Archives Of Weekend Reading For Financial Planners

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a look at the big media buzz around how Peter Thiel managed to built a whopping $5 billion Roth IRA by 'stuffing' it full of pre-IPO shares of his companies and early stage startup investments (first PayPal, then Palantir, as well as Facebook), which as part of a ProPublica investigative journalism expose is already raising questions on whether the IRS needs to further crack down on how illiquid private investments are valued when being contributed to Roth accounts?

Also in the industry news this week are a number of other interesting headlines:

• A recent study on consumer preferences in retirement shows that what retirees actually care about is very different than what they expected in the years leading up to retirement, with a major focus on health, family, and purpose, and not 'just' retirement finances alone
• FPA hires a new "Chief Membership Experience Officer" as incoming CEO Patrick Mahoney attempts to change the tone and focus to turn around the beleaguered membership association

From there, we have several interesting articles on the rising focus on operations and the 'business' side of advisory firms:

• PFI Advisors (an operations consulting firm) launches a new "COO Society" for advisory firm operations staff to learn and train
• Angie Herbers launches a new practice management Academy for advisory firms focused on the core areas of business management for a scaling advisory firm
• Why COOs are increasingly becoming a partnership-track role in larger advisory firms

We've also included a number of articles on the growing focus of 'data' in advisory firms, including:

• A consumer study that shows consumers are very willing to share their data with their wealth managers (more so than their own financial institutions)
• How "Chief Data Officer" may soon become a key role in larger enterprise advisory firms that manage their data as an asset
• The trade-offs in being a data-driven leader (and why there is such a thing as being 'too' data-driven, such that the firm misses out on innovation by looking only in the rear-view mirror)

We wrap up with three final articles, all around the theme of learning from the past to inform the future:

• How "The Office" itself has evolved over the past 100 years, and why repeated calls for it to decline in popularity haven't materialized for decades
• Why it's becoming increasingly popular to (once again) look to antiquity for insights about what's healthy and best for us
• The fascinating link between walking outside and improving our mental health and creativity

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry news that now Goldman Sachs has officially thrown its hat into the RIA custody ring as well, announcing a significant new relationship with mega-RIA Stewardship Partners, and positioning itself to compete especially for the ongoing flow of "breakaway brokers" that may prefer the storied Wall Street brand over a more "retail"-affiliated RIA custodian?

Also in the industry news this week are a number of other interesting regulatory headlines:

• The SEC is once again considering further updates to the Accredited Investor rules, including the potential to increase the income and net worth thresholds (which haven't been adjusted for inflation in decades) but also to potentially allow more exceptions for those with significant education or similar credentials
• The Department of Labor is preparing yet another update to the fiduciary rules that may look into not only the compensation that advisors receive, but the titles they use when holding out to consumers

From there, we have several interesting articles on the evolution of the subscription fee model:

• How subscription fees open up new segments of clients that the AUM model doesn't serve, expanding the breadth of who advisors can serve profitably
• An industry benchmarking study showing that growth in subscription fee service models has reached the point where retainer-fee firms are enjoying the same high retention rates as AUM firms (even through the pandemic in 2020)
• Why it's so important to set a minimum retainer fee for any client an advisory firm works with, to ensure they maximize the time they're spending with clients (and prospects)

We've also included a number of articles on retirement, including:

• Strategies to avoid the IRMAA Medicare surcharges in retirement (particularly by managing pre-tax retirement accounts and their later-years' RMDs)
• The valid and not-so-valid criticisms of using annuities in retirement allocations
• Despite decades of fears that a large segment of consumers won't be prepared for retirement, in practice a recent Gallup study shows that nearly 80% of retirees are satisfied with their retirement (suggesting that we may underestimate our ability to adapt to our retirement circumstances whenever they do come!?)

We wrap up with three final articles, all around the theme of finding financial contentment:

• Economic conditions have improved dramatically since the 1950s, but our financial satisfaction has not, suggesting that the real challenge is not improving our financial condition, but preventing our expectations from growing faster than our reality?
• When we are only ever limited in how much we can control in our lives, the key to financial happiness is not in having 'everything', but getting to the point that we feel we're in enough control to not need to worry about the future
• While we focus heavily on building wealth in portfolios (and recovering from the decline of the pandemic), it's arguably investing in the bonds we have with our friends and family that builds the most happiness and life satisfaction

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry news that LPL has formally announced the rollout of a 'standalone' RIA custodial solution for fee-only RIAs, promising no asset minimums and a more "high-touch, white-glove" approach than its larger competitors (i.e., Schwab and Fidelity), as the largest independent broker-dealer (and third-largest RIA custody given LPL's hybrid RIA assets) continues its shift from brokerage-based roots to becoming a platform for RIAs as the industry at large continues its own shift from brokerage to advisory and products to advice.

