All Archives Of Weekend Reading for Financial Planners

Weekend Reading for Financial Planners (July 31-Aug 1)

July 30, 2021 02:41 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the industry news that the CFP Board is proposing updates to its disciplinary Sanction Guidelines and Procedural Rules, which would make the Failure To Report a disciplinary violation to the CFP Board result in a public censure (not just a private one)... and even more significantly, that the CFP Board is seeking input on whether it should begin to apply monetary sanctions on CFP professionals for violations of its Standards of Conduct, where the fines it levies would be used to fund subsequent enforcement as the CFP Board continues to try to weed more 'bad apples' from its ranks. (For those who are interested, a public comment period will be open until September 21st for those who have something to say about it!)

Also in the industry news this week are a number of other interesting industry headlines:

The SEC announces a series of fines, ranging from $10,000 to more than $90,000, on both RIAs and broker-dealers that still aren't distributing Form CRS to clients and posting it for prospects on their website as required under Reg BI
A new research study finds that more and more consumers are seeking financial planning advice, and that younger clients are actually the most likely to be seeking out a new financial advisor now

From there, we have several articles on advisor marketing:

The latest Schwab benchmarking study shows that the top growth firms are the ones most effectively leveraging digital marketing strategies to outgrow their peers
Why financial advisors need to have a sound financial footing themselves to get clients (or else your need to close the prospect and get the sale will end out killing the deal)
The beliefs that hold advisors back from getting referrals, including that most clients actually do want to refer their advisor, but don't because they're not sure who they know that would qualify for their advisor's minimums

We've also included a number of retirement-related articles, including:

How retirees are increasingly seeking 'non-financial' retirement advice, because the factors that most drive wellbeing in retirement are a function of health and wellness (not finances)
How retirement dreams can quickly cascade down into 'retirement hell' for those that struggle with having too much free time
Confessions of a young tech multi-millionaire about how she struggled greatly when an IPO suddenly brought her an 'unexpected' $6M fortune

We wrap up with three final articles, all around the theme of what it takes to build wealth and how it benefits us:

How 'true' wealth is about being able to control our time, have freedom to say what we want (without fear of reprisal from work), and simply not need to worry about money anymore
A Northwestern University study on siblings and twins shows what appears to be a causal effect between mid-life money (in our 40s) and our subsequent longevity
The "Go Big, Then Stop" approach to saving for retirement (because if you save enough early enough, you literally don't have to keep saving at all to retire, and can simply let the early compounding take over!)

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (July 24-25)

July 23, 2021 03:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with industry buzz that a new Senate bill would remove the "Specified Service Trade Or Business" (SSTB) limitations on the Qualified Business Income deduction, effectively opening the door for financial advisors to claim the 20%-of-income deduction... with the caveat that those financial advisors under $329,800 of income (as married couples, or $164,900 for individuals) could already claim the QBI deduction, while the new rules would begin to phase out the QBI deduction for everyone above $400,000 of income. Which means high-income advisors who couldn't claim the QBI deduction still won't be able to under the new rules anyway (if they're even passed by Congress, which remains to be seen).

Also in the industry news this week are a number of other interesting headlines:

A Capgemini World Wealth Report highlights that high-net-worth investors are increasingly becoming adopters of robo-advisors... and also increasingly want to hire human advisors for their more complex advice needs beyond what an automated investment platform can provide
Vanguard is ramping up its own push into financial advice, as the 0.30% AUM-fee Personal Advisor Services platform surpasses $200B of AUM (albeit mostly from Vanguard users who weren't likely to hire a higher-cost independent advisor anyway?)

From there, we have several articles on the current regulatory environment:

The SEC issues a new Risk Alert on hybrid advisors whose brokerage platforms may be 'double-dipping' on wrap accounts by also earning fees on underlying products
Massachusetts charges Schwab with failing to oversee an independent advisor who was billing clients even after his licenses were terminated... raising questions of what role RIA custodians should play in compliance oversight?
The CFP Board's new Managing Director of Enforcement responds to criticism about whether CFP Board is really ready to take enforcement seriously and says CFP Board is stepping up

We've also included a number of articles on advisor marketing, including:

Consumers are reporting that they don't place much trust in media financial personalities, raising questions about media PR as an advisor marketing strategy
Advisors often don't claim enough credit for their own improvements to clients, and should 'market' their new offerings
Tips on which social media platforms really drive new leads to advisors (hint: it depends on the type of clientele you're trying to attract!)

