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Growing To $470M In 7 Years While Making Yourself Dispensable Enough To Take A Personal Sabbatical: #FASuccess Ep 471 With Dennis Morton

January 6, 2026 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome everyone! Welcome to the 471st episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Dennis Morton. Dennis is the co-founder of Morton Brown Family Wealth, an RIA based in Allentown, Pennsylvania, that oversees $475 million in assets under management for 275 client households.

What's unique about Dennis, though, is how he and his co-founder were able to build sufficient firm infrastructure to be able to take five-week sabbaticals without major disruptions (while continuing to experience client growth).

In this episode, we talk in-depth about how Dennis's firm is able to offer all employees the opportunity to take a sabbatical after five years of service in part by socializing clients with more than one advisor and the rest of the team (so that they don't rely on a single point of contact), how Dennis found that rather than being nervous about their advisor being out-of-pocket for several weeks, that clients were excited for him to have the opportunity to take time away from the business (and showed his authenticity about wanting to spend quality time with his family while building his firm), and how Dennis's experience with a failed succession plan at a previous firm inspired him and his co-founder to build a business where they wouldn't be indispensable.

We also talk about how Dennis and his partner have scaled their firm in part by identifying tasks that need to be done in-house (typically those that require intimate knowledge of their clients' circumstances) versus those that can be outsourced (where knowledge of the firm's principles is sufficient), how Dennis boosted firm growth and amplified his firm's brand both in its local community and online by hiring a director of marketing who leads firm efforts on managing lead pipelines and centralizing marketing data, and how Dennis and his co-founder conducted a "brand DNA" exercise soon after founding their firm, and then revisited it later as the company grew to ensure the full team was on the same page when it comes to firm culture.

And be certain to listen to the end, where Dennis shares how he's found significant value in providing clients with a one-page financial plan as part of his firm's plan presentation meeting, how Dennis has developed an ideal client profile of leaders (including those at the head of businesses and non-profits) who understand the benefit of having smart people around them and who aren't afraid to delegate, and how Dennis has found that his background in the U.S. Army provided valuable leadership skills that have served him well as a firm owner (and how he thinks other career changers can leverage their unique skills to find success in the financial planning industry).

So, whether you're interested in learning about building firm infrastructure and staffing to allow founders and team members to take sabbaticals, the potential value of hiring a director of marketing to build a firm's brand online and in the local community, or strategically deciding which business functions to keep in-house or outsource, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Dennis Morton.

Potential Growth For Prospecting Tools As FINNY Raises $17M (And More Of The Latest In Financial #AdvisorTech – January 2026)

January 5, 2026 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the January 2026 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

This month's edition kicks off with the news that the AI-powered prospecting solution FINNY has recently raised $17 million in Series A funding at a whopping $150 million valuation, suggesting that its investors see the potential for significant growth in tools that can make it easier for advisory firms to generate organic growth – although with only around 5% of advisory firms today using outbound prospecting for client growth, it's worth wondering whether the potential market for tools like FINNY is big enough to justify those expectations?

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Charles Schwab is planning to shut down its "Intelligent Portfolios Premium" service combining automated portfolio management with access to CFP professional advisors – showing how while robo advisors can be run profitably charging minimal fees 'just' to implement client portfolios with no advice, and human advisors are thriving by charging premium fees for relationship-based planning and advice, it's much harder to serve the middle ground by offering lighter-touch advice at low cost
The technology startup Nevis has announced a $35 million fundraising round centered around the pitch that it will help advisors eliminate their administrative work and open up more time for working with clients – but although advisors do tend to spend a lot of time doing administrative work outside of client meetings, our own Kitces Research has shown that technology alone often doesn't lead to more time in client meetings (and therefore more revenue productivity), and advisors who truly want to open up more time to meet with clients may be better off hiring support staff to delegate tasks to than trying to automate them away through technology (which the advisor still needs to use – and troubleshoot when it goes awry – themselves)!
Morningstar has recently announced the launch of two apps within ChatGPT that will bring in proprietary investment research and data from Morningstar (for public markets and funds) and PitchBook (for private markets), showing the potential for research firms like Morningstar to monetize the data they keep behind paywalls where it hasn't already been scraped by AI bots' models – and potentially spelling bad news for third party AI investment research tools, since investment researchers who use ChatGPT can now simply use the Morningstar and PitchBook apps within ChatGPT itself without the need to buy a standalone solution