Also in the industry news this week are a number of other interesting headlines:

• The latest Schwab Independent Advisor Outlook Study finds that the average advisory firm added more clients in 2020 than prior years, but also is struggling more with new competitors in the advice business
• Wealthy investors are increasingly shifting their investment preferences towards a more values-based approach as "purpose-driven investing" threatens to replace "goals-based investing" (at least for HNW clients)

From there, we have several interesting articles on industry regulation:

• FINRA withdraws its proposal to modify the expungement rules as PIABA claims it is not stringent enough in limiting such expungements to ensure consumers (and other regulators) have access to information about consumer complaints against problematic brokers
• New legislation in Congress is shining a fresh light on whether it's time to end "mandatory arbitration" clauses in broker-dealer and RIA agreements
• The SEC is pledging to step up enforcement of Regulation Best Interest, and FSI is pushing back against the potential for "regulation by enforcement"

We've also included a number of articles on the ongoing debates around income and wealth inequality and the broader economy:

• A controversial investigative report from ProPublica finds that 25 wealthiest US billionaires paid an average tax rate of less than 16%, as the ultra-HNW increasingly take advantage of ultra-low interest rates to borrow against their assets for spending to avoid the need to liquidate and pay capital gains taxes
• A new study suggests that the "global savings glut" may be primarily driven by the concentration of wealth, such that the wealthiest households literally can't deploy their cash quickly enough back into the economy (leading to a rise in savings that is driving down interest rates and fueling low-interest debt in the bottom 90% of households)
• The balance between workers and businesses appears to be shifting as wage growth suddenly gains traction while the total number of working-age Americans declines for the first time ever

We wrap up with three final articles, all around the theme of trying new things:

• Often the best "crazy new ideas" are the ones that are most widely criticized... until they're accepted and become self-evident
• How self-criticism is only constructive up to a certain point, beyond which being introspective can actually become self-limiting
• Why in the end, the best way to really learn something is not to study on it and pass a test about it, but to do it and even fail at it (because once you've failed and felt the pain of failure, you rarely ever forget that lesson for the rest of your life!)

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a fascinating industry study of more than 70,000 financial advisors showing that 2020 actually witnessed record client retention rates across the industry (94.6%) but also one of the slowest years for new client acquisition (ostensibly at least in part because so few clients were willing to change advisors in the first place?), as the advisory industry at large continues to shift into increasingly stable ongoing fee-based AUM relationships with its affluent clients (though in practice, the majority of affluent clients are also maintaining unmanaged brokerage accounts for at least some of their investable assets as well!).

Also in the industry news this week are a number of other interesting headlines:

• A new white paper from Bob Veres and Matthew Jackson highlights how niche financial planning is becoming the new frontier (though arguably, fee-only financial planning already has been a niche for the past 20 years?)
• An Arizent study finding that the majority of advisors wish to stay at least partially working from home as the pandemic subsides... although not significantly more than the number of advisors who already worked at least partially from home pre-pandemic!?

From there, we have several interesting articles on cryptocurrency:

• The FPA's latest Trends In Investing survey shows a significant spike in the number of advisors looking to allocate more to cryptocurrency in the coming year (at 26%, up from fewer than 1% of advisors just 1 year ago)
• Schwab may be gearing up to soon make cryptocurrency investing available on its platform
• Why the dominance of cryptocurrency in the consumer media means advisors have to talk to clients about it, even if the advisor's view is that it's not (yet?) worth investing into

We've also included a number of articles on the growing buzz around inflation:

• A recent study highlights the investments that perform better or worse when economies transition into higher inflation environments
• The heat is coming off forward-looking inflation expectations as investment markets increasingly assume the Fed may act
• How to have the 'inflation conversation' with clients by focusing on the Rule of 72 and how long it takes for prices to double

We wrap up with three final articles, all around the theme of adding value in client relationships:

• The opportunities for even fee-only advisors to add value to clients with advice about their insurance policies (even and especially if the advisor isn't the one selling them)
• Tips on how to have more productive annual client review meetings by breaking them into backward-looking and forward-looking sections of the meeting agenda
• How to think about restructuring advice fees into Service Fees and separate Access Fees to better align the interests of the client and their advisor to provide ongoing value

