Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that the Department of Labor will soon be issuing some “follow-up” clarifying guidance about next year’s fiduciary rule, as the DoL formulates a response to the most frequently asked questions coming in from advisors and financial institutions (relating primarily to advisor compensation and large-firm financial incentives related to the products they make available).
From there, we have a few articles related to advisor technology, including a good overview of the latest trends and developments in the advisor tech landscape from Joel Bruckenstein, coverage of the major deal announced last month between Vestorly (which provides content curation tools for advisors to drip market to clients and prospects) and Dow Jones (which will provide Wall Street Journal and other content to Vestorly users), and a review of financial planning software provider FinanceLogix.
We also have a few investment-related articles this week, from an analysis of the trends in securities lending by asset managers, to a look at how capital market assumptions for retirement planning projections could be adjusted to account for sequence of return risk, an examination of how mutual funds and ETF providers are preparing for the change in September when REITs will be removed from financial services sector and placed into their own sector instead, and two articles looking at how many of the foundational principles of investing and modern finance are breaking down as government bond yields keep trending lower and the “risk-free” rate on government bonds is approaching zero or even going negative in some countries (leading to strange outcomes where bond returns are primarily driven by capital gains, and investors are buying stocks for yield!).
We wrap up with three interesting articles: the first looks at a recent Capgemini study on the behaviors of young millionaires, finding that they are drastically more likely to hold cash (as much as 1/3rd of their net worth!), are more likely to invest in alternatives and diversify out of just holding ‘traditional’ stock portfolios, and are less likely than older millionaires to engage with a financial advisor; the second is a review of a few “savings” smartphone apps, like Qapital, Digit, Dyme, and Acorns, which are trying to use technology to make saving easier and more frictionless (the technology equivalent of modern ‘pay yourself first’ savings strategies); and the last is a fascinating study that finds financial stress and economic insecurity can actually lead to increased feelings of physical pain, which may help to explain the country’s rising epidemic of prescription pain medications, and also raises interesting questions about the potential role and value of having a good financial planner!
Also, be certain to check out the video at the end, the trailer of an interesting new “documentary” movie from Mark Hebner of Index Fund Advisors and Robin Powell of Evidence-Based Investor, on the issues with Wall Street and active management and the ever-rising role of index funds (somewhat controversially titled “Index Funds: The 12-Step Recovery Program For Active Investors”).
Enjoy the “light” reading!