All Archives Of Weekend Reading for Financial Planners

Weekend Reading For Financial Planners (June 25-26)

June 24, 2022 02:02 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the Senate has passed companion bills to the House’s “SECURE 2.0” proposals that would represent the most noteworthy changes to retirement savings since the original SECURE Act was passed in 2019. While changes could be made to the proposals as the Senate and House bills are reconciled, strong support for the measures in both chambers suggest that there could be major changes to the retirement landscape by the end of the year (from increasing the age when RMDs begin, to the ability to use retirement distributions to fund long-term care insurance), that could come with significant planning implications in the years that follow!

Also in industry news this week:

The SEC is considering extending its regulation of advisors to ‘information providers’, such as index providers and model portfolio makers, which could clarify the roles and responsibilities of these companies while further stretching the SEC’s inspection bandwidth
A recent survey suggests that clients of financial advisors have more confidence in their financial situation than consumers without advisors across a range of measures, from saving enough for retirement to controlling the amount of risk in their portfolios

From there, we have several articles on tax-planning strategies:

While tax-loss harvesting has gained newfound attention during the current market downturn, other tax-planning strategies, including asset location and Roth conversions, can also provide significant value to clients
Amid proposals to move the RMD age back further, advisors and their clients can consider the potential value of strategic withdrawals and Roth conversions before reaching RMD age
Why direct indexing is gaining in popularity among a broader base of advisors, and why its uses for clients go beyond tax management

We also have a number of articles on investing:

Why retail investors are increasingly turning to private-market investments and the potential benefits and risks of doing so
The implications for advisors of a recent study exploring the characteristics that make it more likely someone will ‘panic sell’
Why alternative investments could potentially be valuable additions to client portfolios in the current market and economic environment

We wrap up with three final articles, all about the drivers of professional success:

Why specialists often have a leg up on generalists as an industry matures and what this means for financial advisors
Why emotional intelligence and organization are more important than ‘book smarts’ for achieving success in the 21^st century
Why personal experience is necessary to gain understanding and mastery of a profession, including financial planning

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (June 18-19)

June 17, 2022 02:02 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that Charles Schwab has agreed to pay $187 million to settle allegations that it misled users of its Schwab Intelligent Portfolios robo-advisor platform by falsely claiming that the cash allocations in its model portfolios (which were significantly higher than its competitors) were determined through a ‘disciplined portfolio construction methodology’ when regulators ultimately determined they were pre-set to generate a desired amount of revenue for Schwab. In other words, even as Schwab advertised that it was not charging a platform fee for the service, Schwab’s large cash allocations in the portfolios were still set to incur a cost for its clients, serving as a ‘hidden’ fee for an otherwise ‘free’ service, which the regulators treated as a violation of the antifraud (no-misleading-advertising) provisions of the Investment Advisers Act. Which in turn raises questions of whether regulators will eventually apply a similar scrutiny to the similar pricing model offered to RIAs using custodial platforms as well?

Also in industry news this week:

Why it is important for advisory firms to review their compliance and disclosure practices in the wake of a new Department of Labor regulation regarding rollovers of workplace retirement plans and IRAs
How the term ‘ESG’ has lost much of its meaning and how advisors can serve clients who want to take a values-based investment approach

From there, we have several articles on this year’s market volatility:

The tools advisors are using to help clients stay the course during the current market downturn
While the 60/40 portfolio has come under fire amid the poor performance of stocks and bonds this year, the classic asset allocation could now be more attractive given improved stock and bond valuations
Why the day the market seems to be at its worst is often one of the best times to buy

We also have a number of articles on bear markets:

Five things advisors can keep in mind during bear markets to provide clients with a long-term perspective
Why a trend following strategy can be an effective risk management tool for a portion of some client portfolios
Why reading books and prioritizing sleep can help advisors and their clients lower their stress levels during bear markets

We wrap up with three final articles, all about putting money in perspective:

While it seems like the worst of times when it comes to the economy and world affairs, the historical record shows how much things have improved over time
How those with better numeracy skills tend to have higher incomes and greater happiness
Why building wealth is not an end in itself and how money can be used to facilitate health and happiness

