Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with a scathing letter submitted by Senator Warren to the Department of Labor, pointing out that while insurance and annuity companies have insisted that a DoL fiduciary rule would be disastrous, when legally obligated to disclose the rule’s true impact to shareholders on earnings calls the major insurance companies have confessed that the rule will have “no significant impact” on their companies and that they’re ready to adapt as necessary (which Warren uses as leverage to encourage OMB to quickly approve the DoL rule).
From there, we have a number of practice management articles this week, including: a consumer study finding that consumers might not actually be as resistant to higher advisor fees as most advisors fear (at least, for those providing real value as advisors!); best practices tips for retaining new associate advisors in a growing firm; more best practices advice about setting compensation for advisory firm employees (and dispelling some compensation myths, such as why it’s not necessary to automatically give an annual cost-of-living adjustment); how advisory firm owners may be too quick to “embrace failure” rather than taking the time to make prudent business decisions; and how elite advisory firms are echewing traditional wholesaler arrangements with asset managers and instead are looking for more sophisticated support for their businesses and clients.
We also have a couple of technical articles this week, from a look at the recent Bipartisan Policy Center proposal to “fix” the country’s long-term care issues with a combination of shorter-term LTC insurance plus a Federal backstop program for large claims, the reasons why clients should consider a revocable living trust besides just probate avoidance, and how Socially Responsible Investing (SRI) actually does appear to provide long-term outperformance (though it may just be because such funds tend to overweight the “quality” factor).
We wrap up with three interesting articles: the first is a discussion of how a subset of robo-advisor investors are actually high net worth individuals (and not Millennials), raising the concern for traditional brokerage firms that they must soon launch competing robo-advisor solutions or risk a rising tide of client outflows; the second is a dive into the research on not just the behavioral finance biases that cause clients to make poor decisions, but also some tips on what to do about it; and the last is some guidance about how advisors who feel “out of control” in their lives and businesses may need to take a hard look at their client capacity and whether they are simply trying to service more clients than they possibly can.
And be certain to check out Bill Winterberg’s “Bits & Bytes” video on the latest in advisor tech news at the end, which this week includes a playlist of all the video highlights from his live coverage of the Technology Tools For Today (T3) Advisor FinTech conference!
Enjoy the “light” reading!