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 huge industry news that mega-RIA United Capital has been sold in a mega-deal to Goldman Sachs for a whopping $750M, in what is both an eye-popping valuation (nearly 3X revenue) that strongly validates the industry’s RIA trend and also signals a major shift for Wall Street itself as Goldman Sachs enters its biggest deal in nearly 20 years to move into the RIA business itself.

Also in the news this week was the announcement that, after years of relying on the Broker Protocol to recruit breakaway brokers from wirehouses, HighTower is now shifting to an RIA-acquisition model and dropping its own no-longer-relevant participation in the Broker Protocol. And the CFP Board has released a new guide with suggestions for what fee-only advisors should be mindful of with the new CFP Board Standards of Conduct coming this fall… as the reality is that it’s not only the broker-dealer community that is impacted by the new rules.

From there, we have several insurance-related articles, including the news that John Hancock is going to start offering LTC policyowners the chance to add a co-pay to their policy benefits as a way to mitigate premium increases, a look at what to consider when evaluating a hybrid LTC insurance policy for a client, and a broader industry look at the ongoing trends in the LTC insurance marketplace (from the ongoing rise of hybrid LTC policies that now outsell traditional LTC insurance almost 4:1, to the emergence of basic LTC coverage attached to Medicare Advantage plans).

We also have a few articles on the rise of video in financial advisor marketing, from tips and best practices in recording and sharing videos (it’s OK to record vertically, but it’s time to add subtitles!), additional tips to prepare if you’re about to start doing video for the first time, and a look at how it’s becoming increasingly common to record a video for your website when changing firms to explain the switch to your clients (both as a means to more personably get the message out to them all at once, and also because it’s easier to navigate the Broker Protocol if the former clients come to you and your website!).

We wrap up with three interesting articles, all around the theme of what’s changing (and what’s not) in the world of financial advice: the first looks at the divide between the “historians” (who suggest that the financial services industry has faced technology disruption before, and always ends out on top) versus the disruptors (who believe this time is really different) and which side is likely to win; the second explores a fascinating study that finds, in the aggregate, that the financial services industry has actually managed to maintain an aggregate fee that amounts to about 1.5% to 2% of all-in costs since the late 1800s (as the industry’s services and products evolve, but its “cut” remains almost exactly the same in the end!); and the last is a fascinating thought experiment from industry commentator Bob Veres about how the financial planning profession, in particular, will likely look different 20 years from now (when he predicts the transition from our product-based roots to our advice-centric value propositions will be complete, and the entire nature of the role of the financial advisor will look fundamentally different than it does today).

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 industry news that Morningstar has finally launched its own Model Marketplace, attached directly to Morningstar Office, but with the capability to customize model marketplace strategies to individual client needs (as a midpoint for advisors between fully building their own portfolios from scratch, and fully outsourcing to a TAMP). Also in the news this week was a new proposal from FINRA that would require broker-dealers who house a high volume of recidivist (repeat-offender) brokers to put aside extra dollars to help pay arbitration awards for damaged clients… which at best will help reduce the number of unpaid arbitrations to consumers, and may simply help discourage those broker-dealers from hiring repeat offenders in the first place (by increasing the cost of capital for them to do so).

From there, we have several other notable industry studies released this week, including one that finds the affluent are increasingly willing to pay for financial advice (but are by and large very dissatisfied with their current providers), another that found only 13%(!) of adult children have any intention of using their parents’ financial advisor (raising questions of whether advisors need to do a better job building relationships with next generation clients, or simply accept that next generation clients don’t want to work with their parents’ financial advisor in the first place), and a third finding that the majority of financial advisors are not happy at their current firms because they don’t feel well engaged by the firm and aren’t clear on how to proceed up the career track from where they’re at.

We also have a few articles on spending habits of the affluent, from one article exploring how wealthy Millennials spend money very differently than prior generations (from a greater desire to spend on VIP experiences, to the rise of luxury streetwear), to another looking at how the affluent are increasingly trying to be private in their real estate transactions, a discussion of Merrill Lynch’s new approach to helping the ultra-high-net-worth make prudent spending decisions (when “can we afford it” is no longer a constraint), and a discussion of when and whether parents should tell their teenagers the details of their household financial situation and how much they make.

