Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with news on the Department of Labor’s proposal that would clear the way for state-based automatic enrollment into IRAs for employees of small business, which has been sent as a final proposal to the Office of Budget and Management (OMB) and is expected to be approved within a month or two, ushering in a new era of accessibility for automatic-enrollment retirement savings.
From there, we have several additional articles on the ever-shifting regulatory landscape for advisors, including a look at what RIAs will have to do to comply with the Department of Labor’s fiduciary rule (which will have less impact on RIAs than broker-dealers, but still introduces new compliance obligations), how the DoL’s “grandfathering” rule allowing existing commission trails to continue may have the unintended consequence of limiting the ability for registered reps to change broker-dealers next year, and a discussion of the SEC’s looming push for an initiative that would start using third-party examiners to increase oversight of RIAs or whether the agency should wait and study current RIA practices to understand which ones really do (or do not) need greater oversight in the first place given the modern role of independent custodians that RIAs work with.
We also have a few practice management articles this week, including: how advisors can improve their marketing by being more transparent about their services and pricing; tips for dealing with introverted vs extroverted prospective clients, and how to frame questions differently to better engage them; and how connecting with and providing even basic advice services for clients’ children is associated with a higher likelihood of getting referrals (though it’s not clear if that’s because helping the children drives referrals, or if clients who refer are more likely to push their advisor to work with their children, too).
There are a couple of investment-related articles as well, from a look at how FinaMetrica (known for its academically rigorous risk tolerance questionnaire) is pairing with both RiXtrema and Macro Risk Analytics to provide more robust tools to analyze a client’s current portfolio and compare it to their risk tolerance, a discussion of whether near-zero or negative yields could actually be a sign of prosperity and not looming global deflation, and a look at how asset managers are still struggling to gain traction with actively managed ETFs.
We wrap up with three interesting articles: the first is a discussion of how the media’s focus on “newsworthy” events, combined with ever-improving access to information about what’s happening in the world, may be causing us to mistakenly believe the world is getting worse, when in reality it’s never been better (we’re just more aware of a smaller number of bad events than we were in the past); the second is an interesting study from the Journal of Financial Planning finding that advice on savings/investments and tax planning really do lead to higher financial satisfaction, but advice regarding debt, mortgages, and insurance does not (unless it’s all paired together holistically); and the last is a fascinating look at how those who enjoy their work the most tend to have the best career progress, the most retirement readiness, yet are the least interested in retiring (because they enjoy their work!), while those who are most miserable in their jobs are the ones who most want to retire but may struggle with earning enough to achieve that retirement, suggesting that the real key is not in doing better “retirement planning” but in helping to guide clients to more fulfilling careers in the first place.
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 flurry of “robo-advisor” news (from the launch of Fidelity Go to announcements that TD Ameritrade and Wells Fargo are working on “robo” tools), along with news from Envestnet/Tamarac on the roll-out of its “Client Portal 2.0”, and MoneyGuidePro releasing a new DoL fiduciary software tool called “Best Interest Scout”.
Enjoy the “light” reading!