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 big Advisor #FinTech news that Orion is acquiring financial planning software Advizr for a whopping $50M in an effort to expand its platform towards more holistic wealth management and provide advisory firms a more planning-centric portal for clients to engage with.

Also in the news this week is the announcement that just 3 months after its launch, Schwab’s monthly subscription service has raked in a whopping $1B of AUM, and AdvicePay crossed 20,000 advisors under enterprise contract facilitating financial planning fee payments, as consumer interest in the monthly subscription model of financial planning continues to heat up.

From there, we have several industry-related articles, including a surprising call from the FPA that the CFP Board should delay enforcement of its new fiduciary Standard of Conduct (but just until next June, to take effect alongside the new Regulation Best Interest), the announcement from the FPA that its OneFPA Network Plan has been finalized by the Board and will be proceeding forward with a 10-chapter beta test (despite generating positive Public Comment letters from less than 0.02% of its membership), an Op-Ed from former CFP Board chair Ray Ferrara disputing at least some of fiduciary advocate Don Trone’s allegations that the CFP Board needs to improve its own fiduciary governance processes, and the news that Fi360 has become (only) the 10th financial advisor designation to earn (ANSI) accreditation for its AIF (Accredited Investment Fiduciary) designation.

We also have a few marketing-related articles this week, from tips on how advisory firms can differentiate themselves on their websites once Reg BI eliminates “fiduciary” as a differentiator, how to improve your Advisor Bio page so it doesn’t “suck,” and basic tips on how to improve the SEO (Search Engine Optimization) of the articles you do publish to your website.

We wrap up with three interesting articles, all around the theme of figuring out what is really fulfilling and “enough” to make us happy: the first looks at how more and more research shows what really makes us happy in our jobs, yet in practice people are less and less happy at work; the second explores the ways that we tend to pursue money, but when faced with difficult time-vs-money trade-offs (e.g., would you take all of Warren Buffet’s money if you also had to take on his current age of 87?) we virtually always choose the time over the money; and the last examines how often the biggest returns we can get on the path to financial success aren’t actually about earning money at all, but about getting comfortable that what we have is “enough” (and then saving all the rest).

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 broker-dealers are stepping up their efforts to fight the CFP Board’s fiduciary rule taking effect in October, with a formal letter through the American Securities Association asking the CFP Board to accept Reg BI compliance as sufficient, and the CFP Board responding that it won’t back down from a full fiduciary requirement for CFP certificants and is willing to lose thousands of CFP certificants if necessary to maintain its differentiation (but may partially relent by delaying enforcement and allowing broker-dealers more time to adapt their compliance oversight).

Also in the news this week was an announcement that Morningstar is engaging in its first major overhaul of its Analyst Ratings since 2011 to focus even more on cost (as one of the few factors that is persistently predictive) and benchmark active managers on both a net-of-fees and risk-adjusted basis when comparing to benchmarks and peers, along with a new study by Spectrem Group about why clients leave advisors besides investment performance alone (hint: failure to respond promptly when clients call is still the #1 reason clients fire advisors outside of investment performance!).

From there, we have several marketing-related articles, including tips on how to take baby steps towards enacting a marketing plan for the first time, strategies to expand the visibility and footprint of your advisory firm’s brand, and why it’s better to memorize stories to communicate your value proposition and ‘pitch’ to prospective clients (rather than just trying to memorize the right words alone).

We also have a few practice management articles this week, from the reasons why advisory firms should focus on improving productivity and their systems before just hiring more employees, to what makes billion-dollar RIA standouts more successful than the rest (hint: their speed at which they do reinvest into both their systems and their people), and the concept of “Meta Roles” that employees can (and should be encourage to) take on to help everyone work better together as a team.

We wrap up with three interesting articles, all around the theme of how to take (effective and better) vacation as a financial advisor: the first provides a helpful series of Do’s and Don’ts reminders about how to prepare for a vacation (and what should and should not be communicated to clients in advance); the second gives tips on how to craft the right Out Of Office (OOO) message while you’re out, to ensure the right tone is set with clients and prospects while you’re gone; and the last looks at how the research in behavioral finance can be applied to taking vacations (e.g., focus on experiences over goods, build the anticipation, and always do a big activity at the end given that we most often remember what came last/most recently anyway).

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 buzz that, once again, the White House is considering an Executive Order that would index cost basis of investments to inflation, effectively eliminating capital gains on the inflation portion of growth and taxing only real dollar returns instead… at least, unless the plan succumbs to a legal challenge.