We wrap up with three final articles, all around the theme of productivity and focus:

How to distinguish between being "busy" and really improving your "productivity" (which isn't about efficiently doing more, but finding the focus to do the fewer things that really matter)
Tips to get yourself 'unstuck' if you feel like you're spinning your wheels and can't move forward
How being more willing to change your mind may seem scary (no one wants to be seen as a "flip-flopper") but research shows it is actually associated with greater wellbeing!

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (July 17-18)

July 16, 2021 02:55 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry news that Vanguard has completed its first-ever external acquisition... of JustInvest, a direct indexing platform, specifically to offer it to financial advisors using Vanguard, as even Vanguard is now placing a bet that direct indexing is going to be a major part of the advisor's investment management services in the future (whether to maximize tax-loss-harvesting benefits, or simply to craft more 'customized' indices for clients based on the advisor's investment philosophy, or the clients' own ESG- or other purpose-based investment preferences).

Also in the industry news this week are a number of other interesting headlines:

A new Executive Order from the White House raises the possibility of a crackdown on advisory industry non-compete and non-solicit agreements in the coming years
Carson Group's $17B of AUM is valued at more than $1B of enterprise value as Bain Capital takes a stake in the rapidly growing RIA channel

From there, we have several more interesting articles on advisory firm acquisitions and valuations:

Advisory firm M&A slows slightly in Q2 over Q1, but is still up more than 50% over 2020 as firms rebound and rising valuations tempt more advisors to sell
Concerns are growing that advisory firm valuations may be rising too much and too quickly... even as others simply suggest that firms have been undervalued all along and the industry is just now recognizing how valuable ongoing fiduciary relationships really are
How advisory firm consolidation is leading some to suggest that the small independent advisor may be doomed... even as the reality is that today's consolidators were small firms that took market share from the mega-firms of 20 years ago!

We've also included a number of articles on focusing an advisory firm's marketing and growth, including:

How sometimes "less is more" when it comes to having a clear focus on an ideal clientele (that helps the firm stand out for those prospects with a premium offering)
Why advisory firms that focus into a niche don't have to say "no" to non-niche clients, but may want to in order to accelerate their own growth
Why newer advisors are beginning to focus on niches from the start as an alternative to the traditional "natural market" approach

We wrap up with three final articles, all around the theme of managing our own focus:

How having discipline in our habits ultimately grants more freedom to make exceptions to those habits when we need to
Why the scarcest resource to manage is not our money, nor our time, but our attention
How creating more flexibility for ourselves to have more options is ultimately what drives our own happiness

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (July 10-11)

July 9, 2021 02:59 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a controversial discussion of the CFP Board's recent ramp-up of enforcement in the aftermath of the July 2019 Wall Street Journal expose about the organization promoting CFP certificants "in good standing" on the CFP Board's website even as they had material regulatory infractions reported on FINRA's BrokerCheck, and raises the question of whether the CFP Board is still doing enough to really clean up its ranks, or if the organization is actually trying to back away from its own standards by eliminating its own marketing messaging around being "the highest standard" and simply promoting the (admittedly still positive) general benefits of financial planning instead?

Also in the industry news this week are a number of other interesting legislative headlines:

A new Senate Bill would restore the tax deductibility for retirement advice... but only if paid via an employer's payroll system, which isn't feasible for most independent advisors
Whether the Senate may revisit a prior proposal to limit the maximum size of IRAs to 'just' $5M (in response to the ProPublica story about Peter Thiel's $5B Roth IRA)

From there, we have several interesting articles on retirement planning:

A new BCG study finds that mass affluent retirees are still underserved... advising large banks and broker-dealers to encroach further on what has historically been the domain of independent financial advisors
An Allianz consumer study finds that a lot of consumers are still reluctant to talk to their financial advisors about their retirement fears
The thought process of one self-directed consumer who decided to hire a financial advisor for the first time when transitioning to retirement (and what were, and were not, factors in his decision)

We've also included a number of articles on cash flow and budgeting, including:

Morgan Housel's take on 10 "Money Rules" to live by
How self-imposed frugality to achieve early retirement can cause a 'frugality syndrome' where retirees can't enjoy their money even once they do retire
Alternatives to minimize the zero-yield cash of an emergency savings fund, including leveraging an HSA instead (just keep the receipts!)