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (June 11-12)

June 10, 2022 02:05 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that amid public interest in the potential conflicts of interest involved in ‘payment-for-order flow’ arrangements between brokerages and market-making firms, SEC Chair Gary Gensler has asked agency staff to explore various ways to make the U.S. equities market more transparent and fair, including potentially creating an order-by-order auction mechanism to help retail traders obtain the best pricing for their orders. While payment-for-order flow arrangements have likely subsidized the dramatic reduction in direct trading costs during the past several years (as well as ‘free’ custodial services for advisory firms), questions remain as to whether the practice leads to better trade execution (and lower indirect costs) for investors compared to alternative arrangements… and whether potential changes from Gensler could alter how brokerage firms (and advisors’ custodians) price their own services.

Also in industry news this week:

RIA aggregator Homrich Berg announced a $75 million debt financing agreement through a multi-bank syndication, demonstrating that RIAs looking to access capital do not necessarily have to give up an equity stake in the business
Invesco and Cerulli Associates have launched a free benchmarking tool allowing advisory firms to compare themselves to the rest of the industry on a range of metrics, from AUM growth to client services

From there, we have several articles on inflation:

What advisors are doing to help their clients cope with the current elevated levels of inflation
8 inflation conversations advisors can have with their clients, from creating a cash management strategy to reassessing long-term inflation assumptions
Why recent declines in the prices of key inputs could lead to a cooling of prices for consumer goods

We also have a number of articles on retirement planning:

How a new study shows that a typical retirement is made up of four stages, with the first beginning during the working years
How recent research shows why personal health, anticipated health care costs, and legacy desires help explain why individuals choose not to smooth their consumption throughout their retirement years
The seven non-financial investments individuals can make during their working years that can lead to greater happiness in retirement

We wrap up with three final articles, all about advice:

10 key lessons from some of the most successful companies, from Stripe’s diligent recruiting practices to why Red Bull outsources production of its own beverages
The big ideas that changed one author’s life, from understanding the importance of tribes to the importance of learning from history
47 lessons learned over the course of one writer’s first 30 years, from when to take risks to the importance of being intentional in your decision making

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (June 4-5)

June 3, 2022 02:04 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with a recent FPA Trends In Investing study that suggests advisor interest in ESG investing might be at a crossroads. While a greater percentage of advisors compared to last year said they plan to increase their use of ESG funds in the next year, the number of advisors that said they use ESG funds at all has declined since 2020 (and client interest has waned somewhat as well), suggesting that more advisors are going ‘all-in’ on a niche around ESG investing… but that those who aren’t all-in are increasingly not in at all.

Also in industry news this week:

Despite anticipated reduced costs related to a drop in price of a new drug, Medicare Part B premiums will remain steady through the rest of 2022, though enrollees could benefit from a potential premium decrease for 2023
The latest Social Security trustees’ report indicates the Social Security trust fund will be exhausted by 2035, but also would still be able to pay out 80% of benefits at that time

From there, we have several articles on advisor technology:

The latest T3/Inside Information Survey shows that a few big players continue to dominate several AdvisorTech categories and also indicates the growing popularity of ‘All-In-One’ solutions
How this year’s T3 Advisor Conference demonstrated the growth of technology solutions that go beyond back-office functions and enhance client engagement
How ‘Big Data’ and artificial intelligence are likely to impact all 7 steps of the financial planning process

We also have a number of articles on retirement planning:

How software solutions are enabling advisors to provide more detailed health care cost analyses for clients
How advisors can take advantage of rising interest rates to help clients earn more income on their cash holdings
Why cost should not necessarily be the driving factor when selecting annuities and their features

We wrap up with three final articles, all about reading:

Why reading a wider range of books and seeking recommendations from those you admire can make you a better reader
How setting a goal to read a certain number of minutes each day, rather than a certain number of books per month or year, can help you build a reading habit
How leaders can benefit from incorporating reading into their workday, rather than viewing it as a leisure activity

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (May 28-29)