We wrap up with three interesting articles, all around the theme of exercise and getting healthy: the first looks at the rejuvenating effects on heart and artery health that can come if you start to exercise more (even if you’ve been sedentary for years or decades); the second looks at a fascinating study that finds, even a decade after getting more physically active, there are still lasting positive effects from having exercised more in the past; and the last looks at the growing volume of research on the “biophilia hypothesis”, that as human beings we have an innate connection to nature, and that we can lift everything from our mood to our health by taking more regular walks outside and taking in a little more nature!

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 latest tracking report on mergers and acquisitions of advisory firms, that finds firms in the first quarter of 2019 doing deals at a near-record pace… but at a volume that is still ultimately a minuscule fraction of the total number of advisory firms in the marketplace, and with storm clouds looming that advisory firm sales could quickly grind to a halt if a bear market emerges (and firm owners may not want to sell at depressed valuations on reduced AUM revenues). Also in the news this week is the somewhat surprising revelation that the Department of Labor is working on a new fiduciary rule… but this time, one that will from-the-start be written to conform to whatever the SEC puts forth in its final Regulation Best Interest rule.

We have several other regulatory-related articles as well, including a look at how the SEC is stepping up its scrutiny on Chief Compliance Officers (and whether RIAs really have a bona fide compliance oversight program in place for their firm), the new expectations that the SEC is setting forth for advisory firms working with seniors (including establishing policies for the firm about how to handle senior clients experiencing cognitive decline), and a recent high-profile case of an RIA that was fined $150,000 by the SEC for failing to disclose over the span of a decade its revenue-sharing solicitor arrangement with Fidelity’s custodial referral program.

From there, we have several articles on advisor marketing and specifically websites, from the reasons why most advisory firm websites are useless (as even when they laud the benefits of the firm, they typically do so in the exact same undifferentiated way as every other advisory firm), updates to focus on first to make an advisory firm website look more modern, common blogging mistakes of advisors who are creating fresh content for their websites but aren’t necessarily distributing or leveraging it properly, and an interesting look in what Baby Boomers really search for online using Google’s Search tools (and why advisors are less likely to get clients with “10 Reasons Why Fiduciaries Deliver The Best Objective Transparent Financial Advice” and more likely to find prospects with “The Best Retirement Cake Inscriptions” instead… with, of course, the advisor’s contact information in the byline at the end!).

We wrap up with three interesting articles, all around the theme of how the advisory industry is forever growing and changing: the first looks at how entrepreneurs may actually be better off by launching their firms alone rather than starting with a team of 2-3 co-founders (at least, as long as they’re ready and willing to hire outside help in the areas they need it when they do need help); the second explores the evolution of the famous Andreessen Horowitz venture capital firm, and how the company is restructuring itself into an RIA (rather than a traditional VC firm) to have even more flexibility to make big focused bets with their client assets; and the last is a fascinating deep-dive into the evolution of Charles Schwab, and how the company grew from a discount broker for do-it-yourselfers into a mega-firm that’s increasingly focused on the full range of financial services… including a growing footprint in financial planning as well.

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 release from the CFP Board of their new “Roadmap” guide on what CFP professionals must do to comply with the new Code of Ethics and Standards of Conduct taking effect in October… and trying to clarify the confusing separation that the CFP Board has created between “financial planning” and non-financial-planning “financial advice,” both of which are subject to a fiduciary duty, but which have different Practice Standards and very different disclosure obligations to clients. Also in the news this week was the announcement that Schwab has put its new Portfolio Connect solution into general release, providing an entirely free portfolio performance reporting and billing solution for advisory firms… at least, for the ones that are willing to bring 100% of their assets to Schwab (as Portfolio Connect is not multi-custodial).