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the big industry headline that Bank of America is banning new Merrill Lynch advisors from cold-calling, in what many are calling the "end of an era" of how financial advisors are recruited into the business, as the company looks to shift to a combination of digital marketing (through LinkedIn) and internal referrals of bank clients into its wealth management division, in what Bank of America says it hopes will reduce advisor churn, better support paying advisors viable starting salaries to avoid the hazardous "eat-what-you-kill" approach of the past, and expand advisor diversity by not needing to hire advisors who already have their own natural market... and also improve Bank of America's own client retention and reduce future advisor breakaways by hiring 'less entrepreneurial' advisors who are more likely to be reliant on the bank for their clients and support in the first place?

Also in the industry news this week are a number of other interesting headlines:

• President Biden unveils the blueprint for his $6 trillion Federal budget for the coming year... though, in the end, the real question is what Congress will pass (or not)
• A new study finds that wealth preferences are shifting, with fewer people viewing wealth as "peace of mind" and more associating wealth with happiness, success, and influence instead

From there, we have several interesting articles on investing:

• Vanguard launches a new private equity investment option for its own retail clients (or at least those who are accredited) as the firm continues to move 'upmarket' to a more affluent clientele (who historically may have hired an independent advisor instead?)
• Why the growing focus on ESG is leading to newfound scrutiny on how the "Big 3" index providers (Vanguard, Blackrock, and State Street) are proxy voting for their massive $15 trillion in investable assets
• How I Bonds are getting some 'fresh love' as the government bond yields 3.54% (consisting of a fixed 0% rate and 3.54% inflation rate) in the current environment (albeit with a cap of just $10,000/year in new purchases)

We've also included a number of articles on broader industry investing trends:

• The ongoing evolution of 529 plans to include more automated glidepath funds (that make changes in smaller, more gradual increments over time)
• Why Millennials are actually not poorer (in terms of income or wealth) than prior generations, though student loan burdens have been especially damaging to a subset of Millennials
• The launch of a new "Onramp Invest" platform to help advisors support their clients who are choosing to invest in cryptocurrencies (by facilitating integrations from popular crypto platforms to the advisors' own software systems)

We wrap up with three final articles, all around the theme of investing in oneself as an expert:

• Why and how to position yourself as a "Visible Expert" to both attract more clients and be able to command higher advisory fees
• How the primary benefit of being curious is often to discover opportunities you weren't even looking for (but never would have found without being curious)
• Why the best bet you can make is often to 'bet on yourself'... which sometimes means being willing to take the scary leap into the unknown and believe in yourself that it will work out (which is what provides the courage and focus for the prediction to become a self-fulfilling prophecy!)

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that 'upstart' RIA custodian Altruist has raised a huge $50M of fresh investment capital to fuel its ongoing growth, even as questions arise as to how quickly the platform is actually growing and whether Altruist is ultimately really an RIA custodian, or a platform TAMP, or a technology firm that overlays custodial services... though arguably Altruist's ongoing growth (and ability to attract investor capital to fuel that growth) despite the murkiness of its 'categorization' may simply highlight how the traditional dividing lines between each are continuing to blur as advisors expect more and more from their advisor platforms (whatever they may be labeled)?

Also in the industry news this week are a number of interesting studies:

• The latest Charles Schwab "Modern Wealth" survey finds that consumers have substantively reined back what it takes to be "wealthy" and "financially happy" as expectations adjust in a post-pandemic world
• A T. Rowe Price study highlights how next generation clients are interested in financial advice, but want to talk about different topics (that are more relevant to them) and prefer flat- and subscription fees over the AUM model when seeking a financial advisor

From there, we have several interesting articles on mergers and acquisitions and advisory firm valuations:

• How often the best way to increase an advisory firm's valuation is to simplify and do less (which makes it easier for an acquirer to quickly integrate the firm and thus be willing to pay more)
• As large advisory firms look more like platforms and platforms provide more advisor-support services, the lines between "selling" and "being recruited" are beginning to blur

We've also included a number of articles on financial advisor marketing:

• How to apply Donald Miller's "StoryBrand" approach to show the value of financial planning to prospects (by highlighting how the financial planning process will transform them)
• Why advancing technology is making it easier for any advisory firm to become a "storyteller" using online tools for easy-to-create videos
• The benefit of marketing an advisory firm's services (i.e., actually focusing on the services the firm will provide) over simply trying to highlight its intangible value

