Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with a recent investigative reporting effort from the Wall Street Journal that found FINRA’s BrokerCheck system is failing to provide consumers information about bankruptcies and even criminal charges of brokers, in some cases because brokers simply fail to report them and in others because the broker-dealer doesn’t record the incident (even in situations where the broker-dealer was named a party to the suit!).
From there, we have a number of practice management articles this week, including an overview of some of the latest trends in compensation for advisor employees (where base salaries are declining but incentive compensation is rising, with total pay up significantly in recent years), a look back at recent M&A activity amongst advisors from Schwab Advisor Services naming 2013 “the year of the tuck-in”, a look at how adoption of e-signatures is beginning to accelerate, a good overview of some of the “unsung” custodians beyond the Big 4 (Schwab, Fidelity, TD Ameritrade, and Pershing) that are looking to grow and attract advisors (often by trying to offer superior tools and technology), and an interesting survey that found advisors who were worried how clients would react if they outsourced their investments but did so anyway found clients were far more “OK” with the transition that they had first feared.
We also have a few investment articles, including a good discussion of the Shiller “CAPE” P/E10 ratio and why it’s still credible (and the warning signs it is flashing), how the financial services industry’s transition to AUM on a massive basis (from the rise of RIAs to the shift of wirehouses to the AUM model) may be setting a “relentless bid” under today’s stock market, and an intriguing look at whether we may be approaching the point where Vanguard is actually getting so big that it could actually stifle competition or even pose systemic risks.
We wrap up with three interesting articles: the first looks at whether the real blocking point to advisors engaging in succession planning might be less about the financial value of the firm and more about the fear of losing the “psychic income” our rewarding work provides to us; the second explores how an increasingly consumer-centric world will put new pressures on advisory firms to create even more client-customized and convenient experiences (while trying to maintain efficiency); and the last is from marketing guru Seth Godin about how Girl Scouts are trained to talk about the features and benefits of buying Girl Scout cookies instead of asking a simple question that evokes an emotional response (a problem that has some disturbing parallels to how we often “sell” financial planning as well). And be certain to check out Bill Winterberg’s “Bits & Bytes” video on the latest in advisor tech news at the end! Enjoy the reading!