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Weekend Reading For Financial Planners (September 19–20)

September 18, 2026 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 Anthropic announced an advisor-specific plug-in to its Claude tool, which will incorporate data from many key advisor tech tools. While the new "Claude for Financial Advisors" plug-in offers the potential to solve the long-simmering problem for advisors of integration across tools in their tech stacks, it also raises questions, including how advisors will use any time savings gained from leveraging the tool and whether these activities can create a positive ROI for the usage-based fees Anthropic charges.

Also in industry news this week:

A survey finds that it's still early innings for many advisors in terms of their AI use, and a strong majority of respondents are seeking more time for prospecting and deepening client relationships despite the tech investments they've made
Only 3% of clients would replace their human advisor with an AI tool, according to a recent survey, though a higher percentage have considered changing their advisor for other reasons (with communication frequency and digital presence appearing to be key factors for younger clients)

From there, we have several articles on tax planning:

When comparing the tax benefits of donating appreciated securities versus making a Qualified Charitable Distribution (QCD), the QCD often comes out on top
Although the IRS's introduction of a new code for custodians to report Qualified Charitable Distributions (QCDs) on 1099-R might make it easier for taxpayers to report QCDs on their tax returns, custodians might not always report those QCDs consistently, meaning it's still up to the IRA owner to make sure that what's reported on their tax return matches the contribution they made in reality
While many advisors recommend clients convert most or all of their pre-tax retirement accounts to Roth, doing so means losing the opportunity to make Qualified Charitable Distributions (QCDs) from a pre-tax IRA – meaning that if the client has charitable intentions, they end up paying tax on the converted dollars when they could have been distributed to charity tax-free as a QCD

We also have a number of articles on generating client referrals:

How newer firm owners can move beyond their personal network to create a sustainable referral engine
Why getting a client to refer a friend or family member is only the first step in them becoming a client, with a firm's online presence potentially playing a major role in the referred individual's decision to move forward as well
How advisors can generate more unsolicited referrals that actually turn into good-fit clients

We wrap up with three final articles, all about retirement lifestyle:

A recent study ranks the best and worst states and cities for retirement based on 46 indicators falling within the broader categories of affordability, quality of life, and health care
How retirement presents an opportunity for individuals to enjoy a slower-paced, more analog lifestyle
While engaging with the arts can be an enjoyable activity in its own right, a recent study suggests doing so could come with health benefits as well

Enjoy the 'light' reading!

Breaking Bad News To A Client About Prior Problematic Financial Decisions: Kitces & Carl 199

September 17, 2026 07:04 am 0 Comments CATEGORY: Kitces & Carl Podcast

When a financial advisor engages a new client, they are analyzing a lifetime’s worth of financial decisions that have brought the client to this point. While this often includes many great decisions, it is also likely that a client has mis-stepped along the way… or at minimum, made suboptimal decisions for their goals. Yet these conversations about a client’s past financial decisions are rarely as simple as correcting a mistake or ‘optimizing’ a portfolio – these are often the best financial decisions a client could have made at the time.

In this 199th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how to have a curious and compassionate conversation about a client’s financial past and help them lay the groundwork for the future.

As a starting point, it’s helpful to remember that every ‘less optimal’ decision carries an emotional and logistical history – at some point, that financial decision seemed to be the client’s best path forward. For example, if a client purchased a life insurance policy that no longer seems to fit their goals, the first question the advisor can ask is what problem the client was trying to solve. The advisor’s recommendation will vary widely if a client purchased that policy as an investment vehicle, was based on a friend’s recommendation, or was to lay the groundwork for starting a family.

From there, there may be an opportunity to recalibrate the client’s finances in the light of their current goals. Often, in the light of current cashflow, insurance, and investment needs, the client may be organically inclined towards change anyway. When possible, advisors can use growth-oriented language, emphasizing how they can help clients get from “here” to “there” with these financial changes – which feels more encouraging and less critical.