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including:

Zeplyn has announced new features that bring it closer to being an "agentic" AI tool than a standalone AI notetaker – which on the one hand gives it a way to differentiate itself from other tools in the crowded AI notetaker field, but on the other hand creates the additional challenge of articulating what advisors can actually do with agentic AI
Amid recent innovations in AI solutions for connecting and syncing data between an advisors' software tools (instead of relying on inconsistent point-to-point integrations or expensive data warehousing solutions), it's worth wondering where that type of solution will ultimately 'live' in an advisor's tech stack – because while platforms like Advisor360, Orion, and MileMarker are rushing to launch their own integrated "AI layers", an advisor doesn't need multiple AI data-syncing solutions at once; rather, they simply need one tool that can do a good job connecting all of the advisor's technology!

And be certain to read to the end, where we have provided an update to our popular "Financial AdvisorTech Solutions Map" (and also added the changes to our AdvisorTech Directory) as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

Weekend Reading For Financial Planners (January 3–4)

January 2, 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 while 2025 was a fruitful year for RIAs, as firm leaders look ahead to 2026, several key themes and decision points are on the horizon, from navigating the recent calm market environment (which is supportive of client portfolios and firm AUM, but could make certain clients or prospects complacent about their need for professional advice) to increasing industry movement (both in terms of the brisk pace of RIA dealmaking and advisors moving to RIAs from other industry channels and between RIAs themselves), all while firms look to boost their organic growth and create the operational (and staffing) capabilities needed to maintain a high level of client service. Which could make 2026 a key year as many firms look to be opportunistic while ensuring they remain prepared for a future economic or market downturn.

Also in industry news this week:

A survey finds that only one-quarter of advisors are at least "very satisfied" with their firms' tech stacks, though many firms appear to be looking to improve them, whether in terms of enhancing core functions (e.g., CRM or financial planning software) or exploring opportunities with AI-enabled software
The U.S. House of Representatives in December passed the INVEST Act, which could lead to more RIAs qualifying as "small entities" (entitling them to certain regulatory relief) and to more individuals qualifying as "accredited investors" with access to certain private market investments

From there, we have several articles on tax planning:

While Modified Adjusted Gross Income (MAGI) is the metric used to determine eligibility for several deductions included in the One Big Beautiful Bill Act (OBBBA), the exact types of income MAGI includes for the purposes of OBBBA measures remains unclear in the absence of IRS guidelines
How financial advisors can potentially save clients thousands of dollars in taxes by ensuring they coordinate their Qualified Charitable Distributions (QCDs) with other IRA withdrawals when it comes to fulfilling their Required Minimum Distributions
How helping clients navigate the capital gains "bump zone" can help them avoid unexpected large increases in the marginal tax rate they face in a given year

We also have a number of articles on investment planning:

How advisors with clients interested in cryptocurrency investments can offer value by calibrating an allocation that meets their particular risk-return preferences and investment goals
Why the timing of investments in (often volatile) cryptocurrency ETFs plays a large role in determining an investor's ultimate returns
While Bitcoin is sometimes referred to as "digital gold", Bitcoin and physical gold have shown quite different performance characteristics in recent years

We wrap up with three final articles, all about New Year's resolutions:

Why setting reasonable goals and being kind to oneself are key tactics for fulfilling New Year's resolutions
New Year's resolution opportunities for financial advisory clients, from reviewing their estate plans to reassessing their liquidity needs
11 daily habits that can help lead to success in achieving one's goals in the coming year and beyond

Enjoy the 'light' reading!

