Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with tips from leading cybersecurity expert Brian Krebs on what you (and your clients!) should do to protect themselves from potential identity theft after the recent news of the massive 143 million person data breach at Equifax.
From there, we have several regulatory articles this week, including an in-depth look from Investment News on the current state of FINRA and whether the industry watchdog needs better oversight and governance itself, the latest warning from the SEC to investment advisers to do a better job monitoring and overseeing their advertising (including the use of third-party recognition programs), and the emerging discussion of whether the best regulatory path forward might not be to apply a uniform fiduciary duty to all advisors and brokers but simply to better regulate the term “advisor” in the first place (and let non-advisor salespeople continue to not be subject to a fiduciary duty, as long as they distance themselves from the “advisor” title).
We also have several practice management articles, from a look by Cerulli at the latest trend of advisors towards outsourcing portfolio management (as the majority of CFP professionals now use some kind of third-party manager), why effective leadership in an advisory firm is all about not treating everyone the same and instead focusing the leadership’s time, energy, and resources into its top emerging talent, and tips on how to effectively groom next generation “G2” talent in an advisory firm to eventually take over and manage client relationships. In addition, there are also articles on how to develop a prospect tracking list, the merits of having a client advisory board versus conducting a client focus group, and when it makes sense to use video as part of your marketing (and how much it costs to get it done right).
We wrap up with three interesting articles, all focused around the psychology of how you position your business, your clients, and your team: the first explores how in the end, the best business models are very simple ones (e.g., make complex things simple, make boring things exciting, or eliminate middlemen), and raises the question of whether as advisors we try too hard to convey complex value propositions when simpler ones would be better; the second is a reminder that in most businesses (including financial advising), the bulk of utilization, revenue, and referrals tend to come from a small subset of “whale” clients, which makes it especially important to connect with them and make them feel appreciated (but balance against overserving them to the point they’re unprofitable!); and the last is a look at how a business that consults on behavioral economics structures its own employee team bonuses, with an emphasis on not just paying a year-end performance-based bonus, but giving employees guidance on how to spend their bonuses in a manner that is most likely to actually contribute to their happiness.
Enjoy the “light” reading!