We wrap up with three final articles, all around the theme of how even "small" advisory firms can be very financially successful:

• Why advisor platforms struggle to be profitable supporting advisors until they're at least $100M of AUM but advisors themselves can be wildly profitable at less than half that amount of AUM
• The importance of doing an "audit" on your own client roster to identify who the really profitable clients are (and those who aren't)
• How growth usually does not lead to economies of scale in advisory firms, which means greater profitability is not about adding more clients in the hopes that margins improve, but about getting smaller and more focused instead

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that the Department of Labor has withdrawn its proposed new Independent Contractor Rule, that would have made it easier for many firms to treat their "gig economy" workers as contractors and not employees (an increasingly controversial issue), but also would have further cemented the treatment of independent advisors as independent contractors with their platforms... leading the Financial Services Institute to join in a lawsuit challenging the withdrawal of the rule as the independent broker-dealer advocacy organization pushes to preserve contractor status for independent advisors.

Also in the industry news this week is an emerging debate between Riskalyze and various "portfolio stress testing" competitors about what is the best way to evaluate a client's risk tolerance and the prospective risk of a proposed portfolio.

From there, we have several interesting articles on retirement:

• The Social Security Administration is testing a new, shorter version of the Social Security statement that would more clearly highlight the increase in retirement benefits for each year that they're delayed
• How the SECURE Act has impaired the outlook for trusteed IRAs (and where they're still worth considering)
• The rise of aging-in-place technologies is increasing how long seniors stay in their homes... which may be quickly leading to an overbuilding glut of senior housing
• The rise of automatic enrollment 401(k) plans is leading to a rise in early withdrawals and 401(k) loans (that lapse), raising questions of whether the industry may be pushing too hard to automatically enroll those who really can't afford to save?

We've also included a number of articles on credit cards and cash flow planning:

• The pandemic is leading to the largest ever pullback in the use of credit cards and may be spawning a new era of credit responsibility (and a new surge of credit card issuers marketing to get more people to sign up for new cards!)
• Considerations when swapping to one of the 'hot' new credit card deals and giving up a long-standing credit card (that may be a foundational pillar in one's credit score)
• How keeping significant cash on hand (or in the bank) may be a significant drag on returns but a worthwhile trade-off to sleep well at night?

We wrap up with three final articles, all around the theme of the emerging in-person/virtual hybrid work environment:

• How to think about the kinds of tasks that should return to being in person, versus the ones that might be better suited to remain virtual
• Tips for recognizing team members in a virtual environment (when you can't just call everyone into the break room or gather around a desk to celebrate a win)
• How advisory firms are shifting in their own business approach with clients now that offices are re-opening to in-person meetings, but it turns out not all clients want to return to in-person!

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a deep dive into the new "SECURE Act 2.0" legislation that this week passed the House Ways and Means Committee... which means it may still be months until the legislation is ultimately finalized and passed, but provides a good indicator of what's coming next from Congress in the world of retirement planning, from a new increase in the RMD age (from age 72 to age 75 by 2030), expanded catch-up contributions, inflation-indexing the limits on Qualified Charitable Distributions, and even the creation of a new "Office of Retirement Savings Lost and Found" to help workers track down old 401(k) plans.

In addition, there are several additional industry "news" articles, including:

• A New York Appeals court strikes down the state's Best Interest standard for annuity agents
• Ric Edelman's RIA Digital Assets Council launches a new 13-hour online course in cryptocurrency and blockchain

From there, we have several interesting articles on retirement:

• The IRS acknowledges it made a recent 'error' in Publication 590 and that the new 10-year rule for inherited retirement accounts will not require annual distributions in each year (just a liquidation by the end of the 10th year after death)
• How options-based strategies may become the next big thing in retirement income strategies, and why Registered Index-Linked Annuities (RILAs) may be especially well-positioned to provide a cost-effective solution
• How the pandemic is spawning a new wave of early retirees with a "life-is-short" mindset who want to retire and enjoy more of their lives while they can

We've also included a number of practice management articles on the theme of growing and scaling an advisory business:

• A new white paper from Bob Veres and Matthew Jackson explores how the advisory firm of the future is not just incrementally better than the current offering but an entirely different solution
• How hiring a CEO to professionally manage an advisory firm can be the key to growing to the next level
• A look at publicly traded RIAs and investment management firms shows that despite "robo" fears, multiples for advisory businesses continue to expand in the current environment

