Archives Of Weekend Reading For Financial Planners

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the SEC is considering updating several of its regulations regarding cybersecurity to address modern threats and vulnerabilities, which for SEC-registered investment advisors, could lead to increased preparedness and reporting requirements (though it remains to be seen whether any new rule would constitute a more clear and comprehensive policy than the current patchwork of cybersecurity regulations that RIAs must follow).

Also in industry news this week:

• The SEC has started sending deficiency letters to broker-dealers who fail to comply with Reg BI’s requirements to assess and document rollovers to ensure they are in clients’ best interests – which portends even greater issues with the DOL set to enforce its own rollover rules starting February 1
• The Public Investors Advocate Bar Association (PIABA) is lobbying the SEC to prohibit forced arbitration clauses in RIA advisory contracts and require firms to cover more of the costs of arbitration (which currently can run upwards of $30,000 for clients just to start the arbitration process)

From there, we have several articles on Medicare strategies:

• How advisors can help their clients select the best Medicare agent
• Why it is important for clients to look past the premiums and consider the total potential costs when selecting Medicare plans
• How Medicare’s general enrollment period, which runs through March, is an opportunity for eligible clients to sign up for Medicare if they missed their initial enrollment period (but still comes with late enrollment penalties)

We also have a number of articles on advisor-client communication:

• A new study assessing the role of qualitative data gathering in developing client trust and commitment shows that most planners overestimate how much effort they’re really putting in to learn about their clients (at least when compared to their clients’ perception of those efforts)
• Why financial advisors often cost themselves business by focusing more on themselves and their expertise in conversations with prospects, when in reality most prospects are more interested in what the advisor can do to make them feel important
• Why the phrase “financial planning” itself can cause resistance to financial planning conversations by conjuring unpleasant feelings about change, aging, and death; while reframing those conversations around “investing” (e.g., in oneself for the future) can make clients feel more positive about planning and saving

We wrap up with three final articles, all about self-improvement:

• How you can more effectively ask for feedback
• How we can combine seemingly unremarkable skills to produce extraordinary outcomes
• Why creating a ‘personal monopoly’ of leveraging your best personal properties is a better option than trying to win the ‘metagame’ by chasing the latest advisory industry trend

Enjoy the ‘light’ reading!

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Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that subscription-based advisory firm Facet Wealth has raised $100 million from venture capital firms in a Series C funding round. At a time when private equity firms are buying up AUM-based RIAs for their current income generation, the venture capital firms’ huge investment in Facet suggests that they see the real potential for Facet’s subscription fee model to become the next big business model for financial advisors in the future.

Also in industry news this week:

• Advocates for the fiduciary standard have sent a letter to the SEC requesting that it adjust its guidance to allow RIAs to specifically use the word “fiduciary” on their form CRS to better differentiate themselves from broker-dealers who are not full-time fiduciaries
• A study finds that higher-income individuals have better investment returns in their Roth IRAs, suggesting that they (and their advisors?) are more often leveraging best practices in asset location to use the tax-free accounts to hold assets expected to appreciate the most

From there, we have several articles on advisor technology:

• Cryptocurrency exchange Gemini’s acquisition of digital asset portfolio management platform BITRIA will give advisors a new way to invest client assets directly in cryptocurrencies (not just crypto futures) via SMA or TAMP structures
• Fidelity plans to introduce a direct indexing product for retail customers with a $5,000 minimum investment, in a sign of the strategy’s growing popularity not only for tax benefits but also for allowing investors to adjust indexes based on ESG/SRI or other preferences
• Four years after acquiring Junxure CRM, AdvisorEngine has released AdvisorEngine CRM, an upgraded cloud-based offering that perhaps signals a bet on the growing importance of CRM at the center of the advisor tech stack

We also have a number of articles on advisor marketing:

• Why specializing in a niche can help an advisory firm overcome many of the challenges of marketing to prospective clients
• How serving a niche can help advisors focus their communications, be more intentional with their marketing budget, and scale their practices more effectively
• Why being bold in marketing may seem scary but ultimately helps advisors stand out from the rest in a crowded marketplace

We wrap up with three final articles, all about how to enhance your lifestyle:

• The steps you can take during the daytime to sleep better at night
• How to design a home gym that is both functional and aesthetically pleasing
• How living a ‘rich’ life does not necessarily involve significant assets or material possessions, but rather features the experiences that are important to you

Enjoy the ‘light’ reading!

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Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that 2021 ended with inflation hitting 7% – its highest annual rate since 1982 – which makes it more likely that the Federal Reserve could raise interest rates in early 2022 (and potentially more than once throughout the year), contributing to uncertainty not only over the Fed’s ability to tamp down inflation, but also over the potential effects of higher interest rates on financial markets and the greater economy as the country continues its recovery from the pandemic.

