Enjoy the current installment of "weekend reading for financial planners" - highlights this week including news on the regulatory front, a number of practice management articles, a few articles about the current difficult investment environment (and whether we may be tipping, or have already tipped, into a recession) and an interesting piece about how the mere gender of the advisor can impact client responses about risk tolerance. Happy reading!
Weekend reading for October 1st/2nd:
Fiduciary Timetable Pushed Back into 2012: This article by Mark Schoeff, Jr. in Investment News discusses the recent announcements by the Labor Department and separately by the SEC to push ongoing rulemaking discussions about fiduciary into 2012. This article, along with a nice piece by Alex Potts on RIABiz entitled "Where the Rewrite of Financial Regs Stands Relating to RIAs" gives a good survey of the current landscape.
Financial Tech Coming To A Phone or Wallet Near You: This article by Reuters Money's Linda Stern highlights some companies from the Finovate conference earlier this month, focused on delivering software and apps that some of your clients may use someday, ranging from a new offering from Google Advisor to bring more transparency to the mortgage and credit card market, to SigFig who seeks to collect your portfolio data and give you comparisons like "your broker is charging you more than 95% of its clients."
5 Ways Advisor Websites Go Wrong (and how to fix it): This article on the ByAllAccounts.com blog by TJ Gilsenan highlights common ways that advisor websites go wrong - with remarkably straightforward examples; for instance, if your website offers fancy flash that gives visitors the option to "skip it", do them a favor and skip it now by removing it from your website, because the attention span of your visitors isn't that long!. This is a pretty quick and easy read... although it may take you slightly longer to work with your website designer to implement the solutions.
CFP Board's 2011 CFP Professionals Survey: This isn't an article, but a summary of the results from the CFP Board's recent survey of its professionals. Scroll down to page 5 to start seeing the results themselves. While a few are pretty straightforward (86% of CFP certificants are very satisfied with their career choice, and 91% would recommend the CFP marks to other financial professionals), some results are more striking: the median age of those FIRST obtaining certification is 39, the median age of all professionals is 52, and 78% of certificants are men. Even more notable, the media client investable assets of CFP certificants is only $450,000, and the median minimum AUM requirement is only $250,000. Are CFP certificants actually more "middle market" than we give them credit to be?
A Test of the Video Narration Effect on Financial Risk-Tolerance Assessment: This article by John Grable and Sonya Britt of the Kansas State University Financial Planning program was published earlier this year in the "Between the Issues" feature of the Journal of Financial Planning, and explores a remarkably simple but significant question: what happens when risk tolerance questions are read out loud (instead of the client reading them to himself/herself), and is there a difference between a male and female question narrator. The results are quite striking; people who have questions read to them exhibit report higher risk tolerance than when they answer the questions just using pen and paper and reading to themselves, and the gender of the narrator has a significant impact (which in turn is impacted depending on the gender of the risk tolerance test taker). Read the article for more details!
ECRI Makes a Recession Call: This brief article by Doug Short of Advisor Perspectives takes a quick look at the data underlying the call this week by the Economic Cycle Research Institute (ECRI) that the U.S. is tipping into recession. The article walks through the history of ECRI's success in predicting recessions based on its indicator; the brief answer is that when it's "this" negative, it's generally quite accurate. Not good news, but good to be aware and preparing.
Not Over by a Longshot: This article by John Hussman of the Hussman Funds discusses why the difficult environment in Europe is not going to be over for a long time. Citing the yield on Greek government bonds (the 1-year Greek bond was yielding 135% last week!), Hussman notes that Greek default is truly just a matter of time now, as the market is already pricing it in; the question is when the European leaders will admit it, and more importantly how they will handle it. Hussman, who virtually always puts out brilliant commentary, also discusses how deleveraging should continue to drag on economic growth (and that, too, isn't over by a longshot in his view), and how the US should be looking at restructuring its major banks.
Has Your Client Asked: What Happens To My "Tweets" When I Die?: This article by attorney Darlynn Morgan on the WealthCounsel Advisors Forum blog discusses an amusing yet real question - how do you shut down a deceased person's social media accounts when they die? The article walks through the basic policies for Twitter, Facebook, and LinkedIn to close the accounts out, or to even (in the case of Facebook) memorialize the page, so friends can still leave (virtual) remembrances.
I hope you enjoy the reading! Let me know what you think, and if there are any articles you think I should highlight in a future column!