May 27, 2022 02:04 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that an advisory firm owner has filed a lawsuit against his former employer (RIA giant Creative Planning), alleging that the firm coordinated with several of the largest RIA custodians to limit his access to their custodial platforms for his new firm, and that their lucrative retail client referral programs are similarly being coordinated amongst a subset of (primarily large) firms that are willing to put their clients into products that generate the custodians more revenue. While the allegations have yet to be adjudicated (and the defendants vigorously deny the claims), the situation highlights both the often complicated and messy divorces that occur when an advisor leaves to start their own firm, and casts a new light on questions of how RIA custodians actually decide when to allow an advisor breaking away from an RIA to start their own on the platform, and the terms under which firms get access to the custodians’ client referral programs.

Also in industry news this week:

Debate is expected to begin soon on a bill that would extend the solvency of the Social Security trust fund by subjecting wages over $400,000 to the payroll tax
A recent study shows that while most advisor social media posts are educational or branding-related, the posts that actually generate the most engagement are those in which the advisor takes a personal stance or shares more of their personal lifestyle

From there, we have several articles on the current state of financial markets:

The four different types of bear markets and how recessions often drive the length and depth of stock market downturns
Why implementing an investment plan can often introduce absolute and relative risks that can draw clients' attention away from their long-term goals
Why putting the current market drawdown into historical perspective can help clients understand that downturns are normal and to be expected

We also have a number of articles on the competition for advisor talent:

How Fidelity’s hiring spree reflects a turn toward human-provided advice and could make the hiring environment more challenging for RIAs looking to hire their own talent
Ally Invest is the latest brokerage firm to begin offering human-provided advice, bringing in advisors and attracting clients with moderate levels of assets
Why advisory firm executives attending the recent DeVoe Elevate conference appeared to be more concerned with simply attracting and retaining talent than striking new deals

We wrap up with three final articles, all about recent changes to the workplace:

How companies can generate innovative ideas while working in a virtual environment
How firms have changed the design of their conference rooms during the pandemic to create more comfortable and functional spaces
How company team retreats have changed during the pandemic and why both in-person and virtual options are viable

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (May 21-22)

May 20, 2022 02:02 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that a court ruling has called into question the Securities and Exchange Commission’s use of its own judges for adjudicating enforcement actions. The court order could pave the way for those advisers ever accused of violating SEC regulations to have the guaranteed right to a jury trial instead, ensuring they will get a chance to ‘have their day in court’ to prove their innocence.

Also in industry news this week:

While some observers thought new leadership at the SEC might pave the way for increased enforcement of Regulation Best Interest, the agency has yet to take any major enforcement actions, potentially leaving consumers still vulnerable to the problematic broker behaviors that Reg BI was meant to solve, and leaving other broker-dealers wondering how to implement the principles-based guidelines
A coalition of advocacy groups has asked the SEC to investigate RIAs’ use of mandatory arbitration clauses with clients, including a call to use regular examinations to gather data on the terms of these clauses and how they are used

From there, we have several articles on the current state of financial markets:

How advisors can put the current market downturn into historical context for their clients
Why seemingly everyone has a bearish outlook for financial markets, and why this could offer a glimmer of hope for market performance going forward
Why the market downturn could present an opportunity for advisors and their clients to take advantage of Roth conversions, as well as alternative strategies advisors could consider

We also have a number of articles on practice management:

How some firms are using equity ownership to attract and retain employees amid the tight labor market
Why asking job candidates about their open browser tabs could be a useful interview question
The most important criteria to consider when selecting a business partner and how best to nurture the relationship

We wrap up with three final articles, all about what it means to be ‘rich’:

While having more money can improve wellbeing for advisors and the broader public, a range of other factors might be even more important
A recent survey shows what net worth Americans think is required to be ‘wealthy’ or ‘financially comfortable’ and also suggests that values-based investing might be gaining momentum
How being ‘rich’ and being ‘wealthy’ are not necessarily the same thing, and how advisors can help clients achieve a life of financial freedom

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (May 14-15)

May 13, 2022 02:06 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the T3 Technology Conference was held last week after a two-year hiatus, drawing a record crowd to see the latest in advisor technology. The event highlighted the growing data management needs of advisors as well as advisors' interest in ways to better scale their practices while continuing to offer individualized planning to their clients.