Also in industry news this week:

• The impact of higher inflation also extends to taxes, and some components of the tax code that are linked to inflation (such as the tax brackets themselves) will see higher-than-average boosts this year (while other taxpayers could experience higher taxes from the components that aren’t linked to inflation, like the income threshold for Net Investment Income Tax)
• Though the news about the twin surges of inflation and the Omicron variant has been grim lately, a closer look at the numbers gives some cause for hope, as the rate at which inflation has increased went down between November and December, while the news from South Africa and the United Kingdom shows that the U.S. could soon see Omicron cases start to decline as swiftly as they rose initially

From there, we have several articles on efforts to improve diversity and inclusion within the financial industry:

• A new company called Choir aims to incentivize financial conferences to include more representation of women and people of color by creating a “diversity certification” (for conferences that choose to hire Choir to assess their conferences and engage Choir’s consulting services to improve their conference diversity)
• A paper suggests that “pre-CFP” designations could serve as a “gateway” to CFP certification for more diverse candidates by providing a lower-cost alternative to the CFP educational requirements that candidates can use to “test the waters” before committing to pursuing the CFP mark
• Kamila Elliott recently began her term as CFP Board chair, and though much attention has been given to her being the first Black woman to serve in that role – a significant milestone for the profession – the reality is that the industry’s diversity issues go beyond anything she can solve in her one-year term and require more structural change in the industry as a whole

We also have a number of articles on how individuals can make the most of their retirement years:

• Why a ‘challenge list’ might be a better choice than a ‘bucket list’ in retirement, and how advisors can help clients discover how they really want to spend their retirements
• While many clients are worried about running out of money in retirement, recent studies show that many retirees can actually safely increase their spending significantly (if only because they are being more conservative than they actually need to be!)
• Why many individuals can lose a sense of purpose in retirement, and how advisors can help clients develop strategies to regain this feeling

We wrap up with three final articles, all about the importance of committing to goals:

• Why personal and professional commitment is undervalued in a world of almost infinite options where we increasingly try to ‘keep our options open’ instead of committing deeply to one path in particular
• Why progress is almost never linear, and how to overcome the inevitable dips and stalls along the way
• How most success stories, from bloggers to financial advisors, are the result of years of hard work and persistence before material results start to show up

Enjoy the ‘light’ reading!

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Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with a study showing that private equity firms are targeting financial advisory firms with relatively clean disciplinary records for acquisitions, but that once acquired, advisor misconduct at these firms skyrockets an average of 147%! The reason for this jump is unclear, but potential explanations include heightened pressure from private equity owners to increase profits, or pushing too hard to cross-sell their other portfolio companies’ products and underestimating the compliance requirements of the advisory business. Either way, the study suggests that firm owners considering a sale who want to ensure that their clients remain in good hands could increase their due diligence of potential acquirers and their business practices!

Also in industry news this week:

• A new FINRA rule went into effect on January 1 that will attempt to reduce the risk to consumers from brokerages with poor disciplinary records by requiring these firms to fund a segregated account to pay potential arbitration awards (and increase their cost of doing business as long as they insist on keeping problematic brokers onboard)
• RIA M&A activity is expected to continue to surge in the coming year, according to a recent survey, with lofty firm valuations expected to sustain as well

From there, we have several articles on advisor communications and marketing:

• How to respond when clients object to their advisor’s recommendations (and why asking more questions might be a better approach than more aggressive persuasion to get them to implement)
• Why the best-performing types of pages on financial advisors’ websites include not only the basic “Who” and “What” of the advisors, but also show why a prospective client could be the right fit for the advisor and how the advisor helps their clients reach their goals
• Why advisors should focus less on client referrals and more on Google Reviews as a one-to-many client referral platform in light of the SEC’s marketing and testimonial rule

We also have a number of articles on being an effective manager and leader:

• Why sales training programs for financial advisors can prove ineffective if they use a “one-size-fits-all” approach without considering the personalities and needs of the advisors themselves
• How leaders can thread the needle between micromanaging their team and being too hands-off by timing their help for when it’s needed most (and backing off when it isn’t)
• Why most advisory firms need at least one person tasked with having a vision for the firm and a strategy to get there – which, as firms grow, may be someone other than the firm’s owner who is hired strictly for their “professional” leadership

We wrap up with three final articles, all about New Year’s Resolutions:

• Why one advisor shifted from making New Year’s Resolutions to focusing on the habits that make it more likely he will achieve his goals (and letting the results fall where they may)
• Ways individuals can make their financial lives happier in 2022, including by focusing internally rather than externally, simplifying their finances, and getting on the same page financially with a spouse
• Why failing at New Year’s Resolutions can actually lead to better personal and professional growth in the future

Enjoy the ‘light’ reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that the Social Security Administration will be keeping its local field offices closed for the foreseeable future, despite earlier reports that they would be re-opening in early 2022 for the first time since March of 2020—meaning that those who rely on Social Security will need to continue to use the agency’s website and phone line to access their services, and advisors working with clients will want to keep getting even more familiar with the SSA’s online capabilities as well.

