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 industry news that FPA Executive Director Lauren Schadle has resigned in the face of 8 years of stagnant membership and a recent accelerating decline, a new interim CEO is stepping in, and the FPA is beginning a national search for new leadership to try to get its growth engine firing again (giving the ongoing growth of the financial planning profession itself).

Also in the news this week is an announcement that the CFP Board is updating its own Disciplinary Rules and Procedures in advance of the June 30th enforcement date for its updated Code of Ethics and fiduciary-at-all-times Standards of Conduct, and a recent study by Hearsay Social shows the dramatic improvement in results that financial advisors get by sharing more personal and authentic information on social media channels beyond just canned investment content.

From there, we have several articles on cash flow and spending decisions, including a look at how credit card companies are beginning to shift their rewards benefits in the face of a major pullback in travel and dining, a look at the ongoing rise of subscription services for ‘everything’ and tips on how to keep track of them all, and an interesting discussion of the benefits of ‘taking a sabbatical’ to work remotely as a renter instead of buying a house (with all the costs and reduced flexibility that entails).

We also have a few retirement-related articles this week, from a look at how the coronavirus pandemic may shave one or several years off the survivability of the Social Security trust fund (accelerating either a prospective cut in Social Security benefits, or action in Congress to shore up the system), a look at the use of hybrid annuity/LTC policies in low-interest-rate environments, and why it’s perhaps time to eliminate the assumption of ‘retirement’ altogether and instead think about phased glidepaths of retirement itself (where hours worked and duties gradually shift over time, rather than a hard-stop retirement plan).

We wrap up with three interesting articles, all around the theme of client communication and engagement: the first delves into recent research on exactly what communication strategies support client trust, satisfaction, and referrals; the importance of evolving client communication beyond ‘just’ regular check-ins (including and especially in the coronavirus pandemic environment); and the last provides a powerful reminder of the emotional benefits of working with a financial planner, in terms of not just walking clients off the proverbial investment ledge but also simply helping them to focus on what they can financially control (from investments to spending and 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 an interesting investor research study showing what clients are actually interested in learning and hearing about now… which shows that while there was an initial burst of interest in commentary about markets and the economy, within just a week or two of the pandemic shutdown client interest had already shifted to topics more ‘personally’ relevant to them, from health and wellness to thinking about second careers (as the pandemic may have shut down their first!), and the family dynamics of how the pandemic and its economic impact may be rippling through their personal lives beyond their portfolios alone.

From there, we have several practice management articles on the continued adaptation of working in a virtual environment, including tips on managing your team remotely (from daily huddles to weekly videos and structured virtual get-togethers), to advisory firms taking a fresh look at their office space decisions as lease renewals may be coming due in the midst of the shutdown, some tips on managing client meetings virtually, and why in the end the key to surviving and thriving in the midst of this pandemic shutdown is not just about figuring out whether and how to adapt by changing your mindset to view this as a positive turning point in your business (and then to decide what you’re going to build towards from here!).

We also have several marketing-related articles this week, from suggestions of what any advisory firm can start doing to improve (virtual) communication and connection with clients and prospects, why it may be a good time to take a fresh look at your advisor website, tips on how to focus on and change your website to do a better job of turning visitors into qualified prospects and eventually clients (now that we have to rely on our websites more than ever!), and how even though clients commonly find prospective advisors through referrals it’s still necessary to do the substantive work of really earning their trust.

We wrap up with three interesting articles, all around the theme of habits and personal productivity: the first is a reminder of the power of “keystone habits”, and how finding just one or two positive anchor habits can help spiral the rest of our lives in a more positive direction; the second is a fascinating look at mathematician and computer scientist Stephen Wolfram and the ‘personal infrastructure’ he has created to make himself more productive; and the last is a powerful reminder that in the end, the pandemic shutdown hasn’t necessarily given us more time to be productive (as though we weren’t already trying to be productive in the past!), it has just shifted our time, and the real key to productivity remains as it always was: not finding more time in the day, or a way to cram more things into the time that’s available, but instead figuring out what you truly need to be doing yourself to be productive… and learning to hyperfocus your time on only those things that really, truly, matter the most!

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 industry news that Goldman Sachs is acquiring small-RIA custodian Folio Institutional… and setting off an industry debate about whether Goldman is aiming to compete for small RIAs, repurpose Folio into a breakaway offering for wirehouse brokers going to Goldman, to use internally for its existing United Capital and Ayco assets (which are already many times the AUM of Folio’s existing business), or to get a foot in the door with Folio’s early-mover fractional share trading to launch a Goldman Direct Indexing solution. Or perhaps all of the above?