Also in industry news this week:

A recent survey shows that the focus of many RIAs remains on attracting ‘mass affluent’ clients through referrals from current clients, perhaps suggesting an opportunity for those willing to break the mold in terms of client wealth or marketing strategies
With many firms looking to diversify the traditionally male-dominated financial advisory industry, the market for female advisors has become increasingly competitive

From there, we have several articles on tax and retirement planning:

While the recent market downturn has created opportunities for advisors to engage in tax-loss harvesting in client accounts, there are several potential pitfalls to avoid
How to find the best solution for clients to make contributions to Roth retirement accounts, no matter their income
Why a contingent deferred annuity might be an appropriate vehicle for clients who want income protection while keeping their assets invested in the market

We also have a number of articles on advisor marketing:

Why webinars can be a valuable lead-generation tool for advisors and how to make them more effective
The key features of advisor websites, from a call to action to credibility indicators, that turn visitors into prospects
Why advisors might want to avoid using the phrase ‘follow-up’ with prospects and an alternative option that could lead to converting more into clients

We wrap up with three final articles, all about saying ‘no’:

How to say ‘no’ firmly and gracefully, whether it is to a friend or a prospective client
Why it is not necessary to make the most out of every minute of the day and how taking time to do nothing and being idle can improve your mental and physical health
How saying ‘no’ can allow advisory firm owners to set their own schedules and work with their optimal clients

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (May 7-8)

May 6, 2022 02:08 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that amid a wave of mergers, the number of broker-dealers has declined during the past few years, according to a report from FINRA. And while broker-dealers are also seeing a decline in the number of their registered representatives, their profits have actually ticked higher in the past few years, perhaps supported by strong market performance buoying their growing fee-based business. At the same time, the number of RIAs continues to grow, suggesting that the shift toward advice-centric, rather than product-centric, business models is continuing!

Also in industry news this week:

For the largest independent broker-dealers, fee-based revenues now make up a majority of total revenue (with commissions accounting for just 34%) according to a recent survey, representing a dramatic shift from just a decade ago, when commissions made up the majority of revenue.
Why FINRA is considering raising the barriers for retail investors to purchase a range of “complex” investments, potentially including leveraged and inverse ETFs

From there, we have several articles on industry studies:

A recent study shows that advisors at RIAs tend to focus on expense ratios rather than recent performance when picking mutual funds for client portfolios, leading to better outcomes than both broker-dealer registered representatives and dual registrants, who are more likely to choose more expensive, active mutual funds
A Cerulli study indicates that in a world of low stock and bond returns, advisors are increasingly considering alternative asset classes to generate income for clients
How an advice-only business model can allow advisors to be more creative with their service offerings and reach a wider range of potential clients

We also have a number of articles on retirement planning:

The pros and cons of using a Qualified Longevity Annuity Contract (QLAC) to insure clients against longevity risk while deferring some RMDs
Why clients with long-term care policies may soon see premium increases and how advisors can help these clients analyze their options
Why planned changes to “Traditional” Medicare could make it look more like Medicare Advantage and how advisory clients might be affected

We wrap up with three final articles, all about how one’s personality can affect their wealth:

How certain personality types are correlated with increased lifetime earnings among the general population, and why the traits that lead to success for financial advisors might be different
How the personality traits associated with ‘self-made’ millionaires differ from those who inherited their wealth, and why these traits could affect client behavior
Why certain characteristics are associated with the ability to separate ‘financial BS’ from genuinely profound advice

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (Apr 30-May 1)

April 29, 2022 02:02 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the Investment Advisers Association has become the latest industry organization to push back against the SEC’s guidance limiting the use of the term “fiduciary” on Form CRS, joining a growing number of voices attesting that RIAs should be able to highlight the differences between the standards of care required of them with respect to their entire advisor-client relationship, versus Reg BI’s standard of care for broker-dealers that is limited to just the moment the broker makes the recommendation (rather than the structure of the broker-dealer itself).