Also in industry news this week:

• The SEC has gone back and forth on whether it will allow RIAs to use the term “fiduciary” on Form CRS, frustrating some RIA owners who want the form to better distinguish the standards of conduct for RIAs from those for broker-dealers
• A new research report shows that the share of client assets managed by wirehouses has declined significantly since 2010, and projects to shrink even further as more advisors continue opting to go independent

From there, we have several articles on various strategies employed by the ultra-wealthy to avoid taxes, including:

• A workaround that allows business owners in certain states to circumvent the $10,000 limit on State and Local Tax (SALT) deductions (if the state enacts the necessary changes)
• How billionaires have aggressively claimed business losses on their hobbies and leisure pursuits to offset their other income, in spite of IRS rules that prohibit such “hobby” losses
• How Wyoming displaced offshore trusts to become one of the most popular tax havens in the world for the ultrawealthy, owing to the “Cowboy Cocktail” of trusts and business entities that allow individuals to conceal their ownership of assets within the state.

We also have a number of articles on the growing field of ‘financial psychology’:

• How understanding financial psychology can allow advisors to help clients make better financial decisions (and lead advisors to create better financial plans)
• What advisors can learn from the high-touch world of concierge medicine
• Why worrying about money transcends wealth levels and what advisors can do to maximize their clients’ (and their own) happiness

We wrap up with three final articles, all about how the pandemic has affected the lives of Americans:

• How the top 1% and the bottom 50% have seen the greatest relative wealth gains during the pandemic, while the middle- and upper-middle class may be getting squeezed (at least on a relative basis)
• Why many knowledge workers are quitting their jobs, and how financial advisors can adapt to the new working environment
• Why Americans have done little to change their recent behavior, despite newly skyrocketing COVID case counts, and how that might affect both advisors and their clients heading in 2022

Enjoy the ‘light’ reading!

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Enjoy the current installment of “Weekend Reading for Financial Planners” - this week’s edition kicks off with the news that the Biden administration will extend the moratorium on Federal student loan payments until May 1, giving some relief to borrowers impacted by the continuing effects of the pandemic (and softening the blow that January’s lapse in monthly Child Tax Credit payments, alongside the original February 1 date when loan payments would have restarted without the extension, was expected to have on household balance sheets).

Also in industry news this week:

• Research shows that, after years of being slow to incorporate ETFs into their clients’ portfolios, investment advisors have actually passed retail investors (and institutions) as the largest buyers of ETFs
• The Department of Labor has issued guidance for brokers to freshly evaluate the potential conflicts of interest that their payout grids present (especially grids that provide retroactively higher payouts upon reaching the next threshold)

From there, we also have several articles discussing retirement planning:

• New research shows that the pace of the observed decline in spending over the course of a retirement can differ based on a retiree’s wealth and health, suggesting that while spending usually declines for retirees in their later years, the typical clients of advisors may actually maintain more level retirement spending after all?
• How advisors can help younger clients balance saving for the future with enjoying life today and not ‘over-saving’
• How a new tool that helps individuals to search for the best places to live in the U.S. (for them) based on a range of criteria could help advisors better estimate a client’s potential expenses in retirement

We also have a number of articles on advisor marketing:

• Why ‘social proof’ is an important part of attracting new clients, and how advisors can use testimonials and online platforms to generate it
• Why advisors might not be getting as many referrals as they would like from Centers of Influence, and how they can get more
• Why establishing and communicating company culture is important to attract and retain the ‘right’ clients and employees (and should deliberately repel the wrong ones!)

