Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the fascinating letter that Blackrock CEO Larry Fink sent to business leaders, stating that they must make a positive contribution to society (in addition to delivering financial performance) to command Blackrock’s interest (as the world’s largest institutional investor)… and raising the question of whether SRI/ESG investing is about to make the shift from niche to mainstream (which, ironically, eliminate any potential performance differential for such strategies as they literally become the market!).
Also in the news this week was the first-time-ever release of a FINRA budget, that (finally) sheds some light on how the organization collects revenue and spends its resources… and recognizes that it must be “right-sized” with fewer staff and lower costs to be sustainable in the face of a shrinking base of broker-dealers. And the U.S. Supreme Court has granted certiorari to hear the case of Ray Lucia v. SEC, which may strike down the SEC’s current process of selecting its administrative law judges as being unconstitutional (and force the SEC to adopt a more independent and better-reviewed appointment process, instead).
From there, we have several articles on retirement planning and research, including a look at how not to split an IRA in a divorce (and why it’s essential to split an IRA after the divorce decree is finalized), why so-called “cash buffer” or “cash bucketing” strategies don’t actually improve retirement income sustainability (and can actually harm it), and how the availability of reverse mortgages may change the 4% rule (taking an initial withdrawal rate equal to 1/25th of the available retirement assets) into a Rule of 30 (taking a 3.33% initial withdrawal rate against the combined value of the retirement portfolios and equity in the home, using a reverse mortgage line of credit to tap the equity in the future if/when/as needed).
We also have a few articles on financial advisor marketing strategies, including a reminder that the best way to get fresh new marketing ideas is not to ask other advisors what works but to ask your target clientele instead, a look at how to refine what your firm delivers to clients to truly create a differentiating client experience (beyond “just” trying to deliver better client service), and a great way of thinking about differentiating as a financial advisor by being capable of delivering something that other advisors either can’t, or don’t deliver themselves (though in the long run, a can’t differentiator may be more sustainable).
We wrap up with three interesting articles, all around the theme of personal growth and development in an evolving business or career path: the first looks at why personal progress is all about continuously taking ourselves out of our personal comfort zone (because in the end, “if you want something in life that you have never had, you will have to do something that you have never done”); the second explores the “four elements of entrepreneurship”, recognizing that it’s more about the mental attitude of being willing to make decisions and attempt new things in the face of uncertainty than any particular skill or ability; and the last delves even further into the steps that successful advisors (and especially advisory firm founders) must take to avoid becoming the bottleneck in their own businesses as they grow.
Enjoy the “light” reading!