Reducing ACA Health Insurance Premiums After The Expiration Of The ‘Enhanced’ Premium Tax Credit

December 31, 2025 07:03 am 0 Comments CATEGORY: Taxes

For millions of Americans who are self-employed, between jobs, or retired before reaching Medicare eligibility at age 65, the primary source of health insurance is the Federal or state Marketplace exchanges created by the Affordable Care Act (ACA). Many of these individuals and families rely on the Premium Tax Credit (PTC) to reduce the cost of their coverage: By limiting the out-of-pocket premium cost to a certain percentage of household income, the PTC effectively subsidizes Marketplace-purchased plans – which are often significantly more expensive than employer-sponsored or government-provided coverage.

From 2021 through 2025, COVID-era legislation temporarily 'enhanced' the PTC by reducing the maximum out-of-pocket limits on insurance premiums and making the credit available to households with income higher than 400% of the Federal Poverty Level (FPL), a group who had previously been disallowed from receiving the PTC. However, Congress allowed the enhanced credit to expire at the end of 2025, reverting the PTC rules back to their pre-2021 version. Which means that households still eligible for the PTC will see a reduction in their credit amount – leading to moderate increases in their out-of-pocket premium payments in 2026 – while those with income over 400% of FPL will be disqualified from receiving the PTC at all, resulting in even sharper cost increases for Marketplace coverage.

The actual amounts of these premium increases will depend on household size and the cost of the underlying insurance plan. Single people with plans that cover only themselves may see modest increases; however, larger families or older couples with more expensive coverage could see their premiums rise by more than $1,000 per month. And because the 400%-of-FPL threshold is a hard cutoff for the PTC, even $1 of income beyond that amount can result in thousands of dollars of additional premiums – all of which must be repaid to the IRS if they were originally paid out as advance premium subsidies.

For households with Marketplace coverage, then, it can be extremely beneficial to keep income under 400% of FPL – $62,600 for a single person, $84,600 for a couple, or $128,600 for a family of four in 2026 – when it's possible to do so. For people who are still working, contributions to pre-tax retirement accounts such as traditional IRAs and 401(k) plans, as well as HSAs and FSAs, can help reduce AGI, which is used to calculate household income for PTC purposes. Self-employed individuals may also have flexibility through the timing of business income and expenses. And those who are retired or between jobs can manage their income by adjusting the mix of pre-tax, Roth, and taxable account distributions, even when traditional tax planning strategies might otherwise favor drawing from pre-tax accounts.

The key point is that even though health insurance premium increases are coming to nearly everyone on Marketplace plans in 2026, the most severe increases – particularly for families just over the 400%-of-FPL threshold, for whom losing the PTC could significantly strain cash flow – can often be mitigated through careful tax planning to reduce AGI via income exclusions and above-the-line deductions. And even for the many families who have already enrolled in Marketplace plans for 2026, income changes made during the year can be updated on their insurance application to re-calculate their PTC for the remainder of the year – meaning it's not too late to put strategies into place to reduce the pain of higher insurance premiums in the year ahead!

Growing To $500M AUM With An Evergreen HNW Client Service Calendar For Evergreen Fees: #FASuccess Ep 470 With Debra Taylor

December 30, 2025 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome everyone! Welcome to the 470th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Debra Taylor. Debra is the managing partner of Carson Wealth Franklin Lakes, a practice within the RIA Carson Wealth and based in Franklin Lakes, New Jersey, that oversees $500 million in assets under management for 120 client households.

What's unique about Debra, though, is how she has developed a client service calendar for her high-net-worth clients that allows her to close more new business and retain more clients by demonstrating the value her team provides throughout the year in return for the fees her clients pay.

In this episode, we talk in-depth about how Debra built out her client service calendar in response to a number of clients who left her practice to handle their finances on their own (perhaps not understanding the full value they were receiving from the planning relationship), how Debra implements the service calendar efficiently by having certain items apply to all clients (for example, an annual tax letter) and others only to clients with certain needs (for instance, changes to a client's estate plan), and how Debra divides the service calendar into “seasons” (that allow for greater flexibility compared to calendar quarters), with key service elements in each one (such as an investment deep dive in the spring and tax return review and analysis in the summer).