We wrap up with three final articles, all about how advances in technology have the potential to change the way we live and work in the future:

• A primer on the buzz around “Web3”, and why, despite the legitimate concerns about its widespread adoption, it’s worth keeping an eye on how blockchain-based Web3 technologies continue to evolve
• Why, after decades of Microsoft Word as the default document editor for many organizations, competitors are now springing up to compete (and change the way we create and edit documents in the online era)
• How the mass adoption of telecommuting could, despite its short-term benefits, pose long-term threats for knowledge workers who may now face more global competition for their jobs

Enjoy the “light” reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that the Senate vote on the much-anticipated Build Back Better Act has been delayed until after the start of 2022 after Senate Democrats could not reconcile their disagreements over the bill’s size and scope – though the pending lapse in expanded Child Tax Credit payments (along with other highly touted parts of President Biden’s agenda) puts pressure on the Senate to act soon to pass the bill ahead of 2022’s midterm elections

Also in the news this week:

• Research from Cerulli has found that the number of retail broker-dealers declined by 28% in the decade from 2010 to 2020, underscoring the extent to which small- and mid-sized broker-dealers have struggled to retain advisors who have either jumped to larger broker-dealer firms or switched to the “pure” RIA model
• A consumer study shows that among people with over $250,000 in assets, having a financial advisor is associated with higher overall happiness – with the effect increasing dramatically for those with over $1.2 million

From there, we also have several articles discussing recent surveys that show how different types of consumers find both financial advice and financial advisors:

• Why wealthy millennials are looking for financial advisors who can best coordinate their advice with digital tools (but aren’t using digital tools in lieu of advisors)
• Consumers are looking to a wide range of online sources – from Facebook to TikTok – for financial advice, suggesting that advisors who demonstrate expertise on these sites could be better positioned to attract potential clients
• A survey of how consumers select financial advisors shows that wealthier individuals are more likely than others to use the recommendations of centers of influence rather than friends, and that affluent Millennials behave more like the affluent than less wealthy Millennials when it comes to working with advisors

We also have a number of articles on inflation and the investments that might serve as inflation hedges:

• How REITs and equities have outperformed gold as inflation hedges
• Why cryptocurrency's value as an inflation hedge is still unclear
• How the inflation-adjusted price of college tuition has recently started to fall, after decades of increases

We wrap up with three final articles, all around how Vanguard shapes the investing and financial advice industry today:

• Why Vanguard is continuing its expansion into financial advice (and opening a new office in the home territory of its rival Charles Schwab)
• Why the biggest fund in the world – the Vanguard Total Stock Market Index Fund – tracks an index (the CRSP U.S. Total Market Index) that few non-professional investors have heard of, and what happens when a fund gets so large that it impacts the index it’s tracking
• How Vanguard has evolved beyond its original mission of low-cost index investing for everyone – and why that doesn’t necessarily constitute a betrayal of its principles

Enjoy the “light” reading!

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Enjoy the current installment of “Weekend Reading for Financial Planners” - this week’s edition kicks off with news about the U.S. Supreme Court’s hearing of a case involving the Northwestern University employee retirement plan, whose participants claim that the plan’s administrators breached their fiduciary duties by offering ‘too many’ choices and providers, such that they failed to reach size breakpoints that could have reduced the plan’s fees… a case that will have broader implications for the types of claims that other retirement plan participants will be able to bring against their plans’ sponsors (and raising broader questions about just how far a fiduciary really has to go in trying to minimize costs for their clients).

Also in industry news this week:

• While regulators have signaled that they don’t intend to re-write the recent SEC and DOL “Best Interests” regulations that allow for conflicted advice, broker-dealers are likely to face more scrutiny in examinations from the SEC and DOL focusing on conflicted compensation in the coming year
• Though the “Secure 2.0” bills in the U.S. House and Senate have seen little progress since being introduced in the spring, legislators are still optimistic that the bipartisan bills could actually still pass before the end of the year (and if not, sometime in early 2022?)

From there, we also have several articles on options for investing in cryptocurrencies and the creation of a new type of blockchain-based organizational structure:

• The introduction of a crypto index using separately managed accounts that could be widely available to advisors next year
• Fidelity launched a ‘spot’ Bitcoin ETF in Canada, but U.S.-based advisors and investors will face hurdles investing in the fund
• The potential for Decentralized Autonomous Organizations (DAOs) to serve as a more efficient business structure for membership-style organizations

We also have a number of articles on investing:

• How the sharp rise in inflation has led to the increased popularity of Series I savings bonds, whose current 7.12% annual interest rate led to over $1.3 billion in new bonds being purchased in November alone
• Why structured notes are gaining more interest as a higher-yielding alternative to traditional fixed-income assets, despite some notable potential downsides to investors
• How “direct indexing” has seen an increase in interest, owing to its possibilities for tax-loss harvesting and customizing portfolios to fit investors’ needs

We wrap up with three final articles, all about seizing opportunities, even if there is a risk of failure:

• Why taking positive asymmetrical risks can lead to personal and professional success
• How striving for excellence rather than perfection can lead to more creativity
• The importance of momentum, and why temporarily skipping over challenging tasks and NOT checking every task on a to-do list can make it more likely a larger goal is achieved

Enjoy the ‘light’ reading!