Also in the news this week is the announcement that TradingFront is partnering with Interactive Brokers to create a new all-in-one RIA custodial offering (particularly for smaller RIAs that don’t have the time and capacity to piece together their own solution), and the news that Schwab is acquiring the technology, IP, and staff of recently-shut-down Motif Investing in what appears to be Schwab’s own looming play to enter the Direct Indexing business to disrupt mutual funds and ETFs (including their own?)!

From there, we have several stories about the aftermath of the recent market volatility and how investors actually behaved, including a study from Morningstar finding that nearly 90% of investors (and almost 97% of target-date fund investors) didn’t make any changes in the midst of the market volatility, Vanguard similarly finding that almost 90% of investors stayed the course and that of the ~10% that did trade 7-in-10 actually bought stocks (rather than selling out) and that advisors also reported being successful in keeping ~90% of their clients on course through the market volatility (recognizing that advisors may disproportionately have the most challenging clients who seek out a financial advisor because they struggled with inopportune trading in prior bear market cycles?).

We also have several retirement-related articles this week, from a look at the history of the Financial Independent/Early Retirement movement (which, viewed from the lens of the average investor being able to inexpensively invest into the stock market through 800 years of stock market evolution, seems to have arrived exactly when it should have), a study on how our ability to manage emotional volatility and delay gratification seems to improve throughout adulthood (perhaps explaining why so many prospective clients are ‘suddenly’ ready to get serious about retirement in their 40s and 50s), and a look at the upcoming changes to the Federal government’s Thrift Savings Plan and a number of changes to its L (Lifecycle) funds.

We wrap up with three interesting articles, all around the theme of how businesses are (or may need to continue) adapting to the work-from-home environment: the first highlights recent research that in the aggregate, productivity of workers from home is ‘only’ down 1%, and the majority of workers are experiencing higher productivity at home (offset by a smaller number that are significantly struggling with lower productivity); the second looks at our growing obsession with sweatpants (and more generally, comfortable clothing, especially off-camera from the waist down) and whether/how the workplace dress code will return when we’re all allowed to go back to work; and the implications of how business owners (including advisory firm owners) may need to adapt if we don’t all get back to work in the next 1-2 months and instead it turns out that a resurgence of the coronavirus results in us operating on an at-least-partial-work-from-home environment (and forcing us to really learn how to survive and thrive in a virtual workplace) for another 12-18 months instead?

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 of a new show to debut this weekend on CNBC that will feature not stock-picking entertainment but actual financial planning advice from real financial advisors (featuring advisor and media personality Josh Brown) in what may be the most visible attempt yet to burnish the public image of what it means to be a “financial advisor” away from existing negative portrayals like Wolf of Wall Street and Ozark.

Also in the news this week is an update to the SEC’s Frequently Asked Questions guidance on Regulation Best Interest reaffirming that standalone broker-dealers will be required to stop using the “advisor” title after June 30th (though dually-registered broker-dealer/RIAs will still be permitted to do so, even when acting as a broker and not an RIA), registration is opening for a new online version of FINRA and NASAA Series 6, 7, 63, and 65 exams as Prometric testing centers look to stay closed for at least several more weeks in many areas (while the CFP Board has announced that the July CFP exam is being delayed to September to allow more time for in-person testing centers to open where the more comprehensive exam can be effectively proctored), a recent Fidelity study finds advisors are buying more active than passive funds in the midst of the current market volatility (though it may simply be because advisors who use active funds are more likely to actively manage them in the first place), FPA launches a “Virtual Externship” program for college students to get up to 160 hours of CFP experience if their prior in-person internships were cancelled, and a new study finds that it’s the frequency of advisor-client interactions and the transparency of the advisor’s compensation that drives perceived value from clients (more so than just “how much” the advisor charges and whether it’s more or less than what other advisors charge).

From there, we have several articles around client communication and relationship-building, including a look at how therapists are adapting to a more virtual environment with their patients (with some lessons for financial advisors communicating with clients), how to be more mindful of whether what you’re saying to clients is really empathetic or not (hint: any sentence that starts with “at least… [it isn’t worse]” isn’t actually very empathetic), and a reminder that it’s almost impossible to really know what others are going through so even when they share their troubles it’s a good idea to pause and say “tell me more about that” before just trying to (empathetically) respond without necessarily understanding what their true concern actually is.