At times, advisors may need to be more candid about a poor financial decision, especially if it will have an outsized negative impact on their future. When this happens, it is important to be clear but compassionate about the client’s viable steps forward. And the advisor can emphasize where these ‘suboptimal’ financial decisions created good habits and strengths – for example, a whole life policy may not be the best fit for a client’s long-term goals, but it may have helped the client with building initial habits around consistently saving.

Ultimately, the key point is that when it comes to a client’s past financial decisions, it’s best to start with curiosity and the client’s motivations at the time. From there, exploring whether that decision still fits their goals is generally a viable way to help them adjust their financial reality to their current goals… and make more informed and sustainable decisions in the future!

Managing Legacy Investments: 6 Best Practices To Reduce RIA Fiduciary And Compliance Risk

September 16, 2026 07:04 am 0 Comments CATEGORY: Regulation & Compliance

While financial advisors often have discretionary control over a client's entire investment portfolio, sometimes new clients enter an advisory relationship with large, 'legacy' positions that they do not want (or are not able) to liquidate. For instance, the client might own a significant number of shares in a closely held business, hold a large position in company stock subject to a lock-up period, or have inherited shares of stock from a loved one that hold emotional value. While an advisor might be tempted to view such positions as peripheral (particularly if the firm isn't charging a fee on those assets), they can be subject to regulatory and civil litigation risks if the firm doesn't have a clear process for advising on (or around) them – including thorough documentation and consistent disclosure of recommended actions to clients.

In this guest post, Rich Chen, the founder of Brightstar Law Group, discusses how RIAs' fiduciary obligations apply to legacy positions, common scenarios (and traps) when dealing with them, billing considerations for firms, and best practices for advisors in managing legacy assets.

Under the Investment Advisers Act of 1940, investment advisers, whether or not they are registered with the SEC, owe clients a Federally-defined fiduciary duty comprised of two distinct obligations: a duty of care and a duty of loyalty. Notably, both duties apply to legacy assets; while the scope of an advisor's fiduciary obligations may be shaped by agreement between the client and advisor, the duty cannot be waived completely.

There are several 'traps' advisors can fall into when managing legacy assets, from assuming that limited trading authority means limited responsibility (when it does not), over-reliance on verbal understandings that are never documented (and that a client might remember differently years later), inconsistency across documents (e.g., an advisory agreement saying one thing and billing statements implying another), and arrangements that were reasonable when established but have become increasingly problematic as a client's circumstances have changed. Presenting alternatives (to continuing to own the legacy position) to the client – and documenting this communication – is the advisor's best defense against regulatory examination and civil litigation.

Billing on legacy assets presents another challenge, as regulators will want to ensure that the advisor's fees are reasonable given the level of service they're providing. Firms have multiple options for handling billing around legacy investments, including excluding legacy assets from billing entirely, continuing to bill on those assets while documenting client-imposed restrictions, and adopting alternative fee structures (e.g., charging a flat planning fee plus an asset-based fee on managed assets) designed to better align compensation with services rendered. Importantly, there is no one 'right' approach; a firm might choose a particular approach based on its own service model and the unique circumstances of its clients.

Amidst this backdrop, several best practices emerge for working with client assets to prevent misunderstandings and mitigate the risk of civil litigation and/or regulatory actions, including documenting client restrictions, clearly defining the advisor's role, evaluating the asset's impact on the overall portfolio, reassessing legacy asset arrangements periodically, ensuring billing practices remain appropriate, and preparing for examination scrutiny in advance. In sum, the most effective firms recognize that legacy assets require more process than advisor-managed assets, not less, because the advisor's limited authority makes documentation and communication all the more important.

Ultimately, the key point is that because there is no universal rule concerning handling legacy investment positions, firms can best serve their clients' interests (and protect themselves) by building a repeatable, consistent framework to deploy when working with a client with such a position!

And if you want to go deeper on this topic, hear directly from the author on the Financial Advisor Technician podcast.