We wrap up with three final articles, all around the theme of personal productivity:

A review of several popular to-do and project management tools to stay self-organized
Why "5" appears to be the optimal number of hours of productive work every day
Tips on how to better focus yourself and make it easier to do the things that actually have the most positive impact in our businesses and our lives

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (July 3-4)

July 2, 2021 02:55 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a discussion of some recent White House proposals that would crack down on popular high-net-worth estate planning strategies, including dynasty trusts and IDGTs, as the administration increasingly focuses not on increasing estate tax rates or reducing the estate tax exemption, but on tightening enforcement to just make it more difficult to avoid the estate tax system as it currently exists.

Also in the industry news this week are a number of other interesting headlines:

A Spectrem Group study finding that what clients value most now is "unbiased advice" and expertise ("having knowledge [the client] is lacking"), while "helps me avoid emotional financial decisions" is actually one of the least valued services according to consumers themselves
How the IBD model is evolving away from being a broker-dealer altogether, as the entire advisory industry continues the transition from commissions to fees

From there, we have several interesting articles on communication with clients and prospects:

Tips on 'icebreaker' questions to ask in an initial prospect meeting to get the conversation going
How to prepare for a difficult conversation with a client (e.g., when it's time to raise your fees!)
How to accelerate the trust-building process with new prospects in the first meeting

We've also included a number of articles on practice management, including:

Why it's so important to manage client capacity to avoid burnout (and what's a realistic number of clients/advisor before hitting the capacity wall)
What it takes to scale an advisory firm from a small practice into a large business
Why the fastest path to achieving scalability may not be implementing better technology, but instead in reducing the number of service options offered to clients in the first place

We wrap up with three final articles, all around the theme of the ever-evolving office of the future:

Why the idea that "offices are necessary to promote spontaneous interactions for innovation" may not actually be valid
How firms are shifting to "bonding trips" as a way to promote team connection in the absence of offices
Why we may miss the daily commute even if we prefer to work from home (because it was actually more beneficial as a time to clear our heads than we may have ever realized?)

Enjoy the 'light' reading, and happy 4th of July weekend!

Weekend Reading for Financial Planners (June 26-27)

June 25, 2021 02:59 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a look at the big media buzz around how Peter Thiel managed to built a whopping $5 billion Roth IRA by 'stuffing' it full of pre-IPO shares of his companies and early stage startup investments (first PayPal, then Palantir, as well as Facebook), which as part of a ProPublica investigative journalism expose is already raising questions on whether the IRS needs to further crack down on how illiquid private investments are valued when being contributed to Roth accounts?

Also in the industry news this week are a number of other interesting headlines:

A recent study on consumer preferences in retirement shows that what retirees actually care about is very different than what they expected in the years leading up to retirement, with a major focus on health, family, and purpose, and not 'just' retirement finances alone
FPA hires a new "Chief Membership Experience Officer" as incoming CEO Patrick Mahoney attempts to change the tone and focus to turn around the beleaguered membership association

From there, we have several interesting articles on the rising focus on operations and the 'business' side of advisory firms:

PFI Advisors (an operations consulting firm) launches a new "COO Society" for advisory firm operations staff to learn and train
Angie Herbers launches a new practice management Academy for advisory firms focused on the core areas of business management for a scaling advisory firm
Why COOs are increasingly becoming a partnership-track role in larger advisory firms

We've also included a number of articles on the growing focus of 'data' in advisory firms, including:

A consumer study that shows consumers are very willing to share their data with their wealth managers (more so than their own financial institutions)
How "Chief Data Officer" may soon become a key role in larger enterprise advisory firms that manage their data as an asset
The trade-offs in being a data-driven leader (and why there is such a thing as being 'too' data-driven, such that the firm misses out on innovation by looking only in the rear-view mirror)

We wrap up with three final articles, all around the theme of learning from the past to inform the future:

How "The Office" itself has evolved over the past 100 years, and why repeated calls for it to decline in popularity haven't materialized for decades
Why it's becoming increasingly popular to (once again) look to antiquity for insights about what's healthy and best for us
The fascinating link between walking outside and improving our mental health and creativity

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (June 19-20)

June 18, 2021 02:55 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry news that now Goldman Sachs has officially thrown its hat into the RIA custody ring as well, announcing a significant new relationship with mega-RIA Stewardship Partners, and positioning itself to compete especially for the ongoing flow of "breakaway brokers" that may prefer the storied Wall Street brand over a more "retail"-affiliated RIA custodian?