From there, we have a number of articles around client communication, including a look at how to better talk to clients about money (and why it’s so important to recognize that there’s no one “right” solution to solve someone’s financial issues), an interesting mental model to consider your own communication style as an Explainer (focused on knowledge), an Elucidator (focused on understanding), or an Enchanter (focused on wisdom), a behavioral finance discussion about why storytelling is so compelling to us as humans (to the point that we’ll make up a narrative just to explain the facts around us), and why it’s so hard for us to talk about money in the first place (hint: it’s often used as a status symbol, which makes it impossible to talk about money without talking about the sensitive issue of our personal perception of our own status in society).

We also have several articles on marketing, including a powerful reminder that it’s often impossible to get someone to sign up for comprehensive financial planning services when they have a pressing problem to solve (until/unless you agree to a more limited-scope engagement to solve that problem first), how to increase your conversion rate with prospects by focusing on how to make it easier for your prospects to engage you in the first place, and some good reminders about the importance of etiquette in building trust with clients (including why it’s really important to actually say “You’re Welcome” when someone says “Thank You” to you!).

We wrap up with three interesting articles, all around the theme of how pervasive technology is becoming in our lives: the first looks at how the pace of disruptive innovation, especially from large tech companies, is creating a backlash against the “move fast and break things” philosophy and towards an era where companies are expected upfront to not only build solutions for customers but also consider how they’ll remain accountable for their solutions not being used in harmful ways; the second is a look at how, with recent discussions of income inequality and the societal risks of mass unemployment due to automation, company executives are publicly downplaying their efforts towards artificial intelligence… even as they invest heavily into it anyway, if only because they’re terrified that if they don’t, a competitor will do so and disrupt them anyway; and the last looks at the rise of new technology companies like Sift and SecureAuth that are gathering data about all of our online activities in order to create a new kind of “trust score” that verifies whether we’re a “normal” human, a malicious bot, or a fraudster, except that unlike a credit score, consumers don’t have access to their trust scores (raising concerns about what happens when technology “scores” us unfavorably and limits our ability to use modern technology and websites, and we have no way to know, much less fix the situation)… even as some companies are finding that the tools may be reducing costs by making it easier to link together data across the internet to identify and eliminate fraudulent activity, and make the internet more trustworthy in the process?

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 big news that the FPA has released the second iteration of its OneFPA Network initiative, which backs off the key controversial requirement for chapters to be dissolved and “nationalized”… but still doesn’t seem to effectively answer the question of why such a big organization-changing initiative is so necessary, instead of simply focusing on the key items from a better membership database to more engaging strategic committees that FPA members and chapter leaders have been asking for in the first place. Also in the news this week was the announcement that New Jersey is now the latest to put forth a state-level fiduciary requirement out of concern that the SEC’s Regulation Best Interest isn’t stringent enough… and the proposed state fiduciary rule is being driven directly by the state’s regulators (not their legislators), which suggests a much greater likelihood that the rule will actually come to pass.

From there, we have a number of practice management articles, including a major new white paper from the CFP Board’s Center for Financial Planning to articulate a standardized career path that advisory firms can use for their next-generation advisors, why managing “human capital” is becoming so much more important in the age of fee-based firms (with the recurring revenue that both supports and then necessitates a growing staff infrastructure), and a look at whether financial planning programs today are doing enough to prepare students for the realities of what it takes to be a successful financial planner (and how far they’ve already come in just a few short decades).

We also have several articles on retirement planning, from a fascinating research study on how retirees tend to be happiest when they spend their time on “active” activities rather than “passive” ones (but how as we age, reduced mobility tends to shift our time from the happiness-inducing active activities to the less-happy passive ones), tips to better maintaining friends and social relationships as clients get older in retirement, and tips to consider as retirees face four major transitions when they age (health care, financial decision-making ability, living/lifestyle, and transportation).