We wrap up with three interesting articles, all around the theme of how businesses and their employees can and are continuing to adapt to the work-from-home environment and the potential of returning back to the office in the coming month: the first explores how a renewed focus on employee safety (from the potential transmission of the coronavirus) may force offices to shift away from the open-office trend and back towards cubicles (with barriers to support social distancing!); the second provides some helpful tips on apps and tools to use to be more productive in a work-from-home environment; and the last provides a helpful reminder for anyone in a position of leadership about how to communicate more productively with employees in an era when virtual workplaces necessitate a more proactive communication approach.

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 new industry study from Broadridge finding that the coronavirus pandemic is just further accelerating the industry’s shift towards more holistic financial planning as a way to demonstrate and add value in the midst of the turbulent market environment (particularly amongst advisors under age 40).

Also in the news this week is a new study finding that nearly 1/3rd of consumers still don’t understand how financial advisors are compensated (undermining their trust in working with an advisor) and that getting a clear understanding of how the advisor is paid is even more important than the actual payment mechanism itself (e.g., commissions, AUM fees, fee-for-service, etc.), a discussion of whether advisors should be cutting fees in the current environment (particularly for their clients facing their own difficult financial situations), and the opportunity for advisors to work with their more affluent clients to make distributions from donor-advised funds to help charities that are trying to serve those most in need right now but may be struggling in the current environment.

From there, we have several articles on behavioral finance and helping clients through difficult environments, including tips on how to handle calls from clients who want to go to cash, how to (and how not to) position your ‘behavioral coaching’ as a value to clients and prospects, recent research showing that the more familiar an investor is with a stock, the more rapidly they tend to trade it (and the worse the results tend to be), an overview of the legal defensibility of various risk tolerance software tools (where some are far more robust than others if the advisor even had to defend their use of the tool in court), tips on what to look for (and what to avoid) in finding a valid and reliable risk tolerance assessment tool, and some guidance on what conversations to have with clients now while markets are calmer (to prepare for the possibility that they could become much more volatile again before the recession is over).

We wrap up with three interesting articles, all around the theme of how the industry itself is changing: the first looks at how in the last (financial) crisis, it was the firms that reinvested the most for growth despite the scary environment that ended out having the most success in the decade that followed; the second looks at the evolving trends in the industry that were already underway but may be accelerated by the coronavirus pandemic; and the last, a send-off from the soon-to-be-retiring Mark Tibergien, explores what financial advisors and the industry at large can do to make ourselves even more valuable in the aftermath of the coronavirus pandemic and the decade to come!

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Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that the Senate and House (and imminently, the President) are signing into law the next wave of coronavirus pandemic stimulus, a $484B bill that includes another $310B of funding for the PPP (along with another $60B for the EIDL program) as small businesses continue to seek capital to stay running and keep employees on board.

Also in the news this week is a fascinating study that the coronavirus has driven nearly 1-in-4 Americans to seek out a financial advisor for the first time (resulting in a surge of new client inquiries for many advisory firms), that TD Ameritrade (and Schwab) still see the Schwabitrade deal as being ‘on’ for the second half of 2020, feedback to a NASAA proposal that all IARs of RIAs be required to earn 12 hours/year of CE credit and that NASAA should permit other types of CE (from CFP to FINRA) to also count, and a FINRA proposal to aggregate the SEC’s Investment Adviser Public Disclosure data into FINRA’s own BrokerCheck site so consumers can have a one-stop shop at BrokerCheck to see the regulatory and disciplinary history of dual-registered brokers.

From there, we have several articles on investing and retirement planning, including how coronavirus volatility is leading more RIAs to leverage the block trading capabilities of their RIA custodians to reduce trading costs for clients, a Blackrock research finding that advisor portfolios tended to significantly underperform their benchmarks in the market decline (but not due to poor equity selection, and instead due to underweighting government bonds as a safety diversifier against the risk of recession), new research that questions whether there’s really any economic value to so-called “bucket strategies”, and some guidance about how to think about changing the client’s financial plan when an update shows a significantly lower Monte Carlo probability of success.

We wrap up with three interesting articles, all around the theme of our opportunity to (re-)build when/as the country eventually emerges from the coronavirus pandemic: the first looks at how, despite incredible innovation and progress, the country has perhaps focused too much energy on building software and technology and not enough on infrastructure and companies that make things we need (until now, when we realize what we don’t have and can’t quickly mass produce); the second looks at how the dynamics of venture capital and its addition to high margins and fast exits may have amplified our lack of building (and what it takes for investors to re-focus on building); and the last looks at how the collective call of the country to fight the coronavirus is itself stimulating a fresh wave of business innovation that may already be creating a lasting positive mark on the country that will remain to our benefit long after the coronavirus is gone!