Also in industry news this week:

In response to the SEC’s proposed regulations for RIAs to address cybersecurity threats, industry advocates have focused on the proposed requirement to report incidents to the SEC within 48 hours, a rule that could impede advisors’ ability to respond to threats adequately while also rushing to meet the reporting deadline, while highlighting that smaller RIAs just don’t have the resources to respond in the same way that large firms do.
The FPA’s Virtual Externship program is open for enrollment for its third year, offering experiential training at scale for newer advisors (and exposure to a diverse range of firms and planning techniques) to give those with classroom knowledge opportunities to see how different advisors “do” financial planning

From there, we have several articles on how advisors are approaching the decision to retire (or not):

At a time when the ‘Great Resignation’ is making headlines, why many advisors are choosing to continue working well into their 70s and 80s
The steps advisory firm owners can take to prevent ‘seller’s remorse’ when they sell their firms by vetting more than just the price of the offers
How one firm navigated an internal succession and the lessons learned from guiding clients through the transition

We also have a number of articles on taxes:

How advisors can add value by reviewing clients’ tax returns (and gain insights about the client’s behavior and values that might not have been revealed in earlier conversations)
How owners of highly appreciated artwork have taken advantage of a tax-planning strategy of donating ‘fractional’ shares of art, allowing them to keep the art for a part of the year while enjoying the tax deduction for the donated share
Why moving to a state with lower income tax rates can actually result in higher costs of living because of factors like property taxes and housing costs (and why financial aspects, including taxes, should make up only part of the reason for moving – or not – to another state)

We wrap up with three final articles, all about personal development:

Why the most important and often hardest step to achieving a goal, whether it is running a marathon or starting an advisory firm, is just getting started, as habits are far easier to maintain than to begin
How a lifetime of recreational exercise could pay dividends for our health as we age
Why ditching your smartphone at key moments during the day can promote personal and professional fulfillment

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (Apr 23-24)

April 22, 2022 02:14 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the CFP Board increased its annual recertification fee by $100 (along with an additional surcharge of up to $19/year for CE credits). Representing the first annual fee increase since 2017, the additional funds will be put toward a range of initiatives, including public awareness, talent retention, diversity, and enforcement. But given the non-trivial nature of the increase, CFP certificants are likely to expect real outcomes from these initiatives!

Also in industry news this week:

Portfolio management giant Orion announced this week that it is acquiring leading advisor CRM provider Redtail in a deal that will bring Redtail’s large base of advisors into Orion’s orbit
Some industry observers think RIA valuations might have peaked, perhaps signaling a slowdown in M&A activity and increased viability of internal succession plans

From there, we have several articles on retirement planning:

Why the creator of the ‘4% Rule’ says retirees might want to reduce their spending given the current market and inflation environment
An analysis shows why the reduced benefits associated with annuity contracts with lower-fee Guaranteed Lifetime Withdrawal Benefit riders could make them inferior to their higher-fee predecessors (and why delaying Social Security could trump both in creating guaranteed retirement income)
Why it is important for advisors working with clients nearing and in retirement to go beyond retirement income and consider their clients’ social connections, health status, and plans for the various stages of retirement

We also have a number of articles on managing cash flow:

Why spending money on building friendships can pay dividends for one’s health and happiness
With statistics showing a significant number of individuals have engaged in financial deception with their partner or spouse, advisors can consider how to handle the financial and emotional impacts of these transgressions
Why clients in the wealth accumulation phase of their lives would be best served by finding ways to increase their income and putting money into the stock market as soon as it is available

We wrap up with three final articles, all about currencies and inflation:

Why cryptocurrencies might not have the inflation-prevention benefits touted by some of their proponents
Why a cryptocurrency skeptic argues that cryptocurrencies are primarily speculative assets rather than useful currencies and are unlikely to change the way we buy goods and services
How the ‘Cantillon Effect’ helps explain who wins and who loses from fiscal and monetary stimulus

Enjoy the ‘light’ reading!