We also talk about how Debra puts tax planning at the center of her value proposition, in part by creating a tax-aware distribution plan for her clients (including strategic partial Roth conversions during opportune times in the year), how Debra finds that having a client service calendar (and sending video explanations when updating clients plans) reduces the pressure to fit in too much during client meetings (which can instead be a time for follow-up or client questions), and how Debra has found that implementing the service calendar (and being able to show the hard-dollar tax savings from distribution planning) not only has led to a higher closing rate of new clients (who better understand the depth of value her team provides) but also greater retention of current clients who can more easily see the value they're receiving (which goes well beyond what they could do on their own) for the fees they're paying.

And be certain to listen to the end, where Debra shares how she created a graphic that shows how her firm goes beyond traditional investment management to offer financial planning and in-depth tax planning to differentiate her practice in the eyes of prospects, how Debra's team might appear heavily staffed for the number of clients they serve but in reality reflects the revenue she's bringing in (and the level of service provided to clients throughout the year), and how Debra transitioned her personal clients to other team members so she can focus on business development and speaking opportunities (and how the calendar supported this by helping clients see the value her firm can provide beyond her individual presence).

So, whether you're interested in learning about building a client service calendar to demonstrate the value your firm provides throughout the year, putting tax planning at the center of your value proposition, or creating one-page graphics to explain your offering and win more clients, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Debra Taylor.

The Best Of Weekend Reading 2025: The Top 23 Articles You Might Have Missed

December 29, 2025 07:02 am 0 Comments CATEGORY: Nerd's Eye View

Each week in Weekend Reading For Financial Planners, we seek to bring you synopses and commentaries on 12 articles covering news for financial advisors, including topics covering technical planning, practice management, advisor marketing, career development, and more. And as 2025 draws to a close, we wanted to highlight 23 of the most popular and insightful articles that were featured throughout the year (that you might have missed!).

We start with several articles on retirement planning:

20 potential mistakes prospects and clients might make with regard to their IRAs, and how advisors can help fix them (or avoid them in the first place)
An exploration of two options for how clients can sustain consistent inflation-adjusted portfolio withdrawals in a retirement that could last beyond 30 years
Four ways to beat "sequence of return risk", including incorporating flexible spending rules, holding "buffer" assets, and more

From there, we have several articles on Social Security planning:

How advisors can incorporate a client's Social Security benefits into their broader retirement income strategy to match client preferences for lifetime income and/or legacy interests
How a Social Security "bridge" strategy that allows them to delay claiming benefits could provide clients with greater income throughout their retirement
Why a subset of financial advisory clients might consider claiming Social Security benefits early, from a current need for additional income to a compelling health reason

We also have a number of articles on tax planning:

How advisors can offer clients value by correctly timing Roth conversions and Required Minimum Distributions (RMDs) to avoid potential penalties or excess contributions
An analysis of the upsides and downsides of different tools (including Section 351 ETFs, exchange funds, and 'side portfolios') that can be used to diversify a client's portfolio with large embedded capital gains while deferring taxation
A mathematical analysis of Roth conversions identifies the factors that can make this strategy more likely to be successful for an advisor's clients

Next, we have a few articles on investment planning:

A 150-year stress test of the 60/40 portfolio shows its ability not only to limit the depth of portfolio drawdowns, but also their length as well
While a review of research on the topic suggests that portfolio rebalancing might not lead to better risk-adjusted returns, it could still prove to be a valuable tactic for advisors, particularly when it comes to aligning a client's portfolio to their risk tolerance and capacity
How interested financial advisors can evaluate different types of private investments, whose return profiles tend to be more opaque and challenging to analyze compared to publicly traded instruments

We continue with two articles on insurance planning:

A framework for helping clients determine the 'right' amount of insurance needed for their particular circumstances
The value for clients of maintaining adequate disability insurance and potential pitfalls to monitor when evaluating different types of coverage

From there, we have a pair of articles on education planning:

How legislation from the past few years has made saving for college in 529 plans increasingly attractive
The pros and cons of four alternatives to 529 plans for education savings, including taxable brokerage accounts and Roth IRAs

Next up are a couple articles on client communication:

Nine ways advisors can leverage the power of questions to build closer (and more lasting) relationships with prospects and clients
How providing a "master list" of goals can help clients explore more specific, vivid objectives and expand their horizons for what retirement might look like

We continue with a few articles on practice management:

Four unconventional KPIs that can measure a firm's productivity, including revenue per hour worked and an impact score to measure the value of different client touchpoints
A blueprint for how firms can create employee career paths that encourage staff to grow and advance within the firm, promoting retention and a more consistent client experience in the process
Five key roles for firms looking to scale effectively, from a visionary leader, to a 'rainmaker' who attracts new clients, to technicians who create advanced planning analyses

We wrap up with two final articles, all about advisor marketing:

The potential value for financial advisors of having "channel focus" in marketing, going all-in on a single marketing channel rather than inconsistently focusing on several tactics
A framework to help advisors develop their sales skills, even if they don’t see themselves as salespeople

Thanks for letting us be a part of your reading list each week, and we'll look forward to highlighting more insightful articles in 2026!

Weekend Reading For Financial Planners (December 27–28)

December 26, 2025 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 survey from Mergers and Acquisitions (M&A) consultancy DeVoe & Company finds that RIA leaders on the whole expect the already brisk pace of deal volume to increase in 2026, as (often private equity-backed) buyers find matches with sellers looking for external partners (who might be able to offer a premium valuation compared to internal successors). Notably, a strong majority of respondents who are looking to make an acquisition cited culture fit as the top characteristic they seek in a potential target (with talent coming in second), perhaps recognizing that successfully integrating an acquired firm is key to the success of a deal (e.g., in terms of client and employee retention). Nonetheless, internal successions do remain viable options for firms, according to the report, with the key to success being a willingness to start planning early to identify potential successors and to create a process and financing program that works for both parties.

Also in industry news this week:

The Securities and Exchange Commission (SEC) has issued a risk alert warning about missteps the regulator has identified regarding its marketing rule, particularly when it comes to making clear disclosures surrounding testimonials, endorsements, and third-party ratings and rankings
The SEC has signaled that it will allow a wide range of asset managers to offer dual-share-class funds, presenting potential fund-expense and tax-saving opportunities for advisors (and potentially raising questions for firms relying on mutual fund commission income)

From there, we have several articles on investment planning:

Morningstar's latest safe withdrawal rate figures ticked higher for those retiring in 2026, with spending flexibility allowing for even higher starting withdrawal rates
While retirement income strategies that rely on spending flexibility are often attractive for clients, explaining potential spending reductions in terms of both the potential dollar amount and the duration of reduced portfolio withdrawals could give clients a better understanding of the tradeoffs involved and avoid negative surprises down the line
Why the concept of sequence of returns isn't just about protecting against market declines early in retirement, but can also be an opportunity to (significantly) boost retirement withdrawals if a positive return sequence occurs

We also have a number of articles on practice management:

Why understanding a firm's capacity could be a more effective forward-looking metric than other measures of productivity
Given that a move 'upmarket' can introduce additional complexity and strain firm capacity, assessing firm infrastructure and fee models before making this move could lead to a more sustainable approach
Why evaluating and potentially revising a firm's internal processes could be more effective than defaulting to hiring a new employee when reaching capacity limitations

We wrap up with three final articles, all about cash flow management:

The value of evaluating the time/money tradeoffs involved when considering whether to take advantage of 'free' offers
How advisors can help clients recognize and address "lifestyle creep" to ensure their spending is aligned with their priorities (perhaps retire earlier than they might expect)
The value of conducting a subscription 'audit' to save time and mental bandwidth in a world of proliferating services charging recurring fees

Enjoy the 'light' reading!

Aligning Your Capital With What’s Important To You By Focusing On Where You PAY Attention: Kitces & Carl 180

December 25, 2025 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

Traditionally, financial advisors have focused on managing a client's money to ensure their lifestyle is supported to and through retirement. Yet money is only one form of personal capital; clients can also draw on their energy, time, and attention. Because these resources are often pulled toward competing priorities, clients may find themselves aiming for one goal while unintentionally directing their resources elsewhere, which may create a disconnect between the client's stated priorities and how their capital is actually being used. Even with the best intentions, managing the many opportunities and demands on the different dimensions of a client's personal capital can create unintended misalignment. Yet devising a strategy to intentionally narrow one's focus to what matters most can yield incredible dividends, from peace of mind to increased time on what truly matters.