We wrap up with three final articles, all around the theme of the future post-pandemic workplace:

• How Google was once known for creating campuses that did everything they could to keep employees there, but is now rebuilding for a future where employees are in the office less and less
• The way workplace "perks" are changing where the new key is "flexibility" for workers
• How suburban retail space may become the new big office space as demand for traditional centralized office space continues to wane

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a recap of the key provisions in President Biden's new "American Families Plan", which includes not only a wide range of provisions regarding child care and education for children, but also a number of "revenue-raisers" of significant pertinence to financial advisors, from higher top ordinary income tax brackets, to a new (much-higher) top capital gains rate, and the elimination of step-up-in-basis rules that would cause all unrealized gains to become taxable as capital gains at death.

In addition, there are several additional articles around this week's tax proposals, including:

• How estate planning may begin to change if step-up-in-basis really is eliminated
• How the concentration of wealth in equities is leading tax policy to shift away from raising ordinary income tax rates and towards rising long-term capital gains rates in particular

From there, we have several interesting articles on retirement:

• While retirement is traditionally viewed as the end of work, considering the positives of work (from having a sense of identity to a purpose to get up every morning) may actually provide the key to what leads to a happy retirement
• Increasing longevity, along with an increase in our "productive" years, is leading to a rethinking of work and when we "should" retire
• Living longer in our later years is leading to a rise in how many people live long enough to experience a cognitive decline, creating a focal issue for financial advisors who are often the first to observe such issues in their clients

We've also included a number of practice management articles on the theme of improving services to clients:

• Why the real key to understanding what clients want isn't just about getting feedback on what you're doing but client input about what they actually want
• The limitations of being a data-driven firm when it comes to figuring out what clients might want that the firm is not already doing (and therefore can't be evaluated in the existing data)
• How the best firms adopting more technology are not using it to expedite client interactions but to free up time for more meaningful interactions instead

We wrap up with three final articles, all around the theme of the ongoing evolution of the advice business itself:

• Why higher standards for financial advisors could actually increase growth and retention rates (as consumers are more likely to seek out a financial advisor in the first place when they have more financial trust in advisors)
• The challenges of emerging "point and click" credentials and why it's important to distinguish between advisor certificates and actual certification
• How the coming decade may witness a transformation of the planning profession, from how firms leverage technology to how the world of advisors is regulated (or, alternatively, begins to peer-review and regulate itself?)

Enjoy the 'light' reading!

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Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the industry news that Morgan Stanley is selling off the E*Trade Advisor Services platform to Axos Financial, a retail-focused online-bank-plus-robo-advisor that is looking to pivot into the business of RIA custody and use E*Trade's RIA custody unit (and its $13B of RIA assets) to immediately gain some economies of scale to compete in the RIA custody business.

In addition, there are several notable industry studies hitting the news this week, including:

• EY reports that affluent clients want more "digital services", not in lieu of a financial advisor, but offered by their financial advisor (and are even willing to pay more to get them!?)
• Spectrem Group highlights the services that clients want from a financial advisor to earn their fees, and finds that "only" 2/3rds even want investment management, which is now almost tied with the number who want financial planning (but not necessarily investment management paired with it!)

From there, we have several interesting articles on investments:

• How establishing "financial habits" can be the best way to overcome the tension between what we "want" (in the short-term) and what we know we "should" do (but may struggle to do) in the long term
• The five "superpowers" of being a good investor, including Restraint, Curiosity, Creativity, Patience, and Courage
• A look at William Bernstein's new book "The Delusion Of Crowds" and why we have a tendency to invest with the herd (even if sometimes doing so leads us straight into a bubble!?)

We've also included a number of practice management articles on the theme of culture:

• How independent firms by and large score well on culture (82% of advisors are proud of their firm's culture) but wirehouse firms are struggling tremendously on culture (with only 43% proud of their firms, and providing a key indicator of why the breakaway broker trend continues?)
• Why it's better to hire for "culture-add" than just "culture-fit" alone
• Tips for advisory firms to create a more data-driven culture where decisions are made on all available data (which must start with the firm's leadership itself)

We wrap up with three final articles, all around the theme of productivity and focus:

• How a sense of "overwhelm" often isn't a result of being short on time, but doing work that is misaligned from our needs and values
• How offering "Office Hours" to connect with other professionals can expedite networking in a time-efficient manner
• How to find your own personal focus and decrease distraction with a personal Kanban system

Enjoy the 'light' reading!

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