Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with a slew of major RIA custodian and broker-dealer news stories, including the decision by TD Ameritrade to eliminate 84% of its no-commission ETF lineup (including all of its Vanguard ETFs) with just 30 days’ notice to advisors to re-design their portfolios, the news that retail online brokerage giant E-Trade is looking to enter the RIA custody business by acquiring Trust Company of America (for a whopping $275M!), the launch of U.S. Bancorp’s new “FundKeeper” platform that could substantially disrupt mutual fund distribution and aid most small-to-mid-sized broker-dealers that don’t self-clear, and a backlash against FINRA for granting block transfer approval in the LPL/NPH deal after not allowing it for any other recent broker-dealer acquisitions (though the change in precedent could just further accelerate broker-dealer consolidation from here!).
From there, we have a few more technical articles, all around the theme of handling concentrated stock positions, from a discussion of a “Stock Protection Fund” strategy to partially hedge concentrated stock positions for executives (without liquidating the stock and incurring tax consequences), to how an “M&A Reseller” strategy can help small business owners gain installment-sale tax deferral on the sale of a business while minimizing the credit risk of taking on an installment note directly from the buyer, and a look at the rise of Securities-Based Lending (SBL) and how it can help provide short-term liquidity at a reasonable cost for those with concentrated stock positions.
We also have several practice management articles this week, including: How to change the ways you ask questions in a prospective client approach meeting to better connect emotionally with clients; a 5-meeting structure for approaching prospects and turning them into clients (and getting them comfortable after they’ve onboarded); and how to re-frame a client or prospect event around a “life transition” event that can help get a far better turnout than “just” talking about your latest investment views or a particular financial planning strategy.
We wrap up with three interesting articles, all around the theme of challenging our perceptions: the first is a fascinating look at how Betterment is putting behavioral testing into practice to determine what really helps clients to stay the course (and finds that just communicating to all clients that they should “stay the course” with a blast email during market turmoil is actually not a very effective strategy after all!); the second looks at the research into how (and why) we actually change our minds, and finds that the biggest key to helping someone change their mind is to give them an “out” so it’s not embarrassing for them to change their views; and the last is a simple but powerful way of looking at advice, recognizing that the best advice is not just good advice, but effective advice that people can implement given all of our behavioral biases!
Enjoy the “light” reading!