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Enjoy the current installment of “Weekend Reading for Financial Planners” – this week’s edition kicks off with the news that industry giant Envestnet has filed with the SEC to launch its first four ETFs, which will take an ‘ActivePassive’ approach that will take both active and passive investing approaches within the same ETF. And while Envestnet has previously used the ‘core and explore’ approach in its mutual funds, these will be their first offerings using the more tax-friendly ETF wrapper.

Also in industry news this week:

• Client risk assessment provider Riskalyze is further expanding its product offering with ‘Discovery’, a tool that combines Riskalyze’s risk assessment score with its proprietary investment risk-adjusted performance metrics to facilitate client portfolio construction for advisors
• A new company is being formed that will support RIAs that want to provide Pooled Employer Plan (PEP) services to clients without running afoul of IRS rules

From there, we also have several articles on retirement planning, including:

• A critique of Morningstar’s suggestion that the “4% Rule” for safe retirement withdrawal rates should be lowered to 3.3%, from the financial planner who first wrote about the 4% Rule
• New research shows how retirees increased their spending as a percentage of their pre-retirement income from 2016 to 2019… but subsequently cut back when COVID struck in 2020
• How the new, streamlined Social Security statement better illustrates the potential benefits of delayed filing

We also have a number of articles on year-end tax planning:

• How to reduce the capital gains tax impact from rebalancing investment portfolios after a strong year of performance in the stock market
• How to determine which types of assets (and accounts) make for the most tax-efficient charitable contributions
• Why cryptocurrency investors may see increased scrutiny from the IRS as it ramps up its efforts to enforce tax compliance on digital assets

We wrap up with three final articles, all about charting a career path and how it might change along the way:

• Why mental models can be useful tools for individuals considering a career change
• How individuals can facilitate ‘hot streaks’ in their career by exploring different areas and exploiting their skills once a promising opportunity is identified
• The importance of understanding which ‘career season’ – growth, lifestyle, and reinvention – an individual wants to pursue at a given time

Enjoy the ‘light’ reading!

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Enjoy the current installment of “Weekend Reading for Financial Planners” – this week’s edition kicks off with a breakdown of how the Build Back Better Act is likely to change now that it has passed the House but is just now heading to the Senate for a fresh round of debates – including, most notably for financial advisors and their clients, the potential increase in the SALT deduction cap that was included at the last minute in the House’s version of the bill but faces resistance from the progressive wing of Democrats in the Senate.

Also in industry news this week:

• IRS data showing that the amount of estate tax paid by Americans fell by over 50% from 2018 to 2020, the result of a combination of higher estate tax exemptions after the Tax Cuts and Jobs Act… and higher adoption of more sophisticated estate planning methods (e.g., GRATs and FLPs) by wealthy individuals
• A new report by Cerulli showing how investors, despite being increasingly aware of the fees they pay for financial advice, are also becoming more willing to pay for the advice itself, creating opportunities for advisors with non-AUM fee-for-service models

From there, we also have several articles on digital marketing, including:

• The highest-performing types of financial advisor blog posts, including both topics that demonstrate the advisor’s expertise, and those that showcase their personality and client experience
• How to create email subject lines that lead to higher opening and click-through rates with prospects
• How video marketing campaigns outperform other media – as long as they are hosted natively on the advisor’s site (not just via YouTube or social media) and promoted effectively

We also have a number of articles on changes to the college financial aid process and student loan planning:

• Upcoming changes to the Free Application For Federal Student Aid (FAFSA) and the formula used to determine financial need
• How distributions from grandparent-owned 529 accounts will no longer negatively affect a student’s eligibility for financial aid under new FAFSA changes in the coming years
• Why the biggest student loan burdens are shifting from undergraduates to graduate students, and the challenge of ‘elite’ Master’s degrees that have a high cost but don’t lead to (materially) higher incomes

We wrap up with three final articles, all about financial advisory practice management and conveying our value as financial advicers:

• Why ‘unbundling’ financial planning services can create value for both advisors and clients
• How clients determine the value they get from a financial planning engagement, and the way advisors can (re-)price their services accordingly
• A consumer survey highlighting that consumers may get initial introductions to advisors through friends-and-family referrals, but increasingly are looking to the advisor’s presentation of services, brand, cost, and communication style, to determine whether to hire (and stick with) the advisor

Enjoy the ‘light’ reading!

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