Also in the industry news this week are a number of other interesting regulatory headlines:

The SEC is once again considering further updates to the Accredited Investor rules, including the potential to increase the income and net worth thresholds (which haven't been adjusted for inflation in decades) but also to potentially allow more exceptions for those with significant education or similar credentials
The Department of Labor is preparing yet another update to the fiduciary rules that may look into not only the compensation that advisors receive, but the titles they use when holding out to consumers

From there, we have several interesting articles on the evolution of the subscription fee model:

How subscription fees open up new segments of clients that the AUM model doesn't serve, expanding the breadth of who advisors can serve profitably
An industry benchmarking study showing that growth in subscription fee service models has reached the point where retainer-fee firms are enjoying the same high retention rates as AUM firms (even through the pandemic in 2020)
Why it's so important to set a minimum retainer fee for any client an advisory firm works with, to ensure they maximize the time they're spending with clients (and prospects)

We've also included a number of articles on retirement, including:

Strategies to avoid the IRMAA Medicare surcharges in retirement (particularly by managing pre-tax retirement accounts and their later-years' RMDs)
The valid and not-so-valid criticisms of using annuities in retirement allocations
Despite decades of fears that a large segment of consumers won't be prepared for retirement, in practice a recent Gallup study shows that nearly 80% of retirees are satisfied with their retirement (suggesting that we may underestimate our ability to adapt to our retirement circumstances whenever they do come!?)

We wrap up with three final articles, all around the theme of finding financial contentment:

Economic conditions have improved dramatically since the 1950s, but our financial satisfaction has not, suggesting that the real challenge is not improving our financial condition, but preventing our expectations from growing faster than our reality?
When we are only ever limited in how much we can control in our lives, the key to financial happiness is not in having 'everything', but getting to the point that we feel we're in enough control to not need to worry about the future
While we focus heavily on building wealth in portfolios (and recovering from the decline of the pandemic), it's arguably investing in the bonds we have with our friends and family that builds the most happiness and life satisfaction

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (June 12-13)

June 11, 2021 02:58 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry news that LPL has formally announced the rollout of a 'standalone' RIA custodial solution for fee-only RIAs, promising no asset minimums and a more "high-touch, white-glove" approach than its larger competitors (i.e., Schwab and Fidelity), as the largest independent broker-dealer (and third-largest RIA custody given LPL's hybrid RIA assets) continues its shift from brokerage-based roots to becoming a platform for RIAs as the industry at large continues its own shift from brokerage to advisory and products to advice.

Also in the industry news this week are a number of other interesting headlines:

The latest Schwab Independent Advisor Outlook Study finds that the average advisory firm added more clients in 2020 than prior years, but also is struggling more with new competitors in the advice business
Wealthy investors are increasingly shifting their investment preferences towards a more values-based approach as "purpose-driven investing" threatens to replace "goals-based investing" (at least for HNW clients)

From there, we have several interesting articles on industry regulation:

FINRA withdraws its proposal to modify the expungement rules as PIABA claims it is not stringent enough in limiting such expungements to ensure consumers (and other regulators) have access to information about consumer complaints against problematic brokers
New legislation in Congress is shining a fresh light on whether it's time to end "mandatory arbitration" clauses in broker-dealer and RIA agreements
The SEC is pledging to step up enforcement of Regulation Best Interest, and FSI is pushing back against the potential for "regulation by enforcement"

We've also included a number of articles on the ongoing debates around income and wealth inequality and the broader economy:

A controversial investigative report from ProPublica finds that 25 wealthiest US billionaires paid an average tax rate of less than 16%, as the ultra-HNW increasingly take advantage of ultra-low interest rates to borrow against their assets for spending to avoid the need to liquidate and pay capital gains taxes
A new study suggests that the "global savings glut" may be primarily driven by the concentration of wealth, such that the wealthiest households literally can't deploy their cash quickly enough back into the economy (leading to a rise in savings that is driving down interest rates and fueling low-interest debt in the bottom 90% of households)
The balance between workers and businesses appears to be shifting as wage growth suddenly gains traction while the total number of working-age Americans declines for the first time ever

We wrap up with three final articles, all around the theme of trying new things:

Often the best "crazy new ideas" are the ones that are most widely criticized... until they're accepted and become self-evident
How self-criticism is only constructive up to a certain point, beyond which being introspective can actually become self-limiting
Why in the end, the best way to really learn something is not to study on it and pass a test about it, but to do it and even fail at it (because once you've failed and felt the pain of failure, you rarely ever forget that lesson for the rest of your life!)

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (June 5-6)

June 4, 2021 02:56 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a fascinating industry study of more than 70,000 financial advisors showing that 2020 actually witnessed record client retention rates across the industry (94.6%) but also one of the slowest years for new client acquisition (ostensibly at least in part because so few clients were willing to change advisors in the first place?), as the advisory industry at large continues to shift into increasingly stable ongoing fee-based AUM relationships with its affluent clients (though in practice, the majority of affluent clients are also maintaining unmanaged brokerage accounts for at least some of their investable assets as well!).