We wrap up with three interesting articles, all around being more “unplugged” and engaging in more “digital minimalism”: the first is a look at one financial advisor who went to Australia for an extended work trip, found internet access was more limited, and ended out positively reshaping his digital habits in the process; the second looks at one company that pays its employees an extra bonus of up to $750 on their vacations for not checking email or Slack while they’re gone (both to encourage them to really unplug and recharge, and also because it better forces teams to learn how to delegate to and reinforce each other when someone is out); and the last is a look at how to more actively engage in “digital minimalism” itself, which isn’t just about unplugging and eliminating the smartphone and internet from your life, but instead just being more deliberate about which parts of your digital life you do want to remain engaged in (and then consciously eliminating the rest that doesn’t really matter after all).

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 Envestnet is adding a new “Credit Exchange” to its platform, where advisors will be able to assist clients in getting (pre-qualified) loans for everything from buying real estate to borrowing for their business, as Envestnet tries to facilitate a wider range of holistic advice for advisors on its platform (and expand the range of products available on/through its platform in which Envestnet itself can participate!). Also in the news this week is the announcement that Betterment is partnering with DFA to offer DFA funds through Betterment’s RIA platform… and without any trading fees (beyond Betterment’s own platform/wrap fee), applying even more pressure to traditional RIA custodians that still charge higher ticket charges to advisors’ clients who want to buy DFA.

From there, we have a number of articles about the increasingly contentious domain of brokers and advisors switching firms, from a new Regulatory Notice 19-10 from FINRA cautioning broker-dealers not to bad-mouth former brokers and in fact requiring them to give the former broker’s contact information to their former clients still at the firm, recent lawsuits from both Schwab and Edelman Financial Engines to pursue departing brokers and advisors as the tactics of Temporary Restraining Orders and injunctions historically used by wirehouses to retain their brokers’ assets are now increasingly being employed in the wealth management and RIA channels, and the rise of forgivable loans as recruiting tools in the independent broker-dealer channels (as wirehouses themselves are cutting back the growth pace since UBS and Morgan Stanley left the Broker Protocol).

We also have several articles on personal finance habits and decisions, from a discussion of how “Concierge Medicine” works and whether it’s really worth the cost, what it really means to be “financially healthy” (beyond just the dollars and cents of your household cash flow and balance sheet), and a discussion of some “unconventional” financial planning strategies that even financial advisors themselves sometimes engage in (e.g., taking money out of a retirement plan to invest in a startup… their own newly-launched advisory firm!).

We wrap up with three interesting articles, all around the theme of the benefits of writing and journaling (and how to do so more effectively): the first explores some of the benefits of establishing a writing habit for yourself in the first place (not merely as a form of communication and expression, but your own learning and self-discovery process); the second provides some good tips on how to write more effectively and “eloquently” when trying to communicate and make a point; and the third explores the benefits of simply writing for yourself, in the form of journaling, and how to adopt an effective journaling habit by simply creating a structure for yourself to journal just one sentence per day (and then look back and see your sense of progress after a month or few!).

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 industry buzz that there’s some new retirement legislation winding its way through Congress, known as the SECURE Act, that is showing promising signs of passing later this year, and would make a number of notable changes to retirement accounts, from eliminating the age limit on IRA contributions, pushing back Required Minimum Distributions from age 70 1/2 to age 72, and curtailing stretch IRAs as a revenue-raiser to “pay” for the other changes.

There were also a number of regulatory news headlines this week, including the death (at least for now) of Maryland’s proposed fiduciary rule, a new simple one-page Fee Disclosure form under consideration in Massachusetts (even as debate continues over the SEC’s proposed four-page Form CRS disclosure), a discussion of whether the recent fiduciary momentum at the state level means that it may actually be a better way to enact improved regulation of advisors (if only to eventually force federal regulators to then create a uniform national law), and a fascinating (and painful) look at how the rise of forgivable-loan recruiting bonuses amongst broker-dealers may be causing consumer harm (and a rising number of broker bankruptcies).

From there, we have a number of articles around practice management, including: what advisory firms should focus on if they’re struggling with growth; how to better measure a firm’s AUM and revenue over time to ensure the firm will know if/when it has a growth problem; how advisory firms are shifting from revenue-based compensation to team-based and firm-based compensation to promote a more team-oriented growth environment; and what owner-advisors should be thinking about to increase the valuation of the business if there’s a plan to sell the firm in the coming decade.

