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!