Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with a recap from the recent “Deals and Dealmakers” Summit on mergers and acquisitions in the advisory industry, which suggests that demand remains strong for advisory firms, though buyers are increasingly focusing on the largest ($1B+ AUM) sellers. Also in the news this week was a fascinating interview with Matt Lunch of Strategy & Resources about the future of the Independent Broker-Dealer (IBD) model, and the announcement that the CFP Board’s Center for Financial Planning is finally launching its new academic journal, dubbed “Financial Planning Review” (FPR), and will have a Call For Papers in October to be considered for the inaugumidral issue coming mid-2018.
From there, we have several technical planning articles this week, including a look at the projected Social Security COLA for 2018 (which will ironically increase payments for upper-income individuals, but likely not for lower- and middle-income households due to the looming unwind of Medicare Part B’s Hold Harmless provisions from 2016-2017), strategies to reduce clients’ state income taxes by changing their state of residence (and what it takes for HNW clients to really substantiate their change in address), and what affluent clients should bear in mind as the IRS increasingly targets its resources on focused examinations of high-income individuals (but with fewer full-tax-return audits).
We also have several practice management articles, from a discussion of whether the traditional A/B/C client segmentation approach is actually just a relic of the old commission-based world and needs to be re-designed for modern advisory firms, to a look at the concept of “Client Journey Mapping” and why there are many opportunities for advisory firms to innovate by focusing on how technology can be used to improve the client’s experience in interacting with the firm, and a fascinating discussion from advisor consultant Stephanie Bogan about how for many advisors the best strategy for handling prospects who ask for discounts or exceptions to the advisor’s minimums is simply to have a stringent “no exceptions” policy.
We wrap up with three interesting articles, all focused on thinking about the ways the advisory industry is changing: the first looks at how the recent Equifax breach was actually an excellent “micro-moment” opportunity for advisors to demonstrate their value and relevance for clients beyond just their investment portfolios… yet few seem to have stepped up to provide proactive guidance to their clients on issues like credit freezes; the second is a look at the real-world consequences of “non-fiduciary” conflicted advice, where the problem is not just that occasional “bad actors” make highly questionable (but still “suitable”) sales to clients, but the fact that because of a current lack of fiduciary standard, they get away with it and keep doing it over and over again; and the last is a good reminder that ultimately, in trying to help clients stick to their investment plan, the best solution is not just about trying to change the portfolio to fit the client’s investment behaviors, but also figuring out how to use the behavioral finance research to help clients adjust their behaviors so they are less stressed about (or focused on) their portfolios in the first place!
Enjoy the “light” reading!