In this 180th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can help clients assess all of their uses of capital: Money, Energy, Time, and Attention. Among these, attention may be both the most powerful and scarce resource. Attention is uniquely fragmented in today's hyper-distracted world, and because it so often dictates where each form of capital flows, a client may internally hold certain values while their calendars and checkbooks reflect different ones.

When an advisor sees tension between a client's stated values and their lived ones, there may be opportunities for gentle nudges toward alignment. For example, if a core goal – such as not being a financial burden to their children – is secure, advisors can invite clients to consider what else matters, such as time spent with grandchildren or supporting adult children still establishing themselves. Giving clients permission to dream about what else is possible with their capital, and to spend their capital in those ways, can be incredibly powerful.

On a larger scale, this perspective offers a powerful reframing of the value of financial advice. Peace of mind, often seen as an intangible benefit of planning, may in fact be an 'attention dividend' that frees clients from the mental load of managing their finances and allowing them to focus their attention elsewhere. In this sense, advisors don't just save clients money or time; they also help clients reclaim attention and energy – intangible yet deeply valued resources. A client who once spent four hours each week monitoring markets might discover 11 more days each year to focus on other things that are more meaningful to them. Financial advice, in this view, becomes not only about wealth management but also about attention management!

Ultimately, this points toward a more human-centered model of advice – one rooted in empathy, presence, and personal alignment. In a world of endless options and technology solutions, the deeper value of advice lies in helping clients direct their attention toward what truly matters and uncover the misalignments between their stated values and their lived reality. Advisors who embrace this broader mandate – helping clients align all forms of capital with what they truly value – can strengthen their role into that of a trusted guide in an increasingly distracted world.

Why Taxable Custodial Accounts Are Better Than OBBBA “Trump Accounts” For Kids’ Savings

December 24, 2025 07:02 am 0 Comments CATEGORY: Taxes

One of the more surprising features of the One Big Beautiful Bill Act (OBBBA) of 2025 was the introduction of a new type of retirement account intended to be opened and contributed on behalf of minor children, which the law named the Trump Account (TA). Conceptually, the purpose of Trump Accounts is to give kids a head start on saving for retirement, and so many of the account's aspects mirror those of traditional IRAs; however, there are unique rules for TAs that take effect from birth through age 17.

For instance, TA contributions are generally limited to $5,000 per year (up to $2,500 of which can be from an employer). But certain organizations, including the Federal, state, and local governments and 501(c)(3) charitable organizations, can contribute additional funds (including an initial $1,000 'pilot' contribution by the Federal government for children born in the years 2025 through 2028). And while TA contributions from individuals are made on an after-tax basis, contributions from employers and government and charitable organizations are made pre-tax, giving the TA many of the same characteristics as a traditional IRA with a mix of pre-tax and after-tax funds. So, when funds are eventually withdrawn from the account – which (like IRAs) can only be done penalty-free after age 59 ½ without a specified exception – they're a mix of both tax-free (i.e., from after-tax contributions) and taxable dollars (from pre-tax contributions and investment growth over time).

The caveat, however, is that many of the issues that often make traditional IRAs problematic for their owners – including pre-tax dollars being taxed at ordinary income tax rates on withdrawal, Required Minimum Distributions (RMDs), and the "10-year rule" for most beneficiaries after the death of the account owner – also apply to TAs. And with the potential for TAs to be funded at a very early age and left to compound and grow for 60 years or more, it's possible that they'll eventually create the very same tax headaches in the future that owners of large traditional IRAs are dealing with today.