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 recap of President Trump’s three-phase “Opening Up America Again” plan, and the guidelines being put out to states and regions about when and how to re-open their economies (in stages, over time) as the coronavirus spread hopefully crests and begins to decline (with protocols in place to deal with the risk and consequences of subsequent flare-ups).

Also in the news this week is the realization that funds for the Paycheck Protection Program (PPP) have already been committed (all $349B) in less than two weeks (amplifying pressure on Congress to expand the program sooner rather than later as 700,000 applications are currently in limbo), a look at where the SEC may focus on whether/how RIAs are still meeting their own compliance obligations (even and especially in a virtual work-from-home environment), and the news that New Jersey has delayed its state fiduciary proposal (as a part of an overall Executive Order by the New Jersey governor to stay any new rule-making by any state agency of the time being) but may still take up the issue again later this year.

From there, we have several articles on how advisory firms are adapting to the current work-from-home and work-with-clients-virtually environment, including the recognition that “yes” it really is possible to work with at least most clients virtually, how to engage in prospecting via one-to-many webinars in the current online-only environment, other digital/online marketing strategies that advisors are engaging in to adapt to the current environment, tips on how to convince clients to switch advisors (including and especially in the current difficult environment), and a new free tool from advisor cybersecurity provider OS33 to evaluate whether an advisory firm’s own work-from-home network and computers are really secure (or not).

We wrap up with three interesting articles, all around the theme of how to handle and manage the emotional turmoil and disruption that the coronavirus pandemic has wrought: the first explores how robo-advisors are adapting by building in various technology ‘nudges’ to help clients make good decisions (en masse) during these difficult times; the second explores how we can reconcile the balance between being in an industry that by and large has stable jobs and income and an ability to work from home but is still personally disruptive and stressing while also being empathetic to those who are still facing far worse; and the last is a powerful reminder that while it’s important to be optimistic to maintain hope for the future (especially with clients) it’s still important to be realistic as well, as the consequences of creating unrealistic hope that is later dashed can be even more harmful than simply being realistic with clients about the opportunities and hoped-for outcomes but also fairly acknowledging the risks that do still remain in the current environment.

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, with the explosive popularity of the $350B Paycheck Protection Program (PPP) for small businesses over the past week, Treasury Secretary Mnuchin is already seeking a $250B expansion to ensure that the dollars don’t run out. In the meantime, the White House is beginning to craft a plan about how to re-open the economy if/when/as the growth rate of the virus slows, while economic experts worry about what it will take for Americans to actually trust that it’s safe to go out again (especially if there’s a second resurgence of the virus later this year).

Also in the news this week are efforts by the CFP Board leading a coalition of advisor membership associations asking Congress to reinstate the tax deduction for advisory fees that was eliminated in the Tax Cuts and Jobs Act of 2017 (as more and more Americans are seeking out financial advice regarding their current situation), S&P deciding to delay rebalancing of the S&P 500 index amidst the recent extreme market volatility (and raising questions about what it really means to be a “passive index”), and the IRS officially expanding the delayed July 15th tax filing date to include more related deadlines from estimated taxes to estate tax returns.

From there, we have several articles on how to leverage video chat tools as we’re increasingly relegated to using them to stay connected to clients, prospects, and potential referrers, including how to improve video engagement with clients and prospects, how to conduct ‘virtual networking’ meetings, and how to leverage your smartphone to record and share high-quality video.

We wrap up with three interesting articles, all around the theme of how the internet has become our lifeline (and how remarkably well it is holding up as we depend on it); the first looks at how the very structure of the internet itself was actually built to be stable (a relic of its Cold-War-era respite that was trying to preemptively protect against global disasters); a deep dive into the data of what Americans are actually doing and using online and how our internet habits are shifting; and an exploration of how the coronavirus pandemic may actually end out stimulating a fresh wave of further investments into internet infrastructure that will just further build our internet capabilities for the decade to come!

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, even as the country is still absorbing the outcomes of last week’s $2 trillion CARES Act stimulus, President Trump has begun to advocate for another $2 trillion round of stimulus, this time focused on major infrastructure spending that both Democrats and Republicans have acknowledged is long overdue, but raising the question of whether the parties can come together to pass such bipartisan legislation on the heels of what has already been the largest economic stimulus legislation in history.

