Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the big industry announcement that Envestnet is building financial planning software company FinanceLogix, as it continues to build towards a "one-stop shop" holistic technology platform for advisors. Also in the news this week was the announcement that the Vanguard Personal Advisor Services solution is now fully open to the public, with a new lower minimum of just $50,000... and notably, has already crossed the threshold of more than $17B of AUM even while it was still in its "beta" phase.
From there, we have a few technical planning articles this week, from a look at the new Section 529 ABLE Accounts for disabled beneficiaries, to a discussion of whether today's potentially low returns in both stocks and bonds may "wreck" retirement, to a recent study from AQR finding that perhaps Active Share is not such a good predictor of fund outperformance after all.
We also have a couple of practice management articles, including: an article by Angie Herbers suggesting that most advisory firm problems aren't actually "business" problems but instead are personal challenges of the owners that they must overcome as the firm grows and evolves; a look at how to properly structure an advisor study group "retreat" to get the most out of your time away from the office; a review of some of the key issues that new advisors should be thinking about (that they aren't always told up front); and a look at how financial advice is not a business where "if you build it, they will come", which is why advisors need to learn to better target a particular type of clientele and really market to them accordingly.
We wrap up with three interesting articles: the first is an article by Shlomo Benartzi in the Harvard Business Review suggesting that employer retirement plans are not paying enough attention to the little issues around how retirement planning choices are presented to today's workers, and that even the smallest differences in how online tools are designed can have significant impacts on retiree savings and investment decisions; the second is a discussion by Bob Veres suggesting that as advisory firms grow, the single most important issue is becoming the firm's ability to cultivate and develop its future leaders, such that the primary role of an advisory firm CEO should actually be focusing on the personal development of its top people; and the last is a look at how 40 years ago, Wall Street predicted doom and gloom with "May Day" and the elimination of fixed commissions, yet instead found that allowing competition and forcing firms to act more in the interests of their customers actually fueled a tremendous investing boom... which raises the question of whether the brokerage industry's current objections to recent proposals for a fiduciary standard represents another moment where the predictions of doom and gloom are off base and that forcing the industry to act more in the interests of their customers could actually lower the cost of and expand the availability of financial advice.
And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including a review of IBM's recent "World of Watson", the Envestnet acquisition of financial planning software FinanceLogix, and the rollout of Vanguard's Personal Advisor Services to the mainstream public.
Enjoy the reading!