Also in the news this week was the House of Representatives passing a spending bill that includes a prohibition on the SEC from using any of its money to actually implement and enforce Regulation Best Interest (in what appears to be a delay tactic by the Democrats hoping that they can take control in the 2020 election and unwind Reg BI thereafter, but one that may not get through the Republican-controlled Senate anyway), and the announcement that former DFA co-CEO Eduardo Repetto is launching a new asset manager called Avanatis that will make an alternative version of DFA-style factor-based funds in an ETF form and without being tied directly to an index (allowing the ETFs to respond even more quickly to shifting factor data than just waiting for changes to the underlying indexes themselves).

From there, we have several articles on aging and retiring, including one that explores how financial literacy tends to decline (by an average of 1.5%/year) in our later years but financial confidence does not decline (leading to a growing gap between what we believe we can do, and what we’re actually capable of, that may help to explain the rise of financial abuse and exploitation of seniors), a new crop of “apps” that are emerging to help protect the elderly from such financial abuse and exploitation, and a(nother) wave of financial apps emerging to help adult children more easily manage their parents’ finances (especially from afar when their parents aren’t geographically local).

We also have a few articles on cash flow and budgeting, from one that provides some good starting steps to get clients onto a budget (first hint: don’t call it a budget, but a “spending plan,” because that has fewer negative connotations!), to another that looks at the rise of apps that help children track their own chores and allowance and begin to learn (digitally-based) financial management for themselves, and a few tools that are emerging to help people get control of the ever-growing number of (sometimes no longer useful at all) subscription fees as seemingly every business converts to an “as a Service” monthly or annual subscription fee.

We wrap up with three interesting articles, all around the theme of finding what we love to do (and have a passion for): the first looks at the growing body of research around “finding your passion” (and how in practice, not having a passion doesn’t necessarily cause significant unhappiness, and that it’s having a passion not pursued that is more problematic); the second explores how there isn’t always a connection between your passion and what makes money, but when it comes to financial advisors in particular, there often is a lot of overlap (at least, as long as the advisor adjusts their firm over time to best align with their own skills and strengths); and the last is a fascinating discussion of how, in the end, it’s the setbacks we face that really help us identify our passions and what we enjoy… because setbacks that we feel compelled to push through are a sign that we’ve found a pursuit we really believe in, while setbacks that make us want to do something else might actually be the best clue of all that it really is time to try something different (that we may ultimately enjoy more)?

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 some clarity around the big industry buzz around the question of whether RIAs will still be permitted to call themselves “fiduciary” after Regulation Best Interest and the new Form CRS take effect (short answer: yes, RIAs can still call themselves fiduciaries, including in Form CRS, as the SEC merely removed the word “fiduciary” from its own prescribed templated language).

Also in the news this week are several other developments on the fiduciary front, including an announcement that now Massachusetts is looking at adopting its own state fiduciary rule (after the SEC failed to adopt a fiduciary standard in Regulation Best Interest), New Jersey’s fiduciary proposal continues to progress (but the comment period is being extended after strong industry pushback), and professor Ron Rhoades raises the question of whether the industry’s organized fight against all forms of fiduciary, from state regulators to the CFP Board, could itself constitute a violation of the Sherman Antitrust Act (particularly with respect to a potential broker-dealer boycott against the CFP Board, which itself is a private organization).

From there, we have several articles on advisory firm practice management, including a study showing that the majority of RIAs either don’t have asset/account minimums or don’t enforce the minimums they do have (which raises significant efficiency and productivity concerns as firms grow), the issues with RIAs (or any advisory firm) requiring clients to sign mandatory arbitration clauses, tips for conducting an effective summer offsite meeting with employees, how to deal with (and what really constitutes) a “toxic” team member, and why one advisory firm decided early on to break the usual pattern of hiring lead advisors, admin support, and junior advisors, and instead hired a “data geek” to help the whole firm run more efficiently (and figure out where to focus its resources).

We wrap up with three interesting articles, all around the theme of our own time and capacity constraints with clients: the first looks at the research on why it may actually be better to make yourself (as a business owner) a little more “scarce” (recognizing that, in practice, when prospective clients perceive you to be less available and in high demand, it can actually make them want to work with you more, as we tend to want what we can’t have!); the second looks at the importance of creating some additional slack in your schedule and business (or what may seem short-term efficient can become long-term unstable); and the long-term value of saying “no” more often to ensure that you focus and prioritize the activities and projects that have the most positive impact on your business (with tips on how to actually say “no” more effectively and without offending).