Also in the news this week is a flurry of focus on the new Paycheck Protection Program (PPP) under the CARES Act as it opens its application process today with the potential for small businesses (including advisory firms) to receive up to $10M in tax-free forgivable loans to support their employees (but on a first-come first-served basis and the risk that the $350B allocation will have more demand than dollars to allocate), and the news from the SEC that, despite economic turmoil and business disruptions, it is sticking with its June 30th effective date for Regulation Best Interest (Reg BI).

From there, we have a number of articles about how advisors are managing the current investment environment, including a discussion of how rebalancing software has found its moment to shine amidst the pressure for rapid rebalancing trades where taking days, or even just hours, to queue up trades can result in a material difference in price, and how market turmoil is leading to an uptick of interest in third-party models and even entire TAMP platforms, as small-to-mid-sized advisory firms realize the time challenges of doing both a burst of reallocating portfolios and reassuring clients at the same time.

We also have a few articles on the current work-from-home environment, including tips about how to avoid “Zoom bombing” (where hackers can interrupt your Zoom meeting with offensive material!), tips on how to improve your webcam setup to be a little more visually flattering, and some additional suggestions on how to remain productive when (suddenly) transitioning to a new work-from-home environment.

We wrap up with three interesting articles, all around the theme of leadership in these challenging times: the first explores the importance of developing team members to have their own autonomy to take risks and make decisions (especially in a bear market when there’s too much to be done for the firm owner to make all the decisions); the second explores how fear in the midst of business risks can unwittingly cause advisory firm owners to clamp down at the exact moment it’s crucial to empower employees more; and the last provides some helpful tips about how to be an effective leader in times of crisis… including recognizing that even if your advisory firm is not in trouble, employees don’t necessarily know that, and still need enhanced communication from the leadership, if only to give them confidence that the firm really will be OK!

Enjoy the ‘light’ reading!

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Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that the Federal government is officially moving the tax filing deadline from April 15th to July 15th, not only allowing tax payments to be deferred but the entire tax filing process (though it remains to be seen whether/how states will follow suit as well, and those seeking tax refunds to get cash in their pockets now will likely still want to file as soon as possible!).

Also in the news this week is discussion that the U.S. is considering whether to issue 50-year(!) government bonds to finance the looming coronavirus economic stimulus package to take advantage of ultra-low interest rates, and that the economic stimulus package may also include a provision allowing the U.S. Treasury to provide a backstop guarantee to money market funds to prevent the risk of recreating a repeat of the panic run on (institutional) money market funds that happened during the 2008 financial crisis.

From there, we have a number of articles about investor behavior during the current market volatility (and how advisors can help), including a look at the data showing that in reality most investors do not panic sell (but the few that do can be especially poor under-performers as a result), how your brain reacts emotionally to market volatility in a form of fight-or-flight response (for which rational explanations of markets don’t necessarily help), and some tips on how to reassure clients during these volatile times (and even remind them that you’re available to help their friends and family who may be in search of a financial advisor to help them through the volatility, too).

We also have a few articles on the emerging practice management implications of the recent market decline, including why advisory firms that didn’t run ‘healthy’ 20%+ profit margins may now face forced layoffs to right their expenses relative to their revenue and the fees they charge, how market volatility and potential layoffs may at least create an opportunity for firms to refocus themselves for the future, and why the recent market decline may not necessarily tank the valuations for advisory firms that want to sell (at least, as long as the seller is willing to bear more of the risk by making a portion of their price contingent on the market recovery that’s anticipated in the coming years).

We wrap up with three interesting articles, all around the theme of dealing with our own thoughts and personal disruptions caused by coronavirus: the first provides tips about how to get comfortable and find more ‘calm’ in the face of a pandemic that may feel particularly challenging to fight (given that it’s an enemy we can’t see, and one that forces us to socially distance and isolate when, as human beings, we tend to come together in times of stress); the second provides a powerful reminder that it’s “not crazy” to be fearful of covid-19 and to be thinking about the potentially challenging long-term implications, and the importance of finding others who share (or at least are willing to listen to and hear) your concerns to talk them out; and the last provides an uplifting reminder that the wave of meetings, events, and activities now being cancelled is unexpectedly presenting us all with a “gift of time”… raising the question of what those “if I had more time I’d get around to it” activities and goals we’ll all be able to take up, now that the time is being forced on us anyway?

Enjoy the ‘light’ reading!

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