We wrap up with three interesting articles, all around the theme of repetition and breaking the boredom routine: the first looks at how adopting deliberately repetitive habits is a key to helping us change our behaviors for the better (and to simply make it easier to do what we know we need to do, without being forced to spend so much time and energy thinking about it!); the second looks at how we as human beings tend to bond by sharing our stories… except when our stories get too repetitive that no one wants to hear them, though ironically acknowledging the repetitiveness of our stories can actually still build trust after all; and the last explores how to relieve the boredom that often comes with routines, not by ending the routine behavior itself but simply by recognizing the benefits of choosing to deliberately break the routine (or as the saying goes, “everything in moderation… including moderation!”).

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 big news that Charles Schwab is launching a new financial-planning-for-a-monthly-subscription-fee solution as a new “Premium” version of its Schwab Intelligent Portfolios solution, providing full access to a CFP professional for ongoing financial planning advice, and accelerating consumer awareness of the new and increasingly popular financial advisor business model (particularly for ‘next generation’ clients who are willing to pay for financial advice but don’t have investment accounts large enough to merit a financially viable AUM relationship).

Also in the news this week was an announcement that FINRA is considering whether to modify or even just consolidate its suitability rule once Regulation Best Interest comes out, noting the similarity and overlap between the two… and ironically showing, by FINRA’s willingness to consolidate the suitability rule into Regulation Best Interest, that Reg BI apparently really isn’t a material improvement or change to broker-dealer standards in the first place (or it would be deemed ‘too disruptive’ to the industry to even try to consolidate the standards!).

From there, we have a number of articles around practice management, and specifically how to attract and retain top talent, including one article looking at the rise of “student loan repayment” as a popular new employee benefits to attract young talent, a second highlighting that more flexible paid time off (or flex time in general) is also an increasingly popular perk, best practices in how to structure interviews for prospective hires, and a fascinating look at how digital-media-savvy Ritholtz Wealth Management has been able to leverage its blog and social media presence to attract good advisors to the firm.

There are also several investment-related articles, from a look at the potential recessionary implications of the recent inversion of the yield curve (from the researcher who first pioneered the study showing how inverted yield curves can foreshadow recessions), to a new BlackRock study suggesting that there might not actually be an “illiquidity premium” after all (but that there is a premium for complexity and more challenging due diligence and governance in private markets that also often happen to be illiquid), and a discussion of how structured products are once again making a resurgence, not to the levels they peaked at in 2007, but driven this time not only by investors who may be nervous about markets and want more downside protection, but also a number of new technology platforms that are trying to make it easier for advisors to shop more efficiently for structure note solutions in the first place.

We wrap up with three interesting articles, all around the theme of how to be more efficient and effective when running meetings: the first looks at some of the scientific research studies on how to run better meetings (along with a study that shows the leader of the meeting is not actually very good at judging the quality of their own meeting!); the second provides some tips about how to carve out or break up meetings that may have gotten “too big” (as invitee lists tend to expand over time!); and the third provides a series of detailed tips on how to not just make meetings more efficient, but to literally make them more effective, from how the meeting itself is run to be inclusive of all participants, to more carefully considering the invitee-list to the meeting, and simply being especially cognizant of why the meeting is being called, its ultimate purpose, and whether it really needs to happen in the first place (or if another medium, from email to company intranet, would be better to accomplish the same meeting goal).

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 latest release of FINRA’s 2019 budget, which once again shows flat revenue as broker-dealers struggle with stagnating growth and a decline in the number of people taking licensing exams to become brokers, forcing FINRA to rely on as much as $185.8M of its reserves this year just to meet its operating and capital expenses… and raising the question of whether FINRA will eventually be forced to restructure, or substantially increase member fees to broker-dealers… which in turn may only further accelerate the broker-dealer decline as regulatory costs rise.