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Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the official release of IRS regulations that kill the charitable “workarounds” that many states have been trying to create since the Tax Cuts and Jobs Act capped the State And Local Tax (SALT) deduction at just $10,000… even as many high-income individuals complete their first tax returns (for 2018) and realize that due to the prior impact of the Alternative Minimum Tax (which eliminated SALT deductions entirely), that, in practice, the SALT cap is often not as problematic as many had feared early on.

From there, we have several articles on the SEC’s recent Regulation Best Interest now that the dust is beginning to settle and the details are emerging, with one article looking at how Reg BI will cement the “two-track” regulatory approach (of keeping broker-dealers and RIAs separate, rather than merging them under a single uniform fiduciary standard), when certain brokers will no longer be allowed to use the advisor/adviser titles (unless they at least become dual-registered as RIAs as well), and what RIAs will need to do to comply with the new Form CRS requirements.

We also have a few articles around the theme of learning to better do sales and business development (especially as an employee advisor who is not naturally inclined towards sales and business development!), including tips for how to better support “sales” activities for non-sales advisor professionals (by reframing it as how to help the advisor help others with their unique skills and abilities), what firms should consider when employee advisors do want to start marketing themselves, why/how professional designations do (or don’t) help make advisors more successful (especially when it comes to getting new clients), what to do to avoid getting brushed off when you do get a referral from a client to a new prospect, and some low-key ways to follow up with prospects after the first meeting to keep them engaged.

We wrap up with three interesting articles, all around the theme of the mid-career crisis and what to do if we feel we’ve hit a wall: the first explores the phenomenon of the mid-career crisis itself, and how it’s similar to a midlife crisis, but requires somewhat different remedies (and mindset changes) to resolve; the second explores the research about why employees ultimately tend to quit their jobs (which is less about the job and company itself, and usually about their direct manager and whether he/she is doing what it takes to support and develop the employee in their career and stage); and the last explores the phenomenon of the “Late Bloomer”, and how, in reality, our brains are still developing throughout our teens and 20s, such that, while society today often celebrates the “early bloomer,” it’s the late bloomer in their 30s, 40s, or even 50s, that may actually be more common and expected. (Which is why it’s never too late to start a new career or path as a financial advisor!)

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 huge news that the SEC has officially passed Regulation Best Interest (by a 3-1 vote), which will require brokers to act in the “best interests” of their clients when making a recommendation but stops short of actually requiring a fiduciary duty or for broker-dealers to mitigate their conflicts of interest… and raising the question of whether the SEC is so expanding the advice exemption for broker-dealers beyond its “solely incidental” roots that, like the Department of Labor’s fiduciary rule, Reg BI may soon end out subject to a legal challenge.

Also in the news this week was the revelation that, with the CFP Board’s own coming fiduciary obligation for CFP certificants, Edward Jones is considering whether to force its nearly 2,000 CFP certificants to drop their marks to avoid the fiduciary obligation (at the risk of having them recruited away by broker-dealer or RIA competitors who are willing to embrace an obligation to do the right thing for clients), the announcement that Fidelity is working on a new Managed Account Xchange (FMAX) akin to other model marketplaces but wrapping together Wealthscape and eMoney Advisor into a potential head-to-head Envestnet competitor, the official release of the Envestnet Fiduciary Insurance Exchange (FIDx) to facilitate RIA access to no-commission annuity products, and a look at the current landscape of independent broker-dealers from Financial Planning magazine’s annual survey (finding that while IBDs are struggling, the largest are growing, in part by increasingly reinventing themselves as fee-based RIA support platforms less reliant on traditional commission-based revenue!).

We also have a few articles this week around the intersection of money and children, including a look at the rise of “allowance apps” that parents are using to dole out allowance and oversee chores in the digital age, Morgan Housel’s advice to his newborn daughter on her financial children, a research study on what children of affluent families are really concerned about (hint: carrying on the family legacy matters to them more than most people realize!), and how to find the “Goldilocks zone” of personal finance, recognizing that while it’s very stressful for those who don’t have enough, it can be similarly very stressful to have “too much” as well!

We wrap up with three interesting articles, all around the theme of having and managing stress: the first looks at how, while we tend to think of stress as being “bad,” a moderate amount of stress can actually be a positive that encourages us to step up and achieve more (as long as we get breaks to refresh and recover, too); the second explores a recent FPA study finding that financial advisors, in particular, are very stressed, despite the ongoing bull market, due to the rising challenges of operating an advisory business; and the last explores the “theory of cumulative stress” and how best to recover when you’ve been carrying too much stress for too long and need some personal relief.