Growing Bigger For Succession And Then Intentionally Downsizing For A Simpler Lifestyle Practice: #FASuccess Ep 507 With Carolyn McClanahan

September 15, 2026 07:06 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Carolyn McClanahan Podcast Featured Image FAS

Welcome everyone! Welcome to the 507th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Carolyn McClanahan. Carolyn is the founder of Life Planning Partners, an RIA based in Jacksonville, Florida, that oversees $300 million in assets under management for 65 client households.

What's unique about Carolyn, though, is how she grew her firm to more than 100 clients before deciding to downsize to improve her work-life balance as she also executes a succession plan.

In this episode, we talk in-depth about how Carolyn initially planned to grow her advisor team to handle increased client demand (with her firm closing and reopening to new clients over time), how Carolyn invested significant effort in training new employees on her high-touch planning process (hoping that doing so would pay off by developing potential successors), and how Carolyn ultimately had to face the prospect of departures of younger employees who wanted to pursue different paths (forcing her to start over with new hires).

We also talk about how Carolyn worked with business coaches to ensure that she offered competitive compensation and development plans for employees and to help her and her staff align their life goals with their professional paths, how Carolyn ultimately made the decision to downsize her client base to have more free time for herself and to pursue her goals supporting the planning industry, and how Carolyn has created a new succession plan that allows her to continue serving clients while transferring ownership to employees at her firm.

And be certain to listen to the end, where Carolyn shares how she set criteria to determine which clients to keep at her firm and which to let go, how Carolyn evaluated other firms to help departing clients find an appropriate advisory home, and how Carolyn (who is also a physician) advocates for medical-style residency programs in the financial planning industry.

So, whether you're interested in learning about navigating hiring challenges while also planning for succession, downsizing a client base in a tactful manner, or thinking about what you truly want to get out of firm ownership, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Carolyn McClanahan.

A 4-Step Guide To Reducing Advisor Turnover By Recruiting Career Changers

September 14, 2026 07:02 am 0 Comments CATEGORY: Practice Management, Research

Heavy turnover leaves advisory firms in a vicious cycle of allocating resources to recruit and onboard new advisors, only to lose them before they generate enough value for the firm to recover its investment. And given that McKinsey projects a shortage of more than 100,000 financial advisors over the next decade, it's never been more important for advisory firms to succeed at attracting and retaining talent.

While attracting new talent and managing turnover are often thought of separately, the two are closely related because not all cohorts of potential new advisors targeted by advisory firms have identical turnover rates. In fact, our Kitces Research data shows new college graduates – a cohort traditionally targeted in recruiting efforts – have far higher turnover rates than those transitioning into financial planning later in their careers. This is for several reasons, including that career changers bring with them both soft skills (e.g., meeting deadlines and managing multiple projects) and transferable professional skills (e.g., analytical experience and managing client relationships) that can help them be – and feel – more effective on the job. These experiences, along with the professional networks developed through prior roles that can serve as an initial source of business, can also better position career changers to grow faster and generate revenue and income more quickly than new advisors fresh out of college.

The end result is an "upfront-cost" versus "attrition-cost" trade-off between career changers and new graduates: Career changers require greater investment to recruit (because they can enter financial planning from virtually any other industry and at any age, making them much more widely dispersed and difficult to target in a scalable way) and are also more expensive to employ, earning 20%–40% higher salaries in their first five years in the profession than new graduates. What firms get from these investments in career changers, though, is 2–5X lower turnover rates compared with new graduates. Which means firms looking to minimize advisor turnover should strongly consider whether the benefits of hiring career changers who are more likely to stick around are worth the higher costs of recruiting and employing them compared with traditional cohorts like new graduates.

