Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a discussion by compliance consultant Brian Hamburger, suggesting that while the investment adviser world seems to prefer SEC user fees to FINRA as a regulator, it may be better to step back and ask more basic questions about what effective enforcement and the role of regulation should really be in the first place. From there, we look at an array of practice management articles this week, including a discussion of how to protect your firm from fraud, how to better engage clients (and generate more referrals as a result), how to get past the growth wall once you hit it, the problems with micro-managing staff instead of empowering them and getting out of their way, and a look at a new tool to benchmark the compensation of advisors and staff. We also look at a few more technical articles, including a research paper on how to evaluate non-qualified stock option decisions, how to incorporate interior finance issues into your practice and work with clients, and a look and what "endogenous risk" means and how it impacts portfolios. We wrap up with two interesting articles; the first provides a good warning about how advisors can better navigate copyright laws when writing material for their blog or website, and the other is a lighter article on "10 Things Happy People Do Differently" which may not provide any great revelations but may provide some nice reminders for a few of you. Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with an interesting analysis of fiduciary history and the CFP Board’s current fiduciary rules for CFP certificants, suggesting that the CFP Board still has a little ways left to go to reach a truly all-encompassing fiduciary standard. From there, we look at an interview in the Journal of Financial Planning with Nobel Prize winner Daniel Kahneman, an exploration by financial planner and researcher Jon Guyton about how the safe withdrawal rate research is holding up for a year 2000 retiree, a study by David Blanchett on the use of variable annuity GMWB riders to support retirement income, a recent study by Harold Evensky (and co-author Shaun Pfeiffer) indicating that active managers may do better in bear markets than bull markets but not by enough to generate consistent alpha over a full market cycle, and a discussion by professor Michael Finke of Texas Tech that the recent Bill Gross article about the "dying cult of equities" may have some validity. There are also a few consumer investment pieces that may be of interest to planners, including a discussion of what "tactical" really means, and some things to watch out for with the recent trend towards managed ETF strategies, along with two strong technical articles, one about new tax planning issues and opportunities tied to the Patient Protection and Affordable Care Act, and the other about how to counsel clients through a short sale or other underwater-mortgage alternatives. We wrap up with an interesting research article suggesting that it’s almost impossible for us to convey that we’re "warm" and "competent" at the same time – instead, the constraints of our language force us to lean in one direction in how we’re perceived, at the direct cost of the other. Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a fantastic advice article for young advisors about how to build an optimal path for themselves by being authentic (advice that’s probably relevant for advisors of all ages!), along with an interesting discussion of a "new model" to bring financial planning to the masses, and a discussion of the ongoing "Great Divide" between the veterans of financial planning and the younger people entering the business. From there, we look at a good discussion of compensation trends in the industry, a discussion of the conflict of interest disclosure rules for CFP certificants, and two interesting "lists" from RIABiz – one is a list of the top 10 words that should be expunged from the RIA business, and the other is the top 10 steps that wirehouses could take to reinvent themselves and stem the RIA tide (in the interest of consumers). There’s also a good article with starter tips to improve the SEO of your website (i.e., how easy it is for people to find you using the search engines), and a dissection of last week’s "surprise" unemployment report. We wrap up with two interesting articles; one looks at recent research into investment risk-taking behavior, finding that excessively risky investing may not just be a behavioral bias problem but actually a physiological one; and the other providing an intriguing forecast of how the student debt problem could be resolved in the next decade as online education with a near-zero dollar cost could drastically undercut the pricing of traditional colleges and universities and shift how most people get their higher education. Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a recap of the recent FPA Experience national conference, along with a discussion of the latest research from Cerulli suggesting that the declining market share of wirehouses may actually be accelerating even as we become more distanced from the financial crisis, and a nice overview of the current state of fiduciary rulemaking (or lack thereof) from the SEC. From there, we look at Financial Planning magazine’s recent Influencer Awards recognition, a discussion of the FA Insight "Growth by Design" study of how firms are strategically viewing and managing growth, and a wide-reaching interview on safe withdrawal rates from retirement researchers Bill Bengen, Jon Guyton, and Wade Pfau. There are also a few investment articles, including the latest change from Vanguard to further drive down the expenses of ETFs, a recap on the current state and future of actively managed ETFs, and a striking article on asset allocation glidepaths suggesting that rising equity exposure in the years before retirement may actually be more effective than declining equity exposure! We wrap up with a brief article (and associated video) showing how to hide the new "endorsements" feature of LinkedIn (which some have suggested may be a violation of the regulations barring client testimonials), and a profile of a financial advisory firm making an interesting splash in social media with a controversial political video that has generated a whopping 1,000,000 views and 100,000 Facebook fans. Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a response from the CFP Board to the recent challenge about whether their fiduciary standard is "a joke" (not surprisingly, the CFP Board suggests that its standard is no joke), along with an article from the Advisor One blogs by Knut Rostad of the Institute for the Fiduciary Standard suggesting that HighTower Advisors is overstating their lack of conflicts of interest to the detriment of advancing the standard, and another article by Dan Moisand that suggests better regulation of financial planning will ultimately be a necessary step to be fully recognized as a profession. From there, we look at some interesting stats suggesting the fiduciary RIA world is grabbing market share of 401(k) plans just as it has been grabbing market share of retail investment advice, and an article about a planning firm that focuses on career coaching and compensation advice as a core deliverable to clients. There are also a number of technical articles, including a discussion of the emerging investment concept of "risk parity" and why it matters, a look at where and how tactical asset allocation will and won’t work, the apparent underutilization of Section 529 college savings plans by financial planners, an analysis of when tax deferral does and does not make sense. and two deep estate planning articles (one focused on estate tax strategies before the end of the year, and the other on recent legal and tax developments over the past year). We wrap up with a lighter article about the importance of body language and what you may be unwittingly communicating in meetings, along with some advice to help ensure you’re in the right state of mind heading into a (client) meeting (because if you’re not, your body language is going to show it!). Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a look at how fiduciary rulemaking progress has slowed so much that any real change may now be years away at best, a discussion of how (despite lack of progress on fiduciary minimum standards) the future of advice may include a small number of mega-firms that are really building a focused, holistic and client-centric approach to advice, and a somewhat disturbing article suggesting that financial planners are becoming a target for cybercrooks that are trying to steal client money by sending advisors fake email transfer requests. From there, we have a few interesting retirement articles, including an interview with Moshe Milevsky, a discussion from Wade Pfau looking at the immediate-annuity-versus-systematic-withdrawal debate, and an analysis of median income for households over the past several decades that shows how retirees are actually faring the best of any age group. We also look at an interesting Journal of Financial Planning article about how to better evaluate cash value life insurance illustrations, a discussion whether it really pays to go to cash waiting for interest rates to rise, and a look from Morningstar at how as more and more people adopt indexing approaches new opportunities may be emerging for active managers. We wrap up with two lighter articles, one with tips on how to get more productivity time back with some good email management tips, and an intriguing discussion of how, in light of the fact that even people who now do what they love often found that path only after a period of time and some difficult early years, "follow your passion" may be bad career advice for Generation Y and that instead we need to paint a more nuanced picture of career paths that acknowledge the (inevitably?) difficult early years. Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a tough look at the CFP Board’s fiduciary standard, raising the question of whether fiduciary is just an advertising gimmick or whether it’s really being enforced as such, along with another recent study that finds the majority of investment assets in the country are being managed by firms with questionable and conflicted business models, or an outright series of regulatory infractions. From there, we look at a few more upbeat industry articles, including two recent studies on planner compensation, one showing that income for senior planners is up 14% in the past two years, and another finding that all else being equal CFP certificants average $5,000/year in additional compensation over non-CFPs. There’s also a discussion of how some firms are developing new training programs to bring more young people into financial planning, and a look at the firm LearnVest which had a "Best In Show" appearance at this week’s Finovate conference with a new iPad app for clients and an announcement of SEC registration as the firm aims to bring financial planning to "the other 99%" of Americans. We also look at two marketing articles, one on how financial advisory firm aggregator HighTower is using social media on a larger firm scale, and an interesting discussion of whether local radio shows still have some marketing value, along with a review of the latest MoneyGuide Pro G3 release. We wrap up with a nice list of market and economic commentaries to check out if you’re looking for good content to stay educated, an interesting discussion about whether we are sometimes too conservative in our recommendations as planners and the impact that can have on clients, and an article about whether the social media revolution is about to get "a little less awesome" as investors put increasing pressure on social media firms to shift from the "making delightful and cheap things" stage to the "making money" stage. Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a surprising interview from Barbara Roper at the Consumer Federation of America, suggesting that given how the SEC is dragging its feet, perhaps FINRA would be the better solution for investor protection after all. Tying into the regulatory theme, we also look at Bob Veres’ latest Financial Planning magazine column, suggesting that RIAs should come to the table with their own fresh proposals rather than waging a FINRA vs SEC battle, a recent study by Financial Advisor magazine, Boston Consulting Group, and 3ethos that attempts to benchmark how well advisors currently execute fiduciary best practices (the answer is not as well as we might have hoped and expected), and a disturbing investigation from the SEC into financial advisor and radio personality Ray Lucia that digs deeply into the backtesting models that Lucia used to support his strategies (raising the question about whether other advisors may also have made errors in assumption or process in their own in-house backtesting efforts regarding the strategies they recommend). From there, we look at a few more aspirational articles, including a vision from hiring consultant Caleb Brown about how financial planners may learn their craft in the future, an interview with practice management consultant Angie Herbers about how to develop great employees, and a great checklist for information you should be certain to cover on your website to give prospective clients what they want/need. There’s also a nice technical summary of some of the planning implications of the Affordable Care Act in the coming years, some thoughts about where the ETF/ETN industry is heading (notwithstanding the growth, it might still be in the early stages!), and a good explanation and comparison of two different types of P/E ratios and what they tell us about whether stocks are cheap or not. We wrap up with some intriguing new research from Morningstar, suggesting that it’s a myth that investors are dumb and pick bad funds; instead, the Morningstar research suggests investors tend to be pretty good at selecting high quality funds, but have a problem in timing the purchase of those funds poorly. Enjoy the reading!
Enjoy the current installment of "weekend reading for financial planners" – this week’s edition starts off with a fascinating interview with Ron Rhoades where he shares his thoughts about the history of fiduciary and regulation of financial advisors, with some surprising insights, and also look at the recent back-and-forth between incoming FPA CEO Lauren Schadle and American College CEO Larry Barton about the CFP marks and whether there should be one designation for financial planning. From there, we look at a few good articles from Advisor Perspectives, including a list from Bob Veres of the top ten faulty assumptions in financial planning, and a good article by Joe Tomlinson looking at how safe annuity companies are. There are a few retirement articles as well this week, including a look at the "critical path" approach to setting a threshold for when clients can and cannot afford to take risk, a new framework for evaluating various retirement income strategies and alternatives, and an article looking at how disability can threaten retirement success yet may be neglected by advisors (especially for their female clients). There’s also an article that presents a good discussion about risk (and the difference between risk and uncertainty), and the latest from John Mauldin showing some surprising employment trends (older workers are actually taking job market share from younger workers!). We wrap up with two very interesting articles – one looking at the dynamics between patients and doctors in providing recommendations that has some striking parallels for what we do as financial planners, and the other exploring some surprising research that demonstrates we actually value the potential for future success more highly than a demonstrated track record of prior success (which may help to clarify why many clients are always so attracted to the next great thing, even when the current thing is working just fine). Enjoy the reading!
Enjoy the current installment of “weekend reading for financial planners” – this week’s edition starts off with a number of surprise announcements in industry news, including the early retirement of FPA CEO Marv Tuttle due to family reasons, the decision by incoming NAPFA chair Ron Rhoades to resign his leadership position due to a compliance infraction, and a letter by the CFP Board to the Consumer Financial Protection Bureau suggesting the creation of a ratings system for advisor designations and certifications to help reduce elder abuse. We also look at an article explaining some of the upcoming changes with the CFP Board’s new sanction guidelines, a discussion from Advizent’s Steve Lockshin about how all advisors must help to raise the industry’s low minimum standards, and the conclusion of the Investment Advisor/ActiFi study examining how advisors are being served on practice management issues. Wrapping up, there’s an(other) article on the rise of the so-called “Robo Advisors”, a discussion of how some stress in your business can actually be a positive but it’s important to handle the stress so it doesn’t become too much, and a technical discussion of some of the unique tax burdens of MLPs, along with a look at how advisors are adjusting investments for a potential inflationary cycle, and a striking article from Texas Tech’s Michael Finke about how aging of the brain may reduce financial literacy in later years. Enjoy the reading!