From there, we have a number of articles around household cash-flow planning, including a fascinating new job-skills training program that focuses on those with problem-solving and perseverance skills and has lifted low-income individuals from an average of $18,000 to $85,000 of income, some tips to keep “lifestyle inflation” in check as income grows, the dynamics of trying to transfer not just financial assets but instill financial and other values for the children of affluent households, and how it’s increasingly necessary to look not just at a household’s own budget and cash flow but also to ask about their potential obligations for other family members (from children who may need to support elderly parents, or parents who may need to support adult children).

There are also several marketing-related articles this week, from tips to quickly and easily adapt “generic” marketing content into something more customized (and more likely to be effective) for clients, “growth hacks” that can accelerate a firm’s marketing success, how the techniques of a hostage negotiator (who must build rapport quickly in high-stakes situations) can inform the way we try to introduces ourselves and connect to prospects, and tips on how to respond to the infamous conversation-ender where you introduce yourself as a financial advisor and someone quickly responds, “I already have a financial advisor!”

We wrap up with three interesting articles, all around the theme of how we spend our time and focus our attention: the first explores the benefits of doing a “time audit” to better understand how you really spend your time (and whether it’s truly on the important tasks, including not just the urgent but also the long-term important ones); the second looks at how scheduling free-time and leisure activities actually reduces their enjoyment (because then it’s just another scheduled task/chore to do!), and why “rough scheduling” with flexibility timing is better; and the last provides a fascinating look at the importance of being cognizant of and deliberate in what you really “measure” in your life (and how that impacts the way you focus your time and effort).

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 mega-news that Envestnet is buying PIETech, the maker of MoneyGuidePro, for a whopping $500 million as Envestnet seeks to further expand itself into a holistic “financial wellness” technology platform.

Also in the news this week was the news that the SEC’s “Share Class Selection Disclosure” initiative has culminated in 79 investment firms agreeing to return $125 million in inappropriately collected or improperly disclosed 12b-1 fees in their hybrid broker-dealer relationship with the client, another study reinforcing that while consumers still don’t trust the financial services industry they overwhelmingly (97%) trust their own individual financial advisor, the revelation that this week’s College Admissions scandal actually emerged as a tip-off to Federal investigators from someone seeking leniency in a securities fraud case, the news that Ameriprise is getting ready to launch a retail bank (so their advisors will be able to offer banking products to their clients), and a new advisory firm loan platform from SkyView Partners that will allow firms looking to merge, acquire, or complete a succession plan to bid out their loan needs to more than a dozen different banks at once.

From there, we have several insurance-related articles this week, including the news that Genworth (the largest long-term care insurer) is indefinitely suspending sales of traditional long-term care insurance through advisors and instead will rely solely on direct-to-consumer telesales instead (a potentially chilling trend for the availability of long-term care insurance to advisors from other carriers in the future), a good primer on the rise of “structured annuities” with various Buffer and Guard strategies to partially protect against downside, and an interesting look at how a decade of “unexpectedly low” interest rates have caused life, annuity, and long-term care insurers to make changes to their policies and premiums that have adversely affected both advisors and their clients.

We wrap up with three interesting articles, all around the theme of the brain and how it works: the first takes an interesting look at the connection between our brains and exercise, particularly running, and the ways that running appears to stimulate our brain functions (for which we may have had an evolutionary bias in the first place); the second explores the emerging research on why the brain is so “noisy,” and how the difficulty in being able to silence our brains may not necessarily be a result of “faulty wiring” but instead part of the brain’s learning mechanisms and how it is able to take in so much information in a wide range of contexts; and the last looks at how, because human beings must take in information to survive, but also exist as “herd animals,” that sometimes our need to be right can conflict with our need to feel socially connected… thus helping to explain why sometimes we’ll ignore factual information that might otherwise change our beliefs (because it would also disrupt our social connections), and how the key to really changing someone’s mind is to start by being more connected to them socially so the “leap” to new information doesn’t require such a socially disruptive leap of faith as well.

Enjoy the “light” reading!

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