000 in average revenue per client reported a median of 14 annual client touchpoints, and those with $12,500 or more in average revenue offered a median of 20 touchpoints. Which suggests that advisors may offer more touchpoints when clients are paying higher fees, and that those clients may also expect more frequent engagement.

The revenue-per-client data also suggests that advisors aiming to move 'upmarket' may benefit from offering more frequent touchpoints – especially since clients paying higher fees often expect more engagement. However, client touchpoints aren't just about quantity – the type of touchpoint being offered also matters. For example, while personalized client phone calls require significant advisor time, standardized formats like newsletters or webinars can offer value more efficiently – and not every touchpoint format needs to be individualized to be effective.

In its examination of client touchpoint strategies, the Kitces Research Study on Advisor Productivity suggests that advisory firms tend to cluster into three broad groups based on the frequency and type of touchpoints they deliver: 1) Personalized Low Touch (about 10 touchpoints, primarily individualized through phone calls or personal emails; 2) Personalized High Touch (more than 20 touchpoints primarily individualized), and 3) Standardized High Touch (more than 20 touchpoints, primarily delivered through standardized means like client newsletters or webinars). Notably, service teams using a Standardized High Touch approach tend to report higher revenue per advisor than those using either Personalized Low Touch or Personalized High Touch approaches. This appears to be due in part to the ability to offer a greater number of touchpoints (linked to higher revenue per client) using less advisor time, freeing up staff capacity for other responsibilities.

Firms considering a shift to a Standardized High Touch approach can start by evaluating which types of client communication truly benefit from a more personalized approach – and which could be standardized without sacrificing client engagement. For instance, an advisor might hold a webinar addressing common client questions rather than repeating the same answers across several phone calls. Or, asynchronous video communication could allow advisors to offer personal responses without the need to coordinate schedules with the client. Further, firms with a high-touch offering can organize their client touchpoints into a clear, digestible format (e.g., a client service calendar) to help clients understand the full scope of what's available and what to expect throughout the year.

Ultimately, the key point is that by offering additional standardized touchpoints – in the formats that their clients find most valuable – advisors can strengthen client engagement and satisfaction (potentially leading to better client retention figures and more client referrals) without overextending themselves!

Weekend Reading For Financial Planners (July 12–13)

July 11, 2025 01:46 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" - this week's edition kicks off with the news that, amidst the growing number of RIAs it supervises, the Securities and Exchange Commission (SEC) is moving ahead with a potential plan to raise the $100 million regulatory assets under management threshold for SEC registration, with the regulator having talks with some state securities regulators (which would bear an increasing regulatory burden if the threshold were lifted and more firms came under their watch) on the issue. While the SEC has not released a formal proposal (which would likely offer advisers and other interested parties a chance to air their views on the issue), such a move could prove frustrating for firms forced to switch to state registration (particularly those with clients spread across state lines) as it would potentially require affected RIAs to register with multiple state regulators and be subject to a varying set of rules depending on which state(s) they are registered in, compared to the more uniform supervision they experience under the SEC.

Also in industry news this week:

A recent survey finds that (unsolicited) client referrals are the top source of new clients for advisors this year, while networking, client appreciation events, and educational events have also proven to be fruitful for some advisors
A survey suggests that some advisors might be underestimating their clients' interest in charitable giving, an area where advisors can potentially offer hard-dollar tax savings for clients

From there, we have several articles on financial planning implications of the "One Big Beautiful Bill Act" (OBBBA):

Potential planning strategies in the wake of the increased State And Local Tax (SALT) cap, (including the potential value of managing income for clients near the phase-out limits)
How the new $6,000 tax deduction for seniors works (and why clients who are delaying claiming Social Security benefits could be in for a pleasant surprise)
Post-OBBBA estate planning strategies for clients across the wealth spectrum and how trusts could be an effective way for some clients to manage income amidst a growing number of phase-out ranges for certain tax benefits

We also have a number of articles on marketing:

Why the value of creating content tailored to an ideal client profile has increased in a world where more individuals are using Artificial Intelligence (AI) tools to find answers to their financial questions
How 'traditional' Search Engine Optimization (SEO) still has value for advisors amidst growing use of AI tools for Internet searches
How advisors can optimize their websites for ChatGPT search and reap the benefits of "Answer Engine Optimization" (AEO)

We wrap up with three final articles, all about social life:

Data show that the time Americans spend on in-person socializing has decreased dramatically over the past several decades, with increased time spent on watching television and using smartphones among the potential causes
Four ways to socialize effectively in one's 30s and beyond, from formalizing social events to 'organizing' friends to identify the most relevant event types for each group
A step-by-step approach to hosting a memorable (and relatively low-stress?) dinner party

Enjoy the 'light' reading!

Kitces & Carl Ep 168: Do You Really Have To Go Deep With Every New Client In The First Meeting?

July 10, 2025 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces & Carl Ep Do You Really Have To Go Deep With Every New Client In The First Meeting

As the financial advice profession has matured, behavioral finance has become an increasingly important element of modern advice. This holistic approach to financial advice, often referred to as life planning, focuses on helping the advisor understand the client’s financial history, deep-seated goals, and overall relationship with money, which can allow for more targeted and comprehensive advice. However, for advisors who want to explore financial psychology with their clients, it may be difficult to determine when – and whether – to go deeper, and how to handle high-emotion conversations gracefully without overwhelming clients.

In this 168th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the pros and cons of holding financial psychology conversations early in the client (or prospect) relationship – and how to determine whether a deeper exploration of the client’s financial history is appropriate in the first place.

From the prospect’s point of view, it’s easier to not hire a financial advisor than it is to hire one (at least in the short term). Sifting through advisors’ websites, fee schedules, and other information can require substantial effort. While some prospects may seek an advisor’s behavioral coaching – especially if the advisor markets themselves as a behavioral finance expert – the majority are motivated by a specific event that propels them to begin the process. As such, a prospect usually comes to an advisor with one key stressor in mind, and it may feel jarring to hear questions like, "What is your first memory with money?" These questions, though intended to build trust, may inadvertently leave clients feeling disoriented or uncomfortable if they were expecting a more straightforward problem-solving approach.

Instead, advisors may find more success in leading with solving the problem that the client immediately presents, and then, over time, gradually exploring the client’s financial background as trust develops. This process of earning permission to go deeper can take months – or even years! – of consistent, high-quality work. Such an approach may also create a more organic environment for advisors to practice and hone their empathy and behavioral finance skills.

Ultimately, the key point is that starting a financial planning relationship with introspective behavioral finance questions may feel jarring to the client unless the advisor has an express specialty in life planning, and the prospect is expecting that approach. For many prospects, it can be more effective to start by addressing the immediately presenting problem and, once trust has been established, dive to gradually explore their money stories together. And in the meantime, it’s worth remembering that the so-called technical work of financial planning isn’t ‘just’ technical – it often involves an incredible amount of emotional support and can go a long way towards helping clients realize their most important financial goals!