Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that the SEC has prevailed in its legal challenge against Regulation Best Interest, as the 2nd Circuit Court of Appeals ruled in its favor, clearing the way for this week’s enforcement date (but with questions looming about whether XY Planning Network will appeal the ruling). In the meantime, the Department of Labor also revealed its newly proposed Advice Rule this week (which would similarly provide an exemption from the typical ERISA fiduciary obligation for brokers that provide non-fiduciary “Best Interest” advice that conforms to Reg BI), and the CFP Board’s own ‘fiduciary at all times’ standards will also begin to be enforced starting this week (but with questions remaining about whether or how effectively the CFP Board can enforce CFP professionals complying with its rules).
From there, we have a number of investment-related articles this week, including discussion of the news that Dimensional Fund Advisors (DFA) will be launching ETF versions of its funds that many advisors have been demanding (but in the process, will move away from its legacy of being an ‘advisor-only’ solution as consumers will now be able to buy DFA in ETF form directly), the Fed briefly becomes the #3 holder of the largest corporate bond ETF as its bond stabilization program expands since May (but may soon contract?), and a fresh look from Morningstar finding that, despite the traditional view that actively managed funds will shine in the midst of market turmoil, in practice, actively managed funds only slightly outperformed in Q2 and by less than they underperformed in Q1 (such that 57% are still underperforming year-to-date!).
We also have a few practice management articles about employee morale, including a look at how autonomy is one of the biggest drivers of advisor satisfaction (which may help to explain the explosion of the independent channels over the past decade?), tips on how to boost staff morale (by not letting the team just get ‘stuck’ in the busy day-to-day management of clients amidst the pandemic), and further tips on how to support employee morale in challenging times (starting with the simple recognition that advisory firms should be at least as proactive in communicating with their teams about the health of the business as they have been with clients about the health of their portfolios and financial lives).
We wrap up with three interesting articles, all around the theme of finding happiness and personal satisfaction: the first examines a recent analysis of long-term longitudinal data that finds higher incomes really are associated with greater happiness, and that consequently a “happiness gap” is emerging that aligns to rising income inequality; the second looks at how higher income may actually be more associated with our evaluation of our life satisfaction but doesn’t actually correlate as well to our day-to-day happiness in living our lives; and the last explores how to find our own ‘happiness threshold’ in trying to draw the line of what constitutes “Enough”.
Enjoy the ‘light’ reading, and happy Fourth of July!