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 revelation that, buried in one of the retirement bills making its way through Congress, is a provision that would allow more retirement advice to be paid for on a pre-tax basis (directly from an employer retirement plan)… a potential boon to those who offer retirement advice (at least when working with/through the 401(k) plan provider themselves). Also in the news this week is the latest Morningstar 529-plans study, which finds growing interest in a new form of “advisor-supported” 529 plans for RIAs (who can’t use “broker-sold” solutions without a FINRA license, but need more of a connection to the plan than just using a traditional direct-sold offering).

From there, we have several marketing-related articles, from a look at the different types of content marketing material advisors can publish (from evergreen to timely news to personal interest/humanizing articles and third-party content sharing), the rise of “search intent” as an SEO factor, the look at the opportunities in the podcasting landscape (overall and including for financial advisors), and some interesting examples of “high-converting” fee pages on advisor websites (i.e., how advisors who share their fees on their websites are doing so in a manner that doesn’t spook their clients).

We also have a few retired planning articles this week, including: the dilemma that new retirees face once they actually do retire and potentially lose and have to rediscover their sense of purpose (when it’s no longer about pushing for the goal of retirement that they just achieved!); the research showing how much of a struggle early retirement often turns out to be personally, with a growing volume of research showing both adverse health impact, cognitive decline, and social isolation that can result from retirement (when we no longer have the purpose and engagement of work); and what retirees should focus on doing in order to thrive in retirement (by finding ways to keep themselves mentally engaged and socially connected).

We wrap up with three interesting articles, all around the theme of coaching and mentoring: the first provides some perspective on the benefits of getting a coach, and how to find/select one; the second looks at the phenomenon of “reverse mentoring,” where more senior organizational leaders get mentored by more junior staff members (to better understand the needs and perspective of the next generation of employees and customers/clients); and the last looks at the power of having a dedicated coach over “just” a good mentor… someone who is really willing to roll up their sleeves and get engaged on behalf of the person they’re coaching and hold them accountable for making the changes they need to make in themselves to improve.

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 slew of major industry news, including details of the SECURE Act that just passed the House and may implement a number of significant changes to retirement accounts (including an increase in the RMD age to 72 and the elimination of stretch IRAs), an updated agenda from the SEC stating that it will release an updated version of Regulation Best Interest for a vote of the SEC Commissions in two weeks, and an announcement that the Department of Labor is working on its own re-proposed fiduciary rule that will be out later this year as well (likely after the SEC’s rule is finalized so the DoL can make its own fiduciary rule conform to it).

Also in the news this week is the revelation that Vanguard is looking to build out an RIA custody platform on the back of its internally-successful Personal Advisor Services platform to compete with Schwab, Fidelity, TD Ameritrade, and Pershing, and the announcement that LPL has bought a small employee-model broker-dealer called Allan & Company that is viewed as a major shift from LPL to get into the captive-employee broker-dealer model alongside its existing independent model (akin to Ameriprise and Raymond James, and anticipated as a pathway both to attract employee-style wirehouse advisors and potentially to even acquire and roll up other smaller employee-style broker-dealers).

From there, we have several investment-related articles, from the SEC’s approval (finally!?) of the first non-transparent actively-managed ETF (that may lead to a huge wave of other asset managers offering active ETFs in the coming year), to some of the emerging risks of “free” no-fee ETFs, how “core” bond holdings are actually not very effective diversifiers of traditional stock portfolios (and why government bonds, even at today’s low interest rates, are better), and a look at the looming rise of “Direct Indexing” as the next big thing that could disintermediate ETFs (and as ETFs continue to disrupt mutual funds).

We wrap up with three interesting articles, all around the theme of ongoing industry and regulatory change: the first looks at how, even as regulators continue to propose fiduciary rules that drive the industry towards fee-based accounts, there is concern that some investors may be getting shifted to fee-based accounts with ongoing AUM fees when, as buy-and-hold investors, they would be better served to simply remain in traditional commission-based brokerage accounts (and pay nothing since they’re not trading anyway); the second looks at some of the research on conflicts of interest being discussed in Australia as regulators there consider the next steps to expand the fiduciary duty of Australian advisors; and the last looks at the looming choice coming for CFP professionals at broker-dealers, who will become subject a CFP-Board-based fiduciary duty on October 1st that not all broker-dealers may be willing to tolerate, and raising the question of whether an industry recruiting battle will be ignited if certain broker-dealers ban their advisors from using the CFP marks after October 1st, where suddenly CFP certificants at those firms will have to agree to either drop the marks they worked so hard to earn and stick with the broker-dealer, or instead simply drop their current broker-dealer and switch to alternative platforms who recruit them with the promise of being more supportive of financial planning and letting them keep their CFP certification.

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 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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