Thankfully, there are other vehicles available for parents to consider when giving funds to their kids. In addition to 529 plans (which can grow tax-free to be used for qualified higher education expenses), one option that worth exploring is a taxable custodial (e.g., UTMA or UGMA) account. Although taxable accounts don't receive tax-deferred treatment on investment income, that fact could actually turn out to be an advantage because of the "kiddie tax" rules, which allow up to $2,700 of qualified dividends and capital gains to be realized tax-free for dependent children. As a result, a custodial account could have significantly more "basis" than a TA at age 18 and beyond – meaning that the TA will end up generating more taxable income in the future (and be taxed at higher rates on that income due to the ordinary income treatment of gains upon withdrawal)!

One factor that could make TAs more favorable is the ability to convert TA funds to Roth, which could allow a TA owner to pay tax on the funds in their account at relatively low rates early in their career and allow them to grow tax-free thereafter. However, unless the owner has funds available outside of the account to pay the actual tax on the conversion, they'd need to withdraw from the account to pay that tax (and pay tax plus an early withdrawal penalty on that amount as well), significantly reducing the amount that's left in the Roth account to grow tax-free. Which means that even with the ability to convert to Roth, the taxable account could still come out ahead in the end (or at least not be so far behind as to be worth sacrificing the greater flexibility of the taxable account's funds to be used pre-retirement).

The key point is that when it comes to saving for kids, starting to save at an early age is far more important than what type of account those savings go into. While many illustrations of TAs project how their value can grow to eye-popping levels over time, the reality is that similar (or even better) results can be achieved in other types of accounts that have far more flexibility than TAs. And so while TAs can serve as a good conversation starter with parents who are interested in saving for their kids (and it may even be worth opening a TA just to receive the 'free' $1,000 pilot contribution if there's a child who is eligible for it), it may be best to involve other types of accounts in the discussion as well – since they could prove to be an as good or better option for growing a child's savings for the long term!

Specializing In (Sound) Income Sources For Retirees To Differentiate A $4 Billion Advisor Enterprise: #FASuccess Ep 469 With David Scranton

December 23, 2025 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome everyone! Welcome to the 469th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is David Scranton. David is the CEO of Sound Income Group, an RIA based in Fort Lauderdale, Florida, that oversees approximately $4 billion in assets under management for 10,000 client households.

What's unique about David, though, is how he has built his business by standing out through his strategy of investing client assets in income-producing individual securities to produce a steady stream of income at a time when many advisors have taken a "total return" investment approach and build portfolios using mutual funds and ETFs.

In this episode, we talk in-depth about how David builds portfolios using a combination of what he calls "insured options" (such as bank CDs, government bonds, and fixed index annuities), "non-insured contractual securities" (such as individual bonds and preferred stocks), and "equity-oriented investments" (including business development companies, real estate investment trusts, and high-dividend stocks), why David prefers to invest in individual securities instead of investment funds both to control the exact securities he's investing in and to avoid forced liquidations when investors in a mutual fund sell at once, and how David finds that prospects are often receptive to this approach given the steady cash flow it generates without necessarily eating into principal to create retirement income (which has also led to greater client retention during market downturns).

We also talk about David's four keys for financial advisors to attract clients (which include having a point of differentiation as well as established branding, lead generation, and conversion processes), how David's focus on these keys shifted over time (from an emphasis on lead generation early on in his career to build a steady flow of prospects to branding now that he's leading an advisor enterprise), and how David has leveraged book-writing (with the assistance of professional ghostwriters and publishing firms) to further build his brand and generate greater familiarity with his ideal target clients.

And be certain to listen to the end, where David shares how he implements his investment approach by using two portfolio management tools (for trading and reporting, separately) and offers it to advisors who don't have the capacity to implement this approach themselves, how David was able to overcome his previously overly analytical nature to be able to focus on the bigger picture of running his business, and how David has found that narrowing in on a specialization has ultimately (and perhaps counterintuitively) allowed him to serve more families than he might have taking a more generalist approach.

So, whether you're interested in learning about what it takes to implement an income-based investment strategy, attracting more prospects by showing how your firm is ‘different', or how to build your brand by authoring books, then we hope you enjoy this episode of the Financial Advisor Success podcast, with David Scranton.