Drawing on a conversation with Hannah Moore, CFP®, founder of Guiding Wealth and Amplified Planning, as well as a research report from Amplified Planning on new entrants into financial services, we created a four-step framework for firms interested in hiring career changers. The first step contains tips for the top-of-funnel task of spreading awareness of job openings among career changers, including focusing on industry programs that have historically attracted large numbers of career changers (such as The Externship and FPA Residency), as well as non-industry-specific job boards. The second and third steps include middle-of-funnel recommendations aimed at letting career changers know they're qualified and will be supported, so that those who see the posting will be more likely to apply. This matters because many career changers hesitate to apply for financial planning industry jobs because, first, they worry employers will not value their professional experiences; and second, because they seek assurances that they'll be supported during the jump to a new industry, which can often involve a significant short-term reduction in income. The fourth and final step involves the bottom-of-funnel task of ensuring that those who do apply are fairly considered. This means ensuring that otherwise qualified candidates are not screened out by AI-based application filters (simply because they lack industry tenure or a degree in finance), and avoiding making common assumptions about career-changer candidates.

Ultimately, the key point is that the framework laid out in this article can be a helpful tool for firms to gain advisors who bring diverse experiences, transferable skills, and a greater likelihood of long-term success – making them valuable assets both to their firms and the profession as a whole!

Weekend Reading For Financial Planners (September 12–13)

September 11, 2026 01:30 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 from Vanguard investigates the perspectives of men and women when it comes to investing and working with a financial advisor, finding in some cases that assumptions about these groups might not always hold. Overall, respondents expressed greater confidence in making a range of financial decisions when working with a financial advisor, though women who had left an advisor were most likely to cite the advisor not working in their best interest as the reason for doing so. Both men and women expressed a range of preferences in terms of communication styles from financial professionals, with an educational approach topping the list for women and a data-driven/analytical approach leading for men (though the preference gaps for men and women on individual styles weren't particularly large). Which, altogether, demonstrates the value of exploring each prospect's and client's unique goals and preferences, as they very well might diverge from an advisor's assumptions.

Also in industry news this week:

An examination of Form ADV filings finds that firms that disclosed AI use actually saw higher staff headcount growth, indicating that for a subset of firms AI adoption is intended to complement, rather than supplant, human team members
While the SEC under chair Paul Atkins appears to be less interested in pursuing broad enforcement actions related to advisory firms' use of off-channel communications with prospects and clients than in years past, an attorney and former SEC official suggests that implementing and enforcing policies toward electronic communications (and their storage) could help firms avoid client harm (which could make them subject to an enforcement action) or, in the case of broker-dealers, continued FINRA scrutiny of communication failures (even if no client harm has occurred)

From there, we have several articles on retirement planning:

An analysis of Social Security claims data and self-reported health amongst retirees finds that those who are in poorer health tend to claim Social Security earlier (in many cases, correctly identifying a shorter expected lifespan)
While wealthier individuals often are able to delay claiming Social Security benefits (to receive their maximum monthly benefit), those who are particularly wealthy might choose to claim earlier to fund insurance policies that could, amongst other purposes, help heirs pay for estate taxes owed
How the ability to claim six months of retroactive Social Security benefits after reaching Full Retirement Age can both be an opportunity (by giving a client more confidence in delaying benefits) and a potential trap (by having a permanently lower monthly benefit if retroactive lump-sum benefits are taken)

We also have a number of articles on client communication:

How financial advisors can support clients in riding the 'waves' of emotion (both positive and negative) that can arise during meetings
A step-by-step framework for working with a client who has recently experienced the loss of a spouse to both give them space to grieve and to prepare them to make key planning decisions
Strategies for advisors when working with a client experiencing "ambiguous loss", such as a loved one suffering from dementia

We wrap up with three final articles, all about the tradeoffs of being a 'maximizer':

How certain tax planning strategies could lead to a lower lifetime tax bill but also less enjoyment of one's wealth
Why much of one's health and financial success is determined by getting the 'big things' right and how trying to optimize for the rest could lead to greater stress
The value of jumping off the "hedonic treadmill" and taking a step back to recognize when key goals have already been met

Enjoy the 'light' reading!