Also in the industry news this week are a number of other interesting headlines:

A new white paper from Bob Veres and Matthew Jackson highlights how niche financial planning is becoming the new frontier (though arguably, fee-only financial planning already has been a niche for the past 20 years?)
An Arizent study finding that the majority of advisors wish to stay at least partially working from home as the pandemic subsides... although not significantly more than the number of advisors who already worked at least partially from home pre-pandemic!?

From there, we have several interesting articles on cryptocurrency:

The FPA's latest Trends In Investing survey shows a significant spike in the number of advisors looking to allocate more to cryptocurrency in the coming year (at 26%, up from fewer than 1% of advisors just 1 year ago)
Schwab may be gearing up to soon make cryptocurrency investing available on its platform
Why the dominance of cryptocurrency in the consumer media means advisors have to talk to clients about it, even if the advisor's view is that it's not (yet?) worth investing into

We've also included a number of articles on the growing buzz around inflation:

A recent study highlights the investments that perform better or worse when economies transition into higher inflation environments
The heat is coming off forward-looking inflation expectations as investment markets increasingly assume the Fed may act
How to have the 'inflation conversation' with clients by focusing on the Rule of 72 and how long it takes for prices to double

We wrap up with three final articles, all around the theme of adding value in client relationships:

The opportunities for even fee-only advisors to add value to clients with advice about their insurance policies (even and especially if the advisor isn't the one selling them)
Tips on how to have more productive annual client review meetings by breaking them into backward-looking and forward-looking sections of the meeting agenda
How to think about restructuring advice fees into Service Fees and separate Access Fees to better align the interests of the client and their advisor to provide ongoing value

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (May 29-30)

May 28, 2021 02:59 pm 7 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry headline that Bank of America is banning new Merrill Lynch advisors from cold-calling, in what many are calling the "end of an era" of how financial advisors are recruited into the business, as the company looks to shift to a combination of digital marketing (through LinkedIn) and internal referrals of bank clients into its wealth management division, in what Bank of America says it hopes will reduce advisor churn, better support paying advisors viable starting salaries to avoid the hazardous "eat-what-you-kill" approach of the past, and expand advisor diversity by not needing to hire advisors who already have their own natural market... and also improve Bank of America's own client retention and reduce future advisor breakaways by hiring 'less entrepreneurial' advisors who are more likely to be reliant on the bank for their clients and support in the first place?

Also in the industry news this week are a number of other interesting headlines:

President Biden unveils the blueprint for his $6 trillion Federal budget for the coming year... though, in the end, the real question is what Congress will pass (or not)
A new study finds that wealth preferences are shifting, with fewer people viewing wealth as "peace of mind" and more associating wealth with happiness, success, and influence instead

From there, we have several interesting articles on investing:

Vanguard launches a new private equity investment option for its own retail clients (or at least those who are accredited) as the firm continues to move 'upmarket' to a more affluent clientele (who historically may have hired an independent advisor instead?)
Why the growing focus on ESG is leading to newfound scrutiny on how the "Big 3" index providers (Vanguard, Blackrock, and State Street) are proxy voting for their massive $15 trillion in investable assets
How I Bonds are getting some 'fresh love' as the government bond yields 3.54% (consisting of a fixed 0% rate and 3.54% inflation rate) in the current environment (albeit with a cap of just $10,000/year in new purchases)

We've also included a number of articles on broader industry investing trends:

The ongoing evolution of 529 plans to include more automated glidepath funds (that make changes in smaller, more gradual increments over time)
Why Millennials are actually not poorer (in terms of income or wealth) than prior generations, though student loan burdens have been especially damaging to a subset of Millennials
The launch of a new "Onramp Invest" platform to help advisors support their clients who are choosing to invest in cryptocurrencies (by facilitating integrations from popular crypto platforms to the advisors' own software systems)

We wrap up with three final articles, all around the theme of investing in oneself as an expert:

Why and how to position yourself as a "Visible Expert" to both attract more clients and be able to command higher advisory fees
How the primary benefit of being curious is often to discover opportunities you weren't even looking for (but never would have found without being curious)
Why the best bet you can make is often to 'bet on yourself'... which sometimes means being willing to take the scary leap into the unknown and believe in yourself that it will work out (which is what provides the courage and focus for the prediction to become a self-fulfilling prophecy!)

Enjoy the 'light' reading!